Item 8.01. Other Events





This is a supplement to the Definitive Proxy Statement on Schedule 14A filed by
Metromile, Inc., a Delaware corporation ("Metromile" or the "Company"), with the
Securities and Exchange Commission (the "SEC") on December 29, 2021 (the
"Definitive Proxy Statement") that was first mailed to Metromile stockholders in
connection with the solicitation of proxies for use at a special meeting of
stockholders of Metromile (the "Special Meeting") to be virtually held on
February 1, 2022, at 9:00 a.m., Pacific Time, at
www.virtualshareholdermeeting.com/MILE2022SM.



The purpose of the Special Meeting is to consider and vote on a proposal to
adopt the Agreement and Plan of Merger and Combination, dated as of November 8,
2021 (as it may be amended from time to time, the "Merger Agreement"), by and
among Metromile, Lemonade, Inc. ("Lemonade"), Citrus Merger Sub A, Inc., a
wholly owned subsidiary of Lemonade, and Citrus Merger Sub B, LLC, a wholly
owned subsidiary of Lemonade (the "Merger Proposal").  Upon the terms and
subject to the conditions set forth in the Merger Agreement, (i) Acquisition Sub
I will merge with and into Metromile, with Metromile continuing as the surviving
entity (the "Initial Surviving Corporation") (the "first merger") and (ii) the
Initial Surviving Corporation will then merge with and into Acquisition Sub II,
with Acquisition Sub II continuing as the surviving entity and as a wholly owned
subsidiary of Lemonade (the "second merger" and, together with the first merger,
the "mergers").



The Definitive Proxy Statement is amended and supplemented by, and should be
read as part of, and in conjunction with, the information set forth in this
Current Report on Form 8-K. To the extent that information set forth herein
differs from or updates information contained in the Definitive Proxy Statement,
the information contained herein supersedes the information contained in the
Definitive Proxy Statement. Capitalized terms used but not defined herein have
the meanings set forth in the Definitive Proxy Statement.



As previously disclosed, on December 21, 2021, December 23, 2021 and December
29, 2021, Metromile received letters on behalf of purported stockholders of
Metromile, in each case stating the stockholder's belief that the Definitive
Proxy Statement contained in the Form S-4 filed by Lemonade with the SEC on
December 14, 2021 (the "Form S-4"), omitted material information with respect to
the transaction and demanding that Metromile make additional and supplemental
disclosures regarding the transaction prior to the Metromile special meeting.
One letter also requested to inspect certain of Metromile's books and records
pursuant to Section 220 of the Delaware General Corporation Law based on
allegations of suspected wrongdoing in connection with Metromile's sale process.
On January 10, 2022, Metromile received another letter on behalf of another
purported stockholder stating that stockholder's belief that the Form S-4
omitted material information with respect to the transaction, demanding that
Metromile make additional and supplemental disclosures regarding the transaction
prior to the Metromile special meeting, and requesting to inspect certain of
Metromile's books and records pursuant to Section 220 based on allegations of
suspected wrongdoing in connection with Metromile's sale process.



As previously disclosed, another purported stockholder of Metromile filed a
complaint in the Southern District of New York alleging Metromile's disclosures
with respect to the transaction were incomplete and requesting injunctive relief
to prevent the consummation of the Mergers, unless certain allegedly material
information is disclosed. That complaint was brought by the plaintiff
individually and is captioned Villareal v. Metromile, Inc. et al., Case No.
1:21-cv-11045 (S.D.N.Y.). Additional purported stockholders filed similar
complaints on December 30, 2021, January 10, 2022, January 11, 2022, January 13,
2022, January 14, 2022, and January 17, 2022. These lawsuits were brought by the
plaintiffs individually and are captioned: Patel v. Metromile, Inc. et al., Case
No. 1:3:21-cv-10068 (N.D. Cal.); McKellar v. Metromile, Inc. et al., Case No.
1:22-cv-00214 (S.D.N.Y.); Prados v. Metromile, Inc. et al., Case No.
2:22-cv-00100 (D.N.J.); Bushansky v. Metromile, Inc. et al., Case
No. 3:22-cv-00180 (N.D. Cal.); Bacchi v. Metromile, Inc. et al., Case No.
1:22-cv-00056 (D. Del.); Blake v. Metromile, Inc. et al., Case No. 2:22-cv-00165
(E.D. Pa.); Wheeler v. Metromile, Inc. et al., Case No. 1:22-cv-00055 (D. Del.);
Wilhelm v. Metromile, Inc. et al., Case No. 1:22-cv-00061 (D. Del.); Carlisle v.
Metromile, Inc. et al., Case No. 1:22-cv-00404 (S.D.N.Y.).



Metromile believes the allegations contained within the demand letters and
complaint are without merit and that no further disclosure is required by
applicable rule, statute, regulation or law beyond that already made. However,
in order to preclude any efforts to delay the closing of the mergers, avoid
nuisance and alleviate the costs, distractions, risks and uncertainties inherent
in litigation, Metromile has determined to voluntarily supplement the Definitive
Proxy Statement with certain supplemental disclosures (the "Supplemental
Disclosures") as described in the following section entitled "Supplemental
Disclosures to the Definitive Proxy Statement" in this Current Report on Form
8-K ("Current Report"). Nothing in this Current Report shall be deemed an
admission of the legal necessity or materiality under applicable laws of any of
the disclosures set forth herein. To the contrary, Metromile specifically denies
all allegations by the purported Metromile stockholders that any additional
disclosure was or is required. Metromile's board of directors continues to
recommend that Metromile stockholders vote "FOR" the merger proposal and the
adjournment proposal at the Special Meeting.



                                       1

Supplemental Disclosures to the Definitive Proxy Statement





The following supplemental information should be read in conjunction with the
Definitive Proxy Statement, which should be read in its entirety. All page
references are to pages in the Definitive Proxy Statement, and terms used below,
unless otherwise defined, have the meaning set forth in the Definitive Proxy
Statement. Underlined text shows text being added to a referenced disclosure in
the Definitive Proxy Statement, and deleted text is stricken through.



The second sentence of the below paragraph on page 82 of the Definitive Proxy
Statement under the section "The Mergers - Background of the Mergers" is amended
and supplemented to read as follows:



On August 16, 2021, Mr. Preston contacted representatives of Party B regarding a
potential strategic transaction involving the EBS business. A non-disclosure
agreement on customary terms was executed by Metromile and Party B on August 23,
2021 (which non-disclosure agreement did not contain a standstill provision),
and representatives of Metromile and Party B met later that day to discuss a
potential strategic transaction involving the EBS business. On August 26, 2021,
representatives of Party B contacted Mr. Preston to confirm that Party B was not
interested in pursuing a transaction with Metromile involving the EBS business.



The third sentence of the below paragraph on page 83 of the Definitive Proxy
Statement under the section "The Mergers - Background of the Mergers" is amended
and supplemented to read as follows:



On August 26, 2021, the Metromile board of directors held a meeting at which
members of Metromile senior management and representatives of Cooley LLP
("Cooley"), Metromile's corporate counsel, and Allen & Company were also
present. At that meeting, Mr. Preston provided an update on the discussions with
Lemonade and his preliminary conversations with Party A and Party B. The
Metromile board of directors also approved and formalized the formation of the
strategic committee and further approved that the strategic committee would be
responsible for decisions regarding the identification of third parties that
would be included in Metromile's outreach to potential strategic partners, and
for providing Metromile's management team and advisors with direction, guidance
and oversight regarding any process involving potential strategic alternatives;
provided that and that the strategic committee would not enter into exclusivity
with a potential strategic partner without approval from the full Metromile
board of directors, and any final determination with respect to price and other
material terms of a potential strategic transaction would be reserved for the
full Metromile board of directors., nor negotiate on price, without the
Metromile board of directors' input and direction. Representatives of Cooley
also provided the Metromile board of directors with an overview of its fiduciary
duties in the context of the exploration of potential strategic alternatives. In
order to enable Metromile to better understand potential alternatives available
to it in light of the inbound interest from Lemonade and the preliminary
conversations with Party A, Allen & Company suggested that Metromile consider
contacting selected third parties that might be interested in a strategic
transaction with Metromile and could potentially provide long-term value to
Metromile's stockholders. Allen & Company noted that, given the small group of
potential strategic partners that might be considered viable candidates, a
tailored strategic approach to certain potential counterparties could provide
Metromile with a sense of the potential strategic alternatives available to it
in the near term and discussed with the Metromile board of directors certain
potential companies (in addition to Lemonade and Party A) that could be
considered. After discussion, the Metromile board of directors approved
approaching certain additional companies, taking into account, among other
factors, the strategic fit for Metromile's business, the rationale for a
potential transaction and the perceived likelihood of engaging in discussions
regarding a potential strategic transaction that could be actionable in the near
term, in order to gauge their interest in a potential strategic transaction with
Metromile. The Metromile board of directors also indicated its desire that
Metromile's management team continue to engage in discussions with Lemonade

and
Party A.



                                       2

The last sentence of the below paragraph on page 85 of the Definitive Proxy Statement under the section "The Mergers - Background of the Mergers" is amended and supplemented to read as follows:


On September 27, 2021, the strategic committee held a meeting with members of
Metromile senior management and representatives of Kirkland, Allen & Company and
Cooley. Mr. Preston and Allen & Company updated the strategic committee on the
conversations with Party A and its financial advisor, noting that, while Party A
indicated that it was interested in exploring a potential strategic transaction
with Metromile, Party A previously mentioned that it was considering another
potential transaction as a priority and was significantly behind in its
assessment of potential synergies and due diligence process relative to
Lemonade. Metromile's senior management team indicated that they would continue
to encourage Party A to advance its due diligence review of Metromile. Allen &
Company also updated the strategic committee on the progress of Metromile's
outreach to the additional companies approved by the Metromile board of
directors at its August 26, 2021 meeting, and that all such companies had
declined to proceed with discussions with Metromile and its representatives
regarding a potential strategic transaction with Metromile. Allen & Company also
updated the strategic committee on the progress of Metromile's outreach to Party
C, indicating that Party C had not yet indicated if it was interested in
engaging in discussions regarding a strategic transaction with Metromile. Allen
& Company also provided an overview of selected analysts' perspectives on
Lemonade and certain financial information relating to Lemonade and Metromile.
The strategic committee then discussed potential responses to Lemonade's term
sheet and Lemonade's September 18 23, 2021 verbal non-binding indication of
interest to acquire Metromile at an exchange ratio equal to one share of
Lemonade common stock for every 18 shares of Metromile common stock and, after
such discussion, instructed Allen & Company to submit a counterproposal to
Lemonade on behalf of Metromile for a transaction with an exchange ratio that
reflected approximately 20-25% premium to Metromile's current market price (or
an exchange ratio of one share of Lemonade common stock for every 14.4-15.0
shares of Metromile common stock).



The third and fourth sentences of the disclosure on page 100 of the Definitive
Proxy Statement under the section "Opinion of Metromile's Financial Advisor -
Financial Analysis - Discounted Cash Flow Analyses - Metromile" is amended and
supplemented to read as follows:



Allen & Company calculated implied terminal values for Metromile by applying,
based on Allen & Company's professional judgment, to Metromile's fiscal year
2031 estimated net operating profit after tax for its insurance operations a
selected range of net operating profit after tax multiples of 16.0x to 19.0x and
applying to Metromile's fiscal year 2031 estimated net operating profit after
tax for its insurance operations and revenue for its enterprise business
operations a selected revenue multiple of 6.5x to Metromile's fiscal year 2031
estimated revenue for its enterprise business operations. The present values (as
of September 30, 2021) of the cash flows and terminal values were then
calculated using a selected range of discount rates of 8.5% to 9.5% derived from
a weighted average cost of capital calculation.



The third and fourth sentences of the disclosure on page 101 of the Definitive
Proxy Statement under the section "Opinion of Metromile's Financial Advisor -
Financial Analysis - Discounted Cash Flow Analyses - Lemonade" is amended and
supplemented to read as follows:



Allen & Company calculated implied terminal values for Lemonade by applying,
based on Allen & Company's professional judgment, to Lemonade's fiscal year 2031
estimated net operating profit after tax a selected range of net operating
profit after tax multiples of 16.0x to 19.0x to Lemonade's fiscal year 2031
estimated net operating profit after tax. The present values (as of September
30, 2021) of the cash flows and terminal values were then calculated using a
selected range of discount rates of 8.0% to 9.0% derived from a weighted average
cost of capital calculation.



                                       3





The disclosure on page 104 of the Definitive Proxy Statement under the section
"Certain Financial Forecasts Utilized by Metromile in Connection with the
Mergers - October Metromile Forecasts" is amended and supplemented by including
additional line items and related footnotes as follows:



October Metromile Forecasts

The following is a summary of the October Metromile forecasts:





                                                                       Fiscal Year Ending December 31,
(Dollars in millions)           2022E      2023E      2024E      2025E      2026E       2027E       2028E       2029E       2030E       2031E
Direct Earned Premium           $  131     $  183     $  272     $  385     $  512     $   644     $   780     $   924     $ 1,075     $ 1,235
Insurance Revenue               $  132     $  187     $  281     $  397     $  530     $   665     $   807     $   955     $ 1,111     $ 1,277
Contribution Profit(1)          $    0     $   12     $   31     $   57     $   93     $   136     $   187     $   245     $   304     $   350
Operating Income                $ (126 )   $ (130 )   $ (132 )   $ (127 )

$ (102 ) $ (69 ) $ (28 ) $ 22 $ 74 $ 109 Net Operating Profit After Tax(2)

$ (126 )   $ (130 )   $ (132 )   $ (127 )   $ (102 )   $   (69 )   $   (28 )   $    22     $    74     $   109
Cash Flow Summary
Net Operating Profit After
Tax(2)                          $ (126 )   $ (130 )   $ (132 )   $ (127 )   $ (102 )   $   (69 )   $   (28 )   $    22     $    74     $   109
Net Depreciation &
Amortization and Capital
Expenditures                    $   (2 )   $    0     $   (1 )   $   (2 )

$ (1 ) $ 2 $ 1 $ 2 $ 2 $ 0 Change in Working Capital $ 17 $ 26 $ 33 $ 5 $ (4 ) $ (17 ) $ (33 ) $ (49 ) $ (68 ) $ (31 ) Unlevered Free Cash Flow(3) $ (111 ) $ (104 ) $ (100 ) $ (124 ) $ (108 ) $ (84 ) $ (60 ) $ (25 ) $ 8 $ 78

(1) Contribution Profit is defined as premiums, interest and other income, minus

losses, loss adjustment expense, premium taxes, bad debt, payment processing

fees, data costs, underwriting reports and other costs related to servicing

policies.

(2) Net Operating Profit After Tax is inclusive of the potential tax benefit

through the tax savings expected from Metromile's net operating losses.

(3) Unlevered Free Cash flow is defined as after-tax operating income, less

capital expenditures, plus depreciation and amortization, plus change in net

working capital. Includes the potential tax benefit through the tax savings

expected from Metromile's net operating losses. The present value (as of

September 30, 2021) of potential future tax benefits subsequent to the

forecast period related to such net operating losses until fully utilized is

estimated to be approximately $53 million to $59 million in the aggregate.






                                       4

The disclosure on pages 104 of the Definitive Proxy Statement under the section "Certain Financial Forecasts Utilized by Metromile in Connection with the Mergers - Extrapolated Lemonade Forecasts" is amended and supplemented by including additional line items and related footnotes as follows:

Extrapolated Lemonade Forecasts

The following is a summary of the extrapolated Lemonade forecasts:





                                                                            Fiscal Year Ending December 31,
(Dollars in millions)              2022E      2023E       2024E       2025E       2026E       2027E       2028E       2029E       2030E       2031E
In Force Premium                   $  632     $  864     $ 1,248     $ 1,693     $ 2,235     $ 2,838     $ 3,520     $ 4,224     $ 5,000     $ 5,750
Gross Earned Premium               $  458     $  692     $ 1,024     $

1,400 $ 1,869 $ 2,414 $ 3,026 $ 3,685 $ 4,389 $ 5,116 Adjusted Gross Profit(1)

$   91     $  147     $   212     $

303 $ 414 $ 547 $ 701 $ 872 $ 1,061 $ 1,262 EBITDA(2)

$ (235 )   $ (196 )   $  (173 )   $  (117 )   $   (39 )   $    57     $   171     $   299     $   442     $   594
Net Operating Profit After
Tax(3)                             $ (302 )   $ (267 )   $  (250 )   $  (198 )   $  (122 )   $   (28 )   $    85     $   212     $   353     $   503
Cash Flow Summary
Net Operating Profit After
Tax(3)                             $ (302 )   $ (267 )   $  (250 )   $  (198 )   $  (122 )   $   (28 )   $    85     $   212     $   353     $   503
Net Depreciation & Amortization
and Capital Expenditures           $    0     $    0     $     0     $     0     $     0     $     0     $     0     $     0     $     0     $     0
Change in Working Capital          $   53     $   87     $   129     $   176     $   216     $   255     $   290     $   334     $   376     $   438
Unlevered Free Cash Flow(4)        $ (249 )   $ (180 )   $  (121 )   $   (22 )   $    94     $   227     $   374     $   546     $   729     $   942

(1) Adjusted Gross Profit is defined as gross profit, excluding net investment

income, plus employee- related costs, plus professional fees and other, plus

depreciation and amortization (allocated to cost of revenue).

(2) EBITDA is defined as net loss excluding the impact of interest expense,

income tax expense, depreciation, amortization, stock-based compensation, net

investment income and other transactions that Lemonade considers to be unique

in nature.

(3) Net Operating Profit After Tax is inclusive of the potential tax benefit

through the tax savings expected from Lemonade's net operating losses.

(4) Unlevered free cash flow is defined as EBITDA, less stock-based compensation

expense, less cash taxes, less capital expenditures, plus change in working

capital. Includes the potential tax benefit as a result of the tax savings

expected from Lemonade's net operating losses. The present value (as of

September 30, 2021) of potential future tax benefits subsequent to the

forecast period related to such net operating losses until fully utilized is

estimated to be approximately $44 million to $49 million in the aggregate.






                                       5

© Edgar Online, source Glimpses