CLOVER HEALTH INVESTMENTS, CORP. current report, 13 August 2021

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Clover Health Investments, Corp. — Form 8-K Summary

Reporting date: August 13, 2021. This Form 8-K reports executive officer changes and related compensation arrangements; it does not provide quarterly financial results.

Business Context and Reporting Period

Clover Health Investments, Corp. is a Delaware corporation headquartered in Franklin, Tennessee. The company’s Class A common stock and redeemable warrants trade on Nasdaq. The filing concerns the transition of the company’s chief financial officer and related arrangements effective August 13, 2021.

Financial Metrics and Liquidity

  • The filing does not provide revenue, profit, cash flow, margins, debt, liquidity, or other operating metrics.
  • The company agreed to pay Joseph Wagner $10,000 per month during a consulting period of up to 12 months, subject to the terms of the separation agreement.
  • The company will pay AP Services, LLC $175,000 per month for interim CFO services provided by Mark Herbers.
  • The filing does not state the aggregate expected cost, accounting treatment, or cash-flow impact of these arrangements.

Material Changes and Management Commentary

  • Joseph Wagner stepped down as chief financial officer on August 13, 2021.
  • Mr. Wagner agreed to provide consulting services as reasonably requested for 12 months following his departure.
  • Subject to his delivery of a release of claims, the company agreed to extend by one year the post-termination exercise period for his vested and unexercised non-qualified stock options.
  • Mark Herbers was appointed interim chief financial officer, principal financial officer, and principal accounting officer.
  • Mr. Herbers is expected to serve while the company searches for a permanent CFO and until a replacement is appointed.
  • Mr. Herbers will remain employed by AP Services, an affiliate of AlixPartners, LLP, during his interim service.

Outlook, Risks, Contingencies, and Unusual Items

  • If the company terminates the consulting agreement before the end of the 12-month period, or hires and onboards a new CFO during that period, it must pay Mr. Wagner a one-time amount equal to the remaining monthly consulting fees that would otherwise have been payable.
  • The consulting agreement may be terminated by either party without prior notice, subject to the stated payment provisions.
  • The interim management services agreement may be terminated by either party upon written notice, with fees and expenses payable to AP Services through termination.
  • Mr. Herbers is expected to enter into the company’s standard executive indemnification agreement, including potential indemnification and advancement of expenses.
  • The filing does not provide guidance regarding operating performance or financial outlook.
  • The separation and interim services agreements were expected to be filed as exhibits to the company’s Form 10-Q for the quarter ending September 30, 2021.

Key Facts for Investors to Verify

  1. Whether a permanent CFO was appointed and when the interim arrangement ended.
  2. The final terms and aggregate cost of Mr. Wagner’s separation and consulting arrangements, including any termination payment.
  3. The aggregate fees paid to AP Services and the duration of Mr. Herbers’ service.
  4. The effect of the extended stock-option exercise period on compensation expense and dilution.
  5. The full separation and interim services agreements when filed with the subsequent Form 10-Q.