What changed in CLOVER HEALTH INVESTMENTS, CORP. /DE's 10-K — 2023 vs 2024

Item 1. Financial Statements and Supplementary Data Report of Independent Registered Public Accounting Firm To the Shareholders and the Board of Directors of Clover Health Investments, Corp. Opinion on the Financial Statements We have audited the accompanying consolidated balance sheets of Clover Health Investments, Corp.

(the Company) as of December 31, 2023 and 2022, the related consolidated statements of operations and comprehensive loss , changes in convertible preferred stock and stockholders' equity and cash flows for each of the three years in the period ended December 31, 2023, and the related notes and financial statement schedules listed in the Index at Item 15 (collectively referred to as the “consolidated financial statements”).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2023 and 2022, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2023, in conformity with U.S. generally accepted accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 31, 2023, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission ( 2013 framework), and our report dated March 14, 2024 expressed an unqualified opinion thereon .

Basis for Opinion These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits.

We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matter The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments.

The communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing separate opinion on the critical audit matter or on the accounts or disclosures to which it relates. 75 Valuation of incurred but not reported reserves Description of the Matter As of December 31, 2023, the Company’s unpaid claims was $138.6 million, a significant portion is incurred but not reported reserves.

As discussed in Notes 2 and 9 to the consolidated financial statements, the Company’s incurred but not reported (IBNR) liability is determined by using actuarial methods that include a number of factors and assumptions, including completion factors, which seek to measure the cumulative percentage of claims expense that have been paid as of the reporting date based on historical claim payment patterns, and assumed medical cost trend factors, which represent an estimate of claims expense based on recent claims expense levels and medical cost levels.

There is significant uncertainty inherent in determining management’s best estimate of completion and trend factors, which are used to calculate actuarial estimates of IBNR. Auditing management’s best estimate of the IBNR was complex and required the involvement of our actuarial specialists due to the highly judgmental nature of completion and trend factor assumptions used in the valuation process.

These assumptions have a significant effect on the valuation of the IBNR liability. How We Addressed the Matter in Our Audit We obtained an understanding, evaluated the design and tested the operating effectiveness of controls over the Company’s actuarial process for estimating the liability for incurred but not paid claims.

These audit procedures included among others, testing management review controls over the application of the actuarial assumptions within the reserve models and the review and approval processes that management has in place for estimating the liability for incurred but not paid claims.

To test the Company’s liability for IBNR, our audit procedures included, among others, testing the completeness and accuracy of data used in the calculation by testing reconciliations of underlying claims and membership data recorded in source systems to the actuarial reserving calculations, and comparing a sample of claims to source documentation.

We involved actuarial specialists to assist with our audit procedures, which included, among others, evaluating the methodologies and assumptions applied by the Company in determining the IBNR and independently calculating a range of IBNR estimates for comparison to management’s actuarial best estimate of the IBNR.

Additionally, we performed a review of the prior period IBNR liabilities to subsequent claims development. /s/ Ernst & Young LLP We have served as the Company’s auditor since 2018. New York, New York March 14, 2024 76 CLOVER HEALTH INVESTMENTS, CORP.

CONSOLIDATED BALANCE SHEETS (Dollars in thousands, except share amounts) December 31, 2023 2022 Assets Current assets Cash and cash equivalents $ 122,863 $ 103,791 Short-term investments 12,218 41,457 Investment securities, available-for-sale (Amortized cost: 2023: $101,412; 2022: $193,300) 100,702 189,498 Investment securities, held-to-maturity (Fair value: 2023: $6,778; 2022: $15) 6,902 15 Accrued retrospective premiums 22,076 20,387 Other receivables 16,666 23,596 Healthcare receivables 64,164 70,607 Non-Insurance receivable 10,926 52,955 Surety bonds and deposits 55,631 100,502 Prepaid expenses 14,418 18,146 Other assets, current 1,404 4,043 Total current assets 427,970 624,997 Investment securities, available-for-sale (Amortized cost: 2023: $121,868; 2022: $142,940) 120,208 137,368 Investment securities, held-to-maturity (Fair value: 2023: $692; 2022: $636) 793 742 Property and equipment, net 5,082 5,753 Operating lease right-of-use assets 3,382 4,025 Goodwill and other intangible assets 2,990 20,000 Other assets, non-current 10,246 15,735 Total assets $ 570,671 $ 808,620 The accompanying notes are an integral part of these consolidated financial statements. 77 CLOVER HEALTH INVESTMENTS, CORP.

CONSOLIDATED BALANCE SHEETS (Dollars in thousands, except share amounts) December 31, 2023 2022 Liabilities and Stockholders' Equity Current liabilities Unpaid claims $ 138,593 $ 141,947 Due to related parties, net 1,363 1,566 Non-Insurance performance year obligation, current 15,568 73,844 Non-Insurance payable 41,565 148,191 Accounts payable and accrued expenses 37,184 32,445 Accrued salaries and benefits 21,061 23,962 Deferred revenue 3,099 — Operating lease liabilities 1,665 1,827 Premium deficiency reserve — 7,239 Other liabilities, current 1,017 486 Total current liabilities 261,115 431,507 Long-term operating lease liabilities 2,998 4,033 Other liabilities, non-current 20,164 16,193 Total liabilities 284,277 451,733 Commitments and Contingencies (Note 19) Stockholders' equity Class A Common Stock, $0.0001 par value; 2,500,000,000 shares authorized at December 31, 2023 and December 31, 2022; 401,183,882 and 383,998,718 issued and outstanding at December 31, 2023 and December 31, 2022, respectively 40 37 Class B Common Stock, $0.0001 par value; 500,000,000 shares authorized at December 31, 2023 and December 31, 2022; 87,867,732 and 94,394,852 issued and outstanding at December 31, 2023 and December 31, 2022, respectively 9 9 Additional paid-in capital 2,461,238 2,319,157 Accumulated other comprehensive loss (2,370) (9,374) Accumulated deficit (2,159,794) (1,946,433) Less: Treasury stock, at cost; 7,912,750 and 2,072,752 shares held at December 31, 2023 and December 31, 2022, respectively (12,729) (6,509) Total stockholders' equity 286,394 356,887 Total liabilities and stockholders' equity $ 570,671 $ 808,620 The accompanying notes are an integral part of these consolidated financial statements. 78 CLOVER HEALTH INVESTMENTS, CORP.

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (Dollars in thousands, except per share and share amounts) Years ended December 31, 2023 2022 2021 Revenues: Premiums earned, net (Net of ceded premiums of $444, $470, and $489 for the years ended December 31, 2023 and 2022, and 2021 respectively) $ 1,235,769 $ 1,084,869 $ 799,414 Non-Insurance revenue 773,177 2,380,135 667,639 Other income 24,774 11,683 4,943 Total revenues 2,033,720 3,476,687 1,471,996 Operating expenses: Net medical claims incurred 1,776,388 3,453,952 1,551,178 Salaries and benefits 257,157 278,725 260,458 General and administrative expenses 187,571 207,917 185,287 Impairment of goodwill and other intangible assets 15,945 — — Premium deficiency reserve expense (benefit) (7,239) (93,517) 110,628 Depreciation and amortization 2,509 1,187 1,246 Restructuring costs 9,931 — — Other expense — 70 191 Total operating expenses 2,242,262 3,848,334 2,108,988 Loss from operations (208,542) (371,647) (636,992) Change in fair value of warrants 86 (900) (66,146) Interest expense 7 1,333 3,193 Amortization of notes and securities discounts — 30 13,717 Loss (gain) on investment 4,726 (9,217) — Gain on extinguishment of note payable $ — $ (23,326) $ — Net loss $ (213,361) $ (339,567) $ (587,756) Per share data: Net loss per share attributable to Class A and Class B common stockholders – basic and diluted (1) $ (0.44) $ (0.71) $ (1.42) Weighted average number of common shares outstanding Basic and diluted weighted average number of Class A and Class B common shares and common share equivalents outstanding (1) 482,176,127 476,244,262 412,922,424 Net unrealized gain (loss) on available-for-sale investments $ 7,004 $ (7,440) $ (1,944) Comprehensive loss $ (206,357) $ (347,007) $ (589,700) (1) Because the Company had a Net loss during the years ended December 31, 2023, 2022, and 2021, the Company's potentially dilutive securities, which include stock options, restricted stock units, 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.

The accompanying notes are an integral part of these consolidated financial statements. 79 CLOVER HEALTH INVESTMENTS, CORP.

CONSOLIDATED STATEMENTS OF CHANGES IN CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS' EQUITY (Dollars in thousands, except share amounts) Convertible Preferred Stock Class A Common Stock Class B Common Stock Treasury Stock Additional paid-in capital Accumulated deficit Accumulated other comprehensive income (loss) Noncontrolling interest Total stockholders' equity (deficit) Shares Amount Shares Amount Shares Amount Shares Amount Balance, December 31, 2020 139,444,346 $ 447,747 — $ — 89,206,266 $ 9 — $ — $ 411,867 $ (1,028,982) $ 10 $ 3,903 $ (613,193) Stock issuance for exercise of stock options, net of early exercise liability — — 4,303,062 — — — — — 6,144 — — — 6,144 Stock-based compensation — — — — — — — — 163,723 — — — 163,723 Vested restricted stock units — — 541,076 — — — — — — — — — — Unrealized holdings gain on investment securities, available-for-sale — — — — — — — — — — (1,944) — (1,944) Preferred stock conversion (139,444,346) (447,747) — — 139,444,346 14 — — 447,733 — — — 447,747 Issuance of common stock related to exercises of legacy warrants — — — — 7,205,490 1 — — 97,781 — — — 97,782 Convertible debt conversion and other issuances — — — — 75,084,703 7 — — 16,052 — — — 16,059 Issuance of common stock in connection with 2021 Business Combination and PIPE offering — — 143,475,108 14 (49,975,104) (5) — — 666,232 — — — 666,241 Conversion from Class B Common Stock to Class A Common Stock — — 231,273,129 23 (231,273,129) (23) — — — — — — — Conversion from Class A Common Stock to Class B Common Stock — — (88,514,196) (9) 88,514,196 9 — — — — — — — Capital contribution for extinguishment of debt — — — — — — — — 126,795 — — — 126,795 Acquisition of Public and Private Placement Warrants — — — — — — — — (147,582) — — — (147,582) Issuance of common stock related to exercises of Public and Private Placement Warrants — — 9,408,264 1 — — — — 81,672 — — — 81,673 Issuance of common stock, net of stock issuance costs — — 52,173,913 5 — — — — 283,770 — — — 283,775 Treasury stock acquired — — (14,730) — — — 14,730 (147) — — — — (147) Net loss — — — — — — — — — (587,756) — — (587,756) Balance, December 31, 2021 — $ — 352,645,626 $ 34 118,206,768 $ 12 14,730 $ (147) $ 2,154,187 $ (1,616,738) $ (1,934) $ 3,903 $ 539,317 80 Convertible Preferred Stock Class A Common Stock Class B Common Stock Treasury Stock Additional paid-in capital Accumulated deficit Accumulated other comprehensive income (loss) Noncontrolling interest Total stockholders' equity (deficit) Shares Amount Shares Amount Shares Amount Shares Amount Change in accounting policy — $ — — $ — — $ — — $ — $ — $ 723 $ — $ — $ 723 Adjusted balance, beginning of period — $ — 352,645,626 $ 34 118,206,768 $ 12 $ 15 $ (147) $ 2,154,187 $ (1,616,015) $ (1,934) $ 3,903 $ 540,040 Stock issuance for exercise of stock options, net of early exercise liability — — 4,367,985 — — — — — 1,400 — — — 1,400 Stock-based compensation — — — — — — — — 164,305 — — — 164,305 Vested restricted stock units — — 2,974,581 — 1,677,873 — — — — — — — — Vested performance stock units — — 8,951 — — — — — — — — — — Unrealized holdings gain on investment securities, available for sale — — — — — — — — — — (7,440) — (7,440) Conversion from Class B Common Stock to Class A Common Stock — — 25,489,789 3 (25,489,789) (3) — — — — — — — Treasury Stock — — (2,058,022) — — — 2,058,022 (6,362) — — — — (6,362) Issuance of Common Stock under Employee Stock Purchase Plan — — 569,808 — — — — — — — — — — Activities from Seek Dissolution — — — — — — — — (735) — — — (735) Derecognition of Non-controlling interest — — — — — — — — — — — (3,903) (3,903) Net loss — — — — — — — — — (339,567) — — (339,567) Balance, December 31, 2022 — $ — 383,998,718 $ 37 94,394,852 $ 9 2,072,752 $ (6,509) $ 2,319,157 $ (1,955,582) $ (9,374) $ — $ 347,738 Change in accounting policy — $ — — $ — — $ — — $ — $ — $ 9,149 $ — $ — $ 9,149 Adjusted balance, beginning of period — $ — 383,998,718 $ 37 94,394,852 $ 9 2,073 $ (6,509) $ 2,319,157 $ (1,946,433) $ (9,374) $ — $ 356,887 Stock issuance for exercise of stock options, net of early exercise liability — — 79,189 — — — — — 1,150 — — — 1,150 Stock-based compensation — — — — — — — — 140,931 — — — 140,931 Vested restricted stock units — — 14,117,561 2 1,773,104 — — — — — — — 2 Unrealized holdings gain on investment securities, available for sale — — — — — — — — — — 7,004 — 7,004 Conversion from Class B Common Stock to Class A Common Stock — — 8,300,224 1 (8,300,224) — — — — — — — 1 Treasury Stock — — (5,839,998) — — — 5,839,998 (6,220) — — — — (6,220) Issuance of Common Stock under Employee Stock Purchase Plan — — 528,188 — — — — — — — — — — Net loss — — — — — — — — — (213,361) — — (213,361) Balance, December 31, 2023 — $ — 401,183,882 $ 40 87,867,732 $ 9 7,912,750 $ (12,729) $ 2,461,238 $ (2,159,794) $ (2,370) $ — $ 286,394 The accompanying notes are an integral part of these consolidated financial statements. 81 CLOVER HEALTH INVESTMENTS, CORP.

CONSOLIDATED STATEMENTS OF CASH FLOWS (Dollars in thousands) Years ended December 31, 2023 2022 2021 Cash flows from operating activities: Net loss $ (213,361) $ (339,567) $ (587,756) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation and amortization expense 2,509 1,187 1,246 Amortization of notes and securities discounts and debt issuance costs — 30 13,717 Stock-based compensation expense 140,931 164,305 163,723 Change in fair value of warrants and amortization of warrants 86 (900) (66,146) Accretion, net of amortization (4,014) (1,503) 200 Net realized (gains) losses on investment securities (20) 267 53 Gain on extinguishment of note payable — (23,326) — Gain on investment 4,726 (9,217) — Impairment of goodwill and other intangible assets 15,945 — — Premium deficiency reserve (7,239) (93,517) 110,628 Changes in operating assets and liabilities: Accrued retrospective premiums (1,689) 14,536 (94) Other receivables 6,930 (8,988) (2,914) Reinsurance recoverable — — (96) Surety bonds and deposits 44,871 (89,846) (10,656) Prepaid expenses 3,728 (3,415) (6,863) Other assets 1,828 (1,204) (4,296) Healthcare receivables 6,443 (22,565) (9,297) Non-Insurance receivable 42,029 (40,785) (12,170) Operating lease right-of-use assets 643 1,984 3,591 Unpaid claims (3,557) 2,589 36,948 Accounts payable and accrued expenses 4,739 7,635 5,307 Accrued salaries and benefits (2,901) 8,784 11,169 Deferred revenue 3,099 — — Deferred rent — — 68 Other liabilities 4,502 2,468 979 Non-Insurance performance year obligation (58,276) 36,953 36,891 Non-Insurance payable (106,626) 110,418 37,773 Operating lease liabilities (1,197) (2,671) (4,331) Net cash used in operating activities (115,871) (286,348) (282,326) Cash flows from investing activities: Purchases of short-term investments, available-for-sale, and held-to-maturity securities (175,567) (369,396) (876,252) Proceeds from sales of short-term investments and available-for-sale securities 60,436 13,348 126,862 Proceeds from maturities of short-term investments, available-for-sale, and held-to-maturity securities 255,728 472,098 314,666 Acquisition of business, net of cash acquired — (16,200) — Purchases of property and equipment (584) (4,467) (723) Acquisition of Character Biosciences, Inc.

Series A preferred shares — (250) — Net cash provided by (used in) investing activities 140,013 95,133 (435,447) Cash flows from financing activities: Payment of notes payable principal — — (30,925) Change in restricted cash related to surety bonds, deposits, and escrow accounts (28,791) 82,422 — Issuance of common stock, net of early exercise liability 1,150 1,400 6,144 Proceeds from reverse recapitalization, net of transaction costs — — 666,241 Proceeds received for the exercise of public and private warrants — — 390 Issuance of common stock, net of stock issuance costs — — 283,775 Payment for the redemptions of public warrants — — (85) Treasury stock acquired (6,220) (6,362) (147) Net cash (used in) provided by financing activities $ (33,861) $ 77,460 $ 925,393 82 Years ended December 31, 2023 2022 2021 Net (decrease) increase in cash, cash equivalents, and restricted cash $ (9,719) $ (113,755) $ 207,620 Cash, cash equivalents, and restricted cash, beginning of period 186,213 299,968 92,348 Cash, cash equivalents, and restricted cash, end of period $ 176,494 $ 186,213 $ 299,968 Reconciliation of cash and cash equivalents and restricted cash Cash and cash equivalents $ 122,863 $ 103,791 $ 299,968 Restricted cash 53,631 82,422 — Total cash, cash equivalents, and restricted cash $ 176,494 $ 186,213 $ 299,968 Supplemental cash flow disclosures Cash paid during the period for interest $ — $ — $ 1,677 Supplemental disclosure of non-cash activities Conversion of preferred stock to common stock — — 447,747 Issuance of common stock related to convertible debt — — 16,059 Capital contribution for extinguishment of debt — — 126,795 Activities from Seek Dissolution — 735 — Issuance of common stock related to warrants exercised — — 97,782 Acquisition of public and private warrants — — 147,582 Issuance of common stock related to the exercise of public and private warrants — — 81,283 Right-of-use assets obtained in exchange for lease liabilities — 642 1,076 Recognition of equity method investments and preferred stock — 8,644 — Derecognition of noncontrolling interest — 3,903 — Conversion of Character Biosciences, Inc. convertible note to preferred stock — 250 — The accompanying notes are an integral part of these consolidated financial statements. 83 CLOVER HEALTH INVESTMENTS, CORP.

Notes to Audited Consolidated Financial Statements 1. Organization and Operations Clover Health Investments, Corp. (collectively with its affiliates and subsidiaries, "Clover" or the "Company") is focused on empowering physicians to identify and manage chronic diseases early.

Clover has centered its strategy on building and deploying technology through its flagship software platform, Clover Assistant, to help America's seniors receive better care at lower costs. Clover aims to provide affordable, high-quality Medicare Advantage plans, including Preferred Provider Organization ("PPO") and Health Maintenance Organization ("HMO") plans, through its regulated insurance subsidiaries.

The Company's regulated insurance subsidiaries consist of Clover Insurance Company and Clover HMO of New Jersey Inc., which operate the Company's PPO and HMO health plans, respectively.

On April 1, 2021, the Company's subsidiary, Clover Health Partners, LLC ("Health Partners"), 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, through which the Company provides care to aligned Medicare fee-for-service ("FFS") beneficiaries (the "Non-Insurance Beneficiaries").

CMS redesigned the DC Model and renamed it the Accountable Care Organization ("ACO") Realizing Equity, Access, and Community Health ("REACH") ("ACO REACH") Model effective January 1, 2023.

On December 1, 2023, the Company notified CMS that it will no longer participate as a REACH ACO in the CMS ACO Reach Program, effective as of the end of the 2023 performance year.

The Company’s exit from the ACO REACH Program follows its November 2022 announcement of a strategic reduction in the number of ACO REACH participating physicians in 2023, and was made after the Company determined that it is in the Company's best interest to fully exit the ACO REACH Program.

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.

For any information following the aforementioned paragraph, the Company will refer to its participation in ACO REACH Model or the Company's participation in the predecessor DC Model as ACO REACH Model henceforth. 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 is designed to use machine learning-powered systems to deliver data and insights to physicians in order to improve outcomes for beneficiaries through the early identification and management of chronic disease 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.

Through its Non-Insurance operations, the Company assumes full risk (i.e., 100.0% shared savings and shared losses) for the total cost of care of aligned Non-Insurance Beneficiaries, empowers providers with Clover Assistant, and offers a variety of programs aimed at reducing expenditures and preserving or enhancing the quality of care for Non-Insurance Beneficiaries.

On October 5, 2020, SCH entered into a Merger Agreement (the "Merger Agreement") with Clover Health Investments, Corp., a corporation originally incorporated on July 17, 2014, in the state of Delaware ("Legacy Clover").

Pursuant to the Merger Agreement, on January 7, 2021, Asclepius Merger Sub Inc., a Delaware corporation and a newly formed, wholly-owned subsidiary of SCH ("Merger Sub"), merged with and into Legacy Clover.

The separate corporate existence of Merger Sub ceased, Legacy Clover 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 "2021 Business Combination").