Assets

Current assets:

Cash

Short-term investments

Investment securities, held-to-maturity

Accrued retrospective premiums

Other receivables

Healthcare receivables

Prepaid expenses

Other assets, current

Total current assets

Investment securities, available-for-sale, at fair value

Investment securities, held-to-maturity

Other assets

Property and equipment, net

Operating lease right-of-use assets

Goodwill

Cash and cash equivalents held in trust account

Other intangible assets

Total assets

Liabilities, Convertible Preferred Stock, and Stockholders’ Deficit

Current liabilities:

Unpaid claims

Accounts payable and accrued expenses

Accrued salaries and benefits

Operating lease liabilities

Current portion of notes and securities payable

Other liabilities, current

Due to investors

Promissory note- related party

Total current liabilities

Other liabilities

Notes and securities payable, net of discounts and deferred issuance costs

Derivative liabilities

Warrants payable

Long-term operating lease liabilities

Deferred underwriting commission

Total liabilities

Convertible preferred stock

Social Capital Hedosophia Class A ordinary shares subject to possible redemption

Stockholders’ equity (deficit):

SCH preferred shares

SCH Class A ordinary shares

SCH Class B ordinary shares

Clover Common stock, $0.0001 par value

Clover Health Common shares, $0.0001 par value

Additional paid-in capital

Accumulated deficit

Accumulated other comprehensive gain

Non-controlling interest

Total stockholders’ equity (deficit)

Total liabilities, redeemable common stock and stockholders’ equity (deficit)

Revenues

Premiums earned, net

Other income

Investment income, net

Total revenue

Expenses:

Net medical claims incurred

Salaries and benefits

General and administrative expenses

Premium deficiency reserve benefit

Depreciation and amortization

Formation and operating costs

Total operating expenses

(Loss) income from operations

Other expense (income):

Change in fair value of warrants

Interest expense

Amortization of notes and securities discounts

(Gain) loss on derivative

Gain on extinguishment of convertible securities

Interest income

Total other (income) expense

Net (loss) income

Net (loss) income per share - basic and diluted

Weighted average common shares outstanding - basic and diluted

•

All outstanding shares of Clover preferred stock converted into 67,427,138 shares of Clover common stock. Clover existing common stock refers to the shares of common stock, par value $0.0001 per share, of Clover.

•

All outstanding shares of Clover existing common stock held by NJ Healthcare Investments, LLC, Caesar Ventures, LLC and Titus Ventures, LLC were exchanged for 39,419,411 shares of Clover Class Z Common Stock (“Founder Share Exchange”).

•

All outstanding principal and accrued but unpaid interest due on the Clover’s convertible securities was converted into 36,117,708 shares of Clover Class Z Common Stock.

•

All outstanding Clover’s warrants were converted into 3,484,154 shares of Clover common stock of which 331,280 shares were exchanged for cash in accordance with the Cash Consideration (as defined below).

•

the historical audited consolidated financial statements of Clover for the year ended December 31, 2020; and

•

the historical audited consolidated financial statements of SCH as of and for the year ended December 31, 2020;

Clover Common Stock assumed outstanding prior to the closing of the Business Combination

Exchange Ratio

Clover Class Z Common Stock assumed outstanding

prior to the closing of the Business Combination

Exchange Ratio

Clover convertible preferred stock assumed outstanding prior to the closing of the Business Combination

Exchange Ratio

Clover warrant assumed outstanding prior to the closing of the Business Combination

Exchange Ratio

Clover cash consideration shares payment prior to the closing of the Business Combination

Exchange Ratio

Estimated shares of Clover Health Class B Common Stock issued to Clover Stockholders upon closing of the Business Combination

(A)

Derived from the audited condensed consolidated balance sheet of SCH as of December 31, 2020.

(B)

Derived from the audited condensed consolidated balance sheet of Clover as of December 31, 2020.

(a)

To reflect the release of $790.0 million of cash from the cash and cash equivalents held in the trust account after adjustment for the payment of transaction-related fees.

(b)

To reflect Clover’s payment for $21.7 million of finance and advisory fees, $2.7 million of legal fees, and $2.4 million of accounting and auditing fees and other professional fees related to the Business Combination. All such fees have been recorded as an offset to additional paid-in capital. The classification of transaction costs as of December 31, 2020 is as follows:

Transaction costs

Amounts previously capitalized and paid

Amounts previously capitalized and not paid

Amounts expected as part of the Business Combination

Total

(c)

To reflect the issuance and sale of 40,000,000 shares of Clover Health Class A Common Stock to the PIPE investors pursuant to subscription agreements for an aggregate commitment amount of $400.0 million concurrent with the completion of the Business Combination.

(d)

To reflect the settlement of $29.0 million of deferred underwriters’ fees incurred during SCH’s IPO that are due upon completion of the Business Combination.

(e)

To reflect SCH’s payment for $5.2 million of professional fees and $1.3 million of other transaction costs related to the Business Combination and the PIPE Investment. All such fees have been recorded as an offset to additional paid-in capital. The classification of transaction costs as of December 31, 2020 is as follows:

Transaction costs

Amounts previously capitalized and paid

Amounts previously capitalized and not paid

Amounts expected as part of the Business Combination

Total

(f)

To reflect SCH’s payment for financial advisory fees of $2.9 million, which will be paid upon the closing of the Business Combination.

(g)

To reflect the accretion of the unamortized discount related to the Clover’s convertible securities of $337.3 million prior to the conversion of such convertible securities upon consummation of the Business Combination.

(h)

To reflect the conversion of $413.8 million of the outstanding principal and $7.8 million of accrued interest under Clover’s convertible securities into 36,117,708 shares of Clover common stock upon consummation of the Business Combination. The $44.8 million of derivative liability associated with Clover’s convertible securities was eliminated in connection with the conversion of Clover’s convertible securities.

(i)

To reflect the automatic conversion, on a one to one basis, of all outstanding shares of Clover’s preferred stock, with a carrying amount of $447.7 million, into 60,584,000 shares of Clover common stock and 6,843,138 shares of Clover Class Z Common Stock as a part of the Pre-Closing Restructuring Plan. The Clover’s preferred stock outstanding shares are comprised of the following:

Preferred Stock classes

Series A-1 Preferred Stock⁽¹⁾

Series A Preferred Stock

Series B Preferred Stock

Series C Preferred Stock⁽¹⁾

Series D Preferred Stock

Total Preferred Stock issued and outstanding

(1)

Excludes 6,247,914 Series A-1 Preferred Stock shares and 595,224 Series C Preferred Stock shares owned by founders prior to the conversion of the Founder Share Exchange. Per the Founder Share Exchange, these Series A-1 and Series C Preferred Stock shares are converted to Clover Class Z Common Stock.

(j)

To reflect the release of $97.8 million of warrant payable associated with liability-classified warrants upon the exercise of all Clover’s outstanding preferred stock and common stock warrants into an aggregate of 3,484,154 shares of Clover common stock upon consummation of the Business Combination, of which shares 331,280 were subject to the Cash Consideration.

(k)

To reflect the automatic conversion of all issued and outstanding shares of SCH Class B ordinary shares into an aggregate of 20,700,000 shares of Clover Health Class A common stock upon consummation of the Business Combination.

(l)

To reflect redemption of 24,892 SCH Class A ordinary shares in an aggregate redemption payment of $0.2 million and the transfer of $787.4 million of remaining SCH Class A ordinary shares to permanent equity.

(m)

To reflect the recapitalization of Clover through the contribution of all the share capital of Clover to Clover Health and the issuance of 143,475,108 shares of Clover Health Class A Common Stock and 260,965,701 shares of Clover Health Class B Common Stock and the elimination of the accumulated deficit of SCH, the accounting acquiree. See footnote 6(h) for further detail of share information.

(n)

To reflect an aggregate of $499.8 million of cash consideration payment (equivalent to 49,975,104 shares after applying the exchange ratio), to those of the Clover Stockholders eligible to make a cash election on a pro rata basis.

(A)

Derived from the audited consolidated statement of operations of SCH for the year ended December 31, 2020.

(B)

Derived from the audited consolidated statement of operations and comprehensive loss of Clover for the year ended December 31, 2020.

(a)

To reflect an adjustment to eliminate $80,000 for administrative and support services to the Sponsor that terminates upon the completion of the Business Combination. SCH entered into an agreement whereby, commencing on April 21, 2020, SCH paid an affiliate of the Sponsor $10,000 per month for office space, administrative and support services.

(b)

To reflect an adjustment to eliminate direct transaction fees incurred as a result of the Business Combination.

(c)

To reflect an adjustment to eliminate interest income on cash and marketable securities held in the trust account as of the beginning of the period.

(d)

To reflect an adjustment to eliminate the impact of the change in the fair value of warrant payable for warrants issued by Clover as it is assumed that all warrants would have been exercised for Clover Common Stock pursuant to the Merger Agreement. As a result, such warrants would no longer be subject to fair value accounting following the assumed closing of the Business Combination on January 1, 2020.

(e)

To reflect an adjustment to eliminate interest expense and amortization of discounts on Clover’s convertible securities that were converted to equity upon completion of the Business Combination. The adjustments were based on the total interest expense and amortization of discounts on Clover’s convertible securities recorded as of and for the year ended December 31, 2020 and the conversion of Clover’s convertible securities based on carrying amounts of the convertible securities as of December 31, 2020, which represents the best available information.

(f)

To reflect an adjustment to eliminate the impact of the change in the fair value of derivative liability associated with Clover’s convertible securities as it is assumed that all convertible securities would have been converted to Clover’s common stock and then to Clover Health Class B Common Stock on January 1, 2020. As a result, the derivative liability would be extinguished following the assumed closing of the Business Combination on January 1, 2020.

(g)

To reflect an adjustment to record a gain of $126.8 million on conversion of Clover’s convertible securities as if the Business Combination had occurred on January 1, 2020. It should be noted that the gain on conversion of $126.8 million was calculated based on the carrying amounts of Clover’s convertible securities and derivative liability as of December 31, 2020, which represents the best available information.

(h)

As the Business Combination and the PIPE Investment are being reflected as if they had occurred at the beginning of the earliest period presented, the calculation of weighted average shares outstanding for basic and diluted net loss per share assumes that the shares issuable relating to the Business Combination and the PIPE Investment have been outstanding for the entirety of the periods presented. The 24,892 shares redeemed by SCH’s public shareholders have been retroactively adjusted to eliminate such shares for the entire period. Weighted average common shares outstanding—basic and diluted for the year ended December 31, 2020 are calculated as follows:

Weighted average shares calculation—basic and diluted

SCH issuance of Class B ordinary shares

Issuance of Clover Health of Class A Common Stock in connection with closing of the PIPE Investment

Issuance of Clover Health Class B Common Stock to Clover shareholders in connection with the Business Combination

SCH Class A ordinary shares subject to redemption reclassified to equity

Weighted average shares outstanding