Item 9A. Controls and Procedures
Item 9A. Controls and Procedures.
Evaluation of Disclosure Controls and Procedures
Disclosure controls are procedures that are designed with the objective of ensuring that information required to be disclosed in our reports filed under the Exchange Act, such as this Form 10-K, is recorded, processed, summarized, and reported within the time period specified in the SEC's rules and forms. Disclosure controls are also designed with the objective of ensuring that such information is accumulated and communicated to our management, including the chief executive officer and chief financial officer, as appropriate to allow timely decisions regarding required disclosure. Our management evaluated, with the participation of our current chief executive officer and chief financial officer (our "Certifying Officers"), the effectiveness of our disclosure controls and procedures at December 31, 2024, pursuant to Rule 13a-15(b) under the Securities Exchange Act of 1934, as amended (the "Exchange Act"). Based upon that evaluation, our Certifying Officers concluded that, at December 31, 2024, our disclosure controls and procedures were effective at achieving their intended objective.
Notwithstanding the foregoing, a control system, no matter how well-designed and operated, can provide only reasonable, not absolute, assurance that it will detect or uncover failures to disclose material information required to be set forth in our periodic reports.
Internal Control over Financial Reporting
Internal control over financial reporting is defined in Rule 13a-15(f) promulgated under the Exchange Act as a process designed by, or under the supervision of, our principal executive and principal financial officers and effected by our Board, management, and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of the consolidated financial statements for external purposes in accordance with U.S. generally accepted accounting principles ("GAAP") and includes those policies and procedures that:
• pertain to the maintenance of records that in reasonable detail accurately and fairly reflect our transactions and dispositions of our assets;
• provide reasonable assurance that transactions are recorded as necessary to permit preparation of the consolidated financial statements in accordance with GAAP, and that our receipts and expenditures are being made only in accordance with authorizations of our management and directors; and
• provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on the consolidated financial statements.
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Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions or that the degree of compliance with the policies or procedures may deteriorate. No change occurred during the fourth quarter of 2024 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting. Management's report on internal control over financial reporting is set forth below and should be read with these limitations in mind.
Management's Report on Internal Control over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act. Management assessed the effectiveness of our internal control over financial reporting at December 31, 2024, using the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control — Integrated Framework (2013) . Based on management's assessment and the criteria set forth by COSO, our management determined that our internal control over financial reporting was effective at December 31, 2024.
The effectiveness of our internal control over financial reporting at December 31, 2024 has been by Ernst & Young LLP, an independent registered public accounting firm (PCAOBID: 42 ), as stated in their report that appears below.
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Report of Independent Registered Public Accounting Firm
To the Shareholders and the Board of Directors of Clover Health Investments, Corp.
Opinion on Internal Control Over Financial Reporting
We have audited Clover Health Investments, Corp.’s internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the COSO criteria). In our opinion, Clover Health Investments, Corp. (the Company) maintained, in all material respects, effective internal control over financial reporting as of December 31, 2024, based on the COSO criteria.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of December 31, 2024 and 2023, the related consolidated statements of operations and comprehensive loss, changes stockholders’ equity and cash flows for each of the three years in the period ended December 31, 2024, and the related notes and financial statement schedules listed in the Index at Item 15(a) and our report dated March 3, 2025 expressed an unqualified opinion thereon.
Basis for Opinion
The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Management’s Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. 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 audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects.
Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.
Definition and Limitations of Internal Control Over Financial Reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
/s/ Ernst & Young LLP
New York, New York
March 3, 2025
Item 9B. Other Information.
During the year ended December 31, 2024, none of the Company’s directors or officers (as defined in Rule 16a-1(f) of the Exchange Act) adopted or terminated (including by modification) a Rule 10b5-1 trading arrangement or non-Rule 10b5-1 trading arrangement (as such terms are defined in Item 408(a) of Regulation S-K of the Securities Act).
Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections.
Not applicable.
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Part III
Item 10. Directors, Executive Officers and Corporate Governance.
The information required by this Item 10 is incorporated herein by reference to the Company's definitive proxy statement for the 2025 Annual Meeting of Stockholders, to be filed by the Company with the SEC pursuant to Regulation 14A within 120 days after the year ended December 31, 2024 ("the 2025 Proxy Statement").
Item 11. Executive Compensation.
The information required by this Item 11 is incorporated herein by reference to our 2025 Proxy Statement, and is incorporated herein by reference.
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.
The information required by this Item 12 is incorporated herein by reference to our 2025 Proxy Statement, and it is incorporated herein by reference.
Item 13. Certain Relationships and Related Person Transactions, and Director Independence.
The information required by this Item 13 is incorporated herein by reference to our 2025 Proxy Statement, and it is incorporated herein by reference.
Item 14. Principal Accounting Fees and Services.
The information required by this Item 14 is incorporated herein by reference to our 2025 Proxy Statement, and it is incorporated herein by reference.
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Part IV
Item 15. Exhibits and Financial Statement Schedules.
(a) The Financial Statements, Financial Statement Schedules, and exhibits set forth below are filed as part of this Form 10-K.
(1) Financial Statements-The response to this portion of Item 15 is submitted as Item 8 of Part II of this Form 10-K.
(2) Financial Statement Schedules-The response to this portion of Item 15 is submitted as Item 8 of Part II of this Form 10-K.
(3) A list of exhibits to this Form 10-K is set forth below:
Incorporated by reference
Exhibit
No. Description Form File No. Exhibit No. Filing date Filed or Furnished herewith
2.1**
Agreement and Plan of Merger, dated as of October 5, 2020, by and among the Registrant, Asclepius Merger Sub Inc. and Clover Health Investments, Corp.
8-K 001-39252 2.1 10/06/2020
2.1(a) Amendment to the Agreement and Plan of Merger, dated as of December 8, 2020
8-K 001-39252 2.1 12/10/2020
3.1 Amended and Restated Certificate of Incorporation of the Registrant
8-K 001-39252 3.1 01/12/2021
3.2 Second Amended and Restated Bylaws of the Registrant
8-K 001-39252 3.1
06/25/2024
4.1 Specimen Class A Common Stock Certificate of the Registrant
S-4/A 333-249558 4.5 11/20/2020
4.2 Specimen Class B Common Stock Certificate of the Registrant
S-4/A 333-249558 4.6 11/20/2020
4.3 Description of Securities
10-K 001-39252 4.3 02/28/2022
10.1* Form of Indemnification Agreement
8-K 001-39252 10.2 01/12/2021
10.2* Amended and Restated 2014 Equity Incentive Plan, and forms of agreement thereunder
S-4 333-249558 10.15 10/20/2020
10.3* 2020 Equity Incentive Plan and forms of agreement thereunder
8-K 001-39252 10.4 01/12/2021
10.4* 2020 Employee Stock Purchase Plan
8-K 001-39252 10.5 01/12/2021
10.5* Management Incentive Plan
8-K 001-39252 10.6 01/12/2021
10.6* Executive Incentive Bonus Plan
8-K 001-39252 10.7 01/12/2021
10.7* Employment Agreement, effective as of December 31, 2021, between the Registrant and Jamie L. Reynoso
10-K 001-39252 10.12 02/28/2022
10.8*
Employment Agreement, effective as of April 29 , 2024, between the Registrant and Peter Kuipers
10-Q 001-39252 10.1 11/08/2024
10.9*
Employment Agreement, effective as of May 9, 2022, between the Registrant and Aric Sharp
10-Q 001-39252 10.2 08/08/2022
10.10*
Employment Agreement, effect ive as of July 18, 2022, between the Registrant and Brady Priest
10-K
001-39252 10.14 03/01/2023
10.11*
Employment Agreement, dated as of August 8, 2022, between the Registrant and Andrew Toy
10-Q 001-39252 10.1 11/07/2022
10.12*
Amended and Restated Director Compensation Policy
10-Q 001-39252 10.1
05/07/2024
10.13*
Board Observer Agreement, dated as of March 16, 2023, between the Registrant and Zach Weinberg.
8-K
001-39525
10.1 03/17/2023
10.14*
Employment Agreement, dated as of February 24, 2022, between the Registrant and Conrad Wai
10-Q
001-39252
10.2 05/09/2023
10.15*
Employment Agreement, dated as of March 8, 2024, between the Registrant and Karen Soares.
10-K
001-39252 10.16
03/14/2024
10.16*
Agreement for the Provision of Interim Management Service, dated as of December 22, 2023 between the Registrant and AP Services, LLC.
10-K
001-39252 10.17
03/14/2024
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19
Insider Trad ing Policy
X
21
List of Subsidiaries
X
23
Consent of Independent Registered Public Accounting Firm
X
31.1
Certification of Principal Executive Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
X
31.2
Certification of Principal Financial Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
X
32.1
Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
X
32.2
Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
X
97
Clover Health Investments, Corp. Clawback Policy
10-K
001-39252 97.1
03/14/2024
101.INS Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because XBRL tags are embedded within the Inline XBRL document.
101.SCH Inline XBRL Taxonomy Extension Schema Document
101.CAL Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF Inline XBRL Taxonomy Extension Definition Linkbase Document
101.LAB Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE Inline XBRL Taxonomy Extension Presentation Linkbase Document
104 Cover Page Interactive Data File (embedded within the Inline XBRL document)
_____________
* Indicates a management contract or compensatory plan or arrangement.
** Schedules to this exhibit have been omitted in accordance with Regulation S-K Item 601(b)(2). The registrant hereby agrees to furnish supplementary a copy of any omitted schedule to the SEC upon its request.
Item 16. Form 10-K Summary.
None.
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
Clover Health Investments, Corp.
Date: March 3, 2025 By: /s/ Andrew Toy
Andrew Toy
Chief Executive Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
Signature Title Date
/s/ Andrew Toy Chief Executive Officer (Principal Executive Officer) and Director Date: March 3, 2025
Andrew Toy
/s/ Peter Kuipers Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer) Date: March 3, 2025
Peter Kuipers
/s/ Vivek Garipalli Director and Executive Chair Date: March 3, 2025
Vivek Garipalli
/s/ Chelsea Clinton Director Date: March 3, 2025
Chelsea Clinton
/s/ Demetrios L. Kouzoukas Director Date: March 3, 2025
Demetrios L. Kouzoukas
/s/ Lee A. Shapiro Director Date: March 3, 2025
Lee A. Shapiro
/s/ William G. Robinson, Jr. Director Date: March 3, 2025
William G. Robinson, Jr.
/s/ Carladenise A. Edwards Director Date: March 3, 2025
Carladenise A. Edwards
/s/ Anna U. Loengard Director Date: March 3, 2025
Anna U. Loengard
/s/ Thomas L. Tran
Director Date: March 3, 2025
Thomas L. Tran
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