As previously announced, on August 1, 2021 (Pacific Daylight Time) / August 2, 2021 (Australian Eastern Standard Time), Square, Inc.
(Square), Lanai (AU) 2 Pty Ltd, an Australian proprietary company limited by shares and an indirect wholly owned subsidiary of Square (Lanai), and Afterpay Limited, an Australian public company limited by shares and listed on
the Australian Securities Exchange (Afterpay), entered into a Scheme Implementation Deed pursuant to which, subject to the satisfaction or waiver of the conditions set forth therein, Square will acquire (indirectly through Lanai) all
Afterpay ordinary shares pursuant to a court-approved scheme of arrangement under Part 5.1 of Australias Corporations Act 2001 (Cth) (the Transaction). On October 5, 2021, Square filed with the Securities and Exchange
Commission (the SEC) a definitive proxy statement (the Definitive Proxy Statement) with respect to the special meeting of Square stockholders scheduled to be held on November 3, 2021 in connection with the Transaction
(the Special Meeting).
Litigation Related to the Transaction
In connection with the Transaction, eight lawsuits were filed between October 13 and October 25, 2021 against one or more of Square
and the directors of Square (collectively, the Defendants). One complaint, Bushansky v. Square, Inc. et al., C.A. No. 3:21-cv-08013 (the
Bushansky Complaint), was filed in the U.S. District Court for the Northern District of California; one complaint, Duenas v. Square, Inc. et al., C.A. No.
1:21-cv-05822 (the Duenas Complaint), was filed in the U.S. District Court for the Eastern District of New York; three complaints, Fetting v. Square, Inc.
et al., C.A. No. 1:21-cv-08589 (the Fetting Complaint), Dunlap v. Square, Inc. et al., C.A. No. 1:21-cv-08612 and Franchi v. Square, Inc. et al., C.A. No. 1:21-cv-08673 (the Franchi Complaint), were filed
in the U.S. District Court for the Southern District of New York; two complaints, Rosenblatt v. Square, Inc. et al., C.A. No. 1:21-cv-01471 and Sabatini v.
Square, Inc. et al., C.A. No. 1:21-cv-01482 (the Sabatini Complaint), were filed in the U.S. District Court for the District of Delaware; and one
complaint, Shumacher v. Square, Inc. et al., C.A. No. 2:21-cv-04665, was filed in the U.S. District Court for the Eastern District of Pennsylvania.
The complaints generally allege, among other things, that the Defendants disseminated a false or misleading proxy statement regarding the
Transaction in violation of Sections 14(a) and 20(a) of the Securities Exchange Act of 1934, as amended (the Exchange Act) and SEC Rule 14a-9 promulgated thereunder. The complaints allege
(1) that the Definitive Proxy Statement filed by Square omitted or misrepresented material information regarding the financial valuation analyses performed by Squares financial advisor in support of its fairness opinion, and in the cases
of the Bushansky Complaint, the Duenas Complaint, the Fetting Complaint and the Sabatini Complaint, the deliberations of Squares board of directors leading up to the Transaction, as well as in the cases of the Duenas Complaint, the Fetting
Complaint and the Franchi Complaint, potential conflicts of interest involving Squares financial advisor, and (2) that disclosure of material information is necessary for Squares stockholders to make an informed decision regarding
whether to vote in favor of the issuance of shares of Square Class A common stock in connection with the Transaction. The complaints further allege that Squares directors are liable for alleged violations as controlling
persons of Square under Section 20(a) of the Exchange Act. Additionally, two purported Square stockholders sent demand letters alleging similar purported insufficiencies in the disclosures in the Definitive Proxy Statement on
October 8 and October 22, 2021 respectively (such letters, the Demand Letters and together with the lawsuits, the Matters).
Among other relief, the complaints generally seek injunctive relief, including enjoining the Transaction unless and until the Defendants
disclose the allegedly omitted material information and rescinding the Transaction in the event the Defendants consummate the Transaction (or awarding rescissory damages), declaratory judgment that the Defendants violated Sections 14(a) and 20(a) of
the Exchange Act and SEC Rule 14a-9 promulgated thereunder, damages, and an award of attorneys and experts fees.
Square believes that the claims asserted in the Matters are without merit and that no further disclosure is required under applicable law.
However, in order to avoid the risk of the Matters delaying or adversely affecting the Transaction and to minimize the costs, risks, and uncertainties inherent in litigation, and without admitting any liability or wrongdoing, Square has determined
to voluntarily supplement the Definitive Proxy Statement as described in this Current Report on Form 8-K. Nothing in this Current Report on Form 8-K 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, Square specifically denies all allegations in the Matters that any additional disclosure was or is required.