Business Combination

12 Months Ended

Dec. 31, 2022

Business Combination and Asset Acquisition [Abstract]

Business Combinations

2022 Business Combination

On November 14, 2022, the Company entered into a securities purchase agreement with an electronic health record software provider, Juxly, Inc. ("Juxly"), to acquire 100% of the outstanding equity interests of Juxly, for a total purchase price of approximately $16.5 million of which $3.0 million is considered contingent consideration and the maximum amount estimated to be paid (the "2022 Business Combination"). The acquisition of Juxly was entered into as part of Clover's broader strategy of integrating Clover Assistant into existing electronic health record platforms deployed in the health care environment. The goodwill resulting from the transaction that was recorded by the Company was approximately $10.5 million.

The total acquisition related costs were $0.2 million and were recognized in the Company's Consolidated Statement of Operations and Comprehensive Loss within General and administrative expenses.

The acquisition described above was accounted for using the acquisition method of accounting, which requires, among other things, the assets acquired and the liabilities assumed be recognized at their fair values as of the acquisition date. The results of the acquisition were included within the consolidated financial statements commencing on the respective acquisition date.

The following table summarizes the fair value estimates of the assets acquired and liabilities assumed for the Juxly acquisition.


November 14, 2022
(in thousands)
Cash and cash equivalents	$	320
Prepaid expenses	38
Accounts receivable	326
Current assets	684
Property and equipment, net	47
Goodwill and other intangible assets (1) (2)	15,907
Total assets acquired	$	16,638

Accounts payable and accrued expenses	$	38
Accrued salaries and benefits	31
Current taxes payable	43
Total liabilities assumed	$	112

Fair value of net assets acquired	$	16,526

Fair value of acquisition consideration	$	16,526

(1) Includes the fair value of Juxly's developed technology, which is being amortized on a straight-line basis over 5 years. The developed technology was valued using the cost approach and the useful life was estimated based on the time to recover the related future discounted cash flows.

(2) Includes the difference between the purchase price over the net identifiable tangible and intangible assets acquired allocated to goodwill, which is not deductible for tax purposes. Goodwill was assigned to Corporate/Other. The goodwill was primarily attributed to increased synergies that are expected to be achieved from the integration of Juxly.

Juxly's results of operations have been included in the Company's consolidated financial statements beginning on November 14, 2022. Juxly contributed revenue of $0.1 million and net loss of $0.4 million (after amortization of non-cash purchase accounting adjustments and transition and transaction costs) for the period from the date of acquisition through December 31, 2022.

2021 Business Combination

As a result of the Merger Agreement, among other things, (i) all outstanding shares of common stock of Legacy Clover immediately prior to the effective time of the First Merger were canceled in exchange for the right to receive, at the election of the holders thereof (except with respect to the shares held by entities controlled by Vivek Garipalli and the holders of convertible securities previously issued by Legacy Clover to certain holders who received only shares of Class B Common Stock, par value $0.0001 per share, of Clover (Class B Common Stock), which are entitled to 10 votes per share), an amount in cash, shares of Class B Common Stock, or a combination thereof, as adjusted in accordance with the Merger Agreement, which equaled in the aggregate $499.8 million in cash and 260,965,701 shares of Class B Common Stock (at a deemed value of $10.00 per share); (ii) shares of Legacy Clover held by entities controlled by Vivek Garipalli and the holders of the convertible securities immediately prior to the effective time of the First Merger were canceled in exchange for the right to receive shares of Class B Common Stock based on an Exchange Ratio (as defined in the Merger Agreement) of approximately 2.0681; and (iii) all shares of common stock of Legacy Clover reserved in respect of Legacy Clover stock options and restricted stock units outstanding as of immediately prior to the effective time of the First Merger, were converted, based on the Exchange Ratio, into awards based on shares of Class B Common Stock. The consideration that a Clover stockholder received was subject to pro rata adjustment depending on the election made by such stockholder, if any, in accordance with the terms of the Merger Agreement. The pro rata adjustments were made based on an Actual Cash/Stock Ratio (as defined in the Merger Agreement) of 32.3%.

Immediately after giving effect to the 2021 Business Combination and the PIPE Investment, there were 143,475,108 shares of Class A Common Stock, 260,965,701 shares of Class B Common Stock and 38,533,271 warrants outstanding, equaling 404,440,809 total shares of common stock outstanding and 38,533,271 warrants outstanding.

The transaction closed on January 7, 2021, and on the following day the Company's Class A Common Stock and public warrants were listed on the Nasdaq Global Select Market (Nasdaq) under the symbols "CLOV" and "CLOVW," respectively, for trading in the public market.

See also Note 5 (Fair Value Measurements), Note 12 (Notes and Securities Payable), and Note 17 (Stockholders' Equity and Convertible Preferred Stock) for additional information regarding changes to the instruments as a result of the 2021 Business Combination.