CLOVER HEALTH INVESTMENTS, CORP. /DE 10-K

Item 8. 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, 2025 and 2024, the related consolidated statements of operations and comprehensive loss , changes in stockholders' equity and cash flows for each of the three years in the period ended December 31, 2025, 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, 2025 and 2024, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2025, 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, 2025, 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 February 27, 2026, 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 a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates. 68 Valuation of incurred but not reported reserves Description of the Matter As of December 31, 2025, the Company’s unpaid claims was $153.3 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 reported reserves. 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 reported reserves. 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 February 27, 2026 69 CLOVER HEALTH INVESTMENTS, CORP. CONSOLIDATED BALANCE SHEETS (Dollars in thousands, except share amounts) December 31, 2025 December 31, 2024 Assets Current assets: Cash and cash equivalents $ 78,301 $ 194,543 Short-term investments 17,047 — Investment securities, available-for-sale (Amortized cost: 2025: $ 23,231 ; 2024: $ 27,153 ) 23,131 26,997 Investment securities, held-to-maturity (Fair value: 2025: $ 1,779 ; 2024: $ 15 ) 1,777 15 Accrued retrospective premiums 63,875 41,253 Healthcare receivables 94,866 51,539 Prepaid expenses 18,209 13,174 Other assets, current 10,649 15,603 Total current assets 307,855 343,124 Investment securities, available-for-sale (Amortized cost: 2025: $ 186,464 ; 2024: $ 203,147 ) 187,092 201,719 Investment securities, held-to-maturity (Fair value: 2025: $ 12,495 ; 2024: $ 13,913 ) 12,571 14,343 Property and equipment, net 6,385 5,307 Other intangible assets 2,990 2,990 Other assets, non-current 24,118 13,259 Total assets $ 541,011 $ 580,742 Liabilities and Stockholders' Equity Current liabilities: Unpaid claims $ 153,250 $ 156,396 Accounts payable and accrued expenses 36,211 34,564 Accrued salaries and benefits 16,038 19,090 Other liabilities, current 3,324 3,466 Total current liabilities 208,823 213,516 Other liabilities, non-current 23,484 26,083 Total liabilities 232,307 239,599 Commitments and Contingencies (Note 13) Stockholders' equity: Class A Common Stock, $ 0.0001 par value; 2,500,000,000 shares authorized at December 31, 2025 and December 31, 2024; 426,669,369 and 414,493,051 issued and outstanding at December 31, 2025 and December 31, 2024, respectively 43 41 Class B Common Stock, $ 0.0001 par value; 500,000,000 shares authorized at December 31, 2025 and December 31, 2024; 92,373,157 and 89,032,305 issued and outstanding at December 31, 2025 and December 31, 2024, respectively 9 9 Additional paid-in capital 2,682,663 2,576,471 Accumulated other comprehensive income (loss) 528 ( 1,584 ) Accumulated deficit ( 2,288,352 ) ( 2,202,803 ) Less: Treasury stock, at cost; 33,412,273 and 18,752,947 shares held at December 31, 2025 and December 31, 2024, respectively ( 86,187 ) ( 30,991 ) Total stockholders' equity 308,704 341,143 Total liabilities and stockholders' equity $ 541,011 $ 580,742 The accompanying notes are an integral part of these consolidated financial statements. 70 CLOVER HEALTH INVESTMENTS, CORP. CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (Dollars in thousands, except per share and share amounts) Year ended December 31, 2025 2024 2023 Revenues: Premiums earned, net (Net of ceded premiums of $ 375 , $ 399 , and $ 444 for the year ended December 31, 2025, 2024, and 2023, respectively.) $ 1,891,732 $ 1,344,881 $ 1,235,769 Other income 32,576 26,250 24,774 Total revenues 1,924,308 1,371,131 1,260,543 Operating expenses: Net medical claims incurred 1,568,406 1,006,327 1,004,590 Salaries and benefits 225,475 232,454 257,157 General and administrative expenses 214,270 176,480 183,089 Impairment of goodwill and other intangible assets — — 15,945 Premium deficiency reserve benefit — — ( 7,239 ) Depreciation and amortization 1,686 1,331 2,509 Restructuring costs — 288 9,821 Total operating expenses 2,009,837 1,416,880 1,465,872 Loss from continuing operations ( 85,529 ) ( 45,749 ) ( 205,329 ) Change in fair value of warrants 20 50 86 Interest expense — — 7 Loss on investment — 467 4,726 Net loss from continuing operations ( 85,549 ) ( 46,266 ) ( 210,148 ) Net income (loss) from discontinued operations — 3,257 ( 3,213 ) Net loss $ ( 85,549 ) $ ( 43,009 ) $ ( 213,361 ) Per share data: Basic and diluted weighted average number of class A and class B common shares and common share equivalents outstanding 511,967,146 490,018,730 482,176,127 Continuing operations: Basic and diluted loss per share $ ( 0.17 ) $ ( 0.09 ) $ ( 0.44 ) Discontinued operations: Basic and diluted earnings (loss) per share $ — $ 0.01 $ ( 0.01 ) Net unrealized gain on available-for-sale investments 2,112 786 7,004 Comprehensive loss $ ( 83,437 ) $ ( 42,223 ) $ ( 206,357 ) The accompanying notes are an integral part of these consolidated financial statements. 71 CLOVER HEALTH INVESTMENTS, CORP. CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (Dollars in thousands, except share amounts) Class A Common Stock Class B Common Stock Treasury Stock Additional paid-in capital Accumulated deficit Accumulated other comprehensive loss Total stockholders' equity Shares Amount Shares Amount Shares Amount Balance, December 31, 2022 383,998,718 $ 37 94,394,852 $ 9 2,072,752 $ ( 6,509 ) $ 2,319,157 $ ( 1,955,582 ) $ ( 9,374 ) 347,738 Change in accounting policy — — — — — — — 9,149 — 9,149 Adjusted balance, beginning of period 383,998,718 $ 37 94,394,852 $ 9 2,072,752 $ ( 6,509 ) $ 2,319,157 $ ( 1,946,433 ) $ ( 9,374 ) 356,887 Stock issuance for exercise of stock options, net of early exercise liability 79,189 — — — — — 34 — — 34 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 Shares withheld for taxes on equity awards ( 5,839,998 ) — — — 5,839,998 ( 6,220 ) — — — ( 6,220 ) Issuance of common stock under employee stock purchase plan 528,188 — — — — — 1,116 — — 1,116 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 Stock issuance for exercise of stock options, net of early exercise liability 409,594 — — — — — 709 — — 709 Stock-based compensation — — — — — — 114,331 — — 114,331 Vested restricted stock units 22,671,645 2 1,781,633 — — — — — — 2 Unrealized holdings gain on investment securities, available for sale — — — — — — — — 786 786 Conversion from class B common stock to class A common stock 617,060 — ( 617,060 ) — — — — — — — Shares withheld for taxes on equity awards ( 9,001,888 ) ( 1 ) — — 9,001,888 ( 16,490 ) — — — ( 16,491 ) Issuance of common stock under employee stock purchase plan 451,067 — — — — — 193 — — 193 Repurchases of common stock ( 1,838,309 ) — — — 1,838,309 ( 1,772 ) — — — ( 1,772 ) Net loss — — — — — — — ( 43,009 ) — ( 43,009 ) Balance, December 31, 2024 414,493,051 $ 41 89,032,305 $ 9 18,752,947 $ ( 30,991 ) $ 2,576,471 $ ( 2,202,803 ) $ ( 1,584 ) 341,143 Stock issuance for exercise of stock options, net of early exercise liability 425,367 — — — — — 718 — — 718 Stock-based compensation — — — — — — 104,378 — — 104,378 Vested restricted stock units 25,942,142 4 3,342,698 — — — — — — 4 Unrealized holdings gain on investment securities, available for sale — — — — — — — — 2,112 2,112 Conversion from class B common stock to class A common stock 1,846 — ( 1,846 ) — — — — — — — Shares withheld for taxes on equity awards ( 9,589,903 ) ( 1 ) — — 9,589,903 ( 36,899 ) — — — ( 36,900 ) Issuance of common stock under employee stock purchase plan 466,289 — — — — — 1,096 — — 1,096 Repurchases of common stock ( 5,069,423 ) ( 1 ) — — 5,069,423 ( 18,297 ) — — — ( 18,298 ) Net loss — — — — — — — ( 85,549 ) — ( 85,549 ) Balance, December 31, 2025 426,669,369 $ 43 92,373,157 $ 9 33,412,273 $ ( 86,187 ) $ 2,682,663 $ ( 2,288,352 ) $ 528 308,704 The accompanying notes are an integral part of these consolidated financial statements. 72 CLOVER HEALTH INVESTMENTS, CORP. CONSOLIDATED STATEMENTS OF CASH FLOWS (Dollars in thousands) Year ended December 31, 2025 2024 2023 Cash flows from operating activities: Net loss $ ( 85,549 ) $ ( 43,009 ) $ ( 213,361 ) Adjustments to reconcile net loss to net cash (used in) provided by operating activities: Depreciation and amortization expense 1,686 1,331 2,509 Stock-based compensation 103,657 114,331 140,931 Change in fair value of warrants and amortization of warrants 20 50 86 Accretion, net of amortization ( 1,843 ) ( 2,524 ) ( 4,014 ) Change in accrued interest earned 271 ( 571 ) — Net realized gains on investment securities ( 979 ) ( 480 ) ( 20 ) Loss on investment — 467 4,726 Impairment of goodwill and other intangible assets — — 15,945 Premium deficiency reserve — — ( 7,239 ) Changes in operating assets and liabilities: Accrued retrospective premiums ( 22,622 ) ( 19,177 ) ( 1,689 ) Prepaid expenses ( 5,035 ) 1,244 3,728 Other assets ( 5,921 ) 2,852 8,859 Healthcare receivables ( 43,327 ) 12,625 6,443 Unpaid claims ( 3,146 ) 19,296 ( 294 ) Accounts payable and accrued expenses 1,647 ( 2,620 ) 4,739 Accrued salaries and benefits ( 3,052 ) ( 1,971 ) ( 2,901 ) Other liabilities ( 2,741 ) 606 6,404 Net cash (used in) provided by operating activities from continuing operations ( 66,934 ) 82,450 ( 35,148 ) Net cash used in operating activities from discontinued operations — ( 47,605 ) ( 109,514 ) Net cash (used in) provided by operating activities ( 66,934 ) 34,845 ( 144,662 ) Cash flows from investing activities: Purchases of short-term investments, available-for-sale, and held-to-maturity securities ( 205,097 ) ( 201,241 ) ( 175,567 ) Proceeds from sales of short-term investments and available-for-sale securities 185,163 83,673 60,436 Proceeds from maturities of short-term investments and available-for-sale securities 26,053 119,689 255,728 Purchases of property and equipment ( 2,043 ) ( 1,556 ) ( 584 ) Net cash provided by investing activities 4,076 565 140,013 Cash flows from financing activities: Issuance of common stock, net of early exercise liability 718 709 34 Issuance of common stock under employee stock purchase plan, net of stock issuance costs 1,096 193 1,116 Cash paid for shares withheld related to stock-based compensation ( 36,900 ) ( 16,491 ) ( 6,220 ) Repurchases of common stock ( 18,298 ) ( 1,772 ) — Net cash used in financing activities ( 53,384 ) ( 17,361 ) ( 5,070 ) Net (decrease) increase in cash and cash equivalents ( 116,242 ) 18,049 ( 9,719 ) Cash and cash equivalents, beginning of period 194,543 176,494 186,213 Cash and cash equivalents, end of period $ 78,301 $ 194,543 $ 176,494 Reconciliation of cash and cash equivalents and restricted cash Cash and cash equivalents (1) $ 78,301 $ 194,543 $ 122,863 Restricted cash — — 53,631 Total cash, cash equivalents, and restricted cash $ 78,301 $ 194,543 $ 176,494 (1) Includes all applicable amounts for both continuing and discontinued operations The accompanying notes are an integral part of these consolidated financial statements. 73 CLOVER HEALTH INVESTMENTS, CORP. Notes to the 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, manage, and treat 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 ("MA"), 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. 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 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. 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. In 2024, the Company launched Counterpart Health, Inc., a subsidiary of the Company which houses a new Software-as-a-Service (“SaaS”) and Tech Enabled Services Solution to bring the power of CA Technology to external payors and providers serving the Medicare eligible population. This external offering aims to equip clinician users with the Company's already built, clinician-centric, and AI-powered care management platform. Strategically, Counterpart Health, Inc., a subsidiary of Clover Health, aims to extend the benefits of data-driven proven technology and personalized care to a wider audience, enabling enhanced patient outcomes and reduced healthcare costs across the nation. Counterpart Health is complementary to Clover Health, and enables the Company to deploy and expand the reach of its existing technology asset for new potential growth and high margin business opportunities, with low startup costs. The Company was originally incorporated as a Cayman Islands exempted company on October 18, 2019, as a special purpose acquisition company 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, 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"). The 2021 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 Health Investments, Corp., as the parent company of the combined business, is the successor Securities and Exchange Commission ("SEC") registrant, meaning that Legacy Clover's consolidated financial statements for previous periods are disclosed in periodic reports filed with the SEC. As a result of the 2021 Business Combination, there were simultaneous changes to Legacy Clover's convertible securities, warrants, and convertible preferred stock. The 2021 Business Combination has had a significant impact on the Company's reported financial condition and results of operations as a consequence of the reverse recapitalization. The 2021 Business Combination closed on January 7, 2021, and on the following day the Company's Class A Common Stock and then outstanding public warrants were listed on the NASDAQ for trading in the public market. 74 2. Summary of Significant Accounting Policies Basis of presentation The Company's consolidated financial statements have been prepared in conformity with GAAP and include the accounts of the Company and its wholly-owned subsidiaries. In the opinion of management, the Company has made all necessary adjustments, which include normal recurring adjustments, necessary for a fair presentation of its financial condition and its results of operations for the periods presented. All material intercompany balances and transactions have been eliminated in consolidating these financial statements. Investments over which the Company exercises significant influence, but do not control, are accounted for using the applicable accounting treatment based on the nature of the investment. Use of estimates The preparation of the consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that impact the amounts reported in the consolidated financial statements and the 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 Company 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 Company assumes prior to payment of claims. If the Company's actual experience is different from its assumptions or estimates, the Company's reserves may prove inadequate. As a result, the Company 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 Company'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 Company's investment securities, other intangible assets, reinsurance, premium deficiency reserve, warrants, embedded derivative related to convertible securities, stock-based compensation, recoveries from third parties for coordination of benefits, Direct Contracting benchmark, specifically cost trend and risk score estimates that can develop over time, and final determination of medical cost adjustment pools. Discontinued operations The results of operations for the Company's former Non-Insurance segment have been reclassified as discontinued operations for all periods presented in the Consolidated Statements of Operations and Comprehensive Loss. Assets and liabilities related to the Company's former Non-Insurance segment have been reclassified as discontinued operations for all periods presented in the Consolidated Balance Sheets. Furthermore, all cash flow related activity related to Non-Insurance has all been reclassified on the Consolidated Statements of Cash Flows. Refer to Note 16 "Discontinued Operations" for additional information. Deferred revenue Premiums earned, net is recognized as income in the period members are entitled to receive services, risk adjustment revenue, and other ancillary income. Premiums received in advance of the service period are reported as deferred revenue on the Consolidated Balance Sheets within Other liabilities, current and recognized within Premiums earned, net once earned. Premiums anticipated to be received within twelve months based on the documented diagnostic criteria of the Company's members are estimated and included in revenue for the period including the member months for which the payment is designated by CMS. Equity method of accounting and variable interest entities Investments in entities in which the Company does not have control but its ownership falls between 20.0% and 50.0%, or it has the ability to exercise significant influence over operating and financial policies, are accounted for under the equity method of accounting. The Company continuously assesses its partially-owned entities to determine if these entities are variable interest entities ("VIEs") and, if so, whether the Company is the primary beneficiary and, therefore, required to consolidate the VIE. To make this determination, the Company applies a qualitative approach to determine whether the Company has both the power to direct the activities of the VIE that most significantly impact the VIE's economic performance and the obligation to absorb losses of, or the rights to receive benefits from, the VIE that could potentially be significant to that VIE. If the Company has an interest in a VIE but is determined to not be the primary beneficiary, the Company accounts for the interest under the equity method of accounting. When the Company's carrying value in an equity method investee company is reduced to zero, no further losses are recorded in the Company's consolidated financial statements unless the Company guaranteed obligations of the investee company or has committed additional funding. When the investee company subsequently reports income, the Company will not record its share of such income until it equals the amount of its share of losses not previously recognized. 75 Business Combinations The Company accounts for business acquisitions under ASC 805, Business Combinations . The total purchase consideration for an acquisition is measured as the fair value of the assets given, equity instruments issued and liabilities assumed at the acquisition date. Costs that are directly attributable to the acquisition are expensed as incurred. Identifiable assets (including intangible assets) and liabilities assumed (including contingent liabilities) in an acquisition are measured initially at their fair values at the acquisition date. The Company recognizes goodwill to the extent that the fair value of the total purchase consideration is in excess of the net fair value of the identifiable assets acquired and the liabilities assumed. The Company includes the results of operations of the acquired business in the consolidated financial statements beginning on the acquisition date. Segment information The Company operates as one reportable segment, Insurance. The Insurance segment provides PPO and HMO plans to Medicare Advantage members in several states. 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, 2025 and 2024, the Company 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 that the Company 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 values 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 Company purchases that are not classified as held-to-maturity, are classified as available-for-sale financial assets. The Company's available-for-sale investments are U.S. Treasury fixed maturity securities, corporate debt, commercial paper, certificate of deposit, and agency bonds. Available-for-sale investments are measured at fair value, and unrealized gains and losses, if any, are recorded in other comprehensive loss, net of applicable income taxes, until realized from a sale or an expected credit loss is recognized. Investment securities, held-to-maturity Investment securities, which consist entirely of debt securities with fixed or determinable payments and fixed maturity dates, where the Company has a positive intent and ability to hold to maturity, are classified as held-to-maturity financial assets. The Company's held-to-maturity investments are comprised of U.S. Treasury fixed maturity securities. The held-to-maturity investments are measured at amortized cost using the effective interest method less impairment. Unrealized holding gains or losses are not recognized. Impairment of investment securities Effective January 1, 2021, the Company adopted the provisions of ASC 326, Current Expected Credit Loss, and modified its accounting policy for the assessment of available-for-sale and held-to-maturity securities for impairment, as further described below. Prior to January 1, 2021, the Company applied the other-than-temporary impairment model for available-for-sale securities in an unrealized loss position which did not result in impairments for 2020 or 2019. Beginning on January 1, 2021, the Company adopted ASC 326, which retained many similarities from the previous other-than-temporary impairment model but eliminated the consideration of the length of time over which the fair value had been less than cost. Additionally, under ASC 326, the expected losses on securities are recognized through an allowance for credit losses rather than as a reduction in the amortized cost of the security. 76 The Company identifies securities that are in an unrealized loss position and could potentially have an impairment. 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, consolidated financial statements, revenue forecasts and cash flow projections as indicators of credit risks. The Company considers relevant facts and circumstances in evaluating the impairment of a security. Relevant facts and circumstances considered include (1) the extent to which the fair value has been below cost or amortized cost, (2) adverse conditions specifically related to the financial condition of the issuer or 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, and (6) the volatility of the fair value changes. There are a number of significant risks and uncertainties inherent in the process of monitoring impairments. 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 consolidated financial statements could be provided to the Company's management to determine the fair value estimates and impairments, and (4) the risk that new information obtained by the Company, or changes in other facts and circumstances, could lead the Company 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 available-for-sale securities whose fair value is less than their amortized cost that the Company does not intend to sell or is not required to sell, management evaluates the expected cash flows to be received as compared to amortized cost and determines if an expected credit loss has occurred. If an expected credit loss occurs, only the amount of the impairment related to the expected credit loss is recognized in income with the remainder, if any, of the loss recognized in other comprehensive loss. To the extent the Company has the intent to sell the security or it is more likely than not that the Company will be required to sell the security before recovery of the amortized cost basis, management recognizes an impairment loss in income in an amount equal to the full difference between the amortized cost basis and the fair value. 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 Company 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, 2025, 2024, and 2023, there was no impairment loss reported. Held-to-maturity securities are evaluated for potential credit loss on a collective basis. The estimate of credit losses considers historical credit loss information that is adjusted for current conditions and reasonable and supportable forecasts. Allowance for expected credit losses The Company assesses outstanding receivables at each period for credit risk. The majority of receivables are from CMS, a United States government entity that presents very limited credit risk. Other income Other income consists of income from operating subleases, miscellaneous revenue, investment income, commissions, realized gains and losses, and software as a services and tech-enabled services. Investment income includes interest, dividends received or accrued on investments, and realized gains or losses, and unrealized gains and losses on equity securities recognized at fair value. Investment income is reported as earned and is presented net of related investment expenses and expected credit losses. 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. 77 To determine the fair value of its investments, the Company 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 Company would use in pricing the Company'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 Company 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 Company's assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment. In making the assessment, the Company 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. The Company 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. Concentrations of credit risk Financial instruments that potentially subject the Company 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 Company from its primary liability for the full amount of the policy coverage, and therefore the Company 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 Company evaluates the financial condition of its reinsurers and monitors concentrations of credit risk with its reinsurers. 78 Capitalized software development costs - cloud computing arrangements The Company's cloud computing arrangements are mostly comprised of hosting arrangements that are mostly service contracts, whereby the Company 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 Consolidated Balance Sheets within Prepaid expenses, 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 are primarily made up of commissions costs, are deferred and subsequently amortized. Deferred acquisition costs are recorded within Other assets, current on the Consolidated Balance Sheets and are amortized over the estimated life of the related contracts. The amortization of deferred acquisition costs is recorded within General and administrative expenses in the Consolidated Statements of Operations and Comprehensive Loss. For the years ended December 31, 2025, 2024, and 2023 charges related to deferred acquisition costs of $ 21.9 million, $ 10.5 million, and $ 6.8 million, respectively, were recognized within General and administrative expenses. Warrants At December 31, 2022, the Company recognized exercisable private warrants which were embedded in several agreements as derivatives. These private warrants were accounted for as assets in accordance with ASC 815-40 and are presented within Other assets, non-current on the Consolidated Balance Sheets. The warrant assets are 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 within the Consolidated Statements of Operations and Comprehensive Loss. These private warrants were classified within Level 3 due to the subjectivity and use of estimates in the calculation of their fair value. During the year ended December 31, 2025, the warrants were settled or expired following the acquisition of the underlying entities. As of December 31, 2025, no warrant assets remain outstanding. 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 to five years. Leasehold improvements are amortized over the shorter of the remaining lease term or estimated useful life of the leasehold improvement. Repairs and maintenance costs are expensed as incurred. Costs related to the development of internal-use software that do not meet capitalization criteria are expensed as incurred. Gains and losses on sales or disposals of property and equipment are included within Other income. 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. Capitalized Software We capitalize certain costs, such as compensation costs, including stock-based compensation, and interest incurred on outstanding debt, in developing internal-use software once planning has been completed, management has authorized and committed project funding, and it is probable that the project will be completed and the software will function as intended. Amortization of such costs occurs on a straight-line basis over the estimated useful life of the related asset and begins once the asset is ready for its intended use. Costs incurred prior to meeting these criteria, together with costs incurred for training and maintenance, are expensed as incurred. In addition, we capitalize interest incurred on outstanding debt during the period of construction-in-progress of certain assets as applicable. 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. 79 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, 2025 or December 31, 2024, and there was an $ 11.7 million impairment of goodwill for the year ended December 31, 2023. 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 Company 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 Company will test for impairment using a quantitative process. If the Company 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 Company and the resulting cash flows. For the years ended December 31, 2025 and December 31, 2024 there was no impairment related to intangible assets with indefinite useful lives. For the year ended December 31, 2023, there was $ 4.2 million of impairment related to intangible assets with indefinite useful lives. Reinsurance In the normal course of business, the Company 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 expected credit losses of Reinsurance recoverable is evaluated based upon a number of factors. Such factors include the amounts outstanding, history of losses, ratings of reinsurers, disputes, any collateral or letters of credit held and other relevant factors. The Company had no material credit allowances for Reinsurance recoverable at December 31, 2025 and 2024. 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 Company for their share of losses, they do not discharge the primary liability of the Company. The Company remains liable for unpaid claims and claims adjustment expenses associated with ceded insured risks if 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 incurred but not yet reported ("IBNR") claims, 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. 80 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 Company'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 Company'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 Company recognizes the cost of medical claims in the period in which services are provided, including an estimate of the cost of medical claims IBNR. Net medical claims incurred reported within 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 Company'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 within Healthcare receivables within the Consolidated Balance Sheets. Overpayments to providers are recognized as a contra medical expense and reported within Other assets, current within the Consolidated Balance Sheets. Premium deficiency reserve A liability for premium deficiency reserves is an actuarial estimate for anticipated losses on the Company's MA and MA Part D ("MAPD") business. The reserve is derived from the assessments performed and provides the amount by which insurance-related expenses are expected to exceed insurance revenues in addition to net investment income. There are key financial statement line items and associated drivers considered in determining the reserve. The most significant of financial statement line items considered when performing reserve assessments are premiums earned, net investment income, and insurance net medical claims incurred. Key inputs considered for premiums earned include expected enrollment changes, revenue rates, risk adjustment, and risk score forecasts. Key metrics considered for insurance net medical claims incurred include claims experience, benefit changes, membership mix, membership changes, and medical management programs. Administrative expenses are assessed for expenses directly and indirectly incurred in order to operate the insurance entities and cannot exceed a percentage of regulatory entity premiums earned due to contractual agreements. There are other operating activities that are considered in accordance with regulatory guidelines. The premium deficiency reserve assessment is performed on a quarterly basis. Every quarter, reserve assessments are made for the period following the most recently ended period through to the end of the current year. For the fourth quarter, assessments are made related to the entire subsequent fiscal year's projected net performance. If a reserve is deemed necessary, a liability and expense will be recognized as of the end of the quarter directly preceding the period for which the future loss is projected. That reserve will be amortized over the course of the contract period assessed to have expected insurance expenses that will exceed insurance revenues. The amortization of the reserve occurs ratably over the assessed contract period and will offset expected future losses . 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. At December 31, 2025 and 2024, respectively, management performed its premium deficiency reserve assessment and determined that no premium deficiency reserve was required, and therefore no liability was recognized. 81 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 Patient Protection and Affordable Care Act ("ACA"). Premiums received in advance of the service period are reported within 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 Company'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 Company is required to make a risk adjustment payment into the risk pool, and if a risk score is above the average risk score the Company 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 Company'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 within the Company'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. Medicare Advantage Part D Revenue Payments received from CMS and members from Clover's participation in the MAPD program are determined from the Company'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 Company or require the Company 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' prospective subsidies against actual prescription drug costs paid is made after the end of the year. Consumer discounts of 50.0 % on brand name prescription drugs for participants in the coverage gap are funded by CMS and pharmaceutical manufacturers. The Company accounts for these subsidies and discounts within Other assets in the Consolidated Balance Sheets and as an operating activity in the Consolidated Statements of Cash Flows. The Company does not recognize premiums revenue or claim expenses for these subsidies or discounts. Leases At the inception of an arrangement, the Company 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 Company's control over the use of that identified asset. The Company does not recognize leases with a lease term of one year or less on its Consolidated Balance Sheets. Leases with a term greater than one year are recognized on the balance sheet as right-of-use ("ROU") assets and lease liabilities. The Company has sublease arrangements and recognizes sublease income from leasing excess space. Sublease income is recognized on a straight-line basis over the sublease term. At December 31, 2025 and 2024, the Company did not have any financing leases. 82 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. At December 31, 2025 and 2024, the Company did not include optional extension periods in the measurement of its leases as they were not reasonably certain of exercise. The Company monitors its plans to renew its material leases on a quarterly basis. Where the rates implicit in the Company's leases are not readily determinable, the Company 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 Company is estimated using a synthetic credit rating analysis since the Company 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 Company 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 Company applies the bright line thresholds referenced in the lease guidance of 75.0% to represent "a major part" and 90.0% to represent "substantially all" as allowed in ASC 842 in evaluating leases for appropriate classification. These are applied consistently to the Company's entire portfolio of leases. Stock-based compensation The Company measures and recognizes compensation expense for all stock-based awards, including Options and RSUs granted to employees, directors, and non-employee consultants, under certain equity incentive plans and stock purchase rights granted under the 2020 Employee Stock Purchase Plan ("ESPP") to employees, based on the estimated fair value of the awards on the date of grant. The fair value of each Option and stock purchase right is estimated using the Black-Scholes option-pricing model. The fair value of each RSU is based on the estimated fair value of the Company's common stock on the date of grant. 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 within the Consolidated Statements of Operations and Comprehensive Loss within Salaries and benefits. The Company recognizes stock-based compensation expense for the portion of awards that have vested. Forfeitures are recorded as they occur. 83 The Company also grants certain awards that have performance-based vesting conditions, including performance restricted stock units that become eligible to vest based on achievement of certain Company or individual performance milestones (“Non-Market PRSUs”) and other performance restricted stock units that become eligible to vest if, prior to the vesting date, the average closing price of one share of the Company's common stock for ninety consecutive days equals or exceeds a specified price ("Market PRSUs"). Stock-based compensation expense for such awards is recognized using an accelerated attribution method from the time it is deemed probable that the vesting condition will be met through the time the service-based vesting condition has been achieved. The grant date fair value of the Market PRSUs is recognized as expense over the vesting period under the accelerated attribution method and is not adjusted in future periods for the success or failure to achieve the specified market condition. The Company has also determined the requisite service period for the Market PRSUs with multiple performance conditions to be the longest of the explicit, implicit, or derived service period. The determination of the grant-date fair value using an option-pricing model is affected by the estimated fair value of the Company's common stock as well as assumptions regarding a number of other complex and subjective variables. These variables include expected stock price volatility over an expected term, actual and projected employee stock option exercise behaviors, the risk-free interest rate for an expected term, and expected dividends. The assumptions used in the option-pricing model represent the Company's best estimates. These estimates involve inherent uncertainties and the application of judgment. If factors change and different assumptions are used, the Company's stock-based compensation expense could be materially different in the future. These assumptions are estimated as follows: Expected term - For Options considered to be "plain vanilla" options, the Company estimates the expected term based on the simplified method, which is essentially the weighted average of the vesting period and contractual term, as the Company's historical option exercise experience does not provide a reasonable basis upon which to estimate the expected term. Expected volatility - The Company performs an analysis of the average volatility of a peer group of representative public companies with sufficient trading history over the expected term to develop an expected volatility assumption. The grant date fair value of the Market PRSUs is recognized as expense over the vesting period under the accelerated attribution method and is not adjusted in future periods for the success or failure to achieve the specified market condition. The grant date fair value of Market PRSUs is determined using a Monte Carlo simulation model that incorporates multiple valuation assumptions, including the probability of achieving the specified market condition, expected volatility and risk-free interest rate. There have been no Market PRSU awards granted during the years ended December 31, 2025 and 2024. The grant date fair value of Non-Market PRSUs is determined based on the closing price of the Company’s class A common stock. See Note 14 "Employee Benefit Plans" to the consolidated financial statements included in this Form 10-K for a complete description of the accounting for stock-based compensation awards. Comprehensive loss Comprehensive loss is a measurement of certain changes within Stockholders' equity 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 The Company 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 The Company 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 Company 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. At December 31, 2025 and 2024, sufficient doubt existed over the Company's ability to generate sufficient taxable income to realize its deferred income tax assets, and accordingly, the Company provided a full valuation allowance against its deferred tax assets. 84 The Company records tax benefits when it is more likely than not that the tax return position taken with respect to a particular transaction will be sustained. A liability for an uncertain tax position, if recorded, is not considered resolved until the statute of limitations for the relevant taxing authority to examine and challenge the tax position has expired, or the tax position is ultimately settled through examination, negotiation, or litigation. The Company did not have any material uncertain tax positions during the years ended December 31, 2025 and 2024. The Company classifies interest and penalties associated with uncertain tax positions in its provision for income taxes. The Company did not incur or record any interest and penalties related to uncertain tax positions at or during the years ended December 31, 2025 and 2024. 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 The Company follows the two-class method when computing net loss per share as the Company 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 potentially dilutive common shares. For purposes of this calculation, outstanding options, convertible preferred stock and warrants to purchase shares of convertible preferred stock are considered potential dilutive common shares. Recent accounting pronouncements Recently adopted accounting pronouncements There have been no new accounting pronouncements adopted during the year ended December 31, 2025 that had a material impact on the Company's consolidated financial statements. Accounting pronouncements effective in future periods In November 2024, the FASB issued ASU 2024-03, Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220-40). The amendments in this update would require a public entity to disclose information about purchases of inventory, employee compensation, depreciation, intangible asset amortization, and depletion for each income statement line item that contains those expenses. ASU 2024-03 is effective for annual reporting periods beginning after December 15, 2026 and interim reporting periods beginning after December 15, 2027. ASU 2024-03 allows for early adoption and requires either prospective adoption to consolidated financial statements issued for reporting periods after the effective date of ASU 2024-03 or retrospectively to any or all prior periods presented in the consolidated financial statements. The Company is currently evaluating the impact of ASU 2024-03 on its consolidated financial statements and related disclosures. In July 2025, the FASB issued ASU 2025-05, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivables and Contract Assets. The amendments in this update provide a practical expedient for entities when estimating expected credit losses on current accounts receivable and contract assets. The expedient allows an entity to assume that economic conditions as of the balance sheet date will remain unchanged for the remaining life of the asset when forecasting expected credit losses. The ASU is effective for fiscal years beginning after December 15, 2025, and interim periods within those fiscal years. The Company is currently evaluating the impact of ASU 2025-05 on its consolidated financial statements and related disclosures. In August 2025, the FASB issued ASU 2025-06, Intangibles-Goodwill and Other-Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software. The amendments in this update modernize the accounting for costs related to internal-use software to better align with current software development practices, such as agile methodologies. The update removes the previous stage-based model for capitalization. Instead, capitalization will begin when management authorizes and commits funding to a project, and it is probable the project will be completed for its intended function. The ASU is effective for annual periods beginning after December 15, 2026, with early adoption permitted. The Company is currently evaluating the impact of ASU 2025-06 on its consolidated financial statements and related disclosures. 85 In September 2025, the FASB issued ASU 2025-07, Derivatives and Hedging (Topic 815) and Revenue from Contracts with Customers (Topic 606): Derivatives Scope Refinements and Clarification for Share-Based Noncash Consideration from a Customer in a Revenue Contract. The amendments in this update expand the scope exception in Topic 815 to exclude certain non-exchange-traded contracts with underlying based on the operations or activities of one of the parties to the contract. Additionally, the update clarifies that share-based noncash consideration received from a customer is subject to the guidance in Topic 606 until the right to consideration is unconditional. The ASU is effective for annual periods beginning after December 15, 2026, with early adoption permitted. The Company is currently evaluating the impact of ASU 2025-07 on its consolidated financial statements and related disclosures. 3. Investment Securities The following tables present amortized cost and fair values of investments at December 31, 2025 and December 31, 2024, respectively: December 31, 2025 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 $ 14,348 $ 3 $ ( 77 ) $ 14,274 Investment securities, available-for-sale: U.S. government and government agencies and authorities 129,217 522 ( 292 ) 129,447 Corporate debt securities 80,197 309 ( 11 ) 80,495 Other 281 — — 281 Total held-to-maturity and available-for-sale investment securities $ 224,043 $ 834 $ ( 380 ) $ 224,497 December 31, 2024 Amortized cost Accumulated unrealized gains Accumulated unrealized losses Fair value (in thousands) Investment securities, held-to-maturity: U.S. government and government agencies and authorities $ 14,358 $ — $ ( 430 ) $ 13,928 Investment securities, available-for-sale: U.S. government and government agencies and authorities 139,597 212 ( 1,548 ) 138,261 Corporate debt 88,753 196 ( 447 ) 88,502 Other 1,950 3 — 1,953 Total held-to-maturity and available-for-sale investment securities $ 244,658 $ 411 $ ( 2,425 ) $ 242,644 The following table presents the amortized cost and fair value of debt securities at December 31, 2025, by contractual maturity: December 31, 2025 Held-to-maturity Available-for-sale Amortized cost Fair value Amortized cost Fair value (in thousands) Due within one year $ 1,777 $ 1,779 $ 23,231 $ 23,131 Due after one year through five years 12,461 12,408 186,464 187,092 Due after five years through ten years — — — — Due after ten years 110 87 — — Total $ 14,348 $ 14,274 $ 209,695 $ 210,223 86 For the years ended December 31, 2025, 2024, and 2023 respectively, net investment income, which is included within Other income within the Consolidated Statements of Operations and Comprehensive Loss, was derived from the following sources: Year ended December 31, 2025 2024 2023 (in thousands) Cash and cash equivalents $ 8,896 $ 13,311 $ 9,063 Short-term investments 177 855 1,812 Investment securities 9,733 8,588 7,499 Investment income, net $ 18,806 $ 22,754 $ 18,374 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 December 31, 2025, and December 31, 2024, respectively: December 31, 2025 Less than 12 months Greater than 12 months Total Fair value Unrealized loss Fair value Unrealized loss Fair value Unrealized loss (in thousands, except number of positions) U.S. government and government agencies and authorities $ 16,669 $ ( 38 ) $ 14,626 $ ( 331 ) $ 31,295 $ ( 369 ) Corporate debt securities 13,733 ( 11 ) — — 13,733 ( 11 ) Total $ 30,402 $ ( 49 ) $ 14,626 $ ( 331 ) $ 45,028 $ ( 380 ) Number of positions 24 9 33 December 31, 2024 Less than 12 months Greater than 12 months Total Fair value Unrealized loss Fair value Unrealized loss Fair value Unrealized loss (in thousands, except number of positions) U.S. government and government agencies and authorities $ 78,065 $ ( 850 ) $ 39,542 $ ( 1,128 ) $ 117,607 $ ( 1,978 ) Corporate debt securities 53,009 ( 447 ) — — 53,009 ( 447 ) Total $ 131,074 $ ( 1,297 ) $ 39,542 $ ( 1,128 ) $ 170,616 $ ( 2,425 ) Number of positions 65 15 80 The Company did no t record any credit allowances for debt securities that were in an unrealized loss position at December 31, 2025 and December 31, 2024. At December 31, 2025, all securities were investment grade, with credit ratings of BBB or higher by S&P Global or as determined by other credit rating agencies within the Company's investment policy. 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 gains at December 31, 2025 were assessed, based on, among other things: • The relative magnitude to which fair values of these securities have been below their amortized cost was not indicative of an impairment loss; • The absence of compelling evidence that would cause the Company to call into question the financial condition or near-term prospects of the issuer of the applicable security; and • The Company's ability and intent to hold the applicable security for a period of time sufficient to allow for any anticipated recovery. 87 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 within the Consolidated Statements of Operations and Comprehensive Loss, were as follows for the year ended December 31, 2025, 2024, and 2023 respectively: Year ended December 31, 2025 2024 2023 (in thousands) Proceeds from sales of investment securities $ 185,163 $ 83,673 $ 60,436 Proceeds from maturities of investment securities 26,053 119,689 255,728 Gross realized gains 989 480 39 Gross realized losses ( 10 ) — ( 19 ) Net realized gains $ 979 $ 480 $ 20 At December 31, 2025 and 2024, the Company had $ 14.6 million, in deposits with various states and regulatory bodies that are included as part of the Company's cash, cash equivalents, and investment balances. 4. Fair Value Measurements The following tables present a summary of fair value measurements for financial instruments at December 31, 2025 and December 31, 2024, respectively: December 31, 2025 Level 1 Level 2 Level 3 Total Fair Value (in thousands) U.S. government and government agencies $ — $ 129,447 $ — $ 129,447 Corporate debt securities — 80,495 — 80,495 Private equity investments — — 12,226 12,226 Warrants receivable — — — — Other — 281 — 281 Total assets at fair value $ — $ 210,223 $ 12,226 $ 222,449 December 31, 2024 Level 1 Level 2 Level 3 Total Fair Value (in thousands) U.S. government and government agencies $ — $ 138,261 $ — $ 138,261 Corporate debt securities — 88,502 — 88,502 Warrants receivable — — 764 764 Other — 1,953 — 1,953 Total assets at fair value $ — $ 228,716 $ 764 $ 229,480 The changes in balances of Clover's Level 3 financial assets and liabilities were as follows: Equity Investments Warrants Receivable Total (in thousands) Balance, December 31, 2023 $ — $ 814 $ 814 Unrealized gains — 50 50 Balance, December 31, 2024 $ — $ 764 $ 764 Realized gains — 815 815 Unrealized gains (losses) 10,400 ( 835 ) 9,565 Sales — ( 744 ) ( 744 ) Transfers in 1,826 — 1,826 Balance, December 31, 2025 $ 12,226 $ — $ 12,226 Unrealized gains for assets still held, included in Net loss $ 10,400 $ — $ 10,400 88 Private Warrants During the year ended December 31, 2025, the Company had exercisable private warrants which were embedded in several agreements as derivatives. These private warrants were accounted for as assets in accordance with ASC 815-40, Derivatives and Hedging, and are presented in Other assets, non-current in the Consolidated Balance Sheets. The warrant assets are measured at fair value at inception and on a recurring basis until redeemed, with changes in fair value presented in Change in fair value of warrants in the Consolidated Statements of Operations and Comprehensive Loss. These private warrants were classified within Level 3 due to the subjectivity and use of estimates in the calculation of their fair value. During the year ended December 31, 2025, one of the Company's warrant receivable arrangements was fully liquidated. The liquidation resulted in a realized gain recorded in the Consolidated Statement of Operations and Comprehensive Loss. Immediately prior to liquidation, the fair value of the warrants receivable was $ 0.7 million. The Company received $ 1.6 million in total consideration for the warrants. The liquidation of the warrants resulted in a realized gain of $ 0.8 million recognized within the Other income line item within the Consolidated Statement of Operations and Comprehensive Loss. In addition, the Company is eligible to receive a pro-rata portion of a contingent payment, upon the satisfaction of certain performance milestones. In accordance with ASC 450, Contingencies , the Company has not recognized any asset or gain related to this contingent payment right because realization is not considered probable. The Company will recognize any gain or revenue related to the contingent payment only when the performance criteria have been met and the payment is deemed certain and collectible. During the year ended December 31, 2025, the Company determined that its remaining private warrant had become zero following financial distress and a subsequent sale of the underlying issuer, and the carrying value of the warrant was written off during the period. As of December 31, 2025, the Company no longer held any private warrants. Equity Investments The Company owns equity securities in privately held companies. Their fair value is classified as Level 3 because the valuation relies primarily on unobservable inputs that require significant management judgment. While the valuation process utilizes inputs based on observable market transactions such as comparable company multiples or similar private placements, these must be significantly adjusted using unobservable assumptions to reflect the specific risks and characteristics of the non-marketable private investment. This reliance on subjective, unobservable inputs is the basis for the Level 3 classification and results in a higher degree of valuation uncertainty. Character Biosciences, Inc. On September 30, 2025, the Company determined it lost significant influence over Character Biosciences, Inc. ("Character Biosciences" or "CB") following dilution of its ownership. Refer to Note 12 "Variable Interest Entity" for additional information on the transition from equity method of accounting under ASC 323, Investments - Equity Method and Joint Ventures , to fair value measurement under ASC 321, Investments - Equity Securities . The Company's investment in the equity securities of CB, which includes both Class A common stock and preferred stock, does not have a readily determinable fair value. It is measured at fair value on a recurring basis, with changes recognized in net income in accordance with ASC Topic 321, Investments - Equity Securities . This investment is classified as a Level 3 fair value measurement within ASC 820, Fair Value Measurement , hierarchy because its valuation relies on significant unobservable inputs. As of December 31, 2025, the fair value of the investment was approximately $ 8.3 million. The fair value was determined using a third-party valuation that incorporated recent market transactions and updated company-specific financial information. The valuation reflected income- and market-based methodologies and included assumptions related to forecasted performance, discount rates, and a discount for lack of marketability. 5. Healthcare Receivables Healthcare receivables include pharmaceutical rebates that are accrued as they are earned and estimated based on contracted rebate rates, eligible amounts submitted to the manufacturers by the Company's pharmacy manager, pharmacy utilization volume, and historical collection patterns. Also included in Healthcare receivables are Medicare Part D settlement receivables, member premium receivables, and other CMS receivables. The Company reported $ 94.9 million and $ 51.5 million within Healthcare receivables at December 31, 2025 and December 31, 2024, respectively. 89 6. Related Party Transactions Related party agreements The Company 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"), for the provision of inpatient and hospital-based outpatient services. CarePoint Health was ultimately held and controlled by Vivek Garipalli, the Company's Executive Chairman and a significant stockholder of the Company. In May 2022, Mr. Garipalli and his family completed a donation of their interest in CarePoint Health to a non-profit organization called CarePoint Health Systems, Inc ("the CarePoint Nonprofit"). In September 2024, Sequoia Healthcare Services, LLC, an entity that Mr. Garipalli has an indirect interest in, transferred certain subsidiaries that provided services to CarePoint Health to the CarePoint Nonprofit. Following such transfer, neither Mr. Garipalli nor any entity he has an interest in currently provide any management services to CarePoint Health. On November 3, 2024, CarePoint Health and its affiliates filed petitions in the United States Bankruptcy Court for the District of Delaware (the "Bankruptcy Court") seeking relief under Chapter 11 of the United States Bankruptcy Code. Ultimately, the Bankruptcy Court confirmed CarePoint Health's plan which became effective as of May 22, 2025. Through CarePoint Health's plan, a majority of CarePoint Health's assets, including CarePoint Health's contracts, were transferred to Hudson Regional Hospital, which now controls CarePoint Health's hospitals following CarePoint Health's emergence from bankruptcy. As a result of such proceedings, CarePoint Health is no longer deemed a related party of the Company as defined by ASC 850, Related Party Disclosures . Expenses and fees incurred related to Clover's contracts with CarePoint Health, recorded in Net medical claims incurred, in the Consolidated Statements of Operations and Comprehensive Loss, were $ 4.4 million, $ 7.0 million, and $ 13.0 million for the years ended December 31, 2025, 2024, and 2023 respectively. Additionally, $ 1.0 million was payable to CarePoint Health at December 31, 2024. The Company has a contract with Medical Records Exchange, LLC (formerly known as "ChartFast," now d/b/a Credo) pursuant to which the Company receives administrative services related to medical records retrieval via Credo's electronic applications and web portal platform. Vivek Garipalli, the Company's Executive Chairman and significant stockholder of the Company, is an indirect owner of Credo Health Solutions, Inc. Expenses and fees incurred related to this agreement were $ 1.5 million, $ 0.7 million, and $ 0.8 million for the years ended December 31, 2025, 2024, and 2023 respectively. Since July 2, 2021, the Company has contracted with Thyme Care, Inc. ("Thyme Care"), an oncology care management company, through which Thyme Care was engaged to provide cancer care management services to the Company's Insurance members and develop a provider network to help ensure member access to high-value oncology care. The Company and Thyme Care have amended the terms of the engagement, effective April 1, 2023, to include additional clinical services available to Clover members as well as the value based payment terms. The Company entered into an agreement with Thyme Care effective September 23, 2020 where the Company purchased 1,773,049 shares (less than five percent ( 5 %) of its class A common stock). The fair value of these shares is $ 3.9 million at December 31, 2025, and is recognized within Other assets, non-current, in the Consolidated Balance Sheets. In accordance with ASC 321, Investments - Equity Securities, any changes in fair value associated with these shares are recognized within Other income in the Consolidated Statements of Operations and Comprehensive Loss. Mr. Garipalli is a member of the board of directors of Thyme Care and holds an equity interest of less than five percent ( 5 %) of that entity. Expenses and fees incurred related to this agreement were $ 8.3 million, $ 4.1 million, and $ 2.3 million for the years ended December 31, 2025, 2024, and 2023 respectively. Additionally, $ 6.6 million and $ 3.3 million were payable to Thyme Care at December 31, 2025, and December 31, 2024, respectively. The Company entered into a Master Services Agreement in July 2025 with Guidehealth, LLC for value-based care enablement and outsourced administrative services. These services primarily leverage technology and support teams to accelerate and enhance medication adherence rates and patient outcomes. Thomas Tran, a member of the Company's Board of Directors and Chair of the Company's Audit Committee, also serves as a director of Guidehealth and holds an ownership interest of less than 5 % in Guidehealth. Pursuant to this agreement, the Company recognized $ 1.2 million for the year ended December 31, 2025. Additionally, zero was payable at December 31, 2025. The Company holds a non-controlling equity investment in Character Biosciences, which is accounted for under ASC 321, Investments - Equity Securities , at fair value. As of December 31, 2025, the fair value of this investment was $ 8.3 million. See Note 4 "Fair Value Measurements" for further information regarding the valuation techniques and inputs used to determine the fair value of this Level 3 investment. Character Biosciences is considered a related party because the Company's Executive Chairman and a significant stockholder of the Company, Vivek Garipalli, serves as a member of Character Bioscience’s Board of Directors as Clover's representative given the Company's investor status; he does not directly or indirectly hold any investment in CB. The investment is recognized within Other assets, non-current, in the Consolidated Balance Sheets. There were no transactions between the Company and Character Biosciences during the periods presented. 90 7. Property and Equipment, Net Property and equipment, net consisted of the following: Year ended December 31, 2025 2024 (in thousands) Capitalized software $ 10,802 $ 8,038 Leasehold improvements 3,035 3,035 Office furniture and fixtures 35 35 Equipment 113 113 Property and equipment, gross 13,985 11,221 Less: accumulated depreciation and amortization ( 7,600 ) ( 5,914 ) Property and equipment, net $ 6,385 $ 5,307 Depreciation expense recorded by the Company was approximately $ 0.2 million, $ 0.2 million, and $ 0.4 million for the years ended December 31, 2025, 2024, and 2023, respectively. Amortization expense recorded by the Company was approximately $ 1.5 million, $ 1.2 million, and $ 1.0 million for the years ended December 31, 2025, 2024, and 2023, respectively. 8. Other Intangibles Other intangible assets 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 Company 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 Company will test for impairment using a quantitative process. If the Company 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 Company and the resulting cash flows. At December 31, 2025 and 2024, there were no circumstances that indicate that the carrying amount of intangible assets deemed to have an indefinite useful life may not be recoverable. The following table presents details of the Company's other intangible assets at December 31, 2025 and 2024, respectively: 2025 2024 Weighted Average life Cost Accumulated Amortization Net Carrying Amount Cost Accumulated Amortization Net Carrying Amount (in thousands) Other intangible assets: Licenses Indefinite 2,990 — 2,990 2,990 — 2,990 The Company does not estimate any amortization expense in the five succeeding fiscal years. 91 9. Unpaid Claims Activity within the liability for Unpaid claims, including claims adjustment expenses, for the years ended December 31, 2025 and 2024, respectively, is summarized as follows: Year ended December 31, 2025 2024 (in thousands) Gross and net balance, beginning of period $ 156,396 $ 137,100 Incurred related to: Current year 1,542,123 1,016,131 Prior years ( 8,667 ) ( 30,539 ) Total incurred 1,533,456 985,592 Paid related to: Current year 1,397,912 869,574 Prior years 138,690 96,722 Total paid 1,536,602 966,296 Gross and net balance, end of period $ 153,250 $ 156,396 The Company uses two methods of standard actuarial techniques to establish unpaid claims reserves. Management estimates are supported by the Company's actuarial analysis. The Company 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 fluctuate 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 for Insurance Operations Unpaid claims for Insurance operations were $ 153.3 million at December 31, 2025. During the year ended December 31, 2025, $ 138.7 million was paid for incurred claims attributable to insured events of prior years. A favorable development of $ 8.7 million was recognized during the year ended December 31, 2025, resulting from the Company's actual experience with claims developing differently as compared to the Company's estimates at December 31, 2024. A favorable development of $ 30.5 million was recognized during the year ended December 31, 2024, resulting from the Company's actual experience with claims developing differently as compared to the Company's estimates at December 31, 2023. 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 90.6 % for the year ended December 31, 2025, and 85.6 % for the year ended December 31, 2024. This ratio serves as an indicator of claims processing speed, indicating that claims were processed at a faster rate during the year ended December 31, 2025, than during the year ended December 31, 2024. The following tables provide information regarding incurred and paid claims development for medical claims, as well as cumulative claim frequency and the total of incurred but not reported liabilities at December 31, 2025, respectively: Cumulative incurred claims for the year ended December 31, Incurred year 2023* 2024* 2025 Total IBNR Number of reported claims (in thousands) (in ones) 2023 and prior $ 3,144,952 $ 3,115,403 $ 3,104,467 $ 1,514 11,380,837 2024 — 1,016,131 1,018,400 7,524 3,035,169 2025 — — 1,542,123 144,212 3,746,848 Total $ 3,144,952 $ 4,131,534 $ 5,664,990 $ 153,250 18,162,854 92 Cumulative net paid claims through December 31, Incurred year 2023* 2024* 2025 (in thousands) 2023 and prior $ 3,008,825 $ 3,105,564 $ 3,102,952 2024 — 869,574 1,010,876 2025 — — 1,397,912 Total $ 3,008,825 $ 3,975,138 $ 5,511,740 * Unaudited supplemental information The reconciliation of net incurred and paid claims development tables to unpaid claims and claims adjustment expenses for medical claims on the Consolidated Balance Sheets is as follows: December 31, 2025 (in thousands) Cumulative incurred claims, net $ 5,664,990 Less: cumulative paid claims, net 5,511,740 Net unpaid claims, including claims adjustment expenses $ 153,250 10. Reinsurance Medicare Advantage Reinsurance Agreement On January 1 of each year, the Company renews a specific excess loss reinsurance agreement to reinsure its MA plan liabilities per covered person per agreement terms in excess of $ 0.5 million for the year ended December 31, 2025, and $ 0.4 million for the years ended December 31, 2024 and 2023. The effects of the reinsurance agreements on the accompanying consolidated financial statements for the years ended December 31, 2025, 2024, and 2023, respectively, are as follows: Year ended December 31, 2025 2024 2023 (in thousands) Premiums earned, gross $ 1,892,107 $ 1,345,280 $ 1,236,213 Premiums earned, ceded ( 375 ) ( 399 ) ( 444 ) Net premiums earned $ 1,891,732 $ 1,344,881 $ 1,235,769 Year ended December 31, 2025 2024 2023 (in thousands) Claims incurred, gross $ 1,537,832 $ 988,208 $ 987,654 Claims incurred, ceded ( 4,376 ) ( 2,616 ) ( 496 ) Net claims incurred $ 1,533,456 $ 985,592 $ 987,158 The Company is not relieved of its primary obligation to the policyholder in a reinsurance transaction. Reinsurance recoverable for the MA plan at December 31, 2025 and 2024, respectively, were comprised of the following: Year ended December 31, 2025 2024 (in thousands) Reinsurance recoverable on paid claims, gross and net $ 4,621 $ 404 93 Life Policies and Annuity Contracts 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 $ 5.1 million of life insurance reserves at both December 31, 2025 and 2024, 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 Company's experience and industry data. Interest rate assumptions used in establishing such reserves range from less than 1.0 % to 4.5 %. Under the arrangement, SFLIC is required to hold in trust an amount that covers all of the outstanding liabilities as of the reporting date. Approximately $ 0.8 million and $ 0.8 million of annuity reserves at both December 31, 2025 and 2024, 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 Company's experience and industry data. Interest rate assumptions used in establishing such reserves from less than 1.0 %. Ceded life insurance and annuity reserves are included within Other assets and gross life insurance and annuity reserves are included within Other liabilities on the Consolidated Balance Sheets, respectively. A reinsurance agreement between two entities transfers the underwriting risk and liabilities to the reinsurer while the insurer retains the contractual relationship with the ultimate insured. As such, these reinsurance agreements do not completely relieve the Company of its potential liability to the ultimate insured. However, given the transfer of underwriting risk, such potential liability is limited to the credit exposure which exists should the reinsurer be unable to meet its obligations under these reinsurance agreements. The Company evaluates its reinsurers on a regular basis including their ratings and financial conditions. 11. Leases Operating Leases The Company leases office space under non-cancelable operating leases. The Company recognizes ROU assets within Other assets, non-current and lease liabilities within Other liabilities, current, and Other liabilities, non-current in the Consolidated Balance Sheets. The Company subleases certain of its leases to third parties for which it receives rental income. These subleases are classified as operating leases. Certain leases include options to renew, with renewal terms that can extend the lease term. The exercise of lease renewal options is at the Company's sole discretion and such options are not recognized as part of the ROU asset and lease liability unless reasonably certain of exercise. 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 Company's operating leases for the years ended December 31, 2025, 2024, and 2023, respectively: Year ended December 31, 2025 2024 2023 (in thousands) Operating lease cost $ 1,356 $ 1,295 $ 1,346 Variable lease cost — 51 51 Sublease income ( 869 ) ( 775 ) ( 256 ) Total lease cost $ 487 $ 571 $ 1,141 Other information Cash paid for amounts included in the measurement of lease liabilities $ 1,544 $ 1,567 $ 1,907 Weighted-average remaining lease term 2.4 years 3.3 years 4.5 years Weighted-average discount rate 10.87 % 10.64 % 10.31 % 94 The following table summarizes the Company's future lease payments for non-cancelable operating lease liabilities at December 31, 2025: (in thousands) 2026 $ 1,575 2027 1,602 2028 425 2029 106 Thereafter 36 Total lease payments 3,744 Less: imputed interest ( 448 ) Total $ 3,296 12. Variable Interest Entity and Equity Method of Accounting On February 4, 2022, Character Biosciences, an affiliate of the Company, completed a private capital transaction in which it raised $ 17.9 million from the issuance of 16,210,602 shares of its preferred stock. Upon completion of the transaction, the Company owned approximately 25.46 % of Character Biosciences. As a result, the Company reassessed its interest in Character Biosciences and determined that while Character Biosciences is a VIE, the Company is not considered the primary beneficiary of the VIE because it does not have the power, through voting or similar rights and the license agreements, to direct the activities of Character Biosciences that most significantly impact Character Biosciences' economic performance. Since that initial financing, Character Biosciences has completed a series of additional capital raises through the issuance of its shares, each of which diluted the Company’s ownership. As of December 31, 2025, the Company’s ownership interest in Character Biosciences had decreased to approximately 8.1 %. During the year ended December 31, 2025, it was concluded that the ability to exert significant influence over CB no longer exists at December 31, 2025. This change in conclusion was influenced by the recent rounds of funding dropping the Company's ownership below the 20% threshold and the lack of evidence to support continued significant influence. As a result, the Company has transitioned its recognition of its equity investment in CB from the equity method of accounting under ASC 323, Investments - Equity Method and Joint Ventures , to fair value measurement under ASC 321, Investments - Equity Securities . In accordance with ASC 321, the Company recognized the fair value of its equity investment in CB on its Consolidated Balance Sheet within Other assets, non-current and recognized the change in fair value within Other Income in its Consolidated Statement of Operations and Comprehensive Loss. See Note 4 "Fair Value Measurements" for further information regarding the valuation techniques and inputs used to determine the fair value of this Level 3 investment. 13. Commitments and Contingencies Legal Actions Various lawsuits against the Company may arise in the ordinary course of the Company'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 Company. At December 31, 2025, and December 31, 2024, respectively, there were no material known contingent liabilities arising outside the normal course of business other than as set forth below. In accordance with ASC No. 450-20, Loss Contingencies , we will record accruals for loss contingencies when it is probable that a liability has been incurred and the amount of loss can be reasonably estimated. Securities Class Actions and Investigations Beginning in February 2021, the Company received subpoenas from the SEC related to certain disclosures and aspects of our business as well as certain matters described in an article issued on February 4, 2021, by Hindenburg Research LLC (the "Hindenburg Article"). The Company cooperated with the SEC's investigation (the "Investigation"). The Hindenburg Article, which discussed, among other things, an inquiry by the U.S. Attorney's Office for the Eastern District of Pennsylvania relating to, among other things, certain of the Company’s arrangements with providers participating in its network and programs, and Clover Assistant, was the subject of the Company’s Current Report on Form 8-K dated February 5, 2021. As previously disclosed on the Company's Current Report on Form 8-K filed on September 30, 2024, by letter dated September 26, 2024 (the “Notice”), the Staff of the SEC Division of Enforcement notified the Company that the SEC had concluded the Investigation, and based on the information that the SEC had as of the date of the Notice, the Staff did not intend to recommend an enforcement action by the SEC against the Company relating to the Investigation. 95 14. Employee Benefit Plans Employee Retirement Savings Plan The Company 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 Company 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 after one year of service. The Company's matching service contributions to the 401(k) Plan amounted to approximately $ 2.0 million, $ 2.0 million, and $ 1.8 million for the years ended December 31, 2025, 2024, and 2023, respectively, and are included within Salaries and benefits on the Consolidated Statements of Operations and Comprehensive Loss. The Company's cash match is invested pursuant to the participant's contribution direction. Employer matching contributions are immediately 100.0 % vested. Stock-based Compensation The Company's 2020 Equity Incentive Plan (the "2020 Plan") provides for grants of restricted stocks units ("RSUs"), performance-based restricted stock units ("PRSUs") and stock options to acquire shares of the Company's common stock, to employees, directors, officers, and non-employee consultants of the Company and its affiliates, and the Company's 2020 Management Incentive Plan (the "2020 MIP") provides for grants of RSUs and PRSUs to the Company's Executive Chair and CEO. During the year ended December 31, 2021, the Company approved the 2020 Plan and the 2020 MIP, and the Company's 2014 Equity Incentive Plan (the "2014 Plan") was terminated. When the 2014 Plan was terminated, the outstanding awards previously granted thereunder were assumed by the Company, and no new awards are available for grant under the 2014 Plan. On March 9, 2022, the Board adopted the Company's 2022 Inducement Award Plan (the "Inducement Plan" and, collectively with the 2020 Plan, the 2020 MIP, and the 2014 Plan, the "Plans") without stockholder approval in accordance with NASDAQ's Listing Rules. Under the Inducement Plan, the Company may grant non-qualified stock options, RSUs, stock appreciation rights, and other stock or cash-based awards to an employee in connection with his or her commencement of employment, or following a bona fide period of non-employment, with the Company or an affiliate. The 2020 Plan has an evergreen provision that requires the number of shares available for issuance under the plan to be increased on the first day of each fiscal year beginning with the 2022 fiscal year and ending on (and including) the last day of the 2024 fiscal year, in each case, in an amount equal to the lesser of (i) seven percent ( 7 %) of the outstanding shares of Class A Common Stock on the last day of the immediately preceding fiscal year and (ii) such number of shares of Class A Common Stock determined by the Board; provided that for each fiscal year beginning with the 2025 fiscal year through the fiscal year that includes the expiration date of the plan, each such increase shall be reduced to the lesser of five percent ( 5 %) of the outstanding shares of Class A Common Stock on the last day of the immediately preceding fiscal year or such number of shares as determined by the Board. The maximum number of shares of the Company's common stock reserved for issuance over the term of the Plans, shares outstanding under the Plans, and shares remaining under the Plans at December 31, 2025 were as follows: December 31, 2025 Shares Authorized Under Plans Shares Outstanding Under Plans Shares Remaining Under Plans 2014 Plan 54,402,264 33,737,271 N/A 2020 Plan 97,638,080 37,105,462 6,714,827 2020 MIP 33,426,983 20,056,191 — Inducement Plan 11,000,000 3,344,178 — The Plans are administered by the Talent and Compensation Committee of the Board (the "Compensation Committee"). Stock options granted under the Plans are subject to the terms and conditions 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 market 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 and generally vest over four or five years . The number of stock options granted is determined by dividing the approved grant date dollar value of an option by the Black Scholes option pricing value per share (as further discussed below). RSU awards are subject to the terms and conditions set forth in the Plans and the applicable RSU grant agreement. Vesting and other restrictions applicable to RSU awards are determined at the discretion of the Compensation Committee, but generally vest over one to four years from the date of grant. The number of RSUs granted is determined by dividing the cash value of an RSU award by the average closing price of a share of the Company's Class A common stock over a specified period through the date of grant. The total estimated grant date fair value is amortized over the requisite service period. 96 The Company recorded stock-based compensation expense for stock options, RSUs, and PRSUs granted under the Plans, and discounts offered in connection with the Company's 2020 Employee Stock Purchase Plan ("ESPP") of $ 103.7 million, $ 114.3 million, and $ 140.9 million during the years ended December 31, 2025, 2024, and 2023 respectively, and such expenses are presented within Salaries and benefits in the accompanying Consolidated Statements of Operations and Comprehensive Loss. Compensation cost presented within Salaries and benefits within the accompanying Consolidated Statements of Operations and Comprehensive Loss were as follows: Year ended December 31, 2025 2024 2023 (in thousands) Stock options $ 336 $ 1,853 $ 3,335 RSUs 91,304 85,812 83,790 PRSUs 11,558 26,145 53,611 ESPP 459 521 195 Total compensation cost recognized for stock-based compensation plans $ 103,657 $ 114,331 $ 140,931 At December 31, 2025, there was approximately $ 349.2 million of unrecognized stock-based compensation expense related to unvested stock options, unvested RSUs, unvested PRSUs, and the ESPP. Stock Options The Company did not grant stock options during fiscal years 2025 and 2024. A summary of option activity under the 2020 Plan during the year ended December 31, 2025, was as follows: Number of stock options Weighted-average exercise price Outstanding, January 1, 2025 804,127 $ 8.87 Granted — — Exercised — — Forfeited ( 30,268 ) 8.88 Outstanding, December 31, 2025 773,859 $ 8.88 A summary of stock option activity under the 2014 Plan during the year ended December 31, 2025, was as follows: Number of stock options Weighted-average exercise price Outstanding, January 1, 2025 23,465,666 $ 2.73 Granted — — Exercised ( 415,013 ) 1.63 Forfeited ( 60,254 ) 3.85 Outstanding, December 31, 2025 22,990,399 $ 2.75 At December 31, 2025, outstanding stock options, substantially all of which are expected to vest, had an aggregate value of $ 7.1 million, and a weighted-average remaining contractual term of 3.34 years. At December 31, 2025, there were 23,764,258 stock options exercisable under the Plans, with an aggregate intrinsic value of $ 7.1 million, a weighted-average exercise price of $ 2.95 per share, and a weighted-average remaining contractual term of 3.34 years. The total value of stock options exercised during the years ended December 31, 2025, 2024, and 2023 was $ 1.4 million, $ 0.9 million, and $ 0.1 million respectively. Cash received from stock option exercises during the years ended December 31, 2025, 2024, and 2023 was $ 0.7 million, $ 0.5 million, and less than $ 0.1 million respectively. 97 Restricted Stock Units A summary of total RSU activity for the year ended December 31, 2025 is presented below: Number of RSUs Weighted-average grant date fair value per share Outstanding, January 1, 2025 55,731,587 $ 3.67 Granted 16,324,638 2.76 Released ( 27,250,844 ) 3.58 Forfeited ( 1,851,427 ) 2.40 Outstanding, December 31, 2025 42,953,954 $ 3.44 Performance Restricted Stock Units The Company has granted PRSUs to certain executives and key employees, which become eligible to vest based on achievement of certain Company or individual performance milestones (“Non-Market PRSUs”) and certain Company stock price targets (“Market PRSUs”), each as determined by the Compensation Committee. Market PRSUs will vest if prior to the vesting date the average closing price of one share of the Company's common stock for 90 consecutive days equals or exceeds a specified price. A significant portion of the total compensation cost recognized for stock-based compensation plans is attributable to Market PRSUs that vest based on pre-established milestones that primarily consist of the volume-weighted average stock closing price ranging from $ 20 to $ 30 for 90 consecutive days. The grant date fair value of the Non-Market PRSUs was based on the closing price of the Company’s Class A common stock and recognized as expense over the requisite performance period under the accelerated attribution method and is adjusted in future periods for the success or failure to achieve the specified performance condition. The grant date fair value of the Market PRSUs was determined using a Monte Carlo simulation model that incorporated multiple valuation assumptions, including the probability of achieving the specified market condition. Expense for Market PRSUs is recognized over the derived service period under the accelerated attribution method and is not adjusted in future periods for the success or failure to achieve the specified market condition. The assumptions that the Company used in the Monte Carlo model to determine the grant date fair value of Market PRSUs granted for the year ended December 31, 2021, were as follows: Year ended December 31, 2021 Expected volatility (1) 40.7 % Risk-free interest rate (2) 0.5 Dividend yield (3) — (1) Expected volatility is based on a blend of peer group company historical data adjusted for the Company's leverage. (2) Risk-free interest rate based on U.S. Treasury yields with a term equal to the remaining Performance Period at the grant date. (3) Dividend yield was assumed to be zero as the Company does not anticipate paying dividends. At December 31, 2025, the market condition component of these PRSUs has not been met, so the awards have not been earned. This expense represents most of the PRSU expense recognized for the year ended December 31, 2025 related to stock-based compensation plans which is presented within Salaries and benefits in the accompanying Consolidated Statements of Operations and Comprehensive Loss. The Company has also determined the requisite service period for the PRSUs with multiple performance conditions to be the longest of the explicit, implicit, or derived service period for each tranche. 98 A summary of PRSU activity for the year ended December 31, 2025 is presented below: Number of PRSUs Weighted-average grant date fair value per share Non-vested, January 1, 2025 29,151,407 $ 9.09 Granted during 2025 62,666 3.81 Adjustment for performance condition achieved 341,459 1.39 Vested ( 2,007,591 ) 1.03 Forfeited ( 24,911 ) 1.19 Non-vested at December 31, 2025 27,523,030 $ 9.57 At December 31, 2025, there was $ 0.2 million of unrecognized share-based compensation expense related to PRSUs. 2020 Employee Stock Purchase Plan On January 6, 2021, the Board adopted and the Company's stockholders approved the ESPP, which permits eligible employees and service providers of either the Company or designated related companies and affiliates to contribute up to 15 % of their eligible compensation during defined offering periods to purchase shares of the Company’s Class A common stock at a 15 % discount from the fair market value of the common stock as determined on specific dates at specific intervals. Subject to adjustments provided in the ESPP that are discussed below, the maximum number of shares of common stock that may be purchased under the ESPP is 14,163,863 shares, and the maximum number of shares that may be purchased on any single purchase date by any one participant is 5,000 shares. At December 31, 2025, 12,161,176 shares of Class A common stock were available for issuance under the ESPP. The ESPP includes an evergreen provision that sets the maximum number of shares of Class A common stock that may be issued under the plan, to 2,785,582 shares, plus the number of shares of Class A common stock that are automatically added 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, in an amount equal to the lesser of (i) one percent ( 1 %) 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 Board; provided that the maximum number of shares of Class A common stock reserved under the ESPP shall not exceed 10.0 % of the total outstanding capital stock of the Company (inclusive of the shares reserved under the ESPP) at January 7, 2021, on an as-converted basis. The assumptions that the Company used in the Black-Scholes option-pricing model to determine the fair value of the purchase rights under the ESPP for the years ended December 31, 2025, 2024, and 2023 are as follows: Year ended 2025 2024 2023 Weighted-average risk-free interest rate 3.8 % 4.5 % 5.4 % Expected term (in years) 0.49 years 0.49 years 0.50 years Expected volatility 79.5 % 94.9 % 82.3 % 15. Restructuring costs On April 17, 2023, the Company announced it would implement certain business transformation initiatives, including an agreement to move its core MA operational platform to UST HealthProof’s (“UST HealthProof”) and additional corporate restructuring actions. The agreement with UST HealthProof includes the transition of certain of the Company’s plan operation functions in support of its Medicare Advantage members pursuant to a master services agreement. In addition to the arrangement with UST HealthProof, in April 2023 the Company conducted a reduction in force to better align its Selling, General, and Administrative cost structure with its revenue base. This restructuring resulted in the elimination of approximately 10 % of the Company's workforce. The Company incurred costs related to these business transformation initiatives, which consisted of employee termination benefits, vendor related costs, and other costs, which are accounted for as exit and disposal costs and recorded pursuant to ASC 420, Exit or Disposal Cost Obligations. These activities were concluded by December 31, 2024. For the years ended December 31, 2025, 2024, and 2023 the Company recognized zero and $ 0.3 million, $ 9.8 million, respectively, of expenses related to these activities in the Consolidated Statements of Operations and Comprehensive Loss. As of December 31, 2025, the remaining vendor-related liability is being reduced through the contractually scheduled payments. This liability is recognized within Accounts payable and accrued expenses in the Consolidated Balance Sheets. 99 16. Discontinued Operations On December 1, 2023, the Company notified CMS that it would no longer participate as a REACH ACO in connection with the 2024 performance year. The Company’s exit from the ACO REACH Program was made after the Company determined that it was in its best interest to fully exit the program, following its November 2022 announcement of a strategic reduction in the number of ACO REACH participating physicians in 2023. Subsequent to the 2023 performance year, the remaining activities related to the December 2024 settlement with CMS for prior performance years. During the years ended December 31, 2025, 2024, and 2023, the Company recognized zero , net income of $ 3.3 million, and a net loss of $ 3.2 million, respectively. 17. Income Taxes The components of income before income taxes are as follows: Year ended December 31, 2025 2024 2023 (in thousands) U.S. Federal $ ( 85,574 ) $ ( 43,198 ) $ ( 214,203 ) Foreign 25 189 842 Components of income taxes $ ( 85,549 ) $ ( 43,009 ) $ ( 213,361 ) The provision for income taxes consisted of the following for the years ended December 31, 2025, 2024, and 2023, respectively: Year ended December 31, 2025 2024 2023 (in thousands) Current: U.S Federal $ — $ — $ — Foreign — — — State — — — $ — $ — $ — Deferred: U.S. Federal $ — $ — $ — Foreign — — — State — — — $ — $ — $ — 100 The Company’s income tax benefit differs from the amount computed by applying the U.S. federal statutory income tax rate of 21% to loss before income taxes primarily due to changes in the valuation allowance, tax credits, and permanent differences. Because the Company has recorded a full valuation allowance against its U.S. deferred tax assets, the tax benefit that would otherwise be expected from current-year losses is substantially offset, resulting in an effective tax rate of zero for the periods presented. For the years ended December 31, 2025, 2024 and 2023, the Company incurred losses from continuing operations before income taxes, all of which were attributable to domestic operations. The Company does not have material foreign operations. A reconciliation of the U.S. Federal statutory tax rate to our December 31, 2025, 2024, and 2023 annual tax rate is as follows: Year ended December 31, 2025 2024 2023 Amount Tax Rate Amount Tax Rate Amount Tax Rate (in thousands) (in thousands) (in thousands) U.S. federal statutory income tax rate $ ( 17,965 ) 21.00 % $ ( 9,032 ) 21.00 % $ ( 44,806 ) 21.00 % State and local income taxes, net of federal benefits — — % — — % — — % Change in valuation allowance 7,188 ( 8.40 ) % 3,903 ( 9.07 ) % 27,376 ( 12.83 ) % Foreign tax effects — — % — — % — — % Tax credits — — % — — % — — % Nontaxable or nondeductible expenses: 162(m) limitation 9,765 ( 11.42 ) % 4,297 ( 9.99 ) % 1,488 ( 0.70 ) % Stock based compensation 816 ( 0.95 ) % 7,495 ( 17.43 ) % 16,408 ( 7.69 ) % Nontaxable or nondeductible expenses, other 55 ( 0.06 ) % 33 ( 0.08 ) % 45 ( 0.02 ) % Prior year true-up 141 ( 0.17 ) % ( 7,637 ) 17.76 % ( 221 ) 0.10 % Other, net — — % 941 ( 2.19 ) % ( 290 ) 0.14 % Reported tax $ — — % $ — — % $ — — % A summary of income taxes paid in 2025 is as follows: Year ended December 31, 2025 (in thousands) U.S. Federal $ — U.S. State and Local — Foreign — Total income taxes paid $ — 101 Principal components of net deferred tax balances at December 31, 2025 and 2024, respectively, were as follows: Year ended December 31, 2025 2024 (in thousands) Deferred income tax assets: Net operating loss carryforward (NOL) $ 331,313 $ 319,934 Stock based compensation 72,346 71,475 Unpaid claim reserve discounting 499 475 Operating lease liabilities 615 696 Fixed assets and intangible assets — 257 Accruals 2,746 6,060 Goodwill 3,476 3,601 Other 77 583 Total deferred income tax assets 411,072 403,081 Less: valuation allowance ( 407,997 ) ( 400,809 ) Total deferred income tax assets, net of valuation allowance 3,075 2,272 Deferred income tax liabilities: Operating lease right-of-use assets ( 484 ) ( 484 ) Nontaxable gain on deconsolidation of entity ( 845 ) ( 845 ) Fixed assets and intangible assets ( 964 ) — Other ( 782 ) ( 943 ) Total deferred income tax liabilities ( 3,075 ) ( 2,272 ) Net deferred income tax assets $ — $ — Operating loss and tax credit carryforwards and protective tax deposits At December 31, 2025 and 2024, the Company had a Federal net operating loss carryforward of $ 1,577.7 million and $ 1,523.5 million. Of the $ 1,577.7 million, Federal net operating loss carryforwards, $ 249.2 million begin to expire in 2035, and $ 1,328.5 million may be carried forward indefinitely, with the exception of net operating losses for the insurance companies. Under Internal Revenue Code Section 382, if a corporation undergoes and "ownership change", the corporation's ability to use its pre-change NOL. carryforwards and other pre-change tax attributes to offset its post-change income may be limited. The Company has completed a study through January 7, 2021 and concluded that ownership changes have occurred that may limit their utilization in future periods. Future realization of the tax benefits of existing temporary differences and net operating loss carryforwards ultimately depends on the existence of sufficient taxable income within the carryforward period. At December 31, 2025 and 2024, the company performed an evaluation to determine whether a valuation allowance was needed. The Company considered all available evidence, both positive and negative, which included the results of operations for the current and preceding years. The Company determined that it was not possible to reasonably quantify future taxable income and determined that it is more likely than not that all of the deferred tax assets will not be realized. Accordingly, the Company maintained a full valuation allowance as of December 31, 2025 and 2024. The Company does not have deposits admitted under Section 6603 of the Internal Revenue Code. Impact of tax planning strategies The Company does not have any tax planning strategies that include the use of reinsurance and there are no deferred tax liabilities not recognized. The Company files income tax returns in the United States. The U.S. Internal Revenue Service ("IRS") is not currently conducting any income tax audits of the Company's returns. The Company's federal income tax returns filed related to tax years subsequent to 2022 remain subject to examination by the IRS. The Company 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. 102 On August 16, 2022, the U.S. enacted the Inflation Reduction Act of 2022 (the “IRA”), which contains a number of tax-related provisions, including a 15% corporate alternative minimum tax imposed on certain corporations that meet an income-based test, as well as a 1% nondeductible excise tax on certain stock repurchases. The Company is not subject to the alternative minimum tax in 2025 based on the income-based test and it will continue to evaluate the IRA’s impact as further information becomes available. Other On July 4, 2025, President Trump signed into law the One Big Beautiful Bill Act (“OBBBA”), which enacts significant changes to the US federal corporate income tax system. The legislation includes, among other provisions, modifications to the treatment of research and development expenditures, permanent 100% bonus depreciation, and changes to the interest deduction limitation under Section 163(j). The legislation does not have a material impact on the Company’s consolidated financial statements. In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures . The amendments in this update aim to provide more transparency regarding tax disclosures mainly related to the rate reconciliation and income taxes paid information. ASU 2023-09 is effective for fiscal years beginning after December 15, 2024. The Company adopted ASU 2023-09 applied on a prospective basis as of December 31, 2025. The adoption impacted income tax disclosures only, primarily related to the effective tax rate reconciliation and income taxes paid, and did not have a material impact on the Company’s consolidated financial statements. 18. Net Loss per Share Basic and diluted net loss per share from continuing operations attributable to Class A common stockholders and Class B common stockholders (collectively, "Common Stockholders") for the years indicated were calculated as follows: Year ended December 31, 2025 2024 2023 (in thousands, except for per share and share amounts) Numerator: Net loss from continuing operations attributable to common stockholders $ ( 85,549 ) $ ( 46,266 ) $ ( 210,148 ) Net income (loss) from discontinued operations attributable to common stockholders — 3,257 ( 3,213 ) Denominator: Weighted average number of common shares and common share equivalents outstanding, basic and diluted 511,967,146 490,018,730 482,176,127 Basic and diluted loss per share from continuing operations $ ( 0.17 ) $ ( 0.09 ) $ ( 0.44 ) Basic and diluted earnings (loss) per share from discontinued operations $ — $ 0.01 $ ( 0.01 ) For all periods presented, the Company had net loss from continuing operations attributable to Common Stockholders. As a result, the Company's potentially dilutive securities, which include Options, RSUs, and PRSUs, have been excluded from the computation of diluted net loss per share from continuing operations, as the effect would be anti-dilutive. Therefore, during these periods, the diluted common shares outstanding equals the average common shares outstanding. The following table presents the potentially dilutive shares that were excluded from the computation of diluted net loss per share of common stock: Year ended December 31, 2025 2024 2023 Options to purchase common stock 23,764,258 24,269,793 24,994,653 RSUs 42,953,954 55,731,587 56,928,405 PRSUs 27,523,030 29,151,407 32,131,532 Total potentially dilutive shares excluded from computation of net loss per share 94,241,242 109,152,787 114,054,590 103 19. Operating Segments Clover Health has one reportable segment: Insurance. The Insurance segment provides PPO and HMO plans to Medicare Advantage members in several states. The segment information is prepared on the same basis that the Company's chief executive officer, who is the Chief Operating Decision Maker ("CODM"). These segment groupings are consistent with information used by the CODM, to assess performance and allocate resources. During the year ended December 31, 2025, the Company started presenting Insurance gross profit, defined as premiums earned, net less net medical claims incurred, as the primary measure of segment performance, consistent with the measure reviewed by the CODM. The CODM also uses insurance gross profit in competitive analysis by benchmarking to the Company’s competitors. The competitive analysis along with the monitoring of budgeted versus actual results are used in assessing performance of the segment and in establishing management’s compensation. Selling, general and administrative expenses are reviewed on a consolidated basis and are therefore excluded from segment results and included in reconciling items to consolidated net loss from continuing operations. The accounting policies of the Insurance segment are the same as those described in the summary of significant accounting policies. Year ended December 31, Insurance Segment 2025 2024 2023 (in thousands) Premiums earned, net (net of ceded premiums) $ 1,891,732 $ 1,344,881 $ 1,235,769 Less: Net medical claims incurred 1,618,219 1,010,289 1,003,683 Segment gross profit $ 273,513 $ 334,592 $ 232,086 Reconciliation: Elimination of intersegment profits (losses) $ 49,813 $ 3,962 $ ( 907 ) Other income 32,576 26,250 24,774 Salaries and benefits ( 225,475 ) ( 232,454 ) ( 257,157 ) General and administrative expenses ( 214,270 ) ( 176,480 ) ( 183,089 ) Impairment of goodwill and other intangible assets — — ( 15,945 ) Premium deficiency reserve benefit — — 7,239 Depreciation and amortization ( 1,686 ) ( 1,331 ) ( 2,509 ) Restructuring costs — ( 288 ) ( 9,821 ) Change in fair value of warrants ( 20 ) ( 50 ) ( 86 ) Interest expense — — ( 7 ) Loss on investment — ( 467 ) ( 4,726 ) Net loss from continuing operations $ ( 85,549 ) $ ( 46,266 ) $ ( 210,148 ) 20. Dividend Restrictions The Company’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. Accordingly, the Company’s regulated insurance subsidiaries’ ability to declare and pay dividends is limited by state regulations, including requirements to obtain prior approval from the New Jersey Department of Banking and Insurance. 21. Statutory Equity Applicable insurance department regulations require that the Company's regulated insurance subsidiaries prepare statutory consolidated 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. 104 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 Company'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 Company'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 Company or regulators. At December 31, 2025 and 2024, the regulated insurance subsidiaries' capital and surplus of $ 212.6 million and $ 178.8 million, respectively, exceeded the minimum RBC requirements of approximately $ 185.1 million and $ 114.1 million, respectively. 22. Regulatory Matters The Company operates in a highly regulated environment. It is regulated by federal and state of New Jersey regulators. The Company's regulated insurance subsidiaries must be licensed by and are subject to regulation by New Jersey Department of Banking and Insurance, which requires periodic financial reports and enforces minimum capital and/or reserve requirements. The laws and regulations governing the Company'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 Company 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 Company's business could require the Company to change how it conducts its business, restrict revenue and enrollment growth, increase health care and administrative costs and capital requirements, or expose the Company 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 Company's financial position, results of operations and cash flows and damage its reputation. 105 CLOVER HEALTH INVESTMENTS, CORP. CONDENSED BALANCE SHEETS (PARENT COMPANY) (Dollars in thousands, except share amounts) Schedule I December 31, 2025 2024 Assets Current assets: Cash and cash equivalents $ 43,704 $ 146,783 Short-term investments 16,970 — Investment securities, available-for sale 12,935 — Other receivables — 24 Total current assets 73,609 146,807 Intercompany interest receivable 4,958 4,958 Intercompany note receivable 40,000 40,000 Investment securities, available-for-sale 33,541 — Investments in consolidated subsidiaries 236,296 200,247 Other assets, non-current 8,309 — Total assets $ 396,713 $ 392,012 Liabilities and Stockholders' Equity Current liabilities: Accounts payable and accrued expenses $ 683 $ 683 Accrued salaries and benefits 6,904 6,663 Other liabilities, current 220 220 Total current liabilities 7,807 7,566 Intercompany payable 79,842 42,943 Notes payable, net of discount and deferred issuance costs 360 360 Total liabilities 88,009 50,869 Stockholders' equity: Class A Common Stock, $ 0.0001 par value; 2,500,000,000 shares authorized at December 31, 2025 and 2024; 426,669,369 and 414,493,051 issued and outstanding at December 31, 2025 and 2024, respectively 43 41 Class B Common Stock, $ 0.0001 par value; 500,000,000 shares authorized at December 31, 2025 and 2024; 92,373,157 and 89,032,305 issued and outstanding at December 31, 2025 and 2024, respectively 9 9 Additional paid-in capital 2,682,663 2,576,471 Accumulated other comprehensive income (loss) 528 ( 1,584 ) Accumulated deficit ( 2,288,352 ) ( 2,202,803 ) Less: Treasury stock, at cost; 33,412,273 and 18,752,947 shares held at December 31, 2025 and 2024, respectively ( 86,187 ) ( 30,991 ) Total stockholders' equity 308,704 341,143 Total liabilities and stockholders' equity $ 396,713 $ 392,012 106 CLOVER HEALTH INVESTMENTS, CORP. CONDENSED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (PARENT COMPANY) (Dollars in thousands, except share amounts) Year ended December 31, 2025 2024 2023 Revenues: Other income $ 14,509 $ 9,355 $ 8,413 Total revenues 14,509 9,355 8,413 Operating expenses: General and administrative expenses 52 117 78 Total operating expenses 52 117 78 Income from operations 14,457 9,238 8,335 Loss on equity investment — 467 4,726 Equity in net losses of consolidated subsidiaries 100,006 51,780 216,970 Net loss $ ( 85,549 ) $ ( 43,009 ) $ ( 213,361 ) Net unrealized gain on available-for-sale investments 36 — — Comprehensive loss $ ( 85,513 ) $ ( 43,009 ) $ ( 213,361 ) 107 CLOVER HEALTH INVESTMENTS, CORP. CONDENSED STATEMENTS OF CASH FLOWS (PARENT COMPANY) (Dollars in thousands, except share amounts) Year ended December 31, 2025 2024 2023 Cash flows from operating activities: Net loss $ ( 85,549 ) $ ( 43,009 ) $ ( 213,361 ) Adjustments to reconcile net loss to net cash provided by (used in) operating activities: Intercompany stock-based compensation 103,657 114,331 140,931 Gain on extinguishment of note payable — — — Accretion, net of amortization ( 92 ) ( 102 ) ( 1,614 ) Change in accrued interest earned ( 385 ) — — Net realized losses on investment securities — 769 4,321 Changes in operating assets and liabilities: Other receivables 24 ( 24 ) — Other assets ( 8,307 ) 394 5,464 Accounts payable and accrued expenses — — ( 182 ) Intercompany accrued salaries and benefits 241 65 22 Other liabilities — 220 — Intercompany payable 36,899 20,778 ( 17,365 ) Net cash provided by (used in) operating activities 46,488 93,422 ( 81,784 ) Cash flows from investing activities: Purchases of short-term investments and available-for-sale securities ( 63,148 ) — ( 57,294 ) Proceeds from sales of short-term investments and available-for-sale securities — 1,507 30,563 Proceeds from maturities of short-term investments available-for-sale securities 252 24,137 173,620 Investments in consolidated subsidiaries ( 33,289 ) ( 3,235 ) ( 81,441 ) Net cash (used in) provided by investing activities ( 96,185 ) 22,409 65,448 Cash flows from financing activities: Issuance of common stock, net of early exercise liability 718 709 1,150 Issuance of common stock under employee stock purchase plan, net of stock issuance costs 1,096 193 — Cash paid for shares withheld related to stock-based compensation ( 36,899 ) ( 16,490 ) ( 6,220 ) Repurchases of common stock ( 18,297 ) ( 1,772 ) — Net cash used in financing activities ( 53,382 ) ( 17,360 ) ( 5,070 ) Net (decrease) increase in Cash and cash equivalents ( 103,079 ) 98,471 ( 21,406 ) Cash and cash equivalents, beginning of year 146,783 48,312 69,718 Cash and cash equivalents, end of year $ 43,704 $ 146,783 $ 48,312 108 CLOVER HEALTH INVESTMENTS, CORP. Notes to Condensed Financial Statements (Parent Company) 1. Organization and Operations Clover Health Investments, Corp. (the "Company") is a holding company incorporated on July 17, 2014, in the state of Delaware. 2. 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 Company'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 consolidated financial statements and accompanying disclosures. Those estimates are inherently subject to change, and actual results may ultimately differ from those estimates. 3. Insurance Subsidiaries Investments in consolidated subsidiaries include regulated insurance subsidiaries and unregulated subsidiaries. The Company holds $ 122.0 million and $ 151.5 million of cash, cash equivalents, and investment securities at the parent and unregulated subsidiaries at December 31, 2025 and 2024, respectively. The Company holds $ 197.9 million and $ 286.1 million of cash, cash equivalents, and investment securities in regulated insurance subsidiaries at December 31, 2025 and 2024, respectively. 4. Surplus Note Effective December 22, 2016, the Company contributed $ 40.0 million to Clover 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 by the Commissioner of Banking and Insurance of the State of New Jersey. In accordance with the New Jersey Department of Banking and Insurance regulations, the Company filed a Form D with the department requesting an extension of payment until December 31, 2027. No payment of principal or interest on the surplus note shall be made without the prior written approval of the Commissioner of Banking and Insurance of the State of New Jersey. 109 Schedule II CLOVER HEALTH INVESTMENTS, CORP. VALUATION AND QUALIFYING ACCOUNTS Additions Balance at beginning of period Charged to costs and expenses Charge to other accounts (Deductions) Balance at end of period (in thousands) Year ended December 31, 2024 Valuation allowance for deferred tax assets $ 396,906 $ 3,903 $ — $ — $ 400,809 Year ended December 31, 2025 Valuation allowance for deferred tax assets $ 400,809 $ 7,188 $ — $ — $ 407,997 The accompanying notes are an integral part of these consolidated financial statements. Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure. None.