Company Overview

Palantir technologies is an American software company founded in 2003 and headquartered in Colorado that specializes in big data analytics.
They started building software for the intelligence community in the US to assist in counterterrorism investigations by helping them identify patterns hidden deep within large datasets.
Later they realized that similarly to the intelligence community, commercial institutions did not have the most effective tools to manage and make sense of the data involved in large projects.
Palantir has now developed two principal software platforms, Palantir Gotham which serves primarily the intelligence community, and Palantir Foundry for commercial purposes.
Palantir went public on September 30, 2020 through a direct public offering. The company opened for trading at $10 a share, giving it an initial valuation of about $22B. As of the date of this publishing, Palantir stock is trading at $25.98, with a Market Cap of $44.26B, and 52-w high of $33.50.

Understanding the Business

Value Proposition
Institutions often rely on various single-purpose software solutions which support the specific workflows of their operations such as customer relationship management and financial planning. Each new software creates a new silo within an already fragmented data landscape.
When it comes to making operational decisions, institutions are left spending significant time and resources to unify their data. By the time the question is answered, the underlying data may be stale.
A central operating system for data
Palantir’s software allows institutions to reorganize the various independent data systems that support their operations into a unified data asset which facilitates advanced data analysis, knowledge management, and collaboration.
Augmenting existing data systems, not displacing
At a large manufacturer, Palantir does not build machine production ERP software, instead, Palantir’s software connects their production ERP data with other relevant systems. By integrating existing solutions into our central operating system, organizations can choose to maintain key historic investments without having to rebuild their entire data infrastructure.
Making data actionable
Gotham and Foundry enable their users to put data in context, using language that people understand. They transform data into objects that make sense to everyone in an organization. Data is represented not as cells in a spreadsheet, or exports from a single system, but as entities, events, relationships, consequences, and decisions.
Their ontology management systems allow organizations to create their own description of the world, starting from a set of basic components: objects (such as people or events), properties (attributes), and relationships that tie objects together.
Understand the history of data and decisions
Palantir’s software tracks each piece of data in the system to its source and records all changes that have been made to a dataset or data object. Users can distinguish between data derived from a source system or data created by another user, and if a dataset has been updated/modified, the user can also identify the fact that the data was updated, the action, and the logic used to perform the update. This allows users to easily explain where the data, logic, and decisions originate.
Enable users to work together even in the most complex circumstances
The versioning and branching capabilities of their software enables thousands of users across departments and organizations to work on the same datasets, and actively collaborate on new models and analysis.
Users can safely branch a view or a dataset into an isolated sandbox where the user is able to build or experiment as they wish and may merge successful experiments back into the main dataset. Each version of a dataset is saved so that it remains protected and available for concurrent access.
Enforce rigorous and reliable data protection
Palantir’s software was designed to embrace the complexity of security clearances, institutional boundaries, and varying data sensitivity levels. Organizations are able to secure each piece of information and define the privileges users require to perform a specific action on a specific resource. The central authorization system creates an audit trial of user activity which allows oversight officials to monitor behavior, identify potential violations, and investigate anomalies.
AI/ML and operational change through data-driven decisions
Their software infrastructure also enables organizations to combine simple math, third-party black box models, and machine trained models of the different components of their businesses in a graph made up of nodes (for example, each node can be a manufacturing unit and distribution site in a supply chain) where each model can describe the properties of a node, resulting in an interactive digital simulation of an entire supply chain.
The AI/ML interface surfaces critical information about models, including plots, validation statistics, model stages, parameters and metadata.
Revenue Streams
Palantir’s revenue streams consists of their two main software, Gotham which was designed primarily for the defense and intelligence sectors, and Foundry for the commercial sector. However, the platforms are not exclusive to either sector, for example, Gotham is also offered to commercial customers in the financial services industry. The two platforms can either be used separately or bundled together as a single ecosystem.
Currently, revenue is more or less evenly split between the government and commercial sector.
It is important to note that for the government sector Palantir has to participate through a procurement process against other contractors who also sell custom tools.
Gotham
Its main tools include:
Graph – a whiteboard like interface for users to explore, visualize, and interact with entities, their properties and their networks. Users can create or edit data in the graph and resolve duplicate objects to ensure robust data quality.
Gaia – lets users plan, execute, and report on operations via a shared live map. Live maps track real-time data and users drag and drop objects from other Gotham applications directly into Gaia.
Dossier – is a live collaboration document editor to share analysis and discover intelligence. Users can collaborate across teams and organizations to create a living, interactive, and up-to-date document.
Video – an application designed to interact with both streaming and historical video data. Users can review video footage in the platform as well as enhance raw footage with geospatial information and overlays based on other data sources.
Ava – an AI system which scans billions of data points in order to proactively assist investigations by alerting users to new, hard-to-find potential connections.
Mobile – brings Gotham into the field via mobile devices to provide support to real-time, distributed operations.
Foundry
Monocle – enables users to understand data lineage using a graphical interface. Users can explore upstream dependencies or downstream consumers of data, as well as trace logic for a dataset back to its source.
Contour – enables top down exploration of large-scale data. Users may filter, join, and visualize datasets to answer analytical questions and publish the results as a report or new dataset that will automatically update with the underlying datasets.
Object Explorer – allows users to interact with data represented as objects – like customers, equipment, or plants – rather than rows in a table.
Fusion – Foundry’s spreadsheet environment.
Reports – allows users to publish their work from other applications in a document that dynamically updates as the underlying data changes.
I strongly suggest watching Palantir’s demo day on January 26 to gain a better understanding of the tools provided by both software.
Palantir’s Software Example Use Cases

• Humanitarian workers plan disaster relief missions following a natural disaster.
• Investigators receive alerts about open cases when new data about a suspect enters any system.
• Automotive plant engineers detect defects at their station while vehicles are still on assembly line.
• District attorney map out complex criminal networks in order to decide where to focus resources.
• Scientists use a unified view of cancer patients to personalize care.

Industry

Market Size
As of Q3 2020 Palantir had 132 customers across 36 industries around the world.
Currently, according to Palantir’s own estimates the Total Addressable Market (TAM) for their software across the commercial and government sectors around the world is approximately $119B. The TAM for the government sector is $63B and for the commercial sector $56B. Within the government TAM, $37B is international and $26B is domestic.
According to Statista’s market forecast revenue in the software market is expected to grow at an annual growth rate of 7.4% between 2021 and 2025.
Industry Fundamentals
Embrace digital transformation or risk getting disrupted
It has become evident that companies which embrace digital transformation persist, while businesses that fail to transform or transform too late will disappear. According to a Harvard Business Review report digital disruption extinguished 52% of Fortune 500 companies between 2000 and 2017.
We have repeatedly seen that pathbreaking institutions that use data to transform their core operations are the ones that win.
Buy or Build
Institutions often resort to the default approach of attempting to build a custom solution themselves. However, according to a recent report by The Standish Group, of 50,000 custom software projects from more than a 1,000 organizations, only 23% that were started from scratch were completed on time and on budget, while 56% of all projects were either overdue or over budget. Additionally, only 12% of organization-wide digital transformation projects were considered successful.
Additionally, according to the NewVantage Partners 2020 Big Data and AI Executive Survey, business adoption of Big Data continues to be a struggle, with 73.4% of firms citing this as an ongoing challenge.
Palantir provides the example of a U.S. Military department which spent more than $1 billion building an enterprise resource planning system from scratch. The system was never delivered, and the project was terminated.
Crisis & Instability
A survey from AppDynamics reports that 71% of IT professionals said COVID-19 has caused their businesses to implement digital transformation projects within weeks rather than the typical months or years, and 65% of respondents said they implemented digital transformation projects during the pandemic that had been previously dismissed.

Competitive Landscape & Risks

Competition
Palantir’s main competitors include:
Internal software development – At first, organizations frequently attempt to build their own data platforms with the help of consultants, IT services companies, packaged and open-source software, and sizable internal IT resources.
And two software companies with very similar business models:
Alteryx – founded 23 years ago and based in California, Alteryx is a public company with FY 2019 revenues of $418M and more than 1,290 employees. Alteryx is focused on providing solutions to the commercial sector and as of 2019 they had approximately 6,100 customers in more than 90 countries. Amongst their main customers are Chevron Corporation, Federal National Mortgage Association, Nasdaq Inc, Netflix, salesforce.com, Toyota, Twitter, and Uber Technologies.
Semantic AI – is a privately-held software firm based in California, Semantic AI was founded in 2001 and after 9/11 it was used as “platform by choice” by the intelligence community. Similar to Palantir, they have gained significant adoption in the Defense and Law Enforcement communities and have recently launched their enterprise intelligence platform.
Competitive Strategy
Customer acquisition
Palantir’s customer acquisition strategy targets large-scale, hard-to-execute opportunities at large government and commercial institutions. The high installation costs, high failure risks, complexity of data environments, and the long sales cycle associated with these opportunities raise the barriers to entry for competition.
Additionally, in the first phase of Palantir’s customer acquisition strategy, they provide minimal risk to their customers through short-term pilot deployments of their software at no or low cost to them. As the customer increases the usage of the platform across its operations, Palantir’s revenue and margins grow significantly.
Software engineers on the front line
In order to fully address the most complex challenges of their customers, Palantir sends their Forward Deployed Engineers (FDEs), in order to experience and understand the problem firsthand. By working alongside their customers, FDEs gain a deep understanding of their needs, how and why they make decisions, and how they calculate trade-offs.
Leverage experience in both private and public sector
To the commercial sector, Palantir offers software which was designed to be secure enough to handle national secrets and stable enough to support soldiers’ wartime decisions. To the government sector, they offer software which incorporates and reflects Palantir’s experience of working across 36 industries and years spent in the field.
Palantir’s strategic relationships last for years
By the end of 2019, Palantir’s top 20 customers had an average relationship of 6.6 years.
Palantir has chosen sides
Their software is exclusively available to the United States and its allies in Europe and around the world.
Growth Strategy
Become the industry default
Palantir’s current and potential customers are some of the largest enterprise in the world. They intend to broaden the platform’s reach through partnerships that establish their platforms as the central operating system for entire industries.
This model has been successfully implemented in the aviation industry where, through its partnership with Airbus, work with more than a 100 airlines and 15 airline suppliers.
Continue to grow their direct sales force
Palantir’s decision to grow their sales force in recent years has resulted in a number of significant new customers, including Fortune 100 companies as well as a number of leading government agencies in the U.S. and other countries.
Increase their reach with existing customers
To drive revenue growth at an account, Palantir uses a number of sales and marketing strategies which include:

• Creating partnerships to extend the platform beyond the customer’s four walls into the operations of their partners and suppliers
• Selling additional productized cross-industry software capabilities
• Selling strategic implementations of Palantir’s software against specific use cases

For Q3 2020 Palantir’s average revenue per customer had increased 38% compared to the same period last year.
Become the default operating system for the U.S. government
Palantir’s software has been tested and improved over years of use across industries and various government agencies in the U.S. who have been able to deploy Palantir’s platforms rapidly with minor configurations.
Palantir already works with government agencies such as the U.S. Army, Navy, and Airforce, CDC, Department of Homeland Security, FDA, and SEC.
New methods of customer acquisition and partnership
As Palantir considers growing into new markets outside the U.S., they may consider entering into partnerships with strategic organizations that operate in their target market.
For example, in Japan they launched a partnership with SOMPO Holdings, Inc.. one of the largest insurance companies in the country, to help grow their commercial and government business in the Japanese market.
Moats
R&D expenditure
Since 2008 and up to 2019, they have invested a total of $1.5B in research and development.
Network effects
Every data source that is integrated to the system, and every action taken by a developer, data scientist, or operational user, is made accessible to all other users at the institution.
At a financial services customer, network effects enabled Palantir’s software to scale from a single use case to more than 70 workstreams across compliance, front office, risk, and internal audit desks. Each new application was built on a shared foundation of integrated systems, user groups, and existing applications.
Additionally, each customer on their platform generates network effects. Palantir can leverage the knowledge acquired and capabilities developed for a customer within a specific industry and incorporate it into the platform for the benefit of all customers across industries. For example, capabilities of Palantir’s platform that were originally developed to help optimize production of crude oil, has been adapted by manufacturers of medical equipment to optimize supply chains.
In addition to supporting individual institutions, Palantir’s platforms have the capacity to become the central operating system for entire industries and sectors.
Regulation
Section 2377 of the Federal Acquisition Streamlining Act (“FASA”) requires the U.S. government to first consider readily available commercial items before pursuing acquisition of custom developed items. Palantir’s software is a commercial item within the meaning of the law. A custom government solution built by a consulting company, is not.
In 2016, Palantir won a lawsuit against the Army, challenging its decision to pursue a software development contract for the replacement of its battlefield intelligence system. In 2018, the ruling was upheld, and the US Court of Appeals ordered the Army to consider existing commercially available products. After testing real products, the Army selected Palantir’s software to deploy tactical units across the force.
Other Relevant Risks
Privacy and civil liberties
Palantir is not in the business of collecting, mining, or selling data. They build software platforms that enable customers to integrate their own data – data they already have. Palantir claims to be committed to ensuring their software is effective as possible while preserving individuals’ fundamental rights to privacy and civil liberties.
Customer concentration
For the 9 months ended September 2020, Palantir’s top 3 customers accounted for 27% of their revenue.

Financial Summary

Proforma Balance Sheet
https://postimg.cc/ykzC91FN
Income Statement
https://postimg.cc/yD1qQLp4
Palantir’s revenue has had a CAGR of 68.8% since inception, and 27.6% for the last three years.
For the 9 months ended September 2020 compared to the same period last year:

• Revenue of the government sector increased by $177M (73%), of the increase 84% was from existing customers.
• Revenue of the commercial sector increased by $80M (30%).
• COGS, Sales and Marketing, R&D, and SG&A expense increases consist primarily of an increase in stock-based compensation expense primarily due to recognition of cumulative stock-based compensation expense upon the Direct Listing related to the company’s restricted stock units. The increase was partially offset by a decrease in traveling expense related to the COVID-19 pandemic.

Palantir uses a Contribution Margin as a key business metric to evaluate their financial performance, which has improved consistently over the last 4 quarters. In short, by achieving a higher contribution margin, the increase in revenue required for Palantir to break-even is smaller.
Proforma Cashflow Statement
https://postimg.cc/64CsSgNw
For the 9 months ended September 2020:
Net cash provided by financing activities consist primarily of proceeds from the issuance of common stock

Investment Decision

Valuation Results
https://postimg.cc/kBF3v0cv
The result of my Valuation Model indicate a Value of Equity per share of $28.38
Mayor assumptions of the valuation model include:

• By 2031, Palantir will gain 6% Market Share of a $119B market that grows 7.4% annually. This implies Palantir’s revenue will grow at a CAGR of 30% for 10 years.
• Palantir will achieve US GAAP operating margins of 23% by 2031.
• Terminal year growth rate of 5% and WACC of 7.5% after reaching a Beta of 1.0.
• Risk free rate of 2.5% and Equity Risk Premium of 5.5%

Follow the link to view the valuation model, it include references to all assumptions. Please feel free to download it, play with it, and share your conclusions.
Investment Decision
I believe that at its current price PLTR is a buy opportunity for the following reasons:

• The model’s revenue and margin growth assumptions are achievable and likely to be exceeded if PLTR successfully executes their growth strategies.
• The industry is driven by strong fundamentals, organizations that do not embrace digital transformation and big data will cease to exist.
• Even though Palantir’s moat is currently narrow, it could expand significantly if they are successful in establishing their software as a central operating system for various industries.

The last drama post I did about Kuma Miko seemed to have gotten some praise, but some wished to see a Hobby Drama post that had consequences outside “people got angry over it”. So without any further delay, here’s a story about a studio that’s close to my heart, one that I’ve backed twice and seen die twice.
Note: This is a fairly lengthy drama, so forgive me if I’m not able to provide all of my sources. Most of the front half of this comes from this video, which chronicles the first half of Lab Zero entirely in Russian.
From Ahad to Mike Z
Let’s start in the beginning. Alex Ahad is a freelance illustrator who, in between other work, had created character designs for a prospective fighting game. Mike Zaimont is a professional fighting game player best known for games like BlazBlue and Marvel Vs. Capcom, but since 1999 had been coding a custom engine in his free time, which he hoped could be used for a fighting game. The two met in 2008, and the two quickly realized that with each other’s help, their dream could come true. In 2010, the two joined the newly developed game studio Reverge Labs. Joining their team was Mariel “Kinuko” Cartwright, a friend of Ahad’s and daughter of a Disney animator who helped animate games such as Scott Pilgrim vs. The World and Shantae; Peter Bartholow, who acted as CEO of Reverge as well as their PR arm; and an assortment of other animators and designers. Their goal: a fighting game in the style of Marvel vs. Capcom 2 with hand-drawn animation that they called Skullgirls.
After obtaining publishers in Autumn Games and Konami (at the time of development the Microsoft required indie devs to have a retail publisher in order to bring their games to Xbox Live Arcade), the team got to work on Skullgirls. Initial impressions were favorful - people liked Ahad’s unique character designs, the fluid animation, and the solid engine Mike Z built - but upon release, there were some concerns. The time and money needed to develop each character meant a starting roster of only eight characters, a far cry from other fighting games (the original MvC had 15 characters in 1998), and due to the team trying to get the game out, there was no in-game move list. Some were also concerned that the cast, consisting entirely of women, was too fanservice-filled, although Bartholow said that the characters were just attractive women who could fight as opposed to characters using their sexuality in battle (Ahad said that sex wasn’t his main focus, he just wanted to have monster girls fight each other). The team at Reverge Labs stressed that they would continue to update the game, with plans to add DLC if the game sold well enough. Good thing nothing could go wro-
Everything goes wrong
Alongside publishing Skullgirls, Autumn Games and Konami had previously published a karaoke game called Def Jam RapStar. Unfortunately, around March 2012, the time Skullgirls released, both parties were at the end of several lawsuits made against them - one argued that Autumn and Konami did not get the rights to some of the songs used in the game, while another claimed that the game was funded with a bank loan which Autumn Games was unable to pay back. The result of these costly lawsuits was that Autumn was unable to pay Reverge the money made from Skullgirls - this led to the entire Reverge team being laid off around July, and the future of the game in the air.
And so, the team decided on a whim to reconvene as a new development studio, Lab Zero Games. At a fundraiser for breast cancer research which included a fighting game tournament, Mike Z revealed the first DLC fighter and promised that new information about her and the team would be posted soon. This would turn out to be an Indiegogo fundraising campaign that asked for $150,000 to develop the first DLC fighter, with more characters promised if people backed enough.
In the end, $829,829 was raised in the campaign, enough to fund five DLC characters, a bevy of stages and voice packs, and other features. It was quickly becoming a cult classic.
The Skullgirls Curse
And so work on Skullgirls DLC was underway. However, a variety of events happened to befall Lab Zero during development, some causing controversy and others just annoying the team. Some dubbed this “The Skullgirls Curse”. So let’s go over some of them:

• Paypal Woes: During the Indiegogo DLC campaign, Lab Zero announced that Ahad had created around 30 prospective designs for DLC characters, and that there would be a vote to see which characters would be the two “mystery characters” teased in the Indiegogo campaign. As you would guess, this caused the Skullgirls fanbase to get heated, to the point where some stressed that they would ask Indiegogo for their money back if their character didn’t win. PayPal, who managed the funds for this campaign, was concerned about these threats and put nearly all of the money on hold. Bartholow tried to negotiate with PayPal, and was eventually able to get the funding - once PayPal was given a hefty sum as collateral.
• Bad Juju - If you notice on the list of prospective DLC characters, one character is Juju, a character who was designed by Ahad from a fan’s suggestion on a Whiteboard Wednesday art stream. Ahad seemed to like the idea of the character, and kept building her up until she became a legit character in the game. The original fan made a joke on Facebook that he’d like to be compensated for the design, which led Lab Zero to negotiate obtaining the character rights from him. They eventually worked out a contract that would give them the rights to the character, but only if the original fan didn’t reveal it until Lab Zero announced it themselves. The fan then posted about it on the Skullgirls forum the very next day, breaking the NDA immediately and making it so that Lab Zero couldn’t use the character at all.
• Don’t be (Red) Cross with me: One of the characters included in the base game of Skullgirls is Valentine. As you can tell, the two biggest features of her character are her being a nurse and a ninja - as such, her costume is decorated with red crosses. This was upsetting to the real Red Cross, which fights hard to prevent its trademark from being associated with violence - as such, when they came to the Skullgirls publisher demanding a change, all red crosses in the game had to be changed to magenta.
• #FucKonami: In November 2013, due to Konami barely helping at all with the publishing process for Skullgirls (they refused to greenlight any patch or DLC until Lab Zero tested it itself on their own time and money, they didn’t help with Microsoft’s certification process for Xbox, etc), Lab Zero dissolved their publishing agreement. This led to a massive snafu where, due to the dissolution, the original Skullgirls was taken down on consoles, and Lab Zero had to scramble to get a new publisher on the consoles side and then reupload the game as Skullgirls: Encore. It was a tangled web of issues which the above YouTube video relays, but required certification from both console storefronts and even the Japan storefront, as their publisher there was also coincidentally being dissolved at the same time without Lab Zero knowing.
• EVO 2014: During one of the largest fighting game tournaments of 2014, Skullgirls was promised a space for airing their tournament stream by controller distributor Madcatz. Lab Zero and Autumn provided a pot for the tourney, and everything was smooth sailing - until a multitude of delays made it so that the entire time Skullgirls had for streaming was replaced with Tekken tournaments. By the time these issues were fixed, only the final four matches were able to be shown.
• What’s the worst kind of ship? Censor-SHIP!: In April 2015, one of the patches of Skullgirls altered the animation of some characters, which according to Lab Zero themselves was because of their own artistic values (while they admitted that panty shots in a fighting game comprised entirely of girls is unavoidable, they didn’t want to go out of their way to show them). As you might expect, this led to a massive onslaught of negative Steam reviews and caustic tweets from people who abhor censorship of any kind. Funnily enough, this brigade started around October, six months after the changes were made, and only via word of mouth - people didn’t even notice there was a change until someone told them about it.
• Backer characters: As part of their Indiegogo campaign, some of the highest-paying backers could have their original characters put in the background of some custom stages. Lab Zero warned these backers that these stages would be a casino and a ballroom, respectively, so their OCs should ideally be designed with a formal flair. Some backers did follow this unspoken rule - ZONE, a notoriously NSFW Flash animator who helped work on the DLC characters, made a perfectly formal look for his mascot Zone-tan. As for the others, well...
• SonicFox: This isn’t included in the compilation video mentioned above as this occurred way after all the initial Skullgirls drama. Basically, SonicFox is a five-time EVO champion and one of the best Skullgirls players in the world. In May 2020, after Skullgirls was mostly complete, they were given a cameo in Skullgirls’ training stage. Of note is that SonicFox is black, non-binary, and a furry, and the character added to the game was their fursona, who has a trans rights flag in the inside of their jacket you can only see for like one frame. People reacted as you would expect. Also, one of the original backers requested to change their character as they were now transitioning, which didn’t get as much flak, so that’s nice I guess.

So as you can see, Skullgirls had a menagerie of problems and issues during its dev time. However, their Skullgirls curse seemed to have faded away, as they had a new game in store.
If I was Indivisible
Indivisible was a new project of Lab Zero, announced in 2015 as Skullgirls DLC production was nearing an end. Billed as a platformer RPG similar to games like Valkyrie Profile, it would tell the story of Ajna, a young girl whose town is stricken by tragedy and she finds out that she’s a portion of the god of creation, who has grown discontent with the world and wishes to remake it anew. Its Indiegogo campaign focused on Incarnations, party members who came from a variety of cultures, religions, and demographics not usually represented in popular culture. And as you can see by the fact that it got over two million dollars in funding, people were excited to see what Lab Zero could do. They even got enough funding to get Studio Trigger, of anime fame, to create the opening for the game.
Of course, it wouldn’t be Lab Zero without the occasional issue here and there. As shown above, some Incarnations were changed or scrapped during development, which irked some who backed because of that character specifically (not naming any names, but look in the incarnation list and see if you notice any). Backer characters were included again, and although there were more places to add them so they didn’t look out of place, you still had the occasional few that did. Critics liked the art and presentation of the game, but disliked some gameplay issues: the second half of the game became a cakewalk once you progressed far enough, it was a bit of a pain to go from one end of the map to another, especially for side quests, and a bunch of party members simply weren’t complete. Most egregiously of all, the Nintendo Switch version of the game was ported by a different company and released before Lab Zero was even aware of it - which forced them to scramble again to patch it up so it was on par with other consoles.
Still, it was a better situation they were in than when Skullgirls started. They had a legit publisher in 505 Games, people were satisfied with the base game, and Mike Z mentioned how the base game would continue to be refined with gameplay changes, small additions, and guest incarnations from other indie games. NBC even announced that Indivisible would be adapted into a television program for their Peacock streaming service. Things were looking up for Lab Zero.
Everything goes wrong... AGAIN
During the production of Indivisible, Alex Ahad was let go by Lab Zero. Not much is mentioned about it except that he was growing increasingly hostile, making it difficult to work with him, and his art was not meeting the standards for the game. He left, tried to sue Lab Zero, and eventually agreed to a sizable settlement. Mariel became the lead artistic director in his stead, and the art team had to be rearranged to compensate.
Now, as Lab Zero was preparing to transition from being employee-owned, Mike Z was made the temporary head of the studio. In June of 2020, Mike Z did an “I can’t breathe” joke during a Skullgirls livestream just days after George Floyd’s death - he later apologized for this, claiming he was trying to bring attention to the issue. Soon, more people provided proof that Mike Z has had a history of sexual harassment. Kinuko chimes in as well, noting that while she tolerated inappropriate behavior for years, when she talked to Mike Z about it, he blamed her for his actions. She talked with others in the team, who came to the conclusion that Zaimont had treated all of them like this. Some Lab Zero employees resigned on their own, while others pushed for Zaimont to resign. However, as Mike was still head of the studio, he dissolved the studio board and laid off the rest of the staff.
So where does that leave everyone?

• Ahad is still doing art on his own, and gets by with commissions and his Patreon.
• Kinuko, as well as the majority of Lab Zero, created a new studio called Future Club, which has promised to create new titles with the same art style they refined from Skullgirls and Indivisible.
• Autumn Games still own the rights to Skullgirls, and with the help of some former Lab Zero devs, created a mobile version of the game. It’s surprisingly not bad, although it’s of course stuffed with microtransactions. However, they’ve apparently made enough to fund a completely new character for the game for both the mobile and console/PC versions.
• After everything with Mike Z, 505 games put out a statement which signaled the end of all development of the game, leaving it unfinished. Mike Z has been suspended from Skullgirls streams and the like, making his future in the gaming world unclear.

There’s probably something I’ve missed in all of this, but yep. I backed them twice, both for Skullgirls and Indivisible. I don’t regret it, and I’m looking forward to whatever Future Club does, but I won’t lie - I’ll always miss what could have been.

Artist: Run The Jewels
Album: RTJ4
Date Released: June 3rd, 2020
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Artist Background
The duo consisting of Atlanta rapper Killer Mike, and legendary underground produceMC El-P, known together as Run The Jewels, originally came together as a result of Adult Swim executive Jason DeMarco who introduced the two in 2011. After his 2011 album PL3DGE peaked at #115 on the US charts, Killer Mike told Jason that he wanted to make his own AmeriKKKa’s Most Wanted. Jason informed Mike, “If you want AmeriKKKa’s Most Wanted modernized, the only producer I know who comes close to the Bomb Squad-level of production is El-P”. The duo’s chemistry was immediate, as El-P went on to produce all of Killer Mike’s 2012 last solo album R.A.P. Music, and Mike featured on El-P’s final solo album Cancer 4 Cure. Mike and El’s respective albums released within a week of each other in May 2012, and the two embarked on a twenty-city US tour in the following months. After returning from tour, the pair had found a friendship growing between themselves, and made the decision to put other projects on hold and focus on the chemistry that had been sparked. Recording at an upstate NY studio beginning in April 2013, the duo re-appropriated the phrase “Run The Jewels” from the LL Cool J track “Cheesy Rat Blues", and released their self-titled collaborative album, for free via digital download, only a mere 2 months later in June 2013.
36” Chain vs. Pistol & Fist
Run The Jewels discography currently exists in a distinct pairing. With Run The Jewels as their debut, this record set the group's tone as a light-hearted, braggadocious duo with as much confidence in their abilities as swag in their punchlines. Just over a year later, the sequel Run The Jewels 2 took the foundation set from their freshman effort and dialed the insanity up to 11. RTJ2 pushed the boundaries of their aggression and flows to new heights; with incredible energy in their verses, and absolutely impeccable beats, blending El-P’s signature industrial sound with sharp synth arpeggios, chopped Zach De La Rocha vocals, and absolutely bonkers Travis Barker drums.
It was then nearly 3 years before Jamie and Mike followed up their breakout RTJ2, with Run The Jewels 3 being released again ahead of its scheduled release date via free digital download, this time on Christmas Eve 2016. Instead of these two attempting to outdo the pure insanity and in-your-face attitude found in their predecessor, Mike and El decide to evolve themselves as a group. The duo had noticeably pulled back on the swag and dick jokes which made such a splash on RTJ2, instead choosing a more subdued, electronic approach to their beats, as well as a clearly stronger political approach in their lyrics. This change in sound and style is demonstrated in the album cover’s artwork. The first two records featured the distinctive RTJ “Pistol and Fist”, with the fist tightly gripping a chain. The chain, in my opinion, represents the swag and braggadocio that drove the aggressive nature of their first two albums. In RTJ3 the chain is removed, leaving only hands that have transformed from bleeding and bandaged, to a pristine gold.
This brings us to early 2020. It’s been nearly 4 years of living in a post-Trump America, and El-P announces that Run The Jewels fourth record has been completed. Mike and El live-stream the first single “yankee and the brave” on Instagram on March 22nd, 2020. Lyrically and sonically, RTJ4 exists as the successor to Run The Jewels 3, with Mike and El again taking the good from their previous effort and launching it into the creative stratosphere. El-P’s beats are again leaning towards the synthetic, electronic side, this time with the intensity dialed all the way up to 11. From a lyrical perspective, RTJ takes the politically-charged lyrics from their predecessor, and again, up the ante, laying down some of the hardest hitting and politically poignant bars either of these two have ever spit.
Album Review
2020 was a year that none of us will soon forget. An unprecedented global health crisis kept the majority of us inside for months at a time. RTJ4 was announced on May 12th, 2020, with a release date slated for June 5th, 2020. However, with 2020 as the gift that won’t stop giving, the end of May was highlighted by the unjust killing of George Floyd. The phrase heard around the world, “I can’t breathe” instantly became a rally-cry for the oppressed to finally take to the streets to demand systemic police reform, as Floyd’s death was not the first time this phrase was uttered in an unjust police killing. In fact, a 2020 study by the New York Times showed that at least 70 people have died in police custody after using the same phrase over the past decade. As millions of American’s began organizing protests and demonstrations in the wake of Floyd’s death, Run The Jewels made the decision to release their latest chapter two days ahead of the scheduled release. El-P tweeted, just minutes ahead of the drop, “Fuck it, why wait. The world is infested with bullshit, so here’s something raw to listen to while you deal with it all. We hope it brings you some joy. Stay safe and hopeful out there and thank you for giving 2 friends the chance to be heard and do what they love”. In line with all past Run The Jewels releases, the album was made available for free digital download, two days ahead of its scheduled release date, on June 3rd, 2020.
THE RETURN (we don’t mean no harm but we truly mean all the disrespect)
RTJ4 opens with the first single, “yankee and the brave (ep. 4)”. Using the team names from their respective hometown baseball teams, Mike and El use the opening track to prove that they’re not just a hip-hop duo, they’re brothers, for better or worse. El-P kicks this installment off with rapid-fire, machine-gun esque snares, matching Killer Mike’s aggressive flow and tightly packed rhymes, before El jumps in to trade some dense rhymes as well. Mike and El depict themselves as outlaws, with Mike surrounded by cops with only one bullet remaining. He contemplates suicide instead of allowing the police to take him alive, until El-P jumps back in, offering Mike a way out, with a getaway car waiting outside. This tense situation is depicted lightheartedly in this song’s music video, which was released via Adult Swim and features the duo animated.
The trade-off between Mike and El’s short verses are reminiscent of late-80’s EPMD flows, while the production sounds like boom-bap that’s been sent to us from the future. This distinctive blend of old-school rap roots and forward thinking production is what continues to separate Run The Jewels from absolutely all of their contemporaries. While so many artists are continually playing catch-up with the latest trends, RTJ are side-stepping the trendy and moving forward with the mind-bending.
FLEXIN’ (ayo one for mayhem, two for mischief)
The second single “ooh la la” samples a Gang Star track "DWYCK (feat. Nice & Smooth)" as the basis for the chorus. I say “samples” as that’s how it is credited in the album’s liner notes, however it’s truly an interpolation of Greg Nice’s bar, slowed down slightly, and sung by El-P and Greg Nice himself. El-P is a true old-head at heart, and it’s abundantly obvious in his work, even going as far as to recruit legendary producer DJ Premiere to handle the scratching on the back end of this banger.
Out of key piano chords are looped to quickly create an unsettling aura surrounding the track, before El-P’s voice cuts through the infectious piano like a whip. Pounding, up-tempo drums are introduced after the chorus’ first iteration, creating what is possibly El-P’s first danceable beat. Lyrically, Mike and El-P initially seem scattered on this track, however the music video quickly makes their point very obvious.

”we imagined the world on the day that the age old struggle of class was finally over. a day that humanity, empathy and community were victorious over the forces that would separate us based on arbitrary systems created by man.
this video is a fantasy of waking up on a day that there is no monetary system, no dividing line, no false construct to tell our fellow man that they are less or more than anyone else. not that people are without but that the whole meaning of money has vanished. that we have somehow solved our self created caste system and can now start fresh with love, hope and celebration. its a dream of humanity’s V-DAY… and the party we know would pop off.”

The video envisions a society celebrating the fact that the class system we currently exist within has finally imploded. Money is worthless, and we have rejected the desire to bind ourselves to the constraints of capitalism. All creeds and colors unite to burn the system that has so effectively controlled us for over a century. It’s a party, and if there was a song to celebrate the end of the world as it is currently known, “ooh la la” is that song.
Mike’s last verse features a few metaphors and comparisons celebrating the destruction of capitalism, saving the most poignant for last:

I used to love Bruce, but livin' my vida loca
Helped me understand I'm probably more of a Joker
When we usher in chaos, just know that we did it smiling
Cannibals on this island, inmates run the asylum

Premo’s expertly cut scratches lead us into the equally hard hitting sample flip of “Misdemeanor”, by Foster Stevens as the basis for the beat to “out of sight”. Lending yet another nod to the old-school greats that laid the foundation for RTJ, “out of sight” samples the same track as The D.O.C.’s “It’s Funky Enough”, only adding a bouncy, electronic synth atop the inverted chord hits, and uptempo, industrial drums, to create an absolutely infectious groove for Mike and El’s dynamic chemistry to shine, rapidly jumping between each other’s two line flows in the first verse.
“out of sight” shows each MC providing insight into how each of them earned a living and achieved their current status. Mike and El’s opening verse each details themselves robbing people in order to eat. El alludes to the fact that he crossed his accomplices in crime for the whole bag, while Mike details the fact his assailant tells him it’s an “honor” to be robbed by his mother’s only son.
While El-P’s production is the obvious stand out on first listen, Killer Mike comes through with one of the most sonically pleasing and technically proficient verses of 2020.

We the motivating, devastating, captivating
Ghost and Rae relating product of the fuckin' '80s
Coke dealin' babies, never regulating, bag accumulating
It would not be overstating to say they are underrating
The pride of Brooklyn and the Grady, baby
We don't need no compliments or confidence
Our attitude and latitude is "fuck you, pay me"

The dense, intricate rhyme schemes smack you in the face, almost distracting you from Mike’s delivery and blistering flow on the verse; flexing his legendary status while paying homage to his drug-dealing past. This absolutely stunning display of technical skill, story telling, and complex rhyming illustrates how RTJ seamlessly integrates the best of both old school and new school hip-hop.
“out of sight” also features a guest verse from 2 Chainz, and he continues to lay the braggadocio on thick. Considering Tity Boi’s dedication to trap stylings, his verse feels right at home on the flex track, despite it’s late 80’s tribute sample, a considerable departure from his usual sound palette.
Up until this point, I haven’t mentioned any of the El-P’s lyrics specifically. El-P is a great rapper, but Killer Mike… Well, Killer Mike is an incredible rapper. He’s the guy who draws you in. El-P is the one who lays the foundation for greatness and Mike is the show stopper, and that’s generally the case for most RTJ tracks. But on “holy calamafuck”, El-P seems determined to make people stop and ask, “Who the fuck is this?!”.
A sharp, yet nearly minimalistic drum kit backing a heavily distorted synthesizer melody lays beneath rhymically knocking cow-bells. This aggressively set stage allows Mike and El to flex as the dynamic duo they are, until the beat suddenly takes a turn for the chaotic. A gnarled, ultra-menacing synth overtakes everything while Mike screams into the abyss, until a distorted snare, enormous 808s, and skeletal hi-hats cut through and launch the beat switch into another dimension. The minimal, yet incredibly dark soundscape allows El-P to snap in a way I have never heard from him previously. His rhymes schemes are reminiscent of an old MF DOOM lyric notebook, while his topics flawlessly combine flexing, psychedelic use, and his well-cemented legacy in the hip-hop community. Cutting and pasting a few of his bars into this review could not convey a fraction of how stunning El-P’s performance on “holy calamafuck” is.
Slightly later in the track list, making liberal use of the Ether song “Gang of Four”, “the ground below” samples and loops the sharp guitar riff and adds aggressive, pounding drums as the basis for the beat; this is finally reminiscent of the forward-thinking, stridulous production El-P has built his reputation on. Capitalising on the classic RTJ moment, Mike and El both flex in their own unique ways. Mike compares himself to Godzilla taking on Tokyo, and El-P demands respect for his name as the legend he is, threatening to smack dying children for mispronouncing his name with his middle finger to the world; his complete disregard for human life and confidence in his abilities are summed up at the end of his verse.

You see a future where Run the Jewels ain’t the shit
Cancel my Hitler-killing trip
Turn the time machine back around a century

SO¢IAL JU$T-ICE (until my voice go from a shriek to whisper...)
While the first few tracks aren’t without their social and political themes, the back-end of RTJ4 is where Mike and El start to bust out the heavy topics. “goonies vs. E.T.”. starts off light, with El-P pointing to the irony of how once he finally started to make it “big” in the industry, the world began to descend into chaos due to climate changes, increasingly obvious social injustice, and political madness. He culminates his frustration with our disregard for the Earth with a fantastic quotable.

Fuck y’all got, another planet on stash?
Far from the fact of the flames and our trash
That is not snow, it is ash, and you gotta know
The past got a wrath, it’s a lover gone mad

Mike’s verse takes the light-hearted frustration expressed by El-P, and turns the aggression to the next level. Aiming his sights against the ruling class and their society that’s been designed to oppress people for profit, who have very meticulously painted themselves as celebrities and idols to the American public. Mike accepts that he will be villainized by these people for speaking against them, but he welcomes the nefarious role, knowing that the working class will eventually eat the rich, no matter how much they are stomped into the dirt.
And this is just the warmup.
If it’s possible for a song to represent a moment in time that captures the absolute shit storm that has been 2020, “walking in the snow” is that song. It’s release coincided perfectly with the protests for George Floyd which were sweeping the nation. Killer Mike’s verse directly references the phrase “I can’t breathe”, the last words of Eric Garner, which also happened to be the last words of Floyd as well. The fact that this verse was reportedly written in November 2019 perpetually underscores the importance of the content and perfectly represents how persistent this problem is. “walking in the snow” is a true encapsulation of both a defining moment in time and an ever-persisting issue.
But he doesn’t just stop at the racial injustice. Mike goes on an absolute rant about the American education system; how it’s not designed to teach people, but to discriminate against poor populations, limiting their legitimate opportunities, and therefore disproportionately leading them into a criminal lifestyle. He calls out the media as fear-mongers, and the apathy of the American public in the face of indecency. Fortunately for Mike, by the time we finally had the chance to hear this masterpiece, we were already on our feet, using this album as a war cry to mobilize against a tyrannical government that militarized against its own citizens simply for asking that we recognize systemic racism and demanding change. Killer Mike has the best verse of the year, no doubt in my mind.
The only drawback is that Mike’s verse is so fucking good that it completely overshadows El-P’s, which is also amazing. A menacing guitar riff and haunting synths kick the track off into a bouncy groove, where El-P unleashes a flurry of internal rhymes that does not relent for about half his verse. Even adding layers of social commentary within the densely packed bars, El refuses to quit and continues on his political tirade; criticizing ICE’s detainment center practices and the “pseudo-Christians” who support them, with a bar that now lives in my head:

Pseudo-Christians, y’all indifferent, kids in prison ain’t a sin? Shit
if even one scrap of what Jesus taught connected you’d feel different
what a disingenuous way to piss away existence, I don’t get it
I’d say you lost your goddamn minds if y’all possessed one to begin with

The combination of two of the best verses spit by any rapper(s) this year and production help from El-P and long time RTJ collaborator Little Shalimar, create a bouncy, aggressive, deeply truthful banger. “walking in the snow” not only encapsulates the crux of 2020 with lyrics that will become more powerful as they age, but will also forever be associated with the Black Lives Matter movement and the determination to expose continuing racial and societal injustices.
The sonic palette of RTJ4 holds an extremely unique place in El-P’s discography. Jamie is the definition of a self-made 90’s hip-hop legend. This is the dude who put New York underground hip-hop on the map with Company Flow, and he did it with his unique flavor of dark, noisy, dense, boom-bap. Whether he was doing it with the help of Rawkus, or completely independently during his Definitive Jux run, El-P has never made music with the intention of becoming famous. Funcrusher Plus, Fantastic Damage,I’ll Sleep When You’re Dead, and Cancer 4 Cure are all highly revered as industrial, technical, abrasive, and completely unsuitable for the radio or a party. The fact that three songs on RTJ4 could easily be heard on the radio, at a party, or in a TV series credits scene is frankly, astounding. In a 2002 interview/documentary on El-P’s budding record label Def Jux, he stated that his friend bet him $500 that he could not make a beat that was “happy”. At the time of the interview, El-P said that he had not won that bet yet. While I might not qualify the beats on RTJ4 as “happy”, if you showed El-P the beat for “JU$T” in 2002, I believe he might have won that bet.
Pharell opens “JU$T” with the pre-chorus, spitting varied examples of how we’re all slaves to our current system throughout the track, over echoing snares and bouncy 808s before bright synth chords and up-tempo hi-hats burst in while Killer Mike delivers the chorus, pointing to the fact that the majority of the people featured on American currency owned slaves at one point in their lives. Mike’s verse touches on the fact that he has committed crimes to get where they are today. Mike is publicly open about his past as a drug dealer. So why is he a criminal, but Benjamin Franklin isn’t? These are the people who built our country, and they built it on the backs of slaves. He illustrates this theme with a more recent examples:

You believe corporations runnin marijuana? Ooh (how that happen?)
and your country gettin ran by a casino owner (ooh)
pedophiles sponsor all these fuckin’ racist bastards (they do)

When corporations are able to sell cannabis legally, but the government continually incarcerates people who trap, our president is a notoriously fraudulent businessman, and the people who helped put him in power run a pedophile ring, yet none of them face consequences and are allowed to continue to profit and remain in power while people suffer; well, we might be closer to slaves than previously imagined.
Rage Against The Machine frontman Zach de la Rocha also makes his mandatory feature appearance at the end of “JU$T”. As the only artist to feature on three Run The Jewels albums, Zach is essentially an unofficial member of the group at this point. His fiery verse is spit with the same “Rage” energy that set him apart in the mid-90’s, ending the track questioning his place in a capitalist society as a recipe for his inevitable demise, since his “breath”, or art, as his weapon to express himself is still being exploited for other’s profit.
Continuing with RTJ4’s heavily synthetic sonic palette, “never look back” features wavering synth leads resting above the slow-jams snappy snares and thumping bass, while a haunting voice echoes in the background. This unsettling aura provides additional gravity for Jamie and Mike to continue self-reflecting on defining moments in their childhood, and as well as how far they’ve come from those moments. Mike and El are both self-made men, and while they have a certain fondness for those gritty moments that defined them, moving forward in life is undoubtedly more important.
Skeletal drums reminiscent of a slowly pounding heart opens “pulling the pin”, before rhythmic hi-hats and textured, watery synths fluttering in the upper register resting above a bouncy synth lead, and punchy 808s, burst in. The track digs itself into a slower, marching groove and shows the duo figuratively doing exactly what the title implies. Painting a portrait of a society that has turned on itself, Mike and El are ready to pull the pin and start over.
The duo both detail their despise for the ruling class, pointing out multiple examples of how the elite have designed our society to keep poor people in their class. Simultaneously recognizing their own hypocrisy for profiting in a system that inherently discriminates; Mike reflects on his own success, knowing that living the lifestyle he enjoys is one built on oppression, and expresses the guilt that has caused him. El-P opens with a brutal metaphor for police, implying that they’re the root cause of the “wretched state of danger” our society exists within, and that the only effective corrective action is to numb yourself with drugs. Despite his advice, Jamie knows this is not a permanent solution, but one that causes more self-inflicted wounds.
The final piece of the puzzle that is RTJ4, “a few words for the firing squad” begins to close the album with ever crescending strings, and loud, thunderous drums which never seem to resolve, continuing throughout their verses. While the drums that lead to nowhere can be sonically unpleasant, the unresolved melodies are intentionally representative of their current mindsets. Their verses are reflective and grim, but simultaneously optimistic and envisions a world where tragedy is a less common occurrence.
El is grateful for what he has now but recognizes his entire life has been skewed by traumas, so out of place feels normal for him. He reflects on his current success, noting that the worst people tend to end up with the most, which makes becoming “rich” something not as desirable as it once was.
Mike opens up about the death of his mother who died while he was on an airplane, admitting his struggles to not cope with his trauma with opioids. However, his wife provides him the most important reason to stay clean “but my queen/say she need a king/not another junkie rapper fiend” while a heartbreaking saxophone solo highlights the gravity of his lyrics.
The track ends with what sounds the like wrap-up voiceover to a TV show, a conceptually satisfying ending, as the opening track “yankee and brave (ep.4)” began with El-P stating:

”This week, on Yankee and The Brave”

This voiceover paints the duo as brothers on the run from the law and crooked cops, and while this does close this “episode” out as intended, the critic in me is bothered by the slightly kitschy outro to such a spectacular album. The voices singing over and over, “Brave, brave, braaaaaave, Yankee and the Brave” would be, simply put, better left on the cutting room floor. The ending of this track alone is what knocks my score of this album down a few points. Despite its stellar lyrical content, with drums that never seem to reach that “holy shit!” moment, and the easily skippable outro, it’s upsetting to me that an album this great ends on such a low note.
Overview
RTJ4 is by far my favorite album of the year. El-P’s cutting edge approach to their sound, blended with lyrical content that continues to be more relevant by the day, the duo have come together with what is objectively their most accessible album to date. RTJ4 is the natural evolution of sound and subject matter for the duo; taking the foundation set by Run The Jewels 3 and evolving it into a more concise, more accessible, and more conceptual album. While I still personally prefer the “fuck the world” intensity and experimental nature of Run The Jewels 2, RTJ4 opens themselves up to a whole new world of exposure, and when you’re as talented as these two, you know they’re going to capitalize on it. RTJ is currently at their apex, and they’ve created an album that will make many new life-long fans going forward.
9.2/10
Discussion Points

• How does this compare to other RTJ releases? How about in comparison to the member’s solo works?
  
• Does the overwhelmingly positive critical reception of this album surprise you?
  
• How will this be looked back on in 5 years?
  
• What are your favorite lyrics?
  

from the SEC:
https://www.sec.gov/Archives/edgadata/1801170/000119312521029637/d66346dex991.htm
click for all the tables/images.
​
EX-99.1 2 d66346dex991.htm EX-99.1
Exhibit 99.1
In Response to Short Seller Firm’s Questions
📷
Andrew Still-Baxter 18 min read
From:
Vivek Garipalli, CEO and Andrew Toy, President of Clover Health
Clover’s mission is to improve every life. We do that by scaling the Clover Assistant platform across physicians to drive a meaningful positive clinical impact towards as wide a percentage of our membership as possible. We align our incentives for the Clover Assistant by embedding our software platform inside of the business of our Medicare Advantage plan. As we improve outcomes, and lower costs, Clover can pass those savings on to consumers, improving the attractiveness of our plans and spurring rapid growth. We ultimately seek to transform healthcare for each and every one of us.
Clover welcomes questions about our business, as it gives us the opportunity to share our vision and to address any skepticism, whether founded or unfounded. As you will see from our detailed,
point-by-point response to the short seller firm’s questions, the alleged “report” is rife with ad-hominem attacks, sweeping inaccuracies and gross mischaracterizations. Importantly, the short seller firm did not contact Clover, and we had no knowledge of the short seller report prior to it being made publicly available. In our view, it belies a desperate attempt for publicity while sacrificing any regard for the truth.
In addition, we would note that the report’s title specifically calls out the involvement of “The King of SPACs,” Chamath Palihapitiya, and accuses him of a dearth of diligence. This, as we will show, is completely untrue, and we suspect this was done in order to sensationalize what is otherwise a rather underwhelming piece of research. Given the market’s latest views on short sellers, we believe that Hindenburg, which takes pains to call out their altruism in saying that they are not short on CLOV stock, is foolheartedly seeking to redeem itself by posturing as a white knight of the financial markets.
We’ve put together this response as rapidly as possible. We hope you will find it extremely informative.
##

1. Did Chamath and/or Clover know about the ongoing DOJ investigation? If so, why was it concealed from investors?

Chamath and Clover were fully aware of the DOJ inquiry.
To be clear, Clover does not believe it is, or has been, in violation of any rules or regulations related to the inquiry.
We went through both an IPO and de-SPAC due diligence process, and this subject received extensive focus and attention. Consistent with the views of Clover’s outside counsel, Social Capital’s outside counsel, and independently retained outside counsel of third parties, including IPO underwriters’ counsel, we concluded that the fact of DOJ’s request for information was not material and was not required to be specifically disclosed in our SEC filings.
How could a DOJ inquiry not be considered material information? As heavily regulated organizations participating in Medicare Advantage, Clover and its peers receive frequent requests for information from regulatory bodies. These are typically confidential. We promptly respond to these requests as and when they come in. As the short selling firm points out, the DOJ also often reaches out to ex-employees, including by civil investigative demands, as part of their information-gathering process.
For absolute clarity:
•
Clover Health believes it has made all appropriate disclosures, which were reviewed and vetted by outside counsel to all parties.
•
Clover has not received any civil investigative demands or subpoenas from the Department of Justice.
•
Clover has received a request for information from the Justice Department, to which, as we do with all requests from regulatory bodies, we responded. This was on a voluntary basis.
•
Clover has conducted a detailed review of matters potentially addressed by the DOJ request for information and has concluded that it is in compliance with all laws and regulations material to its business.
•
Up until the publishing of the short selling report yesterday morning, Clover was unaware of any other ongoing investigations of the Company, its officers, or any companies with which they are affiliated.
•
Following the report yesterday, Clover received notice of an investigation from the SEC. We believe this inquiry is based on the short selling report issued yesterday morning.

1. Is Clover aware of any other regulatory investigations into the company or Vivek Garipalli and his related companies? If so, what are the details?

Clover is unaware of any other ongoing regulatory investigations, except, as noted above, following the short selling firm’s report yesterday morning, Clover received an inquiry from the SEC. We believe this request is based on the short selling report issued yesterday morning.

1. Has Clover received any subpoenas or civil investigative demands from regulators? If so, how many and from which regulators?

No. Clover has not received any civil investigative demands or subpoenas from the Department of Justice. Clover has received a request for information from the Justice Department, to which, as we do with all requests from regulatory bodies, we responded on a voluntary basis.

1. Why does Clover’s subsidiary, “Seek Insurance” operate a website called “SeekMedicare.com” claiming to offer “independent” and “unbiased” advice on selecting Medicare plans without disclosing that it is owned by a Medicare plan provider, representing a blatant conflict of interest?

Seek Medicare is a startup that was incubated and set up as a separate company from Clover — it has its own management team, outside investor (a nationally-recognized public company), board and employees. Clover and the outside investor share in governance of Seek at the board level, including decisions such as the nomination of the CEO. Clover has the right to appoint a Board Member (currently Andrew Toy, Clover’s President & CTO), the outside investor has a right to appoint a Board Member (currently an employee of the outside investor), and the third Board Member, the CEO, must be mutually agreed upon. In addition, this investor has a unilateral contractual option to convert its investment into 50% equity ownership of Seek.
It’s not unusual for payors to create or have stakes in FMOs. What makes Seek different is its fundamental belief that Medicare consumers are simply not well-informed and that hurts their ability to get affordable, great healthcare. Seek is purpose-built to deliver against that problem. In order to make sure it could effectively pursue its goals, Seek was set up as a separate company, and it has raised nearly all of its capital from the outside investor.
At Clover, we obviously want everyone to pick a Clover plan, but we want to earn that business by providing great and affordable healthcare coverage. The most important thing is that Medicare eligibles end up in the right plan for them.
One final note here: Seek is a brand new startup, and its website is still in version 1.0. Please take a look back next week when its planned version 2.0 comes out.

1. Clover’s subsidiary, Seek Insurance, claims on its website “We don’t work for insurance companies. We work for you” despite literally being owned by Clover, an insurance company. What is your response?

While Seek is an affiliate, as we said, it operates separately from Clover, with its own financing and its own goals, which are to provide neutral, objective advice to Medicare eligibles and to empower, educate and assist them. Seek offers Clover plans but, more importantly, Seek also offers many more coverage options. In fact, in every market in which Seek operates, Seek endeavors to offer at least 80% of available plans in that market.
Even though Seek began very recently, it was able to stand up its agency in the most recent AEP and also launched a pilot in ~100 retail locations in six states, with a focus on markets in Georgia, New Jersey and Texas.
If you want to see the objectivity of Seek, we think the results of Seek’s initial sales period speak for themselves:
Percent of Seek sales, by insurance plan, in the most recent AEP:
1.
Cigna: 20%
2.
Humana: 20%
3.
CVS/Aetna: 17%
4.
Clover: 13.5%
5.
UnitedHealth Group: 11.3%
6.
WellCare: 8.5%
7.
Horizon: 5.7%
8.
Other (unrelated to Clover): 4.0%
In terms of scale, applications from Seek totaled less than 1% of the total applications Clover received in the most recent AEP.

1. How much has Clover paid B&H Assurance, the undisclosed outside brokerage firm run by Hiram Bermudez (its Head of Sales) since inception?

Clover has paid approximately $160k directly to B&H since 2017.
Hiram has disclosed the following in connection with his B&H relationship:
•
He does not receive any compensation, direct or indirect, from B&H Assurance for any work related to Clover.
•
He maintains a 50% ownership interest in B&H Assurance, which he has owned since before he joined Clover.
•
Hiram’s only work on behalf of B&H Assurance is monitoring compliance and negotiating contracts, from time to time, with parties that do not include Clover.
•
He maintains an ownership interest in B&H Assurance so that, in case he separates from Clover, he has the option to go back to the brokerage agency he co-founded and not have to start over.
As a general matter, Clover engages with brokers in each of its markets in order to distribute its plans. This is standard operating procedure in the Medicare Advantage space. Broker payments are statutorily defined by state insurance regulators, broker scripts are actively monitored by both internal compliance and CMS — including via “secret shopper” and other methods — and we take our obligations to CMS, our members and potential members very seriously. We believe our marketing materials and the brokers that represent us accurately reflect and portray our plans to our members and potential members and do so with transparency and integrity.

1. What portion of Clover’s business has been referred by B&H Assurance since inception? How many members?

Approximately 8,200 of our current members were referred by B&H Assurance to Clover.
While B&H has been a strong producer, we strongly disagree with the statement that B&H alone has “fueled” Clover’s growth. We believe that all Medicare Advantage plans have key producer relationships, and to say those relationships somehow illegitimately fuel growth is a misnomer.
We believe Clover plans are appealing because they are often amongst the lowest cost plans in our established markets, and they offer the same cost-sharing for in-network and out-of-network primary care and specialist visits. As we expand across the country, we intend to establish relationships with additional brokers and key producers.

1. Former employees told us that the relationship between Clover and B&H Assurance was transferred into the name of Hiram Bermudez’s wife “for compliance purposes”. NAIC filings confirm it was transferred into his wife’s (maiden) name weeks after the go-public announcement. What is the explanation for this?

The statement underlying this question is false and misleading. The reason that B&H Assurance’s appointment list does not include Clover is that B&H has what is referred to as a “downline” relationship with Ritter Insurance Marketing, which contracts directly with Clover (note that it appears B&H does contract directly with a number of other plans based on the cited NAIC record page). Rather than a nefarious circumstance, this is also a standard construct in the Medicare Advantage world.
Further, the statements interpreting Yesenia Rivera (Bermudez)’s NAIC profile are incorrect in their conclusions: (1) there was no transfer of any relationship between Clover and B&H Assurance from Hiram to his wife; (2) the NAIC filing simply shows that on August 14, 2020, Mrs. Bermudez was directly appointed by Clover Health to be able to sell Clover plans as an agent.
For context, Hiram underwent a major organ transplant surgery at the end of last summer due to chronic kidney disease. He, thankfully, is doing very well healthwise after the surgery. Hiram informed us that he and his wife made a decision for her to go through broker certification so that, if his condition deteriorated further, she would be able to take over his 50% ownership in B&H.
No one should ever feel compelled to share this type of personal and private health information publicly, but we deeply respect Hiram’s desire to disclose this to make clear he had no malicious intent. Hiram is highly mission-oriented and an amazing teammate at Clover, and pathetic attempts to slander him are shameful.

1. Will Clover produce the agreement showing the transfer of the relationship into Hiram Bermudez’s wife’s name? Who signed off on the agreement and which senior members of management knew about the deal?

See previous response.

1. Is Clover aware that disclosure of significant transactions with key senior employees is something investors like to know about, so they can be made aware of potential material conflicts of interest?

Consistent with applicable laws and regulations, Clover has conflict of interest policies requiring employees to disclose any existing or potential conflicts of interest. Clover follows SEC rules and regulations regarding the public disclosure of these relationships.

1. Was Chamath aware that the DOJ was looking into issues of potential upcoding when he mentioned, unprompted, on CNBC “they don’t motivate doctors to upcode or do all kinds of things in order to get paid”?

We agree (as does Chamath) that upcoding is a significant problem in the Medicare Advantage industry, and Chamath was fully aware that we have built the Clover Assistant to address the problems in the approaches used by other insurers.
To be clear, Chamath’s statement that “we do not motivate doctors to upcode or do all kinds of things to get paid” is accurate:
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We pay Clover Assistant Primary Care physicians a fixed, flat payment per office visit.
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Unlike other plans, we never compensate more for agreeing with the Clover Assistant. We never pay less for disagreeing with the Clover Assistant. This payment is fixed and guaranteed, and physicians use their own judgment on what they believe is clinically correct in relation to their direct understanding of the patient.
•
Put another way, a clinician could choose to disagree with every suggestion, which means there are no additional diagnoses and no additional risk adjustment codes, and they still get paid the exact same amount as if they did agree. There is NO financial motivation that we provide to physicians to answer in any particular way.
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This is why we specifically do not believe in capitation contracts the same way that others do. These contracts often share risk adjustment back to physicians — i.e., an indirect way to reward them for coding more. Clover does not support those types of strategies.
To be clear, the focus of the Clover Assistant is driving clinical value. Because of its important role in early and improved detection of disease burden, accurate risk adjustment is one of the byproducts of clinical engagement with the Clover Assistant. Notably, however, much of the content in the Clover Assistant has absolutely nothing to do with risk adjustment. More than 50% of the clinical data we capture through Clover Assistant visits has no risk score impact whatsoever.
Here are just a few examples of the Clover Assistant driving clinical value:
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Colorectal Cancer Screening
Medication Therapy Management:
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For Chronic Kidney Disease
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For Statins
Addressing risk:
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Fall Risk
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Mortality Risk
Covid — 19 Response
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Mail Order and Home Drug Delivery

1. Clover reported that “onboarded” physicians used Clover Assistant for 92% of member visits in 2019, but never defined “onboarded”. We found that less than half of Clover’s in-network doctors are considered “Clover Preferred”. What is the definition of an “onboarded” physician? What percentage of Clover’s in-network doctors actually use the Clover Assistant?

This is a good question. Similar to enterprise software, there are two phases of bringing on physicians to Clover Assistant:
Contracting: Where we explain the benefits of Clover Assistant to the physicians and they have agreed to use the software.
Onboarding: Where the physicians have received their initial training and have created their accounts, and we have answered their questions. Basically, they’re ready to use the software. We also refer to the physicians as the “Live” physicians.
We use the Onboarded/Live number (as opposed to Contracted) when discussing engagement because that correlates to the physicians that are trained and ready to use the Clover Assistant. We typically have a pipeline of Contracted physicians waiting to be onboarded at any given time, and our goal is to go from Contracted to Live within 60 days.
Speaking to the second question, currently 22% of all in-network Primary Care Physicians are Live. This correlates to 4% of the total in-network physicians (including PCPs, specialists, etc.), but the Clover Assistant is currently built as a tool for PCPs, so we believe 22% is a more useful number.
That said, we don’t view either of those figures to be particularly relevant to the scalability and impact potential of the Clover Assistant. Instead, we focus on membership coverage. More specifically, as of YE 2020, 56% of our membership were attributed to one of those 22% Live PCPs. An additional 11% are attributed to a PCP who is contracted but in the onboarding pipeline (bringing us to 67% total coverage for Clover Assistant as of YE 2020).
This is because as we bring on physicians, we focus on contracting and onboarding those with more Clover members first, so a disproportionate number of our members are attributed to Clover Assistant-Live PCPs. As we continue to deploy the Clover Assistant, we intend to bring on the remainder of these physicians and we expect to see these numbers converge more. Right now we’re very proud of that 67% coverage number of all Clover members as of year-end 2020.

1. If Clover’s software is so “delightful” to use, why does Clover have to pay doctors extra ($200 per visit) just to use it?

We think this is a big part of the innovation model of Clover and why it’s so important that we build this tool internally as a payor.
The Clover Assistant is a SaaS-type enterprise clinical decision tool, but rather than charge physicians to use it (like regular software startups), we instead reimburse PCPs to encourage them to use it and to recognize the incredibly important role PCPs play in assessing and taking care of our members and controlling costs. PCPs receive less than 5% of total medical expenses in the US, and we believe that to solve the ballooning health care expenses in our country, we need to shift more of our focus, resources, and compensation to primary care doctors.
To be clear, the “extra $200 per visit” is not incremental or “just to use” the Clover Assistant, but represents the overall payment that covers both the PCP office visit and the use of the Clover Assistant. This translates to roughly twice the traditional Medicare fees paid to PCPs for an office visit, more in line with fees paid to specialists.
Most critically, this is a flat fee. We don’t pay them more to agree with us, or less when they disagree. A lot of programs effectively do this, and that creates moral hazards like upcoding or trying to skimp on care. We pay the flat fee because we want to reward PCPs for great data-driven primary care without creating those moral hazards and bad incentives.
Speaking to the delight point — we measure this in an objective, standard way in the form of Net Promoter Score surveys. We run these surveys within Clover Assistant for all Clover Assistant users on a quarterly basis to see how we’re doing in terms of user satisfaction and delight. We’ve traditionally received a score between 55–63 which we think is excellent — particularly for healthcare.
Here’s a screenshot of our NPS survey:
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Clover Assistant NPS Survey
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Our most recent NPS results from the end of last year.
As you can see, most of our Clover Assistant survey respondents give us very high ratings. There are a few “middle” scores, and there are, of course, some detractors who give us low scores. When we receive detractor feedback, we strive to send our Product and User Research teams to interview these users to find out how we can do better. We’re not perfect, but our fast iteration rate (releasing a new Clover Assistant version on average every 3–4 weeks) helps us continuously improve our platform.

1. Multiple doctors explained that it was difficult to remove prior diagnoses from the Clover Assistant. Is Clover aware of this? And can Clover guarantee that in future versions of the software doctors will be able to remove prior diagnoses, so as to ensure accuracy and cost efficiency?

For clarity, every diagnosis that appears in the Clover Assistant is for physician consideration, and they can choose to tell us they don’t think that diagnosis is currently relevant. Here’s a screenshot of how it’s shown.
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Every suggestion made is based upon clinical data that we have at Clover and personalized for each specific patient. Then the physician can tell us whether they can confirm the diagnosis. If they cannot confirm, they can easily select that option (shown above), and we ask them to share the reason why so we can update our internal data.
Note that when a physician tells us a diagnosis is not currently relevant, we do not show that diagnosis again that calendar year unless there is a new reason to believe that the diagnosis applies (e.g., new clinical data).
We may also resurface a diagnosis the following calendar year for reconfirmation. There’s a reason for this: many chronic diagnoses may come and go in terms of their diagnosis state. For example, diabetes may resolve (removing the diagnosis) if a patient loses weight, but if the patient puts the weight back on, diabetes will come back. Or, active cancer may go into remission, then unfortunately return. As such, it’s clinically appropriate to track these previous diagnoses.
Bonus Question: Is Clover Assistant actually helpful to physicians in providing better care above and beyond their EHR?”
This wasn’t actually in the list of questions addressed to us but was implicit in the short-selling firm’s commentary, so we wanted to hit this on the head, too.
We are incredibly proud of the ways, in only a few short years, we have been able to build the Clover Assistant platform in order to support PCPs in providing better care for our members. The Clover Assistant is not attempting to be an EHR; rather, we are focused on building a product that is supplemental to the EHR and driven by physician feedback.
We’ve supported the rapid transition to remote visits during the outbreak of COVID-19 this past spring, we’ve supported members getting their medications delivered to them when they couldn’t leave their home, and we’ve gotten clinical information otherwise not available to PCPs into the hands of those most equipped to utilize that information.
We also surface evidence-based protocols specific to a member’s disease profile. To be clear, we do this in order to help our members receive the right medications, access the right testing, and achieve better outcomes. By doing so, we pay more money now in order to decrease costs and patient suffering down the line.
If you take a look at our most recent investor presentation, you can easily see a view of that functionality on page 10. On page 19 of the same deck, you can also see a view of the Clover Assistant’s impact outside of accurate diagnosis capture.
We are just starting this journey, and know that, like with any software, there are plenty of opportunities for fine tuning and further improvement. But we are motivated by those challenges and solicit that feedback from the healthcare community and our in-network physicians regularly.
— The Clover Product, Clinical, and Engineering Leads

1. A former employee explained that Clover handed out gift cards to doctors and nurses to generate patient leads, a practice prohibited by CMS. These gift cards were justified as being for everything but recruitment, including “morale,” a “thank you,” “motivation,” and “friendship.” How do you respond?

Clover does not provide gift cards to doctors and nurses to generate patient leads.
Clover prides itself on a strong culture of compliance. If we were to discover any violation of CMS regulations or any applicable law or regulation, our compliance department would take decisive and strong corrective action.

1. Does CEO Vivek Garipalli deny that his CarePoint hospitals at one point charged the highest emergency room prices in the entire nation?

It is important to note that CarePoint is a separate and independent business entity, with different management teams, investor structures, and boards of directors. We do not comment on its operations. We also do not respond to ad hominem attacks against our officers.

1. Why did CEO Vivek Garipalli make a secret $1 million donation to the Mayor of Jersey City?

The aforementioned contribution to a PAC has been reported in the media. Like any private citizen, Vivek makes contributions. As our first market, New Jersey is near and dear to us, and Vivek believes the Mayor of Jersey City has done a commendable job of attracting businesses and developing affordable housing policies.
Vivek also donates to other causes in New Jersey and elsewhere — such as a $1MM contribution to the Goodwill Rescue Mission homeless shelter in Newark, NJ.

1. Why has Clover had such extensive executive turnover, with 3 CFOs, 3 COOs, and 2 General Counsels in the last 4 years?

Clover has evolved significantly over the past four years, and we needed different people with different skill sets at each stage of our journey. We are grateful for the contributions of every one of our employees, past and present, and are proud of our current management team. As is evident from our team’s background, they bring extensive experience across their areas of expertise. We believe we should always be looking to bring on more and more talented and mission-oriented individuals as we evolve and grow.
In particular, we are grateful to our co-founder Kris Gale for his work as the original Clover CTO to build the fundamentals of the Clover data platform. When Andrew Toy, our current President and CTO, came on board, one of the first things he did was focus on the creation of a way to turn data into improved care by physicians. The result of that was the Clover Assistant.

Updated January 8, 2020
DISCLAIMER: I wear my mask, wash my hands and try not to touch my face. I limit my social interactions. I follow most rules, even though many don't make sense. This is NOT a “COVID hoax” or “anti-vaxxer” post.
I agreed with lockdown measures that were taken in March 2020, when a lot was unknown. We did not have full knowledge of whom the virus affected and we did not have better treatment measures.
But science and data over the last 10 months has clearly shown that our approach needs to change.
“Where all think alike, no one thinks very much” Walter Lippmann, 2-time Pulitzer Prize winner
SO WHO IS COVID DEADLY FOR? Data from government public health websites.
PUBLIC HEALTH CANADA https://health-infobase.canada.ca/covid ... s.html#fn1
Out of 16435 COVID related deaths in Canada, 89.2% are in the 70+ age group.
Percentage of COVID deaths in the 0-49 age group: 1.1% (this is a total of 192 COVID related deaths in Canada)
NOTE: It is important to make the distinction that just because someone dies WITH COVID does not mean that they died BECAUSE of COVID. COVID deaths may be inflated due to this distinction. False positive cases may further inflate this number (more on this later).
LONG TERM CARE HOMES https://ltc-covid19-tracker.ca
70.3% of all COVID related deaths in Canada have been in long term care homes
PUBLIC HEALTH ALBERTA https://www.alberta.ca/stats/covid-19-a ... istics.htm
Average age of COVID-related death in Alberta: 82 years old.
Out of 1241 COVID related deaths in Alberta, 97.1% have had 1 or more co-morbidities.
Here is the breakdown: * 3 or more comorbidities: 75.0% * 2 comorbidities: 14.4% * 1 comorbidity: 7.7% * No comorbidity: 2.9% (highly likely to be in the older age demographic)
NOTE: Comorbidities included are: Diabetes, Hypertension, COPD, Cancer, Dementia, Stroke, Liver Cirrhosis, Cardiovascular diseases (including IHD and Congestive heart failure), Chronic Kidney disease, and Immuno-deficiency.
STATSCAN REPORT: COVID 19 DEATH COMORBIDITIES IN CANADA (from the first wave, until July 31, 2020) https://www150.statcan.gc.ca/n1/pub/45- ... 87-eng.htm

• 90% of all COVID-involved deaths had at least 1 comorbidity.
• ALL COVID-involved deaths in Canada under the age of 45 had at least 1 other disease/condition certified on the medical certificate of death.

WHAT DOES THIS ALL MEAN?
We must acknowledge that these stats are all people and each number represents a human loss. We are all empathetic to that.
Now, the data clearly states the obvious: 1. A LARGE majority of COVID related deaths have and are still occurring in long term care homes. 2. COVID is a deadly threat to persons with co-morbidities and/or persons above the age of 70. It is not a LONE killer by itself. Note that any disease is dangerous to this population set, not just COVID. 3. For a healthy person below the age of 70, there is greater than 99% chance of COVID recovery. This is no worse than the flu.
This is all good news, because we know who COVID affects and who we desperately need to protect. We also have other good news…
GOOD NEWS #1: VITAMIN D3 DATA
Vitamin D acts a key function for strengthening our immune system and is primarily acquired through sunlight exposure. There is a strong correlation that a Vitamin D deficiency will likely result in a serious case of a COVID infection, lowering hospitalizations, deaths and long-term COVID effects.
Vitamin D3 was shown to be deficient in 80% of hospitalized COVID patients in Spain [2].
The most comprehensive scientific study of Vitamin D deficiency in correlation to COVID patients was conducted in India over a span of 6 weeks [3]. Out of 154 patients, 63 severe cases needed ICU. Out of these, 61 patients (97%) had a Vitamin D deficiency. Overall, India has shown to have a lower strain of COVID, possibly because Vitamin D deficiency hits a much lower percentage of the population (due to more sunlight).
The UK government has already promoted Vitamin D to the entire population and is giving out free vitamin D handouts to persons most at risk for COVID [4].
4000 IU daily is recommended to create a strong immune response to COVID [5].
GOOD NEWS #2: BETTER COVID TREATMENTS
Doctors have improved the mortality rates of severe COVID cases, using better ICU procedures. A person hospitalized in March 2020 was 3 times more likely to die than someone hospitalized in August 2020 [6].
GOOD NEWS #3: ASYMPTOMATIC %
At least 17% of the population is estimated to be asymptomatic to COVID [7]. Many are immune to the danger of COVID.
The converse argument, of course, is the possible asymptomatic spread of infection which is difficult to detect. However, if an asymptomatic person does not interact with the vulnerable portion of the population, then what difference does it make?
Instead, why not focus on controlling spread in the SMALLER vulnerable demographic where it really matters?
BAD NEWS #1: LOOKING AT CASE NUMBERS USING FLAWED PCR TESTING
PCR tests, in their current form, are faulty and ineffective [9]. In Dec 2020, the World Health Organization confirmed what was known for months; that high cycle threshold PCR tests result in a high amount of false positives and that testing labs around the world need to reduce their threshold values [10]. The US FDA has also warned of the risk of false positives from PCR tests [8].
It is important for everyone to understand what a Polymerase Chain Reaction test does. A PCR test is looking for RNA, which is a small particle of any cell (just like DNA). In this case, we are looking for the coronavirus RNA.
The amount of RNA in a saliva/nasal swab is very small, so PCR tests amplify the sample to help detect it. Each cycle doubles the material. One becomes two. In the next cycle, two is amplified to four, and so on. In Canada, and most of the world, specimens are amplified to a minimum value of at least 35 cycle thresholds (Ct). That creates over 17 billion copies of the material, enough to be able to detect any viral particle.
However, a Canadian National Microbiology study stated that specimens with Ct values greater than 24 were found to be viral culture negative [11]. What does this mean?
That if RNA is found at a Ct value of 35, the virus cannot be cultured. It cannot be grown. Because it is DEAD. The RNA is simply a remnant of a past COVID infection. A FALSE POSITIVE CASE. This case does not reflect an active infection nor is it contagious. That person was infected weeks or months ago.
This has been known irrefutable scientific fact for months: PCR tests are not reliable unless we REDUCE Ct values. Why are we creating worldwide mitigation policies based on this?
Lastly, and most importantly, using number of cases for policy making does not reflect the bigger picture. Someone with little or no symptoms of illness is NOT a case.
Instead, our main concern should this: How many of those cases are getting HOSPITALIZED and who is DYING?
THE BAD NEWS #2: LONG COVID
Long term effects of COVID; persistent symptoms such as fatigue, headaches, respiratory, brain and heart issues can continue for weeks and months for some COVID cases. While there is still more research to be done, here is what we know so far.
King’s College London and the UK National Health Service have compiled the largest data set on this topic, using information from 4182 confirmed COVID cases [12]. Here was the breakdown of how many experienced long COVID, by duration of symptoms. The study also states that these numbers were comparable to Sweden and USA.

• 4 weeks: 13.3% (1 out of 7 cases)
• 8 weeks: 4.5% (1 out of 20 cases)
• 12 weeks 2.6% (1 out of 50 cases)

The susceptibility to experience long COVID is increased by the following factors, but can occur in low proportions in healthy individuals as well:

• Increased age
• Severity of COVID infection (i.e. number of COVID symptoms experienced in the first week)
• Obesity

Long COVID is a definitely a concern, but it does not warrant ignoring the negative long-term health effects of a lockdown.
BAD NEWS# 3: LOCKDOWNS DO MORE HARM THAN GOOD
If you believe that a lockdown puts life and health ahead of the economy, you have been gravely misled. Lockdowns kill and destroy more lives than save lives.
The World Health Organization themselves do not advocate for lockdowns as the primary means of control of this virus [13].
The first and very comprehensive cost-benefit analysis of a lockdown in Canada was performed by Dr. Ari Jaffe, an infectious disease expert, who initially supported lockdowns but is now a strong opponent. His study concluded that the lockdowns in Canada will result in 10 statistical lives lost for every 1 COVID life saved [14].
Reasons for these lockdown deaths is due to restricted medical care such as

• delay of elective surgeries
• undiagnosed heart and cancer patients
• lack of accessible treatment for current patients

Moreover, the following repercussions of a lockdown are also not taken into account. All of these have a negative impact on life expectancy and illness.

• Mental Health
• Social Isolation (top 3 predictor of heart disease)
• Suicides
• Domestic Abuse
• Drug Abuse and Alcoholism
• Poverty and accompanying Malnutrition/Starvation
• Children’s Education and Childhood Trauma

The Canadian Mental Health Association concluded a study on all of the above, with 3027 participants Canada wide [15]. Here are some highlights:

• 10% experienced recent thoughts or feelings of suicide (up from 2.5% pre-pandemic).
• 40% have had their mental health decline during the pandemic
• 27% are worried about putting food on the table
• 18% report fearing physical and mental abuse while trapped at home
• Ontario experienced a 38% increase in drug overdose deaths during the 15 weeks of the first wave lockdown[36]

A Canadian Psychiatric Research report has projected an increase of between 418-2114 excess suicides in Canada (depending on 1.6% to 10.7% increase in unemployment) [16].
Lastly, lockdowns are causing our general health and immunity to be being lowered. We are locked down at home, with increasing mental health issues, stress, lack of sunlight and lack of exercise. This further lowers our bodies’ response to any sort of infection, including COVID.
Using lockdowns, we have only looked at short term gratification, while disregarding long term destruction.
BAD NEWS #4: HOSPITAL OVERCAPACITY
The ideal measure to avoid a lockdown is to increase hospital capacity as much as possible.
Unfortunately, hospital space and staff shortages have always been a problem, even before the pandemic [17]. Every flu season in the last 3 years has had hospitals running at over capacity. Don’t let COVID distract you from the historical failures of the government.
This may sound ludicrous, but a simple online search will prove it. Here are a few news articles from previous years addressing that concern:
Dec 2017: https://bit.ly/38wEqwn
Feb 2018: https://bit.ly/2M5dIU4
Jan 2020: https://bit.ly/3nZ5laR
Canada, despite being one of the biggest spenders for health care, sits far behind for services provided. As of 2019, out of 28 developed countries, here is how Canada ranked [18]:

• Doctors: 26th (2.8 doctors per 1000 people)
• Hospital Beds: 26th (2 beds per 1000 people)

Between Mar 15-Jun 13, 2020 (the first lockdown), the Ontario surgical backlog had an average increase of a whopping 11413 surgeries per week. This led to a total of 150000 backlogged surgeries, which is estimated to take 84 weeks to clear (almost 1.5 years) [19].
We were completely unprepared for additional medical concerns, let alone a pandemic. Why has the government not addressed the hospital capacity issue? This is the most IMPORTANT factor in avoiding a lockdown. Why is the public paying the price for government inadequacy?
BAD NEWS #5: CANADA’S ECONOMIC SITUATION
Socio-economic factors are the greatest indicator for the health of the population. Lack of finances do affect mental health, physical health and life expectancy. Look at any third-world country. Look at the impoverished demographic of any population set.
Canadian Annual Deficit:
2019: $19.8 Billion [20]
Projected for March 2021: $381.6 to $398.7 Billion [21]
This is an increase in deficit of almost 2000%. THIS IS REAL. This is NOT a typo. Imagine your $20,000 student loan becoming $398,000. By far, this is the HIGHEST deficit in Canadian history.
Within the last year, Canada has had the worst increase in Debt-to-GDP ratio in the world, which has risen by 80% [22]. We have spent the most amount of money in proportion to what our economy generates.
Our Minister of Finance resigned during the summer. A day after the Fall Economic statement was released on Nov 30, 2020, our Deputy Minister of Finance also resigned.
Our current Minister of Finance has no background in this field. Watch this video of her in Parliament: https://fb.watch/23ypw_Ru1_/
The following industries have been devastated: Aviation, Tourism, Entertainment, Hospitality, Restaurants, Fitness, Retail
Our official unemployment rate in October 2020 was listed at 8.9% [23]. This is deceiving. This is artificially held low by government subsidies and by ridiculous requirements to be considered “unemployed”.
The true unemployment number could be as high as 30%, if not more [24]. That means a staggering 10 million Canadians unemployed.
218000 small-to-medium businesses are at risk of closing permanently [25]. That is 1 out of every 5 businesses. This was based on July 2020 data, before a second lockdown was announced, and is clearly much worse now.
On the other hand, large corporations are thriving. The price of a lockdown is not equally borne across the Canadian population.
We are all in the SAME storm, but not the SAME boat.
WHY IS THE GOVERNMENT STILL IMPLEMENTING SUCH DAMAGING POLICIES?
This all started with a wildly incorrect and catastrophic model of COVID deaths by Dr. Neil Ferguson, from the Imperial College in the U.K. He projected that, unmitigated, COVID-19 would kill 326,000 in Canada this year [26]. Similar projections were made for other countries. Dr. Ferguson’s faulty projections, without being reviewed, led to a swift global lockdown and mass hysteria.
Using the Wuhan lockdown as a example, with a “75% reduction in interpersonal contact rates” however, he predicted deaths would fall to under 46,000 in Canada. Coming to the end of 2020, we are at approximately 15000 COVID related deaths in Canada [1]. While that is still a tragic number, it is nowhere close to what was predicted.
Dr. Ferguson has a history of incorrect modeling, apart from COVID. [26] [27]

• predicted 40000 COVID deaths in Sweden by May 2020, with no lockdown. By then, Sweden actual deaths were under 3000.
• 2002: predicted 150000 deaths from Mad Cow Disease. Actual toll was 2704.
• 2005: predicted 150 million people would be killed by the bird flu. Between 2003-2009, actual toll was 282.
• 2009: predicted swine flu could lead to 65000 U.K. deaths. Actual toll: 457 people.

In March 2020, Dr. Ferguson admitted that his COVID modeling was based on a 13-year old computer code that was intended for a “feared influenza pandemic”.
We shut down the world based on this? No one looked for a second opinion? His reckless advice set a dangerous precedent for lockdown policies and abuse of human and constitutional rights.
If the government realized and changed their approach now, it would essentially mean admitting they are wrong. (Personally, I feel they have succumbed to tunnel vision).
How can they reverse course without getting politically skewered for going all in on what is now by far the largest public spending campaign ever, the most significant restriction on free society ever and the greatest peacetime damage ever inflicted on a generation, socially and economically, in modern history when it turns out it didn't make much of a difference? (Credit: Josh Kocher)
Instead, politicians have used the new “science” of DEMAGOGY - political activity or practices that seek support by appealing to the desires, prejudices and emotions of ordinary people rather than by using rational argument.
Implement measures that make us FEEL safe instead of what is ACTUALLY safe. With only COVID in the spotlight, actions are based on “optics”. As long as COVID lives are down, why bother with the collateral damage from a lockdown and its accompanying non-COVID deaths? Politicians don’t have to wipe that blood off their hands. Ignorance is bliss. Let’s save 1 COVID life that is in the public eye, but it will cost 10 lives down the road, not in the public eye. This is known as the Corona Dilemma (see attached pictures) [14].
If we had always put health ahead of the economy, here’s what would have happened a long time ago.

• Alcohol would be banned
• Tobacco would be banned (21918 deaths/day globally) [14]
• Highly processed and fried foods would be banned
• MORE climate change and air pollution prevention measures would be put in place.
• Driving would be banned (3699 deaths/day globally) [14]
• We would instill a lockdown during every flu season to conserve hospital capacity. NOTE: 230000-650000 people die globally of the common flu every year [28].

Doing the above would save millions of lives globally. But we accept those risks despite high fatality numbers, in order to stimulate the economy. We leave the decisions to drive cars, consume alcohol, eat fried foods and smoke in the hands of the people. (Yes, they are not CONTAGIOUS so it’s a different form of threat, but a death is a death, specially if it is statistically preventable).
Another important point to consider is that politicians are making decisions while being completely protected from the consequences of their decisions. Their salary stays the same and their large pensions fully protected. This is a position of PRIVILEGE.
WHY IS THE PUBLIC SUPPORTING THESE POLICIES?
For the general public, there are many working from home with pay. They have little to lose with a lockdown, so it is easy to support it. Again, a position of privilege. They are unaware of our country’s disastrous economic situation or the dangerous effects of a lockdown.
But more importantly, public support is being driven by mass hysteria; from the fear-mongering and sensationalizing of news by irresponsible journalism and incompetent politicians.
QUESTIONS FOR THE GOVERNMENT
QUESTION: Why are high cycle threshold PCR tests still being used as the lone source for creating broad policies, despite their known inaccuracy and unsuitability? Can we stop with the constant regurgitating of daily case numbers?
QUESTION: Why are long term care facilities still experiencing COVID related deaths and not being protected better?
QUESTION: Why is the rest of Canada shut down when a distinct majority of the COVID related deaths are occurring in long term care homes, in age groups of 70+ and persons with co-morbidities?
QUESTION: Why do thousands of small businesses have to suffer when there is no proof that they are responsible for COVID transmissions?
Ontario COVID-19 Science Advisory Table [29]: Restaurants, bars and clubs were the source of 0.7% of all COVID transmissions in Ontario. In fact, 58% of COVID cases do not know how and where the person was infected. The primary known source, close contact, adds up to 45% of Ontario COVID transmissions [29]. This means an unmasked setting for a prolonged period near someone close to you.
Have we seen Walmart and Costco take the contact information of every customer that enters the premises? No tracing = no cases = let them stay open.
Our politicians are blindly flailing at theories and superstitions to control this virus. How can a politician rob someone of their entire livelihood based on a hunch?
QUESTION: What is considered essential? Who decides this? Why is the LCBO (alcohol store ) open but gyms are not? To every person who is about to lose their job or business, is that not considered ESSENTIAL?
QUESTION: Why is a cost-benefit-result analysis not mentioned in any government policy?
QUESTION: Why has the government not put out a simple disclaimer to increase our Vitamin D3 intake, especially during the winter months? This one measure can possibly yield the MOST result with LEAST effort and collateral damage.
QUESTION: Why has the government not volunteered to take a pay cut, given that most of the population is suffering economically? Don’t CEOs take a pay cut when their company is in financial trouble?
NOTE: The New Zealand PM and her ministers took a 6-month 20% pay cut in April 2020 [30].
SIDENOTE: A Canadian MP who only holds 6 years in office gets a lifelong pension. Even a war veteran does not get this benefit [31]
QUESTION: Why are these policies being made behind closed doors? The Ontario government has abused its arbitrary emergency powers to make policies without the input of ALL members of Parliament. When did we give up democracy? Watch The Ontario Government Being Questioned About This In Parliament: https://fb.watch/22j-hpTDiL/
Why have those affected financially not been given a choice? If someone has to worry about putting food on the table and a roof over their head, they should have the right to go out and make a living. Let them decide for themselves whether they are willing to risk contracting COVID (a disease with a lethality rate of under 1% for the younger healthy working population).
QUESTION: Why is every international arrival subject to an archaic 14-day quarantine, when the Canada’s chief public health officer Dr. Tam herself has said that there is little - if any - evidence of COVID transmission aboard aircraft? [32]
COVID transmission through travel primarily occurred BEFORE mitigation measures were implemented. Now, it is one of the safest public places you can be in. As of Jan 2, 2020, travel has only accounted for 2.5% of all COVID cases in Canada (with a known exposure setting). Most of these travel related cases are from early in the pandemic, before restrictions were placed [1].
Read the following fact-based article: The Irrational Fear Around Air Travel Needs To Stop (And We Need To Use Science Based Measures Instead): https://bit.ly/3rnS3GT
Why is rapid testing not conducted on arriving passengers? Results from the McMaster Health Lab rapid test study at Toronto Pearson airport: 99.7% were cleared or detected for COVID on arrival [34].
QUESTION: If someone got COVID and has recovered, they have built natural immunity. Why do they need to be vaccinated?
DOCTORS AROUND THE WORLD ARE SPEAKING OUT
Great Barrington Declaration: https://gbdeclaration.org
World Doctors Alliance: Letter to Citizens and Governments of the World: https://worlddoctorsalliance.com
MOVING FORWARD: WHAT DO WE DO NOW?
We have had 11 months to prepare and learn more. A lot is still unknown about COVID but A LOT IS KNOWN.
COVID is here now and we cannot stop it; that’s the harsh truth. Risk and harm cannot be completely eliminated. COVID will affect some people; that is unavoidable. It cannot be the SOLE reason behind making broad policies.
COVID is a harmful virus but not the killer virus it was projected to be.
There is a fine line between learning to live with COVID vs paralyzing our lives due to COVID, which we crossed a long time ago. Why are we hiding from COVID when we should use our knowledge to fight against it? Let’s stop the shortsighted and reactionary decision making.
We are we so focused on “number of cases and infections”? The test results are not reliable, and infections pose little or no harm to most of the younger healthy population. The important data is “number of hospitalizations and deaths”. In other words, shift our energy from “how do we limit COVID SPREAD?” to “how do we limit COVID DAMAGE?”
The long-term health and financial effects of a lockdown need to be considered. A lockdown will only transfer lives lost and destroyed. It will not save the overall excess deaths to a population. In fact, it will increase them in the long term.
The ONLY way out of this pandemic is through herd immunity, either naturally or through a vaccine. That vaccine is at least more than a year away for most people (another governmental failure). Moreover, there are many who will choose not to take a vaccine (personally, I will take it). We cannot have another 6 months of lockdowns. Every single day adds incredible amounts of short and long term damage.
A SUMMARY OF WHAT SHOULD BE DONE:
(Edit) Firstly, we should continue precautions to limit COVID spread. These are mitigation measures that may yield results without collateral damage: masks, wash hands frequently, don’t touch your face, reasonably limit social interactions.
I hope it’s clear: the problem isn’t number of cases. It’s the number of deaths and number of hospitalizations.
We know one thing for sure: Lockdowns should be our absolute last measure and that they will still come at a serious cost to society. Lockdowns are a REACTIVE measure to avoid getting hospitals overloaded.
Our most helpful measure to avoid a lockdown would have been to increase hospital capacity, but the government has failed us there.
Moreover, implement the actions below:

1. Offer Focused Protection for the following: long term care homes, the vulnerable population and those that have UNAVOIDABLE interaction with them. The measure alone may reduce COVID related deaths by 90+%. Even if the above demographic is half of the Canadian population, at least the other half don’t need to be locked down.
2. Let everyone else live normally, if they CHOOSE (of course, with cautionary measures)
3. Promote a healthy lifestyle, nutritious diet and increase Vitamin D intake for EVERYONE. This alone may reduce the number of hospitalizations, severe cases and long COVID.
4. BONUS MEASURE: All politicians need to take a pay cut. Sign the following petition: https://www.truenorthinitiative.com/politicians_need_to_cut_their_salaries

LET ME BE CLEAR. This is not about Lives VS. Economy. Health policy has been mistakenly sold as such. The truth is that a Focused Protection approach will save more lives and protect the economy. It’s a win-win.
This is about using everything we know to have an all-inclusive approach and look at the bigger long-term picture. To make decisions using science, data and logic, as opposed to fear and emotion.
Enough damage has been done. Don’t make the CURE worse than the virus. Don’t let political agendas get in the way of real help.
Free discourse is important because it helps to prevent bad ideas from blossoming and spreading.
We cannot simply accept the first viewpoint presented to us. Science requires many different points of view, rigorously tested, before arriving to a conclusion [35]. Science DEMANDS opposing opinions. Propaganda, on the other hand, silences it.
Something is VERY wrong when there is massive blowback to any questioning of the narrative. Something is VERY wrong when fear has become a virtue and courage a vice [35].
Something is VERY wrong when law enforcement questions the government about why they are forced to abandon their oath to the Charter Of Rights & Freedoms. Read their letter: https://bit.ly/3nW0Mhu
Please copy, paste or share this message if you agree.
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Samad Kadri
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REFERENCES
[1] https://health-infobase.canada.ca/covid ... s.html#fn1
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[9] https://cormandrostenreview.com/report/
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[12] https://www.medrxiv.org/content/10.1101 ... 20214494v2
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[14] https://www.preprints.org/manuscript/20 ... 2/download
[15] https://cmha.ca/wp-content/uploads/2020 ... NAL-EN.pdf
[16] https://www.sciencedirect.com/science/a ... 8120310386
[17] https://globalnews.ca/news/7464926/coro ... -capacity/
[18] https://www.fraserinstitute.org/sites/d ... mary_0.pdf
[19] https://www.cmaj.ca/content/192/44/E1347
[20] https://www.budget.gc.ca/2019/docs/plan/toc-tdm-en.html
[21] https://www.ctvnews.ca/politics/federal ... -1.5209807
[22] https://www.weforum.org/agenda/2020/12/ ... dp-covid19
[23] https://www150.statcan.gc.ca/n1/daily-q ... 6a-eng.htm
[24] https://www.thestar.com/business/opinio ... ke-30.html
[25] https://www.cfib-fcei.ca/sites/default/ ... losing.pdf
[26] https://www.iedm.org/the-flawed-covid-1 ... wn-canada/
[27] https://www.nationalreview.com/cornep ... grace/amp/
[28] https://www.health.com/condition/cold-f ... every-year
[29] https://www.thestar.com/news/gta/2020/1 ... tario.html
[30] https://globalnews.ca/news/6820459/jaci ... s-pay-cut/
[31] https://www.canada.ca/en/treasury-board ... -plan.html
[32] https://www.cbc.ca/news/politics/covid- ... -1.5797065
[33] https://www.canada.ca/en/public-health/services/diseases/coronavirus-disease-covid-19/epidemiological-economic-research-data.html
[34] https://mcmasterhealthlabs.ca/pdf/MHL%2 ... Tr6W2NgSCw
[35] https://financialpost.com/opinion/2020- ... he-science
[36] https://www.publichealthontario.ca/-/media/documents/o/2020/opioid-mortality-covid-surveillance-report.pdf?la=en