Cover
Cover | 9 Months Ended |
Sep. 30, 2021 | |
Cover [Abstract] | |
Document Type | S-1 |
Entity Registrant Name | CLOVER HEALTH INVESTMENTS, CORP. /DE |
Entity Incorporation, State or Country Code | DE |
Entity Primary SIC Number | 6324 |
Entity Tax Identification Number | 98-1515192 |
Entity Address, Address Line One | 3401 Mallory Lane |
Entity Address, Address Line Two | Suite |
Entity Address, City or Town | Franklin |
Entity Address, State or Province | TN |
Entity Address, Postal Zip Code | 37067 |
City Area Code | 201 |
Local Phone Number | 432-2133 |
Entity Filer Category | Non-accelerated Filer |
Entity Small Business | false |
Entity Emerging Growth Company | true |
Entity Ex Transition Period | false |
Entity Central Index Key | 0001801170 |
Amendment Flag | false |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 | |
Current assets | |||
Cash and cash equivalents | $ 92,348 | $ 67,598 | |
Short-term investments | 4,098 | 138,638 | |
Investment securities, held-to-maturity (Fair value: 2020: $266; 2019: $0) | 265 | 0 | |
Accrued retrospective premiums | 34,829 | 13,225 | |
Other receivables | 11,368 | 5,503 | |
Reinsurance recoverable | 0 | 481 | |
Healthcare receivables | 38,745 | 25,819 | |
Other assets, current | 8,129 | 1,692 | |
Total current assets | 189,782 | 252,956 | |
Investment securities, available-for-sale, at fair value (Amortized cost: 2020: $53,953; 2019: $56,382) | 53,963 | 56,428 | |
Investment securities, held-to-maturity (Fair value: 2020: $471; 2019: $685) | 429 | 663 | |
Other assets | 8,885 | 9,704 | |
Property and equipment, net | 2,078 | 1,940 | |
Operating lease right-of-use assets | 7,882 | 11,097 | |
Goodwill | 1,243 | 1,243 | |
Other intangible assets | 2,990 | 2,990 | |
Total assets | 267,252 | 337,021 | |
Current liabilities | |||
Unpaid claims | 103,976 | 77,886 | |
Accounts payable and accrued expenses | 30,671 | 19,826 | |
Accrued salaries and benefits | 3,978 | 3,792 | |
Operating lease liabilities | 4,795 | 4,761 | |
Current portion of notes and securities payable | 20,803 | 18,481 | |
Premium deficiency reserve | 0 | 17,128 | |
Other liabilities, current | 5 | 14 | |
Total current liabilities | 164,228 | 141,888 | |
Other liabilities | 13,116 | 11,729 | |
Notes and securities payable, net of discount and deferred issuance costs | 106,413 | 57,917 | |
Derivative liabilities | 44,810 | 138,561 | |
Warrants payable | 97,782 | 17,672 | |
Long-term operating lease liabilities | 6,349 | 10,044 | |
Total liabilities | 432,698 | 377,811 | |
Commitments and contingencies (Note 22) | |||
Convertible Preferred stock (Series Seed A, A-1, B, C, and D), $0.0001 par value; 155,387,025 shares authorized as of December 31, 2020 and 2019; 139,444,346 shares; after reverse capitalization, issued and outstanding as of December 31, 2020 and 2019; aggregate liquidation preference of $470,256 as of December 31, 2020 | 447,747 | [1] | 447,747 |
Stockholders’ deficit: | |||
Common stock, $0.0001 par value, 351,572,668 shares authorized; 89,972,184 and 88,674,206 issued; and 89,206,266 and 88,279,119 shares outstanding; after reverse capitalization as of December 31, 2020 and 2019, respectively | 9 | 9 | |
Additional paid-in capital | 411,867 | 403,041 | |
Accumulated other comprehensive income | 10 | 46 | |
Accumulated deficit | (1,028,982) | (891,633) | |
Clover shareholders’ deficit | (617,096) | (488,537) | |
Non-controlling interest | 3,903 | 0 | |
Total stockholders’ deficit | (613,193) | (488,537) | |
Total liabilities, convertible preferred stock and stockholders’ deficit | $ 267,252 | $ 337,021 | |
[1] | Prior period results have been adjusted to reflect the exchange of Legacy Clover’s common stock for Clover Class B Common Stock at an exchange ratio of approximately 2.0681 in January 2021 as a result of the Business Combination. See Note 3 (Business Combination) for additional information. |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Statement of Financial Position [Abstract] | ||
Investment securities, held-to-maturity, Fair value current | $ 266 | $ 0 |
Investment securities, available-for sale, Amortized cost noncurrent | 53,953 | 56,382 |
Investment securities, held-to-maturity, Fair value noncurrent | $ 471 | $ 685 |
Preferred stock par value, (in dollars per share) | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized (in shares) | 155,387,025 | 155,387,025 |
Preferred stock, shares issued (in shares) | 139,444,346 | 139,444,346 |
Preferred stock, shares outstanding (in shares) | 139,444,346 | 139,444,346 |
Liquidation preference | $ 470,256 | |
Common stock, par value, (in dollars per share) | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized (in shares) | 351,572,668 | 351,572,668 |
Common stock, shares, issued (in shares) | 89,972,184 | 88,674,206 |
Common stock, shares, outstanding (in shares) | 89,206,266 | 88,279,119 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | |
Revenues: | ||||||
Premiums earned, net (Net of ceded premiums: 2020: $599; 2019: $832) | $ 203,657 | $ 167,075 | $ 598,390 | $ 501,100 | $ 665,698 | $ 456,926 |
Other income | 859 | 1,994 | 2,550 | 5,555 | 4,214 | 801 |
Investment income, net | 179 | 823 | 340 | 2,226 | 2,976 | 4,539 |
Total revenues | 427,163 | 169,069 | 1,039,960 | 506,655 | 672,888 | 462,266 |
Expenses: | ||||||
Net medical claims incurred | 436,422 | 144,846 | 1,109,375 | 410,540 | 590,468 | 450,645 |
Salaries and benefits | 73,364 | 16,628 | 201,555 | 57,339 | 71,256 | 91,626 |
General and administrative expenses | 45,749 | 29,847 | 129,983 | 79,798 | 120,444 | 94,757 |
Premium deficiency reserve (benefit) expense | 20,761 | (772) | 48,661 | (16,357) | (17,128) | 7,523 |
Depreciation and amortization | 120 | 138 | 398 | 413 | 555 | 551 |
Other expense | 0 | 0 | 191 | 0 | 0 | 363 |
Total expenses | 576,416 | 190,687 | 1,490,163 | 531,733 | 765,595 | 645,465 |
Loss from operations | (149,253) | (21,618) | (450,203) | (25,078) | (92,707) | (183,199) |
Change in fair value of warrants expense | (115,152) | 20,029 | (66,146) | 31,903 | 80,328 | 2,909 |
Interest expense | 413 | 9,268 | 2,817 | 25,560 | 35,990 | 23,155 |
Amortization of notes and securities discount | 21,118 | 15,913 | ||||
(Gain) loss on derivative | 0 | (68,081) | 0 | (87,475) | (93,751) | 138,561 |
Net loss | $ (34,527) | $ 12,758 | $ (400,555) | $ (10,001) | $ (136,392) | $ (363,737) |
Per share data: | ||||||
Net loss per share attributable to common shareholders - basic (in dollars per share) | $ (0.08) | $ 0.06 | $ (0.98) | $ (0.11) | $ (1.54) | $ (4.14) |
Net loss per share attributable to common shareholders - diluted (in dollars per share) | $ (0.08) | $ 0.02 | $ (0.98) | $ (0.11) | $ (1.54) | $ (4.14) |
Weighted average number of common shares outstanding | ||||||
Basic weighted average number of common shares and common shares equivalents outstanding, after reverse capitalization (in shares) | 414,572,706 | 88,863,244 | 410,417,493 | 88,616,116 | 88,691,582 | 87,829,419 |
Diluted weighted average number of common shares and common shares equivalents outstanding, after reverse capitalization (in shares) | 414,572,706 | 248,133,335 | 410,417,493 | 88,616,116 | 88,691,582 | 87,829,419 |
Unrealized (loss) gain on available-for-sale investments | $ (197) | $ (611) | $ (620) | $ 718 | $ (36) | $ 46 |
Comprehensive loss | $ (34,724) | $ 12,147 | $ (401,175) | $ (9,283) | $ (136,428) | $ (363,691) |
CONSOLIDATED STATEMENTS OF OP_2
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | |
Income Statement [Abstract] | ||||||
Net of ceded premiums | $ 120 | $ 126 | $ 370 | $ 383 | $ 599 | $ 832 |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS' EQUITY (DEFICIT) (Unaudited) - USD ($) $ in Thousands | Total | Previously Reported | Convertible Preferred stock | Convertible Preferred stockPreviously Reported | Convertible Preferred stockRetroactive application of reverse capitalization | Common stock | Common stockPreviously Reported | Common stockRetroactive application of reverse capitalization | Additional paid-in capital | Additional paid-in capitalPreviously Reported | Additional paid-in capitalRetroactive application of reverse capitalization | Accumulated deficit | Accumulated deficitPreviously Reported | Accumulated other comprehensive income (loss) | Accumulated other comprehensive income (loss)Previously Reported | Noncontrolling interest | Noncontrolling interestPreviously Reported | |
Beginning balance (in shares) at Dec. 31, 2018 | 139,444,346 | 67,427,138 | 72,017,208 | |||||||||||||||
Beginning balance at Dec. 31, 2018 | $ 447,747 | $ 447,747 | ||||||||||||||||
Ending balance (in shares) at Dec. 31, 2019 | 139,444,346 | 67,427,138 | 72,017,208 | |||||||||||||||
Ending balance at Dec. 31, 2019 | $ 447,747 | $ 447,747 | $ 447,747 | |||||||||||||||
Beginning balance (in shares) at Dec. 31, 2018 | 87,362,592 | 42,243,445 | 45,119,147 | |||||||||||||||
Beginning balance at Dec. 31, 2018 | $ (502,574) | $ (502,574) | $ 9 | $ 4 | $ 5 | $ 25,313 | $ 25,318 | $ (5) | $ (527,896) | $ (527,896) | $ 0 | $ 0 | $ 0 | $ 0 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||||||||
Stock issuance for exercise of stock options, net of early exercise liability (in shares) | 916,527 | 443,179 | ||||||||||||||||
Stock issuance for exercise of stock options, net of early exercise liability | $ 601 | 601 | ||||||||||||||||
Retroactive application of reverse capitalization (in shares) | 473,348 | |||||||||||||||||
Stock-based compensation | 3,301 | 3,301 | ||||||||||||||||
Unrealized holdings gain (loss) on investment securities, available-for-sale | 46 | 46 | ||||||||||||||||
Beneficial conversion feature | 373,826 | 373,826 | ||||||||||||||||
Net loss | (363,737) | (363,737) | ||||||||||||||||
Ending balance (in shares) at Dec. 31, 2019 | 88,279,119 | 42,686,624 | 45,592,495 | |||||||||||||||
Ending balance at Dec. 31, 2019 | (488,537) | (488,537) | $ 9 | $ 4 | $ 5 | 403,041 | 403,046 | (5) | (891,633) | (891,633) | 46 | 46 | 0 | 0 | ||||
Ending balance (in shares) at Sep. 30, 2020 | 139,444,346 | |||||||||||||||||
Ending balance at Sep. 30, 2020 | $ 447,747 | |||||||||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||||||||
Stock issuance for exercise of stock options, net of early exercise liability | 954 | 954 | ||||||||||||||||
Stock-based compensation | 4,949 | 4,949 | ||||||||||||||||
Unrealized holdings gain (loss) on investment securities, available-for-sale | 718 | |||||||||||||||||
Interests issued | 3,903 | 3,903 | ||||||||||||||||
Net loss | (10,001) | (10,001) | ||||||||||||||||
Ending balance at Sep. 30, 2020 | (488,014) | 408,944 | (901,634) | 764 | 3,903 | |||||||||||||
Beginning balance (in shares) at Dec. 31, 2019 | 139,444,346 | 67,427,138 | 72,017,208 | |||||||||||||||
Beginning balance at Dec. 31, 2019 | $ 447,747 | $ 447,747 | $ 447,747 | |||||||||||||||
Ending balance (in shares) at Dec. 31, 2020 | 139,444,346 | 139,444,346 | 67,427,138 | |||||||||||||||
Ending balance at Dec. 31, 2020 | $ 447,747 | [1] | $ 447,747 | |||||||||||||||
Beginning balance (in shares) at Dec. 31, 2019 | 88,279,119 | 42,686,624 | 45,592,495 | |||||||||||||||
Beginning balance at Dec. 31, 2019 | $ (488,537) | $ (488,537) | $ 9 | $ 4 | $ 5 | 403,041 | $ 403,046 | $ (5) | (891,633) | $ (891,633) | 46 | $ 46 | 0 | $ 0 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||||||||
Stock issuance for exercise of stock options, net of early exercise liability (in shares) | 1,297,977 | 627,626 | ||||||||||||||||
Stock issuance for exercise of stock options, net of early exercise liability | $ 1,748 | 1,748 | ||||||||||||||||
Retroactive application of reverse capitalization (in shares) | 670,351 | |||||||||||||||||
Stock-based compensation | 7,078 | 7,078 | ||||||||||||||||
Buyback and subsequent cancellation of common shares (in shares) | (179,312) | |||||||||||||||||
Buyback and subsequent cancellation of common shares | (957) | (957) | ||||||||||||||||
Retroactive application of reverse capitalization (in shares) | (191,518) | |||||||||||||||||
Unrealized holdings gain (loss) on investment securities, available-for-sale | (36) | (36) | ||||||||||||||||
Interests issued | 3,903 | 3,903 | ||||||||||||||||
Net loss | (136,392) | (136,392) | ||||||||||||||||
Ending balance (in shares) at Dec. 31, 2020 | 89,206,266 | |||||||||||||||||
Ending balance at Dec. 31, 2020 | (613,193) | $ 9 | 411,867 | (1,028,982) | 10 | 3,903 | ||||||||||||
Beginning balance (in shares) at Jun. 30, 2020 | 139,444,346 | |||||||||||||||||
Beginning balance at Jun. 30, 2020 | $ 447,747 | |||||||||||||||||
Ending balance (in shares) at Sep. 30, 2020 | 139,444,346 | |||||||||||||||||
Ending balance at Sep. 30, 2020 | $ 447,747 | |||||||||||||||||
Beginning balance at Jun. 30, 2020 | (501,990) | 407,115 | (914,392) | 1,375 | 3,903 | |||||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||||||||
Stock issuance for exercise of stock options, net of early exercise liability | 329 | 329 | ||||||||||||||||
Stock-based compensation | 1,500 | 1,500 | ||||||||||||||||
Unrealized holdings gain (loss) on investment securities, available-for-sale | (611) | |||||||||||||||||
Net loss | 12,758 | 12,758 | ||||||||||||||||
Ending balance at Sep. 30, 2020 | $ (488,014) | 408,944 | (901,634) | 764 | 3,903 | |||||||||||||
Beginning balance (in shares) at Dec. 31, 2020 | 139,444,346 | 139,444,346 | 67,427,138 | |||||||||||||||
Beginning balance at Dec. 31, 2020 | $ 447,747 | [1] | $ 447,747 | |||||||||||||||
Ending balance (in shares) at Sep. 30, 2021 | 0 | 0 | ||||||||||||||||
Ending balance at Sep. 30, 2021 | $ 0 | $ 0 | ||||||||||||||||
Beginning balance at Dec. 31, 2020 | (613,193) | $ 9 | 411,867 | (1,028,982) | 10 | 3,903 | ||||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||||||||
Stock issuance for exercise of stock options, net of early exercise liability | 5,547 | 5,547 | ||||||||||||||||
Stock-based compensation | 132,542 | 132,542 | ||||||||||||||||
Unrealized holdings gain (loss) on investment securities, available-for-sale | (620) | |||||||||||||||||
Net loss | (400,555) | (400,555) | ||||||||||||||||
Ending balance at Sep. 30, 2021 | $ 412,290 | 1,838,639 | (1,429,537) | (610) | 3,903 | |||||||||||||
Ending balance (in shares) at Sep. 30, 2021 | 0 | 0 | ||||||||||||||||
Ending balance at Sep. 30, 2021 | $ 0 | $ 0 | ||||||||||||||||
Beginning balance at Jun. 30, 2021 | 314,855 | 1,706,334 | (1,395,010) | (413) | 3,903 | |||||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||||||||
Stock issuance for exercise of stock options, net of early exercise liability | 3,830 | 3,830 | ||||||||||||||||
Stock-based compensation | 46,803 | 46,803 | ||||||||||||||||
Unrealized holdings gain (loss) on investment securities, available-for-sale | (197) | |||||||||||||||||
Net loss | (34,527) | (34,527) | ||||||||||||||||
Ending balance at Sep. 30, 2021 | $ 412,290 | $ 1,838,639 | $ (1,429,537) | $ (610) | $ 3,903 | |||||||||||||
[1] | Prior period results have been adjusted to reflect the exchange of Legacy Clover’s common stock for Clover Class B Common Stock at an exchange ratio of approximately 2.0681 in January 2021 as a result of the Business Combination. See Note 3 (Business Combination) for additional information. |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Cash flows from operating activities | ||
Net loss | $ (136,392) | $ (363,737) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation and amortization expense | 555 | 551 |
Amortization of notes and securities discount | 21,084 | 15,807 |
Loss on disposal of property and equipment | 0 | 23 |
Stock-based compensation expense | 7,078 | 3,301 |
Paid in kind interest | 28,334 | 11,633 |
Change in fair value of warrants expense | 80,110 | 2,836 |
Change in derivative liabilities | (93,751) | 138,561 |
Accretion, net of amortization | (195) | (2,857) |
Net realized gains on investment securities | (1,114) | (107) |
Amortization of warrants | 218 | 73 |
Amortization of debt issuance costs | 34 | 506 |
Asset impairment charges | 0 | 1,632 |
Changes in operating assets and liabilities: | ||
Accrued retrospective premiums | (21,604) | 7,546 |
Other receivables | (5,865) | 4,115 |
Reinsurance recoverable | 481 | 63,610 |
Other assets | (5,470) | (274) |
Healthcare receivables | (12,926) | (14,511) |
Operating lease right-of-use assets | 3,257 | (11,933) |
Unpaid claims | 26,090 | 23,882 |
Accounts payable and accrued expenses | 10,845 | 6,298 |
Accrued salaries and benefits | 186 | (2,235) |
Premium deficiency (benefit) reserve | (17,128) | 7,523 |
Reinsurance premium payable | 0 | (64,414) |
Deferred rent | 0 | (2,677) |
Other liabilities | 1,378 | 168 |
Operating lease liabilities | (3,703) | 14,805 |
Net cash used in operating activities | (118,498) | (159,875) |
Cash flows from investing activities | ||
Purchases of available-for-sale securities | (174,318) | (505,545) |
Proceeds from sales of available-for-sale securities | 248,664 | 269,205 |
Proceeds from maturities of available-for-sale securities | 63,751 | 46,415 |
Proceeds from maturities of held-to-maturity securities | 0 | 9,220 |
Acquisition of business, net of cash acquired | 0 | (1,180) |
Purchases of property and equipment | (693) | (23) |
Net cash provided by (used in) investing activities | 137,404 | (181,908) |
Cash flows from financing activities | ||
Proceeds from issuance of convertible securities | 20,000 | 343,410 |
Deferred financing costs | (98) | (363) |
Payment of notes payable principal | (18,752) | (9,670) |
Issuance of common stock, net of early exercise liability | 1,748 | 601 |
Buyback and subsequent cancellation of common stock | (957) | 0 |
Issuance of noncontrolling interest | 3,903 | 0 |
Net cash provided by financing activities | 5,844 | 333,978 |
Net increase (decrease) in cash and cash equivalents | 24,750 | (7,805) |
Cash and cash equivalents, beginning of year | 67,598 | 75,403 |
Cash and cash equivalents, end of year | 92,348 | 67,598 |
Supplemental cash flow disclosures | ||
Cash paid during the year for interest | 4,578 | 6,257 |
Cash paid during the year for health insurance industry fee | 8,022 | 0 |
Supplemental disclosure of non-cash investing and financing activities | ||
Fair value of warrants issued in connection with notes payable | 0 | 17,672 |
Settlement of bridge loan in connection with convertible securities | 0 | 30,416 |
Right-of-use assets obtained in exchange for lease liabilities | $ 42 | $ 459 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 | |
Current assets | |||
Cash and cash equivalents | $ 202,264 | $ 92,348 | |
Short-term investments | 218,390 | 4,098 | |
Investment securities, available-for sale (Amortized cost: 2021: $21,139; 2020: $0) | 21,142 | 0 | |
Investment securities, held-to-maturity (Fair value: 2021: $308; 2020: $266) | 305 | 265 | |
Accrued retrospective premiums | 30,184 | 34,829 | |
Other receivables | 21,127 | 11,368 | |
Healthcare receivables | 34,656 | 38,745 | |
Surety bonds and deposits | 13,165 | 0 | |
Prepaid expenses | 12,177 | 7,830 | |
Other assets, current | 5,871 | 299 | |
Total current assets | 559,281 | 189,782 | |
Direct Contracting performance year receivable | 220,738 | 0 | |
Debt Securities, Available-for-sale, Noncurrent | 146,183 | 53,963 | |
Debt Securities, Held-to-maturity, Noncurrent | 390 | 429 | |
Property and equipment, net | 2,172 | 2,078 | |
Operating lease right-of-use assets | 5,828 | 7,882 | |
Goodwill and other intangible assets | 4,233 | 4,233 | |
Other assets, non-current | 13,653 | 8,885 | |
Total assets | 952,478 | 267,252 | |
Current liabilities | |||
Unpaid claims | 140,210 | 103,976 | |
Accounts payable and accrued expenses | 24,208 | 30,671 | |
Accrued salaries and benefits | 13,436 | 3,978 | |
Operating lease liabilities | 3,729 | 4,795 | |
Current portion of notes and securities payable | 0 | 20,803 | |
Premium deficiency reserve | 48,661 | 0 | |
Other liabilities, current | 5 | 5 | |
Total current liabilities | 230,249 | 164,228 | |
Direct Contracting performance year obligation | 244,599 | 0 | |
Notes and securities payable, net of discount and deferred issuance costs | 19,929 | 106,413 | |
Derivative liabilities | 0 | 44,810 | |
Warrants payable | 0 | 97,782 | |
Long-term operating lease liabilities | 4,818 | 6,349 | |
Other liabilities | 40,593 | 13,116 | |
Total liabilities | 540,188 | 432,698 | |
Commitments and Contingencies | |||
Convertible Preferred stock (Series Seed A, A-1, B, C, and D), $0.0001 par value | 0 | 447,747 | [1] |
Stockholders’ deficit: | |||
Common stock, $0.0001 par value | 9 | ||
Additional paid-in capital | 1,838,639 | 411,867 | |
Accumulated other comprehensive income | (610) | 10 | |
Accumulated deficit | (1,429,537) | (1,028,982) | |
Less: Treasury stock, at cost; 14,730 and 0 shares held as of September 30, 2021, and December 31, 2020, respectively | (147) | ||
Clover shareholders’ deficit | 408,387 | (617,096) | |
Non-controlling interest | 3,903 | 3,903 | |
Total stockholders’ deficit | 412,290 | (613,193) | |
Total liabilities, convertible preferred stock and stockholders’ deficit | 952,478 | 267,252 | |
Common Class A | |||
Stockholders’ deficit: | |||
Common stock, $0.0001 par value | 28 | 0 | |
Common Class B | |||
Stockholders’ deficit: | |||
Common stock, $0.0001 par value | $ 14 | $ 9 | [1] |
[1] | Prior period results have been adjusted to reflect the exchange of Legacy Clover’s common stock for Clover Class B Common Stock at an exchange ratio of approximately 2.0681 in January 2021 as a result of the Business Combination. See Note 3 (Business Combination) for additional information. |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (Parenthetical) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Sep. 30, 2021 | |
Investment securities, available-for sale, Amortized cost current | $ 0 | $ 21,139 |
Investment securities, held-to-maturity, Fair value current | 266 | 308 |
Investment securities, available-for sale, Amortized cost noncurrent | 53,953 | 146,796 |
Investment securities, held-to-maturity, Fair value noncurrent | $ 471 | $ 419 |
Preferred stock par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized (in shares) | 155,387,025 | 0 |
Preferred stock, shares issued (in shares) | 139,444,346 | 0 |
Preferred stock, shares outstanding (in shares) | 139,444,346 | 0 |
Liquidation preference | $ 470,256 | $ 0 |
Preferred stock par value, (in dollars per share) | $ 0.0001 | |
Preferred stock, shares authorized (in shares) | 155,387,025 | |
Preferred stock, shares issued (in shares) | 139,444,346 | |
Preferred stock, shares outstanding (in shares) | 139,444,346 | |
Liquidation preference | $ 470,256 | |
Common stock, par value, (in dollars per share) | $ 0.0001 | |
Common stock, shares authorized (in shares) | 351,572,668 | |
Common stock, shares, issued (in shares) | 89,972,184 | |
Common stock, shares, outstanding (in shares) | 89,206,266 | |
Treasury stock, shares held (in shares) | 0 | 14,730 |
Common stock exchange ratio | 206.81% | |
Common Class A | ||
Common stock, par value, (in dollars per share) | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized (in shares) | 0 | 2,500,000,000 |
Common stock, shares, issued (in shares) | 0 | 278,308,964 |
Common stock, shares, outstanding (in shares) | 0 | 278,308,964 |
Common Class B | ||
Common stock, par value, (in dollars per share) | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized (in shares) | 351,572,668 | 500,000,000 |
Common stock, shares, issued (in shares) | 89,206,266 | 142,318,711 |
Common stock, shares, outstanding (in shares) | 89,206,266 | 142,318,711 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | |
Revenues: | ||||||
Premiums earned, net (Net of ceded premiums of $120 and $126 for the three months ended September 30, 2021 and 2020, respectively; net of ceded premiums of $370 and $383 for the nine months ended September 30, 2021 and 2020, respectively) | $ 203,657 | $ 167,075 | $ 598,390 | $ 501,100 | $ 665,698 | $ 456,926 |
Direct Contracting revenue | 222,647 | 0 | 439,020 | 0 | ||
Other income | 859 | 1,994 | 2,550 | 5,555 | 4,214 | 801 |
Total revenues | 427,163 | 169,069 | 1,039,960 | 506,655 | 672,888 | 462,266 |
Expenses: | ||||||
Net medical claims incurred | 436,422 | 144,846 | 1,109,375 | 410,540 | 590,468 | 450,645 |
Salaries and benefits | 73,364 | 16,628 | 201,555 | 57,339 | 71,256 | 91,626 |
General and administrative expenses | 45,749 | 29,847 | 129,983 | 79,798 | 120,444 | 94,757 |
Premium deficiency reserve expense (benefit) | 20,761 | (772) | 48,661 | (16,357) | (17,128) | 7,523 |
Depreciation and amortization | 120 | 138 | 398 | 413 | 555 | 551 |
Other expense | 0 | 0 | 191 | 0 | 0 | 363 |
Total expenses | 576,416 | 190,687 | 1,490,163 | 531,733 | 765,595 | 645,465 |
Loss from operations | (149,253) | (21,618) | (450,203) | (25,078) | (92,707) | (183,199) |
Change in fair value of warrants expense | (115,152) | 20,029 | (66,146) | 31,903 | 80,328 | 2,909 |
Interest expense | 413 | 9,268 | 2,817 | 25,560 | 35,990 | 23,155 |
Amortization of notes and securities discounts | 13 | 4,408 | 13,681 | 14,935 | ||
(Gain) loss on derivative | 0 | (68,081) | 0 | (87,475) | (93,751) | 138,561 |
Net loss | $ (34,527) | $ 12,758 | $ (400,555) | $ (10,001) | $ (136,392) | $ (363,737) |
Per share data: | ||||||
Net (loss) income per share attributable to common stockholders - basic (in dollars per share) | $ (0.08) | $ 0.06 | $ (0.98) | $ (0.11) | $ (1.54) | $ (4.14) |
Net (loss) income per share attributable to common stockholders - diluted (in dollars per share) | $ (0.08) | $ 0.02 | $ (0.98) | $ (0.11) | $ (1.54) | $ (4.14) |
Weighted average number of common shares outstanding | ||||||
Basic weighted average number of common shares and common shares equivalents outstanding (in shares) | 414,572,706 | 88,863,244 | 410,417,493 | 88,616,116 | 88,691,582 | 87,829,419 |
Diluted weighted average number of common shares and common shares equivalents outstanding (in shares) | 414,572,706 | 248,133,335 | 410,417,493 | 88,616,116 | 88,691,582 | 87,829,419 |
Unrealized (loss) gain on available-for-sale investments | $ (197) | $ (611) | $ (620) | $ 718 | $ (36) | $ 46 |
Comprehensive loss | $ (34,724) | $ 12,147 | $ (401,175) | $ (9,283) | $ (136,428) | $ (363,691) |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (Unaudited) (Parenthetical) - USD ($) $ in Thousands | Jan. 07, 2021 | Jan. 31, 2021 | Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | Dec. 31, 2019 |
Income Statement [Abstract] | ||||||||
Net of ceded premiums | $ 120 | $ 126 | $ 370 | $ 383 | $ 599 | $ 832 | ||
Common stock exchange ratio | 206.81% | 206.81% | 206.81% | |||||
Common Class B | ||||||||
Common stock exchange ratio | 206.81% | 206.81% |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS' EQUITY (DEFICIT) (Unaudited) - USD ($) $ in Thousands | Total | Legacy Warrants | Public and Private Placement Warrants | Convertible Preferred stock | Common stock | Common stockCommon Class A | Common stockCommon Class APublic and Private Placement Warrants | Common stockCommon Class B | Common stockCommon Class BLegacy Warrants | Additional paid-in capital | Additional paid-in capitalLegacy Warrants | Additional paid-in capitalPublic and Private Placement Warrants | Accumulated deficit | Treasury Stock | Accumulated other comprehensive income (loss) | Noncontrolling interest | |
Beginning balance (in shares) at Dec. 31, 2018 | 139,444,346 | ||||||||||||||||
Beginning balance at Dec. 31, 2018 | $ 447,747 | ||||||||||||||||
Ending balance (in shares) at Dec. 31, 2019 | 139,444,346 | ||||||||||||||||
Ending balance at Dec. 31, 2019 | $ 447,747 | $ 447,747 | |||||||||||||||
Beginning balance (in shares) at Dec. 31, 2018 | 87,362,592 | ||||||||||||||||
Beginning balance at Dec. 31, 2018 | $ (502,574) | $ 9 | $ 25,313 | $ (527,896) | $ 0 | $ 0 | |||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||||||||
Stock issuance for exercise of stock options, net of early exercise liability (in shares) | 916,527 | 443,179 | |||||||||||||||
Stock issuance for exercise of stock options, net of early exercise liability | $ 601 | 601 | |||||||||||||||
Stock-based compensation | 3,301 | 3,301 | |||||||||||||||
Convertible debt conversion and other issuances | 373,800 | ||||||||||||||||
Net (loss) income | (363,737) | (363,737) | |||||||||||||||
Ending balance (in shares) at Dec. 31, 2019 | 88,279,119 | 88,279,119 | |||||||||||||||
Ending balance at Dec. 31, 2019 | (488,537) | $ 9 | $ 9 | 403,041 | (891,633) | 46 | 0 | ||||||||||
Ending balance (in shares) at Sep. 30, 2020 | 139,444,346 | ||||||||||||||||
Ending balance at Sep. 30, 2020 | $ 447,747 | ||||||||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||||||||
Stock issuance for exercise of stock options, net of early exercise liability (in shares) | 748,591 | ||||||||||||||||
Stock issuance for exercise of stock options, net of early exercise liability | 954 | 954 | |||||||||||||||
Stock-based compensation | 4,949 | 4,949 | |||||||||||||||
Unrealized holdings gain (loss) on investment securities, available-for-sale | 718 | 718 | |||||||||||||||
Interests issued | 3,903 | 3,903 | |||||||||||||||
Net (loss) income | (10,001) | (10,001) | |||||||||||||||
Ending balance (in shares) at Sep. 30, 2020 | 89,027,710 | ||||||||||||||||
Ending balance at Sep. 30, 2020 | (488,014) | $ 9 | 408,944 | (901,634) | 764 | 3,903 | |||||||||||
Beginning balance (in shares) at Dec. 31, 2019 | 139,444,346 | ||||||||||||||||
Beginning balance at Dec. 31, 2019 | $ 447,747 | $ 447,747 | |||||||||||||||
Ending balance (in shares) at Dec. 31, 2020 | 139,444,346 | 139,444,346 | |||||||||||||||
Ending balance at Dec. 31, 2020 | $ 447,747 | [1] | $ 447,747 | ||||||||||||||
Beginning balance (in shares) at Dec. 31, 2019 | 88,279,119 | 88,279,119 | |||||||||||||||
Beginning balance at Dec. 31, 2019 | $ (488,537) | $ 9 | $ 9 | 403,041 | (891,633) | 46 | 0 | ||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||||||||
Stock issuance for exercise of stock options, net of early exercise liability (in shares) | 1,297,977 | 627,626 | |||||||||||||||
Stock issuance for exercise of stock options, net of early exercise liability | $ 1,748 | 1,748 | |||||||||||||||
Stock-based compensation | 7,078 | 7,078 | |||||||||||||||
Interests issued | 3,903 | 3,903 | |||||||||||||||
Net (loss) income | (136,392) | (136,392) | |||||||||||||||
Ending balance (in shares) at Dec. 31, 2020 | 89,206,266 | 89,206,266 | |||||||||||||||
Ending balance at Dec. 31, 2020 | (613,193) | $ 9 | $ 9 | 411,867 | (1,028,982) | 10 | 3,903 | ||||||||||
Beginning balance (in shares) at Jun. 30, 2020 | 139,444,346 | ||||||||||||||||
Beginning balance at Jun. 30, 2020 | $ 447,747 | ||||||||||||||||
Ending balance (in shares) at Sep. 30, 2020 | 139,444,346 | ||||||||||||||||
Ending balance at Sep. 30, 2020 | $ 447,747 | ||||||||||||||||
Beginning balance (in shares) at Jun. 30, 2020 | 88,786,712 | ||||||||||||||||
Beginning balance at Jun. 30, 2020 | (501,990) | $ 9 | 407,115 | (914,392) | 1,375 | 3,903 | |||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||||||||
Stock issuance for exercise of stock options, net of early exercise liability (in shares) | 240,998 | ||||||||||||||||
Stock issuance for exercise of stock options, net of early exercise liability | 329 | 329 | |||||||||||||||
Stock-based compensation | 1,500 | 1,500 | |||||||||||||||
Unrealized holdings gain (loss) on investment securities, available-for-sale | (611) | (611) | |||||||||||||||
Net (loss) income | 12,758 | 12,758 | |||||||||||||||
Ending balance (in shares) at Sep. 30, 2020 | 89,027,710 | ||||||||||||||||
Ending balance at Sep. 30, 2020 | $ (488,014) | $ 9 | 408,944 | (901,634) | 764 | 3,903 | |||||||||||
Beginning balance (in shares) at Dec. 31, 2020 | 139,444,346 | 139,444,346 | |||||||||||||||
Beginning balance at Dec. 31, 2020 | $ 447,747 | [1] | $ 447,747 | ||||||||||||||
Increase (Decrease) in Temporary Equity [Roll Forward] | |||||||||||||||||
Preferred stock conversion (in shares) | (139,444,346) | ||||||||||||||||
Preferred stock conversion | $ (447,747) | ||||||||||||||||
Ending balance (in shares) at Sep. 30, 2021 | 0 | 0 | |||||||||||||||
Ending balance at Sep. 30, 2021 | $ 0 | $ 0 | |||||||||||||||
Beginning balance (in shares) at Dec. 31, 2020 | 89,206,266 | 89,206,266 | |||||||||||||||
Beginning balance at Dec. 31, 2020 | (613,193) | $ 9 | $ 9 | 411,867 | (1,028,982) | 10 | 3,903 | ||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||||||||
Stock issuance for exercise of stock options, net of early exercise liability (in shares) | 3,859,648 | ||||||||||||||||
Stock issuance for exercise of stock options, net of early exercise liability | 5,547 | 5,547 | |||||||||||||||
Stock-based compensation | 132,542 | 132,542 | |||||||||||||||
Vested restricted stock units (in shares) | 20,158 | ||||||||||||||||
Unrealized holdings gain (loss) on investment securities, available-for-sale | (620) | (620) | |||||||||||||||
Preferred stock conversion (in shares) | 139,444,346 | ||||||||||||||||
Preferred stock conversion | 447,747 | $ 14 | 447,733 | ||||||||||||||
Issuance of common stock related to exercises of warrants (in shares) | 9,408,264 | 7,205,490 | |||||||||||||||
Issuance of common stock related to exercises of warrants | $ 97,782 | $ 81,673 | $ 1 | $ 1 | $ 97,781 | $ 81,672 | |||||||||||
Convertible debt conversion and other issuances (in shares) | 75,084,703 | ||||||||||||||||
Convertible debt conversion and other issuances | 16,059 | $ 7 | 16,052 | ||||||||||||||
Issuance of Common Stock in connection with Business Combination and PIPE offering (in shares) | 146,373,904 | (49,975,104) | |||||||||||||||
Issuance of common stock in connection with Business Combination and PIPE offering | 666,242 | $ 15 | $ (5) | 666,232 | |||||||||||||
Conversion from Class B Common Stock to Class A Common Stock (in shares) | 118,646,990 | (118,646,990) | |||||||||||||||
Conversion from Class B Common Stock to Class A Common Stock | 0 | $ 12 | $ (12) | ||||||||||||||
Capital contribution for extinguishment of debt | 126,795 | 126,795 | |||||||||||||||
Acquisition of Public and Private Placement Warrants | (147,582) | (147,582) | |||||||||||||||
Treasury stock acquired | (147) | $ (147) | |||||||||||||||
Net (loss) income | (400,555) | (400,555) | |||||||||||||||
Ending balance (in shares) at Sep. 30, 2021 | 278,308,964 | 142,318,711 | |||||||||||||||
Ending balance at Sep. 30, 2021 | $ 412,290 | $ 28 | $ 14 | 1,838,639 | (1,429,537) | (147) | (610) | 3,903 | |||||||||
Ending balance (in shares) at Sep. 30, 2021 | 0 | 0 | |||||||||||||||
Ending balance at Sep. 30, 2021 | $ 0 | $ 0 | |||||||||||||||
Beginning balance (in shares) at Jun. 30, 2021 | 148,560,977 | 259,744,474 | |||||||||||||||
Beginning balance at Jun. 30, 2021 | 314,855 | $ 15 | $ 26 | 1,706,334 | (1,395,010) | (413) | 3,903 | ||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||||||||
Stock issuance for exercise of stock options, net of early exercise liability (in shares) | 2,893,802 | ||||||||||||||||
Stock issuance for exercise of stock options, net of early exercise liability | 3,830 | 3,830 | |||||||||||||||
Stock-based compensation | 46,803 | 46,803 | |||||||||||||||
Vested restricted stock units (in shares) | 20,158 | ||||||||||||||||
Unrealized holdings gain (loss) on investment securities, available-for-sale | (197) | (197) | |||||||||||||||
Issuance of common stock related to exercises of warrants (in shares) | 9,408,264 | ||||||||||||||||
Issuance of common stock related to exercises of warrants | $ 81,673 | $ 1 | $ 81,672 | ||||||||||||||
Conversion from Class B Common Stock to Class A Common Stock (in shares) | 117,425,763 | (117,425,763) | |||||||||||||||
Conversion from Class B Common Stock to Class A Common Stock | 0 | $ 12 | $ (12) | ||||||||||||||
Treasury stock acquired | (147) | (147) | |||||||||||||||
Net (loss) income | (34,527) | (34,527) | |||||||||||||||
Ending balance (in shares) at Sep. 30, 2021 | 278,308,964 | 142,318,711 | |||||||||||||||
Ending balance at Sep. 30, 2021 | $ 412,290 | $ 28 | $ 14 | $ 1,838,639 | $ (1,429,537) | $ (147) | $ (610) | $ 3,903 | |||||||||
[1] | Prior period results have been adjusted to reflect the exchange of Legacy Clover’s common stock for Clover Class B Common Stock at an exchange ratio of approximately 2.0681 in January 2021 as a result of the Business Combination. See Note 3 (Business Combination) for additional information. |
CONDENSED CONSOLIDATED STATEM_4
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS' EQUITY (DEFICIT) (Unaudited) (Parenthetical) | Jan. 07, 2021 | Jan. 31, 2021 | Dec. 31, 2020 |
Common stock exchange ratio | 206.81% | 206.81% | 206.81% |
Common Class B | |||
Common stock exchange ratio | 206.81% | 206.81% |
CONDENSED CONSOLIDATED STATEM_5
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | |
Cash flows from operating activities | ||
Net loss | $ (400,555) | $ (10,001) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation and amortization expense | 398 | 413 |
Amortization of notes and securities discounts | 13,681 | 14,935 |
Stock-based compensation expense | 132,542 | 4,949 |
Paid in kind interest | 0 | 18,769 |
Change in fair value of warrants expense | (66,146) | 31,903 |
Change in derivative liabilities | 0 | (87,475) |
Accretion, net of amortization | 142 | (307) |
Net realized gains (losses) on available-for-sale securities | 52 | (421) |
Changes in operating assets and liabilities: | ||
Accrued retrospective premiums | 4,645 | (14,653) |
Other receivables | (9,759) | (9,838) |
Reinsurance recoverable | 0 | 376 |
Performance year receivable | (220,738) | 0 |
Surety bonds and deposits | (13,165) | 0 |
Prepaid expenses | (4,347) | (6,296) |
Other assets | (10,261) | 496 |
Healthcare receivables | 4,089 | (8,506) |
Operating lease right-of-use assets | 2,636 | 2,437 |
Unpaid claims | 36,234 | 15,729 |
Accounts payable and accrued expenses | 1,386 | 5,937 |
Accrued salaries and benefits | 9,458 | 662 |
Premium deficiency (benefit) reserve | 48,661 | (16,356) |
Other liabilities | 27,477 | 1,414 |
Performance year obligation | 244,599 | 0 |
Operating lease liabilities | (3,179) | (2,761) |
Net cash used in operating activities | (202,150) | (58,594) |
Cash flows from investing activities | ||
Purchases of available-for-sale securities | (705,598) | (152,248) |
Proceeds from sales of short-term investments and available-for-sale securities | 126,862 | 166,024 |
Proceeds from maturities of investment securities | 250,265 | 56,701 |
Purchases of property and equipment | (485) | (630) |
Net cash provided by (used in) investing activities | (328,956) | 69,847 |
Cash flows from financing activities | ||
Proceeds from issuance of convertible securities | 0 | 20,000 |
Deferred financing costs | 0 | (108) |
Payment of notes payable principal | (30,925) | (13,868) |
Issuance of common stock, net of early exercise liability | 5,547 | 954 |
Proceeds from reverse recapitalization, net of transaction costs | 666,242 | 0 |
Proceeds received for the exercise of Public and Private Warrants | 390 | 0 |
Payment for the redemptions of Public Warrants | (85) | 0 |
Treasury stock acquired | (147) | 0 |
Issuance of noncontrolling interest | 0 | 3,903 |
Net cash provided by financing activities | 641,022 | 10,881 |
Net increase (decrease) in cash and cash equivalents | 109,916 | 22,134 |
Cash and cash equivalents, beginning of year | 92,348 | 67,598 |
Cash and cash equivalents, end of year | 202,264 | 89,732 |
Supplemental cash flow disclosures | ||
Cash paid during the year for interest | 0 | 3,524 |
Supplemental disclosure of non-cash investing and financing activities | ||
Conversion of preferred stock to common stock | 447,747 | 0 |
Issuance of common stock related to convertible debt | 16,059 | 0 |
Capital contribution for extinguishment of debt | 126,795 | 0 |
Issuance of common stock related to warrants exercised | 97,782 | 0 |
Acquisition of Public and Private Warrants | 147,582 | 0 |
Issuance of common stock related to the exercise of Public and Private Warrants | 81,283 | 0 |
Right-of-use assets obtained in exchange for lease liabilities | $ 582 | $ 0 |
Organization and operations
Organization and operations | 9 Months Ended | 12 Months Ended |
Sep. 30, 2021 | Dec. 31, 2020 | |
Condensed Financial Statements, Captions [Line Items] | ||
Organization and operations | Organization and Operations Clover Health Investments, Corp. (collectively with its affiliates and subsidiaries, “Clover” or the “Corporation”) is singularly focused on creating great, sustainable healthcare to improve every life. Clover has centered its strategy on building and deploying technology through its flagship software platform, the Clover Assistant, to help America’s seniors receive better care at lower costs. Clover provides affordable, high-quality Medicare Advantage (MA) plans, including Preferred Provider Organization (PPO) and Health Maintenance Organization (HMO) plans, through its regulated insurance subsidiaries. The Corporation’s regulated insurance subsidiaries consist of Clover Insurance Company and Clover HMO of New Jersey Inc., which operate the Corporation’s PPO and HMO health plans, respectively. On April 1, 2021, the Corporation’s subsidiary Clover Health Partners, LLC, began participating as a Direct Contracting Entity (DCE) in the Global and Professional Direct Contracting Model (DC Model) of the Centers for Medicare and Medicaid Services (CMS), an agency of the United States Department of Health and Human Services. 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. Clover’s approach is to combine technology, data analytics, and preventive care to lower costs and increase the quality of health and life of Medicare beneficiaries. Clover’s technology platform uses machine learning-powered systems to deliver data and insights to physicians at the point of care in order to improve outcomes for beneficiaries and drive down costs. Clover’s MA plans generally provide access to a wide network of primary care providers, specialists, and hospitals, enabling its members to see any doctor participating in Medicare willing to accept them. Clover focuses on minimizing members’ out-of-pocket costs and offers many plans that allow members to pay the same co-pays for primary care provider visits regardless of whether their physician is in- or out-of-network. Clover's DCE, which assumes full risk (i.e., 100.0% shared savings and shared losses) for the total cost of care of aligned Original Medicare beneficiaries (DCE Beneficiaries), focuses on its technology platform to enhance healthcare delivery, reduce expenditures, and improve care for DCE Beneficiaries. Clover was originally incorporated as a Cayman Islands exempted company on October 18, 2019, as a special purpose acquisition company (SPAC) under the name Social Capital Hedosophia Holdings Corp. III (SCH). On October 5, 2020, SCH entered into a Merger Agreement (the “Merger Agreement”) with Clover Health Investments, Inc., a corporation originally incorporated on July 17, 2014, in the state of Delaware (Legacy Clover). Pursuant to the Merger Agreement, and a favorable vote of SCH’s stockholders on January 6, 2021, Asclepius Merger Sub Inc., a Delaware corporation and a newly formed, wholly owned subsidiary of SCH (Merger Sub), was merged with and into Legacy Clover. Upon consummation of the business combination, the separate corporate existence of Merger Sub ceased, the Corporation survived and merged with and into SCH, with SCH as the surviving corporation, and SCH was redomesticated as a Delaware corporation and renamed Clover Health Investments, Corp. (the “Business Combination”). The Business Combination was accounted for as a reverse recapitalization in accordance with generally accepted accounting principles in the United States (GAAP). Under the guidance in Accounting Standards Codification (ASC) 805, Legacy Clover is treated as the “acquirer” for financial reporting purposes. Legacy Clover is deemed the accounting predecessor of the combined business, and Clover, as the parent company of the combined business, is the successor SEC registrant, meaning that Legacy Clover’s financial statements for previous periods are disclosed in periodic reports filed with the SEC. As a result of the Business Combination, there were simultaneous changes to Legacy Clover’s convertible securities, warrants, and convertible preferred stock. See Note 9 (Notes and Securities Payable), Note 10 (Warrants Payable), and Note 14 (Convertible Preferred Stock) for additional information regarding these changes. See also Note 3 (Business Combination) for additional information related to the Business Combination. | Organization and operations Clover Health Investments, Corp., incorporated on July 17, 2014 in the state of Delaware, together with its affiliates and subsidiaries (collectively, the “Corporation” or “Clover”), provides affordable, high-quality Medicare Advantage (MA) plans, including Preferred Provider Organization (PPO) and Health Maintenance Organization (HMO) plans through its regulated insurance subsidiaries. The Corporation’s regulated insurance subsidiaries consist of Clover Insurance Company and Clover HMO of New Jersey Inc., which operate the PPO and HMO health plans, respectively. 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. Clover’s approach combines technology, data analytics and preventive care to lower costs and increase the quality of health and life of its members. Clover’s technology platform uses machine learning-powered systems to deliver data and insights to physicians at the point of care in order to improve outcomes for members and drive down costs. Clover provides access to a wide network of primary care providers, specialists, and hospitals, enabling its members to see any doctor participating in Medicare willing to accept them. Clover focuses on keeping out-of-pocket costs for its members to a minimum and allows members to pay the same low cost-sharing regardless of whether their doctor is in- or out-of-network. On October 5, 2020, Clover entered into a Merger Agreement (Merger Agreement) with Social Capital Hedosophia Holdings Corp. III (SCH), a special purpose acquisition company (SPAC). The Business Combination is accounted for as a reverse capitalization in accordance with generally accepted accounting principles in the United States (GAAP). Under the guidance in Accounting Standards Codification (ASC) 805, Clover Health Investments, Corp. is treated as the “acquirer” for financial reporting purposes. The Corporation is deemed the accounting predecessor of the combined business, and the parent company of the combined business is the successor SEC registrant, meaning that the Corporation’s financial statements for previous periods will be disclosed in the registrant’s future periodic reports filed with the SEC. As a result of the merger event, there were simultaneous changes to the Corporation’s convertible securities agreement and certain of the warrant agreements. See Note 13 (Notes and securities payable) and Note 14 (Warrants payable) for additional information regarding these changes to the respective agreements. See also Note 26 (Subsequent events) for additional information related to the merger event. |
Parent Company | ||
Condensed Financial Statements, Captions [Line Items] | ||
Organization and operations | Organization and operationsClover Health Investments, Corp. (the “Corporation) is a holding company incorporated on July 17, 2014, in the state of Delaware. |
Summary of significant accounti
Summary of significant accounting policies | 9 Months Ended | 12 Months Ended |
Sep. 30, 2021 | Dec. 31, 2020 | |
Condensed Financial Statements, Captions [Line Items] | ||
Summary of significant accounting policies | Summary of Significant Accounting Policies Basis of presentation The Corporation’s interim Condensed Consolidated Financial Statements have been prepared in conformity with GAAP and include the accounts of the Corporation and its wholly owned subsidiaries. In the opinion of management, the Corporation has made all necessary adjustments, which include normal recurring adjustments necessary for a fair presentation of its financial position and its results of operations for the interim periods presented. All material intercompany balances and transactions have been eliminated in consolidating these financial statements. These interim Condensed Consolidated Financial Statements should be read in conjunction with the audited Consolidated Financial Statements as of and for the years ended December 31, 2020 and 2019 included in Exhibit 99.5 of Amendment No. 1 to the Current Report on Form 8-K (the “Form 8-K/A”) filed with the Securities and Exchange Commission (SEC) on April 1, 2021. Reclassifications To conform to the current period presentation, prepaid expenses, which were previously included in other assets, current, are presented as a separate line item in the prior year’s Condensed Consolidated Balance Sheet. Certain amounts in the prior year period’s Condensed Consolidated Statement of Cash Flows have been reclassified to conform to the current year period’s presentation, primarily related to the amortization of warrants, amortization of debt issuance costs, and paid-in-kind interest. These reclassifications had no effect on the previously reported Consolidated Financial Statements. Use of estimates The preparation of the Condensed Consolidated Financial Statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the Condensed Consolidated Financial Statements and accompanying notes. The areas involving the most significant use of estimates are the amounts of incurred but not reported claims. Many factors can cause actual outcomes to deviate from these assumptions and estimates, such as changes in economic conditions, changes in government healthcare policy, advances in medical technology, changes in treatment patterns, and changes in average lifespan. Accordingly, the Corporation cannot determine with precision the ultimate amounts that it will pay for, or the timing of payment of actual claims, or whether the assets supporting the liabilities will grow to the level the Corporation assumes prior to payment of claims. If the Corporation’s actual experience is different from its assumptions or estimates, the Corporation’s reserves may prove inadequate. As a result, the Corporation would incur a charge to operations in the period in which it determines such a shortfall exists, which could have a material adverse effect on the Corporation’s business, results of operations, and financial condition. Other areas involving significant estimates include risk adjustment provisions related to Medicare contracts and the valuation of the Corporation’s investment securities, goodwill and other intangible assets, reinsurance, the premium deficiency reserve, warrants, the embedded derivative related to the convertible securities, stock-based compensation, recoveries from third parties for coordination of benefits, the Direct Contracting benchmark specifically cost trend and risk score estimates that can develop over time, and final determination of medical cost adjustment pools. Performance guarantees Certain of the Corporation’s arrangements with third-party providers require it to guarantee the performance of its care network to CMS. As a result of the Corporation’s participation in the DC Model, the Corporation determined that it was making a performance guarantee with respect to providers of DCE Beneficiaries that should be recognized in the financial statements. Accordingly, a liability for the performance guarantee was recorded on the Condensed Consolidated Balance Sheet. Each month, as the performance guarantee is fulfilled, the guarantee is amortized on a straight-line basis for the amount that represents the completed performance. With respect to each performance year in which the DCE is a participant, the final consideration due to the DCE by CMS (shared savings) or the consideration due to CMS by the DCE (shared loss) is reconciled in the subsequent years following the performance year. The shared savings or loss is measured periodically and will be applied to the Direct Contracting performance obligation if the Corporation is in a probable loss position. Direct Contracting revenue is also known in the DC Model as CMS’s performance year expenditures and is the primary component used to calculate shared savings or shared loss versus the performance year benchmark. Direct Contracting revenue is representative of CMS’s total expenditures incurred for medical services provided on behalf of DCE Beneficiaries during months in which those beneficiaries were alignment-eligible and aligned to the DCE. Direct Contracting revenue is calculated by taking the sum of the capitation payments made to the Corporation for services within the scope of the Corporation’s capitation arrangement and fee-for-service (FFS) payments made to providers directly from CMS. Capitalized software development costs - cloud computing arrangements The Corporation’s cloud computing arrangements mostly comprise hosting arrangements which are service contracts, whereby the Corporation gains remote access to use enterprise software hosted by the vendor or another third party on an as-needed basis for a period of time in exchange for a subscription fee. Implementation costs for cloud computing arrangements are capitalized if certain criteria are met and consist of internal and external costs directly attributable to developing and configuring cloud computing software for its intended use. These capitalized implementation costs are presented in the Condensed Consolidated Balance Sheets in other assets, and are generally amortized over the fixed, non-cancelable term of the associated hosting arrangement on a straight-line basis. Deferred acquisition costs Acquisition costs directly related to the successful acquisition of new business, which is primarily made up of commissions costs, are deferred and subsequently amortized. Deferred acquisition costs are recorded as other assets on the Condensed Consolidated Balance Sheet and are amortized over the estimated life of the related contracts. The amortization of deferred acquisition costs is recorded in general and administrative expenses in the Condensed Consolidated Statement of Operations and Comprehensive Loss. As of September 30, 2021, there were no deferred acquisition costs as a result of the acceleration of amortization for deferred acquisition costs due to the recognition of a premium deficiency reserve during the three and nine months ended September 30, 2021. For the three and nine months ended September 30, 2021, amortization expense of deferred acquisition costs of $1.1 million and $9.6 million, respectively, were recognized in general and administrative expenses. There was no amortization expense of deferred acquisition costs for the three and nine months ended September 30, 2020. COVID-19 The societal and economic impact of the novel coronavirus (COVID-19) pandemic is continuing to evolve, and the ultimate impact on the Corporation’s business, results of operations, financial condition, and cash flows is uncertain and difficult to predict. The global pandemic has severely impacted businesses worldwide, including many in the health insurance sector. In response to the pandemic, the Corporation has implemented additional steps related to its care delivery, member support, and internal policies and operations. Recent accounting pronouncements Recently adopted accounting pronouncements Emerging Growth Company The Corporation currently qualifies as an “emerging growth company” under the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”). Accordingly, the Corporation has the option to adopt new or revised accounting guidance either (i) within the same periods as those otherwise applicable to non-emerging growth companies or (ii) within the same time periods applicable to private companies. The Corporation has elected to adopt new or revised accounting guidance within the same time period as private companies, unless, as indicated below, management determines it is preferable to take advantage of early adoption provisions offered within the applicable guidance. Fair value measurements In August 2018, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standard Update (ASU) 2018-13, Changes to Disclosure Requirements for Fair Value Measurements, the purpose of which is to improve the effectiveness of disclosure requirements for recurring and nonrecurring fair value measurements. The standard removes, modifies, and adds certain disclosure requirements and is in effect for all entities in fiscal years beginning after December 15, 2019. This standard became effective for the Corporation on January 1, 2020, and did not have a material impact on the Corporation’s disclosures. Cloud computing arrangements In August 2018, the FASB issued ASU 2018-15, Intangibles – Goodwill and Other (Topic 350) – Internal Use Software: Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract. This update changes the accounting guidance for cloud computing arrangements. If a cloud computing arrangement includes a license to internal-use software, the software license is accounted for by the customer by recognizing an asset for the software license and, to the extent that the payments attributable to the software license are made over time, recognizing a corresponding liability. If a cloud computing arrangement does not include a software license, the entity should account for the arrangement as a service contract and should expense any fees associated with the hosting element (service) of the arrangement as incurred. ASU 2018-15 is effective for nonpublic entities for fiscal years beginning after December 15, 2020, with early adoption permitted. The Corporation adopted ASU 2018-15 on January 1, 2021, on a prospective basis. The Corporation's cloud computing arrangements relate to the set-up of various platforms, including but not limited to clinical data repositories and other system integrations. The capitalized implementation costs are presented in the Condensed Consolidated Balance Sheet in other assets, current and are amortized on a straight-line basis over the term of the underlying cloud computing hosting contract, which is the noncancelable term of the arrangement plus any reasonably certain renewal periods. As of September 30, 2021, $5.0 million was recorded in other assets, current, as deferred implementation costs. For both the three and nine months ended September 30, 2021, amortization expense associated with the Corporation’s cloud computing arrangements was $0.2 million. No impairment was recognized during the three and nine months ended September 30, 2021, as there were no events or changes in circumstances to indicate that the carrying amount of the Corporation’s cloud computing arrangements may not be recoverable. Accounting pronouncements effective in future periods Credit losses In June 2016, the FASB issued ASU 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, which was subsequently modified by several ASUs issued in 2018 and 2019. This standard introduces a new current expected credit loss (CECL) model for measuring expected credit losses for certain types of financial instruments measured at amortized cost and replaces the incurred loss model. The CECL model requires an entity to recognize an allowance for credit losses for the difference between the amortized cost basis of a financial instrument and the amount the entity expects to collect over the instrument's contractual life after consideration of historical experience, current conditions, and reasonable and supportable forecasts. This standard also introduces targeted changes to the available-for-sale debt securities impairment model. It eliminates the concept of other-than-temporary impairment and requires an entity to determine whether any impairment is the result of a credit loss or other factors. ASU 2016-13 is effective for nonpublic entities in fiscal years beginning after December 15, 2022, and public entities beginning after December 15, 2019. Early adoption is permitted. The Corporation has evaluated the impact of ASU 2016-13 on the Consolidated Financial Statements and expects the impact to be immaterial. Goodwill and other intangible assets In January 2017, the FASB issued ASU 2017-04, Intangibles – Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment. This update removes Step 2 of the goodwill impairment test under current guidance, which requires a hypothetical purchase price allocation. The new guidance requires an impairment charge to be recognized for the amount by which the carrying amount exceeds the reporting unit's fair value. Upon adoption, the guidance is to be applied prospectively. ASU 2017-04 is effective for nonpublic entities in fiscal years beginning after December 15, 2021, and public entities beginning after December 15, 2019. Early adoption is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. The Corporation is currently evaluating the impact of the adoption of ASU 2017-04 on the Consolidated Financial Statements, but does not expect for this to have a material impact on the Consolidated Financial Statements. Income taxes In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes. The amendments in ASU 2019-12 remove certain exceptions to the general principles in ASC Topic 740. The amendments also clarify and amend existing guidance to improve consistent application. The amendments are effective for nonpublic entities in fiscal years beginning after December 15, 2021, and public entities beginning after December 15, 2020. Early adoption is permitted. The transition method (retrospective, modified retrospective, or prospective basis) related to the amendments depends on the applicable guidance, and all amendments for which there is no transition guidance specified are to be applied on a prospective basis. The Corporation is currently evaluating the impact of ASU 2019-12 on the Consolidated Financial Statements, but does not expect for this to have a material impact on the Consolidated Financial Statements. Accounting for convertible instruments and contracts in an entity’s own equity In August 2020, the FASB issued ASU 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40). The amendments in ASU 2020-06 simplify the accounting for convertible instruments by removing certain separation models for convertible instruments. Under the amendments in ASU 2020-06, the embedded conversion features no longer are separated from the host contract for convertible instruments with conversion features that are not required to be accounted for as derivatives, or that do not result in substantial premiums accounted for as paid-in capital. Consequently, a convertible debt instrument will be accounted for as a single liability measured at its amortized cost, and a convertible preferred stock will be accounted for as a single equity instrument measured at its historical cost, as long as no other features require bifurcation and recognition as derivatives. ASU 2020-06 is effective for nonpublic entities for fiscal years beginning after December 15, 2023. Early adoption is permitted, but no earlier than fiscal years beginning after December 15, 2020 and public entities beginning after December 15, 2021. The Corporation is currently evaluating the impact of the adoption of ASU 2020-06 on the Consolidated Financial Statements, but does not expect for this to have a material impact on the Consolidated Financial Statements. | Summary of significant accounting policies Basis of presentation The Corporation has prepared these Consolidated Financial Statements in accordance with U.S. GAAP, which differs materially from the statutory accounting practices prescribed by various insurance regulatory authorities. The Consolidated Financial Statements include the accounts of the Corporation and its subsidiaries. Intercompany balances and transactions have been eliminated in consolidating these financial statements. Use of estimates The preparation of the Consolidated Financial Statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the Consolidated Financial Statements and accompanying notes. The areas involving the most significant use of estimates are the amounts incurred but not reported (IBNR) claims, recoveries from third parties for coordination of benefits, and final determination of medical cost adjustment pools. Many factors can cause actual outcomes to deviate from these assumptions and estimates, such as changes in economic conditions, changes in government healthcare policy, advances in medical technology, changes in treatment patterns, and changes in average lifespan. Accordingly, the Corporation cannot determine with precision the ultimate amounts that it will pay for, or the timing of payment of actual claims, or whether the assets supporting the liabilities will grow to the level the Corporation assumes prior to payment of claims. The assumptions and estimates are based on the Corporation’s knowledge of current events and anticipated future events; however, actual results may differ from the amounts recorded in the Consolidated Financial Statements, and the Corporation would incur a charge to operations in the period in which it determines a shortfall exists. Other areas involving significant estimates include risk adjustment provisions related to Medicare contracts and the valuation of investment securities, goodwill and other intangible assets, warrants, the embedded derivative related to the convertible securities, and stock-based compensation. Reclassifications Certain amounts in the prior years’ Consolidated Statements of Cash Flows have been reclassified to conform to the current year’s presentation, primarily related to the amortization of warrants, amortization of debt issuance costs, and paid in kind interest. These reclassifications had no effect on the previously reported Consolidated Financial Statements. Segment information The Corporation’s chief operating decision maker is the Chief Executive Officer. The chief operating decision maker manages operations, allocates resources, and evaluates financial performance on a company-wide basis. The Corporation operates in one reporting segment. COVID-19 The temporary deferral of non-essential care resulting from stay-at-home and physical distancing orders and other restrictions on movement and economic activity implemented throughout the country beginning in the second half of March 2020 to reduce the spread of the novel coronavirus (COVID-19) has impacted the Corporation’s business. Beginning in late March 2020 and trending throughout 2020, utilization of healthcare services began to experience reductions as a result of the stay-at-home orders and the closure of certain provider facilities, with some recovery in utilization taking place during times of more eased restrictions. The impact of the deferral of non-essential care was partially offset by additional costs incurred as a result of care for those members who have contracted COVID-19 as well as costs incurred for efforts related to the Corporation’s pandemic response efforts. Cash and cash equivalents Cash and cash equivalents include cash on hand, amounts due from banks, money market instruments and other highly liquid investments with original maturities of 90 days or less. The carrying values of these instruments approximate their respective fair value due to the short-term maturity of these investments. At December 31, 2020 and 2019, the Corporation had cash and cash equivalents at financial institutions which are insured by the Federal Deposit Insurance Corporation (FDIC). At times, balances may exceed the FDIC insured limits. Management believes that credit risk related to those balances is minimal. Investment securities Short-term investments Short-term investments consist of investments which the Corporation expects to convert into cash within one year of the balance sheet date, including time deposits and debt securities, which have original maturities greater than 90 days. Short-term investments are measured at their amortized cost. The carrying value of these instruments approximate their respective fair value due to the short-term maturity of these investments. Investment securities, available-for-sale Investment securities, which consist entirely of debt securities with fixed or determinable payments and fixed maturity dates, that the Corporation purchases with the intent and ability to sell before maturity, are classified as available-for-sale financial assets. The Corporation’s available-for-sale investments are U.S. Treasury fixed maturity securities. Available-for-sale investments are measured at fair value, and unrealized gains and losses, if any, are recorded in other comprehensive income, net of applicable income taxes, until realized from a sale or other-than-temporary impairment. Investment securities, held-to-maturity Investment securities, which consist entirely of debt securities with fixed or determinable payments and fixed maturity dates, where the Corporation has a positive intent and ability to hold to maturity, are classified as held-to-maturity financial assets. The Corporation’s held-to-maturity investments are comprised of U.S. Treasury fixed maturity securities. Subsequent to initial measurement, held-to-maturity investments are measured at amortized cost using the effective interest method less impairment. Unrealized holding gains or losses are not recognized. Other-than-temporary impairment The Corporation has a process in place to identify securities that could potentially have an impairment that is other-than-temporary. This process involves monitoring market events that could impact issuers’ credit ratings, business climate, management changes, litigation and government actions, and other similar factors. This process also involves monitoring late payments, downgrades by rating agencies, key financial ratios, financial statements, revenue forecasts and cash flow projections as indicators of credit risks. The Corporation considers relevant facts and circumstances in evaluating whether the impairment of a security is other-than-temporary. Relevant facts and circumstances considered include (1) the length of time and extent to which the fair value has been below cost or amortized cost, (2) adverse conditions specifically to the financial condition of the issuer or related to the industry, (3) geographic area of the issuer, or the underlying collateral of a security including the current and future impact of any specific events, (4) the payment structure of the security, (5) changes in credit rating of the security by the rating agencies, (6) the volatility of the fair value changes, and (7) changes in fair value of the security after the balance sheet date and whether it is more likely than not that the Corporation will not be required to sell the security until maturity or until it recovers in value. There are a number of significant risks and uncertainties inherent in the process of monitoring impairments and determining if an impairment is other-than-temporary. These risks and uncertainties include (1) the risk that management’s assessment of an issuer’s ability to meet all of its contractual obligations will change based on changes in the credit characteristics of that issuer, (2) the risk that the economic outlook will be worse than expected or have more of an impact on the issuer than anticipated, (3) erroneous information or fraudulent financial statements could be provided to the Corporation’s management to determine the fair value estimates and other-than-temporary impairments, and (4) the risk that new information obtained by the Corporation, or changes in other facts and circumstances lead the Corporation to change its intent to hold the security to maturity or until it recovers in value. Any of these situations could result in a charge to operations in a future period. For a debt security in an unrealized loss position that the Corporation has the intent to sell, or it is more likely than not that the Corporation will have to sell the debt security before recovery of its amortized cost basis, the decline in value is deemed to be other-than-temporary and is recorded to other-than- temporary impairment losses, recognized in investment income, net in the Consolidated Statements of Operations and Comprehensive Loss. For impaired debt securities that the Corporation does not intend to sell or it is more likely than not that it will not have to sell such securities, but the Corporation expects that it will not fully recover the amortized cost basis, the credit component of the other-than-temporary impairment is recognized in other-than-temporary impairment losses, recognized in investment income, net in the Consolidated Statements of Operations and Comprehensive Loss, and the non-credit component of the other-than-temporary impairment is recognized in other comprehensive income. Expected cash flows to be received are evaluated as compared to amortized cost to determine if a credit loss has occurred. The amount of the credit loss component of the security is estimated as the difference between the amortized cost and the present value of the expected cash flows of the security. In developing the expected recovery analysis for debt securities, the Corporation reviews business prospects, credit ratings and available information from asset managers and rating agencies for individual securities. The present value is determined using the best estimate of future cash flows discounted at the implicit interest rate at the date of purchase. For the years ended December 31, 2020 and 2019, respectively, there has been no impairment loss reported. Allowance for uncollectible receivables The Corporation assesses outstanding receivables at each period for collection risk. The majority of collections are from the Center for Medicare and Medicaid Services (CMS), a United States government entity that presents very limited credit risk. Investment income, net Investment income includes interest, dividends received or accrued on investments, and realized gains or losses. Investment income is reported as earned and is presented net of related investment expenses and other-than-temporary impairment. Realized gains or losses are recognized based on the specific identification method. Purchases and sales are recorded on a trade-date basis. Fair value measurements Fair value is defined as the price that would be received upon the sale of an asset or paid to transfer a liability in an orderly transaction between willing, able and knowledgeable market participants at the measurement date. Fair value measurements are not adjusted for transaction costs. To determine the fair value of its investments, the Corporation utilizes third-party valuation service providers to gather, analyze and interpret market information and derive fair values based upon relevant methodologies and assumptions for individual instruments. Valuation service providers typically obtain data about market transactions and other key valuation model inputs from multiple sources and, through the use of widely accepted valuation models, provide a single fair value measurement for individual securities for which a fair value has been requested under the terms of service agreements. The inputs used by the valuation service providers include, but are not limited to, market prices from recently completed transactions and transactions of comparable securities, interest rate yield curves, credit spreads, currency rates and other market observable information, as applicable. The valuation models consider, among other things, observable market information as of the measurement date as well as the specific attributes of the security being valued including its term, interest rate, credit rating, industry sector and, when applicable, collateral quality and other issue or issuer specific information. When market transactions or other observable market data is limited, the extent to which judgment is applied in determining fair value is greatly increased. Assets and liabilities measured at fair value are categorized into a fair value hierarchy based on whether the inputs to valuation techniques are observable or unobservable. Observable inputs are those that market participants operating within the same marketplace as the Corporation would use in pricing the Corporation’s assets or liabilities based on independently derived and observable market data. Unobservable inputs are inputs that cannot be sourced from a broad active market in which assets or liabilities identical or similar to those of the Corporation are traded. The fair value hierarchy includes three levels of inputs based on the degree to which the exit price is independently observable or determinable that may be used to measure fair value as described below: Level 1 – Valuations are based on quoted (unadjusted) market prices in active markets for identical assets or liabilities. Since valuations are based on quoted prices that are readily and regularly available in an active market, valuation of these products does not entail a significant degree of judgment. An active market is defined as a market where transactions for the financial instrument occur with sufficient frequency and volume to provide pricing information on an ongoing basis; Level 2 – Valuations are based on observable inputs other than Level 1 prices such as quoted prices in active markets for similar assets or liabilities, quoted prices for identical or similar assets or liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities; Level 3 – Valuations are based on techniques that use significant inputs that are unobservable and reflect management’s best estimate of what market participants would use when pricing the asset or liability, including assumptions about risk. The valuation of Level 3 assets and liabilities requires the greatest degree of judgment. These measurements may be made under circumstances in which there is little, if any, market activity for the asset or liability. The Corporation’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment. In making the assessment, the Corporation considers factors specific to the asset or liability. In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, the level in the fair value hierarchy within which the fair value measurement is classified is determined based on the lowest level input that is significant to the fair value measurement in its entirety. Fair values of actively traded investments securities are based on quoted market prices. Fair values of other investment securities are based on quoted market prices of identical or similar securities or based on observable inputs, like interest rates generally using a market valuation approach, or, less frequently, an income valuation approach, and are generally classified as Level 2. Clover obtains at least one price for each security from a third-party pricing service. These prices are generally derived from recently reported trades for identical or similar securities, including adjustments through the reporting date based upon observable market information. When quoted prices are not available, the third-party pricing service may use quoted market prices of comparable securities or a discounted cash flow analysis, incorporating inputs that are currently observable in the markets for similar securities. Inputs that are often used in the valuation methodologies include benchmark yields, reported trades, credit spreads, broker quotes, default rates, and prepayment speeds. Fair values of warrants and derivative liabilities related to convertible securities are estimated using a probability-weighted expected return method, where the values of various instruments are estimated based on an analysis of future values for the Corporation, assuming various future outcomes. The resulting instruments’ values are based upon the probability-weighted present value of expected future investment returns, considering each of the possible future outcomes available to the Corporation, as well as the economic benefits attributable to each class of instruments. The expected future investment returns are estimated using a variety of methodologies, including both the market approach and the income approach, where an observable quoted market does not exist, and are generally classified as Level 3. Such methodologies include reviewing values ascribed to the most recent financing by the Corporation, comparing the subject instrument with similar instruments of publicly traded companies in similar lines of business, and reviewing the underlying financial performance of the Corporation and subject instrument, including estimating discounted cash flows. To estimate the fair value attributable to the derivative liabilities, the with and without approach is used. An evaluation of multiple scenarios for future payoffs for the underlying convertible securities is performed using option pricing models, and probability-weighted average value indications are used to arrive at the estimated fair values. Concentrations of credit risk Financial instruments that potentially subject the Corporation to concentrations of credit risk consist principally of cash and cash equivalents. Cash and cash equivalents are held with financial institutions of high quality. Balances may exceed the amount of insurance provided on such balances. The ceding of insurance does not legally discharge the Corporation from its primary liability for the full amount of the policy coverage, and therefore the Corporation will be required to pay the loss and bear collection risk if the reinsurer fails to meet its obligations under the reinsurance agreement. To minimize exposure to significant losses from reinsurance insolvencies, the Corporation evaluates the financial condition of its reinsurers and monitors concentrations of credit risk. Acquisition costs Acquisition costs that vary with and are directly related to the acquisition of new and renewal business, including commissions, are deferred and subsequently amortized. Deferred acquisition costs are recorded as other assets on the Consolidated Balance Sheets and are amortized over the estimated life of the related contracts. The amortization of deferred acquisition costs is recorded in general and administrative expenses in the Consolidated Statements of Operations and Comprehensive Loss. To the extent that a premium deficiency is identified after writing down unamortized deferred acquisition costs, a liability for premium deficiency reserve is established and reported on the Consolidated Balance Sheets. Property and equipment, net Property and equipment, net is reported at cost less accumulated depreciation. Depreciation is recorded using the straight-line method over the estimated useful lives of the respective assets, which are generally three Property and equipment is reviewed for impairment periodically whenever adverse events or changes in circumstances indicate the carrying value of the asset may not be recoverable. Losses are recognized in operations when the undiscounted future cash flows expected to result from the use of the asset are less than its carrying value. An impairment loss is recognized based on the excess of the carrying value over the fair value of the asset. Goodwill and other intangible assets Goodwill represents the excess of the purchase price over the fair value of net assets acquired in business combinations. Goodwill is not amortized but is tested for impairment on an annual basis at a level of reporting referred to as the reporting unit, and more frequently if adverse events or changes in circumstances indicate that the asset may be impaired. A component is considered a reporting unit if the component constitutes a business for which discrete financial information is available that is regularly reviewed by management. Management aggregates components into one reporting unit if they have similar economic characteristics. Goodwill is assigned to the reporting units that are expected to benefit from the specific synergies of the business combination. Management reviews goodwill for impairment to determine both the existence and amount of goodwill impairment, if any. Impairment tests are performed, at a minimum, in the fourth quarter of each year. Management first uses a qualitative assessment to determine if it is more likely than not that a reporting unit is impaired. The qualitative test is used as a screening to help determine if it is necessary to perform the quantitative test. If there are indicators that the fair value is less than the carrying amount of any reporting unit, management performs a quantitative assessment where management allocates the fair value of the reporting units to the assets and liabilities with the unallocated fair value representing an implied fair value of goodwill which is then compared to the carrying amount of goodwill. The impairment review requires management to make judgments in determining various assumptions with respect to changes in economic conditions, revenues, operating margins, growth rates and discount rates. There was no impairment of goodwill during the years ended December 31, 2020 and 2019, respectively. Other intangible assets arising from business combinations are initially recognized at fair value at the date of acquisition. Other intangible assets with indefinite useful lives are tested for impairment at least annually, or more frequently if events or changes in circumstances indicate that the assets may be impaired. The annual impairment test for indefinite-lived intangible assets may be completed through a qualitative assessment to determine if the fair value of the indefinite-lived intangible assets is more likely than not greater than the carrying amount. The Corporation may elect to bypass a qualitative assessment, or if a qualitative assessment indicates it is more likely than not that the estimated carrying value exceeds the fair value, the Corporation will test for impairment using a quantitative process. If the Corporation determines that impairment of its intangible assets may exist, the amount of impairment loss is measured as the excess of carrying value over fair value. The estimates in the determination of the fair value of indefinite-lived intangible assets include the anticipated future revenues of the Corporation and the resulting cash flows. As of December 31, 2020 and 2019, respectively, there were no circumstances that indicate that the carrying amount of intangible assets deemed to have an indefinite useful life may not be recoverable. Reinsurance In the normal course of business, the Corporation seeks to reduce losses by reinsuring certain levels of risk in areas of exposure with other insurance enterprises or reinsurers. Amounts recoverable from reinsurers are estimated in a manner consistent with the claim liability associated with the reinsured policy. To minimize exposure to losses related to a reinsurer’s inability to pay, the financial condition of such reinsurer is evaluated initially upon placement of the reinsurance and periodically thereafter. In addition to considering the financial condition of a reinsurer, the collectability of the reinsurance recoverable is evaluated based upon a number of factors. Such factors include the amounts outstanding, length of collection periods, disputes, any collateral or letters of credit held and other relevant factors. To the extent that an allowance for uncollectible reinsurance recoverable is established, amounts deemed to be uncollectible would be written off against the allowance for estimated uncollectible reinsurance recoverable. The Corporation had no allowances for uncollectible reinsurance recoverable as of December 31, 2020 and 2019, respectively. Amounts recoverable from reinsurers are estimated in a manner consistent with the liability associated with the reinsured business and consistent with the terms of the underlying contracts. Although reinsurance agreements contractually obligate reinsurers to reimburse the Corporation for their share of losses, they do not discharge the primary liability of the Corporation. The Corporation remains liable for unpaid claims and claims adjustment expenses associated with ceded insured risks in the event the assuming reinsurers fail to meet their contractual obligations. The costs of the reinsurance are recognized over the life of the contract in a manner consistent with the earning of premiums on the underlying policies subject to the reinsurance contracts. Unpaid claims Unpaid claims and unpaid claims adjustment expenses include reported claims and IBNR, as well as the estimated expense of processing these claims. Management develops an estimate for IBNR using actuarial methodologies and assumptions, primarily based upon historical claim experience. Although there is considerable variability in such estimates, management believes that the unpaid claims and unpaid claims adjustment expense liability is adequate and represents management’s best estimate of the ultimate cost of all reported and unreported claims incurred through the balance sheet date. The estimates are continually reviewed and adjusted as experience develops or new information becomes known. Changes in estimates are reflected in current consolidated operating results. Liabilities for both reported claims and IBNR not yet processed through the Corporation’s systems are determined in the aggregate, employing actuarial methods that are commonly used by health insurance actuaries and meet Actuarial Standards of Practice. Actuarial Standards of Practice require that the claim liabilities be appropriate under moderately adverse circumstances. Clover determines the amount of the liability for incurred but not paid claims by following a detailed actuarial process that uses both historical claim payment patterns as well as emerging medical cost trends to project the best estimate of claim liabilities. Under this process, historical paid claims data is formatted into “claim triangles,” which compare claim incurred dates to the dates of claim payments. This information is analyzed to create “completion factors” that represent the average percentage of total incurred claims that have been paid through a given date after being incurred. Completion factors are applied to claims paid through the period-end date to estimate the ultimate claim expense incurred for the period. Actuarial estimates of incurred but not paid claim liabilities are then determined by subtracting the actual paid claims from the estimate of the ultimate incurred claims. The Corporation’s reserving practice is to consistently recognize an actuarial best estimate inclusive of a provision for moderately adverse conditions. This provision is reported as part of incurred claims. Medical claims incurred The Corporation recognizes the cost of medical claims in the period in which services are provided, including an estimate of the cost of medical claims IBNR. Medical claim expense reported in the Consolidated Statements of Operations and Comprehensive Loss includes direct medical expenses. Direct medical expenses include amounts paid or payable to hospitals, physicians, pharmacy benefit managers, providers of ancillary services, mandatory supplemental benefits, and is inclusive of the medical expense related to the Corporation’s employed clinicians providing in-home care. Recorded direct medical expenses are reduced by the amount of pharmacy rebates earned, which are estimated based on historical utilization of specific pharmaceuticals, current utilization and contract terms. Pharmacy rebates earned but not yet received from pharmaceutical manufacturers are included in healthcare receivable in the Consolidated Balance Sheets. Overpayments to providers are recognized as a contra medical expense and reported as other receivables in the Consolidated Balance Sheets. Premium deficiency reserve A liability for premium deficiency reserves is an actuarial estimate for anticipated losses on the Corporation’s Medicare Advantage and Medicare Advantage Part D (MAPD) business. Management reassesses the profitability of contracts for providing insurance coverage to members when operating results or forecasts indicate probable future losses. Management establishes a premium deficiency reserve in current operations to the extent that the sum of expected future costs, claim adjustment expenses, and maintenance costs exceeds related future premiums under contracts without consideration of investment income. For purposes of calculating premium deficiency reserves, management groups contracts in a manner consistent with the method of acquiring, servicing, and measuring the profitability of such contracts. Losses recognized as a premium deficiency are recorded in the period in which such losses were identified and reflected in the Consolidated Statements of Operations and Comprehensive Loss. Losses recognized as a premium deficiency result in a beneficial effect in subsequent periods as operating losses under these contracts are charged to the liability previously established. The Patient Protection and Affordable Care Act and The Health Care and Education Reconciliation Act of 2010 (the “Health Care Reform Law”) enacted significant reforms to various aspects of the U.S. health insurance industry. As part of the Health Care Reform Law insurance industry assessments were established, including an annual health insurance industry fee (HIF), which became effective in 2014. The HIF was applicable in 2018, suspended in 2019, and resumed for calendar year 2020. The HIF is not deductible for income tax purposes. The 2019 premium deficiency reserve is inclusive of the 2020 HIF. The Corporation estimates a liability for the HIF and records it in full once qualifying insurance coverage is provided in the applicable calendar year in which the fee is payable, with a corresponding deferred cost that is amortized ratably to expense over the same calendar year. The deferred cost is recorded in other assets on the Consolidated Balance Sheets. The Corporation paid the federal government approximately $8.0 million for the HIF in 2020, which is reflected in the Consolidated Statements of Operations and Comprehensive Loss. Notes and securities payable Debt issuance costs Costs incurred in connection with Corporation’s debt financings are capitalized and amortized to interest expense over the life of the related debt using the effective interest method. Debt issuance costs are presented as a direct deduction from the carrying amount of the related debt liability, consistent with the presentation of debt discounts. Non-convertible notes The Corporation records the non-convertible notes at carrying value, net of discounts on the Consolidated Balance Sheets. Convertible securities The Corporation accounts for convertible securities in accordance with the accounting guidance for debt with conversion and other options, after determining whether embedded conversion options should be bifurcated from their host instruments. Conversion options that are not bifurcated as a derivative and not accounted for as a separate equity component are evaluated to determine whether they are beneficial to the investor at inception, a beneficial conversion feature (BCF), or may become beneficial in the future due to potential adjustments. A BCF is defined as a nondetachable conversion feature that is in the money at the commitment date and the applicable accounting guidance requires recognition of the conversion option’s intrinsic value in equity, with an offsetting reduction to the carrying amount of the instrument. The Corporation accretes the resulting discount us |
Parent Company | ||
Condensed Financial Statements, Captions [Line Items] | ||
Summary of significant accounting policies | Summary of significant accounting policies The accompanying condensed financial statements have been prepared using the equity method. Under the equity method, the investment in consolidated subsidiaries is stated at cost plus equity in undistributed earnings of consolidated subsidiaries since the date of acquisition. These condensed financial statements should be read in conjunction with the Corporation’s consolidated financial statements. Use of estimates The preparation of the condensed financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying disclosures. Those estimates are inherently subject to change, and actual results may ultimately differ from those estimates. Reclassifications Certain amounts in the prior years’ Condensed Statements of Cash Flows have been reclassified to conform to the current year’s presentation, primarily related to the amortization of warrants, amortization of debt issuance costs, and paid in kind interest. These reclassifications had no effect on the previously reported Condensed Financial Statements. |
Reverse capitalization
Reverse capitalization | 12 Months Ended |
Dec. 31, 2020 | |
Reverse Capitalization [Abstract] | |
Reverse capitalization | Reverse capitalizationThe Corporation entered into the Merger Agreement with SCH, a SPAC, on October 5, 2020. Pursuant to the Merger Agreement, and a favorable vote of SCH’s stockholders on January 6, 2021, Asclepius Merger Sub Inc., a Delaware corporation and a newly formed, wholly owned subsidiary of SCH (Merger Sub), was merged with and into the Corporation. Upon consummation of the business combination, the separate corporate existence of Merger Sub ceased, the Corporation survived and merged with and into SCH, with SCH as the surviving corporation, and SCH was renamed Clover Health Investments, Corp. (the “Business Combination”). The Business Combination was accounted for as a reverse capitalization in accordance with U.S. GAAP. Under the guidance in ASC 805, Clover Health Investments, Corp. is treated as the “acquirer” for financial reporting purposes. As such, Clover is deemed the accounting predecessor of the combined business, and Clover, as the parent company of the combined business, is the successor SEC registrant, meaning that the Clover financial statements for previous periods will be disclosed in the registrant’s future periodic reports filed with the SEC. Pursuant to U.S. GAAP, the Corporation retroactively applied the reverse capitalization to our equity structure for the years ended December 31, 2020 and 2019, as summarized below and reflected in the Consolidated Balance Sheets, Consolidated Statements of Operations and Comprehensive Loss, and Consolidated Statements of Changes in Convertible Preferred Stock and Stockholders’ Deficit. Unless otherwise indicated, all of the Corporation’s common stock as well as previously issued stock options presented in the accompanying retroactively revised Consolidated Statements of Changes in Convertible Preferred Stock and Stockholders’ Deficit or in the related notes are presented on an as- or as if-converted basis, converted at the ratio of approximately 2.0681 and presented as shares or awards of our common stock: Retroactive application of reverse capitalization to Consolidated Balance Sheets Date Description As previously reported 1/7/21 conversion ratio Reverse capitalized shares 12/31/2019 Convertible preferred shares authorized 75,136,086 2.0681 155,387,025 12/31/2019 Convertible preferred shares issued and outstanding 67,427,138 2.0681 139,444,346 12/31/2019 Common shares authorized 170,000,000 2.0681 351,572,668 12/31/2019 Common shares issued 42,877,665 2.0681 88,674,206 12/31/2019 Common shares outstanding 42,686,624 2.0681 88,279,119 12/31/2020 Convertible preferred shares authorized 75,136,086 2.0681 155,387,025 12/31/2020 Convertible preferred shares issued and outstanding 67,427,138 2.0681 139,444,346 12/31/2020 Common shares authorized 170,000,000 2.0681 351,572,668 12/31/2020 Common shares issued 43,505,291 2.0681 89,972,184 12/31/2020 Common shares outstanding 43,134,938 2.0681 89,206,266 The following table summarizes the weighted-average outstanding shares, basic and diluted for the years ended December 31, 2020 and 2019 after factoring all retroactive application of capitalization. Retroactive application of reverse capitalization to Consolidated Statements of Operations and Comprehensive Loss Date Description As previously reported 1/7/21 conversion ratio Reverse capitalized amounts 12/31/2019 Net loss per share attributable to common shareholders - basic and diluted $ (8.56) 2.0681 $ (4.14) 12/31/2019 Basic and diluted weighted average number of common shares and common shares equivalents outstanding 42,469,175 2.0681 87,829,419 12/31/2020 Net loss per share attributable to common shareholders - basic and diluted $ (3.18) 2.0681 $ (1.54) 12/31/2020 Basic and diluted weighted average number of common shares and common shares equivalents outstanding 42,886,067 2.0681 88,691,582 Retroactive application of reverse capitalization to Consolidated Statements of Changes in Convertible Preferred Stock and Stockholders’ Deficit Date Description As previously reported 1/7/21 conversion ratio Reverse capitalized amounts 12/31/2018 Convertible preferred stock - shares 67,427,138 2.0681 139,444,346 12/31/2018 Common stock - shares 42,243,445 2.0681 87,362,592 12/31/2018 Common stock - amount $ 4 2.0681 $ 9 |
Investment securities
Investment securities | 9 Months Ended | 12 Months Ended |
Sep. 30, 2021 | Dec. 31, 2020 | |
Investments, Debt and Equity Securities [Abstract] | ||
Investment securities | 4. Investment Securities The following tables present amortized cost and fair values of investments as of September 30, 2021, and December 31, 2020, respectively: September 30, 2021 Amortized cost Accumulated unrealized gains Accumulated unrealized losses Fair value (in thousands) Investment securities, held-to-maturity U.S. government and government agencies and authorities $ 695 $ 42 $ (10) $ 727 Investment securities, available-for-sale U.S. government and government agencies and authorities 167,935 37 (647) 167,325 Total investment securities $ 168,630 $ 79 $ (657) $ 168,052 December 31, 2020 Amortized cost Accumulated unrealized gains Accumulated unrealized losses Fair value (in thousands) Investment securities, held-to-maturity U.S. government and government agencies and authorities $ 694 $ 43 $ — $ 737 Investment securities, available-for-sale U.S. government and government agencies and authorities 53,953 51 (41) 53,963 Total investment securities $ 54,647 $ 94 $ (41) $ 54,700 The following table presents the amortized cost and fair value of debt securities as of September 30, 2021, by contractual maturity: September 30, 2021 Held-to-maturity Available-for-sale Amortized cost Fair value Amortized cost Fair value (in thousands) Due within one year $ 305 $ 308 $ 21,139 $ 21,142 Due after one year through five years 15 16 141,835 141,352 Due after five years through ten years 265 256 4,961 4,831 Due after ten years 110 147 — — Total $ 695 $ 727 $ 167,935 $ 167,325 For the three and nine months ended September 30, 2021 and 2020, respectively, net investment income, which is included within other income in the Condensed Consolidated Statements of Operations and Comprehensive Loss, was derived from the following sources: Three Months Ended Nine Months Ended 2021 2020 2021 2020 (in thousands) Cash and cash equivalents $ — $ 1 $ — $ 108 Short-term investments 62 519 139 1,141 Investment securities 117 303 201 977 Investment income, net $ 179 $ 823 $ 340 $ 2,226 Gross unrealized losses and fair values aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position were as follows at September 30, 2021: September 30, 2021 Less than 12 months Greater than 12 months Total Fair value Unrealized loss Fair value Unrealized loss Fair value Unrealized loss (in thousands, except number of positions) U.S. government and government agencies $ — $ — $ 71,620 $ (657) $ 71,620 $ (657) Total $ — $ — $ 71,620 $ (657) $ 71,620 $ (657) Number of positions — 14 14 As of September 30, 2021, all securities were investment grade, with credit ratings of AA+ or higher by S&P. Unrealized losses on investment grade securities are principally related to changes in interest rates or changes in issuer or sector related credit spreads since the securities were acquired. The gross unrealized investment losses as of September 30, 2021, were deemed to be temporary, based on, among other things: • The duration of time and the relative magnitude to which fair values of these securities have been below their amortized cost was not indicative of an other-than-temporary impairment loss; • The absence of compelling evidence that would cause the Corporation to call into question the financial condition or near-term prospects of the issuer of the applicable security; and • The Corporation’s ability and intent to hold the applicable security for a period of time sufficient to allow for any anticipated recovery. The Corporation may ultimately record a realized loss after having originally concluded that the decline in value was temporary. Risks and uncertainties are inherent in the methodology the Corporation uses to assess other-than-temporary declines in value. Risks and uncertainties could include, but are not limited to, incorrect assumptions about financial condition, liquidity or future prospects, inadequacy of any underlying collateral, and unfavorable changes in economic conditions or social trends, interest rates or credit ratings. Proceeds from sales and maturities of investment securities, inclusive of short-term investments, and related gross realized gains (losses) which are included within other income in the Condensed Consolidated Statements of Operations and Comprehensive Loss, were as follows for the three and nine months ended September 30, 2021 and 2020, respectively: Three Months Ended Nine Months Ended 2021 2020 2021 2020 (in thousands) Proceeds from sales of investment securities $ 89,997 $ 71,049 $ 126,862 $ 166,024 Proceeds from maturities of investment securities 50,000 9,600 250,265 56,701 Gross realized gains 7 504 24 540 Gross realized losses — — (77) — Net realized gains (losses) $ 7 $ 504 $ (53) $ 540 As of September 30, 2021, and December 31, 2020, the Corporation had $11.2 million and $7.5 million, respectively, in deposits with various states and regulatory bodies that are included as part of the Corporation's investment balances. | Investment securities The following tables present cost or amortized cost and fair values of investments as of December 31, 2020 and 2019, respectively: December 31, 2020 Amortized Gross Gross Fair (in thousands) Investment securities, held-to-maturity: U.S. government and government agencies and authorities $ 694 $ 43 $ — $ 737 Investment securities, available-for-sale: U.S. government and government agencies and authorities 53,953 51 (41) 53,963 Total investment securities $ 54,647 $ 94 $ (41) $ 54,700 December 31, 2019 Amortized Gross Gross Fair (in thousands) Investment securities, held-to-maturity: U.S. government and government agencies and authorities $ 663 $ 22 $ — $ 685 Investment securities, available-for-sale: U.S. government and government agencies and authorities 56,382 46 — 56,428 Total investment securities $ 57,045 $ 68 $ — $ 57,113 The following tables present the amortized cost and fair value of debt securities as of December 31, 2020, by contractual maturity: December 31, 2020 Held-to-maturity Available-for-sale Amortized Fair Amortized Fair (in thousands) Due within one year $ 265 $ 266 $ — $ — Due after one year through five years 319 328 43,382 43,431 Due after five years through ten years — — 10,571 10,532 Due after ten years 110 143 — — Total $ 694 $ 737 $ 53,953 $ 53,963 For the years ended December 31, 2020 and 2019, respectively, net investment income was derived from the following sources: December 31, 2020 2019 (in thousands) Cash and cash equivalents $ 108 $ 1,249 Short-term investments 1,722 2,904 Investment securities 1,146 386 Net investment income $ 2,976 $ 4,539 The Corporation has a process in place to identify securities that could potentially have an impairment that is other-than-temporary. This process involves monitoring market events that could impact issuers’ credit ratings, business climate, management changes, litigation and government actions, and other similar factors. This process also involves monitoring late payments, downgrades by rating agencies, key financial ratios, financial statements, revenue forecasts and cash flow projections as indicators of credit issues. There was an immaterial amount of investment securities in an unrealized loss position as of December 31, 2020 and no investment securities in an unrealized loss position as of December 31, 2019. As of December 31, 2020 and 2019, all securities were investment grade, with credit ratings of AA+ or higher by S&P. Unrealized losses on investment grade securities are principally related to changes in interest rates or changes in issuer or sector related credit spreads since the securities were acquired. Proceeds from sales and maturities of investment securities and related gross realized gains (losses) included within net investment income were as follows for the years ended December 31, 2020 and 2019, respectively: December 31, 2020 2019 (in thousands) Proceeds from sales of investment securities $ 248,664 $ 269,205 Proceeds from maturities of investment securities 63,751 55,635 Gross realized gains 1,117 114 Gross realized losses (3) (3) Net realized gains (losses) $ 1,114 $ 111 As of December 31, 2020 and 2019, the Corporation had $7.5 million and $3.7 million, respectively, in deposits with various states and regulatory bodies. |
Fair value measurements
Fair value measurements | 9 Months Ended | 12 Months Ended |
Sep. 30, 2021 | Dec. 31, 2020 | |
Fair Value Disclosures [Abstract] | ||
Fair value measurements | Fair Value Measurements The following table presents a summary of fair value measurements for financial instruments as of September 30, 2021, and December 31, 2020, respectively: September 30, 2021 Level 1 Level 2 Level 3 Total fair (in thousands) U.S. government and government agencies $ — $ 167,325 $ — $ 167,325 Total assets at fair value $ — $ 167,325 $ — $ 167,325 December 31, 2020 Level 1 Level 2 Level 3 Total fair (in thousands) U.S. government and government agencies $ — $ 53,963 $ — $ 53,963 Total assets at fair value $ — $ 53,963 $ — $ 53,963 Derivative liabilities $ — $ — $ 44,810 $ 44,810 Warrants payable — — 97,782 97,782 Total liabilities at fair value $ — $ — $ 142,592 $ 142,592 See Note 9 (Notes and Securities Payable), Note 10 (Warrants Payable), and Note 11 (Derivative Liabilities) for additional information regarding liabilities. The fair value of the convertible securities was based on Level 3 inputs, which were unobservable and reflect management’s best estimate of what market participants would use when pricing the asset or liability, including assumptions about risk. There was no fair value associated with convertible securities at September 30, 2021, due to the conversion of the securities to shares of the Corporation’s common stock due to the completion of the Business Combination, and the estimated fair value of convertible securities was $949.6 million at December 31, 2020. The estimated fair value of the convertible securities and derivative liabilities at December 31, 2020, was calculated as the product of (i) the number of conversion shares at the valuation date and (ii) the marketable value per common share at the valuation date. The significant unobservable inputs used in the Black-Scholes model to measure the warrants payable that are categorized within Level 3 of the fair value hierarchy, as of the year ended December 31, 2020, are as follows: December 31, 2020 Preferred stock purchase warrants Common stock purchase warrants Beginning stock price N/A $ 30.14 Strike price N/A 1.04 Expected volatility N/A 56.0 % Expected term N/A 0.02 years Risk-free interest rate N/A 0.09 % Discount factor N/A 13.0 There were no changes in balances of Level 3 financial liabilities during the three months ended September 30, 2021. The changes in balances of Level 3 financial liabilities during the three months ended September 30, 2020, and the nine months ended September 30, 2021 and 2020, respectively, are as follows: Convertible securities Derivative liabilities Warrants payable Total (in thousands) Balance, June 30, 2020 $ 285,166 $ 119,167 $ 29,424 $ 433,757 Issuances — — — — Settlements — — — — Transfers in — — — — Transfers out — — — — Total realized losses (gains) 95,477 (68,081) 19,978 47,374 Balance, September 30, 2020 $ 380,643 $ 51,086 $ 49,402 $ 481,131 Convertible securities Derivative liabilities Warrants payable Total (in thousands) Balance, December 31, 2020 $ 949,553 $ 44,810 $ 97,782 $ 1,092,145 Issuances — — — — Settlements (949,553) (44,810) (97,782) (1,092,145) Transfers in — — — — Transfers out — — — — Total realized losses (gains) — — — — Balance, September 30, 2021 $ — $ — $ — $ — Convertible securities Derivative liabilities Warrants payable Total (in thousands) Balance, December 31, 2019 $ 251,885 $ 138,561 $ 17,672 $ 408,118 Issuances — — — — Settlements — — — — Transfers in — — — — Transfers out — — — — Total realized losses (gains) 128,758 (87,475) 31,730 73,013 Balance, September 30, 2020 $ 380,643 $ 51,086 $ 49,402 $ 481,131 In addition to the Level 3 financial liabilities in the table above, on September 25, 2020, Seek Insurance Services, Inc., (Seek) a field marketing organization and an indirect wholly-owned subsidiary of the Corporation, entered into a note purchase agreement with a third-party investor and issued a note (the “Seek Convertible Note”) in the principal amount of $20.0 million. For additional information, see Note 9 (Notes and Securities Payable). As of September 30, 2021, and December 31, 2020, both the carrying values, which includes accrued interest, and the fair values of the 2020 Convertible Note were $21.6 million and $20.4 million, respectively, and these were considered Level 3 financial liabilities. There were no transfers in or out of Level 3 financial assets or liabilities for the three and nine months ended September 30, 2021 or 2020. Warrants The Warrants were accounted for as liabilities in accordance with ASC 815-40 and are presented within warrants payable on the Consolidated Balance Sheet. The warrant liabilities were measured at fair value at inception and measured on a recurring basis, with changes in fair value presented within change in fair value of warrants payable in the Consolidated Statement of Operations and Comprehensive Loss. On July 22, 2021, the Company issued a press release stating that it would redeem all of its Warrants. The end of the redemption period was September 9, 2021, at which time the Corporation redeemed all unexercised Warrants at a price of $0.10 per warrant. As of September 30, 2021, no Warrants were outstanding. For additional information, please see Note 10 (Warrants Payable). Liability Measurement The Warrants were measured at fair value on a recurring basis. The Corporation classified the Warrants as a liability due to certain settlement terms and provisions related to certain tender offers and indexation characteristics following the Business Combination and accounted for them as liability instruments in accordance with ASC 815, adjusting the fair value at the end of each reporting period. Additionally, the Corporation determined that the Public Warrants were classified within Level 1 of the fair value hierarchy as the fair value was equal to the publicly traded price of the Public Warrants, and the Private Placement Warrants were classified within Level 2 of the fair value hierarchy as the fair value was estimated using the price of the Public Warrants. In connection with the redemption, effective August 24, 2021, the Public Warrants were delisted and classified within Level 2 of the fair value hierarchy as the fair value of the Public Warrants was based on proportional changes in the price of the Corporation’s common stock. There were no Private Warrants outstanding at August 24, 2021. See Note 10 (Warrants Payable) for additional information on the exercises and redemption of Warrants. The following table presents the changes in the fair value of warrants payable: September 30, 2021 Public and Private Placement Warrants (in thousands) Initial measurement, January 7, 2021 $ 147,582 Mark-to-market adjustment (66,214) Warrants exercised (81,283) Warrants redeemed (85) Warrants payable balance, September 30, 2021 $ — | Fair value measurements The following table presents a summary of fair value measurements for items that are measured at fair value on a recurring basis as of December 31,2020 and 2019, respectively: December 31, 2020 Level 1 Level 2 Level 3 Total fair value (in thousands) U.S. government and government agencies $ — $ 53,963 $ — $ 53,963 Total assets at fair value $ — $ 53,963 $ — $ 53,963 Derivative liabilities — — 44,810 44,810 Warrants payable — — 97,782 97,782 Total liabilities at fair value $ — $ — $ 142,592 $ 142,592 December 31, 2019 Level 1 Level 2 Level 3 Total fair value (in thousands) U.S. government and government agencies $ — $ 56,428 $ — $ 56,428 Total assets at fair value $ — $ 56,428 $ — $ 56,428 Derivative liabilities — — 138,561 138,561 Warrants payable — — 17,672 17,672 Total liabilities at fair value $ — $ — $ 156,233 $ 156,233 See Note 13 (Notes and securities payable,) Note 14 (Warrants payable,) and Note 15 (Derivative liabilities) for additional information regarding liabilities. The fair value of convertible securities is based on level 3 inputs. The estimated fair value of the convertible securities was $949.6 million at December 31, 2020, and $251.9 million at December 31, 2019. The estimated fair value of the convertible securities and derivative liabilities at December 31, 2020, were calculated as the product of (i) the number of conversion shares under the valuation date and (ii) the marketable value per common share at the valuation date. The significant unobservable inputs used in the Black-Scholes model to measure the convertible securities and derivative liabilities as of December 31, 2019, are as follows (the stock price and strike price are presented in thousands): December 31, 2019 Convertible securities Derivative liabilities Beginning stock price (total value) $305,132 - $357,802 $305,132 - $357,802 Strike price (total value) $462,012 - $531,315 $462,012 - $965,184 Expected volatility 45% - 49% 45% - 49% Expected term 2-3 years 2-3 years Risk-free interest rate 1.58% -1.62% 1.58% - 1.62% Discount factor 15 % 15 % The stock price and strike price were used in multiple scenarios as part of the with and without approach to determine the fair value of convertible securities and the derivative liabilities were calculated on a total value basis. The stock price at December 31, 2019 was calculated as the product of (i) the estimated number of conversion shares under the scenarios and (ii) the value per Series D preferred share at the valuation date. The strike price at December 31, 2019 was equal to the effective value received by the holder upon the conversion of the convertible securities under the scenarios, calculated as the product of (i) principal and accrued interest at the conversion date and (ii) 1 / discount factor. The significant unobservable inputs used in the Black-Scholes model to measure the warrants payable that are categorized within Level 3 of the fair value hierarchy, as of the years ended December 31, 2020 and 2019, respectively, are as follows: December 31, 2020 Preferred stock purchase warrants Common stock purchase warrants Beginning stock price N/A $ 30.14 Strike price N/A 1.04 Expected volatility N/A 56.0 % Expected term N/A 0.02 years Risk-free interest rate N/A 0.09 % Discount factor N/A 13 % December 31, 2019 Preferred stock purchase warrants Common stock purchase warrants Beginning stock price $ 10.27 $ 7.19 Strike price 17.27 1.04 Expected volatility 45% - 49% 81.1% - 84.6% Expected term 2 -3 years 2-3 years Risk-free interest rate 1.58% - 1.62% 1.58% - 1.62% Discount factor 15 % 15 % The changes in balances of Level 3 financial liabilities during 2020 and 2019, respectively, were as follows: December 31, 2020 Convertible securities Derivative liabilities Warrants payable Total (in thousands) Beginning balance $ 251,885 $ 138,561 $ 17,672 $ 408,118 Issuances — — — — Settlements — — — — Transfers in — — — — Transfers out — — — — Total recognized losses (gains) 697,668 (93,751) 80,110 684,027 Ending balance $ 949,553 $ 44,810 $ 97,782 $ 1,092,145 December 31, 2019 Convertible securities Derivative liabilities Warrants payable Total (in thousands) Beginning balance $ — $ — $ 14,836 $ 14,836 Issuances 237,362 — — 237,362 Settlements — — — — Transfers in — — — — Transfers out — — — — Total recognized losses (gains) 14,523 138,561 2,836 155,920 Ending balance $ 251,885 $ 138,561 $ 17,672 $ 408,118 In addition to the Level 3 financial liabilities in the table above, on September 25, 2020, the Corporation issued the 2020 Convertible Note (see Note 13 “Notes and securities payable,” for further details) with the carrying value approximating the fair value of $20.0 million. As of December 31, 2020, the carrying value and the fair value of the 2020 Convertible Note was $20.4 million and was considered a Level 3 financial liability. There were no transfers in and out of Level 3 financial assets or liabilities during the years ended December 31, 2020 or 2019. |
Acquisition
Acquisition | 9 Months Ended | 12 Months Ended |
Sep. 30, 2021 | Dec. 31, 2020 | |
Business Combinations [Abstract] | ||
Acquisition | Business Combination On October 5, 2020, Legacy Clover entered into a Merger Agreement with SCH, a SPAC, and Merger Sub. On January 7, 2021, as contemplated by the Merger Agreement and following approval by SCH’s shareholders at an extraordinary general meeting held January 6, 2021 (the “Special Meeting”): • SCH filed a notice of deregistration with the Cayman Islands Registrar of Companies, together with the necessary accompanying documents, and filed a certificate of incorporation and a certificate of corporate domestication with the Secretary of State of the State of Delaware, under which SCH was domesticated and continued as a Delaware corporation (the “Domestication”); and • Merger Sub merged with and into Legacy Clover, the separate corporate existence of Merger Sub ceased and Legacy Clover became the surviving corporation and a wholly owned subsidiary of SCH (the “First Merger”) and Legacy Clover merged with and into SCH, the separate corporate existence of Legacy Clover ceased and SCH became the surviving corporation, changing its name to “Clover Health Investments, Corp.” (together with the First Merger, the “Mergers,” and collectively with the Domestication, the “Business Combination”). As a result of the Mergers, among other things, (i) all outstanding shares of common stock of Legacy Clover immediately prior to the effective time of the First Merger were canceled in exchange for the right to receive, at the election of the holders thereof (except with respect to the shares held by entities controlled by Vivek Garipalli and the holders of convertible securities previously issued by Legacy Clover to certain holders who received only shares of Class B Common Stock, par value $0.0001 per share, of Clover (Class B Common Stock), which are entitled to 10 votes per share, an amount in cash, shares of Class B Common Stock, or a combination thereof, as adjusted in accordance with the Merger Agreement, which equaled in the aggregate $499.8 million in cash and 260,965,701 shares of Class B Common Stock (at a deemed value of $10.00 per share); (ii) shares of Legacy Clover held by entities controlled by Vivek Garipalli and the holders of the convertible securities immediately prior to the effective time of the First Merger were canceled in exchange for the right to receive shares of Class B Common Stock based on an Exchange Ratio (as defined in the Merger Agreement) of approximately 2.0681; and (iii) all shares of common stock of Legacy Clover reserved in respect of Legacy Clover stock options and restricted stock units outstanding as of immediately prior to the effective time of the First Merger, were converted, based on the Exchange Ratio, into awards based on shares of Class B Common Stock. The consideration that a Clover stockholder received was subject to pro rata adjustment depending on the election made by such stockholder, if any, in accordance with the terms of the Merger Agreement. The pro rata adjustments were made based on an Actual Cash/Stock Ratio (as defined in the Merger Agreement) of 32.3%. In connection with the consummation of the Business Combination (the “Closing”), (i) each issued and outstanding Class A ordinary share, par value $0.0001 per share, of SCH (SCH Class A ordinary shares) converted automatically, on a one-for-one basis, into a share of Class A Common Stock, par value $0.0001 per share, of Clover (the “Class A Common Stock,” and together with the Class B Common Stock, the “Common Stock”), which will be entitled to one vote per share, (ii) each of the issued and outstanding Class B ordinary shares, par value $0.0001 per share, of SCH, converted automatically, on a one-for-one basis, into a share of Class A Common Stock, (iii) each issued and outstanding warrant of SCH converted automatically into a warrant to acquire one share of Class A Common Stock (Warrant), pursuant to the Warrant Agreement, dated April 21, 2020, between SCH and Continental Stock Transfer & Trust Company, as warrant agent, and (iv) each issued and outstanding unit of SCH (SCH unit) that had not been previously separated into the underlying Class A ordinary share and underlying warrant of SCH upon the request of the holder thereof, was canceled and the holder thereof is entitled to one share of Class A Common Stock and one-third of one Warrant. As of January 7, 2021, there were public warrants outstanding to purchase an aggregate of 27,599,938 shares of Class A Common Stock (the “Public Warrants”) and private placement warrants outstanding to purchase an aggregate of 10,933,333 shares of Class A Common Stock (the “Private Placement Warrants” and, together with the Public Warrants, the “Warrants”). Each whole Warrant entitled the registered holder to purchase one whole share of Class A Common Stock at a price of $11.50 per share, subject to adjustment at any time commencing on April 24, 2021, which is 12 months from the closing of SCH's initial public offering. Pursuant to the subscription agreements (the “Subscription Agreements”) entered into on October 5, 2020, by and among SCH and certain investors (collectively, the “PIPE Investors”), Clover issued and sold to the PIPE Investors (substantially concurrently with the consummation of the Mergers) an aggregate of 40,000,000 shares of Class A Common Stock for an aggregate purchase price equal to $400.0 million (the “PIPE Investment”), of which 15,200,000 shares were purchased by affiliates of SCH Sponsor III LLC (the “Sponsor,” and collectively, the “Sponsor Related PIPE Investors”). The Business Combination and PIPE Investment were approved by the SCH shareholders at the Special Meeting. Prior to and in connection with the Special Meeting, holders of 24,892 shares of SCH Class A ordinary shares (including those that underlie the SCH units) that were registered pursuant to the Registration Statements on Form S-1 (333-236776 and 333-237777) and the shares of Class A Common Stock issued as a matter of law upon the conversion thereof on the effective date of the Domestication (the “Public Shares”) exercised their right to redeem those shares for cash at a price of $10.00 per share, for an aggregate of $0.2 million. The per share redemption price of $10.00 for public shareholders electing redemption was paid out of the SCH Trust Account, which after taking into account the redemptions, had a balance immediately prior to the Closing of $827.9 million, which cash balance was used to pay the $499.8 million cash component of the merger consideration. Immediately after giving effect to the Business Combination and the PIPE Investment, there were 143,475,108 shares of Class A Common Stock, 260,965,701 shares of Class B Common Stock and 38,533,271 Warrants outstanding, equaling 404,440,809 total shares of common stock outstanding and 38,533,271 Warrants outstanding. The Corporation is authorized to issue 25,000,000 shares of preferred stock having a par value of $0.0001 per share, and the Corporation's board of directors has the authority to determine the rights, preferences, privileges, and restrictions, including voting rights, of those shares. As of September 30, 2021, there were no shares of preferred stock issued and outstanding. The Business Combination was accounted for as a reverse recapitalization in accordance with GAAP. Under the guidance in ASC 805, Legacy Clover is treated as the “acquirer” for financial reporting purposes. As such, Legacy Clover is deemed the accounting predecessor of the combined business, and Clover, as the parent company of the combined business, is the successor SEC registrant, meaning that Legacy Clover’s financial statements for previous periods are disclosed in the Corporation’s periodic reports filed with the SEC. The Business Combination will have a significant impact on the Corporation’s future reported financial position and results as a consequence of the reverse recapitalization. The most significant change in Clover’s future reported financial position and results is an estimated net increase in cash (as compared to the Corporation’s consolidated balance sheet at December 31, 2020) of approximately $670.0 million. The redemption included approximately $400.0 million in proceeds from the PIPE Investment that was consummated substantially simultaneously with the Business Combination, offset by additional transaction costs incurred in connection with the Business Combination. The estimated transaction costs for the Business Combination were approximately $61.0 million, of which $29.0 million represents deferred underwriter fees related to SCH's initial public offering. The transaction closed on January 7, 2021,and on the following day the Corporation's Class A Common Stock and Public Warrants were listed on the Nasdaq Global Select Market (Nasdaq) under the symbols “CLOV” and “CLOVW,” respectively, for trading in the public market. See also Note 9 (Notes and Securities Payable), Note 10 (Warrants Payable), and Note 14 (Convertible Preferred Stock) for additional information regarding changes to the instruments as a result of the Business Combination. | AcquisitionOn February 28, 2019, the Corporation entered into a securities purchase agreement with Censeo Health, LLC to acquire 100% of the outstanding equity interests of Principium Health, LLC (Principium) and Medical Service Professionals of NJ, LLC, providers of in-home chronic care management services, for a total purchase price of approximately $1.4 million. The goodwill resulting from the transaction that was recorded by the Corporation was approximately $1.2 million. |
Healthcare receivables
Healthcare receivables | 9 Months Ended | 12 Months Ended |
Sep. 30, 2021 | Dec. 31, 2020 | |
Receivables [Abstract] | ||
Healthcare receivables | Healthcare Receivables Included within healthcare receivables are pharmaceutical rebates which are accrued as they are earned and estimated based on contracted rebate rates, eligible amounts submitted to the manufacturers by the Corporation's pharmacy manager, pharmacy utilization volume and historical collection patterns. As of September 30, 2021, and December 31, 2020, the Corporation recognized rebate receivables of approximately $30.2 million and $26.6 million, respectively. In addition to pharmaceutical rebates, Medicare Part D settlement receivables, member premium receivables and other CMS receivables included in healthcare receivables totaled $4.5 million and $12.1 million at September 30, 2021, and December 31, 2020, respectively. | Healthcare receivablesIncluded within healthcare receivables are pharmaceutical rebates which are accrued as they are earned and estimated based on contracted rebate rates, eligible amounts submitted to the manufacturers by the Corporation’s pharmacy manager, pharmacy utilization volume and historical collection patterns. As of December 31, 2020 and 2019, the Corporation recognized rebate receivables of approximately $26.6 million and $17.5 million, respectively. In addition to pharmaceutical rebates, Medicare Part D settlement receivables, member premium receivables and other CMS receivables included in the balance totaled $12.1 million and $8.3 million at December 31, 2020 and 2019, respectively. |
Related party transactions
Related party transactions | 9 Months Ended | 12 Months Ended |
Sep. 30, 2021 | Dec. 31, 2020 | |
Related Party Transactions [Abstract] | ||
Related party transactions | Related Party Transactions Related party agreements The Corporation has various contracts with IJKG Opco LLC (d/b/a CarePoint Health - Bayonne Medical Center), Hudson Hospital Opco LLC (d/b/a CarePoint Health - Christ Hospital) and Hoboken University Medical Center Opco LLC (d/b/a CarePoint Health - Hoboken University Medical Center), which collectively do business as the CarePoint Health System (CarePoint Health). CarePoint Health is ultimately held and controlled by Mr. Vivek Garipalli, the Chief Executive Officer and stockholder of the Corporation. The Corporation contracts with CarePoint Health for the provision of inpatient and hospital-based outpatient services. Expenses and fees incurred related to these contracts, recorded in net medical claims incurred, were $1.7 million and $1.9 million for the three months ended September 30, 2021 and 2020, respectively, and $9.2 million and $5.3 million for the nine months ended September 30, 2021 and 2020, respectively. The Corporation has contracted with Rogue Trading, LLC (Rogue), a marketing services provider. The Corporation’s President and Chief Technology Officer, Andrew Toy, is related to the Chief Executive Officer of Rogue. Expenses and fees related to these contracts were immaterial and $0.3 million for the three and nine months ended September 30, 2021, respectively. Expenses and fees related to these contracts were $0.1 million for the three and nine months ended September 30, 2020. The Corporation has a contract with Medical Records Exchange, LLC (d/b/a ChartFast) pursuant to which we receive administrative services related to medical records via ChartFast’s electronic applications and web portal platform. ChartFast is ultimately owned and controlled by Mr. Garipalli. Expenses and fees incurred related to this agreement were $0.1 million for the three and nine months ended September 30, 2021, and $0.1 million for the three and nine months ended September 30, 2020. On July 2, 2021, the Corporation signed a contract with Thyme Care, Inc. (Thyme Care), an oncology benefit management company, through which Thyme Care will provide concierge cancer coordination services to the Corporation’s Medicare Advantage members in New Jersey and develop a provider network to help ensure member access to high-value oncology care. Mr. Garipalli is a member of Thyme Care’s board of directors. Securities payable to related parties The Corporation has entered into various securities payable with certain related parties as further discussed in Note 9 (Notes and Securities Payable). | Related party transactions Related party agreements The Corporation has various contracts with IJKG Opco LLC (d/b/a CarePoint Health - Bayonne Medical Center), Hudson Hospital Opco LLC (d/b/a CarePoint Health - Christ Hospital) and Hoboken University Medical Center Opco LLC (d/b/a CarePoint Health - Hoboken University Medical Center), which collectively do business as the CarePoint Health System (CarePoint Health). CarePoint Health is ultimately held and controlled by Mr. Vivek Garipalli, the Chief Executive Officer and stockholder of the Corporation. The Corporation contracts with CarePoint Health for the provision of inpatient and hospital-based outpatient services. Expenses and fees incurred related to these contracts, recorded in net medical claims incurred, were $11.1 million and $9.7 million for the years ended December 31, 2020 and 2019, respectively. Securities payable to related parties |
Property and equipment, net
Property and equipment, net | 12 Months Ended |
Dec. 31, 2020 | |
Property, Plant and Equipment [Abstract] | |
Property and equipment, net | Property and equipment, net Property and equipment, net consists of the following: As of December 31, 2020 2019 (in thousands) Capitalized software $ 693 $ — Leasehold improvements 3,088 3,088 Office furniture and fixtures 29 29 Equipment 104 104 Property and equipment, gross 3,914 3,221 Less: accumulated depreciation and amortization (1,836) (1,281) Property and equipment, net $ 2,078 $ 1,940 Depreciation expense recorded by the Corporation was approximately $0.5 million and $0.6 million for the years ended December 31, 2020 and 2019, respectively. Amortization expense recorded by the Corporation was approximately $0.1 million and $0 million for the years ended December 31, 2020 and 2019, respectively. |
Goodwill and other intangible a
Goodwill and other intangible assets | 12 Months Ended |
Dec. 31, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and other intangible assets | Goodwill and other intangible assetsOther intangible assets were $3.0 million and $3.0 million as of December 31, 2020 and 2019, respectively. The other intangible assets consist of licenses with indefinite useful lives that are related to Certificates of Operating Authority in 45 states and the District of Columbia. Goodwill was $1.2 million and $1.2 million as of December 31, 2020 and 2019, respectively. Intangible assets with indefinite useful lives and goodwill are not amortized but are tested for impairment at least annually, or more frequently if events or changes in circumstances indicate that the assets may be impaired. As of December 31, 2020 and 2019, respectively, there were no circumstances that indicate that the carrying amount of goodwill and intangible assets deemed to have an indefinite useful life may not be recoverable. No impairment was recorded during the years ended December 31, 2020 and 2019, respectively. |
Unpaid claims
Unpaid claims | 9 Months Ended | 12 Months Ended |
Sep. 30, 2021 | Dec. 31, 2020 | |
Liability for Unpaid Claims and Claims Adjustment Expense, Activity in Liability [Abstract] | ||
Unpaid claims | Unpaid Claims Activity in the liability for unpaid claims, including claims adjustment expenses, for the nine months ended September 30, 2021 and 2020, is summarized as follows: Nine Months Ended September 30, 2021 2020 (in thousands) Gross and net balance, beginning of period $ 103,976 $ 77,886 Incurred related to: Current year 1,092,280 425,941 Prior years 17,095 (15,401) Total incurred 1,109,375 410,540 Paid related to: Current year 963,779 339,252 Prior years 109,362 55,559 Total paid 1,073,141 394,811 Gross and net balance, end of period $ 140,210 $ 93,615 Unpaid claims as of September 30, 2021, were $140.2 million. During the nine months ended September 30, 2021, $109.4 million was paid for incurred claims attributable to insured events of prior years. An unfavorable development of $17.1 million was recognized during the nine months ended September 30, 2021, resulting from the Corporation’s claims experience, likely due to provider administrative challenges related to the COVID-19 pandemic. A favorable development of $15.4 million was recognized during the nine months ended September 30, 2020, resulting from the actualization of fee-for-service claims. Original estimates are increased or decreased, as additional information becomes known regarding individual claims. The ratio of current year medical claims paid as a percentage of current year net medical claims incurred was 88.2% for the nine months ended September 30, 2021, and 79.6% for the nine months ended September 30, 2020. This ratio serves as an indicator of claims processing speed, indicating that claims were processed at a faster rate during the nine months ended September 30, 2021, than during the nine months ended September 30, 2020. Beginning in second quarter 2021, the Corporation began participating in the DC Model, which accounted for approximately 42.4% of the Corporation’s total incurred claims as of September 30, 2021. The Corporation uses a variety of standard actuarial techniques to establish unpaid claims reserves. Management estimates are supported by the Corporation's actuarial analysis. The Corporation utilizes an internal actuarial team to review the adequacy of unpaid claim and unpaid claim adjustment expense. The estimation of claim costs is inherently difficult and requires significant judgment. The estimation has considerable inherent variability and can vary significantly depending upon several factors, including medical cost trends and claim payment patterns, general economic conditions and regulatory changes. The time value of money is not taken into account for the purposes of calculating the liability for unpaid claims. Management believes that the current reserves are adequate based on currently available information. | Unpaid claims Activity in the liability for unpaid claims, including claims adjustment expenses, is summarized as follows: Year ended December 31, 2020 2019 (in thousands) Gross balance , beginning of year $ 77,886 $ 54,004 Less: reinsurance recoverable, beginning of year — (12,344) Net balance , beginning of year 77,886 41,660 Incurred related to: Current year 604,183 453,423 Prior years (13,715) (2,778) Total incurred 590,468 450,645 Paid related to: Current year 501,339 376,677 Prior years 63,039 37,742 Total paid 564,378 414,419 Net balance , end of year 103,976 77,886 Plus: reinsurance recoverable, end of year — — Gross balance , end of year $ 103,976 $ 77,886 Unpaid claims as of December 31, 2020, were $104.0 million. As of December 31, 2020, $63.0 million has been paid for incurred claims and claims adjustment expenses attributable to insured events of prior years. The favorable development recognized in 2020 resulted from the actual experience developing differently from estimates as of December 31, 2019, partially attributable to the deferral of healthcare services as a result of the stay-at-home orders and closure of certain provider facilities throughout the year due to COVID-19 restrictions. Original estimates are increased or decreased, as additional information becomes known regarding individual claims. The ratio of current year medical claims paid as a percent of current year net medical claims incurred was 83.0% for 2020 and 83.1% for 2019. The Corporation did not have any significant changes in methodologies or assumptions used in the calculation of the liability for unpaid claims or claims adjustment expenses. The Corporation uses a variety of standard actuarial techniques to establish unpaid claims reserves. Management estimates are supported by the Corporation’s annual actuarial analysis. The Corporation utilized an in-house actuary to review the adequacy of unpaid claim and unpaid claim adjustment expense. Management believes that the reserves are adequate based on the available information. The estimation of claim costs is inherently difficult and requires significant judgement. The estimation has considerable inherent variability can vary significantly depending upon several factors, including medical cost trends and claim payment patterns, general economic conditions, regulatory changes, and known outbreaks of disease, including COVID-19. Only time and the eventual resolution of each claim will determine whether the claim reserves will ultimately prove to be adequate. The following is information about incurred and paid claims development for medical claims, as well as cumulative claim frequency and the total of incurred but not reported liabilities as of December 31, 2020, respectively. Cumulative incurred claims for the years ended December 31, Incurred year 2018* 2019* 2020 Total Number of reported claims (in thousands) (in thousands, except for number of reported claims) 2018 and prior $ 552,456 $ 549,678 $ 549,649 $ 2 1,737,684 2019 412,695 399,009 1,130 1,188,472 2020 604,183 102,844 1,433,049 Total $ 552,456 $ 962,373 $ 1,552,841 $ 103,976 4,359,205 Cumulative net paid claims through December 31, Paid year 2018* 2019* 2020 (in thousands) Incurred year 2018 and prior $ 511,459 $ 550,974 $ 549,647 2019 343,903 397,879 2020 501,339 Total $ 511,459 $ 894,877 $ 1,448,865 __________________ * Unaudited supplemental information The reconciliation of net incurred and paid claims development tables to unpaid claims and claims adjustment expenses on the Consolidated Balance Sheets is as follows: December 31, 2020 (in thousands) Cumulative incurred claims, net $ 1,552,841 Less: cumulative paid claims, net 1,448,865 Net unpaid claims, including claims adjustment expenses $ 103,976 The time value of money is not taken into account for the purposes of calculating the liability for unpaid claims. The Corporation counts a claim when either a claim or claim adjustment expense amount has been paid, or at any period end, when the Corporation has recorded a medical unpaid claim reserve. The cumulative number of reported claims for each claim year has been developed using historical data captured by claim systems. As such, the cumulative number of reported claims may not be comparable to similar measures reported by other companies. |
Reinsurance
Reinsurance | 12 Months Ended |
Dec. 31, 2020 | |
Insurance [Abstract] | |
Reinsurance | ReinsuranceEffective January 1, 2018, the Corporation entered into a specific excess loss reinsurance agreement to reinsure liabilities in excess of approximately $0.5 million per covered person per agreement term for the years ended December 31, 2020 and 2019. The effects of the reinsurance agreements on the accompanying Consolidated Financial Statements for the years ended December 31, 2020 and 2019, respectively, are as follows: December 31, 2020 2019 (in thousands) Premiums earned, gross $ 666,297 $ 457,758 Premiums earned, ceded (599) (832) Net premiums earned $ 665,698 $ 456,926 December 31, 2020 2019 (in thousands) Claims incurred, gross $ 590,951 $ 452,261 Claims incurred, ceded (483) (1,616) Net claims incurred and claims adjustment expense $ 590,468 $ 450,645 Reinsurance recoverable and reinsurance premium payable as of December 31, 2020 and 2019, respectively, were comprised of the following: December 31, 2020 2019 (in thousands) Reinsurance recoverable on paid claims $ — $ 481 Reinsurance recoverable on unpaid claims — — Reinsurance premium payable — — Reinsurance recoverable, net $ — $ 481 Reinsurance recoverable represents the portion of paid claims and unpaid claims that are covered by reinsurance. Amounts recoverable from reinsurers are estimated in a manner consistent with the methods used to determine unpaid claims as detailed in Note 2 (Summary of significant accounting policies). Clover acquired certain policies and related reinsurance agreements with the purchase of stock of Union Life Labor Insurance Company (Ullico) in April 2016. Ullico originally underwrote those policies which are primarily life policies and annuity contracts, prior to entering “run-off.” All of the underwriting risk related to those policies and contracts has been ceded to third party reinsurers. A large portion of these cessions are in the form of 100% coinsurance where, in addition to the underwriting risk, administrative responsibilities, including premium collections and claim payments, are ceded to third party reinsurers. Approximately $5.3 million and $5.2 million of life insurance reserves, as of December 31, 2020 and 2019, respectively, related to life insurance policies originally issued by Ullico are 100% coinsured with Southern Financial Life Insurance Company (SFLIC), a Louisiana domestic company, in full transfer of risk related to these policies. The life reserves are computed principally in accordance with Net Level Premium Method using mortality and persistency assumptions based upon the Corporation’s experience and industry data. Interest rate assumptions used in establishing such reserves range from less than 1% to 4.5%. Under the arrangement, SFLIC is required to hold in trust 100% of the outstanding liabilities as of the reporting date. Approximately $0.9 million and $0.9 million of annuity reserves as of December 31, 2020 and 2019, respectively, related to annuity contracts originally issued by Ullico, are 100% ceded to Sagicor Life Insurance Company, a Texas domestic company, in full transfer of risk related to these contracts. The annuity reserves are computed principally using assumptions based on the Corporation’s experience and industry data. Interest rate assumptions used in establishing such reserves range from less than 1% to 5.5%. Ceded life insurance and annuity reserves are included in other assets and gross life insurance and annuity reserves are included in other liabilities on the Consolidated Balance Sheets, respectively. |
Notes and Securities Payable
Notes and Securities Payable | 9 Months Ended | 12 Months Ended |
Sep. 30, 2021 | Dec. 31, 2020 | |
Debt Disclosure [Abstract] | ||
Notes and securities payable | Notes and Securities Payable Non-convertible Notes On March 21, 2017, the Corporation entered into a loan facility (the "Loan Facility") for an aggregate principal amount of $60.0 million with the proceeds used to pay all obligations under a $30.0 million 2015 senior secured note, and to provide additional working capital for the Corporation’s subsidiaries. The Loan Facility was secured by the assets of the Corporation. The initial obligation of $40.0 million had a maturity date of March 1, 2022, and was subject to an interest rate of 11.0%, payable monthly, with the majority of principal payments commencing 36 months prior to the maturity date. The additional $20.0 million obligation had a maturity date of October 1, 2022, and was subject to an interest rate of 11.3%, payable monthly, with the majority of principal payments commencing 36 months prior to the maturity date. In conjunction with the Loan Facility, the Corporation issued warrants. See Note 10 (Warrants Payable) for additional information. On June 29, 2021, the Corporation voluntarily paid the remaining principal of $20.7 million and interest of $0.2 million, thereby terminating the Loan Facility. Convertible Securities Pursuant to that certain Convertible Agreement, dated December 27, 2018, between the Corporation and certain qualified institutional buyers, including entities affiliated with the Corporation, for an aggregate principal amount of up to $500.0 million (the “Convertible Agreement”), the Corporation issued convertible securities during 2019 in multiple tranches. On October 5, 2020, the Corporation entered into the Merger Agreement with SCH and simultaneously amended the Convertible Agreement, pursuant to which the convertible securities of Legacy Clover converted into Class Z common stock in connection with the Business Combination. All Class Z common stock converted into Class B Common Stock as of the Closing. Additionally, the conversion incurred a 9.4% charge to account for dilution after the Business Combination to convert the securities as if they had been converted under the mandatory qualified public offering conversion. On January 7, 2021, the Business Combination was completed and the convertible securities were redeemed or converted into a total of 36,117,708 shares of Class Z common stock depending on whether each tranche’s conversion price was a conversion or share-settled redemption feature as follows: • Redemption: The February, March, and May 2019 tranches were redeemed for 34,806,921 shares of Class Z common stock pursuant to the share-settled redemption feature. The redemption of the convertible securities was accounted for as a debt extinguishment as they contained a beneficial conversion feature (BCF), and were redeemed prior to the stated maturity date. As the extinguishment date intrinsic value of the BCF was in excess of the fair value of the shares issued to settle the convertible securities, the full amount of the settlement consideration was treated as the price of reacquiring the BCF. As there was no remaining consideration available to allocate to the re-acquisition of the convertible securities, the extinguishment resulted in a gain equal to the full carrying value of the convertible securities of $126.8 million. This gain was treated as a capital contribution and was recorded as an increase in additional paid in capital as the convertible securities were issued to affiliates of the Corporation. The $126.8 million is comprised of: (a) the carrying value of the tranches of $74.6 million, (b) accrued interest of $7.4 million, and (c) the fair value of the embedded derivative of $44.8 million. • Conversion: The August 2019 tranche converted into 1,310,787 shares of Class Z common stock pursuant to the conversion feature. Prior to the conversion, the carrying value of the tranche was $2.6 million and accrued interest was $0.4 million. As the converted securities contained a BCF, the $13.0 million unamortized debt discount remaining at the date of conversion was recognized in amortization of notes and securities discount in the Consolidated Statements of Operations and Comprehensive Loss. After giving effect to the Exchange Ratio, pursuant to the terms of the Merger Agreement, these shares of Class Z common stock were converted into 74,694,107 shares of Class B Common Stock upon the closing of the Business Combination. See Note 3 (Business Combination) for additional information on the Business Combination. The convertible securities bore a yield (“interest”) at the increasing rates noted below which compounded semi-annually, and would mature April 1, 2023, unless earlier converted, repurchased, or extended. The interest rate and embedded feature discount factor varied based on the length of time elapsed from the issue date of the securities. The interest rates began at 6.5% for the first twelve-month period through the first anniversary of the security issue date, increasing ratably on a semi-annual basis, to 13.5% at the third anniversary of the security issue date until the convertible securities ceased to be outstanding. The embedded feature discount factors began at 75.0% for the first twelve-month period through the first anniversary of the security issue date, decreasing ratably on a semi-annual basis, to 55.0% at the forty-two month anniversary of the security issue date until the convertible securities ceased to be outstanding. The carrying amount of the convertible securities was $76.5 million at December 31, 2020. The unamortized discount was $337.3 million at December 31, 2020. Amortization of the debt discount was approximately $14.9 million during the nine months ended September 30, 2020. Interest expense on the convertible securities was $22.0 million during the nine months ended 2020. The effective interest rate, inclusive of amortization of the discount and the contractual rate, was 90.3% during the nine months ended September 30, 2020. The results presented as of and for the nine months ended September 30, 2021, above, reflect the impact of the conversion of the convertible securities into common stock in connection with the Business Combination. Seek Convertible Note On September 25, 2020, Seek issued the Seek Convertible Note in the principal amount of $20.0 million. The note bears simple interest at an annual rate of 8.0% and matures on September 25, 2023, unless earlier accelerated, converted, or paid in full. The outstanding principal and any accrued but unpaid interest will become immediately due and payable at the election of the note holder upon the occurrence of any event of default as defined in the note. The outstanding principal and accrued but unpaid interest will convert into an equity interest in Seek if prior to maturity, repayment or conversion of the note: (1) the note holder elects to convert the note, (2) upon the closing of Seek’s next equity financing; or (3) upon consummation of an initial public offering of Seek’s common stock or a SPAC or reverse merger transaction with Seek. The Corporation analyzed the embedded features for derivative accounting consideration and determined that the features are clearly and closely related to the debt host and do not require separate accounting as a derivative. The carrying amount of the note was $19.9 million at both September 30, 2021, and December 31, 2020. The Corporation capitalized $0.1 million of issuance costs which are being amortized using the effective interest method over the term of the note. Unamortized debt issuance costs were $0.1 million at both September 30, 2021, and December 31, 2020. Amortization of the debt issuance costs and interest expense on the note was $0.4 million and $1.2 million during the three and nine months ended September 30, 2021, respectively. Amortization of the debt issuance costs and interest expense on the note was immaterial during the three and nine months ended September 30, 2020. The effective interest rate was 8.2% during the three and nine months ended September 30, 2021, and during the three and nine months ended September 30, 2020. | Notes and securities payable Non-convertible notes On March 21, 2017, the Corporation entered into a loan facility (the “Loan Facility”) for an aggregate principal amount of $60.0 million. In March 2017, the Corporation drew down $40.0 million under the Loan Facility. The proceeds were used to pay all obligations under a $30.0 million 2015 senior secured note, and to provide additional working capital for the Corporation’s subsidiaries. The Loan Facility is secured by the assets of the Corporation. The initial obligation has a maturity date of March 1, 2022 and is subject to an interest rate of 11%, payable monthly, with the majority of principal payments commencing 36 months prior to the maturity date. In October 2017, the Corporation drew down the remaining $20.0 million under the Loan Facility. The additional obligation has a maturity date of October 1, 2022, and is subject to an interest rate of 11.25%, payable monthly, with the majority of principal payments commencing 36 months prior to the maturity date. In conjunction with the Loan Facility, the Corporation issued warrants. See Note 14 (Warrants payable) for additional information. The Corporation capitalized approximately $0.3 million of debt issuance costs associated with the Loan Facility, which are being amortized using the effective interest method over the term of the Loan Facility. The carrying amount of the Loan Facility was approximately $30.8 million and $49.3 million at December 31, 2020 and 2019, respectively. Amortization of debt discounts associated with the warrants and debt issuance costs was approximately $0.3 million and $0.4 million during the years ended December 31, 2020 and 2019, respectively. Interest expense was approximately $4.4 million and $6.2 million during the years ended December 31, 2020 and 2019, respectively. The effective interest rate was 11.78% and 11.77% during the years ended December 31, 2020 and 2019, respectively. Bridge loan In connection with the Convertible Securities Purchase Agreement (the “Convertible Agreement”) effective December 27, 2018, discussed in the “Convertible securities” section below, the Corporation entered into a series of non-convertible promissory notes agreements (Bridge Loan) with qualified institutional buyers for an aggregate principal amount of $30.0 million for the purpose of providing additional working capital for the Corporation’s subsidiaries. The Bridge Loan was issued to the Corporation on a bridge basis upon execution of the Convertible Agreement and accrued interest at a rate of 10%. The outstanding Bridge Loan balance at February 21, 2019, of approximately $30.4 million, inclusive of accrued interest, was settled through the issuance of convertible securities under the first tranche of the Convertible Agreement. There was no interest expense for the year ended December 31, 2020, and interest expense of approximately $0.4 million for the year ended December 31, 2019. Convertible securities On December 27, 2018, the Corporation entered into a Convertible Agreement with qualified institutional buyers, including entities affiliated with the Corporation, for an aggregate principal amount of up to $500.0 million to support the Corporation’s growth in the MA market. The convertible securities were issued during 2019 in multiple tranches and at December 31, 2019, the Corporation’s principal balance of borrowings under the Convertible Agreement was approximately $373.8 million, consisting of $343.4 million proceeds and $30.4 million related to the settlement of the Bridge Loan. The convertible securities bear a yield (“interest”) at the increasing rates noted below which compound semi-annually, and mature April 1, 2023 (End Date), unless earlier converted, repurchased, or extended, as discussed below. The interest rate and embedded feature discount factor vary based on the length of time elapsed from the issue date of the securities. The interest rates begin at 6.5% for the first twelve-month period through the first anniversary of the security issue date, increasing ratably on a semi-annual basis, to 13.5% at the third anniversary of the security issue date until the convertible securities cease to be outstanding. The embedded feature discount factors begin at 75% for the first twelve-month period through the first anniversary of the security issue date, decreasing ratably on a semi-annual basis, to 55% at the forty-two month anniversary of the security issue date until the convertible securities cease to be outstanding. The securities issued as part of the Convertible Agreement contain the following embedded features, some of which contain components of both conversion and redemption features: mandatory conversion in a qualified public offering (QPO), financing conversion (security holder election), extraordinary event conversion (security holder election), End Date conversion (security holder election), redemption upon default, Corporation repurchase (Corporation election), and extended End Date conversion (Corporation election). In the mandatory conversion in a QPO, financing conversion, and extraordinary event conversion, the outstanding principal and accrued interest will convert into capital or preferred stock, pursuant to the terms of the Convertible Agreement based on a conversion price calculated as the lesser of (i) the price per share at which the Corporation’s equity securities are issued to the public in the applicable transaction multiplied by the discount factor in effect and (ii) a price per share equal to (x) $2.5 billion, divided by (y) the number of shares of common stock outstanding as of the closing of the applicable transaction on an as-converted, as-exercised basis as defined in the Convertible Agreement. In the End Date conversion, the outstanding principal and accrued interest will convert into shares of senior preferred stock or most recent preferred stock. Shares are calculated as principal and accrued interest divided by the applicable conversion price. Conversion price is the lowest of (i) the product obtained by multiplying (x) the lowest price per share at which the Corporation issued applicable preferred stock, by (y) the discount factor, and (ii) the lowest price per share at which the Corporation issued its most recently authorized series of preferred stock and (iii) a price per share equal to (x) $2.5 billion, divided by (y) the number of shares of common stock outstanding as of the conversion on an as-converted, as-exercised basis as defined in the Convertible Agreement. Upon the occurrence of any event of default, all accrued but unpaid expenses, and the principal and accrued interest will be immediately due and payable in full. In the event of Corporation repurchase, the Corporation would pay the security holders an amount equal to the portion being repurchased, divided by the discount factor and issuing to the security holders a warrant for a number of repurchase warrant shares equal to the repurchase amount divided by the repurchase warrant share price, with the warrant having an exercise price equal to the repurchase warrant share price. Repurchase warrant share price is calculated as the lower of (a) lowest price at which the repurchase warrant shares were originally issued and (b) the quotient obtained by dividing (x) $2.5 billion, divided by (y) the number of shares of common stock outstanding as of the date of issuance of the applicable repurchase warrant on an as-converted, as-exercised basis as defined in the Convertible Agreement. The Corporation may elect to extend the End Date until the earlier of (i) a deemed liquidation event and (ii) the end of a period designated by the Corporation of not less than 15 days and not more than 180 days (if the security holder is an original security holder or an affiliate of the original security holder), or otherwise 365 days (if the security holder is not an original security holder or an affiliate of such security holder), following the original End Date. On October 5, 2020, the Corporation entered into the Merger Agreement with SCH and simultaneously amended the Convertible Agreement whereby, the convertible securities convert into Class Z common stock upon the merger event with SCH. See Note 26 (Subsequent events) for additional information on the merger event. Additionally, the conversion will incur a 9.35% charge to account for dilution after the merger event to convert the securities as if they had been converted under the mandatory QPO conversion. Certain conversion features were determined to be share-settled redemption features. The Corporation analyzed the embedded features for derivative accounting consideration and determined the following: • The redemption feature in the mandatory conversion in a QPO, financing conversion and extraordinary event conversion features meet the requirements to be accounted for separately from the debt host as a derivative because the feature is not clearly and closely related to the debt host, the debt host. See Note 15 (Derivative liabilities) for additional information. • The extended End Date feature requires separate accounting as a derivative. See Note 15 (Derivative liabilities) for additional information. • The End Date conversion feature represents a BCF with an intrinsic value that exceeded the approximately $373.8 million principal balance of the convertible securities. The BCF was recorded within equity in additional-paid-in-capital and as a discount to the convertible securities in an amount equal to the full principal amount of the securities, thus reducing the carrying value of the convertible securities to zero. The discount of $373.8 million is being accreted to the principal amount over the term of the securities, assuming a maturity of April 1, 2023, using the effective interest method. The accretion is recognized in amortization of notes and securities discounts on the Consolidated Statements of Operations and Comprehensive Loss. • The other embedded features are clearly and closely related to the debt host and do not require separate accounting as a derivative. Since the carrying amount of the convertible securities was initially recognized as $0, debt issuance costs incurred in the amount of approximately $0.4 million were expensed on the Consolidated Statements of Operations and Comprehensive Loss during the year ended December 31, 2019. The carrying amount of the convertible securities and unamortized discount were approximately $76.5 million and $337.3 million, respectively, at December 31, 2020. Amortization of the debt discount and interest expense on the convertible securities were approximately $21.1 million and $31.1 million, respectively, during the year ended December 31, 2020. The effective interest rate, inclusive of amortization of the discount and the contractual rate, was in excess of 100% during the year ended December 31, 2019, as a result of the beginning convertible securities carrying value of $0. The End Date conversion feature represents a BCF with an intrinsic value of $2.3 billion. 2020 Convertible Note On September 25, 2020, Seek Insurance Services, Inc. (Seek), the Corporation’s wholly-owned subsidiary, entered into a note purchase agreement (the “Seek Convertible Note Agreement”) with a third party investor, and issued a note in a principal amount of $20.0 million. The outstanding principal as of December 31, 2020, was $20.0 million. The note bears simple interest at an annual rate of 8% and matures on September 25, 2023, unless earlier accelerated, converted, or paid in full, as discussed below. The outstanding principal and any accrued but unpaid interest will become immediately due and payable at the election of the note holder upon the occurrence of any Event of Default as defined in the note. The outstanding principal and accrued but unpaid interest will convert into a minority equity interest in Seek if prior to maturity, repayment or conversion of the note: (1) the note holder elects to convert the note, (2) upon the closing of Seek’s next equity financing; or (3) upon consummation of an initial public offering of Seek’s common stock or a SPAC or reverse merger transaction with Seek. The Corporation analyzed the embedded features for derivative accounting consideration and determined that the features are clearly and closely related to the debt host and do not require separate accounting as a derivative. The carrying amount of the note was $19.9 million and $0 million at December 31, 2020 and 2019, respectively. The Corporation capitalized $0.1 million of issuance costs which are being amortized using the effective interest method over the term of the note. Unamortized debt issue costs were $0.1 million and $0 million at December 31, 2020 and 2019, respectively. Amortization of the debt issue costs and interest expense on the note were immaterial and $0 million during the years ended December 31, 2020 and 2019, respectively. The below table summarizes maturities of the Corporation’s securities payable over the next five years as of December 31, 2020: Year ended December 31, (in thousands) 2021 $ 20,939 2022 9,986 2023 393,827 2024 — 2025 — Total $ 424,752 The Corporation was in compliance with all applicable financial and non-financial covenants under its financing arrangements for the year ended December 31, 2020 and 2019, respectively. |
Condensed Financial Statements, Captions [Line Items] | ||
Surplus Note | Notes and Securities Payable Non-convertible Notes On March 21, 2017, the Corporation entered into a loan facility (the "Loan Facility") for an aggregate principal amount of $60.0 million with the proceeds used to pay all obligations under a $30.0 million 2015 senior secured note, and to provide additional working capital for the Corporation’s subsidiaries. The Loan Facility was secured by the assets of the Corporation. The initial obligation of $40.0 million had a maturity date of March 1, 2022, and was subject to an interest rate of 11.0%, payable monthly, with the majority of principal payments commencing 36 months prior to the maturity date. The additional $20.0 million obligation had a maturity date of October 1, 2022, and was subject to an interest rate of 11.3%, payable monthly, with the majority of principal payments commencing 36 months prior to the maturity date. In conjunction with the Loan Facility, the Corporation issued warrants. See Note 10 (Warrants Payable) for additional information. On June 29, 2021, the Corporation voluntarily paid the remaining principal of $20.7 million and interest of $0.2 million, thereby terminating the Loan Facility. Convertible Securities Pursuant to that certain Convertible Agreement, dated December 27, 2018, between the Corporation and certain qualified institutional buyers, including entities affiliated with the Corporation, for an aggregate principal amount of up to $500.0 million (the “Convertible Agreement”), the Corporation issued convertible securities during 2019 in multiple tranches. On October 5, 2020, the Corporation entered into the Merger Agreement with SCH and simultaneously amended the Convertible Agreement, pursuant to which the convertible securities of Legacy Clover converted into Class Z common stock in connection with the Business Combination. All Class Z common stock converted into Class B Common Stock as of the Closing. Additionally, the conversion incurred a 9.4% charge to account for dilution after the Business Combination to convert the securities as if they had been converted under the mandatory qualified public offering conversion. On January 7, 2021, the Business Combination was completed and the convertible securities were redeemed or converted into a total of 36,117,708 shares of Class Z common stock depending on whether each tranche’s conversion price was a conversion or share-settled redemption feature as follows: • Redemption: The February, March, and May 2019 tranches were redeemed for 34,806,921 shares of Class Z common stock pursuant to the share-settled redemption feature. The redemption of the convertible securities was accounted for as a debt extinguishment as they contained a beneficial conversion feature (BCF), and were redeemed prior to the stated maturity date. As the extinguishment date intrinsic value of the BCF was in excess of the fair value of the shares issued to settle the convertible securities, the full amount of the settlement consideration was treated as the price of reacquiring the BCF. As there was no remaining consideration available to allocate to the re-acquisition of the convertible securities, the extinguishment resulted in a gain equal to the full carrying value of the convertible securities of $126.8 million. This gain was treated as a capital contribution and was recorded as an increase in additional paid in capital as the convertible securities were issued to affiliates of the Corporation. The $126.8 million is comprised of: (a) the carrying value of the tranches of $74.6 million, (b) accrued interest of $7.4 million, and (c) the fair value of the embedded derivative of $44.8 million. • Conversion: The August 2019 tranche converted into 1,310,787 shares of Class Z common stock pursuant to the conversion feature. Prior to the conversion, the carrying value of the tranche was $2.6 million and accrued interest was $0.4 million. As the converted securities contained a BCF, the $13.0 million unamortized debt discount remaining at the date of conversion was recognized in amortization of notes and securities discount in the Consolidated Statements of Operations and Comprehensive Loss. After giving effect to the Exchange Ratio, pursuant to the terms of the Merger Agreement, these shares of Class Z common stock were converted into 74,694,107 shares of Class B Common Stock upon the closing of the Business Combination. See Note 3 (Business Combination) for additional information on the Business Combination. The convertible securities bore a yield (“interest”) at the increasing rates noted below which compounded semi-annually, and would mature April 1, 2023, unless earlier converted, repurchased, or extended. The interest rate and embedded feature discount factor varied based on the length of time elapsed from the issue date of the securities. The interest rates began at 6.5% for the first twelve-month period through the first anniversary of the security issue date, increasing ratably on a semi-annual basis, to 13.5% at the third anniversary of the security issue date until the convertible securities ceased to be outstanding. The embedded feature discount factors began at 75.0% for the first twelve-month period through the first anniversary of the security issue date, decreasing ratably on a semi-annual basis, to 55.0% at the forty-two month anniversary of the security issue date until the convertible securities ceased to be outstanding. The carrying amount of the convertible securities was $76.5 million at December 31, 2020. The unamortized discount was $337.3 million at December 31, 2020. Amortization of the debt discount was approximately $14.9 million during the nine months ended September 30, 2020. Interest expense on the convertible securities was $22.0 million during the nine months ended 2020. The effective interest rate, inclusive of amortization of the discount and the contractual rate, was 90.3% during the nine months ended September 30, 2020. The results presented as of and for the nine months ended September 30, 2021, above, reflect the impact of the conversion of the convertible securities into common stock in connection with the Business Combination. Seek Convertible Note On September 25, 2020, Seek issued the Seek Convertible Note in the principal amount of $20.0 million. The note bears simple interest at an annual rate of 8.0% and matures on September 25, 2023, unless earlier accelerated, converted, or paid in full. The outstanding principal and any accrued but unpaid interest will become immediately due and payable at the election of the note holder upon the occurrence of any event of default as defined in the note. The outstanding principal and accrued but unpaid interest will convert into an equity interest in Seek if prior to maturity, repayment or conversion of the note: (1) the note holder elects to convert the note, (2) upon the closing of Seek’s next equity financing; or (3) upon consummation of an initial public offering of Seek’s common stock or a SPAC or reverse merger transaction with Seek. The Corporation analyzed the embedded features for derivative accounting consideration and determined that the features are clearly and closely related to the debt host and do not require separate accounting as a derivative. The carrying amount of the note was $19.9 million at both September 30, 2021, and December 31, 2020. The Corporation capitalized $0.1 million of issuance costs which are being amortized using the effective interest method over the term of the note. Unamortized debt issuance costs were $0.1 million at both September 30, 2021, and December 31, 2020. Amortization of the debt issuance costs and interest expense on the note was $0.4 million and $1.2 million during the three and nine months ended September 30, 2021, respectively. Amortization of the debt issuance costs and interest expense on the note was immaterial during the three and nine months ended September 30, 2020. The effective interest rate was 8.2% during the three and nine months ended September 30, 2021, and during the three and nine months ended September 30, 2020. | Notes and securities payable Non-convertible notes On March 21, 2017, the Corporation entered into a loan facility (the “Loan Facility”) for an aggregate principal amount of $60.0 million. In March 2017, the Corporation drew down $40.0 million under the Loan Facility. The proceeds were used to pay all obligations under a $30.0 million 2015 senior secured note, and to provide additional working capital for the Corporation’s subsidiaries. The Loan Facility is secured by the assets of the Corporation. The initial obligation has a maturity date of March 1, 2022 and is subject to an interest rate of 11%, payable monthly, with the majority of principal payments commencing 36 months prior to the maturity date. In October 2017, the Corporation drew down the remaining $20.0 million under the Loan Facility. The additional obligation has a maturity date of October 1, 2022, and is subject to an interest rate of 11.25%, payable monthly, with the majority of principal payments commencing 36 months prior to the maturity date. In conjunction with the Loan Facility, the Corporation issued warrants. See Note 14 (Warrants payable) for additional information. The Corporation capitalized approximately $0.3 million of debt issuance costs associated with the Loan Facility, which are being amortized using the effective interest method over the term of the Loan Facility. The carrying amount of the Loan Facility was approximately $30.8 million and $49.3 million at December 31, 2020 and 2019, respectively. Amortization of debt discounts associated with the warrants and debt issuance costs was approximately $0.3 million and $0.4 million during the years ended December 31, 2020 and 2019, respectively. Interest expense was approximately $4.4 million and $6.2 million during the years ended December 31, 2020 and 2019, respectively. The effective interest rate was 11.78% and 11.77% during the years ended December 31, 2020 and 2019, respectively. Bridge loan In connection with the Convertible Securities Purchase Agreement (the “Convertible Agreement”) effective December 27, 2018, discussed in the “Convertible securities” section below, the Corporation entered into a series of non-convertible promissory notes agreements (Bridge Loan) with qualified institutional buyers for an aggregate principal amount of $30.0 million for the purpose of providing additional working capital for the Corporation’s subsidiaries. The Bridge Loan was issued to the Corporation on a bridge basis upon execution of the Convertible Agreement and accrued interest at a rate of 10%. The outstanding Bridge Loan balance at February 21, 2019, of approximately $30.4 million, inclusive of accrued interest, was settled through the issuance of convertible securities under the first tranche of the Convertible Agreement. There was no interest expense for the year ended December 31, 2020, and interest expense of approximately $0.4 million for the year ended December 31, 2019. Convertible securities On December 27, 2018, the Corporation entered into a Convertible Agreement with qualified institutional buyers, including entities affiliated with the Corporation, for an aggregate principal amount of up to $500.0 million to support the Corporation’s growth in the MA market. The convertible securities were issued during 2019 in multiple tranches and at December 31, 2019, the Corporation’s principal balance of borrowings under the Convertible Agreement was approximately $373.8 million, consisting of $343.4 million proceeds and $30.4 million related to the settlement of the Bridge Loan. The convertible securities bear a yield (“interest”) at the increasing rates noted below which compound semi-annually, and mature April 1, 2023 (End Date), unless earlier converted, repurchased, or extended, as discussed below. The interest rate and embedded feature discount factor vary based on the length of time elapsed from the issue date of the securities. The interest rates begin at 6.5% for the first twelve-month period through the first anniversary of the security issue date, increasing ratably on a semi-annual basis, to 13.5% at the third anniversary of the security issue date until the convertible securities cease to be outstanding. The embedded feature discount factors begin at 75% for the first twelve-month period through the first anniversary of the security issue date, decreasing ratably on a semi-annual basis, to 55% at the forty-two month anniversary of the security issue date until the convertible securities cease to be outstanding. The securities issued as part of the Convertible Agreement contain the following embedded features, some of which contain components of both conversion and redemption features: mandatory conversion in a qualified public offering (QPO), financing conversion (security holder election), extraordinary event conversion (security holder election), End Date conversion (security holder election), redemption upon default, Corporation repurchase (Corporation election), and extended End Date conversion (Corporation election). In the mandatory conversion in a QPO, financing conversion, and extraordinary event conversion, the outstanding principal and accrued interest will convert into capital or preferred stock, pursuant to the terms of the Convertible Agreement based on a conversion price calculated as the lesser of (i) the price per share at which the Corporation’s equity securities are issued to the public in the applicable transaction multiplied by the discount factor in effect and (ii) a price per share equal to (x) $2.5 billion, divided by (y) the number of shares of common stock outstanding as of the closing of the applicable transaction on an as-converted, as-exercised basis as defined in the Convertible Agreement. In the End Date conversion, the outstanding principal and accrued interest will convert into shares of senior preferred stock or most recent preferred stock. Shares are calculated as principal and accrued interest divided by the applicable conversion price. Conversion price is the lowest of (i) the product obtained by multiplying (x) the lowest price per share at which the Corporation issued applicable preferred stock, by (y) the discount factor, and (ii) the lowest price per share at which the Corporation issued its most recently authorized series of preferred stock and (iii) a price per share equal to (x) $2.5 billion, divided by (y) the number of shares of common stock outstanding as of the conversion on an as-converted, as-exercised basis as defined in the Convertible Agreement. Upon the occurrence of any event of default, all accrued but unpaid expenses, and the principal and accrued interest will be immediately due and payable in full. In the event of Corporation repurchase, the Corporation would pay the security holders an amount equal to the portion being repurchased, divided by the discount factor and issuing to the security holders a warrant for a number of repurchase warrant shares equal to the repurchase amount divided by the repurchase warrant share price, with the warrant having an exercise price equal to the repurchase warrant share price. Repurchase warrant share price is calculated as the lower of (a) lowest price at which the repurchase warrant shares were originally issued and (b) the quotient obtained by dividing (x) $2.5 billion, divided by (y) the number of shares of common stock outstanding as of the date of issuance of the applicable repurchase warrant on an as-converted, as-exercised basis as defined in the Convertible Agreement. The Corporation may elect to extend the End Date until the earlier of (i) a deemed liquidation event and (ii) the end of a period designated by the Corporation of not less than 15 days and not more than 180 days (if the security holder is an original security holder or an affiliate of the original security holder), or otherwise 365 days (if the security holder is not an original security holder or an affiliate of such security holder), following the original End Date. On October 5, 2020, the Corporation entered into the Merger Agreement with SCH and simultaneously amended the Convertible Agreement whereby, the convertible securities convert into Class Z common stock upon the merger event with SCH. See Note 26 (Subsequent events) for additional information on the merger event. Additionally, the conversion will incur a 9.35% charge to account for dilution after the merger event to convert the securities as if they had been converted under the mandatory QPO conversion. Certain conversion features were determined to be share-settled redemption features. The Corporation analyzed the embedded features for derivative accounting consideration and determined the following: • The redemption feature in the mandatory conversion in a QPO, financing conversion and extraordinary event conversion features meet the requirements to be accounted for separately from the debt host as a derivative because the feature is not clearly and closely related to the debt host, the debt host. See Note 15 (Derivative liabilities) for additional information. • The extended End Date feature requires separate accounting as a derivative. See Note 15 (Derivative liabilities) for additional information. • The End Date conversion feature represents a BCF with an intrinsic value that exceeded the approximately $373.8 million principal balance of the convertible securities. The BCF was recorded within equity in additional-paid-in-capital and as a discount to the convertible securities in an amount equal to the full principal amount of the securities, thus reducing the carrying value of the convertible securities to zero. The discount of $373.8 million is being accreted to the principal amount over the term of the securities, assuming a maturity of April 1, 2023, using the effective interest method. The accretion is recognized in amortization of notes and securities discounts on the Consolidated Statements of Operations and Comprehensive Loss. • The other embedded features are clearly and closely related to the debt host and do not require separate accounting as a derivative. Since the carrying amount of the convertible securities was initially recognized as $0, debt issuance costs incurred in the amount of approximately $0.4 million were expensed on the Consolidated Statements of Operations and Comprehensive Loss during the year ended December 31, 2019. The carrying amount of the convertible securities and unamortized discount were approximately $76.5 million and $337.3 million, respectively, at December 31, 2020. Amortization of the debt discount and interest expense on the convertible securities were approximately $21.1 million and $31.1 million, respectively, during the year ended December 31, 2020. The effective interest rate, inclusive of amortization of the discount and the contractual rate, was in excess of 100% during the year ended December 31, 2019, as a result of the beginning convertible securities carrying value of $0. The End Date conversion feature represents a BCF with an intrinsic value of $2.3 billion. 2020 Convertible Note On September 25, 2020, Seek Insurance Services, Inc. (Seek), the Corporation’s wholly-owned subsidiary, entered into a note purchase agreement (the “Seek Convertible Note Agreement”) with a third party investor, and issued a note in a principal amount of $20.0 million. The outstanding principal as of December 31, 2020, was $20.0 million. The note bears simple interest at an annual rate of 8% and matures on September 25, 2023, unless earlier accelerated, converted, or paid in full, as discussed below. The outstanding principal and any accrued but unpaid interest will become immediately due and payable at the election of the note holder upon the occurrence of any Event of Default as defined in the note. The outstanding principal and accrued but unpaid interest will convert into a minority equity interest in Seek if prior to maturity, repayment or conversion of the note: (1) the note holder elects to convert the note, (2) upon the closing of Seek’s next equity financing; or (3) upon consummation of an initial public offering of Seek’s common stock or a SPAC or reverse merger transaction with Seek. The Corporation analyzed the embedded features for derivative accounting consideration and determined that the features are clearly and closely related to the debt host and do not require separate accounting as a derivative. The carrying amount of the note was $19.9 million and $0 million at December 31, 2020 and 2019, respectively. The Corporation capitalized $0.1 million of issuance costs which are being amortized using the effective interest method over the term of the note. Unamortized debt issue costs were $0.1 million and $0 million at December 31, 2020 and 2019, respectively. Amortization of the debt issue costs and interest expense on the note were immaterial and $0 million during the years ended December 31, 2020 and 2019, respectively. The below table summarizes maturities of the Corporation’s securities payable over the next five years as of December 31, 2020: Year ended December 31, (in thousands) 2021 $ 20,939 2022 9,986 2023 393,827 2024 — 2025 — Total $ 424,752 The Corporation was in compliance with all applicable financial and non-financial covenants under its financing arrangements for the year ended December 31, 2020 and 2019, respectively. |
Parent Company | ||
Debt Disclosure [Abstract] | ||
Notes and securities payable | Surplus NoteEffective December 22, 2016, the Corporation contributed $40.0 million to Clover Health Insurance Company, a wholly owned subsidiary, in exchange for a surplus note. The outstanding balance, including accrued interest, was due and payable on December 31, 2020 but remains unpaid with the payment terms under review for extension until December 31, 2024. The Commissioner of Banking and Insurance of the State of New Jersey must approve any interest and principal payments associated with the note before they are paid. | |
Condensed Financial Statements, Captions [Line Items] | ||
Surplus Note | Surplus NoteEffective December 22, 2016, the Corporation contributed $40.0 million to Clover Health Insurance Company, a wholly owned subsidiary, in exchange for a surplus note. The outstanding balance, including accrued interest, was due and payable on December 31, 2020 but remains unpaid with the payment terms under review for extension until December 31, 2024. The Commissioner of Banking and Insurance of the State of New Jersey must approve any interest and principal payments associated with the note before they are paid. |
Warrants payable
Warrants payable | 9 Months Ended | 12 Months Ended |
Sep. 30, 2021 | Dec. 31, 2020 | |
Stockholders' Equity Note [Abstract] | ||
Warrants payable | Warrants Payable Legacy Warrants In conjunction with the Loan Facility, the Corporation issued warrants to purchase 1,266,284 shares of the Corporation’s Series D preferred stock at an exercise price of $9.38 per share. On October 5, 2020, the Corporation entered into the Merger Agreement with SCH and simultaneously amended the warrants to be automatically exercisable for common stock in connection with the Business Combination. The warrants were accounted for as derivative instruments, and the initial fair value of approximately $1.2 million, which was calculated using a Black-Scholes based valuation model, was recorded as a discount to the carrying amount of the Loan Facility. This discount was being amortized using the effective interest method over the term of the Loan Facility. The warrants were recorded as liabilities and were being marked to market at each reporting period. In September 2015, the Corporation issued warrants to purchase 2,100,000 shares of the Corporation’s common stock at an exercise price of $1.04 per share. The warrants were also contingently exercisable for an additional 2,100,000 shares based proportionally on the aggregate principal amounts of additional notes borrowed by the Corporation. Pursuant to the Merger Agreement, the Loan Facility warrants and the September 2015 warrants automatically converted into 3,484,154 shares of Legacy Clover common stock and, after giving effect to the Exchange Ratio converted into 7,205,490 shares of Class B Common Stock upon the closing of the Business Combination. Public Warrants and Private Placement Warrants As a result of the Business Combination, the Corporation assumed, as of January 7, 2021, Public Warrants to purchase an aggregate of 27,599,938 shares of the Corporation’s Class A Common Stock and Private Placement Warrants to purchase an aggregate of 10,933,333 shares of the Corporation’s Class A Common Stock. Each whole Warrant entitled the registered holder to purchase one whole share of Class A Common Stock at a price of $11.50 per share, at any time commencing on April 24, 2021. The Warrants were accounted for as liabilities in accordance with ASC 815-40 and are presented within warrants payable on the Condensed Consolidated Balance Sheet. The warrant liabilities were measured at fair value at inception and on a recurring basis until redeemed, with changes in fair value presented within change in fair value of warrants payable in the Condensed Consolidated Statement of Operations and Comprehensive Loss. See Note 5 (Fair Value Measurements) for additional information. On July 22, 2021, the Company issued a press release stating that it would redeem all of its Warrants that remained outstanding on August 23, 2021, the redemption date, for a redemption price of $0.10 per Warrant. On August 25, 2021, the Company announced that it was extending the period during which holders of the Public Warrants could exercise the Warrants to September 9, 2021, at which time any unexercised Public Warrants would be redeemed at a price of $0.10 per Warrant. Payment upon exercise of the Warrants could be made either (i) in cash, at an exercise price of $11.50 per share of Class A Common Stock or (ii) on a “cashless basis” in which the exercising holder received 0.249 shares of Class A Common Stock per Warrant shares of Class A Common Stock. Prior to the redemption date, 33,932 Public Warrants were exercised for cash, and 26,716,041 were exercised on a cashless basis in exchange for an aggregate of 6,685,865 shares of Common Stock, in each case in accordance with the terms of the Warrant Agreement, representing 96.9% of the Public Warrants. In addition, all of the Private Placement Warrants were exercised on a cashless basis in exchange for an aggregate of 2,722,399 shares of Common Stock, in accordance with the terms of the Warrant Agreement. Total cash proceeds generated from exercises of the Public Warrants were $0.4 million. The remaining unexercised 849,965 Public Warrants were redeemed by the Corporation for $0.1 million. In connection with the redemption, the Public Warrants were delisted, and no Warrants were outstanding at September 30, 2021. | Warrants payable In conjunction with the Loan Facility effective March 21, 2017, the Corporation issued warrants to purchase 2,618,770 shares of the Corporation’s Series D preferred stock at an exercise price of $4.5346 per share, which expire on September 30, 2027. The warrants are exercisable at any time and up to the expiration date. Per the original terms, in the event of an automatic conversion of the preferred stock prior to the exercise of the warrants, the warrants shall be exercisable in common stock. On October 5, 2020, the Corporation entered into the Merger Agreement with SCH and simultaneously amended the warrants to be exercisable in common stock based on the merger event with SCH. See Note 26 (Subsequent events) for additional information on the merger event. Additionally, the original strike price of the warrants changed from $4.5346 per share to $0. The warrants were accounted for as derivative instruments and the initial fair value of approximately $1.2 million, which was calculated using a Black-Scholes based valuation model, was recorded as a discount to the carrying amount of the Loan Facility. This discount is being amortized using the effective interest method over the term of the Loan Facility. The warrants were recorded as liabilities and are being marked to market at each reporting period. In September 2015, the Corporation issued warrants to purchase 4,342,956 shares of the Corporation’s common stock at an exercise price of $0.5039 per share which expire on September 2, 2022. The warrants are exercisable at any time up to the expiration date. The warrants are also contingently exercisable for an additional 4,342,956 shares based proportionally on the aggregate principal amounts of additional notes borrowed by the Corporation. As a result of the Merger Agreement, the warrants automatically convert into common stock based on the merger event with SCH. The warrants are being recorded at fair value and are reflected as liabilities on the Corporation’s Consolidated Balance Sheets at each reporting period. See Note 5 (Fair value measurements) for additional information. |
Derivative liabilities
Derivative liabilities | 9 Months Ended | 12 Months Ended |
Sep. 30, 2021 | Dec. 31, 2020 | |
Derivative Instruments and Hedges, Liabilities [Abstract] | ||
Derivative liabilities | Derivative LiabilitiesIn connection with the $373.8 million of convertible securities issued in 2019, the Corporation determined that certain of the conversion and redemption features were embedded derivatives and were bifurcated from the host instrument and accounted for as embedded derivative instruments. In connection with the convertible securities, the Corporation recognized a capital contribution of $44.8 million during the nine months ended September 30, 2021. This capital contribution of $44.8 million was recorded as an increase in additional paid in capital as the notes were issued to affiliates of the Corporation. The Corporation recognized a gain of $68.1 million and $87.5 million from activity related to derivative liabilities in connection with the convertible securities during the three and nine months ended September 30, 2020, respectively, which was recognized in gain on derivative in the Condensed Consolidated Statements of Operations and Comprehensive Loss. Upon the completion of the Business Combination with SCH on January 7, 2021, the derivative balance was extinguished as of January 7, 2021. See Note 3 (Business Combination), Note 5 (Fair Value Measurements), and Note 9 (Notes and Securities Payable) for additional information. | Derivative liabilitiesIn connection with the $373.8 million convertible securities issued in 2019, the Corporation determined that certain of the conversion and redemption features were embedded derivatives which have been bifurcated from the host instrument and accounted for as embedded derivative instruments. The Corporation recognized a $93.8 million gain during the year ended December 31, 2020 and a $138.6 million loss related to derivative liabilities during the year ended December 31, 2019. The aggregate loss was recognized in (gain) loss on derivative in the Consolidated Statements of Operations and Comprehensive Loss. The fair value of embedded derivatives was $44.8 million at December 31, 2020, and $138.6 million at December 31, 2019, and is included as derivative liabilities in the Corporation’s Consolidated Balance Sheets. See Note 5 (Fair value measurements) and Note 13 (Notes and securities payable) for additional information. |
Letter of Credit
Letter of Credit | 9 Months Ended | 12 Months Ended |
Sep. 30, 2021 | Dec. 31, 2020 | |
Debt Disclosure [Abstract] | ||
Letter of credit | Letter of CreditOn April 19, 2018, the Corporation entered into a secured letter of credit agreement (the “Letter”) for up to an aggregate amount of $2.5 million with a commercial lender that renews on an annual basis. The Letter bears an interest rate of 0.75%. There was an unused balance of $2.5 million at both September 30, 2021, and December 31, 2020. | Letter of creditOn April 19, 2018, the Corporation entered into a secured letter of credit agreement (the “Letter”) for an amount up to an aggregate of $2.5 million with a commercial lender that renews on an annual basis. The Letter bears an interest rate of 0.75%. There was an unused balance of $2.5 million and $2.5 million as of December 31, 2020 and 2019, respectively. |
Leases
Leases | 9 Months Ended | 12 Months Ended |
Sep. 30, 2021 | Dec. 31, 2020 | |
Leases [Abstract] | ||
Leases | Leases Operating Leases The Corporation leases office space in New Jersey, Minnesota, Tennessee, Georgia, Florida, California, and Hong Kong under non-cancelable operating leases, as further described below. For each lease the Corporation recorded a right-of-use (ROU) asset and lease liability at the earlier of the ASC 842 effective date or lease commencement date. The Corporation utilizes the straight-line method of recognizing lease expense. However, the Corporation is required to pay certain variable executory costs including common area maintenance, real estate taxes, and insurance that are expensed as incurred. These variable costs are excluded from the measurement of leases. Certain of the Corporation’s leases include options to renew, with renewal terms that can extend the lease term. The exercise of lease renewal options is at the Corporation’s sole discretion. The Corporation is not reasonably certain that it will exercise the renewal options described in the individual lease descriptions below. Therefore, these options are not recognized as part of the ROU asset and lease liability. The Corporation subleases certain of its leases to third parties for which it receives rental income to manage occupancy costs. These subleases are classified as operating leases. Certain of the Corporation’s leases are being considered for subletting. Mallory Green Lease: On September 22, 2021, the Corporation entered into an agreement to lease office space for its new corporate headquarters in Franklin, Tennessee, for a period of 37 months. Montgomery Lease: From May 2020 through April 9, 2021, the Corporation was in default with respect to its agreement to lease office space in Jersey City, New Jersey (the “Montgomery Lease”), for not paying rent owed to the lessor. The Corporation accrued for all interest owed and began reducing its security deposit asset in lieu of recording rental payments. On April 9, 2021, the Corporation replenished its security deposit and, therefore, was no longer in default with respect to the Montgomery Lease. Summary of Lease Costs Recognized Under ASC 842: The following table contains a summary of the lease costs recognized under ASC 842 and other information pertaining to the Corporation’s operating leases for the three and nine months ended September 30, 2021: Three Months Ended September 30, 2021 (in thousands) Operating lease cost $ 1,126 Variable lease cost 123 Short-term lease cost 15 Sublease income (650) Total lease cost $ 614 Nine Months Ended September 30, 2021 (in thousands) Operating lease cost $ 3,351 Variable lease cost 391 Short-term lease cost 45 Sublease income (2,077) Total lease cost $ 1,710 Other information Cash paid for amounts included in the measurement of lease liabilities $ 3,894 Weighted-average remaining lease term 4.4 years Weighted-average discount rate 10.26 % Pursuant to the terms of the Corporation’s non-cancelable lease agreements in effect at December 31, 2020, the following table summarizes the Corporation’s maturities of lease liabilities as of September 30, 2021: (in thousands) 2021 $ 1,321 2022 3,001 2023 1,493 2024 1,157 2025 1,149 Thereafter 2,639 Total lease payments 10,760 Less: imputed interest (2,213) Total $ 8,547 | Leases Operating leases The Corporation leases office space in New Jersey, Minnesota, Tennessee, and San Francisco under non-cancelable operating leases, further described below. For each lease the Corporation recorded a ROU asset and lease liability at the earlier of the ASC 842 effective date or lease commencement date. The Corporation utilizes the straight-line method of recognizing lease expense. However, the Corporation is required to pay certain variable executory costs including common area maintenance, real estate taxes, and insurance that are expensed as incurred. These variable costs are excluded from the measurement of leases. Certain of our leases include options to renew, with renewal terms that can extend the lease term. The exercise of lease renewal options is at our sole discretion. The Corporation is not reasonably certain that it will exercise the renewal options described in the individual lease descriptions below. Therefore, these options are not recognized as part of the ROU asset and lease liability. The Corporation subleases certain of its leases to third parties for which it receives rental income to manage occupancy costs. These subleases are classified as operating and are further described below. Tennessee lease (principal executive office): On May 7, 2019, the Corporation entered into an agreement to lease office space for its corporate headquarters in Franklin, Tennessee. The initial lease term ended on August 31, 2020 and became a month-to-month lease that commenced on September 1, 2020 and is treated as a short-term lease. Montgomery leases: On September 28, 2016, the Corporation entered into an agreement to lease office space in Jersey City, New Jersey (the “Montgomery Lease”). The lease expires March 31, 2028 with one option to renew for five years. There was an amendment that expires August 31, 2023 with one option to renew for five years. The Corporation entered into an agreement to sublease (the “Montgomery Sublease”), which commenced October 4, 2019. The Corporation receives rental income for this sublease which has a lease term through March 31, 2021. The Corporation uses the long-lived assets impairment to determine when to test ROU assets (or asset groups that contain one or more ROU assets) for impairment, assess whether ROU assets are impaired, and if so, the amount of the impairment loss to recognize. The sublease income expected to be received under the Montgomery Sublease is less than the amount to be paid under the Montgomery Lease for the sublease term, which indicated that the Montgomery Lease may not be recoverable. Upon execution of the sublease agreement, the Corporation reassessed the asset group and determined that the lowest level of identifiable cash flows pertaining to the Montgomery Sublease was at the individual lease level. The asset group, comprised of both the ROU asset and corresponding leasehold improvements related to the 14th floor of the Montgomery Lease, were determined to not be recoverable and were written down to their respective fair values with an impairment charge of $1.6 million recorded to general and administrative expenses in the Consolidated Statements of Operations and Comprehensive Loss for the year ended December 31, 2019. The Corporation is currently in default with respect to the Montgomery Lease for not paying rent owed to the lessor. The Corporation has accrued for all interest owed and is reducing its security deposit asset in lieu of recording rental payments. The Corporation is currently in discussions with the lessor to resolve this default and related lease issues. San Francisco leases: During 2015 and 2016, the Corporation entered into agreements to lease two floors of office space in San Francisco, California through April 30, 2022. In 2019, the Corporation subleased the two floors beginning in June and October 2019, respectively. The sublease terms also expire on April 30, 2022. Lyndhurst lease: On February 28, 2019, the Corporation completed its acquisition of Principium and assumed its office lease in Lyndhurst, New Jersey. The lease expires May 31, 2022 and has one option to renew for 5 years. The renewal option is not included in the measurement of the lease. Minnesota lease: On October 8, 2020, the Corporation entered into an agreement to lease office space for its Seek subsidiary in Edina, Minnesota, which expires on September 30, 2022. Summary of lease costs recognized under ASC 842: The following table contains a summary of the lease costs recognized under ASC 842 and other information pertaining to the Corporation’s operating leases for the years ended December 31, 2020 and 2019: Year ended December 31, 2020 (in thousands) Operating lease cost $ 4,533 Variable lease cost 632 Short-term lease cost 20 Sublease income (3,098) Total lease cost $ 2,087 Other information Cash paid for amounts included in the measurement of lease liabilities $ 4,979 Weighted-average remaining lease term (in years) 4.4 Weighted-average discount rate 10.17 % Year ended December 31, 2019 (in thousands) Operating lease cost $ 4,552 Variable lease cost 654 Short-term lease cost 58 Sublease income (989) Total lease cost $ 4,275 Other information Cash paid for amounts included in the measurement of lease liabilities $ 4,804 Weighted-average remaining lease term (in years) 4.8 Weighted-average discount rate 10.05 % Pursuant to the terms of the Corporation’s non-cancelable lease agreements in effect at December 31, 2020, the following table summarizes the Corporation’s maturities of lease liabilities as of December 31, 2020: Year ended December 31, 2020 (in thousands) 2021 $ 5,017 2022 2,747 2023 1,408 2024 1,089 2025 1,121 Thereafter 2,649 Total lease payments $ 14,031 Less: imputed interest (2,887) Total $ 11,144 |
Preferred stock
Preferred stock | 9 Months Ended | 12 Months Ended |
Sep. 30, 2021 | Dec. 31, 2020 | |
Temporary Equity Disclosure [Abstract] | ||
Preferred stock | Convertible Preferred Stock Each share of Legacy Clover’s preferred stock was convertible at the option of the holder, at any time and from time to time, and without the payment of additional consideration by the holder thereof, into a number of fully paid and non-assessable shares of common stock as is determined by dividing the applicable original issue price by the applicable conversion price as described in Note 17 (Preferred Stock) to financial statements in the Form 8-K/A in effect at the time of conversion. Pursuant to the Merger Agreement, all outstanding shares of Legacy Clover’s preferred stock automatically converted into 139,444,346 shares of Class B Common Stock after giving effect to the Exchange Ratio upon the closing of the Business Combination. See Note 3 (Business Combination) for additional information on the Business Combination. | Preferred stock During 2015, the Corporation issued 10,907,993 shares of Series A and 14,888,608 shares of Series A-1 preferred stock at $0.50394 per share for total proceeds of approximately $13.0 million. During 2015, the Corporation issued 21,381,446 shares of Series B preferred stock at $1.63693 per share for total proceeds of approximately $35.0 million. During 2016, the Corporation issued 39,431,582 shares of Series C preferred stock at $4.06185 per share for total proceeds of approximately $160.2 million. Issuance costs totaled approximately $0.4 million. During 2017, the Corporation issued 42,910,925 shares of Series D preferred stock at $4.53456 per share for total proceeds of approximately $194.6 million. Issuance costs totaled approximately $0.3 million. During 2018, the Corporation issued 9,923,792 additional shares of Series D preferred stock at $4.53456 per share for total proceeds of approximately $45.0 million. Issuance costs totaled approximately $0.5 million. During 2020 and 2019, the Corporation did not issue any additional shares of preferred stock. As of each balance sheet date, preferred stock consisted of the following ($ in millions, except for share amounts): As of December 31, 2020 and 2019, after recapitalization Preferred Stock Authorized (1) Preferred Stock Issued and Outstanding (1) Carrying Value Liquidation Common Stock Issuable Upon Conversion (1) Series A Preferred stock 10,907,993 10,907,993 $ 5.5 $ 5.5 10,907,993 Series A-1 Preferred stock 14,888,608 14,888,608 7.4 30.0 14,888,608 Series B Preferred stock 21,381,446 21,381,446 35.0 35.0 21,381,446 Series C Preferred stock 39,431,582 39,431,582 160.2 160.2 39,431,582 Series D Preferred stock 68,777,396 52,834,717 239.6 239.6 52,834,717 155,387,025 139,444,346 447.7 470.3 139,444,346 _____________________ (1) Amounts in the above table have been adjusted to reflect the exchange of Legacy Clover’s common stock at an exchange ratio of approximately 2.0681 in January 2021 as a result of the application of reverse capitalization. See Note 3 (Reverse Capitalization) for details. The holders of the preferred stock have rights, preferences and privileges as follows: Dividends The Series A and Series A-1 dividend rate is $0.04032 per share of Series A preferred stock per annum, subject to appropriate adjustment in the event of any stock dividend, stock split, combination or other similar recapitalization with respect to the Series A and Series A-1 preferred stock. The Series B rate is $0.13090 per share of Series B preferred stock per annum, subject to appropriate adjustment in the event of any stock dividend, stock split, combination or other similar recapitalization with respect to Series B preferred stock. The Series C rate is $0.32495 per share of Series C preferred stock per annum, subject to appropriate adjustment in the event of any stock split, combination or other similar recapitalization with respect to the Series C preferred stock. The Series D rate is $0.36276 per share of Series D preferred stock per annum, subject to appropriate adjustment in the event of any stock dividend, stock split, combination or other similar recapitalization with respect to the Series D preferred stock. The Corporation cannot declare, pay or set aside any dividends on shares of any other class or series of capital stock of the Corporation (other than dividends on shares of common stock payable in shares of common stock) unless the holders of the outstanding preferred stock will first receive (on a pari passu basis), or simultaneously receive, a dividend on each outstanding share of preferred stock in an amount equal to the greater of (a) the applicable dividend rate (as listed above) or (b) an amount that such holders of the preferred stock would receive on a pari passu basis with the holders of common stock if such shares of preferred stock had been converted to common stock. The holders of the outstanding preferred stock can waive any dividend preference that the holders are entitled to receive upon the affirmative vote or written consent of the holders of a majority of the shares of outstanding preferred stock (voting together as a single class and on as-converted to common stock basis). Voting Each holder of the outstanding share of preferred stock is entitled to cast the number of votes equal to the number of whole shares of common stock into which the shares of preferred stock held by such holder are convertible as of the record date for determining stockholders entitled to vote on such matter. Unless provided by law or any other provisions of the Certificate of Incorporation, holders of preferred stock can vote together with the holders of common stock as a single class on all matters presented to the stockholders of the Corporation. Conversion Each share of preferred stock can be converted at the option of the holder, at any time and from time to time, and without the payment of additional consideration by the holder thereof, into a number of fully paid and non-assessable shares of common stock as is determined by dividing the applicable original issue price by the applicable common conversion price (as defined below) in effect at the time of conversion. The “Series A conversion price” will initially be equal to the Series A-1 original issue price. The “Series B conversion price” will initially be equal to the Series B original issue price. The “Series C conversion price” will initially be equal to the Series C original issue price. The “Series D conversion price” will initially be equal to the Series D original issue price. The “applicable conversion price” is defined as the Series A conversion price with respect to the Series A preferred stock, the Series A-1 conversion price with respect to the Series A-1 preferred stock, the Series B conversion price with respect to the Series B preferred stock, the Series C conversion price with respect to the Series C preferred stock, and the Series D conversion price with respect to the Series D preferred stock. Each applicable conversion price, and the rate at which shares of preferred stock may be converted into shares of common stock, is subject to adjustment as provided below. In the event of liquidation, dissolution or winding up of the Corporation or a deemed liquidation event, the conversion rights will terminate at the close of business on the last full day preceding the date fixed for the payment of such amounts distributable on such event to the holders of preferred stock. No fractional shares of common stock can be issued upon conversion of the preferred stock. In lieu of any fractional shares to which the holder would otherwise be entitled, the Corporation will pay cash equal to such fraction multiplied by the fair value of a share of common stock as determined in good faith by the Board. Whether or not fractional shares would be issuable upon such conversion will be determined on the basis of the total number of shares of preferred stock the holder is at the time converting into common stock and the aggregate number of shares of common stock issuable upon conversion. The preferred stock of the Corporation is subject to broad based weighted-average anti-dilution subject to customary carveouts. Redemption The preferred stock is not mandatorily redeemable. Any shares of preferred stock that are redeemed or otherwise acquired by the Corporation or any of its subsidiaries will be automatically and immediately cancelled and retired and will not be reissued, sold or transferred. Neither the Corporation nor any of its subsidiaries may exercise any voting or other rights granted to the holders of preferred stock following redemption. |
Employee benefit plans
Employee benefit plans | 9 Months Ended | 12 Months Ended |
Sep. 30, 2021 | Dec. 31, 2020 | |
Share-based Payment Arrangement [Abstract] | ||
Employee benefit plans | Employee Benefit Plans Employee Savings Plan The Corporation has a defined contribution retirement savings plan (the “401(k) Plan”) covering eligible employees, which includes safe harbor matching contributions based on the amount of employees’ contributions to the 401(k) Plan. The Corporation contributes to the 401(k) Plan annually 100.0% of the first 4.0% compensation that is contributed by the employee up to 4.0% of eligible annual compensation. The Corporation’s service contributions to the 401(k) Plan amounted to approximately $0.3 million and $0.3 million for the three months ended September 30, 2021 and 2020, respectively, and $0.9 million and $1.0 million for the nine months ended September 30, 2021 and 2020, respectively, and are included in salaries and benefits on the Condensed Consolidated Statements of Operations and Comprehensive Loss. The Corporation's cash match is invested pursuant to the participant's contribution direction. Employer contributions are immediately 100.0% vested. Stock-based Compensation The Corporation’s 2020 Equity Incentive Plan (the “2020 Plan”) and 2020 Management Incentive Plan (the “2020 MIP”) provide for grants of restricted stocks units (RSUs) and/or options to acquire shares of the Corporation’s common stock, par value $0.0001 per share, to employees, directors, officers, and consultants of the Corporation. During the nine months ended September 30, 2021, the Corporation approved the 2020 Plan and the 2020 MIP, and the Corporation’s 2014 Equity Incentive Plan (the “2014 Plan” and, collectively with the 2020 Plan and the 2020 MIP, the “Plans”) was retired. The maximum number of shares of the Corporation’s common stock reserved for issuance over the term of the Plans, shares outstanding under the Plans, and shares remaining under the Plans, after giving effect to the Exchange Ratio, as of September 30, 2021, and December 31, 2020, were as follows: September 30, 2021 Shares Authorized Under Plans Shares Outstanding Under Plans Shares Remaining Under Plans 2014 Plan 54,402,264 42,441,719 N/A 2020 Plan 30,641,401 1,782,986 28,858,415 2020 MIP 33,426,983 33,426,983 — December 31, 2020 Shares Authorized Under Plan Shares Outstanding Under Plan Shares Remaining Under Plan 2014 Plan 54,402,264 36,557,759 17,844,505 Effective as of the closing of the Business Combination, the 2014 Plan terminated, at which time the outstanding awards previously granted thereunder were assumed by the Corporation, and no new awards are available for grant under the 2014 Plan. Shares that are expired, terminated, surrendered or canceled under the 2014 Plan without having been fully exercised are available for awards under the 2020 Plan. Shares may be issued from authorized but unissued Corporation stock. The Plans are administered by the Talent and Compensation Committee of the Corporation’s Board of Directors (the “Compensation Committee”). The options are subject to the terms and conditions applicable to options granted under the Plans, as described in the applicable Plan and the applicable stock option grant agreement. The exercise prices, vesting and other restrictions applicable to the stock options are determined at the discretion of the Compensation Committee, except that the exercise price per share of incentive stock options may not be less than 100.0% of the fair value of a share of common stock on the date of grant. Stock options awarded under the Plans expire 10 years after the grant date. Incentive stock options and non-statutory options granted to employees, directors, officers and consultants of the Corporation typically vest over four The Corporation granted options to purchase 1,937,968 shares of common stock during the nine months ended September 30, 2021. The Corporation recorded stock-based compensation expense for options, RSUs, performance restricted stock units (PRSUs) granted under the Plans and discounts offered in connection with the Corporation’s 2020 Employee Stock Purchase Plan (ESPP) of $46.8 million and $132.5 million during the three and nine months ended September 30, 2021, and such expenses are presented in salaries and benefits in the accompanying Condensed Consolidated Statements of Operations and Comprehensive Loss. Compensation cost presented in salaries and benefits in the accompanying Condensed Consolidated Statements of Operations and Comprehensive Loss were as follows: Three Months Ended September 30, 2021 2020 (in thousands) Stock options $ 1,665 $ 1,500 RSUs 17,396 — PRSUs 27,675 — ESPP 67 — Total compensation cost recognized for stock-based compensation plans $ 46,803 $ 1,500 Nine Months Ended September 30, 2021 2020 (in thousands) Stock options $ 6,734 $ 4,949 RSUs 45,725 — PRSUs 80,016 — ESPP 67 — Total compensation cost recognized for stock-based compensation plans $ 132,542 $ 4,949 As of September 30, 2021, there was approximately $463.7 million of unrecognized stock-based compensation expense related to unvested stock options, RSUs, PRSUs, and the ESPP, estimated to be recognized over a period of 4.27 years. As of December 31, 2020, there was approximately $14.9 million of unrecognized stock-based compensation expense related to unvested stock options. Stock Options The assumptions that the Corporation used in the Black-Scholes option-pricing model to determine the grant-date fair value of stock options granted for the nine months ended September 30, 2021 and 2020, respectively, were as follows: Nine Months Ended September 30, 2021 2020 Weighted-average risk-free interest rate 1.06 % 0.84 % Expected term (in years) 6.06 4.66 Expected volatility 37.74 % 34.60 % Expected dividend yield — — A summary of option activity under the 2020 Plan during the nine months ended September 30, 2021 is as follows: Number of options Weighted-average exercise price Outstanding, January 1, 2021 — $ — Granted during 2021 1,937,968 8.88 Exercised — — Forfeited (154,982) 8.87 Outstanding, September 30, 2021 1,782,986 $ 8.88 A summary of option activity under the 2014 Plan during the nine months ended September 30, 2021 is as follows: Number of options Weighted-average exercise price Outstanding, January 1, 2021 36,513,193 $ 2.26 Granted during 2021 — — Exercised (3,843,472) 1.43 Forfeited (974,874) 2.78 Outstanding, September 30, 2021 31,694,847 $ 2.29 The aggregate intrinsic value of stock options is calculated as the difference between the exercise price of the stock options and the fair value of the Corporation’s common stock for those stock options that had exercise prices lower than the fair value of the Corporation’s common stock. The weighted-average grant date fair value of stock options granted during the nine months ended September 30, 2021 and 2020 was $3.36 per share and $2.10 per share, respectively. As of September 30, 2021, outstanding stock options, substantially all of which are expected to vest, had an aggregate intrinsic value of $160.1 million, and a weighted-average remaining contractual term of 7.03 years. As of September 30, 2021, there were 21,210,565 options exercisable under the Plan, with an aggregate intrinsic value of $109.0 million, a weighted-average exercise price of $2.26 per share, and a weighted-average remaining contractual term of 6.34 years. The total value of stock options exercised during the nine months ended September 30, 2021 and 2020, was $36.4 million and $1.6 million, respectively. Cash received from stock option exercises during the nine months ended September 30, 2021 and 2020, totaled $5.5 million and $1.0 million, respectively. Pursuant to the terms of the applicable Plan and stock option award agreement, employees may exercise options at any time after grant while maintaining the original vesting period. The proceeds from exercise of unvested options are recorded as a liability until the option vests at which time the liability is reclassified to equity. If the employee terminates or otherwise forfeits an unvested option that has been exercised, the Corporation must redeem those shares at the original exercise price and remit payment of the forfeited portion of shares back to the employee. Restricted Stock Units A summary of total RSU activity for the nine months ended September 30, 2021, is presented below: Nine Months Ended September 30, 2021 Granted 21,035,614 Released (131,766) Forfeited (35,935) Outstanding, September 30, 2021 20,867,913 The weighted-average grant date fair value of the RSUs was $14.77 per underlying share. Performance Restricted Stock Units The Corporation has granted PRSUs which become eligible to vest if prior to the vesting date the average closing price of one share of the Corporation’s common stock for ninety The weighted-average grant date fair value of Market PRSUs granted during the nine months ended September 30, 2021, was $9.58 per underlying share. There were no Market PRSUs granted prior to 2021. The grant date fair value of Market PRSUs was determined using a Monte Carlo simulation model that incorporated multiple valuation assumptions, including the probability of achieving the specified market condition and the following assumptions: Nine Months Ended September 30, 2021 Expected volatility (1) 40.70 % Risk-free interest rate (2) 0.50 Dividend yield (3) — _________________ (1) Expected volatility is based on a blend of peer group company historical data adjusted for the Corporation’s leverage. (2) Risk-free interest rate based on U.S. Treasury yields with a term equal to the remaining Performance Period as of the grant date. (3) Dividend yield was assumed to be zero as the Corporation does not anticipate paying dividends. A summary of total PRSU activity for the nine months ended September 30, 2021, is presented below: Nine Months Ended September 30, 2021 Granted 27,699,171 Non-vested at September 30, 2021 27,699,171 As of September 30, 2021, there was $185.4 million of unrecognized share-based compensation expense related to PRSUs, which is expected to be recognized over a period of 4.27 years. 2020 Employee Stock Purchase Plan On October 5, 2020, SCH’s board of directors adopted, and on January 6, 2021, stockholders approved the ESPP. The ESPP provides a means by which eligible employees and/or eligible service providers of either the Corporation or designated related corporations and affiliates may be given an opportunity to purchase shares of Class A common stock at a 15.0% discount from the fair market value of the common stock as determined on a specific date at six-month intervals. Subject to adjustments provided in the ESPP, the maximum number of shares of common stock that may be purchased under the ESPP is 2,785,582 shares, and the maximum number of shares that may be purchased on any single purchase date by any one participant is 5,000 shares. As of September 30, 2021, 2,785,582 shares of Class A common stock were available for issuance under the ESPP. On the first day of each fiscal year, beginning with the 2022 fiscal year and ending on (and including) the first day of the 2030 fiscal year, the calculation of the maximum number of ESPP shares shall include automatic increases in an amount equal to the lesser of (i) 1.0% of the 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 administrator of the ESPP; 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 Corporation (inclusive of the shares reserved under the ESPP) as of January 7, 2021, on an as-converted basis. The initial offering period for the ESPP is five months, commencing on September 1, 2021, and ending on January 31, 2022. As of the date of this report, no shares of the Corporation’s common stock have been purchased or distributed pursuant to the ESPP. The assumptions that the Corporation used in the Black-Scholes option-pricing model to determine the fair value of the purchase rights under the ESPP for the nine months ended September 30, 2021, were as follows: Nine Months Ended September 30, 2021 Weighted-average risk-free interest rate 0.06 % Expected term (in years) 0.42 Expected volatility 147.42 % Equity warrants In November 2016 and December 2017, the Corporation issued warrants to purchase 139,629 shares of the Corporation’s common stock at an exercise price of $2.61 per share, and 122,052 shares of the Corporation's common stock at an exercise price of $3.45 per share, respectively, as part of payment to certain providers for services provided to the Corporation. These warrants were automatically exercised in connection with the Business Combination. See Note 3 (Business Combination) for additional information. The total fair value of warrants vested during the nine months ended September 30, 2021 and 2020, was $0.0 million and $4.0 million, respectively. A summary of activity relating to the warrants of the service providers during the nine months ended September 30, 2021 and 2020, respectively, is as follows: Number of warrants Weighted-average exercise price Outstanding, December 31, 2019 261,681 $ 3.00 Granted during 2020 — — Exercised — — Forfeited — — Outstanding, September 30, 2020 261,681 $ 3.00 Outstanding, December 31, 2020 261,681 $ 3.00 Granted during 2021 — — Exercised (261,681) 3.00 Forfeited — — Outstanding, September 30, 2021 — $ — | Employee benefit plans Employee savings plan The Corporation has a defined contribution retirement savings plan (the “401(k) Plan”) covering eligible employees, which includes matching contributions based on the amount of employees’ contributions to this plan. The Corporation contributes to the 401(k) Plan annually 100% of the first 4% of compensation that is contributed by the employee up to 4% of eligible annual compensation. The Corporation’s service contributions to the 401 (k) Plan amounted to approximately $1.2 million in 2020, and $1.3 million in 2019 and are included in salaries and benefits on the Consolidated Statements of Operations and Comprehensive Loss. The Corporation’s cash match is invested pursuant to the participant’s contribution direction. Employee contributions are immediately 100% vested. Stock-based compensation The Corporation’s 2014 Equity Incentive Plan (the Plan) grants options of common stock, par value $0.0001 per share, to employees, directors, officers and consultants of the Corporation. The maximum number of common shares reserved for issuance over the term of the Plan may not exceed 54,402,264 as of December 31, 2020, and 37,055,557 shares as of December 31, 2019. Shares that are expired, terminated, surrendered or canceled under the Plan without having been fully exercised will be available for future awards. As of December 31, 2020 and 2019, there were 36,557,759 and 28,189,475, respectively, outstanding options and common stock issued under the Plan, leaving 17,844,505 and 8,866,082 shares, respectively, remaining for future grants, assuming all stock options were granted. Shares may be issued from authorized but unissued Corporation stock. The Plan is administered by the Board. The options will be subject to the terms and conditions applicable to options granted under the Plan, as described in the Plan and the applicable stock option grant agreement. The exercise prices, vesting and other restrictions are determined at the discretion of the Board, except that the exercise price per share of incentive stock options may not be less than 100% of the fair value of the common stock on the date of grant. Stock options awarded under the Plan expire ten years after the grant date. Vesting periods for awards under the Plan are determined at the discretion of the Board. Incentive stock options and non-statutory options granted to employees, directors, officers and consultants of the Corporation typically vest over five years. The stock options are presented on an as converted basis at the ratio of approximately 2.0681. The Corporation granted options to purchase 14,386,426 and 8,828,538 shares of common stock during the years ended December 31, 2020 and 2019, respectively. The Corporation recorded stock-based compensation expense for options granted of $7.1 million and $3.3 million during years ended December 31, 2020 and 2019, respectively, presented in salaries and benefits in the accompanying Consolidated Statements of Operations and Comprehensive Loss. During the years ended December 31, 2020 and 2019, the Corporation granted no shares of restricted stock. Stock option valuation The assumptions that the Corporation used in the Black-Scholes option-pricing model to determine the grant-date fair value of stock options granted for the years ended December 31, 2020 and 2019, respectively, were as follows: Year ended December 31, 2020 2019 Weighted-average risk-free interest rate 0.84 % 1.95 % Expected term (in years) 4.68 6.29 Expected volatility 34.66 % 28.37 % Expected dividend yield 0.00 0.00 A summary of option activity under the Plan, after reverse capitalization, during the years ended December 31, 2020 and 2019, respectively, is as follows: Number of options (1) Weighted-average exercise price (1) Outstanding, January 1, 2019 27,046,177 $ 1.31 Granted during 2019 8,828,538 1.99 Exercised (916,527) 0.74 Forfeited (6,768,713) 1.57 Outstanding, December 31, 2019 28,189,475 1.48 Granted during 2020 14,386,426 3.59 Exercised (1,297,977) 1.53 Forfeited (4,720,165) 1.88 Outstanding, December 31, 2020 36,557,759 $ 2.25 __________________ (1) Amounts in the above table have been adjusted to reflect the exchange of Legacy Clover’s common stock at an exchange ratio of approximately 2.0681 in January 2021 as a result of the application of reverse capitalization. See Note 3 (Reverse Capitalization) for details. The aggregate intrinsic value of stock options is calculated as the difference between the exercise price of the stock options and the fair value of the Corporation’s common stock for those stock options that had exercise prices lower than the fair value of the Corporation’s common stock. In February 2020, the Corporation granted 3,669,608 of non-qualified stock options which were determined to have implied market conditions attached to their vesting schedule. As such, these options are valued using a Monte Carlo valuation model to estimate each share’s fair value as of the grant date. The Monte Carlo valuation model uses multiple simulations to evaluate the probability of achieving certain stock prices, the outputs of which are utilized to determine the grant date fair value of these options. Based on the Monte Carlo simulation, the grant date fair value of these options was determined to be $1.18 and the Corporation recognized approximately $1.8 million in related stock compensation expense for the year ended December 31, 2020. The weighted-average grant date fair value of stock options granted during the years ended December 31, 2020 and 2019 was $1.04 and $0.62 per share, respectively. As of December 31, 2020 and 2019, there was approximately $14.9 million and $9.0 million, respectively, of unrecognized stock-based compensation expense related to unvested stock options. The unrecognized stock-based compensation expense is estimated to be recognized over a period of 2.5 years as of December 31, 2020. The total fair value of options vested during each of the years ended December 31, 2020 and 2019, was approximately $5.5 million and $3.5 million, respectively. As of December 31, 2020, outstanding stock options, substantially all of which are expected to vest, had an aggregate intrinsic value of $445.3 million, and a weighted-average remaining contractual term of 7.75 years. As of December 31, 2020, there were 19,333,153 options exercisable under the Plan, with an aggregate intrinsic value of $246.2 million, a weighted-average exercise price of $1.62, and a weighted-average remaining contractual term of 6.85 years. The total intrinsic value of stock options exercised during the years ended December 31, 2020 and 2019 was $5.8 million and $1.3 million, respectively. Cash received from stock option exercises during the years ended December 31, 2020 and 2019 totaled $2.1 million and $0.7 million, respectively. Pursuant to the Plan agreement, employees may exercise options at any time while maintaining the original vesting period. The proceeds from exercise of unvested options are recorded as a liability until the option vests at which time the liability is reclassified to equity. If the employee terminates or otherwise forfeits an unvested option that has been exercised, the Corporation must redeem those shares at the original exercise price and remit payment of the forfeited portion of shares back to the employee. Equity warrants The Corporation entered into two separate scopes of work with a service provider to provide services to the Corporation. As part of the payment for the services, the Corporation issued warrants in November 2016 and December 2017. The warrants were issued to purchase 139,629 shares of common stock at an exercise price of $2.61 per share, and 122,052 shares of common stock at an exercise price of $3.45 per share. The warrants are exercisable comprising the vesting portion at any time up to and including the earlier of (a) the consummation of an Initial Public Offering (IPO); (b) the consummation of a transaction or series of related transactions that is deemed to constitute a liquidation, dissolution or winding up of the Corporation including a change in control or (c) on the 10 year anniversary of the date of issuance (the expiration date). The warrants are being recorded as equity awards, and compensation expense was recognized over the vesting period. As of December 31, 2020, there were 261,681 warrants exercisable under the Plan, substantially all of which are expected to vest, with an aggregate intrinsic value of $4.6 million, a weighted-average exercise price of $3.00 and a weighted-average remaining contractual term of 6.34 years. The total fair value of warrants vested during each of the years ended December 31, 2020 and 2019, was approximately $7.0 million and $0.9 million, respectively. As a result of the Merger Agreement, the warrants automatically convert into common stock based on the merger event with SCH. See Note 26 (Subsequent events) for additional information related to the Merger Agreement. A summary of warrant activity during the years ended December 31, 2020 and 2019, respectively, is as follows: Number of warrants Weighted-average exercise price Outstanding, January 1, 2019 261,681 $ 3.00 Granted during 2019 — Exercised — Forfeited — Outstanding, December 31, 2019 261,681 3.00 Granted during 2020 — Exercised — Forfeited — Outstanding, December 31, 2020 261,681 $ 3.00 |
Income taxes
Income taxes | 9 Months Ended | 12 Months Ended |
Sep. 30, 2021 | Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | ||
Income taxes | Income Taxes The consolidated effective tax rate of the Corporation for the three months ended September 30, 2021 and 2020, was (0.0%) and (0.0%), respectively. The consolidated effective tax rate of the Corporation for the nine months ended September 30, 2021 and 2020, was (0.0%) and (0.0%), respectively. The Corporation continues to be in a net operating loss and net deferred tax asset position. As a result, and in accordance with accounting standards, the Corporation recorded a valuation allowance to reduce the value of the net deferred tax assets to zero. The Corporation believes that as of September 30, 2021, it had no material uncertain tax positions. Interest and penalties related to unrecognized tax expense (benefits) are recognized in income tax expense, when applicable. There were no material liabilities for interest and penalties accrued as of September 30, 2021, and December 31, 2020. On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) was signed into law in the U.S. to provide certain relief in connection with the COVID-19 pandemic. In addition, governments around the world have enacted or implemented various forms of tax relief measures in response to the economic conditions in the wake of COVID-19. On December 27, 2020, the "Consolidated Appropriations Act, 2021" was signed into law in the U.S. to amend or extend several significant COVID related relief provisions of the CARES Act. The Corporation has determined that neither the CARES Act and Consolidated Appropriations Act nor changes to income tax laws or regulations in other jurisdictions had a significant impact on the Corporation’s effective tax rate. | Income taxes The provision for income taxes consisted of the following for the years ended December 31, 2020 and 2019, respectively: Year ended December 31, 2020 2019 (in thousands) Current provision $ (2) $ (2) Deferred expense 2 2 Provision for income taxes $ — $ — The provision for income taxes was different from the amount computed using the federal statutory rate of 21% for the years ended December 31, 2020 and 2019, respectively, due to the following: Year ended December 31, 2020 2019 (in thousands) Income tax provision at federal statutory rate (21%) $ (28,642) $ (76,385) Interest on convertible securities 6,537 3,505 Interest on convertible securities discount 4,423 3,257 Debt issuance cost related to convertible securities — 76 Derivative liability related to convertible securities (19,688) 29,098 Warrant expense 16,823 596 Meals and entertainment 13 210 Health insurance industry fee 2,715 — Other, net (766) — Valuation allowance 18,585 39,643 Provision for income taxes $ — $ — The Corporation issued convertible securities for which the interest expense recorded in 2020 and 2019 of approximately $31.1 million and $16.7 million, respectively, is not deductible for tax purposes. Deferred income tax balances reflect the impact of temporary differences between the tax bases of assets or liabilities and their reported amounts in the Consolidated Financial Statements and are stated at enacted tax rates expected to be in effect when the reported amounts are actually recovered or settled. Principal components of net deferred tax balances at December 31, 2020 and 2019, respectively, were as follows: Year ended December 31, 2020 2019 (in thousands) Deferred income tax assets: Net operating loss carryforward (NOL) $ 152,423 $ 133,564 Unpaid claim reserve discounting 335 269 Start-up costs amortization 408 464 Charitable contributions carryforward 154 146 Bonus accrual 52 52 Stock based compensation 2,568 1,554 Convertible securities issuance costs 1 1 Tax credits (AMT) — 2 Prepaid and accrued expenses 568 683 Property and equipment 1,318 1,779 Capital loss carryforward — 49 Operating lease liability 2,340 3,109 Premium deficiency reserve — 3,597 Acquisition costs amortization 60 66 Interest expense carryforward 2,318 1,675 Bad debt reserves 2,363 — Total deferred income tax assets 164,908 147,010 Less: valuation allowance (163,204) (144,619) Total deferred income tax assets, net of valuation allowance 1,704 2,391 Deferred income tax liabilities: TCJA Transition Adj. IRC 846 (49) (58) Market discount — (1) Operating lease right of use asset (1,655) (2,330) Total deferred income tax liabilities (1,704) (2,389) Net deferred income tax asset $ — $ 2 Operating loss and tax credit carryforwards and protective tax deposits The Corporation has unused operating loss carryforwards available of approximately $725.8 million and $636.0 million as of December 31, 2020 and 2019, respectively, that may be applied against future taxable income. Losses incurred before 2018 in the amount of approximately $295.1 million begin to expire in 2033. The total net operating losses (NOL) is made up of NOLs generated by the consolidated group and NOLs obtained with the 2014 reorganization. A portion of the pre-consolidated NOLs may be limited by special rules known as Separate Return Limitation Year (SRLY) rules. SRLY NOLs can only be used in years that both the consolidated group and the entity that created the SRLY NOLs have taxable income. Due to these limitations and uncertainty regarding the Corporation’s ability to use the loss carryforwards and other deferred tax assets, a valuation allowance of approximately $163.2 million and $144.6 million was established in 2020 and 2019, respectively. The Corporation does not have deposits admitted under Section 6603 of the Internal Revenue Code. Impact of tax planning strategies The Corporation does not have any tax planning strategies that include the use of reinsurance and there are no deferred tax liabilities not recognized. The Corporation files income tax returns in the United States. The U.S. Internal Revenue Service (IRS) is not currently conducting any income tax audits. The Corporation’s federal income tax returns filed related to tax years subsequent to 2016 remain subject to examination by the IRS. The Corporation is not aware of any material adjustments that may be proposed as a result of any ongoing or future examinations and does not have material uncertain tax positions reflected in the Consolidated Balance Sheets. On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) was signed into law in the U.S. to provide certain relief as a result of the COVID-19 pandemic. In addition, governments around the world have enacted or implemented various forms of tax relief measures in response to the economic conditions in the wake of COVID-19. On December 27, 2020, the “Consolidated Appropriations Act, 2021” was signed into law in the U.S. to amend or extend several significant COVID related relief provisions of the CARES Act. As of December 31, 2020, the Corporation has determined that neither the CARES Act and Consolidated Appropriations Act nor changes to income tax laws or regulations in other jurisdictions had a significant impact on our effective tax rate. |
Net loss per share
Net loss per share | 9 Months Ended | 12 Months Ended |
Sep. 30, 2021 | Dec. 31, 2020 | |
Earnings Per Share [Abstract] | ||
Net loss per share | Net (Loss) Income Per Share Net (Loss) Income Per Share Basic and diluted net (loss) income per share attributable to common stockholders was calculated as follows: Three Months Ended September 30, 2021 2020 (in thousands, except per share data) Net (loss) income $ (34,527) $ 12,758 Net (loss) income attributable to common stockholders (34,527) 4,966 Basic weighted average number of common shares and common share equivalents outstanding (1) 414,572,706 88,863,244 Diluted weighted average number of common shares and common share equivalents outstanding (1) 414,572,706 248,133,335 Net (loss) income per share attributable to common stockholders—basic $ (0.08) $ 0.06 Net (loss) income per share attributable to common stockholders—diluted $ (0.08) $ 0.02 Nine Months Ended September 30, 2021 2020 (in thousands, except per share data) Net loss $ (400,555) $ (10,001) Net loss attributable to common stockholders (400,555) (10,001) Basic and diluted weighted average number of common shares and common share equivalents outstanding (1) 410,417,493 88,616,116 Net loss per share attributable to common stockholders—basic and diluted $ (0.98) $ (0.11) __________________ (1) Prior period results have been adjusted to reflect the exchange of Legacy Clover's common stock for Clover Class B Common Stock at an exchange ratio of approximately 2.0681 in January 2021 as a result of the Business Combination. See Note 3 (Business Combination) for details. Because the Corporation had a net loss during the three and nine months ended September 30, 2021, and a net loss during the nine months ended September 30, 2020, the Corporation’s potentially dilutive securities, which include stock options, restricted stock, preferred stock, and warrants to purchase shares of common stock and preferred stock, have been excluded from the computation of diluted net loss per share, as the effect would be anti-dilutive. Therefore, during these periods, the diluted common shares outstanding equals the average common shares outstanding. The Corporation excluded the following potential common shares, presented based on amounts outstanding at each period end, from the computation of diluted net loss per share attributable to common stockholders for the periods indicated because including them would have had an anti-dilutive effect: Three Months Ended September 30, 2021 2020 Options to purchase common stock (1) 33,477,833 5,183,834 RSUs 21,106,720 — Warrants to purchase common stock (as converted to common stock) (1) — 4,342,956 Warrants to purchase convertible preferred stock (as converted to common stock) (1) — 2,618,770 Total anti-dilutive shares excluded from computation of earnings per share 54,584,553 12,145,560 Nine Months Ended September 30, 2021 2020 Options to purchase common stock (1) 33,477,833 37,296,034 RSUs 21,106,720 — Convertible preferred stock (as converted to common stock) (1) — 139,444,346 Warrants to purchase common stock (as converted to common stock) (1) — 4,884,132 Warrants to purchase convertible preferred stock (as converted to common stock) (1) — 2,618,770 Total anti-dilutive shares excluded from computation of earnings per share 54,584,553 184,243,282 __________________ (1) Prior period results have been adjusted to reflect the exchange of Legacy Clover's common stock for Clover Class B Common Stock at an exchange ratio of approximately 2.0681 in January 2021 as a result of the Business Combination. See Note 3 (Business Combination) for details. | Net loss per share Net loss per share Basic and diluted net loss per share attributable to common stockholders, after reverse capitalization, was calculated as follows (1) : Year ended December 31, 2020 2019 Net loss $ (136,392) $ (363,737) Net loss attributable to common stockholders (136,392) (363,737) Weighted average common shares outstanding—basic and diluted 88,691,582 87,829,419 Net loss per share attributable to common stockholders— basic and diluted $ (1.54) $ (4.14) __________________ (1) Amounts in the above table have been adjusted to reflect the exchange of Legacy Clover’s common stock at an exchange ratio of approximately 2.0681 in January 2021 as a result of the application of reverse capitalization. See Note 3, “Reverse Capitalization,” for details. The Corporation’s potentially dilutive securities, which include stock options, preferred stock and warrants to purchase shares of preferred stock, have been excluded from the computation of diluted net loss per share as the effect would be to reduce the net loss per share. Therefore, the weighted average number of common shares outstanding used to calculate both basic and diluted net loss per share attributable to common stockholders is the same. The Corporation excluded the following potential common shares, presented based on amounts outstanding at each period end after reverse capitalization, from the computation of diluted net loss per share attributable to common stockholders for the periods indicated because including them would have had an anti-dilutive effect (1) : Year ended December 31, 2020 2019 Options to purchase common stock 36,557,759 24,344,848 Convertible preferred stock (as converted to common stock) 139,444,346 139,444,346 Warrants to purchase common stock (as converted to common stock) 7,502,902 4,884,132 Warrants to purchase convertible preferred stock (as converted to common stock) — 2,618,770 183,505,007 171,292,096 __________________ (1) Amounts in the above table have been adjusted to reflect the exchange of Legacy Clover’s common stock at an exchange ratio of approximately 2.0681 in January 2021 as a result of the application of reverse capitalization. See Note 3 (Reverse Capitalization) for details. |
Commitments and contingencies
Commitments and contingencies | 9 Months Ended | 12 Months Ended |
Sep. 30, 2021 | Dec. 31, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | ||
Commitments and contingencies | Commitments and Contingencies Legal Actions Various lawsuits against the Corporation may arise in the ordinary course of the Corporation's business. Contingent liabilities arising from ordinary course litigation, income taxes and other matters are not expected to be material in relation to the financial position of the Corporation. At September 30, 2021, and December 31, 2020, respectively, there were no material known contingent liabilities arising outside the normal course of business. Securities Class Actions and Derivative Litigation In February 2021, the Corporation and certain of its directors and officers were named as defendants in putative class actions filed in the United States District Court for the Middle District of Tennessee: Bond v. Clover Health Investments, Corp. et al. , Case No. 3:21-cv-00096 (M.D. Tenn.); Kaul v. Clover Health Investments, Corp., et al. , Case No. 3:21-cv-00101 (M.D. Tenn.); Yaniv v. Clover Health Investments, Corp., et al. , Case No. 3:21-cv-00109 (M.D. Tenn.); and Tremblay v. Clover Health Investments, Corp., et al. , Case No. 3:21-cv-00138 (M.D. Tenn.). The complaints asserted violations of sections 10(b) and 20(a) of the Exchange Act and Rule 10b-5 promulgated under the Exchange Act. The Kaul action asserted additional claims under sections 11 and 15 of the Securities Act. The complaints generally related to allegations published in an article issued on February 4, 2021, by Hindenburg Research LLC (the “Hindenburg Article”). The complaints sought unspecified damages on behalf of all persons and entities who purchased or acquired Clover securities during the proposed class period (which begins on October 6, 2020, and, depending on the complaint, ends on February 3, 2021, or February 4, 2021), as well as certain other costs. In April 2021, the Middle District of Tennessee class actions described above were consolidated under Bond v. Clover Health Investments, Corp., et al. , Case No. 3:21-cv-00096 (M.D. Tenn.) as lead case. The court appointed a lead plaintiff, approved a lead counsel and a liaison counsel, and approved the parties' proposed schedule for filing an amended complaint and the defendants’ responses. In June 2021, the lead plaintiff and a named plaintiff filed the amended complaint, asserting violations of sections 10(b) and 20(a) of the Exchange Act and Rule 10b-5 promulgated under the Exchange Act. The amended complaint names Clover and certain of its officers and directors as defendants and removes certain defendants named in the initial complaints. The amended complaint generally relates to allegations published in the Hindenburg Article and seeks unspecified damages on behalf of all persons and entities other than the defendants who purchased or acquired Clover securities during the proposed class period (which begins on October 6, 2020, and ends on February 3, 2021), as well as certain other costs. The Corporation moved to dismiss the complaint on August 27, 2021, and briefing on that motion is ongoing under the court’s briefing schedule. Parallel shareholder derivative actions have also been filed, naming Clover as a nominal defendant. The first action was filed in the United States District Court for the District of Delaware and is captioned Furman v. Garipalli, et al. , Case No. 1:21-cv-00191 (D. Del.). The complaint asserts violations of sections 10(b) and 21D of the Exchange Act, breach of fiduciary duty, and waste of corporate assets against certain of the Corporation’s directors. It seeks unspecified damages and an order requiring Clover to take certain actions to enhance Clover's corporate governance policies, and procedures. The second and third actions were filed in the United States District Court for the Middle District of Tennessee and are captioned Sun v. Garipalli, et al. , Case No. 3:21-cv-00311 (M.D. Tenn.), and Luthra v. Garipalli, et al. , Case No. 3:21-cv-00320 (M.D. Tenn.). The complaints assert violations of section 14(a) of the Exchange Act, breach of fiduciary duty, and aiding and abetting a breach of fiduciary duty. The Sun action also asserts unjust enrichment, abuse of control, gross mismanagement, waste of corporate assets, and contribution under section 11(f) of the Securities Act, and sections 10(b) and 21D of the Exchange Act. The complaints name certain current and former officers and directors as defendants. They seek unspecified damages and an order requiring Clover to take certain actions to enhance Clover’s corporate governance policies and procedures. The fourth action was filed in the United States District of Delaware and is captioned Wiegand v. Garipalli, et al. , Case No. 1:21-cv-01053 (D. Del.). The complaint asserts violations of sections 14(a) and 20(a) of the Exchange Act, breach of fiduciary duty, unjust enrichment, and waste of corporate assets. The complaint names certain current and former officers and directors as defendants. It seeks, among other things, unspecified damages and an order requiring Clover to take certain actions to improve Clover’s corporate governance and internal procedures. The fifth action was filed in the Supreme Court of the State of New York and is captioned Sankaranarayanan v. Palihapitiya, et al. , Index No. 655420/2021 (N.Y. Sup. Ct.). The complaint asserts breach of fiduciary duty and unjust enrichment. The complaint names certain former officers and directors as defendants. On May 10, 2021, the Middle District of Tennessee shareholder derivative actions described above were consolidated under Sun v. Garipalli, et al. , Case No. 3:21-cv-00311 (M.D. Tenn.) as lead case. The court designated co-lead counsel and liaison counsel and ordered the parties to submit a proposed schedule for the initial stage of the case. In June 2021, the parties in the Sun and Furman actions submitted joint stipulations and proposed orders to stay both actions. Soon thereafter, the courts in both actions approved the stipulations, thereby staying all proceedings and deadlines in the Sun and Furman actions pending a final decision on a motion to dismiss in the Middle District of Tennessee class actions consolidated under the Bond action. On September 16, 2021, the two District of Delaware derivative actions were consolidated under In re Clover Health Investments, Corp. Derivative Litigation, Case No. 1:21-cv-00191-LPS (Consolidated). The Furman complaint was deemed the operative complaint. All proceedings and deadlines in that matter are also stayed pending a final decision on a motion to dismiss in the Bond Action. All of these cases remain in the preliminary stages. Given the inherent uncertainty of litigation and the legal standards that must be met, including class certification and success on the merits, the Corporation has determined that it is not probable or estimable that an unfavorable outcome or potential loss will occur. Clover intends to vigorously defend itself against the claims asserted against it. Guaranty Assessments Under state guaranty assessment laws, including those related to state cooperative failures in the industry, the Corporation may be assessed, up to prescribed limits, for certain obligations to the policyholders and claimants of insolvent insurance companies that write the same line or lines of business as the Corporation. | Commitments and contingencies Litigation Various lawsuits against the Corporation may arise in the ordinary course of the Corporation’s business. Contingent liabilities arising from ordinary course litigation, income taxes, and other matters are not expected to be material in relation to the financial position of the Corporation. At December 31, 2020 and 2019, respectively, there were no material known contingent liabilities arising outside the normal course of business. Guaranty assessments Under state guaranty assessment laws, including those related to state cooperative failures in the industry, the Corporation may be assessed, up to prescribed limits, for certain obligations to the policyholders and claimants of insolvent insurance companies that write the same line or lines of business as the Corporation. |
Direct Contracting
Direct Contracting | 9 Months Ended |
Sep. 30, 2021 | |
Direct Contracting [Abstract] | |
Direct Contracting | Direct Contracting In April 2021, the Corporation began participating in the DC Model, which utilizes a structured model intended to reduce expenditures and preserve or enhance quality of care for beneficiaries in Medicare FFS. As a participating entity in the DC Model with a global risk arrangement, the Corporation assumes the responsibility of guaranteeing the performance of its care network. The DC Model is intended to reduce the administrative burden, support a focus on complex, chronically ill patients, and encourage physician organizations that have not typically participated in Medicare FFS to serve beneficiaries in Medicare FFS. Key components of the financial agreement for Direct Contracting include: • Performance Year Benchmark The target amount for Medicare expenditures on covered items and services (Medicare Part A and B) furnished to a DCE’s aligned beneficiaries during a performance year. The Performance Year Benchmark will be compared to the DCE’s performance year expenditures. This comparison will be used to calculate shared savings and shared losses. The Performance Year Benchmark is established at the beginning of the performance year utilizing prospective trend estimates and is subject to retrospective trend adjustments, if warranted, before the Financial Reconciliation. • Performance Year A calendar year except for the commencement year, which began on April 1, 2021, and will end on December 31, 2021. • Risk-Sharing Arrangements Used in determining the percent of savings and losses that DCEs are eligible to receive as shared savings or may be required to repay as shared losses. • Financial Reconciliation The process by which CMS determines shared savings or shared losses by comparing the calculated total benchmark expenditure for a given DCE’s aligned population to the actual expenditures of that DCE’s aligned beneficiaries over the course of a performance year that includes various risk-mitigation options such as stop-loss reinsurance and risk corridors. • Risk-Mitigation Options DCEs may elect a “stop-loss arrangement” each performance year, which is designed to reduce the financial uncertainty associated with high-cost expenditures of individual beneficiaries. The Corporation has elected participation in the program for the current performance year. Additionally, CMS has created a mandatory risk corridor program that allocates the DCE’s shared savings and losses in bands of percentage thresholds, after a deviation of greater than 25.0% of the Performance Year Benchmark. Performance Guarantees Certain of the Corporation’s arrangements with third-party providers require it to guarantee the performance of its care network to CMS, which if not obtained, could potentially result in payment to CMS during the financial reconciliation period. As a result of the DC agreement, the Corporation determined that there was a performance guarantee with the providers of DCE Beneficiaries that should be recognized in the financial statements. The Direct Contracting performance year obligation and receivable were initially measured as the target amount for Medicare expenditures on covered items and services. The obligation and receivable were subsequently amortized on a straight-line basis for the amount that represented the completed performance. The DCE is entitled to all of the consideration under the arrangement for all aligned beneficiaries and in the performance year in which the DCE is a participant, the final consideration due to the DCE by CMS (shared savings) or the consideration due to CMS by the DCE (shared loss) is reconciled in the subsequent years following the performance year. The shared savings or loss is measured periodically and will be applied to the Direct Contracting performance obligation if the Corporation is in a probable loss position. The Corporation is unable to estimate the maximum potential amount of future payments under the guarantee. This is attributable to the stop-loss arrangement and the corridors (tiered levels) in the arrangement. A certain percentage of these arrangements will still be the responsibility of the Corporation in addition to a number of variables that are not reasonable for the Corporation to estimate such as, but not limited to, risk ratings and benchmark trends that have an inestimable impact on the estimate of future payments. The tables below include the financial statement impacts of the performance guarantee: September 30, 2021 (in thousands) Direct Contracting performance year receivable $ 220,738 Direct Contracting performance year obligation (1) 244,599 __________________ (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 Nine Months Ended (in thousands) Amortization of the Direct Contracting performance year receivable $ (223,309) $ (441,476) Amortization of the Direct Contracting performance year obligation 223,309 441,476 Direct Contracting revenue 222,647 439,020 |
Dividend restrictions
Dividend restrictions | 9 Months Ended | 12 Months Ended |
Sep. 30, 2021 | Dec. 31, 2020 | |
Disclosure of Restrictions on Dividends, Loans and Advances Disclosure [Abstract] | ||
Dividend restrictions | Dividend RestrictionsThe Corporation's regulated insurance subsidiaries are subject to regulations and standards in their respective jurisdictions. These standards, among other things, require these subsidiaries to maintain specified levels of statutory capital and limit the timing and amount of dividends and other distributions that may be paid to their parent companies. Therefore, the Corporation's regulated insurance subsidiaries' ability to declare and pay dividends is limited by state regulations including obtaining prior approval by the New Jersey Department of Banking and Insurance. As of September 30, 2021, and December 31, 2020, neither of the regulated insurance subsidiaries had paid any dividends. | Dividend restrictionsThe Corporation’s regulated insurance subsidiaries are subject to regulations and standards in their respective jurisdictions. These standards, among other things, require these subsidiaries to maintain specified levels of statutory capital and limit the timing and amount of dividends and other distributions that may be paid to their parent companies. Therefore, the Corporation’s regulated insurance subsidiaries ability to declare and pay dividends is limited by state regulations. Although such regulations do not specifically restrict the regulated insurance subsidiaries from paying dividends, they require the regulated insurance subsidiaries to be financially sound as determined by the New Jersey Department of Banking and Insurance (DOBI). As of December 31, 2020 and 2019, neither of the regulated insurance subsidiaries paid any dividends and may not do so until they meet those requirements and are granted permission to do so by DOBI. |
Statutory equity and income
Statutory equity and income | 12 Months Ended |
Dec. 31, 2020 | |
Insurance [Abstract] | |
Statutory equity and income | Statutory equity and income Applicable insurance department regulations require that the Corporation’s regulated insurance subsidiaries prepare statutory financial statements in accordance with statutory accounting practices prescribed or permitted by the department of insurance of the respective state of domicile. These practices vary in some aspects from U.S. GAAP, with significant differences including that (a) certain assets are not included in statutory surplus, (b) certain statutory reserves are established by a direct charge to surplus, and (c) certain charges are reported as charges to capital and surplus, rather than as a component of net income. Aggregate statutory capital and surplus as per the statutory financial statements of the Corporation’s regulated insurance subsidiaries for the years ended December 31, 2020 and 2019, was $79.4 million and $73.3 million, respectively. The regulated insurance subsidiaries are subject to certain Risk-Based Capital (RBC) requirements specified by the National Association of Insurance Commissioners (NAIC). Under those requirements, the amount of capital and surplus maintained by the Corporation’s regulated insurance subsidiaries is to be determined based on various risk factors, such as (a) asset quality, (b) asset and liability matching, (c) loss reserve adequacy, and other business factors. Regulatory compliance is determined by a ratio of the Corporation’s regulatory total adjusted capital, as defined by the NAIC, to its authorized control level RBC, as defined by the NAIC. Generally, a ratio in excess of the regulatory threshold requires no corrective actions by the Corporation or regulators. As of December 31, 2020 and 2019, the regulated insurance subsidiaries’ capital and surplus exceeded the minimum RBC requirements of their applicable governmental regulator. The statutory RBC necessary to satisfy regulatory requirements of our statutory basis subsidiaries was approximately $75.8 million and $60.8 million as of December 31, 2020 and 2019, respectively. |
Regulatory matters
Regulatory matters | 12 Months Ended |
Dec. 31, 2020 | |
Regulated Operations [Abstract] | |
Regulatory matters | Regulatory mattersThe Corporation operates in a highly regulated environment. It is regulated by federal and state of New Jersey regulators. The Corporation’s regulated insurance subsidiaries must be licensed by and are subject to regulation by DOBI, which requires periodic financial reports and enforces minimum capital and/or reserve requirements. The laws and regulations governing the Corporation’s business and interpretations of those laws and regulations are subject to frequent change. Legislative, administrative, and public policy changes to the Health Care Reform Law continue to be debated, and the Corporation cannot predict if the Health Care Reform Law will be further modified, repealed, or replaced. The broad latitude given to the agencies administering, interpreting and enforcing current and future regulations governing the Corporation’s business could require the Corporation to change how it conducts its business, restrict revenue and enrollment growth, increase health care and administrative costs and capital requirements, or expose the Corporation to increased liability in the courts for coverage determinations, contract interpretation and other actions. The health care industry is also regularly subject to negative publicity, including as a result of governmental investigations, adverse media coverage and political debate surrounding industry regulation. Negative publicity may adversely affect the Corporation’s financial position, results of operations and cash flows and damage its reputation. |
Subsequent events
Subsequent events | 12 Months Ended |
Dec. 31, 2020 | |
Subsequent Events [Abstract] | |
Subsequent events | Subsequent events The Corporation entered into the Merger Agreement with SCH on October 5, 2020. Pursuant to the Merger Agreement, Asclepius Merger Sub Inc. was merged with and into the Corporation. Upon consummation of the business combination, the separate corporate existence of Merger Sub ceased, the Corporation survived and merged with and into SCH, and SCH was renamed Clover Health Investments, Corp. The Business Combination will have a significant impact on our future reported financial position and results as a consequence of the reverse capitalization. The most significant change in Clover’s future reported financial position and results is an estimated net increase in cash (as compared to our consolidated balance sheet at December 31, 2020) of approximately $670.0 million. This redemption includes approximately $400.0 million in proceeds from a private placement (PIPE Investment) that was consummated substantially simultaneously with the Business Combination, offset by additional transaction costs incurred in connection with the Business Combination. The estimated transaction costs for the Business Combination are approximately $61.8 million, of which $29.0 million represents deferred underwriter fees related to SCH’s initial public offering. The transaction closed on January 7, 2021, and the following day the Class A common stock and public warrants were listed on the Nasdaq Global Select Market (Nasdaq) under the symbols “CLOV” and “CLOVW” for trading in the public market. The Corporation’s management has evaluated subsequent events for recognition and measurement purposes through June 9, 2021, which is the date the Consolidated Financial Statements were available to be issued. The Corporation has concluded that no additional events or transactions have occurred that may require adjustment to the Consolidated Financial Statements or disclosures. |
Schedule I - Condensed Financia
Schedule I - Condensed Financial Information | 12 Months Ended |
Dec. 31, 2020 | |
Condensed Financial Information Disclosure [Abstract] | |
Schedule I - Condensed Financial Information | Schedule I As of December 31, 2020 2019 Assets: Cash and cash equivalents $ 5,432 $ 4,569 Other assets 102 342 Intercompany interest receivable 4,958 3,750 Intercompany note receivable 40,000 40,000 Investments in consolidated subsidiaries 77,212 158,159 Total assets $ 127,704 $ 206,820 Liabilities and stockholders’ deficit Liabilities Accounts payable and accrued expenses $ 13,140 $ 5,471 Accrued salaries and benefits 229 — Intercompany payable 27,251 4,093 Notes payable, net of discount and deferred issuance costs 107,674 76,758 Derivative liabilities 44,810 138,561 Warrants payable 97,782 17,672 Total liabilities 290,886 242,555 Convertible Preferred stock (Series Seed A, A-1, B, C, and D), $0.0001 par value; 155,387,025 shares authorized as of December 31, 2020 and 2019; 139,444,346 shares; after reverse capitalization, shares issued and outstanding as of December 31, 2020 and 2019; aggregate liquidation preference of$470,256 as of December 31, 2020 447,747 447,747 Stockholders’ deficit: Common stock, $0.0001 par value,351,572,668 shares authorized; 89,972,184 and88,674,206 issued; and 89,206,266 and 88,279,119; after reverse capitalization, outstanding as of December 31, 2020 and 2019, respectively 9 9 Additional paid-in capital 411,843 403,041 Accumulated deficit (1,022,781) (886,532) Total stockholders’ deficit (610,929) (483,482) Total liabilities, convertible preferred stock, and stockholders’ deficit $ 127,704 $ 206,820 Years ended December 31, 2020 2019 Revenues: Other income $ 3,685 $ 3,396 Investment income, net — 46 Total revenues 3,685 3,442 Expenses: General and administrative expenses 4,831 79 Other expense — 363 Total expenses 4,831 442 Loss from operations (1,146) 3,000 Change in fair value of warrants expense 80,328 2,909 Interest expense 35,556 23,155 Amortization of notes discount 21,118 15,913 (Gain) loss on derivative (93,751) 138,561 Equity in net losses of consolidated subsidiaries 91,995 186,199 Net loss $ (136,392) $ (363,737) Years ended December 31, 2020 2019 Cash flows from operating activities: Net loss $ (136,392) $ (363,737) Adjustments to reconcile net loss to net cash used in operating activities: Amortization of notes discount 21,084 15,807 Stock-based compensation expense 7,078 3,301 Paid in kind interest 28,334 11,633 Change in fair value of warrants 80,110 2,836 Change in derivative liabilities (93,751) 138,561 Amortization of warrants 218 73 Amortization of debt issuance costs 34 506 Changes in operating assets and liabilities: Other assets 214 (391) Accounts payable and accrued expenses 7,669 5,728 Accrued salaries and benefits 229 (169) Intercompany interest receivable (1,208) (1,200) Intercompany payable 23,158 (23,921) Net cash used in operating activities (63,223) (210,973) Cash flows from investing activities: Investments in consolidated subsidiaries 82,047 (154,469) Net cash provided (used in) by investing activities 82,047 (154,469) Cash flows from financing activities: Proceeds from issuance of convertible securities — 343,410 Deferred financing costs — (363) Payment of notes payable principal (18,752) (9,670) Issuance of common stock, net of early exercise liability 1,748 601 Buyback and subsequent cancellation of common stock (957) — Net cash (used in) provided by financing activities (17,961) 333,978 Net increase (decrease) in cash and cash equivalents 863 (31,464) Cash and cash equivalents, beginning of year 4,569 36,033 Cash and cash equivalents, end of year $ 5,432 $ 4,569 |
Insurance Subsidiaries
Insurance Subsidiaries | 12 Months Ended |
Dec. 31, 2020 | |
Insurance [Abstract] | |
Insurance Subsidiaries | Insurance SubsidiariesInvestments in consolidated subsidiaries include regulated insurance subsidiaries and unregulated subsidiaries. The Corporation holds $50.0 million and $156.0 million of cash, cash equivalents, short term investments and investment securities at the parent and unregulated subsidiaries as of December 31, 2020 and 2019, respectively. The Corporation holds $101.1 million and $107.3 million of cash, cash equivalents, short term investments and investment securities in regulated insurance subsidiaries as of December 31, 2020 and 2019, respectively. |
Schedule II - Valuation and Qua
Schedule II - Valuation and Qualifying Accounts | 12 Months Ended |
Dec. 31, 2020 | |
SEC Schedule, 12-09, Valuation and Qualifying Accounts [Abstract] | |
Schedule II - Valuation and Qualifying Accounts | Additions (in thousands) Balance at Charged to Charge to other (Deductions) Balance at Year ended December 31, 2019 Valuation allowance for deferred tax assets $ 104,976 $ 39,643 $ — $ — $ 144,619 Year ended December 31, 2020 Valuation allowance for deferred tax assets $ 144,619 $ 18,585 $ — $ — $ 163,204 |
Organization and Operations_2
Organization and Operations | 9 Months Ended | 12 Months Ended |
Sep. 30, 2021 | Dec. 31, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Organization and Operations | Organization and Operations Clover Health Investments, Corp. (collectively with its affiliates and subsidiaries, “Clover” or the “Corporation”) is singularly focused on creating great, sustainable healthcare to improve every life. Clover has centered its strategy on building and deploying technology through its flagship software platform, the Clover Assistant, to help America’s seniors receive better care at lower costs. Clover provides affordable, high-quality Medicare Advantage (MA) plans, including Preferred Provider Organization (PPO) and Health Maintenance Organization (HMO) plans, through its regulated insurance subsidiaries. The Corporation’s regulated insurance subsidiaries consist of Clover Insurance Company and Clover HMO of New Jersey Inc., which operate the Corporation’s PPO and HMO health plans, respectively. On April 1, 2021, the Corporation’s subsidiary Clover Health Partners, LLC, began participating as a Direct Contracting Entity (DCE) in the Global and Professional Direct Contracting Model (DC Model) of the Centers for Medicare and Medicaid Services (CMS), an agency of the United States Department of Health and Human Services. 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. Clover’s approach is to combine technology, data analytics, and preventive care to lower costs and increase the quality of health and life of Medicare beneficiaries. Clover’s technology platform uses machine learning-powered systems to deliver data and insights to physicians at the point of care in order to improve outcomes for beneficiaries and drive down costs. Clover’s MA plans generally provide access to a wide network of primary care providers, specialists, and hospitals, enabling its members to see any doctor participating in Medicare willing to accept them. Clover focuses on minimizing members’ out-of-pocket costs and offers many plans that allow members to pay the same co-pays for primary care provider visits regardless of whether their physician is in- or out-of-network. Clover's DCE, which assumes full risk (i.e., 100.0% shared savings and shared losses) for the total cost of care of aligned Original Medicare beneficiaries (DCE Beneficiaries), focuses on its technology platform to enhance healthcare delivery, reduce expenditures, and improve care for DCE Beneficiaries. Clover was originally incorporated as a Cayman Islands exempted company on October 18, 2019, as a special purpose acquisition company (SPAC) under the name Social Capital Hedosophia Holdings Corp. III (SCH). On October 5, 2020, SCH entered into a Merger Agreement (the “Merger Agreement”) with Clover Health Investments, Inc., a corporation originally incorporated on July 17, 2014, in the state of Delaware (Legacy Clover). Pursuant to the Merger Agreement, and a favorable vote of SCH’s stockholders on January 6, 2021, Asclepius Merger Sub Inc., a Delaware corporation and a newly formed, wholly owned subsidiary of SCH (Merger Sub), was merged with and into Legacy Clover. Upon consummation of the business combination, the separate corporate existence of Merger Sub ceased, the Corporation survived and merged with and into SCH, with SCH as the surviving corporation, and SCH was redomesticated as a Delaware corporation and renamed Clover Health Investments, Corp. (the “Business Combination”). The Business Combination was accounted for as a reverse recapitalization in accordance with generally accepted accounting principles in the United States (GAAP). Under the guidance in Accounting Standards Codification (ASC) 805, Legacy Clover is treated as the “acquirer” for financial reporting purposes. Legacy Clover is deemed the accounting predecessor of the combined business, and Clover, as the parent company of the combined business, is the successor SEC registrant, meaning that Legacy Clover’s financial statements for previous periods are disclosed in periodic reports filed with the SEC. As a result of the Business Combination, there were simultaneous changes to Legacy Clover’s convertible securities, warrants, and convertible preferred stock. See Note 9 (Notes and Securities Payable), Note 10 (Warrants Payable), and Note 14 (Convertible Preferred Stock) for additional information regarding these changes. See also Note 3 (Business Combination) for additional information related to the Business Combination. | Organization and operations Clover Health Investments, Corp., incorporated on July 17, 2014 in the state of Delaware, together with its affiliates and subsidiaries (collectively, the “Corporation” or “Clover”), provides affordable, high-quality Medicare Advantage (MA) plans, including Preferred Provider Organization (PPO) and Health Maintenance Organization (HMO) plans through its regulated insurance subsidiaries. The Corporation’s regulated insurance subsidiaries consist of Clover Insurance Company and Clover HMO of New Jersey Inc., which operate the PPO and HMO health plans, respectively. 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. Clover’s approach combines technology, data analytics and preventive care to lower costs and increase the quality of health and life of its members. Clover’s technology platform uses machine learning-powered systems to deliver data and insights to physicians at the point of care in order to improve outcomes for members and drive down costs. Clover provides access to a wide network of primary care providers, specialists, and hospitals, enabling its members to see any doctor participating in Medicare willing to accept them. Clover focuses on keeping out-of-pocket costs for its members to a minimum and allows members to pay the same low cost-sharing regardless of whether their doctor is in- or out-of-network. On October 5, 2020, Clover entered into a Merger Agreement (Merger Agreement) with Social Capital Hedosophia Holdings Corp. III (SCH), a special purpose acquisition company (SPAC). The Business Combination is accounted for as a reverse capitalization in accordance with generally accepted accounting principles in the United States (GAAP). Under the guidance in Accounting Standards Codification (ASC) 805, Clover Health Investments, Corp. is treated as the “acquirer” for financial reporting purposes. The Corporation is deemed the accounting predecessor of the combined business, and the parent company of the combined business is the successor SEC registrant, meaning that the Corporation’s financial statements for previous periods will be disclosed in the registrant’s future periodic reports filed with the SEC. As a result of the merger event, there were simultaneous changes to the Corporation’s convertible securities agreement and certain of the warrant agreements. See Note 13 (Notes and securities payable) and Note 14 (Warrants payable) for additional information regarding these changes to the respective agreements. See also Note 26 (Subsequent events) for additional information related to the merger event. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies | 9 Months Ended | 12 Months Ended |
Sep. 30, 2021 | Dec. 31, 2020 | |
Accounting Policies [Abstract] | ||
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies Basis of presentation The Corporation’s interim Condensed Consolidated Financial Statements have been prepared in conformity with GAAP and include the accounts of the Corporation and its wholly owned subsidiaries. In the opinion of management, the Corporation has made all necessary adjustments, which include normal recurring adjustments necessary for a fair presentation of its financial position and its results of operations for the interim periods presented. All material intercompany balances and transactions have been eliminated in consolidating these financial statements. These interim Condensed Consolidated Financial Statements should be read in conjunction with the audited Consolidated Financial Statements as of and for the years ended December 31, 2020 and 2019 included in Exhibit 99.5 of Amendment No. 1 to the Current Report on Form 8-K (the “Form 8-K/A”) filed with the Securities and Exchange Commission (SEC) on April 1, 2021. Reclassifications To conform to the current period presentation, prepaid expenses, which were previously included in other assets, current, are presented as a separate line item in the prior year’s Condensed Consolidated Balance Sheet. Certain amounts in the prior year period’s Condensed Consolidated Statement of Cash Flows have been reclassified to conform to the current year period’s presentation, primarily related to the amortization of warrants, amortization of debt issuance costs, and paid-in-kind interest. These reclassifications had no effect on the previously reported Consolidated Financial Statements. Use of estimates The preparation of the Condensed Consolidated Financial Statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the Condensed Consolidated Financial Statements and accompanying notes. The areas involving the most significant use of estimates are the amounts of incurred but not reported claims. Many factors can cause actual outcomes to deviate from these assumptions and estimates, such as changes in economic conditions, changes in government healthcare policy, advances in medical technology, changes in treatment patterns, and changes in average lifespan. Accordingly, the Corporation cannot determine with precision the ultimate amounts that it will pay for, or the timing of payment of actual claims, or whether the assets supporting the liabilities will grow to the level the Corporation assumes prior to payment of claims. If the Corporation’s actual experience is different from its assumptions or estimates, the Corporation’s reserves may prove inadequate. As a result, the Corporation would incur a charge to operations in the period in which it determines such a shortfall exists, which could have a material adverse effect on the Corporation’s business, results of operations, and financial condition. Other areas involving significant estimates include risk adjustment provisions related to Medicare contracts and the valuation of the Corporation’s investment securities, goodwill and other intangible assets, reinsurance, the premium deficiency reserve, warrants, the embedded derivative related to the convertible securities, stock-based compensation, recoveries from third parties for coordination of benefits, the Direct Contracting benchmark specifically cost trend and risk score estimates that can develop over time, and final determination of medical cost adjustment pools. Performance guarantees Certain of the Corporation’s arrangements with third-party providers require it to guarantee the performance of its care network to CMS. As a result of the Corporation’s participation in the DC Model, the Corporation determined that it was making a performance guarantee with respect to providers of DCE Beneficiaries that should be recognized in the financial statements. Accordingly, a liability for the performance guarantee was recorded on the Condensed Consolidated Balance Sheet. Each month, as the performance guarantee is fulfilled, the guarantee is amortized on a straight-line basis for the amount that represents the completed performance. With respect to each performance year in which the DCE is a participant, the final consideration due to the DCE by CMS (shared savings) or the consideration due to CMS by the DCE (shared loss) is reconciled in the subsequent years following the performance year. The shared savings or loss is measured periodically and will be applied to the Direct Contracting performance obligation if the Corporation is in a probable loss position. Direct Contracting revenue is also known in the DC Model as CMS’s performance year expenditures and is the primary component used to calculate shared savings or shared loss versus the performance year benchmark. Direct Contracting revenue is representative of CMS’s total expenditures incurred for medical services provided on behalf of DCE Beneficiaries during months in which those beneficiaries were alignment-eligible and aligned to the DCE. Direct Contracting revenue is calculated by taking the sum of the capitation payments made to the Corporation for services within the scope of the Corporation’s capitation arrangement and fee-for-service (FFS) payments made to providers directly from CMS. Capitalized software development costs - cloud computing arrangements The Corporation’s cloud computing arrangements mostly comprise hosting arrangements which are service contracts, whereby the Corporation gains remote access to use enterprise software hosted by the vendor or another third party on an as-needed basis for a period of time in exchange for a subscription fee. Implementation costs for cloud computing arrangements are capitalized if certain criteria are met and consist of internal and external costs directly attributable to developing and configuring cloud computing software for its intended use. These capitalized implementation costs are presented in the Condensed Consolidated Balance Sheets in other assets, and are generally amortized over the fixed, non-cancelable term of the associated hosting arrangement on a straight-line basis. Deferred acquisition costs Acquisition costs directly related to the successful acquisition of new business, which is primarily made up of commissions costs, are deferred and subsequently amortized. Deferred acquisition costs are recorded as other assets on the Condensed Consolidated Balance Sheet and are amortized over the estimated life of the related contracts. The amortization of deferred acquisition costs is recorded in general and administrative expenses in the Condensed Consolidated Statement of Operations and Comprehensive Loss. As of September 30, 2021, there were no deferred acquisition costs as a result of the acceleration of amortization for deferred acquisition costs due to the recognition of a premium deficiency reserve during the three and nine months ended September 30, 2021. For the three and nine months ended September 30, 2021, amortization expense of deferred acquisition costs of $1.1 million and $9.6 million, respectively, were recognized in general and administrative expenses. There was no amortization expense of deferred acquisition costs for the three and nine months ended September 30, 2020. COVID-19 The societal and economic impact of the novel coronavirus (COVID-19) pandemic is continuing to evolve, and the ultimate impact on the Corporation’s business, results of operations, financial condition, and cash flows is uncertain and difficult to predict. The global pandemic has severely impacted businesses worldwide, including many in the health insurance sector. In response to the pandemic, the Corporation has implemented additional steps related to its care delivery, member support, and internal policies and operations. Recent accounting pronouncements Recently adopted accounting pronouncements Emerging Growth Company The Corporation currently qualifies as an “emerging growth company” under the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”). Accordingly, the Corporation has the option to adopt new or revised accounting guidance either (i) within the same periods as those otherwise applicable to non-emerging growth companies or (ii) within the same time periods applicable to private companies. The Corporation has elected to adopt new or revised accounting guidance within the same time period as private companies, unless, as indicated below, management determines it is preferable to take advantage of early adoption provisions offered within the applicable guidance. Fair value measurements In August 2018, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standard Update (ASU) 2018-13, Changes to Disclosure Requirements for Fair Value Measurements, the purpose of which is to improve the effectiveness of disclosure requirements for recurring and nonrecurring fair value measurements. The standard removes, modifies, and adds certain disclosure requirements and is in effect for all entities in fiscal years beginning after December 15, 2019. This standard became effective for the Corporation on January 1, 2020, and did not have a material impact on the Corporation’s disclosures. Cloud computing arrangements In August 2018, the FASB issued ASU 2018-15, Intangibles – Goodwill and Other (Topic 350) – Internal Use Software: Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract. This update changes the accounting guidance for cloud computing arrangements. If a cloud computing arrangement includes a license to internal-use software, the software license is accounted for by the customer by recognizing an asset for the software license and, to the extent that the payments attributable to the software license are made over time, recognizing a corresponding liability. If a cloud computing arrangement does not include a software license, the entity should account for the arrangement as a service contract and should expense any fees associated with the hosting element (service) of the arrangement as incurred. ASU 2018-15 is effective for nonpublic entities for fiscal years beginning after December 15, 2020, with early adoption permitted. The Corporation adopted ASU 2018-15 on January 1, 2021, on a prospective basis. The Corporation's cloud computing arrangements relate to the set-up of various platforms, including but not limited to clinical data repositories and other system integrations. The capitalized implementation costs are presented in the Condensed Consolidated Balance Sheet in other assets, current and are amortized on a straight-line basis over the term of the underlying cloud computing hosting contract, which is the noncancelable term of the arrangement plus any reasonably certain renewal periods. As of September 30, 2021, $5.0 million was recorded in other assets, current, as deferred implementation costs. For both the three and nine months ended September 30, 2021, amortization expense associated with the Corporation’s cloud computing arrangements was $0.2 million. No impairment was recognized during the three and nine months ended September 30, 2021, as there were no events or changes in circumstances to indicate that the carrying amount of the Corporation’s cloud computing arrangements may not be recoverable. Accounting pronouncements effective in future periods Credit losses In June 2016, the FASB issued ASU 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, which was subsequently modified by several ASUs issued in 2018 and 2019. This standard introduces a new current expected credit loss (CECL) model for measuring expected credit losses for certain types of financial instruments measured at amortized cost and replaces the incurred loss model. The CECL model requires an entity to recognize an allowance for credit losses for the difference between the amortized cost basis of a financial instrument and the amount the entity expects to collect over the instrument's contractual life after consideration of historical experience, current conditions, and reasonable and supportable forecasts. This standard also introduces targeted changes to the available-for-sale debt securities impairment model. It eliminates the concept of other-than-temporary impairment and requires an entity to determine whether any impairment is the result of a credit loss or other factors. ASU 2016-13 is effective for nonpublic entities in fiscal years beginning after December 15, 2022, and public entities beginning after December 15, 2019. Early adoption is permitted. The Corporation has evaluated the impact of ASU 2016-13 on the Consolidated Financial Statements and expects the impact to be immaterial. Goodwill and other intangible assets In January 2017, the FASB issued ASU 2017-04, Intangibles – Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment. This update removes Step 2 of the goodwill impairment test under current guidance, which requires a hypothetical purchase price allocation. The new guidance requires an impairment charge to be recognized for the amount by which the carrying amount exceeds the reporting unit's fair value. Upon adoption, the guidance is to be applied prospectively. ASU 2017-04 is effective for nonpublic entities in fiscal years beginning after December 15, 2021, and public entities beginning after December 15, 2019. Early adoption is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. The Corporation is currently evaluating the impact of the adoption of ASU 2017-04 on the Consolidated Financial Statements, but does not expect for this to have a material impact on the Consolidated Financial Statements. Income taxes In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes. The amendments in ASU 2019-12 remove certain exceptions to the general principles in ASC Topic 740. The amendments also clarify and amend existing guidance to improve consistent application. The amendments are effective for nonpublic entities in fiscal years beginning after December 15, 2021, and public entities beginning after December 15, 2020. Early adoption is permitted. The transition method (retrospective, modified retrospective, or prospective basis) related to the amendments depends on the applicable guidance, and all amendments for which there is no transition guidance specified are to be applied on a prospective basis. The Corporation is currently evaluating the impact of ASU 2019-12 on the Consolidated Financial Statements, but does not expect for this to have a material impact on the Consolidated Financial Statements. Accounting for convertible instruments and contracts in an entity’s own equity In August 2020, the FASB issued ASU 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40). The amendments in ASU 2020-06 simplify the accounting for convertible instruments by removing certain separation models for convertible instruments. Under the amendments in ASU 2020-06, the embedded conversion features no longer are separated from the host contract for convertible instruments with conversion features that are not required to be accounted for as derivatives, or that do not result in substantial premiums accounted for as paid-in capital. Consequently, a convertible debt instrument will be accounted for as a single liability measured at its amortized cost, and a convertible preferred stock will be accounted for as a single equity instrument measured at its historical cost, as long as no other features require bifurcation and recognition as derivatives. ASU 2020-06 is effective for nonpublic entities for fiscal years beginning after December 15, 2023. Early adoption is permitted, but no earlier than fiscal years beginning after December 15, 2020 and public entities beginning after December 15, 2021. The Corporation is currently evaluating the impact of the adoption of ASU 2020-06 on the Consolidated Financial Statements, but does not expect for this to have a material impact on the Consolidated Financial Statements. | Summary of significant accounting policies Basis of presentation The Corporation has prepared these Consolidated Financial Statements in accordance with U.S. GAAP, which differs materially from the statutory accounting practices prescribed by various insurance regulatory authorities. The Consolidated Financial Statements include the accounts of the Corporation and its subsidiaries. Intercompany balances and transactions have been eliminated in consolidating these financial statements. Use of estimates The preparation of the Consolidated Financial Statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the Consolidated Financial Statements and accompanying notes. The areas involving the most significant use of estimates are the amounts incurred but not reported (IBNR) claims, recoveries from third parties for coordination of benefits, and final determination of medical cost adjustment pools. Many factors can cause actual outcomes to deviate from these assumptions and estimates, such as changes in economic conditions, changes in government healthcare policy, advances in medical technology, changes in treatment patterns, and changes in average lifespan. Accordingly, the Corporation cannot determine with precision the ultimate amounts that it will pay for, or the timing of payment of actual claims, or whether the assets supporting the liabilities will grow to the level the Corporation assumes prior to payment of claims. The assumptions and estimates are based on the Corporation’s knowledge of current events and anticipated future events; however, actual results may differ from the amounts recorded in the Consolidated Financial Statements, and the Corporation would incur a charge to operations in the period in which it determines a shortfall exists. Other areas involving significant estimates include risk adjustment provisions related to Medicare contracts and the valuation of investment securities, goodwill and other intangible assets, warrants, the embedded derivative related to the convertible securities, and stock-based compensation. Reclassifications Certain amounts in the prior years’ Consolidated Statements of Cash Flows have been reclassified to conform to the current year’s presentation, primarily related to the amortization of warrants, amortization of debt issuance costs, and paid in kind interest. These reclassifications had no effect on the previously reported Consolidated Financial Statements. Segment information The Corporation’s chief operating decision maker is the Chief Executive Officer. The chief operating decision maker manages operations, allocates resources, and evaluates financial performance on a company-wide basis. The Corporation operates in one reporting segment. COVID-19 The temporary deferral of non-essential care resulting from stay-at-home and physical distancing orders and other restrictions on movement and economic activity implemented throughout the country beginning in the second half of March 2020 to reduce the spread of the novel coronavirus (COVID-19) has impacted the Corporation’s business. Beginning in late March 2020 and trending throughout 2020, utilization of healthcare services began to experience reductions as a result of the stay-at-home orders and the closure of certain provider facilities, with some recovery in utilization taking place during times of more eased restrictions. The impact of the deferral of non-essential care was partially offset by additional costs incurred as a result of care for those members who have contracted COVID-19 as well as costs incurred for efforts related to the Corporation’s pandemic response efforts. Cash and cash equivalents Cash and cash equivalents include cash on hand, amounts due from banks, money market instruments and other highly liquid investments with original maturities of 90 days or less. The carrying values of these instruments approximate their respective fair value due to the short-term maturity of these investments. At December 31, 2020 and 2019, the Corporation had cash and cash equivalents at financial institutions which are insured by the Federal Deposit Insurance Corporation (FDIC). At times, balances may exceed the FDIC insured limits. Management believes that credit risk related to those balances is minimal. Investment securities Short-term investments Short-term investments consist of investments which the Corporation expects to convert into cash within one year of the balance sheet date, including time deposits and debt securities, which have original maturities greater than 90 days. Short-term investments are measured at their amortized cost. The carrying value of these instruments approximate their respective fair value due to the short-term maturity of these investments. Investment securities, available-for-sale Investment securities, which consist entirely of debt securities with fixed or determinable payments and fixed maturity dates, that the Corporation purchases with the intent and ability to sell before maturity, are classified as available-for-sale financial assets. The Corporation’s available-for-sale investments are U.S. Treasury fixed maturity securities. Available-for-sale investments are measured at fair value, and unrealized gains and losses, if any, are recorded in other comprehensive income, net of applicable income taxes, until realized from a sale or other-than-temporary impairment. Investment securities, held-to-maturity Investment securities, which consist entirely of debt securities with fixed or determinable payments and fixed maturity dates, where the Corporation has a positive intent and ability to hold to maturity, are classified as held-to-maturity financial assets. The Corporation’s held-to-maturity investments are comprised of U.S. Treasury fixed maturity securities. Subsequent to initial measurement, held-to-maturity investments are measured at amortized cost using the effective interest method less impairment. Unrealized holding gains or losses are not recognized. Other-than-temporary impairment The Corporation has a process in place to identify securities that could potentially have an impairment that is other-than-temporary. This process involves monitoring market events that could impact issuers’ credit ratings, business climate, management changes, litigation and government actions, and other similar factors. This process also involves monitoring late payments, downgrades by rating agencies, key financial ratios, financial statements, revenue forecasts and cash flow projections as indicators of credit risks. The Corporation considers relevant facts and circumstances in evaluating whether the impairment of a security is other-than-temporary. Relevant facts and circumstances considered include (1) the length of time and extent to which the fair value has been below cost or amortized cost, (2) adverse conditions specifically to the financial condition of the issuer or related to the industry, (3) geographic area of the issuer, or the underlying collateral of a security including the current and future impact of any specific events, (4) the payment structure of the security, (5) changes in credit rating of the security by the rating agencies, (6) the volatility of the fair value changes, and (7) changes in fair value of the security after the balance sheet date and whether it is more likely than not that the Corporation will not be required to sell the security until maturity or until it recovers in value. There are a number of significant risks and uncertainties inherent in the process of monitoring impairments and determining if an impairment is other-than-temporary. These risks and uncertainties include (1) the risk that management’s assessment of an issuer’s ability to meet all of its contractual obligations will change based on changes in the credit characteristics of that issuer, (2) the risk that the economic outlook will be worse than expected or have more of an impact on the issuer than anticipated, (3) erroneous information or fraudulent financial statements could be provided to the Corporation’s management to determine the fair value estimates and other-than-temporary impairments, and (4) the risk that new information obtained by the Corporation, or changes in other facts and circumstances lead the Corporation to change its intent to hold the security to maturity or until it recovers in value. Any of these situations could result in a charge to operations in a future period. For a debt security in an unrealized loss position that the Corporation has the intent to sell, or it is more likely than not that the Corporation will have to sell the debt security before recovery of its amortized cost basis, the decline in value is deemed to be other-than-temporary and is recorded to other-than- temporary impairment losses, recognized in investment income, net in the Consolidated Statements of Operations and Comprehensive Loss. For impaired debt securities that the Corporation does not intend to sell or it is more likely than not that it will not have to sell such securities, but the Corporation expects that it will not fully recover the amortized cost basis, the credit component of the other-than-temporary impairment is recognized in other-than-temporary impairment losses, recognized in investment income, net in the Consolidated Statements of Operations and Comprehensive Loss, and the non-credit component of the other-than-temporary impairment is recognized in other comprehensive income. Expected cash flows to be received are evaluated as compared to amortized cost to determine if a credit loss has occurred. The amount of the credit loss component of the security is estimated as the difference between the amortized cost and the present value of the expected cash flows of the security. In developing the expected recovery analysis for debt securities, the Corporation reviews business prospects, credit ratings and available information from asset managers and rating agencies for individual securities. The present value is determined using the best estimate of future cash flows discounted at the implicit interest rate at the date of purchase. For the years ended December 31, 2020 and 2019, respectively, there has been no impairment loss reported. Allowance for uncollectible receivables The Corporation assesses outstanding receivables at each period for collection risk. The majority of collections are from the Center for Medicare and Medicaid Services (CMS), a United States government entity that presents very limited credit risk. Investment income, net Investment income includes interest, dividends received or accrued on investments, and realized gains or losses. Investment income is reported as earned and is presented net of related investment expenses and other-than-temporary impairment. Realized gains or losses are recognized based on the specific identification method. Purchases and sales are recorded on a trade-date basis. Fair value measurements Fair value is defined as the price that would be received upon the sale of an asset or paid to transfer a liability in an orderly transaction between willing, able and knowledgeable market participants at the measurement date. Fair value measurements are not adjusted for transaction costs. To determine the fair value of its investments, the Corporation utilizes third-party valuation service providers to gather, analyze and interpret market information and derive fair values based upon relevant methodologies and assumptions for individual instruments. Valuation service providers typically obtain data about market transactions and other key valuation model inputs from multiple sources and, through the use of widely accepted valuation models, provide a single fair value measurement for individual securities for which a fair value has been requested under the terms of service agreements. The inputs used by the valuation service providers include, but are not limited to, market prices from recently completed transactions and transactions of comparable securities, interest rate yield curves, credit spreads, currency rates and other market observable information, as applicable. The valuation models consider, among other things, observable market information as of the measurement date as well as the specific attributes of the security being valued including its term, interest rate, credit rating, industry sector and, when applicable, collateral quality and other issue or issuer specific information. When market transactions or other observable market data is limited, the extent to which judgment is applied in determining fair value is greatly increased. Assets and liabilities measured at fair value are categorized into a fair value hierarchy based on whether the inputs to valuation techniques are observable or unobservable. Observable inputs are those that market participants operating within the same marketplace as the Corporation would use in pricing the Corporation’s assets or liabilities based on independently derived and observable market data. Unobservable inputs are inputs that cannot be sourced from a broad active market in which assets or liabilities identical or similar to those of the Corporation are traded. The fair value hierarchy includes three levels of inputs based on the degree to which the exit price is independently observable or determinable that may be used to measure fair value as described below: Level 1 – Valuations are based on quoted (unadjusted) market prices in active markets for identical assets or liabilities. Since valuations are based on quoted prices that are readily and regularly available in an active market, valuation of these products does not entail a significant degree of judgment. An active market is defined as a market where transactions for the financial instrument occur with sufficient frequency and volume to provide pricing information on an ongoing basis; Level 2 – Valuations are based on observable inputs other than Level 1 prices such as quoted prices in active markets for similar assets or liabilities, quoted prices for identical or similar assets or liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities; Level 3 – Valuations are based on techniques that use significant inputs that are unobservable and reflect management’s best estimate of what market participants would use when pricing the asset or liability, including assumptions about risk. The valuation of Level 3 assets and liabilities requires the greatest degree of judgment. These measurements may be made under circumstances in which there is little, if any, market activity for the asset or liability. The Corporation’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment. In making the assessment, the Corporation considers factors specific to the asset or liability. In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, the level in the fair value hierarchy within which the fair value measurement is classified is determined based on the lowest level input that is significant to the fair value measurement in its entirety. Fair values of actively traded investments securities are based on quoted market prices. Fair values of other investment securities are based on quoted market prices of identical or similar securities or based on observable inputs, like interest rates generally using a market valuation approach, or, less frequently, an income valuation approach, and are generally classified as Level 2. Clover obtains at least one price for each security from a third-party pricing service. These prices are generally derived from recently reported trades for identical or similar securities, including adjustments through the reporting date based upon observable market information. When quoted prices are not available, the third-party pricing service may use quoted market prices of comparable securities or a discounted cash flow analysis, incorporating inputs that are currently observable in the markets for similar securities. Inputs that are often used in the valuation methodologies include benchmark yields, reported trades, credit spreads, broker quotes, default rates, and prepayment speeds. Fair values of warrants and derivative liabilities related to convertible securities are estimated using a probability-weighted expected return method, where the values of various instruments are estimated based on an analysis of future values for the Corporation, assuming various future outcomes. The resulting instruments’ values are based upon the probability-weighted present value of expected future investment returns, considering each of the possible future outcomes available to the Corporation, as well as the economic benefits attributable to each class of instruments. The expected future investment returns are estimated using a variety of methodologies, including both the market approach and the income approach, where an observable quoted market does not exist, and are generally classified as Level 3. Such methodologies include reviewing values ascribed to the most recent financing by the Corporation, comparing the subject instrument with similar instruments of publicly traded companies in similar lines of business, and reviewing the underlying financial performance of the Corporation and subject instrument, including estimating discounted cash flows. To estimate the fair value attributable to the derivative liabilities, the with and without approach is used. An evaluation of multiple scenarios for future payoffs for the underlying convertible securities is performed using option pricing models, and probability-weighted average value indications are used to arrive at the estimated fair values. Concentrations of credit risk Financial instruments that potentially subject the Corporation to concentrations of credit risk consist principally of cash and cash equivalents. Cash and cash equivalents are held with financial institutions of high quality. Balances may exceed the amount of insurance provided on such balances. The ceding of insurance does not legally discharge the Corporation from its primary liability for the full amount of the policy coverage, and therefore the Corporation will be required to pay the loss and bear collection risk if the reinsurer fails to meet its obligations under the reinsurance agreement. To minimize exposure to significant losses from reinsurance insolvencies, the Corporation evaluates the financial condition of its reinsurers and monitors concentrations of credit risk. Acquisition costs Acquisition costs that vary with and are directly related to the acquisition of new and renewal business, including commissions, are deferred and subsequently amortized. Deferred acquisition costs are recorded as other assets on the Consolidated Balance Sheets and are amortized over the estimated life of the related contracts. The amortization of deferred acquisition costs is recorded in general and administrative expenses in the Consolidated Statements of Operations and Comprehensive Loss. To the extent that a premium deficiency is identified after writing down unamortized deferred acquisition costs, a liability for premium deficiency reserve is established and reported on the Consolidated Balance Sheets. Property and equipment, net Property and equipment, net is reported at cost less accumulated depreciation. Depreciation is recorded using the straight-line method over the estimated useful lives of the respective assets, which are generally three Property and equipment is reviewed for impairment periodically whenever adverse events or changes in circumstances indicate the carrying value of the asset may not be recoverable. Losses are recognized in operations when the undiscounted future cash flows expected to result from the use of the asset are less than its carrying value. An impairment loss is recognized based on the excess of the carrying value over the fair value of the asset. Goodwill and other intangible assets Goodwill represents the excess of the purchase price over the fair value of net assets acquired in business combinations. Goodwill is not amortized but is tested for impairment on an annual basis at a level of reporting referred to as the reporting unit, and more frequently if adverse events or changes in circumstances indicate that the asset may be impaired. A component is considered a reporting unit if the component constitutes a business for which discrete financial information is available that is regularly reviewed by management. Management aggregates components into one reporting unit if they have similar economic characteristics. Goodwill is assigned to the reporting units that are expected to benefit from the specific synergies of the business combination. Management reviews goodwill for impairment to determine both the existence and amount of goodwill impairment, if any. Impairment tests are performed, at a minimum, in the fourth quarter of each year. Management first uses a qualitative assessment to determine if it is more likely than not that a reporting unit is impaired. The qualitative test is used as a screening to help determine if it is necessary to perform the quantitative test. If there are indicators that the fair value is less than the carrying amount of any reporting unit, management performs a quantitative assessment where management allocates the fair value of the reporting units to the assets and liabilities with the unallocated fair value representing an implied fair value of goodwill which is then compared to the carrying amount of goodwill. The impairment review requires management to make judgments in determining various assumptions with respect to changes in economic conditions, revenues, operating margins, growth rates and discount rates. There was no impairment of goodwill during the years ended December 31, 2020 and 2019, respectively. Other intangible assets arising from business combinations are initially recognized at fair value at the date of acquisition. Other intangible assets with indefinite useful lives are tested for impairment at least annually, or more frequently if events or changes in circumstances indicate that the assets may be impaired. The annual impairment test for indefinite-lived intangible assets may be completed through a qualitative assessment to determine if the fair value of the indefinite-lived intangible assets is more likely than not greater than the carrying amount. The Corporation may elect to bypass a qualitative assessment, or if a qualitative assessment indicates it is more likely than not that the estimated carrying value exceeds the fair value, the Corporation will test for impairment using a quantitative process. If the Corporation determines that impairment of its intangible assets may exist, the amount of impairment loss is measured as the excess of carrying value over fair value. The estimates in the determination of the fair value of indefinite-lived intangible assets include the anticipated future revenues of the Corporation and the resulting cash flows. As of December 31, 2020 and 2019, respectively, there were no circumstances that indicate that the carrying amount of intangible assets deemed to have an indefinite useful life may not be recoverable. Reinsurance In the normal course of business, the Corporation seeks to reduce losses by reinsuring certain levels of risk in areas of exposure with other insurance enterprises or reinsurers. Amounts recoverable from reinsurers are estimated in a manner consistent with the claim liability associated with the reinsured policy. To minimize exposure to losses related to a reinsurer’s inability to pay, the financial condition of such reinsurer is evaluated initially upon placement of the reinsurance and periodically thereafter. In addition to considering the financial condition of a reinsurer, the collectability of the reinsurance recoverable is evaluated based upon a number of factors. Such factors include the amounts outstanding, length of collection periods, disputes, any collateral or letters of credit held and other relevant factors. To the extent that an allowance for uncollectible reinsurance recoverable is established, amounts deemed to be uncollectible would be written off against the allowance for estimated uncollectible reinsurance recoverable. The Corporation had no allowances for uncollectible reinsurance recoverable as of December 31, 2020 and 2019, respectively. Amounts recoverable from reinsurers are estimated in a manner consistent with the liability associated with the reinsured business and consistent with the terms of the underlying contracts. Although reinsurance agreements contractually obligate reinsurers to reimburse the Corporation for their share of losses, they do not discharge the primary liability of the Corporation. The Corporation remains liable for unpaid claims and claims adjustment expenses associated with ceded insured risks in the event the assuming reinsurers fail to meet their contractual obligations. The costs of the reinsurance are recognized over the life of the contract in a manner consistent with the earning of premiums on the underlying policies subject to the reinsurance contracts. Unpaid claims Unpaid claims and unpaid claims adjustment expenses include reported claims and IBNR, as well as the estimated expense of processing these claims. Management develops an estimate for IBNR using actuarial methodologies and assumptions, primarily based upon historical claim experience. Although there is considerable variability in such estimates, management believes that the unpaid claims and unpaid claims adjustment expense liability is adequate and represents management’s best estimate of the ultimate cost of all reported and unreported claims incurred through the balance sheet date. The estimates are continually reviewed and adjusted as experience develops or new information becomes known. Changes in estimates are reflected in current consolidated operating results. Liabilities for both reported claims and IBNR not yet processed through the Corporation’s systems are determined in the aggregate, employing actuarial methods that are commonly used by health insurance actuaries and meet Actuarial Standards of Practice. Actuarial Standards of Practice require that the claim liabilities be appropriate under moderately adverse circumstances. Clover determines the amount of the liability for incurred but not paid claims by following a detailed actuarial process that uses both historical claim payment patterns as well as emerging medical cost trends to project the best estimate of claim liabilities. Under this process, historical paid claims data is formatted into “claim triangles,” which compare claim incurred dates to the dates of claim payments. This information is analyzed to create “completion factors” that represent the average percentage of total incurred claims that have been paid through a given date after being incurred. Completion factors are applied to claims paid through the period-end date to estimate the ultimate claim expense incurred for the period. Actuarial estimates of incurred but not paid claim liabilities are then determined by subtracting the actual paid claims from the estimate of the ultimate incurred claims. The Corporation’s reserving practice is to consistently recognize an actuarial best estimate inclusive of a provision for moderately adverse conditions. This provision is reported as part of incurred claims. Medical claims incurred The Corporation recognizes the cost of medical claims in the period in which services are provided, including an estimate of the cost of medical claims IBNR. Medical claim expense reported in the Consolidated Statements of Operations and Comprehensive Loss includes direct medical expenses. Direct medical expenses include amounts paid or payable to hospitals, physicians, pharmacy benefit managers, providers of ancillary services, mandatory supplemental benefits, and is inclusive of the medical expense related to the Corporation’s employed clinicians providing in-home care. Recorded direct medical expenses are reduced by the amount of pharmacy rebates earned, which are estimated based on historical utilization of specific pharmaceuticals, current utilization and contract terms. Pharmacy rebates earned but not yet received from pharmaceutical manufacturers are included in healthcare receivable in the Consolidated Balance Sheets. Overpayments to providers are recognized as a contra medical expense and reported as other receivables in the Consolidated Balance Sheets. Premium deficiency reserve A liability for premium deficiency reserves is an actuarial estimate for anticipated losses on the Corporation’s Medicare Advantage and Medicare Advantage Part D (MAPD) business. Management reassesses the profitability of contracts for providing insurance coverage to members when operating results or forecasts indicate probable future losses. Management establishes a premium deficiency reserve in current operations to the extent that the sum of expected future costs, claim adjustment expenses, and maintenance costs exceeds related future premiums under contracts without consideration of investment income. For purposes of calculating premium deficiency reserves, management groups contracts in a manner consistent with the method of acquiring, servicing, and measuring the profitability of such contracts. Losses recognized as a premium deficiency are recorded in the period in which such losses were identified and reflected in the Consolidated Statements of Operations and Comprehensive Loss. Losses recognized as a premium deficiency result in a beneficial effect in subsequent periods as operating losses under these contracts are charged to the liability previously established. The Patient Protection and Affordable Care Act and The Health Care and Education Reconciliation Act of 2010 (the “Health Care Reform Law”) enacted significant reforms to various aspects of the U.S. health insurance industry. As part of the Health Care Reform Law insurance industry assessments were established, including an annual health insurance industry fee (HIF), which became effective in 2014. The HIF was applicable in 2018, suspended in 2019, and resumed for calendar year 2020. The HIF is not deductible for income tax purposes. The 2019 premium deficiency reserve is inclusive of the 2020 HIF. The Corporation estimates a liability for the HIF and records it in full once qualifying insurance coverage is provided in the applicable calendar year in which the fee is payable, with a corresponding deferred cost that is amortized ratably to expense over the same calendar year. The deferred cost is recorded in other assets on the Consolidated Balance Sheets. The Corporation paid the federal government approximately $8.0 million for the HIF in 2020, which is reflected in the Consolidated Statements of Operations and Comprehensive Loss. Notes and securities payable Debt issuance costs Costs incurred in connection with Corporation’s debt financings are capitalized and amortized to interest expense over the life of the related debt using the effective interest method. Debt issuance costs are presented as a direct deduction from the carrying amount of the related debt liability, consistent with the presentation of debt discounts. Non-convertible notes The Corporation records the non-convertible notes at carrying value, net of discounts on the Consolidated Balance Sheets. Convertible securities The Corporation accounts for convertible securities in accordance with the accounting guidance for debt with conversion and other options, after determining whether embedded conversion options should be bifurcated from their host instruments. Conversion options that are not bifurcated as a derivative and not accounted for as a separate equity component are evaluated to determine whether they are beneficial to the investor at inception, a beneficial conversion feature (BCF), or may become beneficial in the future due to potential adjustments. A BCF is defined as a nondetachable conversion feature that is in the money at the commitment date and the applicable accounting guidance requires recognition of the conversion option’s intrinsic value in equity, with an offsetting reduction to the carrying amount of the instrument. The Corporation accretes the resulting discount us |
Business Combination
Business Combination | 9 Months Ended | 12 Months Ended |
Sep. 30, 2021 | Dec. 31, 2020 | |
Business Combinations [Abstract] | ||
Business Combination | Business Combination On October 5, 2020, Legacy Clover entered into a Merger Agreement with SCH, a SPAC, and Merger Sub. On January 7, 2021, as contemplated by the Merger Agreement and following approval by SCH’s shareholders at an extraordinary general meeting held January 6, 2021 (the “Special Meeting”): • SCH filed a notice of deregistration with the Cayman Islands Registrar of Companies, together with the necessary accompanying documents, and filed a certificate of incorporation and a certificate of corporate domestication with the Secretary of State of the State of Delaware, under which SCH was domesticated and continued as a Delaware corporation (the “Domestication”); and • Merger Sub merged with and into Legacy Clover, the separate corporate existence of Merger Sub ceased and Legacy Clover became the surviving corporation and a wholly owned subsidiary of SCH (the “First Merger”) and Legacy Clover merged with and into SCH, the separate corporate existence of Legacy Clover ceased and SCH became the surviving corporation, changing its name to “Clover Health Investments, Corp.” (together with the First Merger, the “Mergers,” and collectively with the Domestication, the “Business Combination”). As a result of the Mergers, among other things, (i) all outstanding shares of common stock of Legacy Clover immediately prior to the effective time of the First Merger were canceled in exchange for the right to receive, at the election of the holders thereof (except with respect to the shares held by entities controlled by Vivek Garipalli and the holders of convertible securities previously issued by Legacy Clover to certain holders who received only shares of Class B Common Stock, par value $0.0001 per share, of Clover (Class B Common Stock), which are entitled to 10 votes per share, an amount in cash, shares of Class B Common Stock, or a combination thereof, as adjusted in accordance with the Merger Agreement, which equaled in the aggregate $499.8 million in cash and 260,965,701 shares of Class B Common Stock (at a deemed value of $10.00 per share); (ii) shares of Legacy Clover held by entities controlled by Vivek Garipalli and the holders of the convertible securities immediately prior to the effective time of the First Merger were canceled in exchange for the right to receive shares of Class B Common Stock based on an Exchange Ratio (as defined in the Merger Agreement) of approximately 2.0681; and (iii) all shares of common stock of Legacy Clover reserved in respect of Legacy Clover stock options and restricted stock units outstanding as of immediately prior to the effective time of the First Merger, were converted, based on the Exchange Ratio, into awards based on shares of Class B Common Stock. The consideration that a Clover stockholder received was subject to pro rata adjustment depending on the election made by such stockholder, if any, in accordance with the terms of the Merger Agreement. The pro rata adjustments were made based on an Actual Cash/Stock Ratio (as defined in the Merger Agreement) of 32.3%. In connection with the consummation of the Business Combination (the “Closing”), (i) each issued and outstanding Class A ordinary share, par value $0.0001 per share, of SCH (SCH Class A ordinary shares) converted automatically, on a one-for-one basis, into a share of Class A Common Stock, par value $0.0001 per share, of Clover (the “Class A Common Stock,” and together with the Class B Common Stock, the “Common Stock”), which will be entitled to one vote per share, (ii) each of the issued and outstanding Class B ordinary shares, par value $0.0001 per share, of SCH, converted automatically, on a one-for-one basis, into a share of Class A Common Stock, (iii) each issued and outstanding warrant of SCH converted automatically into a warrant to acquire one share of Class A Common Stock (Warrant), pursuant to the Warrant Agreement, dated April 21, 2020, between SCH and Continental Stock Transfer & Trust Company, as warrant agent, and (iv) each issued and outstanding unit of SCH (SCH unit) that had not been previously separated into the underlying Class A ordinary share and underlying warrant of SCH upon the request of the holder thereof, was canceled and the holder thereof is entitled to one share of Class A Common Stock and one-third of one Warrant. As of January 7, 2021, there were public warrants outstanding to purchase an aggregate of 27,599,938 shares of Class A Common Stock (the “Public Warrants”) and private placement warrants outstanding to purchase an aggregate of 10,933,333 shares of Class A Common Stock (the “Private Placement Warrants” and, together with the Public Warrants, the “Warrants”). Each whole Warrant entitled the registered holder to purchase one whole share of Class A Common Stock at a price of $11.50 per share, subject to adjustment at any time commencing on April 24, 2021, which is 12 months from the closing of SCH's initial public offering. Pursuant to the subscription agreements (the “Subscription Agreements”) entered into on October 5, 2020, by and among SCH and certain investors (collectively, the “PIPE Investors”), Clover issued and sold to the PIPE Investors (substantially concurrently with the consummation of the Mergers) an aggregate of 40,000,000 shares of Class A Common Stock for an aggregate purchase price equal to $400.0 million (the “PIPE Investment”), of which 15,200,000 shares were purchased by affiliates of SCH Sponsor III LLC (the “Sponsor,” and collectively, the “Sponsor Related PIPE Investors”). The Business Combination and PIPE Investment were approved by the SCH shareholders at the Special Meeting. Prior to and in connection with the Special Meeting, holders of 24,892 shares of SCH Class A ordinary shares (including those that underlie the SCH units) that were registered pursuant to the Registration Statements on Form S-1 (333-236776 and 333-237777) and the shares of Class A Common Stock issued as a matter of law upon the conversion thereof on the effective date of the Domestication (the “Public Shares”) exercised their right to redeem those shares for cash at a price of $10.00 per share, for an aggregate of $0.2 million. The per share redemption price of $10.00 for public shareholders electing redemption was paid out of the SCH Trust Account, which after taking into account the redemptions, had a balance immediately prior to the Closing of $827.9 million, which cash balance was used to pay the $499.8 million cash component of the merger consideration. Immediately after giving effect to the Business Combination and the PIPE Investment, there were 143,475,108 shares of Class A Common Stock, 260,965,701 shares of Class B Common Stock and 38,533,271 Warrants outstanding, equaling 404,440,809 total shares of common stock outstanding and 38,533,271 Warrants outstanding. The Corporation is authorized to issue 25,000,000 shares of preferred stock having a par value of $0.0001 per share, and the Corporation's board of directors has the authority to determine the rights, preferences, privileges, and restrictions, including voting rights, of those shares. As of September 30, 2021, there were no shares of preferred stock issued and outstanding. The Business Combination was accounted for as a reverse recapitalization in accordance with GAAP. Under the guidance in ASC 805, Legacy Clover is treated as the “acquirer” for financial reporting purposes. As such, Legacy Clover is deemed the accounting predecessor of the combined business, and Clover, as the parent company of the combined business, is the successor SEC registrant, meaning that Legacy Clover’s financial statements for previous periods are disclosed in the Corporation’s periodic reports filed with the SEC. The Business Combination will have a significant impact on the Corporation’s future reported financial position and results as a consequence of the reverse recapitalization. The most significant change in Clover’s future reported financial position and results is an estimated net increase in cash (as compared to the Corporation’s consolidated balance sheet at December 31, 2020) of approximately $670.0 million. The redemption included approximately $400.0 million in proceeds from the PIPE Investment that was consummated substantially simultaneously with the Business Combination, offset by additional transaction costs incurred in connection with the Business Combination. The estimated transaction costs for the Business Combination were approximately $61.0 million, of which $29.0 million represents deferred underwriter fees related to SCH's initial public offering. The transaction closed on January 7, 2021,and on the following day the Corporation's Class A Common Stock and Public Warrants were listed on the Nasdaq Global Select Market (Nasdaq) under the symbols “CLOV” and “CLOVW,” respectively, for trading in the public market. See also Note 9 (Notes and Securities Payable), Note 10 (Warrants Payable), and Note 14 (Convertible Preferred Stock) for additional information regarding changes to the instruments as a result of the Business Combination. | AcquisitionOn February 28, 2019, the Corporation entered into a securities purchase agreement with Censeo Health, LLC to acquire 100% of the outstanding equity interests of Principium Health, LLC (Principium) and Medical Service Professionals of NJ, LLC, providers of in-home chronic care management services, for a total purchase price of approximately $1.4 million. The goodwill resulting from the transaction that was recorded by the Corporation was approximately $1.2 million. |
Investment Securities_2
Investment Securities | 9 Months Ended | 12 Months Ended |
Sep. 30, 2021 | Dec. 31, 2020 | |
Investments, Debt and Equity Securities [Abstract] | ||
Investment Securities | 4. Investment Securities The following tables present amortized cost and fair values of investments as of September 30, 2021, and December 31, 2020, respectively: September 30, 2021 Amortized cost Accumulated unrealized gains Accumulated unrealized losses Fair value (in thousands) Investment securities, held-to-maturity U.S. government and government agencies and authorities $ 695 $ 42 $ (10) $ 727 Investment securities, available-for-sale U.S. government and government agencies and authorities 167,935 37 (647) 167,325 Total investment securities $ 168,630 $ 79 $ (657) $ 168,052 December 31, 2020 Amortized cost Accumulated unrealized gains Accumulated unrealized losses Fair value (in thousands) Investment securities, held-to-maturity U.S. government and government agencies and authorities $ 694 $ 43 $ — $ 737 Investment securities, available-for-sale U.S. government and government agencies and authorities 53,953 51 (41) 53,963 Total investment securities $ 54,647 $ 94 $ (41) $ 54,700 The following table presents the amortized cost and fair value of debt securities as of September 30, 2021, by contractual maturity: September 30, 2021 Held-to-maturity Available-for-sale Amortized cost Fair value Amortized cost Fair value (in thousands) Due within one year $ 305 $ 308 $ 21,139 $ 21,142 Due after one year through five years 15 16 141,835 141,352 Due after five years through ten years 265 256 4,961 4,831 Due after ten years 110 147 — — Total $ 695 $ 727 $ 167,935 $ 167,325 For the three and nine months ended September 30, 2021 and 2020, respectively, net investment income, which is included within other income in the Condensed Consolidated Statements of Operations and Comprehensive Loss, was derived from the following sources: Three Months Ended Nine Months Ended 2021 2020 2021 2020 (in thousands) Cash and cash equivalents $ — $ 1 $ — $ 108 Short-term investments 62 519 139 1,141 Investment securities 117 303 201 977 Investment income, net $ 179 $ 823 $ 340 $ 2,226 Gross unrealized losses and fair values aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position were as follows at September 30, 2021: September 30, 2021 Less than 12 months Greater than 12 months Total Fair value Unrealized loss Fair value Unrealized loss Fair value Unrealized loss (in thousands, except number of positions) U.S. government and government agencies $ — $ — $ 71,620 $ (657) $ 71,620 $ (657) Total $ — $ — $ 71,620 $ (657) $ 71,620 $ (657) Number of positions — 14 14 As of September 30, 2021, all securities were investment grade, with credit ratings of AA+ or higher by S&P. Unrealized losses on investment grade securities are principally related to changes in interest rates or changes in issuer or sector related credit spreads since the securities were acquired. The gross unrealized investment losses as of September 30, 2021, were deemed to be temporary, based on, among other things: • The duration of time and the relative magnitude to which fair values of these securities have been below their amortized cost was not indicative of an other-than-temporary impairment loss; • The absence of compelling evidence that would cause the Corporation to call into question the financial condition or near-term prospects of the issuer of the applicable security; and • The Corporation’s ability and intent to hold the applicable security for a period of time sufficient to allow for any anticipated recovery. The Corporation may ultimately record a realized loss after having originally concluded that the decline in value was temporary. Risks and uncertainties are inherent in the methodology the Corporation uses to assess other-than-temporary declines in value. Risks and uncertainties could include, but are not limited to, incorrect assumptions about financial condition, liquidity or future prospects, inadequacy of any underlying collateral, and unfavorable changes in economic conditions or social trends, interest rates or credit ratings. Proceeds from sales and maturities of investment securities, inclusive of short-term investments, and related gross realized gains (losses) which are included within other income in the Condensed Consolidated Statements of Operations and Comprehensive Loss, were as follows for the three and nine months ended September 30, 2021 and 2020, respectively: Three Months Ended Nine Months Ended 2021 2020 2021 2020 (in thousands) Proceeds from sales of investment securities $ 89,997 $ 71,049 $ 126,862 $ 166,024 Proceeds from maturities of investment securities 50,000 9,600 250,265 56,701 Gross realized gains 7 504 24 540 Gross realized losses — — (77) — Net realized gains (losses) $ 7 $ 504 $ (53) $ 540 As of September 30, 2021, and December 31, 2020, the Corporation had $11.2 million and $7.5 million, respectively, in deposits with various states and regulatory bodies that are included as part of the Corporation's investment balances. | Investment securities The following tables present cost or amortized cost and fair values of investments as of December 31, 2020 and 2019, respectively: December 31, 2020 Amortized Gross Gross Fair (in thousands) Investment securities, held-to-maturity: U.S. government and government agencies and authorities $ 694 $ 43 $ — $ 737 Investment securities, available-for-sale: U.S. government and government agencies and authorities 53,953 51 (41) 53,963 Total investment securities $ 54,647 $ 94 $ (41) $ 54,700 December 31, 2019 Amortized Gross Gross Fair (in thousands) Investment securities, held-to-maturity: U.S. government and government agencies and authorities $ 663 $ 22 $ — $ 685 Investment securities, available-for-sale: U.S. government and government agencies and authorities 56,382 46 — 56,428 Total investment securities $ 57,045 $ 68 $ — $ 57,113 The following tables present the amortized cost and fair value of debt securities as of December 31, 2020, by contractual maturity: December 31, 2020 Held-to-maturity Available-for-sale Amortized Fair Amortized Fair (in thousands) Due within one year $ 265 $ 266 $ — $ — Due after one year through five years 319 328 43,382 43,431 Due after five years through ten years — — 10,571 10,532 Due after ten years 110 143 — — Total $ 694 $ 737 $ 53,953 $ 53,963 For the years ended December 31, 2020 and 2019, respectively, net investment income was derived from the following sources: December 31, 2020 2019 (in thousands) Cash and cash equivalents $ 108 $ 1,249 Short-term investments 1,722 2,904 Investment securities 1,146 386 Net investment income $ 2,976 $ 4,539 The Corporation has a process in place to identify securities that could potentially have an impairment that is other-than-temporary. This process involves monitoring market events that could impact issuers’ credit ratings, business climate, management changes, litigation and government actions, and other similar factors. This process also involves monitoring late payments, downgrades by rating agencies, key financial ratios, financial statements, revenue forecasts and cash flow projections as indicators of credit issues. There was an immaterial amount of investment securities in an unrealized loss position as of December 31, 2020 and no investment securities in an unrealized loss position as of December 31, 2019. As of December 31, 2020 and 2019, all securities were investment grade, with credit ratings of AA+ or higher by S&P. Unrealized losses on investment grade securities are principally related to changes in interest rates or changes in issuer or sector related credit spreads since the securities were acquired. Proceeds from sales and maturities of investment securities and related gross realized gains (losses) included within net investment income were as follows for the years ended December 31, 2020 and 2019, respectively: December 31, 2020 2019 (in thousands) Proceeds from sales of investment securities $ 248,664 $ 269,205 Proceeds from maturities of investment securities 63,751 55,635 Gross realized gains 1,117 114 Gross realized losses (3) (3) Net realized gains (losses) $ 1,114 $ 111 As of December 31, 2020 and 2019, the Corporation had $7.5 million and $3.7 million, respectively, in deposits with various states and regulatory bodies. |
Fair Value Measurements_2
Fair Value Measurements | 9 Months Ended | 12 Months Ended |
Sep. 30, 2021 | Dec. 31, 2020 | |
Fair Value Disclosures [Abstract] | ||
Fair Value Measurements | Fair Value Measurements The following table presents a summary of fair value measurements for financial instruments as of September 30, 2021, and December 31, 2020, respectively: September 30, 2021 Level 1 Level 2 Level 3 Total fair (in thousands) U.S. government and government agencies $ — $ 167,325 $ — $ 167,325 Total assets at fair value $ — $ 167,325 $ — $ 167,325 December 31, 2020 Level 1 Level 2 Level 3 Total fair (in thousands) U.S. government and government agencies $ — $ 53,963 $ — $ 53,963 Total assets at fair value $ — $ 53,963 $ — $ 53,963 Derivative liabilities $ — $ — $ 44,810 $ 44,810 Warrants payable — — 97,782 97,782 Total liabilities at fair value $ — $ — $ 142,592 $ 142,592 See Note 9 (Notes and Securities Payable), Note 10 (Warrants Payable), and Note 11 (Derivative Liabilities) for additional information regarding liabilities. The fair value of the convertible securities was based on Level 3 inputs, which were unobservable and reflect management’s best estimate of what market participants would use when pricing the asset or liability, including assumptions about risk. There was no fair value associated with convertible securities at September 30, 2021, due to the conversion of the securities to shares of the Corporation’s common stock due to the completion of the Business Combination, and the estimated fair value of convertible securities was $949.6 million at December 31, 2020. The estimated fair value of the convertible securities and derivative liabilities at December 31, 2020, was calculated as the product of (i) the number of conversion shares at the valuation date and (ii) the marketable value per common share at the valuation date. The significant unobservable inputs used in the Black-Scholes model to measure the warrants payable that are categorized within Level 3 of the fair value hierarchy, as of the year ended December 31, 2020, are as follows: December 31, 2020 Preferred stock purchase warrants Common stock purchase warrants Beginning stock price N/A $ 30.14 Strike price N/A 1.04 Expected volatility N/A 56.0 % Expected term N/A 0.02 years Risk-free interest rate N/A 0.09 % Discount factor N/A 13.0 There were no changes in balances of Level 3 financial liabilities during the three months ended September 30, 2021. The changes in balances of Level 3 financial liabilities during the three months ended September 30, 2020, and the nine months ended September 30, 2021 and 2020, respectively, are as follows: Convertible securities Derivative liabilities Warrants payable Total (in thousands) Balance, June 30, 2020 $ 285,166 $ 119,167 $ 29,424 $ 433,757 Issuances — — — — Settlements — — — — Transfers in — — — — Transfers out — — — — Total realized losses (gains) 95,477 (68,081) 19,978 47,374 Balance, September 30, 2020 $ 380,643 $ 51,086 $ 49,402 $ 481,131 Convertible securities Derivative liabilities Warrants payable Total (in thousands) Balance, December 31, 2020 $ 949,553 $ 44,810 $ 97,782 $ 1,092,145 Issuances — — — — Settlements (949,553) (44,810) (97,782) (1,092,145) Transfers in — — — — Transfers out — — — — Total realized losses (gains) — — — — Balance, September 30, 2021 $ — $ — $ — $ — Convertible securities Derivative liabilities Warrants payable Total (in thousands) Balance, December 31, 2019 $ 251,885 $ 138,561 $ 17,672 $ 408,118 Issuances — — — — Settlements — — — — Transfers in — — — — Transfers out — — — — Total realized losses (gains) 128,758 (87,475) 31,730 73,013 Balance, September 30, 2020 $ 380,643 $ 51,086 $ 49,402 $ 481,131 In addition to the Level 3 financial liabilities in the table above, on September 25, 2020, Seek Insurance Services, Inc., (Seek) a field marketing organization and an indirect wholly-owned subsidiary of the Corporation, entered into a note purchase agreement with a third-party investor and issued a note (the “Seek Convertible Note”) in the principal amount of $20.0 million. For additional information, see Note 9 (Notes and Securities Payable). As of September 30, 2021, and December 31, 2020, both the carrying values, which includes accrued interest, and the fair values of the 2020 Convertible Note were $21.6 million and $20.4 million, respectively, and these were considered Level 3 financial liabilities. There were no transfers in or out of Level 3 financial assets or liabilities for the three and nine months ended September 30, 2021 or 2020. Warrants The Warrants were accounted for as liabilities in accordance with ASC 815-40 and are presented within warrants payable on the Consolidated Balance Sheet. The warrant liabilities were measured at fair value at inception and measured on a recurring basis, with changes in fair value presented within change in fair value of warrants payable in the Consolidated Statement of Operations and Comprehensive Loss. On July 22, 2021, the Company issued a press release stating that it would redeem all of its Warrants. The end of the redemption period was September 9, 2021, at which time the Corporation redeemed all unexercised Warrants at a price of $0.10 per warrant. As of September 30, 2021, no Warrants were outstanding. For additional information, please see Note 10 (Warrants Payable). Liability Measurement The Warrants were measured at fair value on a recurring basis. The Corporation classified the Warrants as a liability due to certain settlement terms and provisions related to certain tender offers and indexation characteristics following the Business Combination and accounted for them as liability instruments in accordance with ASC 815, adjusting the fair value at the end of each reporting period. Additionally, the Corporation determined that the Public Warrants were classified within Level 1 of the fair value hierarchy as the fair value was equal to the publicly traded price of the Public Warrants, and the Private Placement Warrants were classified within Level 2 of the fair value hierarchy as the fair value was estimated using the price of the Public Warrants. In connection with the redemption, effective August 24, 2021, the Public Warrants were delisted and classified within Level 2 of the fair value hierarchy as the fair value of the Public Warrants was based on proportional changes in the price of the Corporation’s common stock. There were no Private Warrants outstanding at August 24, 2021. See Note 10 (Warrants Payable) for additional information on the exercises and redemption of Warrants. The following table presents the changes in the fair value of warrants payable: September 30, 2021 Public and Private Placement Warrants (in thousands) Initial measurement, January 7, 2021 $ 147,582 Mark-to-market adjustment (66,214) Warrants exercised (81,283) Warrants redeemed (85) Warrants payable balance, September 30, 2021 $ — | Fair value measurements The following table presents a summary of fair value measurements for items that are measured at fair value on a recurring basis as of December 31,2020 and 2019, respectively: December 31, 2020 Level 1 Level 2 Level 3 Total fair value (in thousands) U.S. government and government agencies $ — $ 53,963 $ — $ 53,963 Total assets at fair value $ — $ 53,963 $ — $ 53,963 Derivative liabilities — — 44,810 44,810 Warrants payable — — 97,782 97,782 Total liabilities at fair value $ — $ — $ 142,592 $ 142,592 December 31, 2019 Level 1 Level 2 Level 3 Total fair value (in thousands) U.S. government and government agencies $ — $ 56,428 $ — $ 56,428 Total assets at fair value $ — $ 56,428 $ — $ 56,428 Derivative liabilities — — 138,561 138,561 Warrants payable — — 17,672 17,672 Total liabilities at fair value $ — $ — $ 156,233 $ 156,233 See Note 13 (Notes and securities payable,) Note 14 (Warrants payable,) and Note 15 (Derivative liabilities) for additional information regarding liabilities. The fair value of convertible securities is based on level 3 inputs. The estimated fair value of the convertible securities was $949.6 million at December 31, 2020, and $251.9 million at December 31, 2019. The estimated fair value of the convertible securities and derivative liabilities at December 31, 2020, were calculated as the product of (i) the number of conversion shares under the valuation date and (ii) the marketable value per common share at the valuation date. The significant unobservable inputs used in the Black-Scholes model to measure the convertible securities and derivative liabilities as of December 31, 2019, are as follows (the stock price and strike price are presented in thousands): December 31, 2019 Convertible securities Derivative liabilities Beginning stock price (total value) $305,132 - $357,802 $305,132 - $357,802 Strike price (total value) $462,012 - $531,315 $462,012 - $965,184 Expected volatility 45% - 49% 45% - 49% Expected term 2-3 years 2-3 years Risk-free interest rate 1.58% -1.62% 1.58% - 1.62% Discount factor 15 % 15 % The stock price and strike price were used in multiple scenarios as part of the with and without approach to determine the fair value of convertible securities and the derivative liabilities were calculated on a total value basis. The stock price at December 31, 2019 was calculated as the product of (i) the estimated number of conversion shares under the scenarios and (ii) the value per Series D preferred share at the valuation date. The strike price at December 31, 2019 was equal to the effective value received by the holder upon the conversion of the convertible securities under the scenarios, calculated as the product of (i) principal and accrued interest at the conversion date and (ii) 1 / discount factor. The significant unobservable inputs used in the Black-Scholes model to measure the warrants payable that are categorized within Level 3 of the fair value hierarchy, as of the years ended December 31, 2020 and 2019, respectively, are as follows: December 31, 2020 Preferred stock purchase warrants Common stock purchase warrants Beginning stock price N/A $ 30.14 Strike price N/A 1.04 Expected volatility N/A 56.0 % Expected term N/A 0.02 years Risk-free interest rate N/A 0.09 % Discount factor N/A 13 % December 31, 2019 Preferred stock purchase warrants Common stock purchase warrants Beginning stock price $ 10.27 $ 7.19 Strike price 17.27 1.04 Expected volatility 45% - 49% 81.1% - 84.6% Expected term 2 -3 years 2-3 years Risk-free interest rate 1.58% - 1.62% 1.58% - 1.62% Discount factor 15 % 15 % The changes in balances of Level 3 financial liabilities during 2020 and 2019, respectively, were as follows: December 31, 2020 Convertible securities Derivative liabilities Warrants payable Total (in thousands) Beginning balance $ 251,885 $ 138,561 $ 17,672 $ 408,118 Issuances — — — — Settlements — — — — Transfers in — — — — Transfers out — — — — Total recognized losses (gains) 697,668 (93,751) 80,110 684,027 Ending balance $ 949,553 $ 44,810 $ 97,782 $ 1,092,145 December 31, 2019 Convertible securities Derivative liabilities Warrants payable Total (in thousands) Beginning balance $ — $ — $ 14,836 $ 14,836 Issuances 237,362 — — 237,362 Settlements — — — — Transfers in — — — — Transfers out — — — — Total recognized losses (gains) 14,523 138,561 2,836 155,920 Ending balance $ 251,885 $ 138,561 $ 17,672 $ 408,118 In addition to the Level 3 financial liabilities in the table above, on September 25, 2020, the Corporation issued the 2020 Convertible Note (see Note 13 “Notes and securities payable,” for further details) with the carrying value approximating the fair value of $20.0 million. As of December 31, 2020, the carrying value and the fair value of the 2020 Convertible Note was $20.4 million and was considered a Level 3 financial liability. There were no transfers in and out of Level 3 financial assets or liabilities during the years ended December 31, 2020 or 2019. |
Healthcare Receivables_2
Healthcare Receivables | 9 Months Ended | 12 Months Ended |
Sep. 30, 2021 | Dec. 31, 2020 | |
Receivables [Abstract] | ||
Healthcare Receivables | Healthcare Receivables Included within healthcare receivables are pharmaceutical rebates which are accrued as they are earned and estimated based on contracted rebate rates, eligible amounts submitted to the manufacturers by the Corporation's pharmacy manager, pharmacy utilization volume and historical collection patterns. As of September 30, 2021, and December 31, 2020, the Corporation recognized rebate receivables of approximately $30.2 million and $26.6 million, respectively. In addition to pharmaceutical rebates, Medicare Part D settlement receivables, member premium receivables and other CMS receivables included in healthcare receivables totaled $4.5 million and $12.1 million at September 30, 2021, and December 31, 2020, respectively. | Healthcare receivablesIncluded within healthcare receivables are pharmaceutical rebates which are accrued as they are earned and estimated based on contracted rebate rates, eligible amounts submitted to the manufacturers by the Corporation’s pharmacy manager, pharmacy utilization volume and historical collection patterns. As of December 31, 2020 and 2019, the Corporation recognized rebate receivables of approximately $26.6 million and $17.5 million, respectively. In addition to pharmaceutical rebates, Medicare Part D settlement receivables, member premium receivables and other CMS receivables included in the balance totaled $12.1 million and $8.3 million at December 31, 2020 and 2019, respectively. |
Related Party Transactions_2
Related Party Transactions | 9 Months Ended | 12 Months Ended |
Sep. 30, 2021 | Dec. 31, 2020 | |
Related Party Transactions [Abstract] | ||
Related Party Transactions | Related Party Transactions Related party agreements The Corporation has various contracts with IJKG Opco LLC (d/b/a CarePoint Health - Bayonne Medical Center), Hudson Hospital Opco LLC (d/b/a CarePoint Health - Christ Hospital) and Hoboken University Medical Center Opco LLC (d/b/a CarePoint Health - Hoboken University Medical Center), which collectively do business as the CarePoint Health System (CarePoint Health). CarePoint Health is ultimately held and controlled by Mr. Vivek Garipalli, the Chief Executive Officer and stockholder of the Corporation. The Corporation contracts with CarePoint Health for the provision of inpatient and hospital-based outpatient services. Expenses and fees incurred related to these contracts, recorded in net medical claims incurred, were $1.7 million and $1.9 million for the three months ended September 30, 2021 and 2020, respectively, and $9.2 million and $5.3 million for the nine months ended September 30, 2021 and 2020, respectively. The Corporation has contracted with Rogue Trading, LLC (Rogue), a marketing services provider. The Corporation’s President and Chief Technology Officer, Andrew Toy, is related to the Chief Executive Officer of Rogue. Expenses and fees related to these contracts were immaterial and $0.3 million for the three and nine months ended September 30, 2021, respectively. Expenses and fees related to these contracts were $0.1 million for the three and nine months ended September 30, 2020. The Corporation has a contract with Medical Records Exchange, LLC (d/b/a ChartFast) pursuant to which we receive administrative services related to medical records via ChartFast’s electronic applications and web portal platform. ChartFast is ultimately owned and controlled by Mr. Garipalli. Expenses and fees incurred related to this agreement were $0.1 million for the three and nine months ended September 30, 2021, and $0.1 million for the three and nine months ended September 30, 2020. On July 2, 2021, the Corporation signed a contract with Thyme Care, Inc. (Thyme Care), an oncology benefit management company, through which Thyme Care will provide concierge cancer coordination services to the Corporation’s Medicare Advantage members in New Jersey and develop a provider network to help ensure member access to high-value oncology care. Mr. Garipalli is a member of Thyme Care’s board of directors. Securities payable to related parties The Corporation has entered into various securities payable with certain related parties as further discussed in Note 9 (Notes and Securities Payable). | Related party transactions Related party agreements The Corporation has various contracts with IJKG Opco LLC (d/b/a CarePoint Health - Bayonne Medical Center), Hudson Hospital Opco LLC (d/b/a CarePoint Health - Christ Hospital) and Hoboken University Medical Center Opco LLC (d/b/a CarePoint Health - Hoboken University Medical Center), which collectively do business as the CarePoint Health System (CarePoint Health). CarePoint Health is ultimately held and controlled by Mr. Vivek Garipalli, the Chief Executive Officer and stockholder of the Corporation. The Corporation contracts with CarePoint Health for the provision of inpatient and hospital-based outpatient services. Expenses and fees incurred related to these contracts, recorded in net medical claims incurred, were $11.1 million and $9.7 million for the years ended December 31, 2020 and 2019, respectively. Securities payable to related parties |
Unpaid Claims_2
Unpaid Claims | 9 Months Ended | 12 Months Ended |
Sep. 30, 2021 | Dec. 31, 2020 | |
Liability for Unpaid Claims and Claims Adjustment Expense, Activity in Liability [Abstract] | ||
Unpaid Claims | Unpaid Claims Activity in the liability for unpaid claims, including claims adjustment expenses, for the nine months ended September 30, 2021 and 2020, is summarized as follows: Nine Months Ended September 30, 2021 2020 (in thousands) Gross and net balance, beginning of period $ 103,976 $ 77,886 Incurred related to: Current year 1,092,280 425,941 Prior years 17,095 (15,401) Total incurred 1,109,375 410,540 Paid related to: Current year 963,779 339,252 Prior years 109,362 55,559 Total paid 1,073,141 394,811 Gross and net balance, end of period $ 140,210 $ 93,615 Unpaid claims as of September 30, 2021, were $140.2 million. During the nine months ended September 30, 2021, $109.4 million was paid for incurred claims attributable to insured events of prior years. An unfavorable development of $17.1 million was recognized during the nine months ended September 30, 2021, resulting from the Corporation’s claims experience, likely due to provider administrative challenges related to the COVID-19 pandemic. A favorable development of $15.4 million was recognized during the nine months ended September 30, 2020, resulting from the actualization of fee-for-service claims. Original estimates are increased or decreased, as additional information becomes known regarding individual claims. The ratio of current year medical claims paid as a percentage of current year net medical claims incurred was 88.2% for the nine months ended September 30, 2021, and 79.6% for the nine months ended September 30, 2020. This ratio serves as an indicator of claims processing speed, indicating that claims were processed at a faster rate during the nine months ended September 30, 2021, than during the nine months ended September 30, 2020. Beginning in second quarter 2021, the Corporation began participating in the DC Model, which accounted for approximately 42.4% of the Corporation’s total incurred claims as of September 30, 2021. The Corporation uses a variety of standard actuarial techniques to establish unpaid claims reserves. Management estimates are supported by the Corporation's actuarial analysis. The Corporation utilizes an internal actuarial team to review the adequacy of unpaid claim and unpaid claim adjustment expense. The estimation of claim costs is inherently difficult and requires significant judgment. The estimation has considerable inherent variability and can vary significantly depending upon several factors, including medical cost trends and claim payment patterns, general economic conditions and regulatory changes. The time value of money is not taken into account for the purposes of calculating the liability for unpaid claims. Management believes that the current reserves are adequate based on currently available information. | Unpaid claims Activity in the liability for unpaid claims, including claims adjustment expenses, is summarized as follows: Year ended December 31, 2020 2019 (in thousands) Gross balance , beginning of year $ 77,886 $ 54,004 Less: reinsurance recoverable, beginning of year — (12,344) Net balance , beginning of year 77,886 41,660 Incurred related to: Current year 604,183 453,423 Prior years (13,715) (2,778) Total incurred 590,468 450,645 Paid related to: Current year 501,339 376,677 Prior years 63,039 37,742 Total paid 564,378 414,419 Net balance , end of year 103,976 77,886 Plus: reinsurance recoverable, end of year — — Gross balance , end of year $ 103,976 $ 77,886 Unpaid claims as of December 31, 2020, were $104.0 million. As of December 31, 2020, $63.0 million has been paid for incurred claims and claims adjustment expenses attributable to insured events of prior years. The favorable development recognized in 2020 resulted from the actual experience developing differently from estimates as of December 31, 2019, partially attributable to the deferral of healthcare services as a result of the stay-at-home orders and closure of certain provider facilities throughout the year due to COVID-19 restrictions. Original estimates are increased or decreased, as additional information becomes known regarding individual claims. The ratio of current year medical claims paid as a percent of current year net medical claims incurred was 83.0% for 2020 and 83.1% for 2019. The Corporation did not have any significant changes in methodologies or assumptions used in the calculation of the liability for unpaid claims or claims adjustment expenses. The Corporation uses a variety of standard actuarial techniques to establish unpaid claims reserves. Management estimates are supported by the Corporation’s annual actuarial analysis. The Corporation utilized an in-house actuary to review the adequacy of unpaid claim and unpaid claim adjustment expense. Management believes that the reserves are adequate based on the available information. The estimation of claim costs is inherently difficult and requires significant judgement. The estimation has considerable inherent variability can vary significantly depending upon several factors, including medical cost trends and claim payment patterns, general economic conditions, regulatory changes, and known outbreaks of disease, including COVID-19. Only time and the eventual resolution of each claim will determine whether the claim reserves will ultimately prove to be adequate. The following is information about incurred and paid claims development for medical claims, as well as cumulative claim frequency and the total of incurred but not reported liabilities as of December 31, 2020, respectively. Cumulative incurred claims for the years ended December 31, Incurred year 2018* 2019* 2020 Total Number of reported claims (in thousands) (in thousands, except for number of reported claims) 2018 and prior $ 552,456 $ 549,678 $ 549,649 $ 2 1,737,684 2019 412,695 399,009 1,130 1,188,472 2020 604,183 102,844 1,433,049 Total $ 552,456 $ 962,373 $ 1,552,841 $ 103,976 4,359,205 Cumulative net paid claims through December 31, Paid year 2018* 2019* 2020 (in thousands) Incurred year 2018 and prior $ 511,459 $ 550,974 $ 549,647 2019 343,903 397,879 2020 501,339 Total $ 511,459 $ 894,877 $ 1,448,865 __________________ * Unaudited supplemental information The reconciliation of net incurred and paid claims development tables to unpaid claims and claims adjustment expenses on the Consolidated Balance Sheets is as follows: December 31, 2020 (in thousands) Cumulative incurred claims, net $ 1,552,841 Less: cumulative paid claims, net 1,448,865 Net unpaid claims, including claims adjustment expenses $ 103,976 The time value of money is not taken into account for the purposes of calculating the liability for unpaid claims. The Corporation counts a claim when either a claim or claim adjustment expense amount has been paid, or at any period end, when the Corporation has recorded a medical unpaid claim reserve. The cumulative number of reported claims for each claim year has been developed using historical data captured by claim systems. As such, the cumulative number of reported claims may not be comparable to similar measures reported by other companies. |
Notes and Securities Payable_2
Notes and Securities Payable | 9 Months Ended | 12 Months Ended |
Sep. 30, 2021 | Dec. 31, 2020 | |
Debt Disclosure [Abstract] | ||
Notes and Securities Payable | Notes and Securities Payable Non-convertible Notes On March 21, 2017, the Corporation entered into a loan facility (the "Loan Facility") for an aggregate principal amount of $60.0 million with the proceeds used to pay all obligations under a $30.0 million 2015 senior secured note, and to provide additional working capital for the Corporation’s subsidiaries. The Loan Facility was secured by the assets of the Corporation. The initial obligation of $40.0 million had a maturity date of March 1, 2022, and was subject to an interest rate of 11.0%, payable monthly, with the majority of principal payments commencing 36 months prior to the maturity date. The additional $20.0 million obligation had a maturity date of October 1, 2022, and was subject to an interest rate of 11.3%, payable monthly, with the majority of principal payments commencing 36 months prior to the maturity date. In conjunction with the Loan Facility, the Corporation issued warrants. See Note 10 (Warrants Payable) for additional information. On June 29, 2021, the Corporation voluntarily paid the remaining principal of $20.7 million and interest of $0.2 million, thereby terminating the Loan Facility. Convertible Securities Pursuant to that certain Convertible Agreement, dated December 27, 2018, between the Corporation and certain qualified institutional buyers, including entities affiliated with the Corporation, for an aggregate principal amount of up to $500.0 million (the “Convertible Agreement”), the Corporation issued convertible securities during 2019 in multiple tranches. On October 5, 2020, the Corporation entered into the Merger Agreement with SCH and simultaneously amended the Convertible Agreement, pursuant to which the convertible securities of Legacy Clover converted into Class Z common stock in connection with the Business Combination. All Class Z common stock converted into Class B Common Stock as of the Closing. Additionally, the conversion incurred a 9.4% charge to account for dilution after the Business Combination to convert the securities as if they had been converted under the mandatory qualified public offering conversion. On January 7, 2021, the Business Combination was completed and the convertible securities were redeemed or converted into a total of 36,117,708 shares of Class Z common stock depending on whether each tranche’s conversion price was a conversion or share-settled redemption feature as follows: • Redemption: The February, March, and May 2019 tranches were redeemed for 34,806,921 shares of Class Z common stock pursuant to the share-settled redemption feature. The redemption of the convertible securities was accounted for as a debt extinguishment as they contained a beneficial conversion feature (BCF), and were redeemed prior to the stated maturity date. As the extinguishment date intrinsic value of the BCF was in excess of the fair value of the shares issued to settle the convertible securities, the full amount of the settlement consideration was treated as the price of reacquiring the BCF. As there was no remaining consideration available to allocate to the re-acquisition of the convertible securities, the extinguishment resulted in a gain equal to the full carrying value of the convertible securities of $126.8 million. This gain was treated as a capital contribution and was recorded as an increase in additional paid in capital as the convertible securities were issued to affiliates of the Corporation. The $126.8 million is comprised of: (a) the carrying value of the tranches of $74.6 million, (b) accrued interest of $7.4 million, and (c) the fair value of the embedded derivative of $44.8 million. • Conversion: The August 2019 tranche converted into 1,310,787 shares of Class Z common stock pursuant to the conversion feature. Prior to the conversion, the carrying value of the tranche was $2.6 million and accrued interest was $0.4 million. As the converted securities contained a BCF, the $13.0 million unamortized debt discount remaining at the date of conversion was recognized in amortization of notes and securities discount in the Consolidated Statements of Operations and Comprehensive Loss. After giving effect to the Exchange Ratio, pursuant to the terms of the Merger Agreement, these shares of Class Z common stock were converted into 74,694,107 shares of Class B Common Stock upon the closing of the Business Combination. See Note 3 (Business Combination) for additional information on the Business Combination. The convertible securities bore a yield (“interest”) at the increasing rates noted below which compounded semi-annually, and would mature April 1, 2023, unless earlier converted, repurchased, or extended. The interest rate and embedded feature discount factor varied based on the length of time elapsed from the issue date of the securities. The interest rates began at 6.5% for the first twelve-month period through the first anniversary of the security issue date, increasing ratably on a semi-annual basis, to 13.5% at the third anniversary of the security issue date until the convertible securities ceased to be outstanding. The embedded feature discount factors began at 75.0% for the first twelve-month period through the first anniversary of the security issue date, decreasing ratably on a semi-annual basis, to 55.0% at the forty-two month anniversary of the security issue date until the convertible securities ceased to be outstanding. The carrying amount of the convertible securities was $76.5 million at December 31, 2020. The unamortized discount was $337.3 million at December 31, 2020. Amortization of the debt discount was approximately $14.9 million during the nine months ended September 30, 2020. Interest expense on the convertible securities was $22.0 million during the nine months ended 2020. The effective interest rate, inclusive of amortization of the discount and the contractual rate, was 90.3% during the nine months ended September 30, 2020. The results presented as of and for the nine months ended September 30, 2021, above, reflect the impact of the conversion of the convertible securities into common stock in connection with the Business Combination. Seek Convertible Note On September 25, 2020, Seek issued the Seek Convertible Note in the principal amount of $20.0 million. The note bears simple interest at an annual rate of 8.0% and matures on September 25, 2023, unless earlier accelerated, converted, or paid in full. The outstanding principal and any accrued but unpaid interest will become immediately due and payable at the election of the note holder upon the occurrence of any event of default as defined in the note. The outstanding principal and accrued but unpaid interest will convert into an equity interest in Seek if prior to maturity, repayment or conversion of the note: (1) the note holder elects to convert the note, (2) upon the closing of Seek’s next equity financing; or (3) upon consummation of an initial public offering of Seek’s common stock or a SPAC or reverse merger transaction with Seek. The Corporation analyzed the embedded features for derivative accounting consideration and determined that the features are clearly and closely related to the debt host and do not require separate accounting as a derivative. The carrying amount of the note was $19.9 million at both September 30, 2021, and December 31, 2020. The Corporation capitalized $0.1 million of issuance costs which are being amortized using the effective interest method over the term of the note. Unamortized debt issuance costs were $0.1 million at both September 30, 2021, and December 31, 2020. Amortization of the debt issuance costs and interest expense on the note was $0.4 million and $1.2 million during the three and nine months ended September 30, 2021, respectively. Amortization of the debt issuance costs and interest expense on the note was immaterial during the three and nine months ended September 30, 2020. The effective interest rate was 8.2% during the three and nine months ended September 30, 2021, and during the three and nine months ended September 30, 2020. | Notes and securities payable Non-convertible notes On March 21, 2017, the Corporation entered into a loan facility (the “Loan Facility”) for an aggregate principal amount of $60.0 million. In March 2017, the Corporation drew down $40.0 million under the Loan Facility. The proceeds were used to pay all obligations under a $30.0 million 2015 senior secured note, and to provide additional working capital for the Corporation’s subsidiaries. The Loan Facility is secured by the assets of the Corporation. The initial obligation has a maturity date of March 1, 2022 and is subject to an interest rate of 11%, payable monthly, with the majority of principal payments commencing 36 months prior to the maturity date. In October 2017, the Corporation drew down the remaining $20.0 million under the Loan Facility. The additional obligation has a maturity date of October 1, 2022, and is subject to an interest rate of 11.25%, payable monthly, with the majority of principal payments commencing 36 months prior to the maturity date. In conjunction with the Loan Facility, the Corporation issued warrants. See Note 14 (Warrants payable) for additional information. The Corporation capitalized approximately $0.3 million of debt issuance costs associated with the Loan Facility, which are being amortized using the effective interest method over the term of the Loan Facility. The carrying amount of the Loan Facility was approximately $30.8 million and $49.3 million at December 31, 2020 and 2019, respectively. Amortization of debt discounts associated with the warrants and debt issuance costs was approximately $0.3 million and $0.4 million during the years ended December 31, 2020 and 2019, respectively. Interest expense was approximately $4.4 million and $6.2 million during the years ended December 31, 2020 and 2019, respectively. The effective interest rate was 11.78% and 11.77% during the years ended December 31, 2020 and 2019, respectively. Bridge loan In connection with the Convertible Securities Purchase Agreement (the “Convertible Agreement”) effective December 27, 2018, discussed in the “Convertible securities” section below, the Corporation entered into a series of non-convertible promissory notes agreements (Bridge Loan) with qualified institutional buyers for an aggregate principal amount of $30.0 million for the purpose of providing additional working capital for the Corporation’s subsidiaries. The Bridge Loan was issued to the Corporation on a bridge basis upon execution of the Convertible Agreement and accrued interest at a rate of 10%. The outstanding Bridge Loan balance at February 21, 2019, of approximately $30.4 million, inclusive of accrued interest, was settled through the issuance of convertible securities under the first tranche of the Convertible Agreement. There was no interest expense for the year ended December 31, 2020, and interest expense of approximately $0.4 million for the year ended December 31, 2019. Convertible securities On December 27, 2018, the Corporation entered into a Convertible Agreement with qualified institutional buyers, including entities affiliated with the Corporation, for an aggregate principal amount of up to $500.0 million to support the Corporation’s growth in the MA market. The convertible securities were issued during 2019 in multiple tranches and at December 31, 2019, the Corporation’s principal balance of borrowings under the Convertible Agreement was approximately $373.8 million, consisting of $343.4 million proceeds and $30.4 million related to the settlement of the Bridge Loan. The convertible securities bear a yield (“interest”) at the increasing rates noted below which compound semi-annually, and mature April 1, 2023 (End Date), unless earlier converted, repurchased, or extended, as discussed below. The interest rate and embedded feature discount factor vary based on the length of time elapsed from the issue date of the securities. The interest rates begin at 6.5% for the first twelve-month period through the first anniversary of the security issue date, increasing ratably on a semi-annual basis, to 13.5% at the third anniversary of the security issue date until the convertible securities cease to be outstanding. The embedded feature discount factors begin at 75% for the first twelve-month period through the first anniversary of the security issue date, decreasing ratably on a semi-annual basis, to 55% at the forty-two month anniversary of the security issue date until the convertible securities cease to be outstanding. The securities issued as part of the Convertible Agreement contain the following embedded features, some of which contain components of both conversion and redemption features: mandatory conversion in a qualified public offering (QPO), financing conversion (security holder election), extraordinary event conversion (security holder election), End Date conversion (security holder election), redemption upon default, Corporation repurchase (Corporation election), and extended End Date conversion (Corporation election). In the mandatory conversion in a QPO, financing conversion, and extraordinary event conversion, the outstanding principal and accrued interest will convert into capital or preferred stock, pursuant to the terms of the Convertible Agreement based on a conversion price calculated as the lesser of (i) the price per share at which the Corporation’s equity securities are issued to the public in the applicable transaction multiplied by the discount factor in effect and (ii) a price per share equal to (x) $2.5 billion, divided by (y) the number of shares of common stock outstanding as of the closing of the applicable transaction on an as-converted, as-exercised basis as defined in the Convertible Agreement. In the End Date conversion, the outstanding principal and accrued interest will convert into shares of senior preferred stock or most recent preferred stock. Shares are calculated as principal and accrued interest divided by the applicable conversion price. Conversion price is the lowest of (i) the product obtained by multiplying (x) the lowest price per share at which the Corporation issued applicable preferred stock, by (y) the discount factor, and (ii) the lowest price per share at which the Corporation issued its most recently authorized series of preferred stock and (iii) a price per share equal to (x) $2.5 billion, divided by (y) the number of shares of common stock outstanding as of the conversion on an as-converted, as-exercised basis as defined in the Convertible Agreement. Upon the occurrence of any event of default, all accrued but unpaid expenses, and the principal and accrued interest will be immediately due and payable in full. In the event of Corporation repurchase, the Corporation would pay the security holders an amount equal to the portion being repurchased, divided by the discount factor and issuing to the security holders a warrant for a number of repurchase warrant shares equal to the repurchase amount divided by the repurchase warrant share price, with the warrant having an exercise price equal to the repurchase warrant share price. Repurchase warrant share price is calculated as the lower of (a) lowest price at which the repurchase warrant shares were originally issued and (b) the quotient obtained by dividing (x) $2.5 billion, divided by (y) the number of shares of common stock outstanding as of the date of issuance of the applicable repurchase warrant on an as-converted, as-exercised basis as defined in the Convertible Agreement. The Corporation may elect to extend the End Date until the earlier of (i) a deemed liquidation event and (ii) the end of a period designated by the Corporation of not less than 15 days and not more than 180 days (if the security holder is an original security holder or an affiliate of the original security holder), or otherwise 365 days (if the security holder is not an original security holder or an affiliate of such security holder), following the original End Date. On October 5, 2020, the Corporation entered into the Merger Agreement with SCH and simultaneously amended the Convertible Agreement whereby, the convertible securities convert into Class Z common stock upon the merger event with SCH. See Note 26 (Subsequent events) for additional information on the merger event. Additionally, the conversion will incur a 9.35% charge to account for dilution after the merger event to convert the securities as if they had been converted under the mandatory QPO conversion. Certain conversion features were determined to be share-settled redemption features. The Corporation analyzed the embedded features for derivative accounting consideration and determined the following: • The redemption feature in the mandatory conversion in a QPO, financing conversion and extraordinary event conversion features meet the requirements to be accounted for separately from the debt host as a derivative because the feature is not clearly and closely related to the debt host, the debt host. See Note 15 (Derivative liabilities) for additional information. • The extended End Date feature requires separate accounting as a derivative. See Note 15 (Derivative liabilities) for additional information. • The End Date conversion feature represents a BCF with an intrinsic value that exceeded the approximately $373.8 million principal balance of the convertible securities. The BCF was recorded within equity in additional-paid-in-capital and as a discount to the convertible securities in an amount equal to the full principal amount of the securities, thus reducing the carrying value of the convertible securities to zero. The discount of $373.8 million is being accreted to the principal amount over the term of the securities, assuming a maturity of April 1, 2023, using the effective interest method. The accretion is recognized in amortization of notes and securities discounts on the Consolidated Statements of Operations and Comprehensive Loss. • The other embedded features are clearly and closely related to the debt host and do not require separate accounting as a derivative. Since the carrying amount of the convertible securities was initially recognized as $0, debt issuance costs incurred in the amount of approximately $0.4 million were expensed on the Consolidated Statements of Operations and Comprehensive Loss during the year ended December 31, 2019. The carrying amount of the convertible securities and unamortized discount were approximately $76.5 million and $337.3 million, respectively, at December 31, 2020. Amortization of the debt discount and interest expense on the convertible securities were approximately $21.1 million and $31.1 million, respectively, during the year ended December 31, 2020. The effective interest rate, inclusive of amortization of the discount and the contractual rate, was in excess of 100% during the year ended December 31, 2019, as a result of the beginning convertible securities carrying value of $0. The End Date conversion feature represents a BCF with an intrinsic value of $2.3 billion. 2020 Convertible Note On September 25, 2020, Seek Insurance Services, Inc. (Seek), the Corporation’s wholly-owned subsidiary, entered into a note purchase agreement (the “Seek Convertible Note Agreement”) with a third party investor, and issued a note in a principal amount of $20.0 million. The outstanding principal as of December 31, 2020, was $20.0 million. The note bears simple interest at an annual rate of 8% and matures on September 25, 2023, unless earlier accelerated, converted, or paid in full, as discussed below. The outstanding principal and any accrued but unpaid interest will become immediately due and payable at the election of the note holder upon the occurrence of any Event of Default as defined in the note. The outstanding principal and accrued but unpaid interest will convert into a minority equity interest in Seek if prior to maturity, repayment or conversion of the note: (1) the note holder elects to convert the note, (2) upon the closing of Seek’s next equity financing; or (3) upon consummation of an initial public offering of Seek’s common stock or a SPAC or reverse merger transaction with Seek. The Corporation analyzed the embedded features for derivative accounting consideration and determined that the features are clearly and closely related to the debt host and do not require separate accounting as a derivative. The carrying amount of the note was $19.9 million and $0 million at December 31, 2020 and 2019, respectively. The Corporation capitalized $0.1 million of issuance costs which are being amortized using the effective interest method over the term of the note. Unamortized debt issue costs were $0.1 million and $0 million at December 31, 2020 and 2019, respectively. Amortization of the debt issue costs and interest expense on the note were immaterial and $0 million during the years ended December 31, 2020 and 2019, respectively. The below table summarizes maturities of the Corporation’s securities payable over the next five years as of December 31, 2020: Year ended December 31, (in thousands) 2021 $ 20,939 2022 9,986 2023 393,827 2024 — 2025 — Total $ 424,752 The Corporation was in compliance with all applicable financial and non-financial covenants under its financing arrangements for the year ended December 31, 2020 and 2019, respectively. |
Warrants Payable_2
Warrants Payable | 9 Months Ended | 12 Months Ended |
Sep. 30, 2021 | Dec. 31, 2020 | |
Stockholders' Equity Note [Abstract] | ||
Warrants Payable | Warrants Payable Legacy Warrants In conjunction with the Loan Facility, the Corporation issued warrants to purchase 1,266,284 shares of the Corporation’s Series D preferred stock at an exercise price of $9.38 per share. On October 5, 2020, the Corporation entered into the Merger Agreement with SCH and simultaneously amended the warrants to be automatically exercisable for common stock in connection with the Business Combination. The warrants were accounted for as derivative instruments, and the initial fair value of approximately $1.2 million, which was calculated using a Black-Scholes based valuation model, was recorded as a discount to the carrying amount of the Loan Facility. This discount was being amortized using the effective interest method over the term of the Loan Facility. The warrants were recorded as liabilities and were being marked to market at each reporting period. In September 2015, the Corporation issued warrants to purchase 2,100,000 shares of the Corporation’s common stock at an exercise price of $1.04 per share. The warrants were also contingently exercisable for an additional 2,100,000 shares based proportionally on the aggregate principal amounts of additional notes borrowed by the Corporation. Pursuant to the Merger Agreement, the Loan Facility warrants and the September 2015 warrants automatically converted into 3,484,154 shares of Legacy Clover common stock and, after giving effect to the Exchange Ratio converted into 7,205,490 shares of Class B Common Stock upon the closing of the Business Combination. Public Warrants and Private Placement Warrants As a result of the Business Combination, the Corporation assumed, as of January 7, 2021, Public Warrants to purchase an aggregate of 27,599,938 shares of the Corporation’s Class A Common Stock and Private Placement Warrants to purchase an aggregate of 10,933,333 shares of the Corporation’s Class A Common Stock. Each whole Warrant entitled the registered holder to purchase one whole share of Class A Common Stock at a price of $11.50 per share, at any time commencing on April 24, 2021. The Warrants were accounted for as liabilities in accordance with ASC 815-40 and are presented within warrants payable on the Condensed Consolidated Balance Sheet. The warrant liabilities were measured at fair value at inception and on a recurring basis until redeemed, with changes in fair value presented within change in fair value of warrants payable in the Condensed Consolidated Statement of Operations and Comprehensive Loss. See Note 5 (Fair Value Measurements) for additional information. On July 22, 2021, the Company issued a press release stating that it would redeem all of its Warrants that remained outstanding on August 23, 2021, the redemption date, for a redemption price of $0.10 per Warrant. On August 25, 2021, the Company announced that it was extending the period during which holders of the Public Warrants could exercise the Warrants to September 9, 2021, at which time any unexercised Public Warrants would be redeemed at a price of $0.10 per Warrant. Payment upon exercise of the Warrants could be made either (i) in cash, at an exercise price of $11.50 per share of Class A Common Stock or (ii) on a “cashless basis” in which the exercising holder received 0.249 shares of Class A Common Stock per Warrant shares of Class A Common Stock. Prior to the redemption date, 33,932 Public Warrants were exercised for cash, and 26,716,041 were exercised on a cashless basis in exchange for an aggregate of 6,685,865 shares of Common Stock, in each case in accordance with the terms of the Warrant Agreement, representing 96.9% of the Public Warrants. In addition, all of the Private Placement Warrants were exercised on a cashless basis in exchange for an aggregate of 2,722,399 shares of Common Stock, in accordance with the terms of the Warrant Agreement. Total cash proceeds generated from exercises of the Public Warrants were $0.4 million. The remaining unexercised 849,965 Public Warrants were redeemed by the Corporation for $0.1 million. In connection with the redemption, the Public Warrants were delisted, and no Warrants were outstanding at September 30, 2021. | Warrants payable In conjunction with the Loan Facility effective March 21, 2017, the Corporation issued warrants to purchase 2,618,770 shares of the Corporation’s Series D preferred stock at an exercise price of $4.5346 per share, which expire on September 30, 2027. The warrants are exercisable at any time and up to the expiration date. Per the original terms, in the event of an automatic conversion of the preferred stock prior to the exercise of the warrants, the warrants shall be exercisable in common stock. On October 5, 2020, the Corporation entered into the Merger Agreement with SCH and simultaneously amended the warrants to be exercisable in common stock based on the merger event with SCH. See Note 26 (Subsequent events) for additional information on the merger event. Additionally, the original strike price of the warrants changed from $4.5346 per share to $0. The warrants were accounted for as derivative instruments and the initial fair value of approximately $1.2 million, which was calculated using a Black-Scholes based valuation model, was recorded as a discount to the carrying amount of the Loan Facility. This discount is being amortized using the effective interest method over the term of the Loan Facility. The warrants were recorded as liabilities and are being marked to market at each reporting period. In September 2015, the Corporation issued warrants to purchase 4,342,956 shares of the Corporation’s common stock at an exercise price of $0.5039 per share which expire on September 2, 2022. The warrants are exercisable at any time up to the expiration date. The warrants are also contingently exercisable for an additional 4,342,956 shares based proportionally on the aggregate principal amounts of additional notes borrowed by the Corporation. As a result of the Merger Agreement, the warrants automatically convert into common stock based on the merger event with SCH. The warrants are being recorded at fair value and are reflected as liabilities on the Corporation’s Consolidated Balance Sheets at each reporting period. See Note 5 (Fair value measurements) for additional information. |
Derivative Liabilities_2
Derivative Liabilities | 9 Months Ended | 12 Months Ended |
Sep. 30, 2021 | Dec. 31, 2020 | |
Derivative Instruments and Hedges, Liabilities [Abstract] | ||
Derivative Liabilities | Derivative LiabilitiesIn connection with the $373.8 million of convertible securities issued in 2019, the Corporation determined that certain of the conversion and redemption features were embedded derivatives and were bifurcated from the host instrument and accounted for as embedded derivative instruments. In connection with the convertible securities, the Corporation recognized a capital contribution of $44.8 million during the nine months ended September 30, 2021. This capital contribution of $44.8 million was recorded as an increase in additional paid in capital as the notes were issued to affiliates of the Corporation. The Corporation recognized a gain of $68.1 million and $87.5 million from activity related to derivative liabilities in connection with the convertible securities during the three and nine months ended September 30, 2020, respectively, which was recognized in gain on derivative in the Condensed Consolidated Statements of Operations and Comprehensive Loss. Upon the completion of the Business Combination with SCH on January 7, 2021, the derivative balance was extinguished as of January 7, 2021. See Note 3 (Business Combination), Note 5 (Fair Value Measurements), and Note 9 (Notes and Securities Payable) for additional information. | Derivative liabilitiesIn connection with the $373.8 million convertible securities issued in 2019, the Corporation determined that certain of the conversion and redemption features were embedded derivatives which have been bifurcated from the host instrument and accounted for as embedded derivative instruments. The Corporation recognized a $93.8 million gain during the year ended December 31, 2020 and a $138.6 million loss related to derivative liabilities during the year ended December 31, 2019. The aggregate loss was recognized in (gain) loss on derivative in the Consolidated Statements of Operations and Comprehensive Loss. The fair value of embedded derivatives was $44.8 million at December 31, 2020, and $138.6 million at December 31, 2019, and is included as derivative liabilities in the Corporation’s Consolidated Balance Sheets. See Note 5 (Fair value measurements) and Note 13 (Notes and securities payable) for additional information. |
Letter of Credit_2
Letter of Credit | 9 Months Ended | 12 Months Ended |
Sep. 30, 2021 | Dec. 31, 2020 | |
Debt Disclosure [Abstract] | ||
Letter of Credit | Letter of CreditOn April 19, 2018, the Corporation entered into a secured letter of credit agreement (the “Letter”) for up to an aggregate amount of $2.5 million with a commercial lender that renews on an annual basis. The Letter bears an interest rate of 0.75%. There was an unused balance of $2.5 million at both September 30, 2021, and December 31, 2020. | Letter of creditOn April 19, 2018, the Corporation entered into a secured letter of credit agreement (the “Letter”) for an amount up to an aggregate of $2.5 million with a commercial lender that renews on an annual basis. The Letter bears an interest rate of 0.75%. There was an unused balance of $2.5 million and $2.5 million as of December 31, 2020 and 2019, respectively. |
Leases_2
Leases | 9 Months Ended | 12 Months Ended |
Sep. 30, 2021 | Dec. 31, 2020 | |
Leases [Abstract] | ||
Leases | Leases Operating Leases The Corporation leases office space in New Jersey, Minnesota, Tennessee, Georgia, Florida, California, and Hong Kong under non-cancelable operating leases, as further described below. For each lease the Corporation recorded a right-of-use (ROU) asset and lease liability at the earlier of the ASC 842 effective date or lease commencement date. The Corporation utilizes the straight-line method of recognizing lease expense. However, the Corporation is required to pay certain variable executory costs including common area maintenance, real estate taxes, and insurance that are expensed as incurred. These variable costs are excluded from the measurement of leases. Certain of the Corporation’s leases include options to renew, with renewal terms that can extend the lease term. The exercise of lease renewal options is at the Corporation’s sole discretion. The Corporation is not reasonably certain that it will exercise the renewal options described in the individual lease descriptions below. Therefore, these options are not recognized as part of the ROU asset and lease liability. The Corporation subleases certain of its leases to third parties for which it receives rental income to manage occupancy costs. These subleases are classified as operating leases. Certain of the Corporation’s leases are being considered for subletting. Mallory Green Lease: On September 22, 2021, the Corporation entered into an agreement to lease office space for its new corporate headquarters in Franklin, Tennessee, for a period of 37 months. Montgomery Lease: From May 2020 through April 9, 2021, the Corporation was in default with respect to its agreement to lease office space in Jersey City, New Jersey (the “Montgomery Lease”), for not paying rent owed to the lessor. The Corporation accrued for all interest owed and began reducing its security deposit asset in lieu of recording rental payments. On April 9, 2021, the Corporation replenished its security deposit and, therefore, was no longer in default with respect to the Montgomery Lease. Summary of Lease Costs Recognized Under ASC 842: The following table contains a summary of the lease costs recognized under ASC 842 and other information pertaining to the Corporation’s operating leases for the three and nine months ended September 30, 2021: Three Months Ended September 30, 2021 (in thousands) Operating lease cost $ 1,126 Variable lease cost 123 Short-term lease cost 15 Sublease income (650) Total lease cost $ 614 Nine Months Ended September 30, 2021 (in thousands) Operating lease cost $ 3,351 Variable lease cost 391 Short-term lease cost 45 Sublease income (2,077) Total lease cost $ 1,710 Other information Cash paid for amounts included in the measurement of lease liabilities $ 3,894 Weighted-average remaining lease term 4.4 years Weighted-average discount rate 10.26 % Pursuant to the terms of the Corporation’s non-cancelable lease agreements in effect at December 31, 2020, the following table summarizes the Corporation’s maturities of lease liabilities as of September 30, 2021: (in thousands) 2021 $ 1,321 2022 3,001 2023 1,493 2024 1,157 2025 1,149 Thereafter 2,639 Total lease payments 10,760 Less: imputed interest (2,213) Total $ 8,547 | Leases Operating leases The Corporation leases office space in New Jersey, Minnesota, Tennessee, and San Francisco under non-cancelable operating leases, further described below. For each lease the Corporation recorded a ROU asset and lease liability at the earlier of the ASC 842 effective date or lease commencement date. The Corporation utilizes the straight-line method of recognizing lease expense. However, the Corporation is required to pay certain variable executory costs including common area maintenance, real estate taxes, and insurance that are expensed as incurred. These variable costs are excluded from the measurement of leases. Certain of our leases include options to renew, with renewal terms that can extend the lease term. The exercise of lease renewal options is at our sole discretion. The Corporation is not reasonably certain that it will exercise the renewal options described in the individual lease descriptions below. Therefore, these options are not recognized as part of the ROU asset and lease liability. The Corporation subleases certain of its leases to third parties for which it receives rental income to manage occupancy costs. These subleases are classified as operating and are further described below. Tennessee lease (principal executive office): On May 7, 2019, the Corporation entered into an agreement to lease office space for its corporate headquarters in Franklin, Tennessee. The initial lease term ended on August 31, 2020 and became a month-to-month lease that commenced on September 1, 2020 and is treated as a short-term lease. Montgomery leases: On September 28, 2016, the Corporation entered into an agreement to lease office space in Jersey City, New Jersey (the “Montgomery Lease”). The lease expires March 31, 2028 with one option to renew for five years. There was an amendment that expires August 31, 2023 with one option to renew for five years. The Corporation entered into an agreement to sublease (the “Montgomery Sublease”), which commenced October 4, 2019. The Corporation receives rental income for this sublease which has a lease term through March 31, 2021. The Corporation uses the long-lived assets impairment to determine when to test ROU assets (or asset groups that contain one or more ROU assets) for impairment, assess whether ROU assets are impaired, and if so, the amount of the impairment loss to recognize. The sublease income expected to be received under the Montgomery Sublease is less than the amount to be paid under the Montgomery Lease for the sublease term, which indicated that the Montgomery Lease may not be recoverable. Upon execution of the sublease agreement, the Corporation reassessed the asset group and determined that the lowest level of identifiable cash flows pertaining to the Montgomery Sublease was at the individual lease level. The asset group, comprised of both the ROU asset and corresponding leasehold improvements related to the 14th floor of the Montgomery Lease, were determined to not be recoverable and were written down to their respective fair values with an impairment charge of $1.6 million recorded to general and administrative expenses in the Consolidated Statements of Operations and Comprehensive Loss for the year ended December 31, 2019. The Corporation is currently in default with respect to the Montgomery Lease for not paying rent owed to the lessor. The Corporation has accrued for all interest owed and is reducing its security deposit asset in lieu of recording rental payments. The Corporation is currently in discussions with the lessor to resolve this default and related lease issues. San Francisco leases: During 2015 and 2016, the Corporation entered into agreements to lease two floors of office space in San Francisco, California through April 30, 2022. In 2019, the Corporation subleased the two floors beginning in June and October 2019, respectively. The sublease terms also expire on April 30, 2022. Lyndhurst lease: On February 28, 2019, the Corporation completed its acquisition of Principium and assumed its office lease in Lyndhurst, New Jersey. The lease expires May 31, 2022 and has one option to renew for 5 years. The renewal option is not included in the measurement of the lease. Minnesota lease: On October 8, 2020, the Corporation entered into an agreement to lease office space for its Seek subsidiary in Edina, Minnesota, which expires on September 30, 2022. Summary of lease costs recognized under ASC 842: The following table contains a summary of the lease costs recognized under ASC 842 and other information pertaining to the Corporation’s operating leases for the years ended December 31, 2020 and 2019: Year ended December 31, 2020 (in thousands) Operating lease cost $ 4,533 Variable lease cost 632 Short-term lease cost 20 Sublease income (3,098) Total lease cost $ 2,087 Other information Cash paid for amounts included in the measurement of lease liabilities $ 4,979 Weighted-average remaining lease term (in years) 4.4 Weighted-average discount rate 10.17 % Year ended December 31, 2019 (in thousands) Operating lease cost $ 4,552 Variable lease cost 654 Short-term lease cost 58 Sublease income (989) Total lease cost $ 4,275 Other information Cash paid for amounts included in the measurement of lease liabilities $ 4,804 Weighted-average remaining lease term (in years) 4.8 Weighted-average discount rate 10.05 % Pursuant to the terms of the Corporation’s non-cancelable lease agreements in effect at December 31, 2020, the following table summarizes the Corporation’s maturities of lease liabilities as of December 31, 2020: Year ended December 31, 2020 (in thousands) 2021 $ 5,017 2022 2,747 2023 1,408 2024 1,089 2025 1,121 Thereafter 2,649 Total lease payments $ 14,031 Less: imputed interest (2,887) Total $ 11,144 |
Convertible Preferred Stock
Convertible Preferred Stock | 9 Months Ended | 12 Months Ended |
Sep. 30, 2021 | Dec. 31, 2020 | |
Temporary Equity Disclosure [Abstract] | ||
Convertible Preferred Stock | Convertible Preferred Stock Each share of Legacy Clover’s preferred stock was convertible at the option of the holder, at any time and from time to time, and without the payment of additional consideration by the holder thereof, into a number of fully paid and non-assessable shares of common stock as is determined by dividing the applicable original issue price by the applicable conversion price as described in Note 17 (Preferred Stock) to financial statements in the Form 8-K/A in effect at the time of conversion. Pursuant to the Merger Agreement, all outstanding shares of Legacy Clover’s preferred stock automatically converted into 139,444,346 shares of Class B Common Stock after giving effect to the Exchange Ratio upon the closing of the Business Combination. See Note 3 (Business Combination) for additional information on the Business Combination. | Preferred stock During 2015, the Corporation issued 10,907,993 shares of Series A and 14,888,608 shares of Series A-1 preferred stock at $0.50394 per share for total proceeds of approximately $13.0 million. During 2015, the Corporation issued 21,381,446 shares of Series B preferred stock at $1.63693 per share for total proceeds of approximately $35.0 million. During 2016, the Corporation issued 39,431,582 shares of Series C preferred stock at $4.06185 per share for total proceeds of approximately $160.2 million. Issuance costs totaled approximately $0.4 million. During 2017, the Corporation issued 42,910,925 shares of Series D preferred stock at $4.53456 per share for total proceeds of approximately $194.6 million. Issuance costs totaled approximately $0.3 million. During 2018, the Corporation issued 9,923,792 additional shares of Series D preferred stock at $4.53456 per share for total proceeds of approximately $45.0 million. Issuance costs totaled approximately $0.5 million. During 2020 and 2019, the Corporation did not issue any additional shares of preferred stock. As of each balance sheet date, preferred stock consisted of the following ($ in millions, except for share amounts): As of December 31, 2020 and 2019, after recapitalization Preferred Stock Authorized (1) Preferred Stock Issued and Outstanding (1) Carrying Value Liquidation Common Stock Issuable Upon Conversion (1) Series A Preferred stock 10,907,993 10,907,993 $ 5.5 $ 5.5 10,907,993 Series A-1 Preferred stock 14,888,608 14,888,608 7.4 30.0 14,888,608 Series B Preferred stock 21,381,446 21,381,446 35.0 35.0 21,381,446 Series C Preferred stock 39,431,582 39,431,582 160.2 160.2 39,431,582 Series D Preferred stock 68,777,396 52,834,717 239.6 239.6 52,834,717 155,387,025 139,444,346 447.7 470.3 139,444,346 _____________________ (1) Amounts in the above table have been adjusted to reflect the exchange of Legacy Clover’s common stock at an exchange ratio of approximately 2.0681 in January 2021 as a result of the application of reverse capitalization. See Note 3 (Reverse Capitalization) for details. The holders of the preferred stock have rights, preferences and privileges as follows: Dividends The Series A and Series A-1 dividend rate is $0.04032 per share of Series A preferred stock per annum, subject to appropriate adjustment in the event of any stock dividend, stock split, combination or other similar recapitalization with respect to the Series A and Series A-1 preferred stock. The Series B rate is $0.13090 per share of Series B preferred stock per annum, subject to appropriate adjustment in the event of any stock dividend, stock split, combination or other similar recapitalization with respect to Series B preferred stock. The Series C rate is $0.32495 per share of Series C preferred stock per annum, subject to appropriate adjustment in the event of any stock split, combination or other similar recapitalization with respect to the Series C preferred stock. The Series D rate is $0.36276 per share of Series D preferred stock per annum, subject to appropriate adjustment in the event of any stock dividend, stock split, combination or other similar recapitalization with respect to the Series D preferred stock. The Corporation cannot declare, pay or set aside any dividends on shares of any other class or series of capital stock of the Corporation (other than dividends on shares of common stock payable in shares of common stock) unless the holders of the outstanding preferred stock will first receive (on a pari passu basis), or simultaneously receive, a dividend on each outstanding share of preferred stock in an amount equal to the greater of (a) the applicable dividend rate (as listed above) or (b) an amount that such holders of the preferred stock would receive on a pari passu basis with the holders of common stock if such shares of preferred stock had been converted to common stock. The holders of the outstanding preferred stock can waive any dividend preference that the holders are entitled to receive upon the affirmative vote or written consent of the holders of a majority of the shares of outstanding preferred stock (voting together as a single class and on as-converted to common stock basis). Voting Each holder of the outstanding share of preferred stock is entitled to cast the number of votes equal to the number of whole shares of common stock into which the shares of preferred stock held by such holder are convertible as of the record date for determining stockholders entitled to vote on such matter. Unless provided by law or any other provisions of the Certificate of Incorporation, holders of preferred stock can vote together with the holders of common stock as a single class on all matters presented to the stockholders of the Corporation. Conversion Each share of preferred stock can be converted at the option of the holder, at any time and from time to time, and without the payment of additional consideration by the holder thereof, into a number of fully paid and non-assessable shares of common stock as is determined by dividing the applicable original issue price by the applicable common conversion price (as defined below) in effect at the time of conversion. The “Series A conversion price” will initially be equal to the Series A-1 original issue price. The “Series B conversion price” will initially be equal to the Series B original issue price. The “Series C conversion price” will initially be equal to the Series C original issue price. The “Series D conversion price” will initially be equal to the Series D original issue price. The “applicable conversion price” is defined as the Series A conversion price with respect to the Series A preferred stock, the Series A-1 conversion price with respect to the Series A-1 preferred stock, the Series B conversion price with respect to the Series B preferred stock, the Series C conversion price with respect to the Series C preferred stock, and the Series D conversion price with respect to the Series D preferred stock. Each applicable conversion price, and the rate at which shares of preferred stock may be converted into shares of common stock, is subject to adjustment as provided below. In the event of liquidation, dissolution or winding up of the Corporation or a deemed liquidation event, the conversion rights will terminate at the close of business on the last full day preceding the date fixed for the payment of such amounts distributable on such event to the holders of preferred stock. No fractional shares of common stock can be issued upon conversion of the preferred stock. In lieu of any fractional shares to which the holder would otherwise be entitled, the Corporation will pay cash equal to such fraction multiplied by the fair value of a share of common stock as determined in good faith by the Board. Whether or not fractional shares would be issuable upon such conversion will be determined on the basis of the total number of shares of preferred stock the holder is at the time converting into common stock and the aggregate number of shares of common stock issuable upon conversion. The preferred stock of the Corporation is subject to broad based weighted-average anti-dilution subject to customary carveouts. Redemption The preferred stock is not mandatorily redeemable. Any shares of preferred stock that are redeemed or otherwise acquired by the Corporation or any of its subsidiaries will be automatically and immediately cancelled and retired and will not be reissued, sold or transferred. Neither the Corporation nor any of its subsidiaries may exercise any voting or other rights granted to the holders of preferred stock following redemption. |
Employee Benefit Plans_2
Employee Benefit Plans | 9 Months Ended | 12 Months Ended |
Sep. 30, 2021 | Dec. 31, 2020 | |
Share-based Payment Arrangement [Abstract] | ||
Employee Benefit Plans | Employee Benefit Plans Employee Savings Plan The Corporation has a defined contribution retirement savings plan (the “401(k) Plan”) covering eligible employees, which includes safe harbor matching contributions based on the amount of employees’ contributions to the 401(k) Plan. The Corporation contributes to the 401(k) Plan annually 100.0% of the first 4.0% compensation that is contributed by the employee up to 4.0% of eligible annual compensation. The Corporation’s service contributions to the 401(k) Plan amounted to approximately $0.3 million and $0.3 million for the three months ended September 30, 2021 and 2020, respectively, and $0.9 million and $1.0 million for the nine months ended September 30, 2021 and 2020, respectively, and are included in salaries and benefits on the Condensed Consolidated Statements of Operations and Comprehensive Loss. The Corporation's cash match is invested pursuant to the participant's contribution direction. Employer contributions are immediately 100.0% vested. Stock-based Compensation The Corporation’s 2020 Equity Incentive Plan (the “2020 Plan”) and 2020 Management Incentive Plan (the “2020 MIP”) provide for grants of restricted stocks units (RSUs) and/or options to acquire shares of the Corporation’s common stock, par value $0.0001 per share, to employees, directors, officers, and consultants of the Corporation. During the nine months ended September 30, 2021, the Corporation approved the 2020 Plan and the 2020 MIP, and the Corporation’s 2014 Equity Incentive Plan (the “2014 Plan” and, collectively with the 2020 Plan and the 2020 MIP, the “Plans”) was retired. The maximum number of shares of the Corporation’s common stock reserved for issuance over the term of the Plans, shares outstanding under the Plans, and shares remaining under the Plans, after giving effect to the Exchange Ratio, as of September 30, 2021, and December 31, 2020, were as follows: September 30, 2021 Shares Authorized Under Plans Shares Outstanding Under Plans Shares Remaining Under Plans 2014 Plan 54,402,264 42,441,719 N/A 2020 Plan 30,641,401 1,782,986 28,858,415 2020 MIP 33,426,983 33,426,983 — December 31, 2020 Shares Authorized Under Plan Shares Outstanding Under Plan Shares Remaining Under Plan 2014 Plan 54,402,264 36,557,759 17,844,505 Effective as of the closing of the Business Combination, the 2014 Plan terminated, at which time the outstanding awards previously granted thereunder were assumed by the Corporation, and no new awards are available for grant under the 2014 Plan. Shares that are expired, terminated, surrendered or canceled under the 2014 Plan without having been fully exercised are available for awards under the 2020 Plan. Shares may be issued from authorized but unissued Corporation stock. The Plans are administered by the Talent and Compensation Committee of the Corporation’s Board of Directors (the “Compensation Committee”). The options are subject to the terms and conditions applicable to options granted under the Plans, as described in the applicable Plan and the applicable stock option grant agreement. The exercise prices, vesting and other restrictions applicable to the stock options are determined at the discretion of the Compensation Committee, except that the exercise price per share of incentive stock options may not be less than 100.0% of the fair value of a share of common stock on the date of grant. Stock options awarded under the Plans expire 10 years after the grant date. Incentive stock options and non-statutory options granted to employees, directors, officers and consultants of the Corporation typically vest over four The Corporation granted options to purchase 1,937,968 shares of common stock during the nine months ended September 30, 2021. The Corporation recorded stock-based compensation expense for options, RSUs, performance restricted stock units (PRSUs) granted under the Plans and discounts offered in connection with the Corporation’s 2020 Employee Stock Purchase Plan (ESPP) of $46.8 million and $132.5 million during the three and nine months ended September 30, 2021, and such expenses are presented in salaries and benefits in the accompanying Condensed Consolidated Statements of Operations and Comprehensive Loss. Compensation cost presented in salaries and benefits in the accompanying Condensed Consolidated Statements of Operations and Comprehensive Loss were as follows: Three Months Ended September 30, 2021 2020 (in thousands) Stock options $ 1,665 $ 1,500 RSUs 17,396 — PRSUs 27,675 — ESPP 67 — Total compensation cost recognized for stock-based compensation plans $ 46,803 $ 1,500 Nine Months Ended September 30, 2021 2020 (in thousands) Stock options $ 6,734 $ 4,949 RSUs 45,725 — PRSUs 80,016 — ESPP 67 — Total compensation cost recognized for stock-based compensation plans $ 132,542 $ 4,949 As of September 30, 2021, there was approximately $463.7 million of unrecognized stock-based compensation expense related to unvested stock options, RSUs, PRSUs, and the ESPP, estimated to be recognized over a period of 4.27 years. As of December 31, 2020, there was approximately $14.9 million of unrecognized stock-based compensation expense related to unvested stock options. Stock Options The assumptions that the Corporation used in the Black-Scholes option-pricing model to determine the grant-date fair value of stock options granted for the nine months ended September 30, 2021 and 2020, respectively, were as follows: Nine Months Ended September 30, 2021 2020 Weighted-average risk-free interest rate 1.06 % 0.84 % Expected term (in years) 6.06 4.66 Expected volatility 37.74 % 34.60 % Expected dividend yield — — A summary of option activity under the 2020 Plan during the nine months ended September 30, 2021 is as follows: Number of options Weighted-average exercise price Outstanding, January 1, 2021 — $ — Granted during 2021 1,937,968 8.88 Exercised — — Forfeited (154,982) 8.87 Outstanding, September 30, 2021 1,782,986 $ 8.88 A summary of option activity under the 2014 Plan during the nine months ended September 30, 2021 is as follows: Number of options Weighted-average exercise price Outstanding, January 1, 2021 36,513,193 $ 2.26 Granted during 2021 — — Exercised (3,843,472) 1.43 Forfeited (974,874) 2.78 Outstanding, September 30, 2021 31,694,847 $ 2.29 The aggregate intrinsic value of stock options is calculated as the difference between the exercise price of the stock options and the fair value of the Corporation’s common stock for those stock options that had exercise prices lower than the fair value of the Corporation’s common stock. The weighted-average grant date fair value of stock options granted during the nine months ended September 30, 2021 and 2020 was $3.36 per share and $2.10 per share, respectively. As of September 30, 2021, outstanding stock options, substantially all of which are expected to vest, had an aggregate intrinsic value of $160.1 million, and a weighted-average remaining contractual term of 7.03 years. As of September 30, 2021, there were 21,210,565 options exercisable under the Plan, with an aggregate intrinsic value of $109.0 million, a weighted-average exercise price of $2.26 per share, and a weighted-average remaining contractual term of 6.34 years. The total value of stock options exercised during the nine months ended September 30, 2021 and 2020, was $36.4 million and $1.6 million, respectively. Cash received from stock option exercises during the nine months ended September 30, 2021 and 2020, totaled $5.5 million and $1.0 million, respectively. Pursuant to the terms of the applicable Plan and stock option award agreement, employees may exercise options at any time after grant while maintaining the original vesting period. The proceeds from exercise of unvested options are recorded as a liability until the option vests at which time the liability is reclassified to equity. If the employee terminates or otherwise forfeits an unvested option that has been exercised, the Corporation must redeem those shares at the original exercise price and remit payment of the forfeited portion of shares back to the employee. Restricted Stock Units A summary of total RSU activity for the nine months ended September 30, 2021, is presented below: Nine Months Ended September 30, 2021 Granted 21,035,614 Released (131,766) Forfeited (35,935) Outstanding, September 30, 2021 20,867,913 The weighted-average grant date fair value of the RSUs was $14.77 per underlying share. Performance Restricted Stock Units The Corporation has granted PRSUs which become eligible to vest if prior to the vesting date the average closing price of one share of the Corporation’s common stock for ninety The weighted-average grant date fair value of Market PRSUs granted during the nine months ended September 30, 2021, was $9.58 per underlying share. There were no Market PRSUs granted prior to 2021. The grant date fair value of Market PRSUs was determined using a Monte Carlo simulation model that incorporated multiple valuation assumptions, including the probability of achieving the specified market condition and the following assumptions: Nine Months Ended September 30, 2021 Expected volatility (1) 40.70 % Risk-free interest rate (2) 0.50 Dividend yield (3) — _________________ (1) Expected volatility is based on a blend of peer group company historical data adjusted for the Corporation’s leverage. (2) Risk-free interest rate based on U.S. Treasury yields with a term equal to the remaining Performance Period as of the grant date. (3) Dividend yield was assumed to be zero as the Corporation does not anticipate paying dividends. A summary of total PRSU activity for the nine months ended September 30, 2021, is presented below: Nine Months Ended September 30, 2021 Granted 27,699,171 Non-vested at September 30, 2021 27,699,171 As of September 30, 2021, there was $185.4 million of unrecognized share-based compensation expense related to PRSUs, which is expected to be recognized over a period of 4.27 years. 2020 Employee Stock Purchase Plan On October 5, 2020, SCH’s board of directors adopted, and on January 6, 2021, stockholders approved the ESPP. The ESPP provides a means by which eligible employees and/or eligible service providers of either the Corporation or designated related corporations and affiliates may be given an opportunity to purchase shares of Class A common stock at a 15.0% discount from the fair market value of the common stock as determined on a specific date at six-month intervals. Subject to adjustments provided in the ESPP, the maximum number of shares of common stock that may be purchased under the ESPP is 2,785,582 shares, and the maximum number of shares that may be purchased on any single purchase date by any one participant is 5,000 shares. As of September 30, 2021, 2,785,582 shares of Class A common stock were available for issuance under the ESPP. On the first day of each fiscal year, beginning with the 2022 fiscal year and ending on (and including) the first day of the 2030 fiscal year, the calculation of the maximum number of ESPP shares shall include automatic increases in an amount equal to the lesser of (i) 1.0% of the 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 administrator of the ESPP; 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 Corporation (inclusive of the shares reserved under the ESPP) as of January 7, 2021, on an as-converted basis. The initial offering period for the ESPP is five months, commencing on September 1, 2021, and ending on January 31, 2022. As of the date of this report, no shares of the Corporation’s common stock have been purchased or distributed pursuant to the ESPP. The assumptions that the Corporation used in the Black-Scholes option-pricing model to determine the fair value of the purchase rights under the ESPP for the nine months ended September 30, 2021, were as follows: Nine Months Ended September 30, 2021 Weighted-average risk-free interest rate 0.06 % Expected term (in years) 0.42 Expected volatility 147.42 % Equity warrants In November 2016 and December 2017, the Corporation issued warrants to purchase 139,629 shares of the Corporation’s common stock at an exercise price of $2.61 per share, and 122,052 shares of the Corporation's common stock at an exercise price of $3.45 per share, respectively, as part of payment to certain providers for services provided to the Corporation. These warrants were automatically exercised in connection with the Business Combination. See Note 3 (Business Combination) for additional information. The total fair value of warrants vested during the nine months ended September 30, 2021 and 2020, was $0.0 million and $4.0 million, respectively. A summary of activity relating to the warrants of the service providers during the nine months ended September 30, 2021 and 2020, respectively, is as follows: Number of warrants Weighted-average exercise price Outstanding, December 31, 2019 261,681 $ 3.00 Granted during 2020 — — Exercised — — Forfeited — — Outstanding, September 30, 2020 261,681 $ 3.00 Outstanding, December 31, 2020 261,681 $ 3.00 Granted during 2021 — — Exercised (261,681) 3.00 Forfeited — — Outstanding, September 30, 2021 — $ — | Employee benefit plans Employee savings plan The Corporation has a defined contribution retirement savings plan (the “401(k) Plan”) covering eligible employees, which includes matching contributions based on the amount of employees’ contributions to this plan. The Corporation contributes to the 401(k) Plan annually 100% of the first 4% of compensation that is contributed by the employee up to 4% of eligible annual compensation. The Corporation’s service contributions to the 401 (k) Plan amounted to approximately $1.2 million in 2020, and $1.3 million in 2019 and are included in salaries and benefits on the Consolidated Statements of Operations and Comprehensive Loss. The Corporation’s cash match is invested pursuant to the participant’s contribution direction. Employee contributions are immediately 100% vested. Stock-based compensation The Corporation’s 2014 Equity Incentive Plan (the Plan) grants options of common stock, par value $0.0001 per share, to employees, directors, officers and consultants of the Corporation. The maximum number of common shares reserved for issuance over the term of the Plan may not exceed 54,402,264 as of December 31, 2020, and 37,055,557 shares as of December 31, 2019. Shares that are expired, terminated, surrendered or canceled under the Plan without having been fully exercised will be available for future awards. As of December 31, 2020 and 2019, there were 36,557,759 and 28,189,475, respectively, outstanding options and common stock issued under the Plan, leaving 17,844,505 and 8,866,082 shares, respectively, remaining for future grants, assuming all stock options were granted. Shares may be issued from authorized but unissued Corporation stock. The Plan is administered by the Board. The options will be subject to the terms and conditions applicable to options granted under the Plan, as described in the Plan and the applicable stock option grant agreement. The exercise prices, vesting and other restrictions are determined at the discretion of the Board, except that the exercise price per share of incentive stock options may not be less than 100% of the fair value of the common stock on the date of grant. Stock options awarded under the Plan expire ten years after the grant date. Vesting periods for awards under the Plan are determined at the discretion of the Board. Incentive stock options and non-statutory options granted to employees, directors, officers and consultants of the Corporation typically vest over five years. The stock options are presented on an as converted basis at the ratio of approximately 2.0681. The Corporation granted options to purchase 14,386,426 and 8,828,538 shares of common stock during the years ended December 31, 2020 and 2019, respectively. The Corporation recorded stock-based compensation expense for options granted of $7.1 million and $3.3 million during years ended December 31, 2020 and 2019, respectively, presented in salaries and benefits in the accompanying Consolidated Statements of Operations and Comprehensive Loss. During the years ended December 31, 2020 and 2019, the Corporation granted no shares of restricted stock. Stock option valuation The assumptions that the Corporation used in the Black-Scholes option-pricing model to determine the grant-date fair value of stock options granted for the years ended December 31, 2020 and 2019, respectively, were as follows: Year ended December 31, 2020 2019 Weighted-average risk-free interest rate 0.84 % 1.95 % Expected term (in years) 4.68 6.29 Expected volatility 34.66 % 28.37 % Expected dividend yield 0.00 0.00 A summary of option activity under the Plan, after reverse capitalization, during the years ended December 31, 2020 and 2019, respectively, is as follows: Number of options (1) Weighted-average exercise price (1) Outstanding, January 1, 2019 27,046,177 $ 1.31 Granted during 2019 8,828,538 1.99 Exercised (916,527) 0.74 Forfeited (6,768,713) 1.57 Outstanding, December 31, 2019 28,189,475 1.48 Granted during 2020 14,386,426 3.59 Exercised (1,297,977) 1.53 Forfeited (4,720,165) 1.88 Outstanding, December 31, 2020 36,557,759 $ 2.25 __________________ (1) Amounts in the above table have been adjusted to reflect the exchange of Legacy Clover’s common stock at an exchange ratio of approximately 2.0681 in January 2021 as a result of the application of reverse capitalization. See Note 3 (Reverse Capitalization) for details. The aggregate intrinsic value of stock options is calculated as the difference between the exercise price of the stock options and the fair value of the Corporation’s common stock for those stock options that had exercise prices lower than the fair value of the Corporation’s common stock. In February 2020, the Corporation granted 3,669,608 of non-qualified stock options which were determined to have implied market conditions attached to their vesting schedule. As such, these options are valued using a Monte Carlo valuation model to estimate each share’s fair value as of the grant date. The Monte Carlo valuation model uses multiple simulations to evaluate the probability of achieving certain stock prices, the outputs of which are utilized to determine the grant date fair value of these options. Based on the Monte Carlo simulation, the grant date fair value of these options was determined to be $1.18 and the Corporation recognized approximately $1.8 million in related stock compensation expense for the year ended December 31, 2020. The weighted-average grant date fair value of stock options granted during the years ended December 31, 2020 and 2019 was $1.04 and $0.62 per share, respectively. As of December 31, 2020 and 2019, there was approximately $14.9 million and $9.0 million, respectively, of unrecognized stock-based compensation expense related to unvested stock options. The unrecognized stock-based compensation expense is estimated to be recognized over a period of 2.5 years as of December 31, 2020. The total fair value of options vested during each of the years ended December 31, 2020 and 2019, was approximately $5.5 million and $3.5 million, respectively. As of December 31, 2020, outstanding stock options, substantially all of which are expected to vest, had an aggregate intrinsic value of $445.3 million, and a weighted-average remaining contractual term of 7.75 years. As of December 31, 2020, there were 19,333,153 options exercisable under the Plan, with an aggregate intrinsic value of $246.2 million, a weighted-average exercise price of $1.62, and a weighted-average remaining contractual term of 6.85 years. The total intrinsic value of stock options exercised during the years ended December 31, 2020 and 2019 was $5.8 million and $1.3 million, respectively. Cash received from stock option exercises during the years ended December 31, 2020 and 2019 totaled $2.1 million and $0.7 million, respectively. Pursuant to the Plan agreement, employees may exercise options at any time while maintaining the original vesting period. The proceeds from exercise of unvested options are recorded as a liability until the option vests at which time the liability is reclassified to equity. If the employee terminates or otherwise forfeits an unvested option that has been exercised, the Corporation must redeem those shares at the original exercise price and remit payment of the forfeited portion of shares back to the employee. Equity warrants The Corporation entered into two separate scopes of work with a service provider to provide services to the Corporation. As part of the payment for the services, the Corporation issued warrants in November 2016 and December 2017. The warrants were issued to purchase 139,629 shares of common stock at an exercise price of $2.61 per share, and 122,052 shares of common stock at an exercise price of $3.45 per share. The warrants are exercisable comprising the vesting portion at any time up to and including the earlier of (a) the consummation of an Initial Public Offering (IPO); (b) the consummation of a transaction or series of related transactions that is deemed to constitute a liquidation, dissolution or winding up of the Corporation including a change in control or (c) on the 10 year anniversary of the date of issuance (the expiration date). The warrants are being recorded as equity awards, and compensation expense was recognized over the vesting period. As of December 31, 2020, there were 261,681 warrants exercisable under the Plan, substantially all of which are expected to vest, with an aggregate intrinsic value of $4.6 million, a weighted-average exercise price of $3.00 and a weighted-average remaining contractual term of 6.34 years. The total fair value of warrants vested during each of the years ended December 31, 2020 and 2019, was approximately $7.0 million and $0.9 million, respectively. As a result of the Merger Agreement, the warrants automatically convert into common stock based on the merger event with SCH. See Note 26 (Subsequent events) for additional information related to the Merger Agreement. A summary of warrant activity during the years ended December 31, 2020 and 2019, respectively, is as follows: Number of warrants Weighted-average exercise price Outstanding, January 1, 2019 261,681 $ 3.00 Granted during 2019 — Exercised — Forfeited — Outstanding, December 31, 2019 261,681 3.00 Granted during 2020 — Exercised — Forfeited — Outstanding, December 31, 2020 261,681 $ 3.00 |
Income Taxes_2
Income Taxes | 9 Months Ended | 12 Months Ended |
Sep. 30, 2021 | Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | ||
Income Taxes | Income Taxes The consolidated effective tax rate of the Corporation for the three months ended September 30, 2021 and 2020, was (0.0%) and (0.0%), respectively. The consolidated effective tax rate of the Corporation for the nine months ended September 30, 2021 and 2020, was (0.0%) and (0.0%), respectively. The Corporation continues to be in a net operating loss and net deferred tax asset position. As a result, and in accordance with accounting standards, the Corporation recorded a valuation allowance to reduce the value of the net deferred tax assets to zero. The Corporation believes that as of September 30, 2021, it had no material uncertain tax positions. Interest and penalties related to unrecognized tax expense (benefits) are recognized in income tax expense, when applicable. There were no material liabilities for interest and penalties accrued as of September 30, 2021, and December 31, 2020. On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) was signed into law in the U.S. to provide certain relief in connection with the COVID-19 pandemic. In addition, governments around the world have enacted or implemented various forms of tax relief measures in response to the economic conditions in the wake of COVID-19. On December 27, 2020, the "Consolidated Appropriations Act, 2021" was signed into law in the U.S. to amend or extend several significant COVID related relief provisions of the CARES Act. The Corporation has determined that neither the CARES Act and Consolidated Appropriations Act nor changes to income tax laws or regulations in other jurisdictions had a significant impact on the Corporation’s effective tax rate. | Income taxes The provision for income taxes consisted of the following for the years ended December 31, 2020 and 2019, respectively: Year ended December 31, 2020 2019 (in thousands) Current provision $ (2) $ (2) Deferred expense 2 2 Provision for income taxes $ — $ — The provision for income taxes was different from the amount computed using the federal statutory rate of 21% for the years ended December 31, 2020 and 2019, respectively, due to the following: Year ended December 31, 2020 2019 (in thousands) Income tax provision at federal statutory rate (21%) $ (28,642) $ (76,385) Interest on convertible securities 6,537 3,505 Interest on convertible securities discount 4,423 3,257 Debt issuance cost related to convertible securities — 76 Derivative liability related to convertible securities (19,688) 29,098 Warrant expense 16,823 596 Meals and entertainment 13 210 Health insurance industry fee 2,715 — Other, net (766) — Valuation allowance 18,585 39,643 Provision for income taxes $ — $ — The Corporation issued convertible securities for which the interest expense recorded in 2020 and 2019 of approximately $31.1 million and $16.7 million, respectively, is not deductible for tax purposes. Deferred income tax balances reflect the impact of temporary differences between the tax bases of assets or liabilities and their reported amounts in the Consolidated Financial Statements and are stated at enacted tax rates expected to be in effect when the reported amounts are actually recovered or settled. Principal components of net deferred tax balances at December 31, 2020 and 2019, respectively, were as follows: Year ended December 31, 2020 2019 (in thousands) Deferred income tax assets: Net operating loss carryforward (NOL) $ 152,423 $ 133,564 Unpaid claim reserve discounting 335 269 Start-up costs amortization 408 464 Charitable contributions carryforward 154 146 Bonus accrual 52 52 Stock based compensation 2,568 1,554 Convertible securities issuance costs 1 1 Tax credits (AMT) — 2 Prepaid and accrued expenses 568 683 Property and equipment 1,318 1,779 Capital loss carryforward — 49 Operating lease liability 2,340 3,109 Premium deficiency reserve — 3,597 Acquisition costs amortization 60 66 Interest expense carryforward 2,318 1,675 Bad debt reserves 2,363 — Total deferred income tax assets 164,908 147,010 Less: valuation allowance (163,204) (144,619) Total deferred income tax assets, net of valuation allowance 1,704 2,391 Deferred income tax liabilities: TCJA Transition Adj. IRC 846 (49) (58) Market discount — (1) Operating lease right of use asset (1,655) (2,330) Total deferred income tax liabilities (1,704) (2,389) Net deferred income tax asset $ — $ 2 Operating loss and tax credit carryforwards and protective tax deposits The Corporation has unused operating loss carryforwards available of approximately $725.8 million and $636.0 million as of December 31, 2020 and 2019, respectively, that may be applied against future taxable income. Losses incurred before 2018 in the amount of approximately $295.1 million begin to expire in 2033. The total net operating losses (NOL) is made up of NOLs generated by the consolidated group and NOLs obtained with the 2014 reorganization. A portion of the pre-consolidated NOLs may be limited by special rules known as Separate Return Limitation Year (SRLY) rules. SRLY NOLs can only be used in years that both the consolidated group and the entity that created the SRLY NOLs have taxable income. Due to these limitations and uncertainty regarding the Corporation’s ability to use the loss carryforwards and other deferred tax assets, a valuation allowance of approximately $163.2 million and $144.6 million was established in 2020 and 2019, respectively. The Corporation does not have deposits admitted under Section 6603 of the Internal Revenue Code. Impact of tax planning strategies The Corporation does not have any tax planning strategies that include the use of reinsurance and there are no deferred tax liabilities not recognized. The Corporation files income tax returns in the United States. The U.S. Internal Revenue Service (IRS) is not currently conducting any income tax audits. The Corporation’s federal income tax returns filed related to tax years subsequent to 2016 remain subject to examination by the IRS. The Corporation is not aware of any material adjustments that may be proposed as a result of any ongoing or future examinations and does not have material uncertain tax positions reflected in the Consolidated Balance Sheets. On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) was signed into law in the U.S. to provide certain relief as a result of the COVID-19 pandemic. In addition, governments around the world have enacted or implemented various forms of tax relief measures in response to the economic conditions in the wake of COVID-19. On December 27, 2020, the “Consolidated Appropriations Act, 2021” was signed into law in the U.S. to amend or extend several significant COVID related relief provisions of the CARES Act. As of December 31, 2020, the Corporation has determined that neither the CARES Act and Consolidated Appropriations Act nor changes to income tax laws or regulations in other jurisdictions had a significant impact on our effective tax rate. |
Net (Loss) Income Per Share
Net (Loss) Income Per Share | 9 Months Ended | 12 Months Ended |
Sep. 30, 2021 | Dec. 31, 2020 | |
Earnings Per Share [Abstract] | ||
Net (Loss) Income Per Share | Net (Loss) Income Per Share Net (Loss) Income Per Share Basic and diluted net (loss) income per share attributable to common stockholders was calculated as follows: Three Months Ended September 30, 2021 2020 (in thousands, except per share data) Net (loss) income $ (34,527) $ 12,758 Net (loss) income attributable to common stockholders (34,527) 4,966 Basic weighted average number of common shares and common share equivalents outstanding (1) 414,572,706 88,863,244 Diluted weighted average number of common shares and common share equivalents outstanding (1) 414,572,706 248,133,335 Net (loss) income per share attributable to common stockholders—basic $ (0.08) $ 0.06 Net (loss) income per share attributable to common stockholders—diluted $ (0.08) $ 0.02 Nine Months Ended September 30, 2021 2020 (in thousands, except per share data) Net loss $ (400,555) $ (10,001) Net loss attributable to common stockholders (400,555) (10,001) Basic and diluted weighted average number of common shares and common share equivalents outstanding (1) 410,417,493 88,616,116 Net loss per share attributable to common stockholders—basic and diluted $ (0.98) $ (0.11) __________________ (1) Prior period results have been adjusted to reflect the exchange of Legacy Clover's common stock for Clover Class B Common Stock at an exchange ratio of approximately 2.0681 in January 2021 as a result of the Business Combination. See Note 3 (Business Combination) for details. Because the Corporation had a net loss during the three and nine months ended September 30, 2021, and a net loss during the nine months ended September 30, 2020, the Corporation’s potentially dilutive securities, which include stock options, restricted stock, preferred stock, and warrants to purchase shares of common stock and preferred stock, have been excluded from the computation of diluted net loss per share, as the effect would be anti-dilutive. Therefore, during these periods, the diluted common shares outstanding equals the average common shares outstanding. The Corporation excluded the following potential common shares, presented based on amounts outstanding at each period end, from the computation of diluted net loss per share attributable to common stockholders for the periods indicated because including them would have had an anti-dilutive effect: Three Months Ended September 30, 2021 2020 Options to purchase common stock (1) 33,477,833 5,183,834 RSUs 21,106,720 — Warrants to purchase common stock (as converted to common stock) (1) — 4,342,956 Warrants to purchase convertible preferred stock (as converted to common stock) (1) — 2,618,770 Total anti-dilutive shares excluded from computation of earnings per share 54,584,553 12,145,560 Nine Months Ended September 30, 2021 2020 Options to purchase common stock (1) 33,477,833 37,296,034 RSUs 21,106,720 — Convertible preferred stock (as converted to common stock) (1) — 139,444,346 Warrants to purchase common stock (as converted to common stock) (1) — 4,884,132 Warrants to purchase convertible preferred stock (as converted to common stock) (1) — 2,618,770 Total anti-dilutive shares excluded from computation of earnings per share 54,584,553 184,243,282 __________________ (1) Prior period results have been adjusted to reflect the exchange of Legacy Clover's common stock for Clover Class B Common Stock at an exchange ratio of approximately 2.0681 in January 2021 as a result of the Business Combination. See Note 3 (Business Combination) for details. | Net loss per share Net loss per share Basic and diluted net loss per share attributable to common stockholders, after reverse capitalization, was calculated as follows (1) : Year ended December 31, 2020 2019 Net loss $ (136,392) $ (363,737) Net loss attributable to common stockholders (136,392) (363,737) Weighted average common shares outstanding—basic and diluted 88,691,582 87,829,419 Net loss per share attributable to common stockholders— basic and diluted $ (1.54) $ (4.14) __________________ (1) Amounts in the above table have been adjusted to reflect the exchange of Legacy Clover’s common stock at an exchange ratio of approximately 2.0681 in January 2021 as a result of the application of reverse capitalization. See Note 3, “Reverse Capitalization,” for details. The Corporation’s potentially dilutive securities, which include stock options, preferred stock and warrants to purchase shares of preferred stock, have been excluded from the computation of diluted net loss per share as the effect would be to reduce the net loss per share. Therefore, the weighted average number of common shares outstanding used to calculate both basic and diluted net loss per share attributable to common stockholders is the same. The Corporation excluded the following potential common shares, presented based on amounts outstanding at each period end after reverse capitalization, from the computation of diluted net loss per share attributable to common stockholders for the periods indicated because including them would have had an anti-dilutive effect (1) : Year ended December 31, 2020 2019 Options to purchase common stock 36,557,759 24,344,848 Convertible preferred stock (as converted to common stock) 139,444,346 139,444,346 Warrants to purchase common stock (as converted to common stock) 7,502,902 4,884,132 Warrants to purchase convertible preferred stock (as converted to common stock) — 2,618,770 183,505,007 171,292,096 __________________ (1) Amounts in the above table have been adjusted to reflect the exchange of Legacy Clover’s common stock at an exchange ratio of approximately 2.0681 in January 2021 as a result of the application of reverse capitalization. See Note 3 (Reverse Capitalization) for details. |
Commitments and Contingencies_2
Commitments and Contingencies | 9 Months Ended | 12 Months Ended |
Sep. 30, 2021 | Dec. 31, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | ||
Commitments and Contingencies | Commitments and Contingencies Legal Actions Various lawsuits against the Corporation may arise in the ordinary course of the Corporation's business. Contingent liabilities arising from ordinary course litigation, income taxes and other matters are not expected to be material in relation to the financial position of the Corporation. At September 30, 2021, and December 31, 2020, respectively, there were no material known contingent liabilities arising outside the normal course of business. Securities Class Actions and Derivative Litigation In February 2021, the Corporation and certain of its directors and officers were named as defendants in putative class actions filed in the United States District Court for the Middle District of Tennessee: Bond v. Clover Health Investments, Corp. et al. , Case No. 3:21-cv-00096 (M.D. Tenn.); Kaul v. Clover Health Investments, Corp., et al. , Case No. 3:21-cv-00101 (M.D. Tenn.); Yaniv v. Clover Health Investments, Corp., et al. , Case No. 3:21-cv-00109 (M.D. Tenn.); and Tremblay v. Clover Health Investments, Corp., et al. , Case No. 3:21-cv-00138 (M.D. Tenn.). The complaints asserted violations of sections 10(b) and 20(a) of the Exchange Act and Rule 10b-5 promulgated under the Exchange Act. The Kaul action asserted additional claims under sections 11 and 15 of the Securities Act. The complaints generally related to allegations published in an article issued on February 4, 2021, by Hindenburg Research LLC (the “Hindenburg Article”). The complaints sought unspecified damages on behalf of all persons and entities who purchased or acquired Clover securities during the proposed class period (which begins on October 6, 2020, and, depending on the complaint, ends on February 3, 2021, or February 4, 2021), as well as certain other costs. In April 2021, the Middle District of Tennessee class actions described above were consolidated under Bond v. Clover Health Investments, Corp., et al. , Case No. 3:21-cv-00096 (M.D. Tenn.) as lead case. The court appointed a lead plaintiff, approved a lead counsel and a liaison counsel, and approved the parties' proposed schedule for filing an amended complaint and the defendants’ responses. In June 2021, the lead plaintiff and a named plaintiff filed the amended complaint, asserting violations of sections 10(b) and 20(a) of the Exchange Act and Rule 10b-5 promulgated under the Exchange Act. The amended complaint names Clover and certain of its officers and directors as defendants and removes certain defendants named in the initial complaints. The amended complaint generally relates to allegations published in the Hindenburg Article and seeks unspecified damages on behalf of all persons and entities other than the defendants who purchased or acquired Clover securities during the proposed class period (which begins on October 6, 2020, and ends on February 3, 2021), as well as certain other costs. The Corporation moved to dismiss the complaint on August 27, 2021, and briefing on that motion is ongoing under the court’s briefing schedule. Parallel shareholder derivative actions have also been filed, naming Clover as a nominal defendant. The first action was filed in the United States District Court for the District of Delaware and is captioned Furman v. Garipalli, et al. , Case No. 1:21-cv-00191 (D. Del.). The complaint asserts violations of sections 10(b) and 21D of the Exchange Act, breach of fiduciary duty, and waste of corporate assets against certain of the Corporation’s directors. It seeks unspecified damages and an order requiring Clover to take certain actions to enhance Clover's corporate governance policies, and procedures. The second and third actions were filed in the United States District Court for the Middle District of Tennessee and are captioned Sun v. Garipalli, et al. , Case No. 3:21-cv-00311 (M.D. Tenn.), and Luthra v. Garipalli, et al. , Case No. 3:21-cv-00320 (M.D. Tenn.). The complaints assert violations of section 14(a) of the Exchange Act, breach of fiduciary duty, and aiding and abetting a breach of fiduciary duty. The Sun action also asserts unjust enrichment, abuse of control, gross mismanagement, waste of corporate assets, and contribution under section 11(f) of the Securities Act, and sections 10(b) and 21D of the Exchange Act. The complaints name certain current and former officers and directors as defendants. They seek unspecified damages and an order requiring Clover to take certain actions to enhance Clover’s corporate governance policies and procedures. The fourth action was filed in the United States District of Delaware and is captioned Wiegand v. Garipalli, et al. , Case No. 1:21-cv-01053 (D. Del.). The complaint asserts violations of sections 14(a) and 20(a) of the Exchange Act, breach of fiduciary duty, unjust enrichment, and waste of corporate assets. The complaint names certain current and former officers and directors as defendants. It seeks, among other things, unspecified damages and an order requiring Clover to take certain actions to improve Clover’s corporate governance and internal procedures. The fifth action was filed in the Supreme Court of the State of New York and is captioned Sankaranarayanan v. Palihapitiya, et al. , Index No. 655420/2021 (N.Y. Sup. Ct.). The complaint asserts breach of fiduciary duty and unjust enrichment. The complaint names certain former officers and directors as defendants. On May 10, 2021, the Middle District of Tennessee shareholder derivative actions described above were consolidated under Sun v. Garipalli, et al. , Case No. 3:21-cv-00311 (M.D. Tenn.) as lead case. The court designated co-lead counsel and liaison counsel and ordered the parties to submit a proposed schedule for the initial stage of the case. In June 2021, the parties in the Sun and Furman actions submitted joint stipulations and proposed orders to stay both actions. Soon thereafter, the courts in both actions approved the stipulations, thereby staying all proceedings and deadlines in the Sun and Furman actions pending a final decision on a motion to dismiss in the Middle District of Tennessee class actions consolidated under the Bond action. On September 16, 2021, the two District of Delaware derivative actions were consolidated under In re Clover Health Investments, Corp. Derivative Litigation, Case No. 1:21-cv-00191-LPS (Consolidated). The Furman complaint was deemed the operative complaint. All proceedings and deadlines in that matter are also stayed pending a final decision on a motion to dismiss in the Bond Action. All of these cases remain in the preliminary stages. Given the inherent uncertainty of litigation and the legal standards that must be met, including class certification and success on the merits, the Corporation has determined that it is not probable or estimable that an unfavorable outcome or potential loss will occur. Clover intends to vigorously defend itself against the claims asserted against it. Guaranty Assessments Under state guaranty assessment laws, including those related to state cooperative failures in the industry, the Corporation may be assessed, up to prescribed limits, for certain obligations to the policyholders and claimants of insolvent insurance companies that write the same line or lines of business as the Corporation. | Commitments and contingencies Litigation Various lawsuits against the Corporation may arise in the ordinary course of the Corporation’s business. Contingent liabilities arising from ordinary course litigation, income taxes, and other matters are not expected to be material in relation to the financial position of the Corporation. At December 31, 2020 and 2019, respectively, there were no material known contingent liabilities arising outside the normal course of business. Guaranty assessments Under state guaranty assessment laws, including those related to state cooperative failures in the industry, the Corporation may be assessed, up to prescribed limits, for certain obligations to the policyholders and claimants of insolvent insurance companies that write the same line or lines of business as the Corporation. |
Direct Contracting_2
Direct Contracting | 9 Months Ended |
Sep. 30, 2021 | |
Direct Contracting [Abstract] | |
Direct Contracting | Direct Contracting In April 2021, the Corporation began participating in the DC Model, which utilizes a structured model intended to reduce expenditures and preserve or enhance quality of care for beneficiaries in Medicare FFS. As a participating entity in the DC Model with a global risk arrangement, the Corporation assumes the responsibility of guaranteeing the performance of its care network. The DC Model is intended to reduce the administrative burden, support a focus on complex, chronically ill patients, and encourage physician organizations that have not typically participated in Medicare FFS to serve beneficiaries in Medicare FFS. Key components of the financial agreement for Direct Contracting include: • Performance Year Benchmark The target amount for Medicare expenditures on covered items and services (Medicare Part A and B) furnished to a DCE’s aligned beneficiaries during a performance year. The Performance Year Benchmark will be compared to the DCE’s performance year expenditures. This comparison will be used to calculate shared savings and shared losses. The Performance Year Benchmark is established at the beginning of the performance year utilizing prospective trend estimates and is subject to retrospective trend adjustments, if warranted, before the Financial Reconciliation. • Performance Year A calendar year except for the commencement year, which began on April 1, 2021, and will end on December 31, 2021. • Risk-Sharing Arrangements Used in determining the percent of savings and losses that DCEs are eligible to receive as shared savings or may be required to repay as shared losses. • Financial Reconciliation The process by which CMS determines shared savings or shared losses by comparing the calculated total benchmark expenditure for a given DCE’s aligned population to the actual expenditures of that DCE’s aligned beneficiaries over the course of a performance year that includes various risk-mitigation options such as stop-loss reinsurance and risk corridors. • Risk-Mitigation Options DCEs may elect a “stop-loss arrangement” each performance year, which is designed to reduce the financial uncertainty associated with high-cost expenditures of individual beneficiaries. The Corporation has elected participation in the program for the current performance year. Additionally, CMS has created a mandatory risk corridor program that allocates the DCE’s shared savings and losses in bands of percentage thresholds, after a deviation of greater than 25.0% of the Performance Year Benchmark. Performance Guarantees Certain of the Corporation’s arrangements with third-party providers require it to guarantee the performance of its care network to CMS, which if not obtained, could potentially result in payment to CMS during the financial reconciliation period. As a result of the DC agreement, the Corporation determined that there was a performance guarantee with the providers of DCE Beneficiaries that should be recognized in the financial statements. The Direct Contracting performance year obligation and receivable were initially measured as the target amount for Medicare expenditures on covered items and services. The obligation and receivable were subsequently amortized on a straight-line basis for the amount that represented the completed performance. The DCE is entitled to all of the consideration under the arrangement for all aligned beneficiaries and in the performance year in which the DCE is a participant, the final consideration due to the DCE by CMS (shared savings) or the consideration due to CMS by the DCE (shared loss) is reconciled in the subsequent years following the performance year. The shared savings or loss is measured periodically and will be applied to the Direct Contracting performance obligation if the Corporation is in a probable loss position. The Corporation is unable to estimate the maximum potential amount of future payments under the guarantee. This is attributable to the stop-loss arrangement and the corridors (tiered levels) in the arrangement. A certain percentage of these arrangements will still be the responsibility of the Corporation in addition to a number of variables that are not reasonable for the Corporation to estimate such as, but not limited to, risk ratings and benchmark trends that have an inestimable impact on the estimate of future payments. The tables below include the financial statement impacts of the performance guarantee: September 30, 2021 (in thousands) Direct Contracting performance year receivable $ 220,738 Direct Contracting performance year obligation (1) 244,599 __________________ (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 Nine Months Ended (in thousands) Amortization of the Direct Contracting performance year receivable $ (223,309) $ (441,476) Amortization of the Direct Contracting performance year obligation 223,309 441,476 Direct Contracting revenue 222,647 439,020 |
Operating Segments
Operating Segments | 9 Months Ended |
Sep. 30, 2021 | |
Segment Reporting [Abstract] | |
Operating Segments | Operating Segments The Corporation manages operations based on two reportable segments: Medicare Advantage and Direct Contracting. The reportable segments are distinguished based on the healthcare delivery business model. Its Medicare Advantage segment is an insurance business model that focuses on leveraging the Clover Assistant at the point of care. Its Direct Contracting segment is similar to a cost management and care coordination model accounted for as a performance guarantee, where Clover is responsible for coordinating care, managing costs, and providing support to providers and their DCE Beneficiaries through the use of Clover Assistant. These segment groupings are consistent with information used by the Chief Executive Officer, the Corporation’s chief operating decision maker, to assess performance and allocate resources. There are certain revenues and expenses that are attributable to clinical services and corporate overhead; these amounts are reported separately from reportable segments in the tables presenting segment results below. The operations of the Corporation are organized into the following segments: • Medicare Advantage Segment includes operations related to our MA plans, which generally provide access to a wide network of primary care providers, specialists, and hospitals. • Direct Contracting Segment includes our operations relating to CMS’s DC Model, which provides options aimed at reducing expenditures and preserving or enhancing quality of care for beneficiaries. • Corporate/Other includes other clinical services not included in Medicare Advantage and Direct Contracting and all other corporate overhead. Clinical services is comprised of Clover Home Care and other clinical services that are offered to eligible beneficiaries. The table below summarizes the Corporation’s results by operating segment: Medicare Direct Contracting Corporate/Other Eliminations Consolidated Total Three Months Ended September 30, 2021 (in thousands) Premiums earned, net (Net of ceded premiums of $120) $ 203,657 $ — $ — $ — $ 203,657 Direct Contracting revenue — 222,647 — — 222,647 Other income 80 — 24,967 (24,188) 859 Intersegment revenues — — 9,375 (9,375) — Net medical claims incurred 208,661 228,060 2,253 (2,552) 436,422 Gross (loss) profit $ (4,924) $ (5,413) $ 32,089 $ (31,011) $ (9,259) Total assets $ 347,535 $ 260,142 $ 887,089 $ (542,288) $ 952,478 Medicare Direct Contracting Corporate/Other Eliminations Consolidated Total Nine Months Ended September 30, 2021 (in thousands) Premiums earned, net (Net of ceded premiums of $370) $ 598,390 $ — $ — $ — $ 598,390 Direct Contracting revenue — 439,020 — — 439,020 Other income 108 — 66,990 (64,548) 2,550 Intersegment revenues — — 33,130 (33,130) — Net medical claims incurred 640,624 469,972 5,273 (6,494) 1,109,375 Gross (loss) profit $ (42,126) $ (30,952) $ 94,847 $ (91,184) $ (69,415) Total assets $ 347,535 $ 260,142 $ 887,089 $ (542,288) $ 952,478 A reconciliation of the reportable segments’ gross loss to the net loss included in the Condensed Consolidated Statements of Operations and Comprehensive Loss for the three and nine months ended September 30, 2021, is as follows: Three Months Ended September 30, 2021 Nine Months Ended September 30, 2021 (in thousands) Gross loss $ (9,259) $ (69,415) Salaries and benefits 73,364 201,555 General and administrative expenses 45,749 129,983 Premium deficiency reserve (benefit) 20,761 48,661 Depreciation and amortization 120 398 Other expense — 191 Change in fair value of warrants payable (115,152) (66,146) Interest expense 413 2,817 Amortization of notes and securities discounts 13 13,681 Net loss $ (34,527) $ (400,555) |
Dividend Restrictions_2
Dividend Restrictions | 9 Months Ended | 12 Months Ended |
Sep. 30, 2021 | Dec. 31, 2020 | |
Disclosure of Restrictions on Dividends, Loans and Advances Disclosure [Abstract] | ||
Dividend Restrictions | Dividend RestrictionsThe Corporation's regulated insurance subsidiaries are subject to regulations and standards in their respective jurisdictions. These standards, among other things, require these subsidiaries to maintain specified levels of statutory capital and limit the timing and amount of dividends and other distributions that may be paid to their parent companies. Therefore, the Corporation's regulated insurance subsidiaries' ability to declare and pay dividends is limited by state regulations including obtaining prior approval by the New Jersey Department of Banking and Insurance. As of September 30, 2021, and December 31, 2020, neither of the regulated insurance subsidiaries had paid any dividends. | Dividend restrictionsThe Corporation’s regulated insurance subsidiaries are subject to regulations and standards in their respective jurisdictions. These standards, among other things, require these subsidiaries to maintain specified levels of statutory capital and limit the timing and amount of dividends and other distributions that may be paid to their parent companies. Therefore, the Corporation’s regulated insurance subsidiaries ability to declare and pay dividends is limited by state regulations. Although such regulations do not specifically restrict the regulated insurance subsidiaries from paying dividends, they require the regulated insurance subsidiaries to be financially sound as determined by the New Jersey Department of Banking and Insurance (DOBI). As of December 31, 2020 and 2019, neither of the regulated insurance subsidiaries paid any dividends and may not do so until they meet those requirements and are granted permission to do so by DOBI. |
Summary of significant accoun_3
Summary of significant accounting policies (Policies) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2021 | Dec. 31, 2020 | |
Condensed Financial Statements, Captions [Line Items] | ||
Basis of presentation | Basis of presentation The Corporation’s interim Condensed Consolidated Financial Statements have been prepared in conformity with GAAP and include the accounts of the Corporation and its wholly owned subsidiaries. In the opinion of management, the Corporation has made all necessary adjustments, which include normal recurring adjustments necessary for a fair presentation of its financial position and its results of operations for the interim periods presented. All material intercompany balances and transactions have been eliminated in consolidating these financial statements. These interim Condensed Consolidated Financial Statements should be read in conjunction with the audited Consolidated Financial Statements as of and for the years ended December 31, 2020 and 2019 included in Exhibit 99.5 of Amendment No. 1 to the Current Report on Form 8-K (the “Form 8-K/A”) filed with the Securities and Exchange Commission (SEC) on April 1, 2021. | Basis of presentation The Corporation has prepared these Consolidated Financial Statements in accordance with U.S. GAAP, which differs materially from the statutory accounting practices prescribed by various insurance regulatory authorities. The Consolidated Financial Statements include the accounts of the Corporation and its subsidiaries. Intercompany balances and transactions have been eliminated in consolidating these financial statements. |
Use of estimates | Use of estimates The preparation of the Condensed Consolidated Financial Statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the Condensed Consolidated Financial Statements and accompanying notes. The areas involving the most significant use of estimates are the amounts of incurred but not reported claims. Many factors can cause actual outcomes to deviate from these assumptions and estimates, such as changes in economic conditions, changes in government healthcare policy, advances in medical technology, changes in treatment patterns, and changes in average lifespan. Accordingly, the Corporation cannot determine with precision the ultimate amounts that it will pay for, or the timing of payment of actual claims, or whether the assets supporting the liabilities will grow to the level the Corporation assumes prior to payment of claims. If the Corporation’s actual experience is different from its assumptions or estimates, the Corporation’s reserves may prove inadequate. As a result, the Corporation would incur a charge to operations in the period in which it determines such a shortfall exists, which could have a material adverse effect on the Corporation’s business, results of operations, and financial condition. Other areas involving significant estimates include risk adjustment provisions related to Medicare contracts and the valuation of the Corporation’s investment securities, goodwill and other intangible assets, reinsurance, the premium deficiency reserve, warrants, the embedded derivative related to the convertible securities, stock-based compensation, recoveries from third parties for coordination of benefits, the Direct Contracting benchmark specifically cost trend and risk score estimates that can develop over time, and final determination of medical cost adjustment pools. | Use of estimates The preparation of the Consolidated Financial Statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the Consolidated Financial Statements and accompanying notes. The areas involving the most significant use of estimates are the amounts incurred but not reported (IBNR) claims, recoveries from third parties for coordination of benefits, and final determination of medical cost adjustment pools. Many factors can cause actual outcomes to deviate from these assumptions and estimates, such as changes in economic conditions, changes in government healthcare policy, advances in medical technology, changes in treatment patterns, and changes in average lifespan. Accordingly, the Corporation cannot determine with precision the ultimate amounts that it will pay for, or the timing of payment of actual claims, or whether the assets supporting the liabilities will grow to the level the Corporation assumes prior to payment of claims. The assumptions and estimates are based on the Corporation’s knowledge of current events and anticipated future events; however, actual results may differ from the amounts recorded in the Consolidated Financial Statements, and the Corporation would |
Reclassifications | Reclassifications To conform to the current period presentation, prepaid expenses, which were previously included in other assets, current, are presented as a separate line item in the prior year’s Condensed Consolidated Balance Sheet. Certain amounts in the prior year period’s Condensed Consolidated Statement of Cash Flows have been reclassified to conform to the current year period’s presentation, primarily related to the amortization of warrants, amortization of debt issuance costs, and paid-in-kind interest. These reclassifications had no effect on the previously reported Consolidated Financial Statements. | Reclassifications Certain amounts in the prior years’ Consolidated Statements of Cash Flows have been reclassified to conform to the current year’s presentation, primarily related to the amortization of warrants, amortization of debt issuance costs, and paid in kind interest. These reclassifications had no effect on the previously reported Consolidated Financial Statements. |
Segment information | Segment information The Corporation’s chief operating decision maker is the Chief Executive Officer. The chief operating decision maker manages operations, allocates resources, and evaluates financial performance on a company-wide basis. The Corporation operates in one reporting segment. | |
COVID-19 | COVID-19The societal and economic impact of the novel coronavirus (COVID-19) pandemic is continuing to evolve, and the ultimate impact on the Corporation’s business, results of operations, financial condition, and cash flows is uncertain and difficult to predict. The global pandemic has severely impacted businesses worldwide, including many in the health insurance sector. In response to the pandemic, the Corporation has implemented additional steps related to its care delivery, member support, and internal policies and operations. | COVID-19 The temporary deferral of non-essential care resulting from stay-at-home and physical distancing orders and other restrictions on movement and economic activity implemented throughout the country beginning in the second half of March 2020 to reduce the spread of the novel coronavirus (COVID-19) has impacted the Corporation’s business. Beginning in late March 2020 and trending throughout 2020, utilization of healthcare services began to experience reductions as a result of the stay-at-home orders and the closure of certain provider facilities, with some recovery in utilization taking place during times of more eased restrictions. The impact of the deferral of non-essential care was partially offset by additional costs incurred as a result of care for those members who have contracted COVID-19 as well as costs incurred for efforts related to the Corporation’s pandemic response efforts. |
Cash and cash equivalents | Cash and cash equivalents Cash and cash equivalents include cash on hand, amounts due from banks, money market instruments and other highly liquid investments with original maturities of 90 days or less. The carrying values of these instruments approximate their respective fair value due to the short-term maturity of these investments. At December 31, 2020 and 2019, the Corporation had cash and cash equivalents at financial institutions which are insured by the Federal Deposit Insurance Corporation (FDIC). At times, balances may exceed the FDIC insured limits. Management believes that credit risk related to those balances is minimal. | |
Investment securities | Investment securities Short-term investments Short-term investments consist of investments which the Corporation expects to convert into cash within one year of the balance sheet date, including time deposits and debt securities, which have original maturities greater than 90 days. Short-term investments are measured at their amortized cost. The carrying value of these instruments approximate their respective fair value due to the short-term maturity of these investments. Investment securities, available-for-sale Investment securities, which consist entirely of debt securities with fixed or determinable payments and fixed maturity dates, that the Corporation purchases with the intent and ability to sell before maturity, are classified as available-for-sale financial assets. The Corporation’s available-for-sale investments are U.S. Treasury fixed maturity securities. Available-for-sale investments are measured at fair value, and unrealized gains and losses, if any, are recorded in other comprehensive income, net of applicable income taxes, until realized from a sale or other-than-temporary impairment. Investment securities, held-to-maturity Investment securities, which consist entirely of debt securities with fixed or determinable payments and fixed maturity dates, where the Corporation has a positive intent and ability to hold to maturity, are classified as held-to-maturity financial assets. The Corporation’s held-to-maturity investments are comprised of U.S. Treasury fixed maturity securities. Subsequent to initial measurement, held-to-maturity investments are measured at amortized cost using the effective interest method less impairment. Unrealized holding gains or losses are not recognized. Other-than-temporary impairment The Corporation has a process in place to identify securities that could potentially have an impairment that is other-than-temporary. This process involves monitoring market events that could impact issuers’ credit ratings, business climate, management changes, litigation and government actions, and other similar factors. This process also involves monitoring late payments, downgrades by rating agencies, key financial ratios, financial statements, revenue forecasts and cash flow projections as indicators of credit risks. The Corporation considers relevant facts and circumstances in evaluating whether the impairment of a security is other-than-temporary. Relevant facts and circumstances considered include (1) the length of time and extent to which the fair value has been below cost or amortized cost, (2) adverse conditions specifically to the financial condition of the issuer or related to the industry, (3) geographic area of the issuer, or the underlying collateral of a security including the current and future impact of any specific events, (4) the payment structure of the security, (5) changes in credit rating of the security by the rating agencies, (6) the volatility of the fair value changes, and (7) changes in fair value of the security after the balance sheet date and whether it is more likely than not that the Corporation will not be required to sell the security until maturity or until it recovers in value. There are a number of significant risks and uncertainties inherent in the process of monitoring impairments and determining if an impairment is other-than-temporary. These risks and uncertainties include (1) the risk that management’s assessment of an issuer’s ability to meet all of its contractual obligations will change based on changes in the credit characteristics of that issuer, (2) the risk that the economic outlook will be worse than expected or have more of an impact on the issuer than anticipated, (3) erroneous information or fraudulent financial statements could be provided to the Corporation’s management to determine the fair value estimates and other-than-temporary impairments, and (4) the risk that new information obtained by the Corporation, or changes in other facts and circumstances lead the Corporation to change its intent to hold the security to maturity or until it recovers in value. Any of these situations could result in a charge to operations in a future period. For a debt security in an unrealized loss position that the Corporation has the intent to sell, or it is more likely than not that the Corporation will have to sell the debt security before recovery of its amortized cost basis, the decline in value is deemed to be other-than-temporary and is recorded to other-than- temporary impairment losses, recognized in investment income, net in the Consolidated Statements of Operations and Comprehensive Loss. For impaired debt securities that the Corporation does not intend to sell or it is more likely than not that it will not have to sell such securities, but the Corporation expects that it will not fully recover the amortized cost basis, the credit component of the other-than-temporary impairment is recognized in other-than-temporary impairment losses, recognized in investment income, net in the Consolidated Statements of Operations and Comprehensive Loss, and the non-credit component of the other-than-temporary impairment is recognized in other comprehensive income. | |
Allowance for uncollectible receivables | Allowance for uncollectible receivables The Corporation assesses outstanding receivables at each period for collection risk. The majority of collections are from the Center for Medicare and Medicaid Services (CMS), a United States government entity that presents very limited credit risk. | |
Investment income, net | Investment income, net Investment income includes interest, dividends received or accrued on investments, and realized gains or losses. Investment income is reported as earned and is presented net of related investment expenses and other-than-temporary impairment. Realized gains or losses are recognized based on the specific identification method. Purchases and sales are recorded on a trade-date basis. | |
Fair value measurements | Fair value measurements Fair value is defined as the price that would be received upon the sale of an asset or paid to transfer a liability in an orderly transaction between willing, able and knowledgeable market participants at the measurement date. Fair value measurements are not adjusted for transaction costs. To determine the fair value of its investments, the Corporation utilizes third-party valuation service providers to gather, analyze and interpret market information and derive fair values based upon relevant methodologies and assumptions for individual instruments. Valuation service providers typically obtain data about market transactions and other key valuation model inputs from multiple sources and, through the use of widely accepted valuation models, provide a single fair value measurement for individual securities for which a fair value has been requested under the terms of service agreements. The inputs used by the valuation service providers include, but are not limited to, market prices from recently completed transactions and transactions of comparable securities, interest rate yield curves, credit spreads, currency rates and other market observable information, as applicable. The valuation models consider, among other things, observable market information as of the measurement date as well as the specific attributes of the security being valued including its term, interest rate, credit rating, industry sector and, when applicable, collateral quality and other issue or issuer specific information. When market transactions or other observable market data is limited, the extent to which judgment is applied in determining fair value is greatly increased. Assets and liabilities measured at fair value are categorized into a fair value hierarchy based on whether the inputs to valuation techniques are observable or unobservable. Observable inputs are those that market participants operating within the same marketplace as the Corporation would use in pricing the Corporation’s assets or liabilities based on independently derived and observable market data. Unobservable inputs are inputs that cannot be sourced from a broad active market in which assets or liabilities identical or similar to those of the Corporation are traded. The fair value hierarchy includes three levels of inputs based on the degree to which the exit price is independently observable or determinable that may be used to measure fair value as described below: Level 1 – Valuations are based on quoted (unadjusted) market prices in active markets for identical assets or liabilities. Since valuations are based on quoted prices that are readily and regularly available in an active market, valuation of these products does not entail a significant degree of judgment. An active market is defined as a market where transactions for the financial instrument occur with sufficient frequency and volume to provide pricing information on an ongoing basis; Level 2 – Valuations are based on observable inputs other than Level 1 prices such as quoted prices in active markets for similar assets or liabilities, quoted prices for identical or similar assets or liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities; Level 3 – Valuations are based on techniques that use significant inputs that are unobservable and reflect management’s best estimate of what market participants would use when pricing the asset or liability, including assumptions about risk. The valuation of Level 3 assets and liabilities requires the greatest degree of judgment. These measurements may be made under circumstances in which there is little, if any, market activity for the asset or liability. The Corporation’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment. In making the assessment, the Corporation considers factors specific to the asset or liability. In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, the level in the fair value hierarchy within which the fair value measurement is classified is determined based on the lowest level input that is significant to the fair value measurement in its entirety. Fair values of actively traded investments securities are based on quoted market prices. Fair values of other investment securities are based on quoted market prices of identical or similar securities or based on observable inputs, like interest rates generally using a market valuation approach, or, less frequently, an income valuation approach, and are generally classified as Level 2. Clover obtains at least one price for each security from a third-party pricing service. These prices are generally derived from recently reported trades for identical or similar securities, including adjustments through the reporting date based upon observable market information. When quoted prices are not available, the third-party pricing service may use quoted market prices of comparable securities or a discounted cash flow analysis, incorporating inputs that are currently observable in the markets for similar securities. Inputs that are often used in the valuation methodologies include benchmark yields, reported trades, credit spreads, broker quotes, default rates, and prepayment speeds. Fair values of warrants and derivative liabilities related to convertible securities are estimated using a probability-weighted expected return method, where the values of various instruments are estimated based on an analysis of future values for the Corporation, assuming various future outcomes. The resulting instruments’ values are based upon the probability-weighted present value of expected future investment returns, considering each of the possible future outcomes available to the Corporation, as well as the economic benefits attributable to each class of instruments. The expected future investment returns are estimated using a variety of methodologies, including both the market approach and the income approach, where an observable quoted market does not exist, and are generally classified as Level 3. Such methodologies include reviewing values ascribed to the most recent financing by the Corporation, comparing the subject instrument with similar instruments of publicly traded companies in similar lines of business, and reviewing the underlying financial performance of the Corporation and subject instrument, including estimating discounted cash flows. To estimate the fair value attributable to the derivative liabilities, the with and without approach is used. An evaluation of multiple scenarios for future payoffs for the underlying convertible securities is performed using option pricing models, and probability-weighted average value indications are used to arrive at the estimated fair values. | |
Concentrations of credit risk | Concentrations of credit risk Financial instruments that potentially subject the Corporation to concentrations of credit risk consist principally of cash and cash equivalents. Cash and cash equivalents are held with financial institutions of high quality. Balances may exceed the amount of insurance provided on such balances. The ceding of insurance does not legally discharge the Corporation from its primary liability for the full amount of the policy coverage, and therefore the Corporation will be required to pay the loss and bear collection risk if the reinsurer fails to meet its obligations under the reinsurance agreement. To minimize exposure to significant losses from reinsurance insolvencies, the Corporation evaluates the financial condition of its reinsurers and monitors concentrations of credit risk. | |
Acquisition costs | Deferred acquisition costs Acquisition costs directly related to the successful acquisition of new business, which is primarily made up of commissions costs, are deferred and subsequently amortized. Deferred acquisition costs are recorded as other assets on the Condensed Consolidated Balance Sheet and are amortized over the estimated life of the related contracts. The amortization of deferred acquisition costs is recorded in general and administrative expenses in the Condensed Consolidated Statement of Operations and Comprehensive Loss. As of September 30, 2021, there were no deferred acquisition costs as a result of the acceleration of amortization for deferred acquisition costs due to the recognition of a premium deficiency reserve during the three and nine months ended September 30, 2021. For the three and nine months ended September 30, 2021, amortization expense of deferred acquisition costs of $1.1 million and $9.6 million, respectively, were recognized in general and administrative expenses. There was no amortization expense of deferred acquisition costs for the three and nine months ended September 30, 2020. | Acquisition costs Acquisition costs that vary with and are directly related to the acquisition of new and renewal business, including commissions, are deferred and subsequently amortized. Deferred acquisition costs are recorded as other assets on the Consolidated Balance Sheets and are amortized over the estimated life of the related contracts. The amortization of deferred acquisition costs is recorded in general and administrative expenses in the Consolidated Statements of Operations and Comprehensive Loss. To the extent that a premium deficiency is identified after writing down unamortized deferred acquisition costs, a liability for premium deficiency reserve is established and reported on the Consolidated Balance Sheets. |
Property and equipment, net | Property and equipment, net Property and equipment, net is reported at cost less accumulated depreciation. Depreciation is recorded using the straight-line method over the estimated useful lives of the respective assets, which are generally three Property and equipment is reviewed for impairment periodically whenever adverse events or changes in circumstances indicate the carrying value of the asset may not be recoverable. Losses are recognized in operations when the undiscounted future cash flows expected to result from the use of the asset are less than its carrying value. An impairment loss is recognized based on the excess of the carrying value over the fair value of the asset. | |
Goodwill and other intangible assets | Goodwill and other intangible assets Goodwill represents the excess of the purchase price over the fair value of net assets acquired in business combinations. Goodwill is not amortized but is tested for impairment on an annual basis at a level of reporting referred to as the reporting unit, and more frequently if adverse events or changes in circumstances indicate that the asset may be impaired. A component is considered a reporting unit if the component constitutes a business for which discrete financial information is available that is regularly reviewed by management. Management aggregates components into one reporting unit if they have similar economic characteristics. Goodwill is assigned to the reporting units that are expected to benefit from the specific synergies of the business combination. Management reviews goodwill for impairment to determine both the existence and amount of goodwill impairment, if any. Impairment tests are performed, at a minimum, in the fourth quarter of each year. Management first uses a qualitative assessment to determine if it is more likely than not that a reporting unit is impaired. The qualitative test is used as a screening to help determine if it is necessary to perform the quantitative test. If there are indicators that the fair value is less than the carrying amount of any reporting unit, management performs a quantitative assessment where management allocates the fair value of the reporting units to the assets and liabilities with the unallocated fair value representing an implied fair value of goodwill which is then compared to the carrying amount of goodwill. The impairment review requires management to make judgments in determining various assumptions with respect to changes in economic conditions, revenues, operating margins, growth rates and discount rates. There was no impairment of goodwill during the years ended December 31, 2020 and 2019, respectively. Other intangible assets arising from business combinations are initially recognized at fair value at the date of acquisition. Other intangible assets with indefinite useful lives are tested for impairment at least annually, or more frequently if events or changes in circumstances indicate that the assets may be impaired. The annual impairment test for indefinite-lived intangible assets may be completed through a qualitative assessment to determine if the fair value of the indefinite-lived intangible assets is more likely than not greater than the carrying amount. The Corporation may elect to bypass a qualitative assessment, or if a qualitative assessment indicates it is more likely than not that the estimated carrying value exceeds the fair value, the Corporation will test for impairment using a quantitative process. If the Corporation determines that impairment of its intangible assets may exist, the amount of impairment loss is measured as the excess of carrying value over fair value. The estimates in the determination of the fair value of indefinite-lived intangible assets include the anticipated future revenues of the Corporation and the resulting cash flows. As of December 31, 2020 and 2019, respectively, there were no circumstances that indicate that the carrying amount of intangible assets deemed to have an indefinite useful life may not be recoverable. | |
Reinsurance | Reinsurance In the normal course of business, the Corporation seeks to reduce losses by reinsuring certain levels of risk in areas of exposure with other insurance enterprises or reinsurers. Amounts recoverable from reinsurers are estimated in a manner consistent with the claim liability associated with the reinsured policy. To minimize exposure to losses related to a reinsurer’s inability to pay, the financial condition of such reinsurer is evaluated initially upon placement of the reinsurance and periodically thereafter. In addition to considering the financial condition of a reinsurer, the | |
Unpaid claims and Medical claims incurred | Unpaid claims Unpaid claims and unpaid claims adjustment expenses include reported claims and IBNR, as well as the estimated expense of processing these claims. Management develops an estimate for IBNR using actuarial methodologies and assumptions, primarily based upon historical claim experience. Although there is considerable variability in such estimates, management believes that the unpaid claims and unpaid claims adjustment expense liability is adequate and represents management’s best estimate of the ultimate cost of all reported and unreported claims incurred through the balance sheet date. The estimates are continually reviewed and adjusted as experience develops or new information becomes known. Changes in estimates are reflected in current consolidated operating results. Liabilities for both reported claims and IBNR not yet processed through the Corporation’s systems are determined in the aggregate, employing actuarial methods that are commonly used by health insurance actuaries and meet Actuarial Standards of Practice. Actuarial Standards of Practice require that the claim liabilities be appropriate under moderately adverse circumstances. Clover determines the amount of the liability for incurred but not paid claims by following a detailed actuarial process that uses both historical claim payment patterns as well as emerging medical cost trends to project the best estimate of claim liabilities. Under this process, historical paid claims data is formatted into “claim triangles,” which compare claim incurred dates to the dates of claim payments. This information is analyzed to create “completion factors” that represent the average percentage of total incurred claims that have been paid through a given date after being incurred. Completion factors are applied to claims paid through the period-end date to estimate the ultimate claim expense incurred for the period. Actuarial estimates of incurred but not paid claim liabilities are then determined by subtracting the actual paid claims from the estimate of the ultimate incurred claims. The Corporation’s reserving practice is to consistently recognize an actuarial best estimate inclusive of a provision for moderately adverse conditions. This provision is reported as part of incurred claims. Medical claims incurred The Corporation recognizes the cost of medical claims in the period in which services are provided, including an estimate of the cost of medical claims IBNR. Medical claim expense reported in the Consolidated Statements of Operations and Comprehensive Loss includes direct medical expenses. Direct medical expenses include amounts paid or payable to hospitals, physicians, pharmacy benefit managers, providers of ancillary services, mandatory supplemental benefits, and is inclusive of the medical expense related to the Corporation’s employed clinicians providing in-home care. Recorded direct medical expenses are reduced by the amount of pharmacy rebates earned, which are estimated based on historical utilization of specific pharmaceuticals, current utilization and contract terms. Pharmacy rebates earned but not yet received from pharmaceutical manufacturers are included in healthcare receivable in the Consolidated Balance Sheets. Overpayments to providers are recognized as a contra medical expense and reported as other receivables in the Consolidated Balance Sheets. | |
Premium deficiency reserve and Revenue recognition | Premium deficiency reserve A liability for premium deficiency reserves is an actuarial estimate for anticipated losses on the Corporation’s Medicare Advantage and Medicare Advantage Part D (MAPD) business. Management reassesses the profitability of contracts for providing insurance coverage to members when operating results or forecasts indicate probable future losses. Management establishes a premium deficiency reserve in current operations to the extent that the sum of expected future costs, claim adjustment expenses, and maintenance costs exceeds related future premiums under contracts without consideration of investment income. For purposes of calculating premium deficiency reserves, management groups contracts in a manner consistent with the method of acquiring, servicing, and measuring the profitability of such contracts. Losses recognized as a premium deficiency are recorded in the period in which such losses were identified and reflected in the Consolidated Statements of Operations and Comprehensive Loss. Losses recognized as a premium deficiency result in a beneficial effect in subsequent periods as operating losses under these contracts are charged to the liability previously established. Revenue recognition Premiums earned, net Premiums revenue is recognized as income in the period members are entitled to receive services, and is net of estimated uncollectible amounts, retroactive membership adjustments, and any adjustments to recognize rebates under the minimum benefit ratios required under the Health Care Reform Law. Premiums received in advance of the service period are reported as other liabilities on the Consolidated Balance Sheets and recognized as revenue when earned. Premiums anticipated to be received within twelve months based on the documented diagnostic criteria of the Corporation’s enrollees are estimated and included in revenue for the period including the member months for which the payment is designated by CMS. CMS uses a risk-adjustment model which adjusts premiums paid to MA contracts, based on risk scores that are compared with the overall average risk scores for the relevant state and market pool. Generally, if a risk score is below the average risk score the Corporation is required to make a risk adjustment payment into the risk pool, and if a risk score is above the average risk score the Corporation receives a risk adjustment payment from the risk pool. Risk adjustments can have a positive or negative retroactive impact to rates. Under this model, rates paid to MA plans are based on actuarially determined bids, which include a process whereby prospective payments are based on the Corporation’s estimated cost of providing standard Medicare- covered benefits to a member with an average risk profile. That baseline payment amount is adjusted to reflect the health status of enrolled membership. Under the risk-adjustment methodology, all MA plans must collect and submit the necessary diagnosis code information to CMS within prescribed deadlines. Estimated audit settlements are recorded as a reduction of premiums revenue in the Corporation’s Consolidated Statements of Operations and Comprehensive Loss, based upon available information. Retrospective premiums involve the evaluation of past claims experience for the purpose of determining the actual cost of providing insurance for the customer. This evaluation is performed once every year and retrospective premiums are recognized in the year earned. MAPD revenue Payments received from CMS and members from Clover’s participation in the MAPD program are determined from the Corporation’s annual bid and represent amounts for providing prescription drug insurance coverage and are recognized as premium revenue ratably over the term of the annual contract. Such CMS payments are subject to risk sharing through risk corridor provisions. The risk corridor provisions compare costs targeted in bids to actual prescription drug costs, limited to actual costs that would have been incurred under the standard coverage as defined by CMS. Variances exceeding certain thresholds may result in CMS making additional payments to the Corporation or require the Corporation to refund to CMS a portion of the premiums received. As risk corridor provisions are considered in the overall annual bid process, management estimates and recognizes an adjustment to premiums revenue related to these provisions based upon pharmacy claims experience. Management records a receivable or payable at the contract level on the Consolidated Balance Sheets. Reinsurance and low-income cost subsidies represent funding from CMS in connection with the MAPD program for which Clover assumes no risk. Reinsurance subsidies represent funding from CMS for its portion of prescription drug costs which exceed the member’s out-of-pocket threshold, or the catastrophic coverage level. Low-income cost subsidies represent funding from CMS for all or a portion of the deductible, the coinsurance and co-payment amounts above the out-of-pocket threshold for low-income beneficiaries. Payments from CMS for reinsurance and low-income cost subsidies are based on assumptions submitted with the annual bid. A reconciliation and related settlement of CMS’s prospective subsidies against actual prescription drug costs paid is made after the end of the year. Consumer discounts of 50% on brand name prescription drugs for participants in the coverage gap are funded by CMS and pharmaceutical manufacturers. The Corporation accounts for these subsidies and discounts in other assets in the Consolidated Balance Sheets and as an operating activity in the Consolidated Statements of Cash Flows. The Corporation does not recognize premiums revenue or claim expenses for these subsidies or discounts. | |
Notes and securities payable | Notes and securities payable Debt issuance costs Costs incurred in connection with Corporation’s debt financings are capitalized and amortized to interest expense over the life of the related debt using the effective interest method. Debt issuance costs are presented as a direct deduction from the carrying amount of the related debt liability, consistent with the presentation of debt discounts. Non-convertible notes The Corporation records the non-convertible notes at carrying value, net of discounts on the Consolidated Balance Sheets. Convertible securities The Corporation accounts for convertible securities in accordance with the accounting guidance for debt with conversion and other options, after determining whether embedded conversion options should be bifurcated from their host instruments. Conversion options that are not bifurcated as a derivative and not accounted for as a separate equity component are evaluated to determine whether they are beneficial to the investor at inception, a beneficial conversion feature (BCF), or may become beneficial in the future due to potential adjustments. A BCF is defined as a nondetachable conversion feature that is in the money at the commitment date and the applicable accounting guidance requires recognition of the conversion option’s intrinsic value in equity, with an offsetting reduction to the carrying amount of the instrument. The Corporation accretes the resulting discount using the effective interest method over the life of the instrument. The Corporation records, as applicable, discounts to convertible securities for the intrinsic value of conversion options embedded in debt instruments. Discounts on the debt are amortized over the term of the notes, using the effective interest method. Convertible securities are recorded at carrying value, net of discounts on the Consolidated Balance Sheets. The fair value of convertible securities is calculated for the purposes of determining the fair value of the related derivative liabilities. | |
Warrants payable | Warrants payable For warrants issued in connection with notes payable, the Corporation determines whether the warrants are considered freestanding instruments. The warrants are considered to be freestanding instruments if they meet either of the following conditions: (1) they are entered into separately and apart from any of the Corporation’s other financial instruments or equity transactions or (2) they are entered into in conjunction with some other transaction and are legally detachable and separately exercisable. The Corporation considers its warrants to be legally detachable and separately exercisable from the simultaneous notes payable transactions they were issued with, and therefore accounts for them separately. To determine the balance sheet classification for these warrants, the Corporation evaluates whether they qualify as liabilities per the debt accounting guidance. Financial instruments that do not qualify as liabilities under the debt accounting guidance may still be classified as liabilities if they do not meet the derivative guidance requirements for equity classification. Changes in the fair value of the warrant liability are recognized as changes in fair value of warrants in the Consolidated Statements of Operations and Comprehensive Loss. | |
Derivatives liabilities | Derivative liabilities The Corporation evaluates the embedded features of its convertible securities by applying the derivatives accounting guidance. Derivatives embedded within non-derivative instruments, such as convertible securities, are bifurcated from the host instrument when the embedded derivative is not clearly and closely related to the host instrument. The Corporation’s embedded derivatives associated with its convertible securities are recognized as derivative liabilities and recorded at fair value. | |
Leases | Leases At the inception of an arrangement, the Corporation determines whether the arrangement is or contains a lease based on the unique facts and circumstances present in the arrangement including the use of an identified asset(s) and the Corporation’s control over the use of that identified asset. The Corporation does not recognize leases with a lease term of one year or less on its balance sheet. Leases with a term greater than one year are recognized on the balance sheet as right-of-use (ROU) assets and lease liabilities. The Corporation has sublease arrangements and recognizes sublease income from leasing excess space. Sublease income is recognized on a straight-line basis over the sublease term. As of December 31, 2020 and 2019, respectively, the Corporation does not have any financing leases. Lease liabilities and their corresponding ROU assets are initially recorded based on the present value of lease payments over the expected remaining lease term. Certain adjustments to the ROU asset may be required for items such as incentives received or initial direct costs. When an option to extend the lease exists, a determination is made whether that option is reasonably certain of exercise based on economic factors present at the measurement date and as circumstances may change. As of December 31, 2020 and 2019, respectively, the Corporation has not included optional extension periods in the measurement of its leases as they are not reasonably certain of exercise. The Corporation monitors its plans to renew its material leases on a quarterly basis. Where the rates implicit in the Corporation’s leases are not readily determinable, the Corporation utilizes the appropriate incremental borrowing rate, which is the rate incurred to borrow on a collateralized basis over a similar term, an amount equal to the lease payments in a similar economic environment over the lease term. Historically, the rate implicit in the leases has not been readily determinable and the appropriate incremental borrowing rate has been utilized. To estimate the appropriate incremental borrowing rate, a credit rating applicable to the Corporation is estimated using a synthetic credit rating analysis since the Corporation does not currently have a rating agency-based credit rating. Components of a lease are split into three categories: lease components, non-lease components, and non-components. The fixed and in-substance fixed contract consideration (including any consideration related to non-components) are allocated, based on the respective relative fair values, to the lease components and non-lease components. The Corporation has elected to account for lease and non-lease components together as a single lease component for all underlying assets and allocate all of the contract consideration to the lease component only. In determining the classification of a lease as operating or finance, ASC 842, Leases , allows for the use of judgment in determining whether the assumed lease term is for a major part of the remaining economic life of the underlying asset and whether the present value of lease payments represents substantially all of the fair value of the underlying asset. The Corporation applies the bright line thresholds referenced in the lease guidance of 75 percent to represent “a major part” and 90 percent to represent “substantially all” as allowed in ASC 842 in evaluating leases for appropriate classification. These are applied consistently to the Corporation’s entire portfolio of leases. | |
Stock-based compensation | Stock-based compensation The Corporation accounts for all stock-based payment awards granted to employees and non-employees as stock-based compensation expense at fair value. The Corporation’s stock-based payments include stock options and grants of common stock, including common stock subject to vesting. The measurement date for employee awards is the date of grant, and stock-based compensation costs are recognized as expense over the employees’ requisite service period, which is the vesting period, on a straight-line basis. The measurement date for non-employee awards is the date of grant without changes in the fair value of the award. Stock-based compensation costs for non-employees are recognized as expense over the vesting period on a straight-line basis. Stock-based compensation expense is classified in the accompanying Consolidated Statements of Operations and Comprehensive Loss in salaries and benefits. The Corporation recognizes stock-based compensation expense for the portion of awards that have vested. Forfeitures are recorded as they occur. The fair value of each stock option grant is estimated on the date of grant using the Black-Scholes option-pricing model. As of December 31, 2020, the Corporation is a private entity and lacks entity-specific historical and implied volatility information. Therefore, it estimates its expected stock volatility based on the historical volatility of a publicly traded set of peer companies. The expected term of the Corporation’s stock options has been determined utilizing the “simplified” method for awards that qualify as “plain-vanilla” options. The risk-free interest rate is determined by reference to the U.S. Treasury yield curve in effect at the time of grant of the award for time periods approximately equal to the expected term of the award. Expected dividend yield is based on the fact that the Corporation has never paid cash dividends on common stock and does not expect to pay any cash dividends in the foreseeable future. For warrants issued to non-employees as payments for services, the Corporation considers the warrants to be in scope of stock-based compensation guidance to non-employees. To determine whether the warrants should be classified as liabilities or equity awards, the Corporation evaluates the criteria for debt accounting guidance because share-based payments classified as liabilities under this guidance would also be classified as liabilities under the stock-based accounting guidance. As these warrants do not meet any of the criteria to be accounted for as debt, they are classified as equity awards. On the grant date, these warrants are measured by estimating the fair value of the equity instruments to be issued. Stock-based compensation expense is recorded for the vested portion of the warrants. | |
Comprehensive income | Comprehensive income Comprehensive income is a measurement of certain changes in stockholders’ deficit that results from transactions and other economic events other than transactions with the stockholders. The cumulative amount of these changes is reported on the Consolidated Balance Sheets. | |
Contingent liabilities | Contingent liabilities The Corporation records a provision for a contingent liability when it is both probable that a liability has been incurred and the amount of the loss can be reasonably estimated. With respect to legal matters, provisions are reviewed and adjusted to reflect the impact of negotiations, estimated settlements, legal rulings, advice of legal counsel and other information and events pertaining to a particular matter. | |
Federal income taxes | Federal income taxes The Corporation recognizes an asset or liability for the deferred tax consequences of temporary differences between the tax bases of assets or liabilities and their reported amounts in the Consolidated Financial Statements. These temporary differences will result in taxable or deductible amounts in future years when the reported amounts of the assets or liabilities are recovered or settled. The Corporation also recognizes the future tax benefits such as net operating and capital loss carryforwards as deferred tax assets. A valuation allowance is provided against these deferred tax assets if it is more likely than not that some portion or all of the deferred tax assets will not be realized. Future years’ tax expense may be increased or decreased by adjustments to the valuation allowance or to the estimated accrual for income taxes. Deferred tax assets and deferred tax liabilities are further adjusted for changes in the enacted tax rates. As of December 31, 2020 and 2019, respectively, sufficient doubt existed over the Corporation’s ability to generate sufficient taxable income to realize its deferred income tax assets, and accordingly, the Corporation has provided a full valuation allowance against its deferred tax assets. | |
General and administrative expenses | General and administrative expenses General and administrative expenses include professional service fees, outside legal, tax and accounting service fees, insurance, software application and system expenses, advertising and marketing, lease and occupancy costs and other overhead costs. General and administrative expenses also include claim adjudication and processing costs. | |
Net loss per share | Net loss per share The Corporation follows the two-class method when computing net loss per share as the Corporation has issued shares that meet the definition of participating securities. The two-class method determines net loss per share for each class of common and participating securities according to dividends declared or accumulated and participation rights in undistributed earnings. The two-class method requires income available to common stockholders for the period to be allocated between common and participating securities based upon their respective rights to receive dividends as if all income for the period had been distributed. Basic net loss per share attributable to common stockholders is computed by dividing the net loss attributable to common stockholders by the weighted average number of common shares outstanding for the period. Diluted net loss attributable to common stockholders is computed by adjusting net loss attributable to common stockholders to reallocate undistributed earnings based on the potential impact of dilutive securities. Diluted net loss per share attributable to common stockholders is computed by dividing the diluted net loss attributable to common stockholders by the weighted average number of common shares outstanding for the period, including potential dilutive common shares. For purpose of this calculation, outstanding stock options, convertible preferred stock and warrants to purchase shares of convertible preferred stock are considered potential dilutive common shares. The Corporation’s convertible preferred stock contractually entitles the holders of such shares to participate in dividends but does not contractually require the holders of such shares to participate in losses of the Corporation. | |
Recent accounting pronouncements | Recent accounting pronouncements Recently adopted accounting pronouncements Emerging Growth Company The Corporation currently qualifies as an “emerging growth company” under the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”). Accordingly, the Corporation has the option to adopt new or revised accounting guidance either (i) within the same periods as those otherwise applicable to non-emerging growth companies or (ii) within the same time periods applicable to private companies. The Corporation has elected to adopt new or revised accounting guidance within the same time period as private companies, unless, as indicated below, management determines it is preferable to take advantage of early adoption provisions offered within the applicable guidance. Fair value measurements In August 2018, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standard Update (ASU) 2018-13, Changes to Disclosure Requirements for Fair Value Measurements, the purpose of which is to improve the effectiveness of disclosure requirements for recurring and nonrecurring fair value measurements. The standard removes, modifies, and adds certain disclosure requirements and is in effect for all entities in fiscal years beginning after December 15, 2019. This standard became effective for the Corporation on January 1, 2020, and did not have a material impact on the Corporation’s disclosures. Cloud computing arrangements In August 2018, the FASB issued ASU 2018-15, Intangibles – Goodwill and Other (Topic 350) – Internal Use Software: Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract. This update changes the accounting guidance for cloud computing arrangements. If a cloud computing arrangement includes a license to internal-use software, the software license is accounted for by the customer by recognizing an asset for the software license and, to the extent that the payments attributable to the software license are made over time, recognizing a corresponding liability. If a cloud computing arrangement does not include a software license, the entity should account for the arrangement as a service contract and should expense any fees associated with the hosting element (service) of the arrangement as incurred. ASU 2018-15 is effective for nonpublic entities for fiscal years beginning after December 15, 2020, with early adoption permitted. The Corporation adopted ASU 2018-15 on January 1, 2021, on a prospective basis. The Corporation's cloud computing arrangements relate to the set-up of various platforms, including but not limited to clinical data repositories and other system integrations. The capitalized implementation costs are presented in the Condensed Consolidated Balance Sheet in other assets, current and are amortized on a straight-line basis over the term of the underlying cloud computing hosting contract, which is the noncancelable term of the arrangement plus any reasonably certain renewal periods. As of September 30, 2021, $5.0 million was recorded in other assets, current, as deferred implementation costs. For both the three and nine months ended September 30, 2021, amortization expense associated with the Corporation’s cloud computing arrangements was $0.2 million. No impairment was recognized during the three and nine months ended September 30, 2021, as there were no events or changes in circumstances to indicate that the carrying amount of the Corporation’s cloud computing arrangements may not be recoverable. Accounting pronouncements effective in future periods Credit losses In June 2016, the FASB issued ASU 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, which was subsequently modified by several ASUs issued in 2018 and 2019. This standard introduces a new current expected credit loss (CECL) model for measuring expected credit losses for certain types of financial instruments measured at amortized cost and replaces the incurred loss model. The CECL model requires an entity to recognize an allowance for credit losses for the difference between the amortized cost basis of a financial instrument and the amount the entity expects to collect over the instrument's contractual life after consideration of historical experience, current conditions, and reasonable and supportable forecasts. This standard also introduces targeted changes to the available-for-sale debt securities impairment model. It eliminates the concept of other-than-temporary impairment and requires an entity to determine whether any impairment is the result of a credit loss or other factors. ASU 2016-13 is effective for nonpublic entities in fiscal years beginning after December 15, 2022, and public entities beginning after December 15, 2019. Early adoption is permitted. The Corporation has evaluated the impact of ASU 2016-13 on the Consolidated Financial Statements and expects the impact to be immaterial. Goodwill and other intangible assets In January 2017, the FASB issued ASU 2017-04, Intangibles – Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment. This update removes Step 2 of the goodwill impairment test under current guidance, which requires a hypothetical purchase price allocation. The new guidance requires an impairment charge to be recognized for the amount by which the carrying amount exceeds the reporting unit's fair value. Upon adoption, the guidance is to be applied prospectively. ASU 2017-04 is effective for nonpublic entities in fiscal years beginning after December 15, 2021, and public entities beginning after December 15, 2019. Early adoption is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. The Corporation is currently evaluating the impact of the adoption of ASU 2017-04 on the Consolidated Financial Statements, but does not expect for this to have a material impact on the Consolidated Financial Statements. Income taxes In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes. The amendments in ASU 2019-12 remove certain exceptions to the general principles in ASC Topic 740. The amendments also clarify and amend existing guidance to improve consistent application. The amendments are effective for nonpublic entities in fiscal years beginning after December 15, 2021, and public entities beginning after December 15, 2020. Early adoption is permitted. The transition method (retrospective, modified retrospective, or prospective basis) related to the amendments depends on the applicable guidance, and all amendments for which there is no transition guidance specified are to be applied on a prospective basis. The Corporation is currently evaluating the impact of ASU 2019-12 on the Consolidated Financial Statements, but does not expect for this to have a material impact on the Consolidated Financial Statements. Accounting for convertible instruments and contracts in an entity’s own equity In August 2020, the FASB issued ASU 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40). The amendments in ASU 2020-06 simplify the accounting for convertible instruments by removing certain separation models for convertible instruments. Under the amendments in ASU 2020-06, the embedded conversion features no longer are separated from the host contract for convertible instruments with conversion features that are not required to be accounted for as derivatives, or that do not result in substantial premiums accounted for as paid-in capital. Consequently, a convertible debt instrument will be accounted for as a single liability measured at its amortized cost, and a convertible preferred stock will be accounted for as a single equity instrument measured at its historical cost, as long as no other features require bifurcation and recognition as derivatives. ASU 2020-06 is effective for nonpublic entities for fiscal years beginning after December 15, 2023. Early adoption is permitted, but no earlier than fiscal years beginning after December 15, 2020 and public entities beginning after December 15, 2021. The Corporation is currently evaluating the impact of the adoption of ASU 2020-06 on the Consolidated Financial Statements, but does not expect for this to have a material impact on the Consolidated Financial Statements. | Recent accounting pronouncements Recently adopted accounting pronouncements Emerging Growth Company The Corporation has elected to be treated as an “emerging growth company” under the Jumpstart Our Business Startups Act of 2012, or the JOBS Act. Accordingly, the Corporation is provided the option to adopt new or revised accounting guidance either (i) within the same periods as those otherwise applicable to non-emerging growth companies or (ii) within the same time periods as private companies. The Corporation has elected to adopt new or revised accounting guidance within the same time period as private companies, unless, as indicated below, management determines it is preferable to take advantage of early adoption provisions offered within the applicable guidance. Revenue recognition In May 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2014-09, Revenue from Contracts with Customers (Topic 606) , as modified by subsequently issued ASU’s 2015-14, 2016-08, 2016-10, 2016-12 and 2016-20 (collectively, ASU 2014-09). ASU 2014-09 superseded existing revenue recognition standards with a single model unless those contracts are within the scope of other standards (e.g., an insurance entity’s insurance contracts). The revenue recognition principle in ASU 2014-09 is that an entity should recognize revenue to depict the transfer of goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. Adoption of ASU 2014-09 did not have a material impact on the Corporation’s Consolidated Financial Statements. Leases In February 2016, the FASB issued ASU 2016-02, ASC 842, as amended, which superseded the lease accounting requirements in ASC 840 and created ASC 842. The Corporation elected to early adopt ASC 842, using the required modified retrospective approach and utilizing the effective date of January 1, 2019 as its date of initial application. The Corporation elected the short-term lease expedient for leases with a term of one year or less, which permits a lessee to not recognize lease assets and lease liabilities for those leases. Lessees continue to differentiate between finance leases (previously referred to as capital leases) and operating leases using classification criteria that are substantially similar to the previous guidance. In addition, the Corporation elected to utilize the package of practical expedients which allowed it to not reassess the following: (i) whether any expired or existing contracts contained leases; (ii) the lease classification for any expired or existing leases; and (iii) the treatment of initial direct costs for any existing leases. In transition, the Corporation elected to utilize the remaining lease term of its leases, as of the effective date, in determining the appropriate incremental borrowing rate. Lease cost for operating leases is recognized on a straight-line basis over the lease term as an operating expense. Variable lease costs are expensed as incurred as an operating expense. The adoption of this standard resulted in the recognition of operating lease ROU assets of approximately $14.3 million and lease liabilities of approximately $17.4 million, on the Corporation’s Consolidated Balance Sheets at adoption relating to its office leases in New Jersey and San Francisco. The difference between the ROU assets and lease liabilities was due to previously recorded net deferred rent liabilities and incentives that were de-recognized and reclassified into the ROU assets. The adoption of ASU 2016-02 did not have a material impact on the Corporation’s liquidity or the Consolidated Statements of Operations and Comprehensive Loss. Statement of cash flows In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments. This update addresses eight specific cash flow issues with the objective of reducing the existing diversity in practice in how certain cash receipts and cash payments are presented and classified. ASU 2016-15 is effective for nonpublic entities in fiscal years beginning after December 15, 2018. The Corporation adopted this ASU effective January 1, 2019. Adoption of ASU 2016-15 did not have a material impact on the Corporation’s Consolidated Financial Statements. Restricted cash In November 2016, the FASB issued ASU 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash . ASU 2016-18 is intended to clarify how entities present restricted cash in the statement of cash flows. The guidance requires entities to show the changes in the total of cash and cash equivalents and restricted cash in the statement of cash flows. As a result, entities will no longer present transfers between cash and cash equivalents and restricted cash in the statement of cash flows. When cash and cash equivalents and restricted cash are presented in more than one line-item on the balance sheet, the new guidance requires a reconciliation of the totals in the statement of cash flows to the related captions in the balance sheet. This reconciliation can be presented either on the face of the statement of cash flows or in the notes to the financial statements. ASU 2016-18 is effective for nonpublic entities in fiscal years beginning after December 15, 2018, and is to be applied retrospectively. The Corporation adopted ASU 2016-18 effective January 1, 2019. Adoption of ASU 2016-18 did not have a material impact on the Corporation’s Consolidated Financial Statements. Fair value measurements In August 2018, the FASB issued ASU 2018-13, Changes to Disclosure Requirements for Fair Value Measurements , which improves the effectiveness of disclosure requirements for recurring and nonrecurring fair value measurements. The standard removes, modifies, and adds certain disclosure requirements, and is effective for all entities in fiscal years beginning after December 15, 2019. This standard became effective for the Corporation on January 1, 2020, and did not have a material impact on the Corporation’s disclosures. Accounting pronouncements effective in future periods Credit losses In June 2016, the FASB issued ASU 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments , which was subsequently modified by several ASUs issued in 2018 and 2019. This standard introduces a new current expected credit loss (CECL) model for measuring expected credit losses for certain types of financial instruments measured at amortized cost and replaces the incurred loss model. The CECL model requires an entity to recognize an allowance for credit losses for the difference between the amortized cost basis of a financial instrument and the amount the entity expects to collect over the instrument’s contractual life after consideration of historical experience, current conditions, and reasonable and supportable forecasts. This standard also introduces targeted changes to the available-for-sale debt securities impairment model. It eliminates the concept of other-than-temporary impairment and requires an entity to determine whether any impairment is the result of a credit loss or other factors. ASU 2016-13 is effective for nonpublic entities in fiscal years beginning after December 15, 2022. Early adoption is permitted. The Corporation has evaluated the impact of ASU 2016-13 on the Consolidated Financial Statements and determined the impact to be immaterial. Goodwill and other intangible assets In January 2017, the FASB issued ASU 2017-04, Intangibles – Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment. This update removes Step 2 of the goodwill impairment test under current guidance, which requires a hypothetical purchase price allocation. The new guidance requires an impairment charge to be recognized for the amount by which the carrying amount exceeds the reporting unit’s fair value. Upon adoption, the guidance is to be applied prospectively. ASU 2017-04 is effective for nonpublic entities in fiscal years beginning after December 15, 2021, with early adoption permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. The Corporation is currently evaluating the impact of the adoption of ASU 2017-04 on the Consolidated Financial Statements. Cloud computing arrangements In August 2018, the FASB issued ASU 2018-15, Intangibles – Goodwill and Other (Topic 350) – Internal Use Software: Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract. This update changes the accounting guidance for cloud computing arrangements. If a cloud computing arrangement includes a license to internal-use software, then the software license is accounted for by the customer by recognizing an intangible asset for the software license and, to the extent that the payments attributable to the software license are made over time, recognizing a corresponding liability. If a cloud computing arrangement does not include a software license, the entity should account for the arrangement as a service contract and should expense any fees associated with the hosting element (service) of the arrangement as incurred. ASU 2018-15 is effective for nonpublic entities for fiscal years beginning after December 15, 2020, with early adoption permitted. The Corporation is currently evaluating the impact of the adoption of ASU 2018-15 on the Consolidated Financial Statements. Income taxes In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes. The amendments in ASU 2019-12 remove certain exceptions to the general principles in ASC Topic 740. The amendments also clarify and amend existing guidance to improve consistent application. The amendments are effective for nonpublic entities in fiscal years beginning after December 15, 2021, with early adoption permitted. The transition method (retrospective, modified retrospective, or prospective basis) related to the amendments depends on the applicable guidance, and all amendments for which there is no transition guidance specified are to be applied on a prospective basis. The Corporation is currently evaluating the impact of the adoption of ASU 2019-12 on the Consolidated Financial Statements. Accounting for convertible instruments and contracts in an entity’s own equity In August 2020, the FASB issued ASU 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40). The amendments in ASU 2020-06 simplify the accounting for convertible instruments by removing certain separation models for convertible instruments. Under the amendments in ASU 2020-06, the embedded conversion features no longer are separated from the host contract for convertible instruments with conversion features that are not required to be accounted for as derivatives, or that do not result in substantial premiums accounted for as paid-in capital. Consequently, a convertible debt instrument will be accounted for as a single liability measured at its amortized cost and a convertible preferred stock will be accounted for as a single equity instrument measured at its historical cost, as long as no other features require bifurcation and recognition as derivatives. ASU 2020-06 is effective for nonpublic entities for fiscal years beginning after December 15, 2023. Early adoption is permitted, but no earlier than fiscal years beginning after December 15, 2020. The Corporation is currently evaluating the impact of the adoption of ASU 2020-06 on the Consolidated Financial Statements. |
Parent Company | ||
Condensed Financial Statements, Captions [Line Items] | ||
Basis of presentation | The accompanying condensed financial statements have been prepared using the equity method. Under the equity method, the investment in consolidated subsidiaries is stated at cost plus equity in undistributed earnings of consolidated subsidiaries since the date of acquisition. These condensed financial statements should be read in conjunction with the Corporation’s consolidated financial statements. | |
Use of estimates | Use of estimates The preparation of the condensed financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying disclosures. Those estimates are inherently subject to change, and actual results may ultimately differ from those estimates. | |
Reclassifications | Reclassifications Certain amounts in the prior years’ Condensed Statements of Cash Flows have been reclassified to conform to the current year’s presentation, primarily related to the amortization of warrants, amortization of debt issuance costs, and paid in kind interest. These reclassifications had no effect on the previously reported Condensed Financial Statements. |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies (Policies) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2021 | Dec. 31, 2020 | |
Accounting Policies [Abstract] | ||
Basis of presentation | Basis of presentation The Corporation’s interim Condensed Consolidated Financial Statements have been prepared in conformity with GAAP and include the accounts of the Corporation and its wholly owned subsidiaries. In the opinion of management, the Corporation has made all necessary adjustments, which include normal recurring adjustments necessary for a fair presentation of its financial position and its results of operations for the interim periods presented. All material intercompany balances and transactions have been eliminated in consolidating these financial statements. These interim Condensed Consolidated Financial Statements should be read in conjunction with the audited Consolidated Financial Statements as of and for the years ended December 31, 2020 and 2019 included in Exhibit 99.5 of Amendment No. 1 to the Current Report on Form 8-K (the “Form 8-K/A”) filed with the Securities and Exchange Commission (SEC) on April 1, 2021. | Basis of presentation The Corporation has prepared these Consolidated Financial Statements in accordance with U.S. GAAP, which differs materially from the statutory accounting practices prescribed by various insurance regulatory authorities. The Consolidated Financial Statements include the accounts of the Corporation and its subsidiaries. Intercompany balances and transactions have been eliminated in consolidating these financial statements. |
Reclassifications | Reclassifications To conform to the current period presentation, prepaid expenses, which were previously included in other assets, current, are presented as a separate line item in the prior year’s Condensed Consolidated Balance Sheet. Certain amounts in the prior year period’s Condensed Consolidated Statement of Cash Flows have been reclassified to conform to the current year period’s presentation, primarily related to the amortization of warrants, amortization of debt issuance costs, and paid-in-kind interest. These reclassifications had no effect on the previously reported Consolidated Financial Statements. | Reclassifications Certain amounts in the prior years’ Consolidated Statements of Cash Flows have been reclassified to conform to the current year’s presentation, primarily related to the amortization of warrants, amortization of debt issuance costs, and paid in kind interest. These reclassifications had no effect on the previously reported Consolidated Financial Statements. |
Use of estimates | Use of estimates The preparation of the Condensed Consolidated Financial Statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the Condensed Consolidated Financial Statements and accompanying notes. The areas involving the most significant use of estimates are the amounts of incurred but not reported claims. Many factors can cause actual outcomes to deviate from these assumptions and estimates, such as changes in economic conditions, changes in government healthcare policy, advances in medical technology, changes in treatment patterns, and changes in average lifespan. Accordingly, the Corporation cannot determine with precision the ultimate amounts that it will pay for, or the timing of payment of actual claims, or whether the assets supporting the liabilities will grow to the level the Corporation assumes prior to payment of claims. If the Corporation’s actual experience is different from its assumptions or estimates, the Corporation’s reserves may prove inadequate. As a result, the Corporation would incur a charge to operations in the period in which it determines such a shortfall exists, which could have a material adverse effect on the Corporation’s business, results of operations, and financial condition. Other areas involving significant estimates include risk adjustment provisions related to Medicare contracts and the valuation of the Corporation’s investment securities, goodwill and other intangible assets, reinsurance, the premium deficiency reserve, warrants, the embedded derivative related to the convertible securities, stock-based compensation, recoveries from third parties for coordination of benefits, the Direct Contracting benchmark specifically cost trend and risk score estimates that can develop over time, and final determination of medical cost adjustment pools. | Use of estimates The preparation of the Consolidated Financial Statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the Consolidated Financial Statements and accompanying notes. The areas involving the most significant use of estimates are the amounts incurred but not reported (IBNR) claims, recoveries from third parties for coordination of benefits, and final determination of medical cost adjustment pools. Many factors can cause actual outcomes to deviate from these assumptions and estimates, such as changes in economic conditions, changes in government healthcare policy, advances in medical technology, changes in treatment patterns, and changes in average lifespan. Accordingly, the Corporation cannot determine with precision the ultimate amounts that it will pay for, or the timing of payment of actual claims, or whether the assets supporting the liabilities will grow to the level the Corporation assumes prior to payment of claims. The assumptions and estimates are based on the Corporation’s knowledge of current events and anticipated future events; however, actual results may differ from the amounts recorded in the Consolidated Financial Statements, and the Corporation would |
Performance guarantees | Performance guarantees Certain of the Corporation’s arrangements with third-party providers require it to guarantee the performance of its care network to CMS. As a result of the Corporation’s participation in the DC Model, the Corporation determined that it was making a performance guarantee with respect to providers of DCE Beneficiaries that should be recognized in the financial statements. Accordingly, a liability for the performance guarantee was recorded on the Condensed Consolidated Balance Sheet. Each month, as the performance guarantee is fulfilled, the guarantee is amortized on a straight-line basis for the amount that represents the completed performance. With respect to each performance year in which the DCE is a participant, the final consideration due to the DCE by CMS (shared savings) or the consideration due to CMS by the DCE (shared loss) is reconciled in the subsequent years following the performance year. The shared savings or loss is measured periodically and will be applied to the Direct | |
Capitalized software development costs - cloud computing arrangements | Capitalized software development costs - cloud computing arrangements The Corporation’s cloud computing arrangements mostly comprise hosting arrangements which are service contracts, whereby the Corporation gains remote access to use enterprise software hosted by the vendor or another third party on an as-needed basis for a period of time in exchange for a subscription fee. Implementation costs for cloud computing arrangements are capitalized if certain criteria are met and consist of internal and external costs directly attributable to developing and configuring cloud computing software for its intended use. These capitalized implementation costs are presented in the Condensed Consolidated Balance Sheets in other assets, and are generally amortized over the fixed, non-cancelable term of the associated hosting arrangement on a straight-line basis. | |
Deferred acquisition costs | Deferred acquisition costs Acquisition costs directly related to the successful acquisition of new business, which is primarily made up of commissions costs, are deferred and subsequently amortized. Deferred acquisition costs are recorded as other assets on the Condensed Consolidated Balance Sheet and are amortized over the estimated life of the related contracts. The amortization of deferred acquisition costs is recorded in general and administrative expenses in the Condensed Consolidated Statement of Operations and Comprehensive Loss. As of September 30, 2021, there were no deferred acquisition costs as a result of the acceleration of amortization for deferred acquisition costs due to the recognition of a premium deficiency reserve during the three and nine months ended September 30, 2021. For the three and nine months ended September 30, 2021, amortization expense of deferred acquisition costs of $1.1 million and $9.6 million, respectively, were recognized in general and administrative expenses. There was no amortization expense of deferred acquisition costs for the three and nine months ended September 30, 2020. | Acquisition costs Acquisition costs that vary with and are directly related to the acquisition of new and renewal business, including commissions, are deferred and subsequently amortized. Deferred acquisition costs are recorded as other assets on the Consolidated Balance Sheets and are amortized over the estimated life of the related contracts. The amortization of deferred acquisition costs is recorded in general and administrative expenses in the Consolidated Statements of Operations and Comprehensive Loss. To the extent that a premium deficiency is identified after writing down unamortized deferred acquisition costs, a liability for premium deficiency reserve is established and reported on the Consolidated Balance Sheets. |
COVID-19 | COVID-19The societal and economic impact of the novel coronavirus (COVID-19) pandemic is continuing to evolve, and the ultimate impact on the Corporation’s business, results of operations, financial condition, and cash flows is uncertain and difficult to predict. The global pandemic has severely impacted businesses worldwide, including many in the health insurance sector. In response to the pandemic, the Corporation has implemented additional steps related to its care delivery, member support, and internal policies and operations. | COVID-19 The temporary deferral of non-essential care resulting from stay-at-home and physical distancing orders and other restrictions on movement and economic activity implemented throughout the country beginning in the second half of March 2020 to reduce the spread of the novel coronavirus (COVID-19) has impacted the Corporation’s business. Beginning in late March 2020 and trending throughout 2020, utilization of healthcare services began to experience reductions as a result of the stay-at-home orders and the closure of certain provider facilities, with some recovery in utilization taking place during times of more eased restrictions. The impact of the deferral of non-essential care was partially offset by additional costs incurred as a result of care for those members who have contracted COVID-19 as well as costs incurred for efforts related to the Corporation’s pandemic response efforts. |
Recent accounting pronouncements | Recent accounting pronouncements Recently adopted accounting pronouncements Emerging Growth Company The Corporation currently qualifies as an “emerging growth company” under the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”). Accordingly, the Corporation has the option to adopt new or revised accounting guidance either (i) within the same periods as those otherwise applicable to non-emerging growth companies or (ii) within the same time periods applicable to private companies. The Corporation has elected to adopt new or revised accounting guidance within the same time period as private companies, unless, as indicated below, management determines it is preferable to take advantage of early adoption provisions offered within the applicable guidance. Fair value measurements In August 2018, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standard Update (ASU) 2018-13, Changes to Disclosure Requirements for Fair Value Measurements, the purpose of which is to improve the effectiveness of disclosure requirements for recurring and nonrecurring fair value measurements. The standard removes, modifies, and adds certain disclosure requirements and is in effect for all entities in fiscal years beginning after December 15, 2019. This standard became effective for the Corporation on January 1, 2020, and did not have a material impact on the Corporation’s disclosures. Cloud computing arrangements In August 2018, the FASB issued ASU 2018-15, Intangibles – Goodwill and Other (Topic 350) – Internal Use Software: Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract. This update changes the accounting guidance for cloud computing arrangements. If a cloud computing arrangement includes a license to internal-use software, the software license is accounted for by the customer by recognizing an asset for the software license and, to the extent that the payments attributable to the software license are made over time, recognizing a corresponding liability. If a cloud computing arrangement does not include a software license, the entity should account for the arrangement as a service contract and should expense any fees associated with the hosting element (service) of the arrangement as incurred. ASU 2018-15 is effective for nonpublic entities for fiscal years beginning after December 15, 2020, with early adoption permitted. The Corporation adopted ASU 2018-15 on January 1, 2021, on a prospective basis. The Corporation's cloud computing arrangements relate to the set-up of various platforms, including but not limited to clinical data repositories and other system integrations. The capitalized implementation costs are presented in the Condensed Consolidated Balance Sheet in other assets, current and are amortized on a straight-line basis over the term of the underlying cloud computing hosting contract, which is the noncancelable term of the arrangement plus any reasonably certain renewal periods. As of September 30, 2021, $5.0 million was recorded in other assets, current, as deferred implementation costs. For both the three and nine months ended September 30, 2021, amortization expense associated with the Corporation’s cloud computing arrangements was $0.2 million. No impairment was recognized during the three and nine months ended September 30, 2021, as there were no events or changes in circumstances to indicate that the carrying amount of the Corporation’s cloud computing arrangements may not be recoverable. Accounting pronouncements effective in future periods Credit losses In June 2016, the FASB issued ASU 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, which was subsequently modified by several ASUs issued in 2018 and 2019. This standard introduces a new current expected credit loss (CECL) model for measuring expected credit losses for certain types of financial instruments measured at amortized cost and replaces the incurred loss model. The CECL model requires an entity to recognize an allowance for credit losses for the difference between the amortized cost basis of a financial instrument and the amount the entity expects to collect over the instrument's contractual life after consideration of historical experience, current conditions, and reasonable and supportable forecasts. This standard also introduces targeted changes to the available-for-sale debt securities impairment model. It eliminates the concept of other-than-temporary impairment and requires an entity to determine whether any impairment is the result of a credit loss or other factors. ASU 2016-13 is effective for nonpublic entities in fiscal years beginning after December 15, 2022, and public entities beginning after December 15, 2019. Early adoption is permitted. The Corporation has evaluated the impact of ASU 2016-13 on the Consolidated Financial Statements and expects the impact to be immaterial. Goodwill and other intangible assets In January 2017, the FASB issued ASU 2017-04, Intangibles – Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment. This update removes Step 2 of the goodwill impairment test under current guidance, which requires a hypothetical purchase price allocation. The new guidance requires an impairment charge to be recognized for the amount by which the carrying amount exceeds the reporting unit's fair value. Upon adoption, the guidance is to be applied prospectively. ASU 2017-04 is effective for nonpublic entities in fiscal years beginning after December 15, 2021, and public entities beginning after December 15, 2019. Early adoption is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. The Corporation is currently evaluating the impact of the adoption of ASU 2017-04 on the Consolidated Financial Statements, but does not expect for this to have a material impact on the Consolidated Financial Statements. Income taxes In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes. The amendments in ASU 2019-12 remove certain exceptions to the general principles in ASC Topic 740. The amendments also clarify and amend existing guidance to improve consistent application. The amendments are effective for nonpublic entities in fiscal years beginning after December 15, 2021, and public entities beginning after December 15, 2020. Early adoption is permitted. The transition method (retrospective, modified retrospective, or prospective basis) related to the amendments depends on the applicable guidance, and all amendments for which there is no transition guidance specified are to be applied on a prospective basis. The Corporation is currently evaluating the impact of ASU 2019-12 on the Consolidated Financial Statements, but does not expect for this to have a material impact on the Consolidated Financial Statements. Accounting for convertible instruments and contracts in an entity’s own equity In August 2020, the FASB issued ASU 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40). The amendments in ASU 2020-06 simplify the accounting for convertible instruments by removing certain separation models for convertible instruments. Under the amendments in ASU 2020-06, the embedded conversion features no longer are separated from the host contract for convertible instruments with conversion features that are not required to be accounted for as derivatives, or that do not result in substantial premiums accounted for as paid-in capital. Consequently, a convertible debt instrument will be accounted for as a single liability measured at its amortized cost, and a convertible preferred stock will be accounted for as a single equity instrument measured at its historical cost, as long as no other features require bifurcation and recognition as derivatives. ASU 2020-06 is effective for nonpublic entities for fiscal years beginning after December 15, 2023. Early adoption is permitted, but no earlier than fiscal years beginning after December 15, 2020 and public entities beginning after December 15, 2021. The Corporation is currently evaluating the impact of the adoption of ASU 2020-06 on the Consolidated Financial Statements, but does not expect for this to have a material impact on the Consolidated Financial Statements. | Recent accounting pronouncements Recently adopted accounting pronouncements Emerging Growth Company The Corporation has elected to be treated as an “emerging growth company” under the Jumpstart Our Business Startups Act of 2012, or the JOBS Act. Accordingly, the Corporation is provided the option to adopt new or revised accounting guidance either (i) within the same periods as those otherwise applicable to non-emerging growth companies or (ii) within the same time periods as private companies. The Corporation has elected to adopt new or revised accounting guidance within the same time period as private companies, unless, as indicated below, management determines it is preferable to take advantage of early adoption provisions offered within the applicable guidance. Revenue recognition In May 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2014-09, Revenue from Contracts with Customers (Topic 606) , as modified by subsequently issued ASU’s 2015-14, 2016-08, 2016-10, 2016-12 and 2016-20 (collectively, ASU 2014-09). ASU 2014-09 superseded existing revenue recognition standards with a single model unless those contracts are within the scope of other standards (e.g., an insurance entity’s insurance contracts). The revenue recognition principle in ASU 2014-09 is that an entity should recognize revenue to depict the transfer of goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. Adoption of ASU 2014-09 did not have a material impact on the Corporation’s Consolidated Financial Statements. Leases In February 2016, the FASB issued ASU 2016-02, ASC 842, as amended, which superseded the lease accounting requirements in ASC 840 and created ASC 842. The Corporation elected to early adopt ASC 842, using the required modified retrospective approach and utilizing the effective date of January 1, 2019 as its date of initial application. The Corporation elected the short-term lease expedient for leases with a term of one year or less, which permits a lessee to not recognize lease assets and lease liabilities for those leases. Lessees continue to differentiate between finance leases (previously referred to as capital leases) and operating leases using classification criteria that are substantially similar to the previous guidance. In addition, the Corporation elected to utilize the package of practical expedients which allowed it to not reassess the following: (i) whether any expired or existing contracts contained leases; (ii) the lease classification for any expired or existing leases; and (iii) the treatment of initial direct costs for any existing leases. In transition, the Corporation elected to utilize the remaining lease term of its leases, as of the effective date, in determining the appropriate incremental borrowing rate. Lease cost for operating leases is recognized on a straight-line basis over the lease term as an operating expense. Variable lease costs are expensed as incurred as an operating expense. The adoption of this standard resulted in the recognition of operating lease ROU assets of approximately $14.3 million and lease liabilities of approximately $17.4 million, on the Corporation’s Consolidated Balance Sheets at adoption relating to its office leases in New Jersey and San Francisco. The difference between the ROU assets and lease liabilities was due to previously recorded net deferred rent liabilities and incentives that were de-recognized and reclassified into the ROU assets. The adoption of ASU 2016-02 did not have a material impact on the Corporation’s liquidity or the Consolidated Statements of Operations and Comprehensive Loss. Statement of cash flows In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments. This update addresses eight specific cash flow issues with the objective of reducing the existing diversity in practice in how certain cash receipts and cash payments are presented and classified. ASU 2016-15 is effective for nonpublic entities in fiscal years beginning after December 15, 2018. The Corporation adopted this ASU effective January 1, 2019. Adoption of ASU 2016-15 did not have a material impact on the Corporation’s Consolidated Financial Statements. Restricted cash In November 2016, the FASB issued ASU 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash . ASU 2016-18 is intended to clarify how entities present restricted cash in the statement of cash flows. The guidance requires entities to show the changes in the total of cash and cash equivalents and restricted cash in the statement of cash flows. As a result, entities will no longer present transfers between cash and cash equivalents and restricted cash in the statement of cash flows. When cash and cash equivalents and restricted cash are presented in more than one line-item on the balance sheet, the new guidance requires a reconciliation of the totals in the statement of cash flows to the related captions in the balance sheet. This reconciliation can be presented either on the face of the statement of cash flows or in the notes to the financial statements. ASU 2016-18 is effective for nonpublic entities in fiscal years beginning after December 15, 2018, and is to be applied retrospectively. The Corporation adopted ASU 2016-18 effective January 1, 2019. Adoption of ASU 2016-18 did not have a material impact on the Corporation’s Consolidated Financial Statements. Fair value measurements In August 2018, the FASB issued ASU 2018-13, Changes to Disclosure Requirements for Fair Value Measurements , which improves the effectiveness of disclosure requirements for recurring and nonrecurring fair value measurements. The standard removes, modifies, and adds certain disclosure requirements, and is effective for all entities in fiscal years beginning after December 15, 2019. This standard became effective for the Corporation on January 1, 2020, and did not have a material impact on the Corporation’s disclosures. Accounting pronouncements effective in future periods Credit losses In June 2016, the FASB issued ASU 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments , which was subsequently modified by several ASUs issued in 2018 and 2019. This standard introduces a new current expected credit loss (CECL) model for measuring expected credit losses for certain types of financial instruments measured at amortized cost and replaces the incurred loss model. The CECL model requires an entity to recognize an allowance for credit losses for the difference between the amortized cost basis of a financial instrument and the amount the entity expects to collect over the instrument’s contractual life after consideration of historical experience, current conditions, and reasonable and supportable forecasts. This standard also introduces targeted changes to the available-for-sale debt securities impairment model. It eliminates the concept of other-than-temporary impairment and requires an entity to determine whether any impairment is the result of a credit loss or other factors. ASU 2016-13 is effective for nonpublic entities in fiscal years beginning after December 15, 2022. Early adoption is permitted. The Corporation has evaluated the impact of ASU 2016-13 on the Consolidated Financial Statements and determined the impact to be immaterial. Goodwill and other intangible assets In January 2017, the FASB issued ASU 2017-04, Intangibles – Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment. This update removes Step 2 of the goodwill impairment test under current guidance, which requires a hypothetical purchase price allocation. The new guidance requires an impairment charge to be recognized for the amount by which the carrying amount exceeds the reporting unit’s fair value. Upon adoption, the guidance is to be applied prospectively. ASU 2017-04 is effective for nonpublic entities in fiscal years beginning after December 15, 2021, with early adoption permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. The Corporation is currently evaluating the impact of the adoption of ASU 2017-04 on the Consolidated Financial Statements. Cloud computing arrangements In August 2018, the FASB issued ASU 2018-15, Intangibles – Goodwill and Other (Topic 350) – Internal Use Software: Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract. This update changes the accounting guidance for cloud computing arrangements. If a cloud computing arrangement includes a license to internal-use software, then the software license is accounted for by the customer by recognizing an intangible asset for the software license and, to the extent that the payments attributable to the software license are made over time, recognizing a corresponding liability. If a cloud computing arrangement does not include a software license, the entity should account for the arrangement as a service contract and should expense any fees associated with the hosting element (service) of the arrangement as incurred. ASU 2018-15 is effective for nonpublic entities for fiscal years beginning after December 15, 2020, with early adoption permitted. The Corporation is currently evaluating the impact of the adoption of ASU 2018-15 on the Consolidated Financial Statements. Income taxes In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes. The amendments in ASU 2019-12 remove certain exceptions to the general principles in ASC Topic 740. The amendments also clarify and amend existing guidance to improve consistent application. The amendments are effective for nonpublic entities in fiscal years beginning after December 15, 2021, with early adoption permitted. The transition method (retrospective, modified retrospective, or prospective basis) related to the amendments depends on the applicable guidance, and all amendments for which there is no transition guidance specified are to be applied on a prospective basis. The Corporation is currently evaluating the impact of the adoption of ASU 2019-12 on the Consolidated Financial Statements. Accounting for convertible instruments and contracts in an entity’s own equity In August 2020, the FASB issued ASU 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40). The amendments in ASU 2020-06 simplify the accounting for convertible instruments by removing certain separation models for convertible instruments. Under the amendments in ASU 2020-06, the embedded conversion features no longer are separated from the host contract for convertible instruments with conversion features that are not required to be accounted for as derivatives, or that do not result in substantial premiums accounted for as paid-in capital. Consequently, a convertible debt instrument will be accounted for as a single liability measured at its amortized cost and a convertible preferred stock will be accounted for as a single equity instrument measured at its historical cost, as long as no other features require bifurcation and recognition as derivatives. ASU 2020-06 is effective for nonpublic entities for fiscal years beginning after December 15, 2023. Early adoption is permitted, but no earlier than fiscal years beginning after December 15, 2020. The Corporation is currently evaluating the impact of the adoption of ASU 2020-06 on the Consolidated Financial Statements. |
Reverse capitalization (Tables)
Reverse capitalization (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Reverse Capitalization [Abstract] | |
Schedule of Reverse Capitalization | Pursuant to U.S. GAAP, the Corporation retroactively applied the reverse capitalization to our equity structure for the years ended December 31, 2020 and 2019, as summarized below and reflected in the Consolidated Balance Sheets, Consolidated Statements of Operations and Comprehensive Loss, and Consolidated Statements of Changes in Convertible Preferred Stock and Stockholders’ Deficit. Unless otherwise indicated, all of the Corporation’s common stock as well as previously issued stock options presented in the accompanying retroactively revised Consolidated Statements of Changes in Convertible Preferred Stock and Stockholders’ Deficit or in the related notes are presented on an as- or as if-converted basis, converted at the ratio of approximately 2.0681 and presented as shares or awards of our common stock: Retroactive application of reverse capitalization to Consolidated Balance Sheets Date Description As previously reported 1/7/21 conversion ratio Reverse capitalized shares 12/31/2019 Convertible preferred shares authorized 75,136,086 2.0681 155,387,025 12/31/2019 Convertible preferred shares issued and outstanding 67,427,138 2.0681 139,444,346 12/31/2019 Common shares authorized 170,000,000 2.0681 351,572,668 12/31/2019 Common shares issued 42,877,665 2.0681 88,674,206 12/31/2019 Common shares outstanding 42,686,624 2.0681 88,279,119 12/31/2020 Convertible preferred shares authorized 75,136,086 2.0681 155,387,025 12/31/2020 Convertible preferred shares issued and outstanding 67,427,138 2.0681 139,444,346 12/31/2020 Common shares authorized 170,000,000 2.0681 351,572,668 12/31/2020 Common shares issued 43,505,291 2.0681 89,972,184 12/31/2020 Common shares outstanding 43,134,938 2.0681 89,206,266 The following table summarizes the weighted-average outstanding shares, basic and diluted for the years ended December 31, 2020 and 2019 after factoring all retroactive application of capitalization. Retroactive application of reverse capitalization to Consolidated Statements of Operations and Comprehensive Loss Date Description As previously reported 1/7/21 conversion ratio Reverse capitalized amounts 12/31/2019 Net loss per share attributable to common shareholders - basic and diluted $ (8.56) 2.0681 $ (4.14) 12/31/2019 Basic and diluted weighted average number of common shares and common shares equivalents outstanding 42,469,175 2.0681 87,829,419 12/31/2020 Net loss per share attributable to common shareholders - basic and diluted $ (3.18) 2.0681 $ (1.54) 12/31/2020 Basic and diluted weighted average number of common shares and common shares equivalents outstanding 42,886,067 2.0681 88,691,582 Retroactive application of reverse capitalization to Consolidated Statements of Changes in Convertible Preferred Stock and Stockholders’ Deficit Date Description As previously reported 1/7/21 conversion ratio Reverse capitalized amounts 12/31/2018 Convertible preferred stock - shares 67,427,138 2.0681 139,444,346 12/31/2018 Common stock - shares 42,243,445 2.0681 87,362,592 12/31/2018 Common stock - amount $ 4 2.0681 $ 9 |
Investment securities (Tables)
Investment securities (Tables) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2021 | Dec. 31, 2020 | |
Investments, Debt and Equity Securities [Abstract] | ||
Schedule Of Investment Securities Reconciliation | The following tables present amortized cost and fair values of investments as of September 30, 2021, and December 31, 2020, respectively: September 30, 2021 Amortized cost Accumulated unrealized gains Accumulated unrealized losses Fair value (in thousands) Investment securities, held-to-maturity U.S. government and government agencies and authorities $ 695 $ 42 $ (10) $ 727 Investment securities, available-for-sale U.S. government and government agencies and authorities 167,935 37 (647) 167,325 Total investment securities $ 168,630 $ 79 $ (657) $ 168,052 December 31, 2020 Amortized cost Accumulated unrealized gains Accumulated unrealized losses Fair value (in thousands) Investment securities, held-to-maturity U.S. government and government agencies and authorities $ 694 $ 43 $ — $ 737 Investment securities, available-for-sale U.S. government and government agencies and authorities 53,953 51 (41) 53,963 Total investment securities $ 54,647 $ 94 $ (41) $ 54,700 | The following tables present cost or amortized cost and fair values of investments as of December 31, 2020 and 2019, respectively: December 31, 2020 Amortized Gross Gross Fair (in thousands) Investment securities, held-to-maturity: U.S. government and government agencies and authorities $ 694 $ 43 $ — $ 737 Investment securities, available-for-sale: U.S. government and government agencies and authorities 53,953 51 (41) 53,963 Total investment securities $ 54,647 $ 94 $ (41) $ 54,700 December 31, 2019 Amortized Gross Gross Fair (in thousands) Investment securities, held-to-maturity: U.S. government and government agencies and authorities $ 663 $ 22 $ — $ 685 Investment securities, available-for-sale: U.S. government and government agencies and authorities 56,382 46 — 56,428 Total investment securities $ 57,045 $ 68 $ — $ 57,113 |
Schedule of Amortized Cost and Fair Value of Debt Securities | The following table presents the amortized cost and fair value of debt securities as of September 30, 2021, by contractual maturity: September 30, 2021 Held-to-maturity Available-for-sale Amortized cost Fair value Amortized cost Fair value (in thousands) Due within one year $ 305 $ 308 $ 21,139 $ 21,142 Due after one year through five years 15 16 141,835 141,352 Due after five years through ten years 265 256 4,961 4,831 Due after ten years 110 147 — — Total $ 695 $ 727 $ 167,935 $ 167,325 | The following tables present the amortized cost and fair value of debt securities as of December 31, 2020, by contractual maturity: December 31, 2020 Held-to-maturity Available-for-sale Amortized Fair Amortized Fair (in thousands) Due within one year $ 265 $ 266 $ — $ — Due after one year through five years 319 328 43,382 43,431 Due after five years through ten years — — 10,571 10,532 Due after ten years 110 143 — — Total $ 694 $ 737 $ 53,953 $ 53,963 |
Schedule of Net Investment Income | For the three and nine months ended September 30, 2021 and 2020, respectively, net investment income, which is included within other income in the Condensed Consolidated Statements of Operations and Comprehensive Loss, was derived from the following sources: Three Months Ended Nine Months Ended 2021 2020 2021 2020 (in thousands) Cash and cash equivalents $ — $ 1 $ — $ 108 Short-term investments 62 519 139 1,141 Investment securities 117 303 201 977 Investment income, net $ 179 $ 823 $ 340 $ 2,226 | For the years ended December 31, 2020 and 2019, respectively, net investment income was derived from the following sources: December 31, 2020 2019 (in thousands) Cash and cash equivalents $ 108 $ 1,249 Short-term investments 1,722 2,904 Investment securities 1,146 386 Net investment income $ 2,976 $ 4,539 |
Proceeds from Sales and Maturities of Investment Securities | Proceeds from sales and maturities of investment securities and related gross realized gains (losses) included within net investment income were as follows for the years ended December 31, 2020 and 2019, respectively: December 31, 2020 2019 (in thousands) Proceeds from sales of investment securities $ 248,664 $ 269,205 Proceeds from maturities of investment securities 63,751 55,635 Gross realized gains 1,117 114 Gross realized losses (3) (3) Net realized gains (losses) $ 1,114 $ 111 |
Fair value measurements (Tables
Fair value measurements (Tables) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2021 | Dec. 31, 2020 | |
Fair Value Disclosures [Abstract] | ||
Summary of Fair Value Measurements for Items | The following table presents a summary of fair value measurements for financial instruments as of September 30, 2021, and December 31, 2020, respectively: September 30, 2021 Level 1 Level 2 Level 3 Total fair (in thousands) U.S. government and government agencies $ — $ 167,325 $ — $ 167,325 Total assets at fair value $ — $ 167,325 $ — $ 167,325 December 31, 2020 Level 1 Level 2 Level 3 Total fair (in thousands) U.S. government and government agencies $ — $ 53,963 $ — $ 53,963 Total assets at fair value $ — $ 53,963 $ — $ 53,963 Derivative liabilities $ — $ — $ 44,810 $ 44,810 Warrants payable — — 97,782 97,782 Total liabilities at fair value $ — $ — $ 142,592 $ 142,592 | The following table presents a summary of fair value measurements for items that are measured at fair value on a recurring basis as of December 31,2020 and 2019, respectively: December 31, 2020 Level 1 Level 2 Level 3 Total fair value (in thousands) U.S. government and government agencies $ — $ 53,963 $ — $ 53,963 Total assets at fair value $ — $ 53,963 $ — $ 53,963 Derivative liabilities — — 44,810 44,810 Warrants payable — — 97,782 97,782 Total liabilities at fair value $ — $ — $ 142,592 $ 142,592 December 31, 2019 Level 1 Level 2 Level 3 Total fair value (in thousands) U.S. government and government agencies $ — $ 56,428 $ — $ 56,428 Total assets at fair value $ — $ 56,428 $ — $ 56,428 Derivative liabilities — — 138,561 138,561 Warrants payable — — 17,672 17,672 Total liabilities at fair value $ — $ — $ 156,233 $ 156,233 |
Schedule of significant unobservable inputs used in Black-Scholes model to measure warrants payable | The significant unobservable inputs used in the Black-Scholes model to measure the warrants payable that are categorized within Level 3 of the fair value hierarchy, as of the year ended December 31, 2020, are as follows: December 31, 2020 Preferred stock purchase warrants Common stock purchase warrants Beginning stock price N/A $ 30.14 Strike price N/A 1.04 Expected volatility N/A 56.0 % Expected term N/A 0.02 years Risk-free interest rate N/A 0.09 % Discount factor N/A 13.0 | The significant unobservable inputs used in the Black-Scholes model to measure the convertible securities and derivative liabilities as of December 31, 2019, are as follows (the stock price and strike price are presented in thousands): December 31, 2019 Convertible securities Derivative liabilities Beginning stock price (total value) $305,132 - $357,802 $305,132 - $357,802 Strike price (total value) $462,012 - $531,315 $462,012 - $965,184 Expected volatility 45% - 49% 45% - 49% Expected term 2-3 years 2-3 years Risk-free interest rate 1.58% -1.62% 1.58% - 1.62% Discount factor 15 % 15 % The significant unobservable inputs used in the Black-Scholes model to measure the warrants payable that are categorized within Level 3 of the fair value hierarchy, as of the years ended December 31, 2020 and 2019, respectively, are as follows: December 31, 2020 Preferred stock purchase warrants Common stock purchase warrants Beginning stock price N/A $ 30.14 Strike price N/A 1.04 Expected volatility N/A 56.0 % Expected term N/A 0.02 years Risk-free interest rate N/A 0.09 % Discount factor N/A 13 % December 31, 2019 Preferred stock purchase warrants Common stock purchase warrants Beginning stock price $ 10.27 $ 7.19 Strike price 17.27 1.04 Expected volatility 45% - 49% 81.1% - 84.6% Expected term 2 -3 years 2-3 years Risk-free interest rate 1.58% - 1.62% 1.58% - 1.62% Discount factor 15 % 15 % |
Schedule of changes in balances of level 3 financial liabilities | The changes in balances of Level 3 financial liabilities during the three months ended September 30, 2020, and the nine months ended September 30, 2021 and 2020, respectively, are as follows: Convertible securities Derivative liabilities Warrants payable Total (in thousands) Balance, June 30, 2020 $ 285,166 $ 119,167 $ 29,424 $ 433,757 Issuances — — — — Settlements — — — — Transfers in — — — — Transfers out — — — — Total realized losses (gains) 95,477 (68,081) 19,978 47,374 Balance, September 30, 2020 $ 380,643 $ 51,086 $ 49,402 $ 481,131 Convertible securities Derivative liabilities Warrants payable Total (in thousands) Balance, December 31, 2020 $ 949,553 $ 44,810 $ 97,782 $ 1,092,145 Issuances — — — — Settlements (949,553) (44,810) (97,782) (1,092,145) Transfers in — — — — Transfers out — — — — Total realized losses (gains) — — — — Balance, September 30, 2021 $ — $ — $ — $ — Convertible securities Derivative liabilities Warrants payable Total (in thousands) Balance, December 31, 2019 $ 251,885 $ 138,561 $ 17,672 $ 408,118 Issuances — — — — Settlements — — — — Transfers in — — — — Transfers out — — — — Total realized losses (gains) 128,758 (87,475) 31,730 73,013 Balance, September 30, 2020 $ 380,643 $ 51,086 $ 49,402 $ 481,131 | The changes in balances of Level 3 financial liabilities during 2020 and 2019, respectively, were as follows: December 31, 2020 Convertible securities Derivative liabilities Warrants payable Total (in thousands) Beginning balance $ 251,885 $ 138,561 $ 17,672 $ 408,118 Issuances — — — — Settlements — — — — Transfers in — — — — Transfers out — — — — Total recognized losses (gains) 697,668 (93,751) 80,110 684,027 Ending balance $ 949,553 $ 44,810 $ 97,782 $ 1,092,145 December 31, 2019 Convertible securities Derivative liabilities Warrants payable Total (in thousands) Beginning balance $ — $ — $ 14,836 $ 14,836 Issuances 237,362 — — 237,362 Settlements — — — — Transfers in — — — — Transfers out — — — — Total recognized losses (gains) 14,523 138,561 2,836 155,920 Ending balance $ 251,885 $ 138,561 $ 17,672 $ 408,118 |
Property and equipment, net (Ta
Property and equipment, net (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Property, Plant and Equipment [Abstract] | |
Summary of Property and Equipment, Net | Property and equipment, net consists of the following: As of December 31, 2020 2019 (in thousands) Capitalized software $ 693 $ — Leasehold improvements 3,088 3,088 Office furniture and fixtures 29 29 Equipment 104 104 Property and equipment, gross 3,914 3,221 Less: accumulated depreciation and amortization (1,836) (1,281) Property and equipment, net $ 2,078 $ 1,940 |
Unpaid claims (Tables)
Unpaid claims (Tables) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2021 | Dec. 31, 2020 | |
Liability for Unpaid Claims and Claims Adjustment Expense, Activity in Liability [Abstract] | ||
Schedule of Activity in the Liability for Unpaid Claims and Claims Adjustment Expense | Activity in the liability for unpaid claims, including claims adjustment expenses, for the nine months ended September 30, 2021 and 2020, is summarized as follows: Nine Months Ended September 30, 2021 2020 (in thousands) Gross and net balance, beginning of period $ 103,976 $ 77,886 Incurred related to: Current year 1,092,280 425,941 Prior years 17,095 (15,401) Total incurred 1,109,375 410,540 Paid related to: Current year 963,779 339,252 Prior years 109,362 55,559 Total paid 1,073,141 394,811 Gross and net balance, end of period $ 140,210 $ 93,615 | Activity in the liability for unpaid claims, including claims adjustment expenses, is summarized as follows: Year ended December 31, 2020 2019 (in thousands) Gross balance , beginning of year $ 77,886 $ 54,004 Less: reinsurance recoverable, beginning of year — (12,344) Net balance , beginning of year 77,886 41,660 Incurred related to: Current year 604,183 453,423 Prior years (13,715) (2,778) Total incurred 590,468 450,645 Paid related to: Current year 501,339 376,677 Prior years 63,039 37,742 Total paid 564,378 414,419 Net balance , end of year 103,976 77,886 Plus: reinsurance recoverable, end of year — — Gross balance , end of year $ 103,976 $ 77,886 |
Schedule of Claims Development and Claim Frequency | The following is information about incurred and paid claims development for medical claims, as well as cumulative claim frequency and the total of incurred but not reported liabilities as of December 31, 2020, respectively. Cumulative incurred claims for the years ended December 31, Incurred year 2018* 2019* 2020 Total Number of reported claims (in thousands) (in thousands, except for number of reported claims) 2018 and prior $ 552,456 $ 549,678 $ 549,649 $ 2 1,737,684 2019 412,695 399,009 1,130 1,188,472 2020 604,183 102,844 1,433,049 Total $ 552,456 $ 962,373 $ 1,552,841 $ 103,976 4,359,205 Cumulative net paid claims through December 31, Paid year 2018* 2019* 2020 (in thousands) Incurred year 2018 and prior $ 511,459 $ 550,974 $ 549,647 2019 343,903 397,879 2020 501,339 Total $ 511,459 $ 894,877 $ 1,448,865 __________________ * Unaudited supplemental information | |
Reconciliation of Incurred and Paid Claims Development | The reconciliation of net incurred and paid claims development tables to unpaid claims and claims adjustment expenses on the Consolidated Balance Sheets is as follows: December 31, 2020 (in thousands) Cumulative incurred claims, net $ 1,552,841 Less: cumulative paid claims, net 1,448,865 Net unpaid claims, including claims adjustment expenses $ 103,976 |
Reinsurance (Tables)
Reinsurance (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Insurance [Abstract] | |
Effects of Reinsurance | The effects of the reinsurance agreements on the accompanying Consolidated Financial Statements for the years ended December 31, 2020 and 2019, respectively, are as follows: December 31, 2020 2019 (in thousands) Premiums earned, gross $ 666,297 $ 457,758 Premiums earned, ceded (599) (832) Net premiums earned $ 665,698 $ 456,926 December 31, 2020 2019 (in thousands) Claims incurred, gross $ 590,951 $ 452,261 Claims incurred, ceded (483) (1,616) Net claims incurred and claims adjustment expense $ 590,468 $ 450,645 Reinsurance recoverable and reinsurance premium payable as of December 31, 2020 and 2019, respectively, were comprised of the following: December 31, 2020 2019 (in thousands) Reinsurance recoverable on paid claims $ — $ 481 Reinsurance recoverable on unpaid claims — — Reinsurance premium payable — — Reinsurance recoverable, net $ — $ 481 |
Notes and securities payable (T
Notes and securities payable (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Debt Disclosure [Abstract] | |
Schedule of Maturities of Long-term Debt | The below table summarizes maturities of the Corporation’s securities payable over the next five years as of December 31, 2020: Year ended December 31, (in thousands) 2021 $ 20,939 2022 9,986 2023 393,827 2024 — 2025 — Total $ 424,752 |
Leases (Tables)
Leases (Tables) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2021 | Dec. 31, 2020 | |
Leases [Abstract] | ||
Summary of Lease Costs Recognized under ASC 842 and Other Information Pertaining to Operating Leases | The following table contains a summary of the lease costs recognized under ASC 842 and other information pertaining to the Corporation’s operating leases for the three and nine months ended September 30, 2021: Three Months Ended September 30, 2021 (in thousands) Operating lease cost $ 1,126 Variable lease cost 123 Short-term lease cost 15 Sublease income (650) Total lease cost $ 614 Nine Months Ended September 30, 2021 (in thousands) Operating lease cost $ 3,351 Variable lease cost 391 Short-term lease cost 45 Sublease income (2,077) Total lease cost $ 1,710 Other information Cash paid for amounts included in the measurement of lease liabilities $ 3,894 Weighted-average remaining lease term 4.4 years Weighted-average discount rate 10.26 % | The following table contains a summary of the lease costs recognized under ASC 842 and other information pertaining to the Corporation’s operating leases for the years ended December 31, 2020 and 2019: Year ended December 31, 2020 (in thousands) Operating lease cost $ 4,533 Variable lease cost 632 Short-term lease cost 20 Sublease income (3,098) Total lease cost $ 2,087 Other information Cash paid for amounts included in the measurement of lease liabilities $ 4,979 Weighted-average remaining lease term (in years) 4.4 Weighted-average discount rate 10.17 % Year ended December 31, 2019 (in thousands) Operating lease cost $ 4,552 Variable lease cost 654 Short-term lease cost 58 Sublease income (989) Total lease cost $ 4,275 Other information Cash paid for amounts included in the measurement of lease liabilities $ 4,804 Weighted-average remaining lease term (in years) 4.8 Weighted-average discount rate 10.05 % |
Summary of Maturities of Operating Lease Liabilities | Pursuant to the terms of the Corporation’s non-cancelable lease agreements in effect at December 31, 2020, the following table summarizes the Corporation’s maturities of lease liabilities as of September 30, 2021: (in thousands) 2021 $ 1,321 2022 3,001 2023 1,493 2024 1,157 2025 1,149 Thereafter 2,639 Total lease payments 10,760 Less: imputed interest (2,213) Total $ 8,547 | Pursuant to the terms of the Corporation’s non-cancelable lease agreements in effect at December 31, 2020, the following table summarizes the Corporation’s maturities of lease liabilities as of December 31, 2020: Year ended December 31, 2020 (in thousands) 2021 $ 5,017 2022 2,747 2023 1,408 2024 1,089 2025 1,121 Thereafter 2,649 Total lease payments $ 14,031 Less: imputed interest (2,887) Total $ 11,144 |
Preferred stock (Tables)
Preferred stock (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Temporary Equity Disclosure [Abstract] | |
Schedule of Preferred Stock | As of each balance sheet date, preferred stock consisted of the following ($ in millions, except for share amounts): As of December 31, 2020 and 2019, after recapitalization Preferred Stock Authorized (1) Preferred Stock Issued and Outstanding (1) Carrying Value Liquidation Common Stock Issuable Upon Conversion (1) Series A Preferred stock 10,907,993 10,907,993 $ 5.5 $ 5.5 10,907,993 Series A-1 Preferred stock 14,888,608 14,888,608 7.4 30.0 14,888,608 Series B Preferred stock 21,381,446 21,381,446 35.0 35.0 21,381,446 Series C Preferred stock 39,431,582 39,431,582 160.2 160.2 39,431,582 Series D Preferred stock 68,777,396 52,834,717 239.6 239.6 52,834,717 155,387,025 139,444,346 447.7 470.3 139,444,346 _____________________ (1) Amounts in the above table have been adjusted to reflect the exchange of Legacy Clover’s common stock at an exchange ratio of approximately 2.0681 in January 2021 as a result of the application of reverse capitalization. See Note 3 (Reverse Capitalization) for details. |
Employee benefit plans (Tables)
Employee benefit plans (Tables) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2021 | Dec. 31, 2020 | |
Share-based Payment Arrangement [Abstract] | ||
Schedule of Assumptions to Estimate Fair Value of Stock Options on Weighted Average Basis | The assumptions that the Corporation used in the Black-Scholes option-pricing model to determine the grant-date fair value of stock options granted for the nine months ended September 30, 2021 and 2020, respectively, were as follows: Nine Months Ended September 30, 2021 2020 Weighted-average risk-free interest rate 1.06 % 0.84 % Expected term (in years) 6.06 4.66 Expected volatility 37.74 % 34.60 % Expected dividend yield — — | The assumptions that the Corporation used in the Black-Scholes option-pricing model to determine the grant-date fair value of stock options granted for the years ended December 31, 2020 and 2019, respectively, were as follows: Year ended December 31, 2020 2019 Weighted-average risk-free interest rate 0.84 % 1.95 % Expected term (in years) 4.68 6.29 Expected volatility 34.66 % 28.37 % Expected dividend yield 0.00 0.00 |
Summary of Stock Option Activity | A summary of option activity under the 2020 Plan during the nine months ended September 30, 2021 is as follows: Number of options Weighted-average exercise price Outstanding, January 1, 2021 — $ — Granted during 2021 1,937,968 8.88 Exercised — — Forfeited (154,982) 8.87 Outstanding, September 30, 2021 1,782,986 $ 8.88 A summary of option activity under the 2014 Plan during the nine months ended September 30, 2021 is as follows: Number of options Weighted-average exercise price Outstanding, January 1, 2021 36,513,193 $ 2.26 Granted during 2021 — — Exercised (3,843,472) 1.43 Forfeited (974,874) 2.78 Outstanding, September 30, 2021 31,694,847 $ 2.29 | A summary of option activity under the Plan, after reverse capitalization, during the years ended December 31, 2020 and 2019, respectively, is as follows: Number of options (1) Weighted-average exercise price (1) Outstanding, January 1, 2019 27,046,177 $ 1.31 Granted during 2019 8,828,538 1.99 Exercised (916,527) 0.74 Forfeited (6,768,713) 1.57 Outstanding, December 31, 2019 28,189,475 1.48 Granted during 2020 14,386,426 3.59 Exercised (1,297,977) 1.53 Forfeited (4,720,165) 1.88 Outstanding, December 31, 2020 36,557,759 $ 2.25 __________________ (1) Amounts in the above table have been adjusted to reflect the exchange of Legacy Clover’s common stock at an exchange ratio of approximately 2.0681 in January 2021 as a result of the application of reverse capitalization. See Note 3 (Reverse Capitalization) for details. |
Summary of Warrant Activity | A summary of activity relating to the warrants of the service providers during the nine months ended September 30, 2021 and 2020, respectively, is as follows: Number of warrants Weighted-average exercise price Outstanding, December 31, 2019 261,681 $ 3.00 Granted during 2020 — — Exercised — — Forfeited — — Outstanding, September 30, 2020 261,681 $ 3.00 Outstanding, December 31, 2020 261,681 $ 3.00 Granted during 2021 — — Exercised (261,681) 3.00 Forfeited — — Outstanding, September 30, 2021 — $ — | A summary of warrant activity during the years ended December 31, 2020 and 2019, respectively, is as follows: Number of warrants Weighted-average exercise price Outstanding, January 1, 2019 261,681 $ 3.00 Granted during 2019 — Exercised — Forfeited — Outstanding, December 31, 2019 261,681 3.00 Granted during 2020 — Exercised — Forfeited — Outstanding, December 31, 2020 261,681 $ 3.00 |
Income taxes (Tables)
Income taxes (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | |
Schedule of Components of Income Tax | The provision for income taxes consisted of the following for the years ended December 31, 2020 and 2019, respectively: Year ended December 31, 2020 2019 (in thousands) Current provision $ (2) $ (2) Deferred expense 2 2 Provision for income taxes $ — $ — |
Schedule of Effective Income Tax Rate Reconciliation | The provision for income taxes was different from the amount computed using the federal statutory rate of 21% for the years ended December 31, 2020 and 2019, respectively, due to the following: Year ended December 31, 2020 2019 (in thousands) Income tax provision at federal statutory rate (21%) $ (28,642) $ (76,385) Interest on convertible securities 6,537 3,505 Interest on convertible securities discount 4,423 3,257 Debt issuance cost related to convertible securities — 76 Derivative liability related to convertible securities (19,688) 29,098 Warrant expense 16,823 596 Meals and entertainment 13 210 Health insurance industry fee 2,715 — Other, net (766) — Valuation allowance 18,585 39,643 Provision for income taxes $ — $ — |
Schedule of Deferred Tax Assets and Liabilities | Principal components of net deferred tax balances at December 31, 2020 and 2019, respectively, were as follows: Year ended December 31, 2020 2019 (in thousands) Deferred income tax assets: Net operating loss carryforward (NOL) $ 152,423 $ 133,564 Unpaid claim reserve discounting 335 269 Start-up costs amortization 408 464 Charitable contributions carryforward 154 146 Bonus accrual 52 52 Stock based compensation 2,568 1,554 Convertible securities issuance costs 1 1 Tax credits (AMT) — 2 Prepaid and accrued expenses 568 683 Property and equipment 1,318 1,779 Capital loss carryforward — 49 Operating lease liability 2,340 3,109 Premium deficiency reserve — 3,597 Acquisition costs amortization 60 66 Interest expense carryforward 2,318 1,675 Bad debt reserves 2,363 — Total deferred income tax assets 164,908 147,010 Less: valuation allowance (163,204) (144,619) Total deferred income tax assets, net of valuation allowance 1,704 2,391 Deferred income tax liabilities: TCJA Transition Adj. IRC 846 (49) (58) Market discount — (1) Operating lease right of use asset (1,655) (2,330) Total deferred income tax liabilities (1,704) (2,389) Net deferred income tax asset $ — $ 2 |
Net loss per share (Tables)
Net loss per share (Tables) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2021 | Dec. 31, 2020 | |
Earnings Per Share [Abstract] | ||
Schedule of Basic and Diluted Loss Per Share | Basic and diluted net (loss) income per share attributable to common stockholders was calculated as follows: Three Months Ended September 30, 2021 2020 (in thousands, except per share data) Net (loss) income $ (34,527) $ 12,758 Net (loss) income attributable to common stockholders (34,527) 4,966 Basic weighted average number of common shares and common share equivalents outstanding (1) 414,572,706 88,863,244 Diluted weighted average number of common shares and common share equivalents outstanding (1) 414,572,706 248,133,335 Net (loss) income per share attributable to common stockholders—basic $ (0.08) $ 0.06 Net (loss) income per share attributable to common stockholders—diluted $ (0.08) $ 0.02 Nine Months Ended September 30, 2021 2020 (in thousands, except per share data) Net loss $ (400,555) $ (10,001) Net loss attributable to common stockholders (400,555) (10,001) Basic and diluted weighted average number of common shares and common share equivalents outstanding (1) 410,417,493 88,616,116 Net loss per share attributable to common stockholders—basic and diluted $ (0.98) $ (0.11) __________________ (1) Prior period results have been adjusted to reflect the exchange of Legacy Clover's common stock for Clover Class B Common Stock at an exchange ratio of approximately 2.0681 in January 2021 as a result of the Business Combination. See Note 3 (Business Combination) for details. | Basic and diluted net loss per share attributable to common stockholders, after reverse capitalization, was calculated as follows (1) : Year ended December 31, 2020 2019 Net loss $ (136,392) $ (363,737) Net loss attributable to common stockholders (136,392) (363,737) Weighted average common shares outstanding—basic and diluted 88,691,582 87,829,419 Net loss per share attributable to common stockholders— basic and diluted $ (1.54) $ (4.14) __________________ (1) Amounts in the above table have been adjusted to reflect the exchange of Legacy Clover’s common stock at an exchange ratio of approximately 2.0681 in January 2021 as a result of the application of reverse capitalization. See Note 3, “Reverse Capitalization,” for details. |
Schedule of Antidilutive Securities Excluded from Diluted Net Loss Per Share | The Corporation excluded the following potential common shares, presented based on amounts outstanding at each period end, from the computation of diluted net loss per share attributable to common stockholders for the periods indicated because including them would have had an anti-dilutive effect: Three Months Ended September 30, 2021 2020 Options to purchase common stock (1) 33,477,833 5,183,834 RSUs 21,106,720 — Warrants to purchase common stock (as converted to common stock) (1) — 4,342,956 Warrants to purchase convertible preferred stock (as converted to common stock) (1) — 2,618,770 Total anti-dilutive shares excluded from computation of earnings per share 54,584,553 12,145,560 Nine Months Ended September 30, 2021 2020 Options to purchase common stock (1) 33,477,833 37,296,034 RSUs 21,106,720 — Convertible preferred stock (as converted to common stock) (1) — 139,444,346 Warrants to purchase common stock (as converted to common stock) (1) — 4,884,132 Warrants to purchase convertible preferred stock (as converted to common stock) (1) — 2,618,770 Total anti-dilutive shares excluded from computation of earnings per share 54,584,553 184,243,282 __________________ (1) Prior period results have been adjusted to reflect the exchange of Legacy Clover's common stock for Clover Class B Common Stock at an exchange ratio of approximately 2.0681 in January 2021 as a result of the Business Combination. See Note 3 (Business Combination) for details. | The Corporation excluded the following potential common shares, presented based on amounts outstanding at each period end after reverse capitalization, from the computation of diluted net loss per share attributable to common stockholders for the periods indicated because including them would have had an anti-dilutive effect (1) : Year ended December 31, 2020 2019 Options to purchase common stock 36,557,759 24,344,848 Convertible preferred stock (as converted to common stock) 139,444,346 139,444,346 Warrants to purchase common stock (as converted to common stock) 7,502,902 4,884,132 Warrants to purchase convertible preferred stock (as converted to common stock) — 2,618,770 183,505,007 171,292,096 __________________ (1) Amounts in the above table have been adjusted to reflect the exchange of Legacy Clover’s common stock at an exchange ratio of approximately 2.0681 in January 2021 as a result of the application of reverse capitalization. See Note 3 (Reverse Capitalization) for details. |
Direct Contracting (Tables)
Direct Contracting (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Direct Contracting [Abstract] | |
Schedule of Performance Guarantees | The tables below include the financial statement impacts of the performance guarantee: September 30, 2021 (in thousands) Direct Contracting performance year receivable $ 220,738 Direct Contracting performance year obligation (1) 244,599 __________________ (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 Nine Months Ended (in thousands) Amortization of the Direct Contracting performance year receivable $ (223,309) $ (441,476) Amortization of the Direct Contracting performance year obligation 223,309 441,476 Direct Contracting revenue 222,647 439,020 |
Schedule I - Condensed Financ_2
Schedule I - Condensed Financial Information (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Condensed Financial Information Disclosure [Abstract] | |
Condensed Balance Sheets (Parent Company) | As of December 31, 2020 2019 Assets: Cash and cash equivalents $ 5,432 $ 4,569 Other assets 102 342 Intercompany interest receivable 4,958 3,750 Intercompany note receivable 40,000 40,000 Investments in consolidated subsidiaries 77,212 158,159 Total assets $ 127,704 $ 206,820 Liabilities and stockholders’ deficit Liabilities Accounts payable and accrued expenses $ 13,140 $ 5,471 Accrued salaries and benefits 229 — Intercompany payable 27,251 4,093 Notes payable, net of discount and deferred issuance costs 107,674 76,758 Derivative liabilities 44,810 138,561 Warrants payable 97,782 17,672 Total liabilities 290,886 242,555 Convertible Preferred stock (Series Seed A, A-1, B, C, and D), $0.0001 par value; 155,387,025 shares authorized as of December 31, 2020 and 2019; 139,444,346 shares; after reverse capitalization, shares issued and outstanding as of December 31, 2020 and 2019; aggregate liquidation preference of$470,256 as of December 31, 2020 447,747 447,747 Stockholders’ deficit: Common stock, $0.0001 par value,351,572,668 shares authorized; 89,972,184 and88,674,206 issued; and 89,206,266 and 88,279,119; after reverse capitalization, outstanding as of December 31, 2020 and 2019, respectively 9 9 Additional paid-in capital 411,843 403,041 Accumulated deficit (1,022,781) (886,532) Total stockholders’ deficit (610,929) (483,482) Total liabilities, convertible preferred stock, and stockholders’ deficit $ 127,704 $ 206,820 |
Condensed Statements of Operation (Parent Company) | Years ended December 31, 2020 2019 Revenues: Other income $ 3,685 $ 3,396 Investment income, net — 46 Total revenues 3,685 3,442 Expenses: General and administrative expenses 4,831 79 Other expense — 363 Total expenses 4,831 442 Loss from operations (1,146) 3,000 Change in fair value of warrants expense 80,328 2,909 Interest expense 35,556 23,155 Amortization of notes discount 21,118 15,913 (Gain) loss on derivative (93,751) 138,561 Equity in net losses of consolidated subsidiaries 91,995 186,199 Net loss $ (136,392) $ (363,737) |
Condensed Statements of Cash Flows (Parent Company) | Years ended December 31, 2020 2019 Cash flows from operating activities: Net loss $ (136,392) $ (363,737) Adjustments to reconcile net loss to net cash used in operating activities: Amortization of notes discount 21,084 15,807 Stock-based compensation expense 7,078 3,301 Paid in kind interest 28,334 11,633 Change in fair value of warrants 80,110 2,836 Change in derivative liabilities (93,751) 138,561 Amortization of warrants 218 73 Amortization of debt issuance costs 34 506 Changes in operating assets and liabilities: Other assets 214 (391) Accounts payable and accrued expenses 7,669 5,728 Accrued salaries and benefits 229 (169) Intercompany interest receivable (1,208) (1,200) Intercompany payable 23,158 (23,921) Net cash used in operating activities (63,223) (210,973) Cash flows from investing activities: Investments in consolidated subsidiaries 82,047 (154,469) Net cash provided (used in) by investing activities 82,047 (154,469) Cash flows from financing activities: Proceeds from issuance of convertible securities — 343,410 Deferred financing costs — (363) Payment of notes payable principal (18,752) (9,670) Issuance of common stock, net of early exercise liability 1,748 601 Buyback and subsequent cancellation of common stock (957) — Net cash (used in) provided by financing activities (17,961) 333,978 Net increase (decrease) in cash and cash equivalents 863 (31,464) Cash and cash equivalents, beginning of year 4,569 36,033 Cash and cash equivalents, end of year $ 5,432 $ 4,569 |
Investment Securities (Tables_2
Investment Securities (Tables) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2021 | Dec. 31, 2020 | |
Investments, Debt and Equity Securities [Abstract] | ||
Schedule of Investment Securities Reconciliation | The following tables present amortized cost and fair values of investments as of September 30, 2021, and December 31, 2020, respectively: September 30, 2021 Amortized cost Accumulated unrealized gains Accumulated unrealized losses Fair value (in thousands) Investment securities, held-to-maturity U.S. government and government agencies and authorities $ 695 $ 42 $ (10) $ 727 Investment securities, available-for-sale U.S. government and government agencies and authorities 167,935 37 (647) 167,325 Total investment securities $ 168,630 $ 79 $ (657) $ 168,052 December 31, 2020 Amortized cost Accumulated unrealized gains Accumulated unrealized losses Fair value (in thousands) Investment securities, held-to-maturity U.S. government and government agencies and authorities $ 694 $ 43 $ — $ 737 Investment securities, available-for-sale U.S. government and government agencies and authorities 53,953 51 (41) 53,963 Total investment securities $ 54,647 $ 94 $ (41) $ 54,700 | The following tables present cost or amortized cost and fair values of investments as of December 31, 2020 and 2019, respectively: December 31, 2020 Amortized Gross Gross Fair (in thousands) Investment securities, held-to-maturity: U.S. government and government agencies and authorities $ 694 $ 43 $ — $ 737 Investment securities, available-for-sale: U.S. government and government agencies and authorities 53,953 51 (41) 53,963 Total investment securities $ 54,647 $ 94 $ (41) $ 54,700 December 31, 2019 Amortized Gross Gross Fair (in thousands) Investment securities, held-to-maturity: U.S. government and government agencies and authorities $ 663 $ 22 $ — $ 685 Investment securities, available-for-sale: U.S. government and government agencies and authorities 56,382 46 — 56,428 Total investment securities $ 57,045 $ 68 $ — $ 57,113 |
Schedule of Amortized Cost and Fair Value of Debt Securities | The following table presents the amortized cost and fair value of debt securities as of September 30, 2021, by contractual maturity: September 30, 2021 Held-to-maturity Available-for-sale Amortized cost Fair value Amortized cost Fair value (in thousands) Due within one year $ 305 $ 308 $ 21,139 $ 21,142 Due after one year through five years 15 16 141,835 141,352 Due after five years through ten years 265 256 4,961 4,831 Due after ten years 110 147 — — Total $ 695 $ 727 $ 167,935 $ 167,325 | The following tables present the amortized cost and fair value of debt securities as of December 31, 2020, by contractual maturity: December 31, 2020 Held-to-maturity Available-for-sale Amortized Fair Amortized Fair (in thousands) Due within one year $ 265 $ 266 $ — $ — Due after one year through five years 319 328 43,382 43,431 Due after five years through ten years — — 10,571 10,532 Due after ten years 110 143 — — Total $ 694 $ 737 $ 53,953 $ 53,963 |
Schedule of Net Investment Income | For the three and nine months ended September 30, 2021 and 2020, respectively, net investment income, which is included within other income in the Condensed Consolidated Statements of Operations and Comprehensive Loss, was derived from the following sources: Three Months Ended Nine Months Ended 2021 2020 2021 2020 (in thousands) Cash and cash equivalents $ — $ 1 $ — $ 108 Short-term investments 62 519 139 1,141 Investment securities 117 303 201 977 Investment income, net $ 179 $ 823 $ 340 $ 2,226 | For the years ended December 31, 2020 and 2019, respectively, net investment income was derived from the following sources: December 31, 2020 2019 (in thousands) Cash and cash equivalents $ 108 $ 1,249 Short-term investments 1,722 2,904 Investment securities 1,146 386 Net investment income $ 2,976 $ 4,539 |
Schedule of Gross Unrealized Losses and Fair Value For Fixed Maturities In a Continuous Unrealized Loss Position | Gross unrealized losses and fair values aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position were as follows at September 30, 2021: September 30, 2021 Less than 12 months Greater than 12 months Total Fair value Unrealized loss Fair value Unrealized loss Fair value Unrealized loss (in thousands, except number of positions) U.S. government and government agencies $ — $ — $ 71,620 $ (657) $ 71,620 $ (657) Total $ — $ — $ 71,620 $ (657) $ 71,620 $ (657) Number of positions — 14 14 | |
Schedule of Realized Gain (Loss) on Investment Securities | Proceeds from sales and maturities of investment securities, inclusive of short-term investments, and related gross realized gains (losses) which are included within other income in the Condensed Consolidated Statements of Operations and Comprehensive Loss, were as follows for the three and nine months ended September 30, 2021 and 2020, respectively: Three Months Ended Nine Months Ended 2021 2020 2021 2020 (in thousands) Proceeds from sales of investment securities $ 89,997 $ 71,049 $ 126,862 $ 166,024 Proceeds from maturities of investment securities 50,000 9,600 250,265 56,701 Gross realized gains 7 504 24 540 Gross realized losses — — (77) — Net realized gains (losses) $ 7 $ 504 $ (53) $ 540 |
Fair Value Measurements (Tabl_2
Fair Value Measurements (Tables) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2021 | Dec. 31, 2020 | |
Fair Value Disclosures [Abstract] | ||
Summary of Fair Value Measurements for Items | The following table presents a summary of fair value measurements for financial instruments as of September 30, 2021, and December 31, 2020, respectively: September 30, 2021 Level 1 Level 2 Level 3 Total fair (in thousands) U.S. government and government agencies $ — $ 167,325 $ — $ 167,325 Total assets at fair value $ — $ 167,325 $ — $ 167,325 December 31, 2020 Level 1 Level 2 Level 3 Total fair (in thousands) U.S. government and government agencies $ — $ 53,963 $ — $ 53,963 Total assets at fair value $ — $ 53,963 $ — $ 53,963 Derivative liabilities $ — $ — $ 44,810 $ 44,810 Warrants payable — — 97,782 97,782 Total liabilities at fair value $ — $ — $ 142,592 $ 142,592 | The following table presents a summary of fair value measurements for items that are measured at fair value on a recurring basis as of December 31,2020 and 2019, respectively: December 31, 2020 Level 1 Level 2 Level 3 Total fair value (in thousands) U.S. government and government agencies $ — $ 53,963 $ — $ 53,963 Total assets at fair value $ — $ 53,963 $ — $ 53,963 Derivative liabilities — — 44,810 44,810 Warrants payable — — 97,782 97,782 Total liabilities at fair value $ — $ — $ 142,592 $ 142,592 December 31, 2019 Level 1 Level 2 Level 3 Total fair value (in thousands) U.S. government and government agencies $ — $ 56,428 $ — $ 56,428 Total assets at fair value $ — $ 56,428 $ — $ 56,428 Derivative liabilities — — 138,561 138,561 Warrants payable — — 17,672 17,672 Total liabilities at fair value $ — $ — $ 156,233 $ 156,233 |
Schedule of Significant Unobservable Inputs Used in Black-Scholes Model to Measure Warrants Payable | The significant unobservable inputs used in the Black-Scholes model to measure the warrants payable that are categorized within Level 3 of the fair value hierarchy, as of the year ended December 31, 2020, are as follows: December 31, 2020 Preferred stock purchase warrants Common stock purchase warrants Beginning stock price N/A $ 30.14 Strike price N/A 1.04 Expected volatility N/A 56.0 % Expected term N/A 0.02 years Risk-free interest rate N/A 0.09 % Discount factor N/A 13.0 | The significant unobservable inputs used in the Black-Scholes model to measure the convertible securities and derivative liabilities as of December 31, 2019, are as follows (the stock price and strike price are presented in thousands): December 31, 2019 Convertible securities Derivative liabilities Beginning stock price (total value) $305,132 - $357,802 $305,132 - $357,802 Strike price (total value) $462,012 - $531,315 $462,012 - $965,184 Expected volatility 45% - 49% 45% - 49% Expected term 2-3 years 2-3 years Risk-free interest rate 1.58% -1.62% 1.58% - 1.62% Discount factor 15 % 15 % The significant unobservable inputs used in the Black-Scholes model to measure the warrants payable that are categorized within Level 3 of the fair value hierarchy, as of the years ended December 31, 2020 and 2019, respectively, are as follows: December 31, 2020 Preferred stock purchase warrants Common stock purchase warrants Beginning stock price N/A $ 30.14 Strike price N/A 1.04 Expected volatility N/A 56.0 % Expected term N/A 0.02 years Risk-free interest rate N/A 0.09 % Discount factor N/A 13 % December 31, 2019 Preferred stock purchase warrants Common stock purchase warrants Beginning stock price $ 10.27 $ 7.19 Strike price 17.27 1.04 Expected volatility 45% - 49% 81.1% - 84.6% Expected term 2 -3 years 2-3 years Risk-free interest rate 1.58% - 1.62% 1.58% - 1.62% Discount factor 15 % 15 % |
Schedule of Changes in Balances of Level 3 Financial Liabilities | The changes in balances of Level 3 financial liabilities during the three months ended September 30, 2020, and the nine months ended September 30, 2021 and 2020, respectively, are as follows: Convertible securities Derivative liabilities Warrants payable Total (in thousands) Balance, June 30, 2020 $ 285,166 $ 119,167 $ 29,424 $ 433,757 Issuances — — — — Settlements — — — — Transfers in — — — — Transfers out — — — — Total realized losses (gains) 95,477 (68,081) 19,978 47,374 Balance, September 30, 2020 $ 380,643 $ 51,086 $ 49,402 $ 481,131 Convertible securities Derivative liabilities Warrants payable Total (in thousands) Balance, December 31, 2020 $ 949,553 $ 44,810 $ 97,782 $ 1,092,145 Issuances — — — — Settlements (949,553) (44,810) (97,782) (1,092,145) Transfers in — — — — Transfers out — — — — Total realized losses (gains) — — — — Balance, September 30, 2021 $ — $ — $ — $ — Convertible securities Derivative liabilities Warrants payable Total (in thousands) Balance, December 31, 2019 $ 251,885 $ 138,561 $ 17,672 $ 408,118 Issuances — — — — Settlements — — — — Transfers in — — — — Transfers out — — — — Total realized losses (gains) 128,758 (87,475) 31,730 73,013 Balance, September 30, 2020 $ 380,643 $ 51,086 $ 49,402 $ 481,131 | The changes in balances of Level 3 financial liabilities during 2020 and 2019, respectively, were as follows: December 31, 2020 Convertible securities Derivative liabilities Warrants payable Total (in thousands) Beginning balance $ 251,885 $ 138,561 $ 17,672 $ 408,118 Issuances — — — — Settlements — — — — Transfers in — — — — Transfers out — — — — Total recognized losses (gains) 697,668 (93,751) 80,110 684,027 Ending balance $ 949,553 $ 44,810 $ 97,782 $ 1,092,145 December 31, 2019 Convertible securities Derivative liabilities Warrants payable Total (in thousands) Beginning balance $ — $ — $ 14,836 $ 14,836 Issuances 237,362 — — 237,362 Settlements — — — — Transfers in — — — — Transfers out — — — — Total recognized losses (gains) 14,523 138,561 2,836 155,920 Ending balance $ 251,885 $ 138,561 $ 17,672 $ 408,118 |
Schedule of Changes in Fair Value of Warrants Payable | The following table presents the changes in the fair value of warrants payable: September 30, 2021 Public and Private Placement Warrants (in thousands) Initial measurement, January 7, 2021 $ 147,582 Mark-to-market adjustment (66,214) Warrants exercised (81,283) Warrants redeemed (85) Warrants payable balance, September 30, 2021 $ — |
Unpaid Claims (Tables)_2
Unpaid Claims (Tables) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2021 | Dec. 31, 2020 | |
Liability for Unpaid Claims and Claims Adjustment Expense, Activity in Liability [Abstract] | ||
Schedule of Activity in the Liability for Unpaid Claims and Claims Adjustment Expense | Activity in the liability for unpaid claims, including claims adjustment expenses, for the nine months ended September 30, 2021 and 2020, is summarized as follows: Nine Months Ended September 30, 2021 2020 (in thousands) Gross and net balance, beginning of period $ 103,976 $ 77,886 Incurred related to: Current year 1,092,280 425,941 Prior years 17,095 (15,401) Total incurred 1,109,375 410,540 Paid related to: Current year 963,779 339,252 Prior years 109,362 55,559 Total paid 1,073,141 394,811 Gross and net balance, end of period $ 140,210 $ 93,615 | Activity in the liability for unpaid claims, including claims adjustment expenses, is summarized as follows: Year ended December 31, 2020 2019 (in thousands) Gross balance , beginning of year $ 77,886 $ 54,004 Less: reinsurance recoverable, beginning of year — (12,344) Net balance , beginning of year 77,886 41,660 Incurred related to: Current year 604,183 453,423 Prior years (13,715) (2,778) Total incurred 590,468 450,645 Paid related to: Current year 501,339 376,677 Prior years 63,039 37,742 Total paid 564,378 414,419 Net balance , end of year 103,976 77,886 Plus: reinsurance recoverable, end of year — — Gross balance , end of year $ 103,976 $ 77,886 |
Leases (Tables)_2
Leases (Tables) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2021 | Dec. 31, 2020 | |
Leases [Abstract] | ||
Summary of Lease Costs Recognized under ASC 842 and Other Information Pertaining to Operating Leases | The following table contains a summary of the lease costs recognized under ASC 842 and other information pertaining to the Corporation’s operating leases for the three and nine months ended September 30, 2021: Three Months Ended September 30, 2021 (in thousands) Operating lease cost $ 1,126 Variable lease cost 123 Short-term lease cost 15 Sublease income (650) Total lease cost $ 614 Nine Months Ended September 30, 2021 (in thousands) Operating lease cost $ 3,351 Variable lease cost 391 Short-term lease cost 45 Sublease income (2,077) Total lease cost $ 1,710 Other information Cash paid for amounts included in the measurement of lease liabilities $ 3,894 Weighted-average remaining lease term 4.4 years Weighted-average discount rate 10.26 % | The following table contains a summary of the lease costs recognized under ASC 842 and other information pertaining to the Corporation’s operating leases for the years ended December 31, 2020 and 2019: Year ended December 31, 2020 (in thousands) Operating lease cost $ 4,533 Variable lease cost 632 Short-term lease cost 20 Sublease income (3,098) Total lease cost $ 2,087 Other information Cash paid for amounts included in the measurement of lease liabilities $ 4,979 Weighted-average remaining lease term (in years) 4.4 Weighted-average discount rate 10.17 % Year ended December 31, 2019 (in thousands) Operating lease cost $ 4,552 Variable lease cost 654 Short-term lease cost 58 Sublease income (989) Total lease cost $ 4,275 Other information Cash paid for amounts included in the measurement of lease liabilities $ 4,804 Weighted-average remaining lease term (in years) 4.8 Weighted-average discount rate 10.05 % |
Summary of Maturities of Operating Lease Liabilities | Pursuant to the terms of the Corporation’s non-cancelable lease agreements in effect at December 31, 2020, the following table summarizes the Corporation’s maturities of lease liabilities as of September 30, 2021: (in thousands) 2021 $ 1,321 2022 3,001 2023 1,493 2024 1,157 2025 1,149 Thereafter 2,639 Total lease payments 10,760 Less: imputed interest (2,213) Total $ 8,547 | Pursuant to the terms of the Corporation’s non-cancelable lease agreements in effect at December 31, 2020, the following table summarizes the Corporation’s maturities of lease liabilities as of December 31, 2020: Year ended December 31, 2020 (in thousands) 2021 $ 5,017 2022 2,747 2023 1,408 2024 1,089 2025 1,121 Thereafter 2,649 Total lease payments $ 14,031 Less: imputed interest (2,887) Total $ 11,144 |
Employee Benefit Plans (Table_2
Employee Benefit Plans (Tables) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2021 | Dec. 31, 2020 | |
Share-based Payment Arrangement [Abstract] | ||
Share-Based Payment Arrangement, Activity | The maximum number of shares of the Corporation’s common stock reserved for issuance over the term of the Plans, shares outstanding under the Plans, and shares remaining under the Plans, after giving effect to the Exchange Ratio, as of September 30, 2021, and December 31, 2020, were as follows: September 30, 2021 Shares Authorized Under Plans Shares Outstanding Under Plans Shares Remaining Under Plans 2014 Plan 54,402,264 42,441,719 N/A 2020 Plan 30,641,401 1,782,986 28,858,415 2020 MIP 33,426,983 33,426,983 — December 31, 2020 Shares Authorized Under Plan Shares Outstanding Under Plan Shares Remaining Under Plan 2014 Plan 54,402,264 36,557,759 17,844,505 | |
Summary of Stock-Based Compensation Cost | Compensation cost presented in salaries and benefits in the accompanying Condensed Consolidated Statements of Operations and Comprehensive Loss were as follows: Three Months Ended September 30, 2021 2020 (in thousands) Stock options $ 1,665 $ 1,500 RSUs 17,396 — PRSUs 27,675 — ESPP 67 — Total compensation cost recognized for stock-based compensation plans $ 46,803 $ 1,500 Nine Months Ended September 30, 2021 2020 (in thousands) Stock options $ 6,734 $ 4,949 RSUs 45,725 — PRSUs 80,016 — ESPP 67 — Total compensation cost recognized for stock-based compensation plans $ 132,542 $ 4,949 | |
Schedule of Assumptions to Estimate Fair Value of Stock Options on Weighted Average Basis | The assumptions that the Corporation used in the Black-Scholes option-pricing model to determine the grant-date fair value of stock options granted for the nine months ended September 30, 2021 and 2020, respectively, were as follows: Nine Months Ended September 30, 2021 2020 Weighted-average risk-free interest rate 1.06 % 0.84 % Expected term (in years) 6.06 4.66 Expected volatility 37.74 % 34.60 % Expected dividend yield — — | The assumptions that the Corporation used in the Black-Scholes option-pricing model to determine the grant-date fair value of stock options granted for the years ended December 31, 2020 and 2019, respectively, were as follows: Year ended December 31, 2020 2019 Weighted-average risk-free interest rate 0.84 % 1.95 % Expected term (in years) 4.68 6.29 Expected volatility 34.66 % 28.37 % Expected dividend yield 0.00 0.00 |
Summary of Stock Option Activity | A summary of option activity under the 2020 Plan during the nine months ended September 30, 2021 is as follows: Number of options Weighted-average exercise price Outstanding, January 1, 2021 — $ — Granted during 2021 1,937,968 8.88 Exercised — — Forfeited (154,982) 8.87 Outstanding, September 30, 2021 1,782,986 $ 8.88 A summary of option activity under the 2014 Plan during the nine months ended September 30, 2021 is as follows: Number of options Weighted-average exercise price Outstanding, January 1, 2021 36,513,193 $ 2.26 Granted during 2021 — — Exercised (3,843,472) 1.43 Forfeited (974,874) 2.78 Outstanding, September 30, 2021 31,694,847 $ 2.29 | A summary of option activity under the Plan, after reverse capitalization, during the years ended December 31, 2020 and 2019, respectively, is as follows: Number of options (1) Weighted-average exercise price (1) Outstanding, January 1, 2019 27,046,177 $ 1.31 Granted during 2019 8,828,538 1.99 Exercised (916,527) 0.74 Forfeited (6,768,713) 1.57 Outstanding, December 31, 2019 28,189,475 1.48 Granted during 2020 14,386,426 3.59 Exercised (1,297,977) 1.53 Forfeited (4,720,165) 1.88 Outstanding, December 31, 2020 36,557,759 $ 2.25 __________________ (1) Amounts in the above table have been adjusted to reflect the exchange of Legacy Clover’s common stock at an exchange ratio of approximately 2.0681 in January 2021 as a result of the application of reverse capitalization. See Note 3 (Reverse Capitalization) for details. |
Summary of Total RSU activity | A summary of total RSU activity for the nine months ended September 30, 2021, is presented below: Nine Months Ended September 30, 2021 Granted 21,035,614 Released (131,766) Forfeited (35,935) Outstanding, September 30, 2021 20,867,913 | |
Summary of Weighted Average Grant Date Fair Value of Performance Restricted Stock Units | The grant date fair value of Market PRSUs was determined using a Monte Carlo simulation model that incorporated multiple valuation assumptions, including the probability of achieving the specified market condition and the following assumptions: Nine Months Ended September 30, 2021 Expected volatility (1) 40.70 % Risk-free interest rate (2) 0.50 Dividend yield (3) — _________________ (1) Expected volatility is based on a blend of peer group company historical data adjusted for the Corporation’s leverage. (2) Risk-free interest rate based on U.S. Treasury yields with a term equal to the remaining Performance Period as of the grant date. (3) Dividend yield was assumed to be zero as the Corporation does not anticipate paying dividends. | |
Summary of Total Performance Restricted Stock Units | A summary of total PRSU activity for the nine months ended September 30, 2021, is presented below: Nine Months Ended September 30, 2021 Granted 27,699,171 Non-vested at September 30, 2021 27,699,171 | |
Assumptions Used in ESPP Fair Value Determination | The assumptions that the Corporation used in the Black-Scholes option-pricing model to determine the fair value of the purchase rights under the ESPP for the nine months ended September 30, 2021, were as follows: Nine Months Ended September 30, 2021 Weighted-average risk-free interest rate 0.06 % Expected term (in years) 0.42 Expected volatility 147.42 % | |
Summary of Warrant Activity | A summary of activity relating to the warrants of the service providers during the nine months ended September 30, 2021 and 2020, respectively, is as follows: Number of warrants Weighted-average exercise price Outstanding, December 31, 2019 261,681 $ 3.00 Granted during 2020 — — Exercised — — Forfeited — — Outstanding, September 30, 2020 261,681 $ 3.00 Outstanding, December 31, 2020 261,681 $ 3.00 Granted during 2021 — — Exercised (261,681) 3.00 Forfeited — — Outstanding, September 30, 2021 — $ — | A summary of warrant activity during the years ended December 31, 2020 and 2019, respectively, is as follows: Number of warrants Weighted-average exercise price Outstanding, January 1, 2019 261,681 $ 3.00 Granted during 2019 — Exercised — Forfeited — Outstanding, December 31, 2019 261,681 3.00 Granted during 2020 — Exercised — Forfeited — Outstanding, December 31, 2020 261,681 $ 3.00 |
Net (Loss) Income Per Share (Ta
Net (Loss) Income Per Share (Tables) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2021 | Dec. 31, 2020 | |
Earnings Per Share [Abstract] | ||
Schedule of Basic and Diluted Loss Per Share | Basic and diluted net (loss) income per share attributable to common stockholders was calculated as follows: Three Months Ended September 30, 2021 2020 (in thousands, except per share data) Net (loss) income $ (34,527) $ 12,758 Net (loss) income attributable to common stockholders (34,527) 4,966 Basic weighted average number of common shares and common share equivalents outstanding (1) 414,572,706 88,863,244 Diluted weighted average number of common shares and common share equivalents outstanding (1) 414,572,706 248,133,335 Net (loss) income per share attributable to common stockholders—basic $ (0.08) $ 0.06 Net (loss) income per share attributable to common stockholders—diluted $ (0.08) $ 0.02 Nine Months Ended September 30, 2021 2020 (in thousands, except per share data) Net loss $ (400,555) $ (10,001) Net loss attributable to common stockholders (400,555) (10,001) Basic and diluted weighted average number of common shares and common share equivalents outstanding (1) 410,417,493 88,616,116 Net loss per share attributable to common stockholders—basic and diluted $ (0.98) $ (0.11) __________________ (1) Prior period results have been adjusted to reflect the exchange of Legacy Clover's common stock for Clover Class B Common Stock at an exchange ratio of approximately 2.0681 in January 2021 as a result of the Business Combination. See Note 3 (Business Combination) for details. | Basic and diluted net loss per share attributable to common stockholders, after reverse capitalization, was calculated as follows (1) : Year ended December 31, 2020 2019 Net loss $ (136,392) $ (363,737) Net loss attributable to common stockholders (136,392) (363,737) Weighted average common shares outstanding—basic and diluted 88,691,582 87,829,419 Net loss per share attributable to common stockholders— basic and diluted $ (1.54) $ (4.14) __________________ (1) Amounts in the above table have been adjusted to reflect the exchange of Legacy Clover’s common stock at an exchange ratio of approximately 2.0681 in January 2021 as a result of the application of reverse capitalization. See Note 3, “Reverse Capitalization,” for details. |
Schedule of Antidilutive Securities Excluded from Diluted Net Loss Per Share | The Corporation excluded the following potential common shares, presented based on amounts outstanding at each period end, from the computation of diluted net loss per share attributable to common stockholders for the periods indicated because including them would have had an anti-dilutive effect: Three Months Ended September 30, 2021 2020 Options to purchase common stock (1) 33,477,833 5,183,834 RSUs 21,106,720 — Warrants to purchase common stock (as converted to common stock) (1) — 4,342,956 Warrants to purchase convertible preferred stock (as converted to common stock) (1) — 2,618,770 Total anti-dilutive shares excluded from computation of earnings per share 54,584,553 12,145,560 Nine Months Ended September 30, 2021 2020 Options to purchase common stock (1) 33,477,833 37,296,034 RSUs 21,106,720 — Convertible preferred stock (as converted to common stock) (1) — 139,444,346 Warrants to purchase common stock (as converted to common stock) (1) — 4,884,132 Warrants to purchase convertible preferred stock (as converted to common stock) (1) — 2,618,770 Total anti-dilutive shares excluded from computation of earnings per share 54,584,553 184,243,282 __________________ (1) Prior period results have been adjusted to reflect the exchange of Legacy Clover's common stock for Clover Class B Common Stock at an exchange ratio of approximately 2.0681 in January 2021 as a result of the Business Combination. See Note 3 (Business Combination) for details. | The Corporation excluded the following potential common shares, presented based on amounts outstanding at each period end after reverse capitalization, from the computation of diluted net loss per share attributable to common stockholders for the periods indicated because including them would have had an anti-dilutive effect (1) : Year ended December 31, 2020 2019 Options to purchase common stock 36,557,759 24,344,848 Convertible preferred stock (as converted to common stock) 139,444,346 139,444,346 Warrants to purchase common stock (as converted to common stock) 7,502,902 4,884,132 Warrants to purchase convertible preferred stock (as converted to common stock) — 2,618,770 183,505,007 171,292,096 __________________ (1) Amounts in the above table have been adjusted to reflect the exchange of Legacy Clover’s common stock at an exchange ratio of approximately 2.0681 in January 2021 as a result of the application of reverse capitalization. See Note 3 (Reverse Capitalization) for details. |
Direct Contracting (Tables)_2
Direct Contracting (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Direct Contracting [Abstract] | |
Schedule of Performance Guarantees | The tables below include the financial statement impacts of the performance guarantee: September 30, 2021 (in thousands) Direct Contracting performance year receivable $ 220,738 Direct Contracting performance year obligation (1) 244,599 __________________ (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 Nine Months Ended (in thousands) Amortization of the Direct Contracting performance year receivable $ (223,309) $ (441,476) Amortization of the Direct Contracting performance year obligation 223,309 441,476 Direct Contracting revenue 222,647 439,020 |
Operating Segments (Tables)
Operating Segments (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Segment Reporting [Abstract] | |
Schedule of Segment Reporting Information, by Segment | The table below summarizes the Corporation’s results by operating segment: Medicare Direct Contracting Corporate/Other Eliminations Consolidated Total Three Months Ended September 30, 2021 (in thousands) Premiums earned, net (Net of ceded premiums of $120) $ 203,657 $ — $ — $ — $ 203,657 Direct Contracting revenue — 222,647 — — 222,647 Other income 80 — 24,967 (24,188) 859 Intersegment revenues — — 9,375 (9,375) — Net medical claims incurred 208,661 228,060 2,253 (2,552) 436,422 Gross (loss) profit $ (4,924) $ (5,413) $ 32,089 $ (31,011) $ (9,259) Total assets $ 347,535 $ 260,142 $ 887,089 $ (542,288) $ 952,478 Medicare Direct Contracting Corporate/Other Eliminations Consolidated Total Nine Months Ended September 30, 2021 (in thousands) Premiums earned, net (Net of ceded premiums of $370) $ 598,390 $ — $ — $ — $ 598,390 Direct Contracting revenue — 439,020 — — 439,020 Other income 108 — 66,990 (64,548) 2,550 Intersegment revenues — — 33,130 (33,130) — Net medical claims incurred 640,624 469,972 5,273 (6,494) 1,109,375 Gross (loss) profit $ (42,126) $ (30,952) $ 94,847 $ (91,184) $ (69,415) Total assets $ 347,535 $ 260,142 $ 887,089 $ (542,288) $ 952,478 |
Reconciliation of Revenue from Segments to Consolidated | A reconciliation of the reportable segments’ gross loss to the net loss included in the Condensed Consolidated Statements of Operations and Comprehensive Loss for the three and nine months ended September 30, 2021, is as follows: Three Months Ended September 30, 2021 Nine Months Ended September 30, 2021 (in thousands) Gross loss $ (9,259) $ (69,415) Salaries and benefits 73,364 201,555 General and administrative expenses 45,749 129,983 Premium deficiency reserve (benefit) 20,761 48,661 Depreciation and amortization 120 398 Other expense — 191 Change in fair value of warrants payable (115,152) (66,146) Interest expense 413 2,817 Amortization of notes and securities discounts 13 13,681 Net loss $ (34,527) $ (400,555) |
Summary of significant accoun_5
Summary of significant accounting policies - Additional Information (Details) | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2021USD ($)segment | Dec. 31, 2020USD ($)segmentreporting_unit | Dec. 31, 2019USD ($) | Jan. 01, 2019USD ($) | |
Accounting Policies [Abstract] | ||||
Number of reporting segments | segment | 2 | 1 | ||
Other than temporary impairment losses | $ 0 | $ 0 | ||
Property, Plant and Equipment [Line Items] | ||||
Number of reporting units | reporting_unit | 1 | |||
Impairment of goodwill | $ 0 | 0 | ||
Allowances for uncollectible reinsurance recoverable | 0 | 0 | ||
HIF paid | 8,022,000 | 0 | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Operating lease ROU assets | $ 5,828,000 | 7,882,000 | $ 11,097,000 | |
Operating lease liabilities | $ 8,547,000 | $ 11,144,000 | ||
Minimum | ||||
Property, Plant and Equipment [Line Items] | ||||
Useful lives of property and equipment, net | 3 years | |||
Maximum | ||||
Property, Plant and Equipment [Line Items] | ||||
Useful lives of property and equipment, net | 7 years | |||
Cumulative Effect, Period of Adoption, Adjustment | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Operating lease ROU assets | $ 14,300,000 | |||
Operating lease liabilities | $ 17,400,000 |
Reverse capitalization - Retroa
Reverse capitalization - Retroactive Application of Reverse Capitalization to Consolidated Balance Sheets (Details) - shares | Jan. 07, 2021 | Jan. 31, 2021 | Dec. 31, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Jun. 30, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Schedule Of Reverse Capitalization [Line Items] | ||||||||
Convertible Preferred shares authorized (in shares) | 155,387,025 | 0 | ||||||
Convertible preferred shares issued (in shares) | 139,444,346 | 0 | ||||||
Convertible preferred shares outstanding (in shares) | 139,444,346 | 0 | ||||||
Common shares authorized (in shares) | 351,572,668 | 351,572,668 | ||||||
Common shares issued (in shares) | 89,972,184 | 88,674,206 | ||||||
Common shares outstanding (in shares) | 89,206,266 | 88,279,119 | 87,362,592 | |||||
1/7/21 conversion ratio | 206.81% | 206.81% | 206.81% | |||||
Convertible Preferred stock | ||||||||
Schedule Of Reverse Capitalization [Line Items] | ||||||||
Convertible Preferred shares authorized (in shares) | 155,387,025 | 155,387,025 | ||||||
Convertible preferred shares issued (in shares) | 139,444,346 | 139,444,346 | ||||||
Convertible preferred shares outstanding (in shares) | 139,444,346 | 0 | 139,444,346 | 139,444,346 | 139,444,346 | 139,444,346 | ||
Previously Reported | ||||||||
Schedule Of Reverse Capitalization [Line Items] | ||||||||
Common shares authorized (in shares) | 170,000,000 | 170,000,000 | ||||||
Common shares issued (in shares) | 43,505,291 | 42,877,665 | ||||||
Common shares outstanding (in shares) | 43,134,938 | 42,686,624 | 42,243,445 | |||||
Previously Reported | Convertible Preferred stock | ||||||||
Schedule Of Reverse Capitalization [Line Items] | ||||||||
Convertible Preferred shares authorized (in shares) | 75,136,086 | 75,136,086 | ||||||
Convertible preferred shares issued (in shares) | 67,427,138 | 67,427,138 | ||||||
Convertible preferred shares outstanding (in shares) | 67,427,138 | 67,427,138 | 67,427,138 |
Reverse capitalization - Retr_2
Reverse capitalization - Retroactive Application of Reverse Capitalization to Consolidated Balance Sheets (Details) - $ / shares | Jan. 07, 2021 | Jan. 31, 2021 | Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | Dec. 31, 2019 |
Schedule Of Reverse Capitalization [Line Items] | ||||||||
Net loss per share attributable to common shareholders - basic (in dollars per share) | $ (0.08) | $ 0.06 | $ (0.98) | $ (0.11) | $ (1.54) | $ (4.14) | ||
Net loss per share attributable to common shareholders - diluted (in dollars per share) | $ (0.08) | $ 0.02 | $ (0.98) | $ (0.11) | $ (1.54) | $ (4.14) | ||
Basic weighted average number of common shares and common shares equivalents outstanding (in shares) | 414,572,706 | 88,863,244 | 410,417,493 | 88,616,116 | 88,691,582 | 87,829,419 | ||
Diluted weighted average number of common shares and common shares equivalents outstanding (in shares) | 414,572,706 | 248,133,335 | 410,417,493 | 88,616,116 | 88,691,582 | 87,829,419 | ||
1/7/21 conversion ratio | 206.81% | 206.81% | 206.81% | |||||
Previously Reported | ||||||||
Schedule Of Reverse Capitalization [Line Items] | ||||||||
Net loss per share attributable to common shareholders - basic (in dollars per share) | $ (3.18) | $ (8.56) | ||||||
Net loss per share attributable to common shareholders - diluted (in dollars per share) | $ (3.18) | $ (8.56) | ||||||
Basic weighted average number of common shares and common shares equivalents outstanding (in shares) | 42,886,067 | 42,469,175 | ||||||
Diluted weighted average number of common shares and common shares equivalents outstanding (in shares) | 42,886,067 | 42,469,175 |
Reverse capitalization - Retr_3
Reverse capitalization - Retroactive Application of Reverse Capitalization to Consolidated Statements of Changes in Convertible Preferred Stock and Stockholders’ Deficit (Details) - USD ($) $ in Thousands | Jan. 07, 2021 | Jan. 31, 2021 | Dec. 31, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Jun. 30, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Schedule Of Reverse Capitalization [Line Items] | ||||||||
Convertible preferred shares outstanding (in shares) | 139,444,346 | 0 | ||||||
Common stock, shares, outstanding (in shares) | 89,206,266 | 88,279,119 | 87,362,592 | |||||
Common stock - amount | $ 9 | |||||||
1/7/21 conversion ratio | 206.81% | 206.81% | 206.81% | |||||
Convertible Preferred stock | ||||||||
Schedule Of Reverse Capitalization [Line Items] | ||||||||
Convertible preferred shares outstanding (in shares) | 139,444,346 | 0 | 139,444,346 | 139,444,346 | 139,444,346 | 139,444,346 | ||
Previously Reported | ||||||||
Schedule Of Reverse Capitalization [Line Items] | ||||||||
Common stock, shares, outstanding (in shares) | 43,134,938 | 42,686,624 | 42,243,445 | |||||
Common stock - amount | $ 4 | |||||||
Previously Reported | Convertible Preferred stock | ||||||||
Schedule Of Reverse Capitalization [Line Items] | ||||||||
Convertible preferred shares outstanding (in shares) | 67,427,138 | 67,427,138 | 67,427,138 |
Investment securities - Schedul
Investment securities - Schedule of Present Cost or Amortized Cost and Fair Values of Investments (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Investment securities, held-to-maturity: | |||
Amortized cost | $ 695 | $ 694 | |
Gross unrealized gains | 42 | 43 | |
Gross unrealized losses | (10) | 0 | |
Fair value | 727 | 737 | |
Investment securities, available-for-sale: | |||
Amortized cost | 167,935 | 53,953 | |
Gross unrealized gains | 37 | 51 | |
Gross unrealized losses | (647) | (41) | |
Fair value | 167,325 | 53,963 | |
Total investment securities | |||
Amortized cost | 168,630 | 54,647 | $ 57,045 |
Gross unrealized gains | 79 | 94 | 68 |
Gross unrealized losses | (657) | (41) | 0 |
Fair value | $ 168,052 | 54,700 | 57,113 |
U.S. government and government agencies and authorities | Investment securities, held-to-maturity: | |||
Investment securities, held-to-maturity: | |||
Amortized cost | 694 | 663 | |
Gross unrealized gains | 43 | 22 | |
Gross unrealized losses | 0 | 0 | |
Fair value | 737 | 685 | |
U.S. government and government agencies and authorities | Investment securities, available-for-sale: | |||
Investment securities, available-for-sale: | |||
Amortized cost | 53,953 | 56,382 | |
Gross unrealized gains | 51 | 46 | |
Gross unrealized losses | (41) | 0 | |
Fair value | $ 53,963 | $ 56,428 |
Investment securities - Sched_2
Investment securities - Schedule of Amortized Cost and Fair Value of Debt Securities (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Debt Securities, Held-to-maturity, Maturity, Amortized Cost, Net [Abstract] | ||
Due within one year | $ 305 | $ 265 |
Due after one year through five years | 15 | 319 |
Due after five years through ten years | 265 | 0 |
Due after ten years | 110 | 110 |
Amortized cost | 695 | 694 |
Debt Securities, Held-to-maturity, Maturity, Fair Value [Abstract] | ||
Due within one year | 308 | 266 |
Due after one year through five years | 16 | 328 |
Due after five years through ten years | 256 | 0 |
Due after ten years | 147 | 143 |
Total | 727 | 737 |
Debt Securities, Available-for-sale, Amortized Cost [Abstract] | ||
Due within one year | 21,139 | 0 |
Due after one year through five years | 141,835 | 43,382 |
Due after five years through ten years | 4,961 | 10,571 |
Due after ten years | 0 | 0 |
Total | 167,935 | 53,953 |
Debt Securities, Available-for-sale, Fair Value, Fiscal Year Maturity [Abstract] | ||
Due within one year | 21,142 | 0 |
Due after one year through five years | 141,352 | 43,431 |
Due after five years through ten years | 4,831 | 10,532 |
Due after ten years | 0 | 0 |
Total | $ 167,325 | $ 53,963 |
Investment securities - sched_3
Investment securities - schedule of Net Investment Income (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | |
Fair Value, Separate Account Investment [Line Items] | ||||||
Net investment income | $ 179 | $ 823 | $ 340 | $ 2,226 | $ 2,976 | $ 4,539 |
Cash and cash equivalents | ||||||
Fair Value, Separate Account Investment [Line Items] | ||||||
Net investment income | 0 | 1 | 0 | 108 | 108 | 1,249 |
Short-term investments | ||||||
Fair Value, Separate Account Investment [Line Items] | ||||||
Net investment income | 62 | 519 | 139 | 1,141 | 1,722 | 2,904 |
Investment securities | ||||||
Fair Value, Separate Account Investment [Line Items] | ||||||
Net investment income | $ 117 | $ 303 | $ 201 | $ 977 | $ 1,146 | $ 386 |
Investment securities - Proceed
Investment securities - Proceeds from Sales and Maturities of Investment Securities (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | |
Investments, Debt and Equity Securities [Abstract] | ||||||
Proceeds from sales of investment securities | $ 89,997 | $ 71,049 | $ 126,862 | $ 166,024 | $ 248,664 | $ 269,205 |
Proceeds from maturities of investment securities | 50,000 | 9,600 | 250,265 | 56,701 | 63,751 | 55,635 |
Gross realized gains | 7 | 504 | 24 | 540 | 1,117 | 114 |
Gross realized losses | 0 | 0 | (77) | 0 | (3) | (3) |
Net realized gains (losses) | $ 7 | $ 504 | $ (53) | $ 540 | $ 1,114 | $ 111 |
Investment securities - Additio
Investment securities - Additional Information (Details) - USD ($) $ in Millions | Sep. 30, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Investments, Debt and Equity Securities [Abstract] | |||
Deposits with various states and regulatory bodies | $ 11.2 | $ 7.5 | $ 3.7 |
Fair value measurements - Summa
Fair value measurements - Summary of Fair Value Measurements for Items (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Total assets at fair value | $ 167,325 | $ 53,963 | $ 56,428 |
Total liabilities at fair value | 142,592 | 156,233 | |
Derivative liabilities | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Total liabilities at fair value | 44,810 | 138,561 | |
Warrants payable | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Total liabilities at fair value | 97,782 | 17,672 | |
U.S. government and government agencies | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Total assets at fair value | 53,963 | 56,428 | |
Level 1 | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Total assets at fair value | 0 | 0 | 0 |
Total liabilities at fair value | 0 | 0 | |
Level 1 | Derivative liabilities | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Total liabilities at fair value | 0 | 0 | |
Level 1 | Warrants payable | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Total liabilities at fair value | 0 | 0 | |
Level 1 | U.S. government and government agencies | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Total assets at fair value | 0 | 0 | |
Level 2 | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Total assets at fair value | 167,325 | 53,963 | 56,428 |
Total liabilities at fair value | 0 | 0 | |
Level 2 | Derivative liabilities | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Total liabilities at fair value | 0 | 0 | |
Level 2 | Warrants payable | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Total liabilities at fair value | 0 | 0 | |
Level 2 | U.S. government and government agencies | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Total assets at fair value | 53,963 | 56,428 | |
Level 3 | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Total assets at fair value | $ 0 | 0 | 0 |
Total liabilities at fair value | 142,592 | 156,233 | |
Level 3 | Derivative liabilities | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Total liabilities at fair value | 44,810 | 138,561 | |
Level 3 | Warrants payable | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Total liabilities at fair value | 97,782 | 17,672 | |
Level 3 | U.S. government and government agencies | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Total assets at fair value | $ 0 | $ 0 |
Fair value measurements - Addit
Fair value measurements - Additional Information (Details) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | Sep. 25, 2020 | |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||||||
Financial asset or liabilities transfer in and out | $ 0 | $ 0 | |||||
Level 3 | |||||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||||||
Estimated fair value of convertible securities | $ 0 | $ 0 | 949,600,000 | $ 251,900,000 | |||
Financial asset or liabilities transfer in and out | 0 | $ 0 | 0 | $ 0 | |||
Level 3 | 2020 Convertible Note | |||||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||||||
Estimated fair value of convertible securities | $ 20,000,000 | ||||||
Estimated fair value and carrying value of convertible securities | $ 21,600,000 | $ 21,600,000 | $ 20,400,000 |
Fair value measurements - Conve
Fair value measurements - Convertible Securities and Derivative Liability (Details) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Dec. 31, 2019USD ($) | |
Minimum | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Convertible securities, expected term | 2 years | |
Derivative liability, expected term | 2 years | |
Maximum | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Convertible securities, expected term | 3 years | |
Derivative liability, expected term | 3 years | |
Beginning stock price (total value) | Minimum | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Convertible securities | 305,132 | |
Derivative liabilities | 305,132 | |
Beginning stock price (total value) | Maximum | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Convertible securities | 357,802 | |
Derivative liabilities | 357,802 | |
Strike price (total value) | Minimum | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Convertible securities | 462,012 | |
Derivative liabilities | 462,012 | |
Strike price (total value) | Maximum | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Convertible securities | 531,315 | |
Derivative liabilities | 965,184 | |
Expected volatility | Minimum | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Convertible securities | 0.45 | |
Derivative liabilities | 0.45 | |
Expected volatility | Maximum | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Convertible securities | 0.49 | |
Derivative liabilities | 0.49 | |
Risk-free interest rate | Minimum | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Convertible securities | 0.0158 | |
Derivative liabilities | 0.0158 | |
Risk-free interest rate | Maximum | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Convertible securities | 0.0162 | |
Derivative liabilities | 0.0162 | |
Discount factor | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Convertible securities | 0.15 | |
Derivative liabilities | 0.15 |
Fair value measurements - Sched
Fair value measurements - Schedule of Significant Unobservable Inputs Used in Black-Scholes Model to Measure Warrants Payable (Details) - $ / shares | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Preferred stock purchase warrants | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Beginning stock price (in dollars per share) | $ 10.27 | |
Strike price (in dollars per share) | $ 17.27 | |
Discount factor | 15.00% | |
Preferred stock purchase warrants | Minimum | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Expected volatility | 45.00% | |
Expected term | 2 years | |
Risk-free interest rate | 1.58% | |
Preferred stock purchase warrants | Maximum | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Expected volatility | 49.00% | |
Expected term | 3 years | |
Risk-free interest rate | 1.62% | |
Common stock purchase warrants | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Beginning stock price (in dollars per share) | $ 30.14 | $ 7.19 |
Strike price (in dollars per share) | $ 1.04 | $ 1.04 |
Expected volatility | 56.00% | |
Expected term | 7 days | |
Risk-free interest rate | 0.09% | |
Discount factor | 13.00% | 15.00% |
Common stock purchase warrants | Minimum | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Expected volatility | 81.10% | |
Expected term | 2 years | |
Risk-free interest rate | 1.58% | |
Common stock purchase warrants | Maximum | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Expected volatility | 84.60% | |
Expected term | 3 years | |
Risk-free interest rate | 1.62% |
Fair value measurements - Sch_2
Fair value measurements - Schedule of Changes in Balances of Level 3 Financial Liabilities (Details) - Level 3 - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |||||
Beginning balance | $ 433,757 | $ 1,092,145 | $ 408,118 | $ 408,118 | $ 14,836 |
Issuances | 0 | 0 | 0 | 0 | 237,362 |
Settlements | 0 | (1,092,145) | 0 | 0 | 0 |
Transfers in | 0 | 0 | 0 | 0 | 0 |
Transfers out | 0 | 0 | 0 | 0 | 0 |
Total recognized losses (gains) | 47,374 | 0 | 73,013 | 684,027 | 155,920 |
Ending balance | 481,131 | 0 | 481,131 | 1,092,145 | 408,118 |
Convertible securities | |||||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |||||
Beginning balance | 285,166 | 949,553 | 251,885 | 251,885 | 0 |
Issuances | 0 | 0 | 0 | 0 | 237,362 |
Settlements | 0 | (949,553) | 0 | 0 | 0 |
Transfers in | 0 | 0 | 0 | 0 | 0 |
Transfers out | 0 | 0 | 0 | 0 | 0 |
Total recognized losses (gains) | 95,477 | 0 | 128,758 | 697,668 | 14,523 |
Ending balance | 380,643 | 0 | 380,643 | 949,553 | 251,885 |
Derivative liabilities | |||||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |||||
Beginning balance | 119,167 | 44,810 | 138,561 | 138,561 | 0 |
Issuances | 0 | 0 | 0 | 0 | 0 |
Settlements | 0 | (44,810) | 0 | 0 | 0 |
Transfers in | 0 | 0 | 0 | 0 | 0 |
Transfers out | 0 | 0 | 0 | 0 | 0 |
Total recognized losses (gains) | (68,081) | 0 | (87,475) | (93,751) | 138,561 |
Ending balance | 51,086 | 0 | 51,086 | 44,810 | 138,561 |
Warrants payable | |||||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |||||
Beginning balance | 29,424 | 97,782 | 17,672 | 17,672 | 14,836 |
Issuances | 0 | 0 | 0 | 0 | 0 |
Settlements | 0 | (97,782) | 0 | 0 | 0 |
Transfers in | 0 | 0 | 0 | 0 | 0 |
Transfers out | 0 | 0 | 0 | 0 | 0 |
Total recognized losses (gains) | 19,978 | 0 | 31,730 | 80,110 | 2,836 |
Ending balance | $ 49,402 | $ 0 | $ 49,402 | $ 97,782 | $ 17,672 |
Acquisition - Additional Inform
Acquisition - Additional Information (Details) - Principium and MSPNJ $ in Millions | Feb. 28, 2019USD ($) |
Business Acquisition [Line Items] | |
Percentage of outstanding equity interest acquired | 100.00% |
Total purchase price | $ 1.4 |
Goodwill acquired | $ 1.2 |
Healthcare receivables - Additi
Healthcare receivables - Additional Information (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Receivables [Line Items] | |||
Healthcare receivables | $ 34,656 | $ 38,745 | $ 25,819 |
Rebate Receivables | |||
Receivables [Line Items] | |||
Healthcare receivables | 30,200 | 26,600 | 17,500 |
Other Healthcare Receivables | |||
Receivables [Line Items] | |||
Healthcare receivables | $ 4,500 | $ 12,100 | $ 8,300 |
Related-party transactions - Ad
Related-party transactions - Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | |
Related Party Transaction [Line Items] | ||||||
Net medical claims incurred | $ 436,422 | $ 144,846 | $ 1,109,375 | $ 410,540 | $ 590,468 | $ 450,645 |
CarePoint Health Contract | ||||||
Related Party Transaction [Line Items] | ||||||
Net medical claims incurred | $ 1,700 | $ 1,900 | $ 9,200 | $ 5,300 | $ 11,100 | $ 9,700 |
Property and equipment, net - S
Property and equipment, net - Summary (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Property, Plant and Equipment [Line Items] | |||
Property and equipment, gross | $ 3,914 | $ 3,221 | |
Less: accumulated depreciation and amortization | (1,836) | (1,281) | |
Property and equipment, net | $ 2,172 | 2,078 | 1,940 |
Capitalized software | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, gross | 693 | 0 | |
Leasehold improvements | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, gross | 3,088 | 3,088 | |
Office furniture and fixtures | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, gross | 29 | 29 | |
Equipment | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, gross | $ 104 | $ 104 |
Property and equipment, net - A
Property and equipment, net - Additional Information (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Property, Plant and Equipment [Abstract] | ||
Depreciation expense | $ 0.5 | $ 0.6 |
Amortization expense | $ 0.1 | $ 0 |
Goodwill and other intangible_2
Goodwill and other intangible assets - Additional Information (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Other intangible assets | $ 2,990,000 | $ 2,990,000 |
Goodwill | 1,243,000 | 1,243,000 |
Goodwill and intangible asset, impairment | $ 0 | $ 0 |
Unpaid claims - Schedule of Act
Unpaid claims - Schedule of Activity in the Liability for Unpaid Claims and Claims Adjustment Expense (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | |
Liability for Unpaid Claims and Claims Adjustment Expense [Roll Forward] | ||||
Gross balance, beginning of year | $ 103,976 | $ 77,886 | $ 77,886 | $ 54,004 |
Less: reinsurance recoverable, beginning of year | 0 | 0 | 0 | (12,344) |
Net balance, beginning of year | 103,976 | 77,886 | 77,886 | 41,660 |
Incurred related to: | ||||
Current year | 1,092,280 | 425,941 | 604,183 | 453,423 |
Prior years | 17,095 | (15,401) | (13,715) | (2,778) |
Total incurred | 1,109,375 | 410,540 | 590,468 | 450,645 |
Paid related to: | ||||
Current year | 963,779 | 339,252 | 501,339 | 376,677 |
Prior years | 109,362 | 55,559 | 63,039 | 37,742 |
Total paid | 1,073,141 | 394,811 | 564,378 | 414,419 |
Net balance, end of year | $ 140,210 | $ 93,615 | 103,976 | 77,886 |
Plus: reinsurance recoverable, end of year | 0 | 0 | ||
Gross balance, end of year | $ 103,976 | $ 77,886 |
Unpaid claims - Additional info
Unpaid claims - Additional information (Details) $ in Thousands | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2021USD ($) | Sep. 30, 2020USD ($) | Dec. 31, 2020USD ($) | Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($) | |
Liability for Unpaid Claims and Claims Adjustment Expense, Activity in Liability [Abstract] | |||||
Unpaid claims | $ 140,210 | $ 93,615 | $ 103,976 | $ 77,886 | $ 41,660 |
Prior years | $ 109,362 | $ 55,559 | $ 63,039 | $ 37,742 | |
Ratio of current year medical claims paid as a percent of current year net medical claims | 0.882 | 0.796 | 0.830 | 0.831 |
Unpaid claims - Incurred Claims
Unpaid claims - Incurred Claims (Details) $ in Thousands | Dec. 31, 2020USD ($)claim | Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($) |
Claims Development [Line Items] | |||
Cumulative incurred claims | $ 1,552,841 | $ 962,373 | $ 552,456 |
Total IBNR | $ 103,976 | ||
Number of reported claims | claim | 4,359,205 | ||
2018 and prior | |||
Claims Development [Line Items] | |||
Cumulative incurred claims | $ 549,649 | 549,678 | $ 552,456 |
Total IBNR | $ 2 | ||
Number of reported claims | claim | 1,737,684 | ||
2019 | |||
Claims Development [Line Items] | |||
Cumulative incurred claims | $ 399,009 | $ 412,695 | |
Total IBNR | $ 1,130 | ||
Number of reported claims | claim | 1,188,472 | ||
2020 | |||
Claims Development [Line Items] | |||
Cumulative incurred claims | $ 604,183 | ||
Total IBNR | $ 102,844 | ||
Number of reported claims | claim | 1,433,049 |
Unpaid claims - Paid Claims (De
Unpaid claims - Paid Claims (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Claims Development [Line Items] | |||
Cumulative net paid claims | $ 1,448,865 | $ 894,877 | $ 511,459 |
2018 and prior | |||
Claims Development [Line Items] | |||
Cumulative net paid claims | 549,647 | 550,974 | $ 511,459 |
2019 | |||
Claims Development [Line Items] | |||
Cumulative net paid claims | 397,879 | $ 343,903 | |
2020 | |||
Claims Development [Line Items] | |||
Cumulative net paid claims | $ 501,339 |
Unpaid claims - Reconciliation
Unpaid claims - Reconciliation (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Insurance [Abstract] | |||
Cumulative incurred claims, net | $ 1,552,841 | $ 962,373 | $ 552,456 |
Less: cumulative paid claims, net | 1,448,865 | $ 894,877 | $ 511,459 |
Net unpaid claims, including claims adjustment expenses | $ 103,976 |
Reinsurance - Additional Inform
Reinsurance - Additional Information (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Effects of Reinsurance [Line Items] | ||
Reinsurance, excess loss coverage threshold | $ 0.5 | $ 0.5 |
Life insurance reserves, fully coinsured by third party | $ 5.3 | 5.2 |
Life insurance reserves, coinsurance percentage | 100.00% | |
Life insurance reserves, hold in trust percentage | 100.00% | |
Annuity reserve, fully ceded to third party | $ 0.9 | $ 0.9 |
Annuity reserves, transfer of risk percentage | 100.00% | |
Minimum | ||
Effects of Reinsurance [Line Items] | ||
Life insurance reserves assumption, interest rate | 1.00% | |
Annuity reserves assumption, interest rate | 1.00% | |
Maximum | ||
Effects of Reinsurance [Line Items] | ||
Life insurance reserves assumption, interest rate | 4.50% | |
Annuity reserves assumption, interest rate | 5.50% |
Reinsurance (Details)
Reinsurance (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Premiums Earned, Net [Abstract] | |||||||
Premiums earned, gross | $ 666,297 | $ 457,758 | |||||
Premiums earned, ceded | $ (120) | $ (126) | $ (370) | $ (383) | (599) | (832) | |
Net premiums earned | 203,657 | 167,075 | 598,390 | 501,100 | 665,698 | 456,926 | |
Policyholder Benefits and Claims Incurred, Net [Abstract] | |||||||
Claims incurred, gross | 590,951 | 452,261 | |||||
Claims incurred, ceded | (483) | (1,616) | |||||
Net claims incurred and claims adjustment expense | $ 436,422 | $ 144,846 | $ 1,109,375 | $ 410,540 | 590,468 | 450,645 | |
Reinsurance Recoverables, Including Reinsurance Premium Paid [Abstract] | |||||||
Reinsurance recoverable on paid claims | 0 | 481 | |||||
Reinsurance recoverable on unpaid claims | 0 | 0 | $ 12,344 | ||||
Reinsurance premium payable | 0 | 0 | |||||
Reinsurance recoverable, net | $ 0 | $ 481 |
Notes and securities payable -
Notes and securities payable - Additional Information (Details) - USD ($) | Jun. 29, 2021 | Jan. 07, 2021 | Oct. 05, 2020 | Dec. 27, 2018 | Mar. 21, 2017 | Oct. 31, 2017 | Mar. 31, 2017 | Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | Sep. 25, 2020 | Feb. 21, 2019 |
Debt Instrument [Line Items] | |||||||||||||||
Debt principal balance | $ 424,752,000 | ||||||||||||||
Initial obligation interest rate | 8.00% | ||||||||||||||
Amortization of notes and securities discounts | $ 13,000 | $ 4,408,000 | $ 13,681,000 | $ 14,935,000 | |||||||||||
Proceeds from issuance of convertible securities | 0 | 20,000,000 | 20,000,000 | $ 343,410,000 | |||||||||||
Extinguishment of debt | 126,795,000 | 0 | |||||||||||||
Issuance of common stock related to convertible debt | 16,059,000 | 0 | |||||||||||||
Amortization of debt issuance costs | 34,000 | 506,000 | |||||||||||||
Amortization of debt discount | 14,900,000 | ||||||||||||||
Current portion of notes and securities payable | 0 | 0 | 20,803,000 | 18,481,000 | |||||||||||
Capitalized debt issuance cost | 100,000 | 100,000 | 100,000 | ||||||||||||
Interest expense | $ 413,000 | $ 9,268,000 | $ 2,817,000 | $ 25,560,000 | 35,990,000 | 23,155,000 | |||||||||
Debt Instrument, Interest Rate Period One | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Embedded derivative, discount rate | 75.00% | 75.00% | |||||||||||||
Debt Instrument, Interest Rate Period One | Convertible Agreement Debt | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Embedded derivative, discount rate | 75.00% | ||||||||||||||
Debt Instrument, Interest Rate Period Two | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Embedded derivative, discount rate | 55.00% | 55.00% | |||||||||||||
Debt Instrument, Interest Rate Period Two | Convertible Agreement Debt | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Embedded derivative, discount rate | 55.00% | ||||||||||||||
Seek Insurance Services, Inc. (Seek) | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Effective interest rate | 8.20% | 8.20% | 8.20% | 8.20% | |||||||||||
Current portion of notes and securities payable | 19,900,000 | 0 | |||||||||||||
Interest expense | $ 400,000 | $ 1,200,000 | 0 | 0 | |||||||||||
Convertible Debt Securities | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Effective interest rate inclusive of amortization | 90.30% | 90.30% | |||||||||||||
Interest expense | $ 22,000,000 | ||||||||||||||
Non Convertible Notes Payable | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Debt principal balance | $ 60,000,000 | 30,800,000 | 49,300,000 | ||||||||||||
Amount drawn from loan facility | $ 40,000,000 | $ 40,000,000 | |||||||||||||
Initial obligation interest rate | 11.00% | 11.25% | |||||||||||||
Additional amount under loan facility | $ 20,000,000 | ||||||||||||||
Capitalized debt issuance costs | $ 300,000 | ||||||||||||||
Amortization of notes and securities discounts | 300,000 | 400,000 | |||||||||||||
Interest expense, debt | $ 4,400,000 | $ 6,200,000 | |||||||||||||
Effective interest rate | 11.78% | 11.77% | |||||||||||||
Extinguishment of debt | $ 20,700,000 | ||||||||||||||
Payments of accrued interest | $ 200,000 | ||||||||||||||
Non Convertible Notes Payable | Bridge Loan | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Debt principal balance | $ 30,400,000 | ||||||||||||||
Initial obligation interest rate | 10.00% | ||||||||||||||
Aggregate principal amount | $ 30,000,000 | ||||||||||||||
Interest expense, debt | $ 0 | $ 400,000 | |||||||||||||
Extinguishment of debt | 30,400,000 | ||||||||||||||
2015 Senior Secured Note | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Proceeds to pay obligations and working capital | $ 30,000,000 | $ 30,000,000 | |||||||||||||
Convertible Securities | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Debt principal balance | $ 2,600,000 | 76,500,000 | 373,800,000 | ||||||||||||
Proceeds from issuance of convertible securities | 343,400,000 | ||||||||||||||
Unamortized discount | 13,000,000 | 337,300,000 | |||||||||||||
Capital contribution for extinguishment of debt | 126,800,000 | ||||||||||||||
Aggregate principal amount | 74,600,000 | ||||||||||||||
Fair value of embedded derivative liability | 44,800,000 | ||||||||||||||
Convertible Securities | Convertible Agreement Debt | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Convertible, stock price trigger, value in calculation | $ 2,500,000,000 | ||||||||||||||
Convertible debt, extension period upon new security holder | 365 days | ||||||||||||||
Convertible Securities | Merger Agreement Debt | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Debt principal balance | $ 373,800,000 | 76,500,000 | 0 | ||||||||||||
Interest expense, debt | 31,100,000 | ||||||||||||||
Unamortized discount | $ 373,800,000 | ||||||||||||||
Unamortized debt issuance cost | 337,300,000 | $ 400,000 | |||||||||||||
Amortization of debt issuance costs | 21,100,000 | ||||||||||||||
Effective interest rate inclusive of amortization | 100.00% | ||||||||||||||
Beneficial conversion feature | $ 2,300,000,000 | ||||||||||||||
Convertible Securities | Debt Instrument, Interest Rate Period One | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Initial obligation interest rate | 6.50% | 6.50% | |||||||||||||
Convertible Securities | Debt Instrument, Interest Rate Period One | Convertible Agreement Debt | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Initial obligation interest rate | 6.50% | ||||||||||||||
Convertible Securities | Debt Instrument, Interest Rate Period Two | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Initial obligation interest rate | 13.50% | 13.50% | |||||||||||||
Convertible Securities | Debt Instrument, Interest Rate Period Two | Convertible Agreement Debt | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Initial obligation interest rate | 13.50% | ||||||||||||||
Convertible Securities | Minimum | Convertible Agreement Debt | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Convertible debt, extension period | 15 days | ||||||||||||||
Convertible Securities | Maximum | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Convertible debt, borrowing capacity | $ 500,000,000 | ||||||||||||||
Convertible Securities | Maximum | Convertible Agreement Debt | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Convertible debt, extension period | 180 days | ||||||||||||||
Convertible Securities | Tranche One | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Debt instrument, accrued interest | 400,000 | ||||||||||||||
Convertible Securities | Other Tranche | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Debt instrument, accrued interest | $ 7,400,000 | ||||||||||||||
Convertible Securities | Common Class Z | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Debt instrument, redeemed and converted, shares issued (in shares) | 36,117,708 | ||||||||||||||
Debt instrument, redeemed, shares issued (in shares) | 34,806,921 | ||||||||||||||
Debt instrument conversion, shares issued (in shares) | 1,310,787 | ||||||||||||||
Convertible Securities | Common Class B | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Debt instrument conversion, shares issued (in shares) | 74,694,107 | ||||||||||||||
2020 Convertible Note | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Unamortized debt issuance cost | $ 100,000 | $ 100,000 | $ 100,000 | 0 | |||||||||||
2020 Convertible Note | Seek Insurance Services, Inc. (Seek) | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Debt principal balance | $ 20,000,000 | ||||||||||||||
Initial obligation interest rate | 8.00% | ||||||||||||||
Principal borrowed | $ 20,000,000 | ||||||||||||||
Qualified Public Offering | Convertible Securities | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Charge to account for dilution | 9.40% | ||||||||||||||
Qualified Public Offering | Convertible Securities | Merger Agreement Debt | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Charge to account for dilution | 9.35% |
Notes and securities payable _2
Notes and securities payable - Schedule of Maturities of Long-term Debt (Details) $ in Thousands | Dec. 31, 2020USD ($) |
Debt Disclosure [Abstract] | |
2021 | $ 20,939 |
2022 | 9,986 |
2023 | 393,827 |
2024 | 0 |
2025 | 0 |
Total | $ 424,752 |
Notes and securities payable _3
Notes and securities payable - Surplus Note (Details) $ in Millions | Dec. 22, 2016USD ($) |
Parent Company | |
Debt Instrument [Line Items] | |
Surplus note | $ 40 |
Warrants payable (Details)
Warrants payable (Details) - USD ($) $ / shares in Units, $ in Thousands | Mar. 21, 2017 | Mar. 21, 2017 | Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | Sep. 09, 2021 | Oct. 05, 2020 | Dec. 31, 2017 | Nov. 30, 2016 | Sep. 30, 2015 |
Class of Warrant or Right [Line Items] | |||||||||||||
Class of warrant or right, number of securities called by warrants or rights (in shares) | 122,052 | 139,629 | |||||||||||
Exercise price of warrants (in dollars per share) | $ 0.10 | $ 3.45 | $ 2.61 | ||||||||||
Change in fair value of warrants expense | $ (115,152) | $ 20,029 | $ (66,146) | $ 31,903 | $ 80,328 | $ 2,909 | |||||||
Common stock | |||||||||||||
Class of Warrant or Right [Line Items] | |||||||||||||
Class of warrant or right, number of securities called by warrants or rights (in shares) | 2,100,000 | ||||||||||||
Exercise price of warrants (in dollars per share) | $ 1.04 | ||||||||||||
Additional shares of warrants (in shares) | 2,100,000 | ||||||||||||
Common stock | Previously Reported | |||||||||||||
Class of Warrant or Right [Line Items] | |||||||||||||
Class of warrant or right, number of securities called by warrants or rights (in shares) | 4,342,956 | ||||||||||||
Exercise price of warrants (in dollars per share) | $ 0.5039 | ||||||||||||
Additional shares of warrants (in shares) | 4,342,956 | ||||||||||||
Series D Preferred stock | |||||||||||||
Class of Warrant or Right [Line Items] | |||||||||||||
Class of warrant or right, number of securities called by warrants or rights (in shares) | 1,266,284 | 1,266,284 | |||||||||||
Exercise price of warrants (in dollars per share) | $ 9.38 | $ 9.38 | |||||||||||
Change in fair value of warrants expense | $ 1,200 | ||||||||||||
Series D Preferred stock | Previously Reported | |||||||||||||
Class of Warrant or Right [Line Items] | |||||||||||||
Class of warrant or right, number of securities called by warrants or rights (in shares) | 2,618,770 | 2,618,770 | |||||||||||
Exercise price of warrants (in dollars per share) | $ 4.5346 | $ 4.5346 | $ 0 | ||||||||||
Change in fair value of warrants expense | $ 1,200 |
Derivative liabilities (Details
Derivative liabilities (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | |
Derivative Instruments and Hedges, Liabilities [Abstract] | |||||
Convertible debt conversion and other issuances | $ 16,059 | $ 373,800 | |||
Gain on derivative liabilities | $ 68,100 | $ 87,500 | $ 93,800 | ||
Loss on derivative liabilities | 138,600 | ||||
Derivative liabilities | $ 0 | $ 44,810 | $ 138,561 |
Letter of credit - Additional I
Letter of credit - Additional Information (Details) - Letter of Credit Agreement - USD ($) $ in Millions | Apr. 19, 2018 | Sep. 30, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Line of Credit Facility [Line Items] | ||||
Interest rate | 0.75% | |||
Maximum | ||||
Line of Credit Facility [Line Items] | ||||
Aggregate amount | $ 2.5 | |||
Unused lines of Credit | ||||
Line of Credit Facility [Line Items] | ||||
Unused balance | $ 2.5 | $ 2.5 | $ 2.5 |
Leases - Additional Information
Leases - Additional Information (Details) $ in Millions | Feb. 28, 2019renewalOption | Sep. 28, 2016renewalOption | Dec. 31, 2019USD ($)floor | Dec. 31, 2016floor |
Montgomery Leases | ||||
Property Subject to or Available for Operating Lease [Line Items] | ||||
Number of renewal options | renewalOption | 1 | |||
Lease renewal term | 5 years | |||
Operating lease impairment charge | $ | $ 1.6 | |||
San Francisco Leases | ||||
Property Subject to or Available for Operating Lease [Line Items] | ||||
Number of floors on lease | floor | 2 | |||
Number of floors on sub lease | floor | 2 | |||
Lyndhurst Lease | ||||
Property Subject to or Available for Operating Lease [Line Items] | ||||
Number of renewal options | renewalOption | 1 | |||
Lease renewal term | 5 years |
Leases - Summary of Lease Costs
Leases - Summary of Lease Costs Recognized under ASC 842 and Other Information Pertaining to Operating Leases (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Leases [Abstract] | ||||
Operating lease cost | $ 1,126 | $ 3,351 | $ 4,533 | $ 4,552 |
Variable lease cost | 123 | 391 | 632 | 654 |
Short-term lease cost | 15 | 45 | 20 | 58 |
Sublease income | (650) | (2,077) | (3,098) | (989) |
Total lease cost | $ 614 | 1,710 | 2,087 | 4,275 |
Cash paid for amounts included in the measurement of lease liabilities | $ 3,894 | $ 4,979 | $ 4,804 | |
Weighted-average remaining lease term (in years) | 4 years 4 months 24 days | 4 years 4 months 24 days | 4 years 4 months 24 days | 4 years 9 months 18 days |
Weighted-average discount rate | 10.26% | 10.26% | 10.17% | 10.05% |
Leases - Summary of Maturities
Leases - Summary of Maturities of Operating Lease Liabilities (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Leases [Abstract] | ||
2021 | $ 3,001 | $ 5,017 |
2022 | 1,493 | 2,747 |
2023 | 1,157 | 1,408 |
2024 | 1,149 | 1,089 |
2025 | 1,121 | |
Thereafter | 2,649 | |
Total lease payments | 10,760 | 14,031 |
Less: imputed interest | (2,213) | (2,887) |
Total | $ 8,547 | $ 11,144 |
Preferred stock - Additional In
Preferred stock - Additional Information (Details) - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | ||||
Dec. 31, 2020 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Class of Stock [Line Items] | |||||
Issuance costs | $ 0.5 | $ 0.3 | $ 0.4 | ||
Series A and A-1 Preferred Stock | |||||
Class of Stock [Line Items] | |||||
Sale of stock, price per share (in dollars per share) | $ 0.50394 | ||||
Proceeds | $ 13 | ||||
Dividend rate (in dollars per share) | $ 0.04032 | ||||
Series A Preferred stock | |||||
Class of Stock [Line Items] | |||||
Sale of stock, number of shares issued in transaction (in shares) | 10,907,993 | ||||
Series A-1 Preferred stock | |||||
Class of Stock [Line Items] | |||||
Sale of stock, number of shares issued in transaction (in shares) | 14,888,608 | ||||
Series B Preferred stock | |||||
Class of Stock [Line Items] | |||||
Sale of stock, number of shares issued in transaction (in shares) | 21,381,446 | ||||
Sale of stock, price per share (in dollars per share) | $ 1.63693 | ||||
Proceeds | $ 35 | ||||
Dividend rate (in dollars per share) | 0.13090 | ||||
Series C Preferred stock | |||||
Class of Stock [Line Items] | |||||
Sale of stock, number of shares issued in transaction (in shares) | 39,431,582 | ||||
Sale of stock, price per share (in dollars per share) | $ 4.06185 | ||||
Proceeds | $ 160.2 | ||||
Dividend rate (in dollars per share) | 0.32495 | ||||
Series D Preferred stock | |||||
Class of Stock [Line Items] | |||||
Sale of stock, number of shares issued in transaction (in shares) | 9,923,792 | 42,910,925 | |||
Sale of stock, price per share (in dollars per share) | $ 4.53456 | $ 4.53456 | |||
Proceeds | $ 45 | $ 194.6 | |||
Dividend rate (in dollars per share) | $ 0.36276 |
Preferred stock (Details)
Preferred stock (Details) - USD ($) $ in Thousands | Jan. 07, 2021 | Jan. 31, 2021 | Dec. 31, 2020 | Sep. 30, 2021 | Dec. 31, 2019 | |
Class of Stock [Line Items] | ||||||
Preferred Stock Authorized (in shares) | 155,387,025 | 0 | ||||
Preferred Stock Issued (in shares) | 139,444,346 | 0 | ||||
Preferred Stock Outstanding (in shares) | 139,444,346 | 0 | ||||
Carrying Value | $ 447,747 | [1] | $ 0 | $ 447,747 | ||
Liquidation Preference | $ 470,256 | $ 0 | ||||
Common Stock Issuable Upon Conversion (in shares) | 139,444,346 | |||||
Common stock exchange ratio | 206.81% | 206.81% | 206.81% | |||
Subsequent Event | ||||||
Class of Stock [Line Items] | ||||||
Common stock exchange ratio | 206.81% | |||||
Series A Preferred stock | ||||||
Class of Stock [Line Items] | ||||||
Preferred Stock Authorized (in shares) | 10,907,993 | |||||
Preferred Stock Issued (in shares) | 10,907,993 | |||||
Preferred Stock Outstanding (in shares) | 10,907,993 | |||||
Carrying Value | $ 5,500 | |||||
Liquidation Preference | $ 5,500 | |||||
Common Stock Issuable Upon Conversion (in shares) | 10,907,993 | |||||
Series A-1 Preferred stock | ||||||
Class of Stock [Line Items] | ||||||
Preferred Stock Authorized (in shares) | 14,888,608 | |||||
Preferred Stock Issued (in shares) | 14,888,608 | |||||
Preferred Stock Outstanding (in shares) | 14,888,608 | |||||
Carrying Value | $ 7,400 | |||||
Liquidation Preference | $ 30,000 | |||||
Common Stock Issuable Upon Conversion (in shares) | 14,888,608 | |||||
Series B Preferred stock | ||||||
Class of Stock [Line Items] | ||||||
Preferred Stock Authorized (in shares) | 21,381,446 | |||||
Preferred Stock Issued (in shares) | 21,381,446 | |||||
Preferred Stock Outstanding (in shares) | 21,381,446 | |||||
Carrying Value | $ 35,000 | |||||
Liquidation Preference | $ 35,000 | |||||
Common Stock Issuable Upon Conversion (in shares) | 21,381,446 | |||||
Series C Preferred stock | ||||||
Class of Stock [Line Items] | ||||||
Preferred Stock Authorized (in shares) | 39,431,582 | |||||
Preferred Stock Issued (in shares) | 39,431,582 | |||||
Preferred Stock Outstanding (in shares) | 39,431,582 | |||||
Carrying Value | $ 160,200 | |||||
Liquidation Preference | $ 160,200 | |||||
Common Stock Issuable Upon Conversion (in shares) | 39,431,582 | |||||
Series D Preferred stock | ||||||
Class of Stock [Line Items] | ||||||
Preferred Stock Authorized (in shares) | 68,777,396 | |||||
Preferred Stock Issued (in shares) | 52,834,717 | |||||
Preferred Stock Outstanding (in shares) | 52,834,717 | |||||
Carrying Value | $ 239,600 | |||||
Liquidation Preference | $ 239,600 | |||||
Common Stock Issuable Upon Conversion (in shares) | 52,834,717 | |||||
[1] | Prior period results have been adjusted to reflect the exchange of Legacy Clover’s common stock for Clover Class B Common Stock at an exchange ratio of approximately 2.0681 in January 2021 as a result of the Business Combination. See Note 3 (Business Combination) for additional information. |
Employee benefit plans - Additi
Employee benefit plans - Additional Information (Details) - USD ($) $ / shares in Units, $ in Thousands | Jan. 07, 2021 | Jan. 31, 2021 | Feb. 29, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | Sep. 09, 2021 | Dec. 31, 2018 | Dec. 31, 2017 | Nov. 30, 2016 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||
Employer matching contribution, percent of match | 100.00% | 100.00% | |||||||||||
Employer matching contribution, percent of employees' gross pay | 4.00% | 4.00% | |||||||||||
Employer maximum annual contributions per employee, percent | 4.00% | 4.00% | |||||||||||
Employer discretionary contribution amount | $ 300 | $ 300 | $ 900 | $ 1,000 | $ 1,200 | $ 1,300 | |||||||
Employers matching contribution, vesting percentage | 100.00% | 100.00% | |||||||||||
Common stock, par value, (in dollars per share) | $ 0.0001 | $ 0.0001 | |||||||||||
Shares authorized under plan (in shares) | 54,402,264 | 37,055,557 | |||||||||||
Shares outstanding under plan (in shares) | 36,557,759 | 28,189,475 | 27,046,177 | ||||||||||
Shares remaining for future grants (in shares) | 17,844,505 | 8,866,082 | |||||||||||
Common stock exchange ratio | 206.81% | 206.81% | 206.81% | ||||||||||
Options granted (in shares) | 3,669,608 | 1,937,968 | 14,386,426 | 8,828,538 | |||||||||
Stock compensation expense | 46,803 | 1,500 | $ 132,542 | $ 4,949 | |||||||||
Awards granted (in shares) | 0 | ||||||||||||
Stock options granted, grant date fair value (in dollars per share) | $ 1.18 | $ 3.36 | $ 2.10 | $ 1.04 | $ 0.62 | ||||||||
Unvested stock options, unrecognized stock-based compensation | 463,700 | $ 463,700 | $ 14,900 | $ 9,000 | |||||||||
Cost not yet recognized, period for recognition | 4 years 3 months 7 days | 2 years 6 months | |||||||||||
Fair value of options vested | $ 5,500 | 3,500 | |||||||||||
Aggregate intrinsic value of stock options outstanding, | $ 160,100 | $ 160,100 | $ 445,300 | ||||||||||
Weighted average remaining contractual term of stock options outstanding | 7 years 10 days | 7 years 9 months | |||||||||||
Stock options exercisable (in shares) | 21,210,565 | 21,210,565 | 19,333,153 | ||||||||||
Aggregate intrinsic value of stock options exercisable | $ 109,000 | $ 109,000 | $ 246,200 | ||||||||||
Weighted average exercise price of stock options exercisable (in dollars per share) | $ 2.26 | $ 2.26 | $ 1.62 | ||||||||||
Weighted average remaining contractual term of stock options exercisable | 6 years 4 months 2 days | 6 years 10 months 6 days | |||||||||||
Aggregate intrinsic value of stock options exercised | $ 36,400 | $ 1,600 | $ 5,800 | 1,300 | |||||||||
Cash received from stock options exercised | $ 2,100 | 700 | |||||||||||
Warrants issued to purchase shares of common stock (in shares) | 122,052 | 139,629 | |||||||||||
Exercise price of warrants (in dollars per share) | $ 0.10 | $ 3.45 | $ 2.61 | ||||||||||
Weighted -average exercise price of warrants exercisable (in dollars per share) | $ 3 | ||||||||||||
Weighted-average remaining contractual term of warrants exercisable | 6 years 4 months 2 days | ||||||||||||
Total fair value of warrants vested | 0 | 4,000 | $ 7,000 | $ 900 | |||||||||
Warrants | |||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||
Awards granted (in shares) | 0 | 0 | |||||||||||
Exercise price of warrants (in dollars per share) | $ 11.50 | $ 11.50 | |||||||||||
Warrants exercisable (in shares) | 261,681 | ||||||||||||
Aggregate intrinsic value of warrants exercisable | $ 4,600 | ||||||||||||
Stock options | |||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||
Terms of award | The exercise prices, vesting and other restrictions are determined at the discretion of the Board, except that the exercise price per share of incentive stock options may not be less than 100% of the fair value of the common stock on the date of grant. | ||||||||||||
Exercise price, percentage of fair value of common stock | 100.00% | ||||||||||||
Expiration period | 10 years | ||||||||||||
Vesting period | 5 years | ||||||||||||
Stock compensation expense | $ 1,665 | $ 1,500 | $ 6,734 | $ 4,949 | $ 7,100 | $ 3,300 | |||||||
Stock options | February 2020 | |||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||
Stock compensation expense | $ 1,800 | ||||||||||||
Restricted Stock | |||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||
Awards granted (in shares) | 0 |
Employee benefit plans - Schedu
Employee benefit plans - Schedule of Assumptions to Estimate Fair Value of Stock Options on Weighted Average Basis (Details) - Stock options | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Weighted-average risk-free interest rate | 1.06% | 0.84% | 0.84% | 1.95% |
Expected term (in years) | 6 years 21 days | 4 years 7 months 28 days | 4 years 8 months 4 days | 6 years 3 months 14 days |
Expected volatility | 37.74% | 34.60% | 34.66% | 28.37% |
Expected dividend yield | 0.00% | 0.00% | 0.00% | 0.00% |
Employee benefit plans - Summar
Employee benefit plans - Summary of Stock Option Activity (Details) - $ / shares | Jan. 07, 2021 | Jan. 31, 2021 | Feb. 29, 2020 | Sep. 30, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Number of options | ||||||
Number of options, Outstanding, beginning balance (in shares) | 36,557,759 | 36,557,759 | 28,189,475 | 27,046,177 | ||
Number of options, Granted (in shares) | 3,669,608 | 1,937,968 | 14,386,426 | 8,828,538 | ||
Number of options, Exercised (in shares) | (1,297,977) | (916,527) | ||||
Number of options, Forfeited (in shares) | (4,720,165) | (6,768,713) | ||||
Number of options, Outstanding, ending balance (in shares) | 36,557,759 | 28,189,475 | ||||
Weighted-average exercise price | ||||||
Weighted-average exercise price, Outstanding, beginning balance (in dollars per share) | $ 2.25 | $ 2.25 | $ 1.48 | $ 1.31 | ||
Weighted-average exercise price, Granted (in dollars per share) | 3.59 | 1.99 | ||||
Weighted-average exercise price, Exercised (in dollars per share) | 1.53 | 0.74 | ||||
Weighted-average exercise price, Forfeited (in dollars per share) | 1.88 | 1.57 | ||||
Weighted-average exercise price, Outstanding, ending balance (in dollars per share) | $ 2.25 | $ 1.48 | ||||
Common stock exchange ratio | 206.81% | 206.81% | 206.81% |
Employee benefit plans - Summ_2
Employee benefit plans - Summary of Warrant Activity (Details) - $ / shares | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | |
Number of warrants | ||||
Granted (in shares) | 0 | |||
Warrants | ||||
Number of warrants | ||||
Beginning balance, Outstanding (in shares) | 261,681 | 261,681 | 261,681 | 261,681 |
Granted (in shares) | 0 | 0 | ||
Exercised (in shares) | 0 | 0 | ||
Forfeited (in shares) | 0 | 0 | ||
Ending balance, Outstanding (in shares) | 261,681 | 261,681 | ||
Weighted-average exercise price | ||||
Weighted-average exercise price, beginning balance (in dollars per share) | $ 3 | $ 3 | $ 3 | $ 3 |
Granted (in dollars per share) | 0 | 0 | ||
Exercised (in dollars per share) | 3 | 0 | ||
Forfeited (in dollars per share) | 0 | 0 | ||
Weighted-average exercise price, ending balance (in dollars per share) | $ 0 | $ 3 | $ 3 | $ 3 |
Income taxes - Schedule of Comp
Income taxes - Schedule of Components of Income Tax (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | ||
Current provision | $ (2) | $ (2) |
Deferred expense | 2 | 2 |
Provision for income taxes | $ 0 | $ 0 |
Income taxes - Schedule of Effe
Income taxes - Schedule of Effective Income Tax Rate Reconciliation (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | ||
Income tax provision at federal statutory rate (21%) | $ (28,642) | $ (76,385) |
Interest on convertible securities | 6,537 | 3,505 |
Interest on convertible securities discount | 4,423 | 3,257 |
Debt issuance cost related to convertible securities | 0 | 76 |
Derivative liability related to convertible securities | (19,688) | 29,098 |
Warrant expense | 16,823 | 596 |
Meals and entertainment | 13 | 210 |
Health insurance industry fee | 2,715 | 0 |
Other, net | (766) | 0 |
Valuation allowance | 18,585 | 39,643 |
Provision for income taxes | $ 0 | $ 0 |
Income taxes - Additional Infor
Income taxes - Additional Information (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | ||
Interest expense on convertible securities | $ 31,100 | $ 16,700 |
Operating loss carryforwards | 725,800 | 636,000 |
Operating loss carryforwards, subject to expiration | 295,100 | |
Valuation allowance | $ 163,204 | $ 144,619 |
Income taxes - Schedule of Defe
Income taxes - Schedule of Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Deferred income tax assets: | ||
Net operating loss carryforward (NOL) | $ 152,423 | $ 133,564 |
Unpaid claim reserve discounting | 335 | 269 |
Start-up costs amortization | 408 | 464 |
Charitable contributions carryforward | 154 | 146 |
Bonus accrual | 52 | 52 |
Stock based compensation | 2,568 | 1,554 |
Convertible securities issuance costs | 1 | 1 |
Tax credits (AMT) | 0 | 2 |
Prepaid and accrued expenses | 568 | 683 |
Property and equipment | 1,318 | 1,779 |
Capital loss carryforward | 0 | 49 |
Operating lease liability | 2,340 | 3,109 |
Premium deficiency reserve | 0 | 3,597 |
Acquisition costs amortization | 60 | 66 |
Interest expense carryforward | 2,318 | 1,675 |
Bad debt reserves | 2,363 | 0 |
Total deferred income tax assets | 164,908 | 147,010 |
Less: valuation allowance | (163,204) | (144,619) |
Total deferred income tax assets, net of valuation allowance | 1,704 | 2,391 |
Deferred income tax liabilities: | ||
TCJA Transition Adj. IRC 846 | (49) | (58) |
Market discount | 0 | (1) |
Operating lease right of use asset | (1,655) | (2,330) |
Total deferred income tax liabilities | (1,704) | (2,389) |
Net deferred income tax asset | $ 0 | $ 2 |
Net loss per share - Calculatio
Net loss per share - Calculation of Basic and Diluted Net Loss Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | |
Earnings Per Share [Abstract] | ||||||
Net loss | $ (34,527) | $ 12,758 | $ (400,555) | $ (10,001) | $ (136,392) | $ (363,737) |
Net loss attributable to common stockholders | $ (34,527) | $ 4,966 | $ (400,555) | $ (10,001) | $ (136,392) | $ (363,737) |
Basic weighted average number of common shares and common shares equivalents outstanding (in shares) | 414,572,706 | 88,863,244 | 410,417,493 | 88,616,116 | 88,691,582 | 87,829,419 |
Diluted weighted average number of common shares and common shares equivalents outstanding (in shares) | 414,572,706 | 248,133,335 | 410,417,493 | 88,616,116 | 88,691,582 | 87,829,419 |
Net loss per share attributable to common shareholders - basic (in dollars per share) | $ (0.08) | $ 0.06 | $ (0.98) | $ (0.11) | $ (1.54) | $ (4.14) |
Net loss per share attributable to common shareholders - diluted (in dollars per share) | $ (0.08) | $ 0.02 | $ (0.98) | $ (0.11) | $ (1.54) | $ (4.14) |
Net loss per share - Calculat_2
Net loss per share - Calculation of Basic and Diluted Net Loss Per Share Footnote (Details) | Jan. 07, 2021 | Jan. 31, 2021 | Dec. 31, 2020 |
Earnings Per Share [Abstract] | |||
Common stock exchange ratio | 206.81% | 206.81% | 206.81% |
Net loss per share - Schedule o
Net loss per share - Schedule of Antidilutive Securities Excluded from Diluted Net Loss Per Share (Details) - shares | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||||
Dilutive common shares excluded from the calculations of diluted loss per share (in shares) | 54,584,553 | 12,145,560 | 54,584,553 | 184,243,282 | 183,505,007 | 171,292,096 |
Options to purchase common stock | ||||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||||
Dilutive common shares excluded from the calculations of diluted loss per share (in shares) | 33,477,833 | 5,183,834 | 33,477,833 | 37,296,034 | 36,557,759 | 24,344,848 |
Convertible preferred stock (as converted to common stock) | ||||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||||
Dilutive common shares excluded from the calculations of diluted loss per share (in shares) | 0 | 139,444,346 | 139,444,346 | 139,444,346 | ||
Warrants to purchase common stock (as converted to common stock) | ||||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||||
Dilutive common shares excluded from the calculations of diluted loss per share (in shares) | 0 | 4,342,956 | 0 | 4,884,132 | 7,502,902 | 4,884,132 |
Warrants to purchase convertible preferred stock (as converted to common stock) | ||||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||||
Dilutive common shares excluded from the calculations of diluted loss per share (in shares) | 0 | 2,618,770 | 0 | 2,618,770 | 0 | 2,618,770 |
Net loss per share - Schedule_2
Net loss per share - Schedule of Antidilutive Securities Excluded from Diluted Net Loss Per Share Footnote (Details) | Jan. 07, 2021 | Jan. 31, 2021 | Dec. 31, 2020 |
Earnings Per Share [Abstract] | |||
Common stock exchange ratio | 206.81% | 206.81% | 206.81% |
Direct Contracting - Schedule o
Direct Contracting - Schedule of Performance Guarantees (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | |
Direct Contracting [Abstract] | |||||
Direct Contracting performance year receivable | $ 220,738 | $ 220,738 | $ 0 | ||
Direct Contracting, performance year obligation | 244,599 | 244,599 | $ 0 | ||
Amortization of the Direct Contracting performance year receivable | (223,309) | (441,476) | |||
Amortization of the Direct Contracting performance year obligation | 223,309 | 441,476 | |||
Direct Contracting revenue | $ 222,647 | $ 0 | $ 439,020 | $ 0 |
Direct Contracting - Narrative
Direct Contracting - Narrative (Details) | Sep. 30, 2021 |
Direct Contracting [Abstract] | |
Maximum percentage deviation of Performance Year Benchmark | 25.00% |
Statutory equity and income (De
Statutory equity and income (Details) - USD ($) $ in Millions | Dec. 31, 2020 | Dec. 31, 2019 |
Insurance [Abstract] | ||
Aggregate statutory capital and surplus | $ 79.4 | $ 73.3 |
Statutory RBC required | $ 75.8 | $ 60.8 |
Subsequent events (Details)
Subsequent events (Details) $ in Millions | Jan. 07, 2021USD ($) |
PIPE Investment | |
Subsequent Event [Line Items] | |
Business combination, proceeds from private placement | $ 400 |
IPO | |
Subsequent Event [Line Items] | |
Business combination, deferred underwriter fees | 29 |
SCH and Merger Sub | Merger Agreement | |
Subsequent Event [Line Items] | |
Business combination, net increase in cash | 670 |
Business combination, transaction costs | 61 |
Subsequent Event | PIPE Investment | |
Subsequent Event [Line Items] | |
Business combination, proceeds from private placement | 400 |
Subsequent Event | IPO | |
Subsequent Event [Line Items] | |
Business combination, deferred underwriter fees | 29 |
Subsequent Event | SCH and Merger Sub | Merger Agreement | |
Subsequent Event [Line Items] | |
Business combination, net increase in cash | 670 |
Business combination, transaction costs | $ 61.8 |
Schedule I - Condensed Financ_3
Schedule I - Condensed Financial Information - Balance Sheet (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Assets: | ||||
Cash and cash equivalents | $ 202,264 | $ 92,348 | $ 67,598 | |
Total assets | 952,478 | 267,252 | 337,021 | |
Liabilities: | ||||
Accounts payable and accrued expenses | 24,208 | 30,671 | 19,826 | |
Accrued salaries and benefits | 13,436 | 3,978 | 3,792 | |
Notes payable, net of discount and deferred issuance costs | 19,929 | 106,413 | 57,917 | |
Derivative liabilities | 0 | 44,810 | 138,561 | |
Warrants payable | 0 | 97,782 | 17,672 | |
Total liabilities | 540,188 | 432,698 | 377,811 | |
Convertible Preferred stock (Series Seed A, A-1, B, C, and D), $0.0001 par value | 0 | 447,747 | [1] | 447,747 |
Stockholders’ deficit: | ||||
Common stock, $0.0001 par value,351,572,668 shares authorized; 89,972,184 and88,674,206 issued; and 89,206,266 and 88,279,119; after reverse capitalization, outstanding as of December 31, 2020 and 2019, respectively | 9 | 9 | ||
Additional paid-in capital | 1,838,639 | 411,867 | 403,041 | |
Accumulated deficit | (1,429,537) | (1,028,982) | (891,633) | |
Clover shareholders’ deficit | 408,387 | (617,096) | (488,537) | |
Total liabilities, convertible preferred stock and stockholders’ deficit | $ 952,478 | 267,252 | 337,021 | |
Parent Company | ||||
Assets: | ||||
Cash and cash equivalents | 5,432 | 4,569 | ||
Other assets | 102 | 342 | ||
Intercompany interest receivable | 4,958 | 3,750 | ||
Intercompany note receivable | 40,000 | 40,000 | ||
Investments in consolidated subsidiaries | 77,212 | 158,159 | ||
Total assets | 127,704 | 206,820 | ||
Liabilities: | ||||
Accounts payable and accrued expenses | 13,140 | 5,471 | ||
Accrued salaries and benefits | 229 | 0 | ||
Intercompany payable | 27,251 | 4,093 | ||
Notes payable, net of discount and deferred issuance costs | 107,674 | 76,758 | ||
Derivative liabilities | 44,810 | 138,561 | ||
Warrants payable | 97,782 | 17,672 | ||
Total liabilities | 290,886 | 242,555 | ||
Convertible Preferred stock (Series Seed A, A-1, B, C, and D), $0.0001 par value | 447,747 | 447,747 | ||
Stockholders’ deficit: | ||||
Common stock, $0.0001 par value,351,572,668 shares authorized; 89,972,184 and88,674,206 issued; and 89,206,266 and 88,279,119; after reverse capitalization, outstanding as of December 31, 2020 and 2019, respectively | 9 | 9 | ||
Additional paid-in capital | 411,843 | 403,041 | ||
Accumulated deficit | (1,022,781) | (886,532) | ||
Clover shareholders’ deficit | (610,929) | (483,482) | ||
Total liabilities, convertible preferred stock and stockholders’ deficit | $ 127,704 | $ 206,820 | ||
[1] | Prior period results have been adjusted to reflect the exchange of Legacy Clover’s common stock for Clover Class B Common Stock at an exchange ratio of approximately 2.0681 in January 2021 as a result of the Business Combination. See Note 3 (Business Combination) for additional information. |
Schedule I - Condensed Financ_4
Schedule I - Condensed Financial Information - Balance Sheet (Parenthetical) (Details) - USD ($) $ / shares in Units, $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Condensed Financial Information Disclosure [Abstract] | |||
Preferred stock par value, (in dollars per share) | $ 0.0001 | $ 0.0001 | |
Preferred stock, shares authorized (in shares) | 155,387,025 | 155,387,025 | |
Preferred stock, shares issued (in shares) | 139,444,346 | 139,444,346 | |
Preferred stock, shares outstanding (in shares) | 139,444,346 | 139,444,346 | |
Liquidation preference | $ 470,256 | ||
Common stock, par value, (in dollars per share) | $ 0.0001 | $ 0.0001 | |
Common stock, shares authorized (in shares) | 351,572,668 | 351,572,668 | |
Common stock, shares, issued (in shares) | 89,972,184 | 88,674,206 | |
Common stock, shares, outstanding (in shares) | 89,206,266 | 88,279,119 | 87,362,592 |
Schedule I - Condensed Financ_5
Schedule I - Condensed Financial Information - Statements of Operations (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | |
Revenues: | ||||||
Other income | $ 859 | $ 1,994 | $ 2,550 | $ 5,555 | $ 4,214 | $ 801 |
Investment income, net | 179 | 823 | 340 | 2,226 | 2,976 | 4,539 |
Total revenues | 427,163 | 169,069 | 1,039,960 | 506,655 | 672,888 | 462,266 |
Expenses: | ||||||
General and administrative expenses | 45,749 | 29,847 | 129,983 | 79,798 | 120,444 | 94,757 |
Other expense | 0 | 0 | 191 | 0 | 0 | 363 |
Total expenses | 576,416 | 190,687 | 1,490,163 | 531,733 | 765,595 | 645,465 |
Loss from operations | (149,253) | (21,618) | (450,203) | (25,078) | (92,707) | (183,199) |
Change in fair value of warrants expense | (115,152) | 20,029 | (66,146) | 31,903 | 80,328 | 2,909 |
Interest expense | 413 | 9,268 | 2,817 | 25,560 | 35,990 | 23,155 |
Amortization of notes and securities discount | 21,118 | 15,913 | ||||
(Gain) loss on derivative | 0 | (68,081) | 0 | (87,475) | (93,751) | 138,561 |
Net loss | $ (34,527) | $ 12,758 | $ (400,555) | $ (10,001) | (136,392) | (363,737) |
Parent Company | ||||||
Revenues: | ||||||
Other income | 3,685 | 3,396 | ||||
Investment income, net | 0 | 46 | ||||
Total revenues | 3,685 | 3,442 | ||||
Expenses: | ||||||
General and administrative expenses | 4,831 | 79 | ||||
Other expense | 0 | 363 | ||||
Total expenses | 4,831 | 442 | ||||
Loss from operations | (1,146) | 3,000 | ||||
Change in fair value of warrants expense | 80,328 | 2,909 | ||||
Interest expense | 35,556 | 23,155 | ||||
Amortization of notes and securities discount | 21,118 | 15,913 | ||||
(Gain) loss on derivative | (93,751) | 138,561 | ||||
Equity in net losses of consolidated subsidiaries | 91,995 | 186,199 | ||||
Net loss | $ (136,392) | $ (363,737) |
Schedule I - Condensed Financ_6
Schedule I - Condensed Financial Information - Statements of Cash Flows (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | |
Cash flows from operating activities | ||||
Net loss | $ (400,555) | $ (10,001) | $ (136,392) | $ (363,737) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||||
Amortization of notes discount | 21,084 | 15,807 | ||
Stock-based compensation expense | 132,542 | 4,949 | 7,078 | 3,301 |
Paid in kind interest | 0 | 18,769 | 28,334 | 11,633 |
Change in fair value of warrants | (66,146) | 31,903 | 80,110 | 2,836 |
Change in derivative liabilities | 0 | (87,475) | (93,751) | 138,561 |
Amortization of warrants | 218 | 73 | ||
Amortization of debt issuance costs | 34 | 506 | ||
Changes in operating assets and liabilities: | ||||
Other assets | (10,261) | 496 | (5,470) | (274) |
Accounts payable and accrued expenses | 1,386 | 5,937 | 10,845 | 6,298 |
Accrued salaries and benefits | 9,458 | 662 | 186 | (2,235) |
Net cash used in operating activities | (202,150) | (58,594) | (118,498) | (159,875) |
Cash flows from investing activities | ||||
Net cash provided by (used in) investing activities | (328,956) | 69,847 | 137,404 | (181,908) |
Cash flows from financing activities | ||||
Deferred financing costs | 0 | (108) | (98) | (363) |
Payment of notes payable principal | (30,925) | (13,868) | (18,752) | (9,670) |
Issuance of common stock, net of early exercise liability | 5,547 | 954 | 1,748 | 601 |
Buyback and subsequent cancellation of common stock | (147) | 0 | (957) | 0 |
Net cash provided by financing activities | 641,022 | 10,881 | 5,844 | 333,978 |
Net increase (decrease) in cash and cash equivalents | 109,916 | 22,134 | 24,750 | (7,805) |
Cash and cash equivalents, beginning of year | 92,348 | 67,598 | 67,598 | 75,403 |
Cash and cash equivalents, end of year | 202,264 | 89,732 | 92,348 | 67,598 |
Parent Company | ||||
Cash flows from operating activities | ||||
Net loss | (136,392) | (363,737) | ||
Adjustments to reconcile net loss to net cash used in operating activities: | ||||
Amortization of notes discount | 21,084 | 15,807 | ||
Stock-based compensation expense | 7,078 | 3,301 | ||
Paid in kind interest | 28,334 | 11,633 | ||
Change in fair value of warrants | 80,110 | 2,836 | ||
Change in derivative liabilities | (93,751) | 138,561 | ||
Amortization of warrants | 218 | 73 | ||
Amortization of debt issuance costs | 34 | 506 | ||
Changes in operating assets and liabilities: | ||||
Other assets | 214 | (391) | ||
Accounts payable and accrued expenses | 7,669 | 5,728 | ||
Accrued salaries and benefits | 229 | (169) | ||
Intercompany interest receivable | (1,208) | (1,200) | ||
Intercompany payable | 23,158 | (23,921) | ||
Net cash used in operating activities | (63,223) | (210,973) | ||
Cash flows from investing activities | ||||
Investments in consolidated subsidiaries | 82,047 | (154,469) | ||
Net cash provided by (used in) investing activities | 82,047 | (154,469) | ||
Cash flows from financing activities | ||||
Proceeds from issuance of convertible securities | 0 | 343,410 | ||
Deferred financing costs | 0 | (363) | ||
Payment of notes payable principal | (18,752) | (9,670) | ||
Issuance of common stock, net of early exercise liability | 1,748 | 601 | ||
Buyback and subsequent cancellation of common stock | (957) | 0 | ||
Net cash provided by financing activities | (17,961) | 333,978 | ||
Net increase (decrease) in cash and cash equivalents | 863 | (31,464) | ||
Cash and cash equivalents, beginning of year | $ 5,432 | $ 4,569 | 4,569 | 36,033 |
Cash and cash equivalents, end of year | $ 5,432 | $ 4,569 |
Insurance Subsidiaries (Details
Insurance Subsidiaries (Details) - USD ($) $ in Millions | Dec. 31, 2020 | Dec. 31, 2019 |
Parent Company And Unregulated Subsidiaries | ||
Cash and Cash Equivalents [Line Items] | ||
Investments and cash | $ 50 | $ 156 |
Regulated Subsidiaries | ||
Cash and Cash Equivalents [Line Items] | ||
Investments and cash | $ 101.1 | $ 107.3 |
Schedule II - Valuation and Q_2
Schedule II - Valuation and Qualifying Accounts (Details) - SEC Schedule, 12-09, Valuation Allowance, Deferred Tax Asset - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
SEC Schedule, 12-09, Movement in Valuation Allowances and Reserves [Roll Forward] | ||
Balance at beginning of period | $ 144,619 | $ 104,976 |
Charged to costs and expenses | 18,585 | 39,643 |
Charge to other accounts | 0 | 0 |
(Deductions) | 0 | 0 |
Balance at end of period | $ 163,204 | $ 144,619 |
Organization and Operations (De
Organization and Operations (Details) | Sep. 30, 2021 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Direct Contracting, shared savings and losses, percent | 100.00% |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies (Details) $ in Millions | 3 Months Ended | 9 Months Ended |
Sep. 30, 2021USD ($) | Sep. 30, 2021USD ($) | |
Amortization of intangible assets | $ 0.2 | $ 0.2 |
Impairment of intangible assets | 0 | 0 |
Other Current Assets | ||
Deferred implementation costs | 5 | 5 |
General and Administrative Expense | ||
Amortization expense of deferred acquisition costs | $ 1.1 | $ 9.6 |
Business Combination (Details)
Business Combination (Details) $ / shares in Units, $ in Thousands | Jan. 07, 2021USD ($)vote$ / sharesshares | Jan. 06, 2021USD ($)$ / sharesshares | Oct. 05, 2020USD ($)shares | Jan. 31, 2021 | Sep. 30, 2021USD ($)$ / sharesshares | Sep. 30, 2020USD ($) | Dec. 31, 2020USD ($)$ / sharesshares | Dec. 31, 2019USD ($)$ / sharesshares | Sep. 09, 2021$ / shares | Jan. 08, 2021shares | Apr. 21, 2020$ / shares | Dec. 31, 2018shares | Dec. 31, 2017$ / sharesshares | Nov. 30, 2016$ / sharesshares |
Business Acquisition [Line Items] | ||||||||||||||
Common stock, par value, (in dollars per share) | $ / shares | $ 0.0001 | $ 0.0001 | ||||||||||||
Common stock, shares, outstanding (in shares) | 89,206,266 | 88,279,119 | 87,362,592 | |||||||||||
Common stock exchange ratio | 206.81% | 206.81% | 206.81% | |||||||||||
Class of warrant or right, number of securities called by warrants or rights (in shares) | 122,052 | 139,629 | ||||||||||||
Exercise price of warrants (in dollars per share) | $ / shares | $ 0.10 | $ 3.45 | $ 2.61 | |||||||||||
Proceeds from issuance of common stock | $ | $ 5,547 | $ 954 | $ 1,748 | $ 601 | ||||||||||
Warrants outstanding (in shares) | 38,533,271 | 38,533,271 | ||||||||||||
Preferred stock, shares authorized (in shares) | 155,387,025 | 155,387,025 | ||||||||||||
Preferred stock par value, (in dollars per share) | $ / shares | $ 0.0001 | $ 0.0001 | ||||||||||||
Preferred stock, shares issued (in shares) | 139,444,346 | 139,444,346 | ||||||||||||
Preferred stock, shares outstanding (in shares) | 139,444,346 | 139,444,346 | ||||||||||||
SCH and Merger Sub | Merger Agreement | ||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||
Business combination, net increase in cash | $ | $ 670,000 | |||||||||||||
Business combination, transaction costs | $ | 61,000 | |||||||||||||
Board of Directors | ||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||
Preferred stock, shares authorized (in shares) | 25,000,000 | |||||||||||||
Preferred stock par value, (in dollars per share) | $ / shares | $ 0.0001 | |||||||||||||
Preferred stock, shares issued (in shares) | 0 | |||||||||||||
Preferred stock, shares outstanding (in shares) | 0 | |||||||||||||
PIPE Investment | ||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||
Business combination, proceeds from private placement | $ | 400,000 | |||||||||||||
IPO | ||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||
Business combination, deferred underwriter fees | $ | $ 29,000 | |||||||||||||
Public Warrants | ||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||
Warrants outstanding (in shares) | 0 | |||||||||||||
Private Placement Warrant and Public Warrant | ||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||
Exercise price of warrants (in dollars per share) | $ / shares | $ 11.50 | |||||||||||||
Common Class A | ||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||
Common stock, par value, (in dollars per share) | $ / shares | $ 0.0001 | $ 0.0001 | ||||||||||||
Common stock, shares, outstanding (in shares) | 143,475,108 | 278,308,964 | 0 | |||||||||||
Common Class A | PIPE Investment | ||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||
Sale of stock, number of shares issued in transaction (in shares) | 40,000,000 | |||||||||||||
Proceeds from issuance of common stock | $ | $ 400,000 | |||||||||||||
Common Class A | Private Placement Warrant | ||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||
Class of warrant or right, number of securities called by warrants or rights (in shares) | 10,933,333 | |||||||||||||
Common Class A | Public Warrants | ||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||
Class of warrant or right, number of securities called by warrants or rights (in shares) | 27,599,938 | |||||||||||||
Common Class A | Clover Health Investments Corp | ||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||
Common stock, voting rights | one vote | |||||||||||||
Common Class A | SCH Sponsor III LLC | ||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||
Sale of stock, number of shares issued in transaction (in shares) | 15,200,000 | |||||||||||||
Common Class B | ||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||
Common stock, par value, (in dollars per share) | $ / shares | $ 0.0001 | $ 0.0001 | $ 0.0001 | |||||||||||
Common stock, voting rights per share | vote | 10 | |||||||||||||
Cash consideration received from business combination | $ | $ 499,800 | |||||||||||||
Common stock, shares, outstanding (in shares) | 260,965,701 | 142,318,711 | 89,206,266 | |||||||||||
Share price (in dollars per share) | $ / shares | $ 10 | |||||||||||||
Common stock exchange ratio | 206.81% | 206.81% | ||||||||||||
Pro rata adjustments, percentage | 32.30% | |||||||||||||
Common Class A and Class B | ||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||
Common stock, shares, outstanding (in shares) | 404,440,809 | |||||||||||||
SCH class B ordinary shares converted to Clover class A common Stock | Social Capital Hedosophia Holdings Corp III | ||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||
Common stock, par value, (in dollars per share) | $ / shares | $ 0.0001 | |||||||||||||
Common stock. conversion basis | one-for-one | |||||||||||||
SCH class A ordinary shares converted to Clover class A common Stock | Social Capital Hedosophia Holdings Corp III | ||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||
Common stock, par value, (in dollars per share) | $ / shares | $ 0.0001 | |||||||||||||
Common stock. conversion basis | one-for-one | |||||||||||||
Shares redeemed for cash | 24,892 | |||||||||||||
Sale of stock, price per share (in dollars per share) | $ / shares | $ 10 | |||||||||||||
Cash paid for redemption of common stock | $ | $ 200 | |||||||||||||
Redemption price (in dollars per share) | $ / shares | $ 10 | |||||||||||||
Cash held-in-trust account | $ | $ 827,900 | |||||||||||||
Balance to pay on merger consideration | $ | $ 499,800 |
Investment Securities - Sched_4
Investment Securities - Schedule of Present Cost or Amortized Cost and Fair Values of Investments (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Investment securities, held-to-maturity: | |||
Amortized cost | $ 695 | $ 694 | |
Gross unrealized gains | 42 | 43 | |
Gross unrealized losses | (10) | 0 | |
Fair value | 727 | 737 | |
Investment securities, available-for-sale: | |||
Amortized cost | 167,935 | 53,953 | |
Gross unrealized gains | 37 | 51 | |
Gross unrealized losses | (647) | (41) | |
Fair value | 167,325 | 53,963 | |
Total investment securities | |||
Amortized cost | 168,630 | 54,647 | $ 57,045 |
Gross unrealized gains | 79 | 94 | 68 |
Gross unrealized losses | (657) | (41) | 0 |
Fair value | $ 168,052 | 54,700 | 57,113 |
U.S. government and government agencies and authorities | Investment securities, held-to-maturity: | |||
Investment securities, held-to-maturity: | |||
Amortized cost | 694 | 663 | |
Gross unrealized gains | 43 | 22 | |
Gross unrealized losses | 0 | 0 | |
Fair value | 737 | 685 | |
U.S. government and government agencies and authorities | Investment securities, available-for-sale: | |||
Investment securities, available-for-sale: | |||
Amortized cost | 53,953 | 56,382 | |
Gross unrealized gains | 51 | 46 | |
Gross unrealized losses | (41) | 0 | |
Fair value | $ 53,963 | $ 56,428 |
Investment Securities - Sched_5
Investment Securities - Schedule of Amortized Cost and Fair Value of Debt Securities (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Debt Securities, Held-to-maturity, Maturity, Amortized Cost, Net [Abstract] | ||
Due within one year | $ 305 | $ 265 |
Due after one year through five years | 15 | 319 |
Due after five years through ten years | 265 | 0 |
Due after ten years | 110 | 110 |
Amortized cost | 695 | 694 |
Debt Securities, Held-to-maturity, Maturity, Fair Value [Abstract] | ||
Due within one year | 308 | 266 |
Due after one year through five years | 16 | 328 |
Due after five years through ten years | 256 | 0 |
Due after ten years | 147 | 143 |
Total | 727 | 737 |
Debt Securities, Available-for-sale, Amortized Cost [Abstract] | ||
Due within one year | 21,139 | 0 |
Due after one year through five years | 141,835 | 43,382 |
Due after five years through ten years | 4,961 | 10,571 |
Due after ten years | 0 | 0 |
Total | 167,935 | 53,953 |
Debt Securities, Available-for-sale, Fair Value, Fiscal Year Maturity [Abstract] | ||
Due within one year | 21,142 | 0 |
Due after one year through five years | 141,352 | 43,431 |
Due after five years through ten years | 4,831 | 10,532 |
Due after ten years | 0 | 0 |
Total | $ 167,325 | $ 53,963 |
Investment Securities - Sched_6
Investment Securities - Schedule of Net Investment Income (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | |
Fair Value, Separate Account Investment [Line Items] | ||||||
Net investment income | $ 179 | $ 823 | $ 340 | $ 2,226 | $ 2,976 | $ 4,539 |
Cash and cash equivalents | ||||||
Fair Value, Separate Account Investment [Line Items] | ||||||
Net investment income | 0 | 1 | 0 | 108 | 108 | 1,249 |
Short-term investments | ||||||
Fair Value, Separate Account Investment [Line Items] | ||||||
Net investment income | 62 | 519 | 139 | 1,141 | 1,722 | 2,904 |
Investment securities | ||||||
Fair Value, Separate Account Investment [Line Items] | ||||||
Net investment income | $ 117 | $ 303 | $ 201 | $ 977 | $ 1,146 | $ 386 |
Investment Securities - Sched_7
Investment Securities - Schedule of Gross Unrealized Losses and Fair Value (Details) $ in Thousands | Sep. 30, 2021USD ($)position |
Debt Securities, Held-to-maturity, Allowance for Credit Loss [Line Items] | |
Less than 12 months, Fair value | $ 0 |
Less than 12 months, Unrealized loss | 0 |
Greater than 12 Months, Fair Value | 71,620 |
Greater than 12 months, Unrealized loss | (657) |
Total, Fair value | 71,620 |
Total, Unrealized Loss | $ (657) |
Less than 12 months, Number of positions | position | 0 |
12 Months or Longer, Number of positions | position | 14 |
Total, Number of positions | position | 14 |
U.S. government and government agencies | |
Debt Securities, Held-to-maturity, Allowance for Credit Loss [Line Items] | |
Less than 12 months, Fair value | $ 0 |
Less than 12 months, Unrealized loss | 0 |
Greater than 12 Months, Fair Value | 71,620 |
Greater than 12 months, Unrealized loss | (657) |
Total, Fair value | 71,620 |
Total, Unrealized Loss | $ (657) |
Investment Securities - Proce_2
Investment Securities - Proceeds from Sales and Maturities of Investment Securities (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | |
Investments, Debt and Equity Securities [Abstract] | ||||||
Proceeds from sales of investment securities | $ 89,997 | $ 71,049 | $ 126,862 | $ 166,024 | $ 248,664 | $ 269,205 |
Proceeds from maturities of investment securities | 50,000 | 9,600 | 250,265 | 56,701 | 63,751 | 55,635 |
Gross realized gains | 7 | 504 | 24 | 540 | 1,117 | 114 |
Gross realized losses | 0 | 0 | (77) | 0 | (3) | (3) |
Net realized gains (losses) | $ 7 | $ 504 | $ (53) | $ 540 | $ 1,114 | $ 111 |
Investment Securities - Addit_2
Investment Securities - Additional Information (Details) - USD ($) $ in Millions | Sep. 30, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Investments, Debt and Equity Securities [Abstract] | |||
Deposits with various states and regulatory bodies | $ 11.2 | $ 7.5 | $ 3.7 |
Fair Value Measurements - Sum_2
Fair Value Measurements - Summary of Fair Value Measurements for Items (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
U.S. government and government agencies | $ 167,325 | $ 53,963 | |
Total assets at fair value | 167,325 | 53,963 | $ 56,428 |
Derivative liabilities | 44,810 | ||
Warrants payable | 97,782 | ||
Total liabilities at fair value | 142,592 | 156,233 | |
Level 1 | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
U.S. government and government agencies | 0 | 0 | |
Total assets at fair value | 0 | 0 | 0 |
Derivative liabilities | 0 | ||
Warrants payable | 0 | ||
Total liabilities at fair value | 0 | 0 | |
Level 2 | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
U.S. government and government agencies | 167,325 | 53,963 | |
Total assets at fair value | 167,325 | 53,963 | 56,428 |
Derivative liabilities | 0 | ||
Warrants payable | 0 | ||
Total liabilities at fair value | 0 | 0 | |
Level 3 | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
U.S. government and government agencies | 0 | 0 | |
Total assets at fair value | $ 0 | 0 | 0 |
Derivative liabilities | 44,810 | ||
Warrants payable | 97,782 | ||
Total liabilities at fair value | $ 142,592 | $ 156,233 |
Fair Value Measurements - Add_2
Fair Value Measurements - Additional Information (Details) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||||||||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | Sep. 09, 2021 | Aug. 24, 2021 | Jan. 08, 2021 | Jan. 07, 2021 | Sep. 25, 2020 | Dec. 31, 2017 | Nov. 30, 2016 | |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||||||||||||
Financial asset or liabilities transfer in and out | $ 0 | $ 0 | |||||||||||
Exercise price of warrants (in dollars per share) | $ 0.10 | $ 3.45 | $ 2.61 | ||||||||||
Warrants outstanding | $ 0 | $ 0 | 97,782,000 | 17,672,000 | |||||||||
Warrants outstanding (in shares) | 38,533,271 | 38,533,271 | |||||||||||
Private Placement Warrants | |||||||||||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||||||||||||
Warrants outstanding | $ 0 | ||||||||||||
Level 3 | |||||||||||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||||||||||||
Estimated fair value of convertible securities | 0 | 0 | 949,600,000 | $ 251,900,000 | |||||||||
Financial asset or liabilities transfer in and out | 0 | $ 0 | 0 | $ 0 | |||||||||
Level 3 | 2020 Convertible Note | |||||||||||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||||||||||||
Estimated fair value of convertible securities | $ 20,000,000 | ||||||||||||
Estimated fair value and carrying value of convertible securities | $ 21,600,000 | $ 21,600,000 | $ 20,400,000 |
Fair Value Measurements - Sch_3
Fair Value Measurements - Schedule of Significant Unobservable Inputs Used in Black-Scholes Model to Measure Warrants Payable (Details) - Common stock purchase warrants - $ / shares | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Beginning stock price (in dollars per share) | $ 30.14 | $ 7.19 |
Strike price (in dollars per share) | $ 1.04 | $ 1.04 |
Expected volatility | 56.00% | |
Expected term | 7 days | |
Risk-free interest rate | 0.09% | |
Discount factor | 13.00% | 15.00% |
Fair Value Measurements - Sch_4
Fair Value Measurements - Schedule of Changes in Balances of Level 3 Financial Liabilities (Details) - Level 3 - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |||||
Beginning balance | $ 433,757 | $ 1,092,145 | $ 408,118 | $ 408,118 | $ 14,836 |
Issuances | 0 | 0 | 0 | 0 | 237,362 |
Settlements | 0 | (1,092,145) | 0 | 0 | 0 |
Transfers in | 0 | 0 | 0 | 0 | 0 |
Transfers out | 0 | 0 | 0 | 0 | 0 |
Total recognized losses (gains) | 47,374 | 0 | 73,013 | 684,027 | 155,920 |
Ending balance | 481,131 | 0 | 481,131 | 1,092,145 | 408,118 |
Convertible securities | |||||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |||||
Beginning balance | 285,166 | 949,553 | 251,885 | 251,885 | 0 |
Issuances | 0 | 0 | 0 | 0 | 237,362 |
Settlements | 0 | (949,553) | 0 | 0 | 0 |
Transfers in | 0 | 0 | 0 | 0 | 0 |
Transfers out | 0 | 0 | 0 | 0 | 0 |
Total recognized losses (gains) | 95,477 | 0 | 128,758 | 697,668 | 14,523 |
Ending balance | 380,643 | 0 | 380,643 | 949,553 | 251,885 |
Derivative liabilities | |||||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |||||
Beginning balance | 119,167 | 44,810 | 138,561 | 138,561 | 0 |
Issuances | 0 | 0 | 0 | 0 | 0 |
Settlements | 0 | (44,810) | 0 | 0 | 0 |
Transfers in | 0 | 0 | 0 | 0 | 0 |
Transfers out | 0 | 0 | 0 | 0 | 0 |
Total recognized losses (gains) | (68,081) | 0 | (87,475) | (93,751) | 138,561 |
Ending balance | 51,086 | 0 | 51,086 | 44,810 | 138,561 |
Warrants payable | |||||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |||||
Beginning balance | 29,424 | 97,782 | 17,672 | 17,672 | 14,836 |
Issuances | 0 | 0 | 0 | 0 | 0 |
Settlements | 0 | (97,782) | 0 | 0 | 0 |
Transfers in | 0 | 0 | 0 | 0 | 0 |
Transfers out | 0 | 0 | 0 | 0 | 0 |
Total recognized losses (gains) | 19,978 | 0 | 31,730 | 80,110 | 2,836 |
Ending balance | $ 49,402 | $ 0 | $ 49,402 | $ 97,782 | $ 17,672 |
Fair Value Measurements - Sch_5
Fair Value Measurements - Schedule of Changes in Fair Value of Warrants Payable (Details) - Public and Private Placement Warrants - Warrants payable - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2021 | Jan. 06, 2021 | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Initial measurement, January 7, 2021 | $ 0 | $ 147,582 |
Mark-to-market adjustment | (66,214) | |
Warrants exercised | (81,283) | |
Warrants redeemed | (85) | |
Warrants payable balance, September 30, 2021 | $ 0 | $ 147,582 |
Healthcare Receivables (Details
Healthcare Receivables (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Receivables [Line Items] | |||
Healthcare receivables | $ 34,656 | $ 38,745 | $ 25,819 |
Rebate Receivables | |||
Receivables [Line Items] | |||
Healthcare receivables | 30,200 | 26,600 | 17,500 |
Other Healthcare Receivables | |||
Receivables [Line Items] | |||
Healthcare receivables | $ 4,500 | $ 12,100 | $ 8,300 |
Related-Party Transactions (Det
Related-Party Transactions (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | |
Related Party Transaction [Line Items] | ||||||
Net medical claims incurred | $ 436,422 | $ 144,846 | $ 1,109,375 | $ 410,540 | $ 590,468 | $ 450,645 |
General and administrative expenses | 45,749 | 29,847 | 129,983 | 79,798 | 120,444 | 94,757 |
CarePoint Health Contract | ||||||
Related Party Transaction [Line Items] | ||||||
Net medical claims incurred | 1,700 | 1,900 | 9,200 | 5,300 | $ 11,100 | $ 9,700 |
Rogue Trading | ||||||
Related Party Transaction [Line Items] | ||||||
Marketing expense | 300 | 100 | 300 | 100 | ||
Medical Records Exchange, LLC | ||||||
Related Party Transaction [Line Items] | ||||||
General and administrative expenses | $ 100 | $ 100 | $ 100 | $ 100 |
Unpaid Claims - Schedule of A_2
Unpaid Claims - Schedule of Activity in the Liability for Unpaid Claims and Claims Adjustment Expense (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | |
Liability for Unpaid Claims and Claims Adjustment Expense [Roll Forward] | ||||
Net balance, beginning of year | $ 103,976 | $ 77,886 | $ 77,886 | $ 41,660 |
Incurred related to: | ||||
Current year | 1,092,280 | 425,941 | 604,183 | 453,423 |
Prior years | 17,095 | (15,401) | (13,715) | (2,778) |
Total incurred | 1,109,375 | 410,540 | 590,468 | 450,645 |
Paid related to: | ||||
Current year | 963,779 | 339,252 | 501,339 | 376,677 |
Prior years | 109,362 | 55,559 | 63,039 | 37,742 |
Total paid | 1,073,141 | 394,811 | 564,378 | 414,419 |
Net balance, end of year | $ 140,210 | $ 93,615 | $ 103,976 | $ 77,886 |
Unpaid Claims - Additional in_2
Unpaid Claims - Additional information (Details) $ in Thousands | 6 Months Ended | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2021USD ($) | Sep. 30, 2021USD ($) | Sep. 30, 2020USD ($) | Dec. 31, 2020USD ($) | Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($) | |
Liability for Unpaid Claims and Claims Adjustment Expense, Activity in Liability [Abstract] | ||||||
Unpaid claims | $ 140,210 | $ 140,210 | $ 93,615 | $ 103,976 | $ 77,886 | $ 41,660 |
Incurred claims paid | 1,073,141 | 394,811 | 564,378 | 414,419 | ||
Favorable development | $ (17,095) | $ 15,401 | $ 13,715 | $ 2,778 | ||
Ratio of current year medical claims paid as a percent of current year net medical claims | 0.882 | 0.796 | 0.830 | 0.831 | ||
Direct Contracting Model, percentage of incurred claims | 42.40% |
Notes and Securities Payable (D
Notes and Securities Payable (Details) - USD ($) $ in Thousands | Jun. 29, 2021 | Jan. 07, 2021 | Oct. 05, 2020 | Mar. 21, 2017 | Oct. 31, 2017 | Mar. 31, 2017 | Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | Sep. 25, 2020 | Dec. 27, 2018 |
Debt Instrument [Line Items] | ||||||||||||||
Debt principal balance | $ 424,752 | |||||||||||||
Initial obligation interest rate | 8.00% | |||||||||||||
Extinguishment of debt | $ 126,795 | $ 0 | ||||||||||||
Amortization of debt discount | 14,900 | |||||||||||||
Interest expense | $ 413 | $ 9,268 | 2,817 | $ 25,560 | 35,990 | $ 23,155 | ||||||||
Capitalized debt issuance cost | $ 100 | $ 100 | 100 | |||||||||||
Debt Instrument, Interest Rate Period One | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Embedded derivative, discount rate | 75.00% | 75.00% | ||||||||||||
Debt Instrument, Interest Rate Period Two | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Embedded derivative, discount rate | 55.00% | 55.00% | ||||||||||||
Seek Insurance Services, Inc. (Seek) | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Interest expense | $ 400 | $ 1,200 | 0 | 0 | ||||||||||
Effective interest rate | 8.20% | 8.20% | 8.20% | 8.20% | ||||||||||
Convertible Debt Securities | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Interest expense | $ 22,000 | |||||||||||||
Effective interest rate inclusive of amortization | 90.30% | 90.30% | ||||||||||||
Non Convertible Notes Payable | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Debt principal balance | $ 60,000 | $ 30,800 | $ 49,300 | |||||||||||
Amount drawn from loan facility | $ 40,000 | $ 40,000 | ||||||||||||
Initial obligation interest rate | 11.00% | 11.25% | ||||||||||||
Additional amount under loan facility | $ 20,000 | |||||||||||||
Extinguishment of debt | $ 20,700 | |||||||||||||
Payments of accrued interest | $ 200 | |||||||||||||
Effective interest rate | 11.78% | 11.77% | ||||||||||||
2015 Senior Secured Note | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Proceeds to pay obligations and working capital | $ 30,000 | $ 30,000 | ||||||||||||
Convertible Securities | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Debt principal balance | $ 2,600 | $ 76,500 | $ 373,800 | |||||||||||
Capital contribution for extinguishment of debt | 126,800 | |||||||||||||
Aggregate principal amount | 74,600 | |||||||||||||
Fair value of embedded derivative liability | 44,800 | |||||||||||||
Unamortized discount | 13,000 | 337,300 | ||||||||||||
Convertible Securities | Debt Instrument, Interest Rate Period One | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Initial obligation interest rate | 6.50% | 6.50% | ||||||||||||
Convertible Securities | Debt Instrument, Interest Rate Period Two | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Initial obligation interest rate | 13.50% | 13.50% | ||||||||||||
Convertible Securities | Tranche One | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Debt instrument, accrued interest | 400 | |||||||||||||
Convertible Securities | Other Tranche | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Debt instrument, accrued interest | $ 7,400 | |||||||||||||
Convertible Securities | Common Class Z | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Debt instrument, redeemed and converted, shares issued (in shares) | 36,117,708 | |||||||||||||
Debt instrument, redeemed, shares issued (in shares) | 34,806,921 | |||||||||||||
Debt instrument conversion, shares issued (in shares) | 1,310,787 | |||||||||||||
Convertible Securities | Common Class B | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Debt instrument conversion, shares issued (in shares) | 74,694,107 | |||||||||||||
Convertible Securities | Qualified Public Offering | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Charge to account for dilution | 9.40% | |||||||||||||
Convertible Securities | Maximum | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Convertible debt, borrowing capacity | $ 500,000 | |||||||||||||
Convertible Debt | Subsidiary Issuer | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Debt principal balance | $ 19,900 | $ 19,900 | 19,900 | |||||||||||
Aggregate principal amount | $ 20,000 | |||||||||||||
2020 Convertible Note | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Unamortized debt issuance cost | $ 100 | $ 100 | $ 100 | 0 | ||||||||||
2020 Convertible Note | Seek Insurance Services, Inc. (Seek) | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Debt principal balance | $ 20,000 | |||||||||||||
Initial obligation interest rate | 8.00% |
Warrants Payable (Details)_2
Warrants Payable (Details) - USD ($) | Sep. 09, 2021 | Sep. 08, 2021 | Jan. 07, 2021 | Mar. 21, 2017 | Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | Aug. 24, 2021 | Jul. 22, 2021 | Jan. 08, 2021 | Dec. 31, 2017 | Nov. 30, 2016 | Sep. 30, 2015 |
Class of Warrant or Right [Line Items] | ||||||||||||||||
Class of warrant or right, number of securities called by warrants or rights (in shares) | 122,052 | 139,629 | ||||||||||||||
Exercise price of warrants (in dollars per share) | $ 0.10 | $ 3.45 | $ 2.61 | |||||||||||||
Change in fair value of warrants expense | $ (115,152,000) | $ 20,029,000 | $ (66,146,000) | $ 31,903,000 | $ 80,328,000 | $ 2,909,000 | ||||||||||
Proceeds from exercises of warrants | 390,000 | 0 | ||||||||||||||
Payments for redemption of warrants | 85,000 | $ 0 | ||||||||||||||
Warrants outstanding | 0 | 0 | $ 97,782,000 | $ 17,672,000 | ||||||||||||
Warrants outstanding (in shares) | 38,533,271 | 38,533,271 | ||||||||||||||
Public Warrants | ||||||||||||||||
Class of Warrant or Right [Line Items] | ||||||||||||||||
Number of warrants exercised for cash (in shares) | 33,932 | |||||||||||||||
Number of cashless exercises of warrants (in shares) | 26,716,041 | |||||||||||||||
Issuance of common stock related to exercises of warrants (in shares) | 6,685,865 | |||||||||||||||
Percentage of warrants | 96.90% | |||||||||||||||
Proceeds from exercises of warrants | $ 400,000 | |||||||||||||||
Remaining unexercised warrants (in shares) | 849,965 | |||||||||||||||
Payments for redemption of warrants | $ 100,000 | |||||||||||||||
Warrants outstanding | $ 0 | $ 0 | ||||||||||||||
Warrants outstanding (in shares) | 0 | 0 | ||||||||||||||
Private Placement Warrants | ||||||||||||||||
Class of Warrant or Right [Line Items] | ||||||||||||||||
Issuance of common stock related to exercises of warrants (in shares) | 2,722,399 | |||||||||||||||
Warrants outstanding | $ 0 | |||||||||||||||
Common stock | ||||||||||||||||
Class of Warrant or Right [Line Items] | ||||||||||||||||
Class of warrant or right, number of securities called by warrants or rights (in shares) | 2,100,000 | |||||||||||||||
Exercise price of warrants (in dollars per share) | $ 1.04 | |||||||||||||||
Additional shares of warrants (in shares) | 2,100,000 | |||||||||||||||
Warrants | ||||||||||||||||
Class of Warrant or Right [Line Items] | ||||||||||||||||
Exercise price of warrants (in dollars per share) | $ 11.50 | $ 11.50 | ||||||||||||||
Redemption price per warrant (in dollars per share) | $ 0.10 | $ 0.10 | ||||||||||||||
Class of warrant or right, number of securities called by each warrant or right (in shares) | 0.249 | |||||||||||||||
Series D Preferred stock | ||||||||||||||||
Class of Warrant or Right [Line Items] | ||||||||||||||||
Class of warrant or right, number of securities called by warrants or rights (in shares) | 1,266,284 | |||||||||||||||
Exercise price of warrants (in dollars per share) | $ 9.38 | |||||||||||||||
Change in fair value of warrants expense | $ 1,200,000 | |||||||||||||||
Common Class B | ||||||||||||||||
Class of Warrant or Right [Line Items] | ||||||||||||||||
Stock issued upon conversion (in shares) | 139,444,346 | |||||||||||||||
Common Class B | Merger Agreement With SCH | ||||||||||||||||
Class of Warrant or Right [Line Items] | ||||||||||||||||
Class of warrant or right, number of securities called by warrants or rights (in shares) | 3,484,154 | |||||||||||||||
Stock issued upon conversion (in shares) | 7,205,490 | |||||||||||||||
Common Class A | Public Warrants | ||||||||||||||||
Class of Warrant or Right [Line Items] | ||||||||||||||||
Class of warrant or right, number of securities called by warrants or rights (in shares) | 27,599,938 | |||||||||||||||
Common Class A | Private Placement Warrants | ||||||||||||||||
Class of Warrant or Right [Line Items] | ||||||||||||||||
Class of warrant or right, number of securities called by warrants or rights (in shares) | 10,933,333 |
Derivative Liabilities (Detai_2
Derivative Liabilities (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | |
Derivative Instruments and Hedges, Liabilities [Abstract] | |||||
Convertible debt conversion and other issuances | $ 16,059 | $ 373,800 | |||
Increase in additional paid in capital | $ 44,800 | ||||
Gain on derivative liabilities | $ 68,100 | $ 87,500 | $ 93,800 |
Letter of Credit (Details)
Letter of Credit (Details) - Letter of Credit Agreement - USD ($) $ in Millions | Apr. 19, 2018 | Sep. 30, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Line of Credit Facility [Line Items] | ||||
Line of credit facility, initiation date | Apr. 19, 2018 | |||
Aggregate amount | $ 2.5 | |||
Interest rate | 0.75% | |||
Unused lines of Credit | ||||
Line of Credit Facility [Line Items] | ||||
Unused balance | $ 2.5 | $ 2.5 | $ 2.5 |
Leases - Additional Informati_2
Leases - Additional Information (Details) | Sep. 22, 2021 |
Franklin, Tennessee | |
Lessee, Lease, Description [Line Items] | |
Lease period | 37 months |
Leases - Summary of Lease Cos_2
Leases - Summary of Lease Costs Recognized under ASC 842 and Other Information Pertaining to Operating Leases (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Leases [Abstract] | ||||
Operating lease cost | $ 1,126 | $ 3,351 | $ 4,533 | $ 4,552 |
Variable lease cost | 123 | 391 | 632 | 654 |
Short-term lease cost | 15 | 45 | 20 | 58 |
Sublease income | (650) | (2,077) | (3,098) | (989) |
Total lease cost | $ 614 | 1,710 | 2,087 | 4,275 |
Cash paid for amounts included in the measurement of lease liabilities | $ 3,894 | $ 4,979 | $ 4,804 | |
Weighted-average remaining lease term (in years) | 4 years 4 months 24 days | 4 years 4 months 24 days | 4 years 4 months 24 days | 4 years 9 months 18 days |
Weighted-average discount rate | 10.26% | 10.26% | 10.17% | 10.05% |
Leases - Summary of Maturitie_2
Leases - Summary of Maturities of Operating Lease Liabilities (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Leases [Abstract] | ||
2021 | $ 1,321 | |
2022 | 3,001 | $ 5,017 |
2023 | 1,493 | 2,747 |
2024 | 1,157 | 1,408 |
2025 | 1,149 | 1,089 |
Thereafter | 2,639 | |
Total lease payments | 10,760 | 14,031 |
Less: imputed interest | (2,213) | (2,887) |
Total | $ 8,547 | $ 11,144 |
Convertible Preferred Stock (De
Convertible Preferred Stock (Details) | Jan. 07, 2021shares |
Common Class B | |
Class of Stock [Line Items] | |
Stock issued upon conversion (in shares) | 139,444,346 |
Employee Benefit Plans - Narrat
Employee Benefit Plans - Narrative (Details) - USD ($) $ / shares in Units, $ in Thousands | Jan. 06, 2021 | Feb. 29, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | Sep. 09, 2021 | Dec. 31, 2017 | Nov. 30, 2016 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Employer matching contribution, percent of match | 100.00% | 100.00% | |||||||||
Employer matching contribution, percent of employees' gross pay | 4.00% | 4.00% | |||||||||
Employer maximum annual contributions per employee, percent | 4.00% | 4.00% | |||||||||
Employer discretionary contribution amount | $ 300 | $ 300 | $ 900 | $ 1,000 | $ 1,200 | $ 1,300 | |||||
Employers matching contribution, vesting percentage | 100.00% | 100.00% | |||||||||
Common stock, par value, (in dollars per share) | $ 0.0001 | $ 0.0001 | |||||||||
Options granted (in shares) | 3,669,608 | 1,937,968 | 14,386,426 | 8,828,538 | |||||||
Stock compensation expense | 46,803 | 1,500 | $ 132,542 | $ 4,949 | |||||||
Unvested stock options, unrecognized stock-based compensation | 463,700 | $ 463,700 | $ 14,900 | $ 9,000 | |||||||
Cost not yet recognized, period for recognition | 4 years 3 months 7 days | 2 years 6 months | |||||||||
Stock options granted, grant date fair value (in dollars per share) | $ 1.18 | $ 3.36 | $ 2.10 | $ 1.04 | $ 0.62 | ||||||
Aggregate intrinsic value of stock options outstanding, | $ 160,100 | $ 160,100 | $ 445,300 | ||||||||
Weighted average remaining contractual term of stock options outstanding | 7 years 10 days | 7 years 9 months | |||||||||
Stock options exercisable (in shares) | 21,210,565 | 21,210,565 | 19,333,153 | ||||||||
Aggregate intrinsic value of stock options exercisable | $ 109,000 | $ 109,000 | $ 246,200 | ||||||||
Weighted average exercise price of stock options exercisable (in dollars per share) | $ 2.26 | $ 2.26 | $ 1.62 | ||||||||
Weighted average remaining contractual term of stock options exercisable | 6 years 4 months 2 days | 6 years 10 months 6 days | |||||||||
Aggregate intrinsic value of stock options exercised | $ 36,400 | $ 1,600 | $ 5,800 | $ 1,300 | |||||||
Cash received from stock options exercised | $ 2,100 | $ 700 | |||||||||
Shares remaining for future grants (in shares) | 17,844,505 | 8,866,082 | |||||||||
Warrants issued to purchase shares of common stock (in shares) | 122,052 | 139,629 | |||||||||
Exercise price of warrants (in dollars per share) | $ 0.10 | $ 3.45 | $ 2.61 | ||||||||
Total fair value of warrants vested | $ 0 | 4,000 | $ 7,000 | $ 900 | |||||||
Common Class A | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Common stock, par value, (in dollars per share) | $ 0.0001 | $ 0.0001 | $ 0.0001 | ||||||||
Stock options | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Exercise price, percentage of fair value of common stock | 100.00% | ||||||||||
Expiration period | 10 years | ||||||||||
Vesting period | 5 years | ||||||||||
Stock compensation expense | $ 1,665 | 1,500 | $ 6,734 | 4,949 | $ 7,100 | $ 3,300 | |||||
RSUs | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Stock compensation expense | 17,396 | 0 | $ 45,725 | 0 | |||||||
Stock options granted, grant date fair value (in dollars per share) | $ 14.77 | ||||||||||
PRSUs | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Stock compensation expense | 27,675 | 0 | $ 80,016 | 0 | |||||||
Unvested stock options, unrecognized stock-based compensation | 185,400 | $ 185,400 | |||||||||
Cost not yet recognized, period for recognition | 4 years 3 months 7 days | ||||||||||
Stock options granted, grant date fair value (in dollars per share) | $ 9.58 | ||||||||||
Eligibility for vesting period | 90 days | ||||||||||
ESPP | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Stock compensation expense | $ 67 | $ 0 | $ 67 | 0 | |||||||
Shares remaining for future grants (in shares) | 2,785,582 | ||||||||||
Maximum number of shares that may be purchased by any one participant | 5,000 | ||||||||||
Initial offering period | 5 months | ||||||||||
ESPP | Common Class A | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Discount rate | 15.00% | ||||||||||
Number of shares available for issuance | 2,785,582 | 2,785,582 | |||||||||
Calculation of maximum number of ESPP, percentage of total number of shares outstanding | 1.00% | ||||||||||
Maximum common stock reserved, threshold percentage | 10.00% | ||||||||||
2020 Equity And Management Incentive Plan | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Common stock, par value, (in dollars per share) | $ 0.0001 | $ 0.0001 | |||||||||
2014 Plan | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Options granted (in shares) | 0 | ||||||||||
Cash received from stock options exercised | $ 5,500 | $ 1,000 | |||||||||
Shares remaining for future grants (in shares) | 17,844,505 | ||||||||||
2014 Plan | Stock options | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Exercise price, percentage of fair value of common stock | 100.00% | ||||||||||
Expiration period | 10 years | ||||||||||
2014 Plan | Stock options | Tranche One | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Vesting period | 4 years | ||||||||||
2014 Plan | Stock options | Tranche Two | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Vesting period | 5 years | ||||||||||
2014 Plan | RSUs | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Vesting period | 4 years | ||||||||||
Trading days | 90 days |
Employee Benefit Plans - Share-
Employee Benefit Plans - Share-Based Payment Arrangement, Activity (Details) - shares | Sep. 30, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Shares Authorized Under Plan | 54,402,264 | 37,055,557 | |
Shares Remaining Under Plan | 17,844,505 | 8,866,082 | |
2014 Plan | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Shares Authorized Under Plan | 54,402,264 | 54,402,264 | |
Shares Outstanding Under Plans | 42,441,719 | 36,557,759 | |
Shares Remaining Under Plan | 17,844,505 | ||
2020 Plan | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Shares Authorized Under Plan | 30,641,401 | ||
Shares Outstanding Under Plans | 1,782,986 | ||
Shares Remaining Under Plan | 28,858,415 | ||
2020 Management Incentive Plan | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Shares Authorized Under Plan | 33,426,983 | ||
Shares Outstanding Under Plans | 33,426,983 | ||
Shares Remaining Under Plan | 0 |
Employee Benefit Plans - Summ_3
Employee Benefit Plans - Summary of Stock-Based Compensation Cost (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Total compensation cost recognized for stock-based compensation plans | $ 46,803 | $ 1,500 | $ 132,542 | $ 4,949 | ||
Stock options | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Total compensation cost recognized for stock-based compensation plans | 1,665 | 1,500 | 6,734 | 4,949 | $ 7,100 | $ 3,300 |
RSUs | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Total compensation cost recognized for stock-based compensation plans | 17,396 | 0 | 45,725 | 0 | ||
PRSUs | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Total compensation cost recognized for stock-based compensation plans | 27,675 | 0 | 80,016 | 0 | ||
ESPP | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Total compensation cost recognized for stock-based compensation plans | $ 67 | $ 0 | $ 67 | $ 0 |
Employee Benefit Plans - Sche_2
Employee Benefit Plans - Schedule of Assumptions to Estimate Fair Value of Stock Options on Weighted Average Basis (Details) - Stock options | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Risk-free interest rate | 1.06% | 0.84% | 0.84% | 1.95% |
Expected term | 6 years 21 days | 4 years 7 months 28 days | 4 years 8 months 4 days | 6 years 3 months 14 days |
Expected volatility | 37.74% | 34.60% | 34.66% | 28.37% |
Expected dividend yield | 0.00% | 0.00% | 0.00% | 0.00% |
Employee Benefit Plans - Summ_4
Employee Benefit Plans - Summary of Stock Option Activity (Details) - $ / shares | 1 Months Ended | 9 Months Ended | 12 Months Ended | |
Feb. 29, 2020 | Sep. 30, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Number of options | ||||
Number of options, Outstanding, beginning balance (in shares) | 36,557,759 | 28,189,475 | 27,046,177 | |
Number of options, Granted (in shares) | 3,669,608 | 1,937,968 | 14,386,426 | 8,828,538 |
Number of options, Exercised (in shares) | (1,297,977) | (916,527) | ||
Number of options, Forfeited (in shares) | (4,720,165) | (6,768,713) | ||
Number of options, Outstanding, ending balance (in shares) | 36,557,759 | 28,189,475 | ||
Weighted-average exercise price | ||||
Weighted-average exercise price, Outstanding, beginning balance (in dollars per share) | $ 2.25 | $ 1.48 | $ 1.31 | |
Weighted-average exercise price, Granted (in dollars per share) | 3.59 | 1.99 | ||
Weighted-average exercise price, Exercised (in dollars per share) | 1.53 | 0.74 | ||
Weighted-average exercise price, Forfeited (in dollars per share) | 1.88 | 1.57 | ||
Weighted-average exercise price, Outstanding, ending balance (in dollars per share) | $ 2.25 | $ 1.48 | ||
2020 Plan | ||||
Number of options | ||||
Number of options, Outstanding, beginning balance (in shares) | 0 | |||
Number of options, Granted (in shares) | 1,937,968 | |||
Number of options, Exercised (in shares) | 0 | |||
Number of options, Forfeited (in shares) | (154,982) | |||
Number of options, Outstanding, ending balance (in shares) | 1,782,986 | 0 | ||
Weighted-average exercise price | ||||
Weighted-average exercise price, Outstanding, beginning balance (in dollars per share) | $ 0 | |||
Weighted-average exercise price, Granted (in dollars per share) | 8.88 | |||
Weighted-average exercise price, Exercised (in dollars per share) | 0 | |||
Weighted-average exercise price, Forfeited (in dollars per share) | 8.87 | |||
Weighted-average exercise price, Outstanding, ending balance (in dollars per share) | $ 8.88 | $ 0 | ||
2014 Plan | ||||
Number of options | ||||
Number of options, Outstanding, beginning balance (in shares) | 36,513,193 | |||
Number of options, Granted (in shares) | 0 | |||
Number of options, Exercised (in shares) | (3,843,472) | |||
Number of options, Forfeited (in shares) | (974,874) | |||
Number of options, Outstanding, ending balance (in shares) | 31,694,847 | 36,513,193 | ||
Weighted-average exercise price | ||||
Weighted-average exercise price, Outstanding, beginning balance (in dollars per share) | $ 2.26 | |||
Weighted-average exercise price, Granted (in dollars per share) | 0 | |||
Weighted-average exercise price, Exercised (in dollars per share) | 1.43 | |||
Weighted-average exercise price, Forfeited (in dollars per share) | 2.78 | |||
Weighted-average exercise price, Outstanding, ending balance (in dollars per share) | $ 2.29 | $ 2.26 |
Employee Benefit Plans - Summ_5
Employee Benefit Plans - Summary of Total RSUs Activity (Details) - shares | 9 Months Ended | 12 Months Ended |
Sep. 30, 2021 | Dec. 31, 2020 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Awards granted (in shares) | 0 | |
RSUs | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Awards granted (in shares) | 21,035,614 | |
Exercised (in shares) | (131,766) | |
Forfeited (in shares) | (35,935) | |
Outstanding (in shares) | 20,867,913 |
Employee Benefit Plans - Sche_3
Employee Benefit Plans - Schedule of Assumptions to Estimate Fair Value of PRSUs on Weighted Average Basis (Details) - PRSUs | 9 Months Ended |
Sep. 30, 2021 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Expected volatility | 40.70% |
Risk-free interest rate | 0.50% |
Dividend yield | 0.00% |
Employee Benefit Plans - Summ_6
Employee Benefit Plans - Summary of Total PRSUs Activity (Details) - shares | 9 Months Ended | 12 Months Ended |
Sep. 30, 2021 | Dec. 31, 2020 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Awards granted (in shares) | 0 | |
PRSUs | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Awards granted (in shares) | 27,699,171 | |
Non-vested (in shares) | 27,699,171 |
Employee Benefit Plans - ESPP V
Employee Benefit Plans - ESPP Valuation Assumption (Details) - ESPP | 9 Months Ended |
Sep. 30, 2021 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Expected term | 5 months 1 day |
Expected volatility | 147.42% |
Weighted Average | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Risk-free interest rate | 0.06% |
Employee Benefit Plans - Summ_7
Employee Benefit Plans - Summary of Warrant Activity (Details) - Warrants - $ / shares | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | |
Number of warrants | ||||
Outstanding at beginning of period (in shares) | 261,681 | 261,681 | 261,681 | |
Beginning balance, Outstanding (in shares) | 261,681 | 261,681 | 261,681 | 261,681 |
Granted (in shares) | 0 | 0 | ||
Exercised (in shares) | (261,681) | 0 | ||
Forfeited (in shares) | 0 | 0 | ||
Outstanding at end of period (in shares) | 0 | 261,681 | 261,681 | 261,681 |
Weighted-average exercise price | ||||
Weighted-average exercise price, beginning balance (in dollars per share) | $ 3 | $ 3 | $ 3 | $ 3 |
Granted (in dollars per share) | 0 | 0 | ||
Exercised (in dollars per share) | 3 | 0 | ||
Forfeited (in dollars per share) | 0 | 0 | ||
Weighted-average exercise price, ending balance (in dollars per share) | $ 0 | $ 3 | $ 3 | $ 3 |
Income Taxes (Details)
Income Taxes (Details) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Income Tax Disclosure [Abstract] | ||||
Effective tax rate | 0.00% | 0.00% | 0.00% | 0.00% |
Net (Loss) Income Per Share - C
Net (Loss) Income Per Share - Calculation of Basic and Diluted Net Loss Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | |
Earnings Per Share [Abstract] | ||||||
Net (loss) income | $ (34,527) | $ 12,758 | $ (400,555) | $ (10,001) | $ (136,392) | $ (363,737) |
Net (loss) income attributable to common stockholders | $ (34,527) | $ 4,966 | $ (400,555) | $ (10,001) | $ (136,392) | $ (363,737) |
Basic weighted average number of common shares and common shares equivalents outstanding (in shares) | 414,572,706 | 88,863,244 | 410,417,493 | 88,616,116 | 88,691,582 | 87,829,419 |
Diluted weighted average number of common shares and common shares equivalents outstanding (in shares) | 414,572,706 | 248,133,335 | 410,417,493 | 88,616,116 | 88,691,582 | 87,829,419 |
Net (loss) income per share attributable to common stockholders - basic (in dollars per share) | $ (0.08) | $ 0.06 | $ (0.98) | $ (0.11) | $ (1.54) | $ (4.14) |
Net (loss) income per share attributable to common stockholders - diluted (in dollars per share) | $ (0.08) | $ 0.02 | $ (0.98) | $ (0.11) | $ (1.54) | $ (4.14) |
Net (Loss) Income Per Share -_2
Net (Loss) Income Per Share - Calculation of Basic and Diluted Net Loss Per Share Footnote (Details) | Jan. 07, 2021 | Jan. 31, 2021 | Dec. 31, 2020 |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Common stock exchange ratio | 206.81% | 206.81% | 206.81% |
Common Class B | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Common stock exchange ratio | 206.81% | 206.81% |
Net (Loss) Income Per Share - S
Net (Loss) Income Per Share - Schedule of Antidilutive Securities Excluded from Diluted Net Loss Per Share (Details) - shares | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||||
Dilutive common shares excluded from the calculations of diluted loss per share (in shares) | 54,584,553 | 12,145,560 | 54,584,553 | 184,243,282 | 183,505,007 | 171,292,096 |
Options to purchase common stock | ||||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||||
Dilutive common shares excluded from the calculations of diluted loss per share (in shares) | 33,477,833 | 5,183,834 | 33,477,833 | 37,296,034 | 36,557,759 | 24,344,848 |
Preferred stock purchase warrants | ||||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||||
Dilutive common shares excluded from the calculations of diluted loss per share (in shares) | 0 | 139,444,346 | 139,444,346 | 139,444,346 | ||
Warrants to purchase common stock (as converted to common stock) | ||||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||||
Dilutive common shares excluded from the calculations of diluted loss per share (in shares) | 0 | 4,342,956 | 0 | 4,884,132 | 7,502,902 | 4,884,132 |
Warrants to purchase convertible preferred stock (as converted to common stock) | ||||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||||
Dilutive common shares excluded from the calculations of diluted loss per share (in shares) | 0 | 2,618,770 | 0 | 2,618,770 | 0 | 2,618,770 |
RSUs | ||||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||||
Dilutive common shares excluded from the calculations of diluted loss per share (in shares) | 21,106,720 | 0 | 21,106,720 | 0 |
Net (Loss) Income Per Share -_3
Net (Loss) Income Per Share - Schedule of Antidilutive Securities Excluded from Diluted Net Loss Per Share Footnote (Details) | Jan. 07, 2021 | Jan. 31, 2021 | Dec. 31, 2020 |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Common stock exchange ratio | 206.81% | 206.81% | 206.81% |
Common Class B | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Common stock exchange ratio | 206.81% | 206.81% |
Direct Contracting - Narrativ_2
Direct Contracting - Narrative (Details) | Sep. 30, 2021 |
Direct Contracting [Abstract] | |
Maximum percentage deviation of Performance Year Benchmark | 25.00% |
Direct Contracting - Schedule_2
Direct Contracting - Schedule of Performance Guarantees (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | |
Direct Contracting [Abstract] | |||||
Direct Contracting performance year receivable | $ 220,738 | $ 220,738 | $ 0 | ||
Direct Contracting, performance year obligation | 244,599 | 244,599 | $ 0 | ||
Amortization of the Direct Contracting performance year receivable | (223,309) | (441,476) | |||
Amortization of the Direct Contracting performance year obligation | 223,309 | 441,476 | |||
Direct Contracting revenue | $ 222,647 | $ 0 | $ 439,020 | $ 0 |
Operating Segments - Narrative
Operating Segments - Narrative (Details) - segment | 9 Months Ended | 12 Months Ended |
Sep. 30, 2021 | Dec. 31, 2020 | |
Segment Reporting [Abstract] | ||
Number of reportable segments | 2 | 1 |
Operating Segments - Schedule o
Operating Segments - Schedule of Revenue by Operating Segment (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | |
Revenue, Major Customer [Line Items] | ||||||
Premiums earned, (Net of ceded premiums) | $ 203,657 | $ 167,075 | $ 598,390 | $ 501,100 | $ 665,698 | $ 456,926 |
Direct Contracting revenue | 222,647 | 0 | 439,020 | 0 | ||
Other income | 859 | 1,994 | 2,550 | 5,555 | 4,214 | 801 |
Revenues | 427,163 | 169,069 | 1,039,960 | 506,655 | 672,888 | 462,266 |
Net medical claims incurred | 436,422 | 144,846 | 1,109,375 | 410,540 | 590,468 | 450,645 |
Gross (loss) profit | (9,259) | (69,415) | ||||
Assets | 952,478 | 952,478 | 267,252 | 337,021 | ||
Net of ceded premiums | 120 | $ 126 | 370 | $ 383 | $ 599 | $ 832 |
Intersegment Eliminations | ||||||
Revenue, Major Customer [Line Items] | ||||||
Premiums earned, (Net of ceded premiums) | 0 | 0 | ||||
Direct Contracting revenue | 0 | 0 | ||||
Other income | (24,188) | (64,548) | ||||
Revenues | (9,375) | (33,130) | ||||
Net medical claims incurred | (2,552) | (6,494) | ||||
Gross (loss) profit | (31,011) | (91,184) | ||||
Assets | (542,288) | (542,288) | ||||
Medicare Advantage | Operating Segments | ||||||
Revenue, Major Customer [Line Items] | ||||||
Premiums earned, (Net of ceded premiums) | 203,657 | 598,390 | ||||
Direct Contracting revenue | 0 | 0 | ||||
Other income | 80 | 108 | ||||
Net medical claims incurred | 208,661 | 640,624 | ||||
Gross (loss) profit | (4,924) | (42,126) | ||||
Assets | 347,535 | 347,535 | ||||
Medicare Advantage | Intersegment Eliminations | ||||||
Revenue, Major Customer [Line Items] | ||||||
Revenues | 0 | 0 | ||||
Direct Contracting | Operating Segments | ||||||
Revenue, Major Customer [Line Items] | ||||||
Premiums earned, (Net of ceded premiums) | 0 | 0 | ||||
Direct Contracting revenue | 222,647 | 439,020 | ||||
Other income | 0 | 0 | ||||
Net medical claims incurred | 228,060 | 469,972 | ||||
Gross (loss) profit | (5,413) | (30,952) | ||||
Assets | 260,142 | 260,142 | ||||
Direct Contracting | Intersegment Eliminations | ||||||
Revenue, Major Customer [Line Items] | ||||||
Revenues | 0 | 0 | ||||
Corporate/Other | Operating Segments | ||||||
Revenue, Major Customer [Line Items] | ||||||
Premiums earned, (Net of ceded premiums) | 0 | 0 | ||||
Direct Contracting revenue | 0 | 0 | ||||
Other income | 24,967 | 66,990 | ||||
Net medical claims incurred | 2,253 | 5,273 | ||||
Gross (loss) profit | 32,089 | 94,847 | ||||
Assets | 887,089 | 887,089 | ||||
Corporate/Other | Intersegment Eliminations | ||||||
Revenue, Major Customer [Line Items] | ||||||
Revenues | $ 9,375 | $ 33,130 |
Operating Segments - Reconcilia
Operating Segments - Reconciliation of Revenue of Segments to Statement of Operations (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | |
Segment Reporting [Abstract] | ||||||
Gross profit | $ (9,259) | $ (69,415) | ||||
Salaries and benefits | 73,364 | $ 16,628 | 201,555 | $ 57,339 | $ 71,256 | $ 91,626 |
General and administrative expenses | 45,749 | 29,847 | 129,983 | 79,798 | 120,444 | 94,757 |
Premium deficiency reserve expense (benefit) | 20,761 | (772) | 48,661 | (16,357) | (17,128) | 7,523 |
Depreciation and amortization | 120 | 138 | 398 | 413 | 555 | 551 |
Other expense | 0 | 0 | 191 | 0 | 0 | 363 |
Change in fair value of warrants expense | (115,152) | 20,029 | (66,146) | 31,903 | 80,328 | 2,909 |
Interest expense | 413 | 9,268 | 2,817 | 25,560 | 35,990 | 23,155 |
Amortization of notes and securities discounts | 13 | 4,408 | 13,681 | 14,935 | ||
Net loss | $ (34,527) | $ 12,758 | $ (400,555) | $ (10,001) | $ (136,392) | $ (363,737) |