LEMONADE, INC. Item 2.01 Completion of Acquisition or Disposition of Assets
Pursuant to the Merger Agreement, the Mergers were consummated and became
effective as of
Merger Consideration
· At the effective time of the First Merger (the "First Effective Time"), all
shares of Metromile common stock that were held in treasury by Metromile or
were held directly by Company or Acquisition Sub I immediately prior to the
First Effective Time were cancelled and ceased to exist and no consideration
was paid or payable in respect thereof;
· Except as described in the preceding bullet point, each share of Metromile
common stock that was issued and outstanding immediately prior to the First
Effective Time (including the "Earnout Shares," as such term is defined in
that certain Sponsor Share Cancellation and Vesting Agreement, dated as of
November 24, 2020 , by and among INSU Acquisition Corp. II ("INSU"),
Insurance Acquisition Sponsor II, LLC , and Dioptra Advisors II, LLC ) was
converted into the right to receive, without interest, 0.05263 validly
issued, fully paid and non-assessable shares of Company common stock;
· Each share of common stock, par value $0.01 per share, of Acquisition Sub I
that was issued and outstanding immediately prior to the First Effective
Time was converted into one (1) validly issued, fully paid and
non-assessable share of common stock, par value $0.01 per share, of
Metromile as the Surviving Company ; and
· At the effective time of the Second Merger (the "Second Effective Time"),
each share of common stock, par value $0.01 per share, of Metromile that was
issued and outstanding immediately prior to the Second Effective Time was
cancelled and ceased to exist. Each limited liability company interest of
Acquisition Sub II issued and outstanding immediately prior to the Second
Effective Time remained outstanding as a limited liability company interest
of the Surviving Company .
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Treatment of Fractional Shares
No fractional shares of Company common stock were issued in connection with the Mergers. Each Metromile stockholder who would otherwise have been entitled to receive in the Mergers a fractional share of Company common stock pursuant to the Merger Agreement, in lieu of such fractional share and upon surrender of such holder's certificates representing shares of Metromile common stock or book-entry positions representing non-certificated shares of Metromile common stock, in each case outstanding as of immediately prior to the First Effective Time, will be paid in cash the dollar amount (rounded to the nearest whole cent), without interest and subject to any required tax withholding, determined by multiplying such fraction by the average of the volume-weighted average trading prices per share of Company common stock on the NYSE (as reported by Bloomberg L.P.) on each of the twenty (20) consecutive trading days ending on (and including) the trading day that is three (3) trading days prior to the date of the First Effective Time (as adjusted to reflect any stock splits, stock dividends, combinations, reorganizations, reclassifications or similar events). No such holder was entitled to dividends, voting rights or any other rights in respect of any fractional share of Company common stock that would otherwise have been issuable as part of the merger consideration. The payment of cash in lieu of fractional share interests merely represents a mechanical rounding-off of the fractions in the exchange.
Treatment of Metromile Equity Awards
Effective as of the First Effective Time, the Company assumed Metromile's 2011 Equity Incentive Plan, as amended, and 2021 Equity Incentive Plan, and the outstanding awards thereunder were converted to awards covering Company common stock or into rights to receive cash payments, as set forth below.
Except as set forth in the immediately following sentence, each Metromile stock
option, whether vested or unvested, that was outstanding and unexercised as of
immediately prior to the First Effective Time was automatically converted into a
stock option to acquire a number of shares of Company common stock (rounded down
to the nearest whole share) equal to the product of (i) the number of shares
subject to the Metromile stock option and (ii) the exchange ratio, with an
exercise price per share of Company common stock (rounded up to the nearest
whole cent) equal to (A) the per share exercise price of the Metromile stock
option divided by (B) the exchange ratio. Each outstanding and unexercised
Metromile stock option held by any individual who was not employed by or
providing services to Metromile as of
Except as set forth in the immediately following sentence, each Metromile restricted stock unit award ("Metromile RSU award") that was outstanding immediately prior to the First Effective Time, was automatically converted into a Company restricted stock unit award ("Company RSU award") covering a number of shares of Company common stock equal to (i) the number of shares of Metromile common stock underlying such Metromile RSU award multiplied by (ii) the exchange ratio. Each outstanding Metromile RSU award held by Metromile's non-employee directors and each Metromile RSU award that was outstanding and eligible to vest based on the achievement of one or more performance criteria was cancelled and converted automatically into the right to receive an amount in cash, without interest, equal to the RSU consideration. For purposes of the foregoing, the determination of actual performance with respect to any performance-based Metromile RSU award and the number of shares underlying the Metromile RSU award that vested as of the First Effective Time as a result of such performance was made by Metromile prior to the First Effective Time in accordance with the terms and conditions of the applicable award agreement.
Aside from the foregoing adjustments, each Metromile stock option and Metromile RSU award that was converted into a Company stock option or Company RSU award remains subject to the same vesting and other terms and conditions that applied to such award immediately prior to the First Effective Time.
Treatment of Metromile Warrants
At the First Effective Time, each Metromile warrant exercisable for Metromile common stock (each, a "Metromile Warrant") ceased to represent a Metromile Warrant and was assumed by Company and converted automatically into a warrant . . .
Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers
The information set forth in the Explanatory Note and Item 2.01 of this Current Report is incorporated by reference into this Item 5.02.
Surviving Company
In connection with the consummation of the Mergers, as contemplated by the
Merger Agreement, the managers of Acquisition Sub II (
Item 7.01 Other Events
On
A copy of the press release is attached hereto as Exhibit 99.1 and is incorporated by reference herein.
The information contained in Item 7.01 of this Current Report, including Exhibit 99.1, is furnished under this Item 7.01 and shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or incorporated by reference in any filing thereunder or under the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such filing.
Item 9.01 Financial Statements and Exhibits
(a) Financial statement of business acquired
To the extent required, the Company will provide the financial statements required to be filed by Item 9.01(a) of Form 8-K by amendment to this Current Report no later than the 71st day after the required filing date for this Current Report.
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(b) Pro forma financial information
To the extent required, the Company will provide the pro forma financial statements required to be filed by Item 9.01(b) of Form 8-K by amendment to this Current Report no later than the 71st day after the required filing date for this Current Report.
(d) Exhibits Exhibit Number Description 2.1 Agreement and Plan of Merger, dated as ofNovember 8, 2021 , by and amongLemonade, Inc. ,Citrus Merger Sub A, Inc. ,Citrus Merger Sub B, LLC and Metromile, Inc. (incorporated by reference to Exhibit 2.1 to the Company's Quarterly Report on Form 10-Q, filed with theSEC onNovember 9, 2021 ).* 99.1 Press Release, datedJuly 28, 2022 . 104 Cover Page Interaction Date File (embedded within the Inline XBRL document)
* Schedules have been omitted pursuant to Item 601(a)(5) of Regulation S-K.
Forward-Looking Statements
This Current Report contains forward-looking statements. We intend such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in Section 27A of the Securities Act of 1933, as amended and Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act. All statements other than statements of historical fact contained in this Current Report, including without limitation statements regarding our future results of operations and financial position, our ability to attract, retain and expand our customer base, our ability to operate under and maintain our business model, our ability to maintain and enhance our brand and reputation, our ability to effectively manage the growth of our business, the effects of seasonal trends on our results of operations, our ability to attain greater value from each customer, our ability to compete effectively in our industry, the future performance of the markets in which we operate, and our ability to maintain reinsurance contracts and the plans and objectives of management for future operations and capital expenditures are forward-looking statements. These statements involve known and unknown risks, uncertainties and other important factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements.
In some cases, you can identify forward-looking statements by terms such as
"may," "will," "should," "expect," "plan," "anticipate," "could," "intend,"
"target," "project," "contemplate," "believe," "estimate," "predict,"
"potential", or "continue" or the negative of these terms or other similar
expressions. The forward-looking statements in this Current Report are only
predictions. We have based these forward-looking statements largely on our
current expectations and projections about future events and financial trends
that we believe may affect our business, financial condition and results of
operations. These forward-looking statements speak only as of the date of this
Current Report and are subject to a number of important factors that could cause
actual results to differ materially from those in the forward-looking
statements, including the factors described under the sections in the Company's
Annual Report on Form 10-K for the period ended
You should read this Current Report and the documents that we reference in this Current Report completely and with the understanding that our actual future results may be materially different from what we expect. We qualify all of our forward-looking statements by these cautionary statements. Except as required by applicable law, we do not plan to publicly update or revise any forward-looking statements contained herein, whether as a result of any new information, future events, changed circumstances or otherwise.
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