Item 2.01 Completion of Acquisition or Disposition of Assets
Pursuant to the Merger Agreement, the Mergers
were consummated and became effective as of July 28, 2022. As a result of the Mergers, among other things, Metromile became a subsidiary
of the Company under the name “Metromile, LLC” (the “Surviving Company”). The Mergers and the Merger Agreement
were previously described in the Registration Statement and the Joint Proxy Statement/Prospectus.
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. |
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 November 8, 2021 was converted into the right to receive
an amount in cash, without interest, equal to the Option Consideration (as defined in the Merger Agreement). Any such Metromile stock
option that had an exercise price per share that is greater than or equal to the per Metromile share cash consideration was cancelled
for no consideration.
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 denominated in shares of Company common stock from Company on the same terms
and conditions (including vesting terms) as applied to such Metromile Warrant immediately prior to the First Effective Time (with the
number of warrants and exercise price being adjusted based on the exchange ratio).
Treatment of Additional Shares
The transactions contemplated by the Merger Agreement,
including the Mergers, did not constitute an “Acceleration Event” (as such term is defined in that certain Agreement and Plan
of Merger and Reorganization, dated as of November 24, 2020 and as amended on January 12, 2021 and further amended on February 8, 2021,
by and among INSU, INSU II Merger Sub Corp. and Legacy Metromile (the “INSU Merger Agreement”)). Accordingly, the “Additional
Shares” (as such term is defined in the INSU Merger Agreement) were not issued as of immediately prior to the First Effective Time.
In accordance with the terms of the INSU Merger
Agreement, if, (a) at any point following the First Effective Time and prior to February 9, 2023, the closing share price of Company common
stock over any twenty (20) trading days within any thirty (30) trading day period is greater than the quotient of (i) $15.00 divided by
(ii) the exchange ratio, then, (b) as soon as practicable (but in any event within ten (10) business days) after such satisfaction, the
Company will issue, on a ratable basis to the persons eligible to receive such Additional Shares, a number of shares of Company common
stock in an amount equal to the product of (i) 10,000,000 multiplied by (ii) the exchange ratio.
The information set forth in the “Explanatory
Note” of this Current Report on Form 8-K (the “Current Report”) is incorporated by reference into this Item 2.01.
The foregoing description of the Merger Agreement
does not purport to be complete and is subject to and qualified in its entirety by reference to the full text of the Merger Agreement,
a copy of which was filed as Exhibit 2.1 to the Quarterly Report on Form 10-Q filed by the Company on November 9, 2021 and is incorporated
herein by reference. The Merger Agreement is not intended to be a source of factual, business or operational information about the Company
or its subsidiaries.