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Hippo (HIPO)

Filed: 8 Jul 21, 4:47pm
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As filed with the Securities and Exchange Commission on July 8, 2021

Registration No. 333-254691

 

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

Amendment No. 4

to

FORM S-4

REGISTRATION STATEMENT

UNDER

THE SECURITIES ACT OF 1933

 

 

Reinvent Technology Partners Z

(Exact Name of Registrant as Specified in Its Charter)

 

 

 

Cayman Islands* 6770 98-1548118

(State or other jurisdiction of

incorporation or organization)

 

(Primary Standard Industrial

Classification Code Number)

 (I.R.S. Employer
Identification Number)

215 Park Avenue, Floor 11

New York, New York 10003

Telephone: (212) 457-1272

(Address, including zip code, and telephone number, including area code, of Registrant’s principal executive offices)

 

 

Maples Fiduciary Services (Delaware) Inc.

4001 Kennett Pike, Suite 302

Wilmington, Delaware 19807

Telephone: (302) 338-9130

(Name, address, including zip code, and telephone number, including area code, of agent for service)

 

 

Copies to:

 

H. Rodgin Cohen, Esq.

Jared M. Fishman, Esq.

Marion Leydier, Esq.

Sullivan & Cromwell LLP

125 Broad Street

New York, New York 10004

(212) 558-4000

 

Tad J. Freese, Esq.

Chad G. Rolston, Esq.

Miles P. Jennings, Esq.

Latham & Watkins LLP

140 Scott Drive

Menlo Park, California 94025

(650) 328-4600

Approximate date of commencement of proposed sale of the securities to the public: As soon as practicable after this registration statement is declared effective and all other conditions to the Business Combination described in the enclosed proxy statement/prospectus have been satisfied or waived.

If the securities being registered on this Form are being offered in connection with the formation of a holding company and there is compliance with General Instruction G, check the following box:  ☐

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering:  ☐

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering:  ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer   Accelerated filer 
Non-accelerated filer   Smaller reporting company 
   Emerging growth company 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 7(a)(2)(B) of the Securities Act.  ☐

If applicable, place an X in the box to designate the appropriate rule provision relied upon in conducting this transaction:

 

Exchange Act Rule 13e-4(i)  (Cross-Border Issuer Tender Offer)

   

Exchange Act Rule 14d-l(d) (Cross-Border Third-Party Tender Offer)

   

 

 

The registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act or until the registration statement shall become effective on such date as the SEC, acting pursuant to said Section 8(a), may determine.

 

 

 


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The information in this preliminary proxy statement/prospectus is not complete and may be changed. The registrant may not sell the securities described in this preliminary proxy statement/ prospectus until the registration statement filed with the Securities and Exchange Commission is declared effective. This preliminary proxy statement/prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any jurisdiction where the offer or sale is not permitted.

 

SUBJECT TO COMPLETION, DATED JULY 8, 2021

PROXY STATEMENT FOR

EXTRAORDINARY GENERAL MEETING OF

REINVENT TECHNOLOGY PARTNERS Z

(A CAYMAN ISLANDS EXEMPTED COMPANY)

PROSPECTUS FOR

580,950,000 SHARES OF COMMON STOCK AND

4,600,000 REDEEMABLE WARRANTS

OF

REINVENT TECHNOLOGY PARTNERS Z

(AFTER ITS DOMESTICATION AS A CORPORATION INCORPORATED IN

THE STATE OF DELAWARE),

THE CONTINUING ENTITY FOLLOWING THE DOMESTICATION,

WHICH WILL BE RENAMED “HIPPO HOLDINGS INC.”

IN CONNECTION WITH THE BUSINESS COMBINATION DESCRIBED HEREIN

The board of directors of Reinvent Technology Partners Z, a Cayman Islands exempted company (“RTPZ” and, after the Domestication as described below, “Hippo Holdings”), has unanimously approved (1) the domestication of RTPZ as a Delaware corporation (the “Domestication”); (2) the merger of RTPZ Merger Sub Inc. (“Merger Sub”), a Delaware corporation and subsidiary of RTPZ, with and into Hippo Enterprises Inc. (“Hippo”), a Delaware corporation (the “First Merger”), with Hippo surviving the Merger as a wholly owned subsidiary of Hippo Holdings, and, immediately following the First Merger, the merger of Hippo (as the surviving corporation of the First Merger) with and into Hippo Holdings, with Hippo Holdings surviving (the “Second Merger” and, together with the First Merger, the “Mergers”), in each case pursuant to the terms of the Agreement and Plan of Merger, dated as of March 3, 2021, by and among RTPZ, Merger Sub and Hippo, attached to this proxy statement/prospectus as Annex A (the “Merger Agreement”), as more fully described elsewhere in this proxy statement/prospectus; and (3) the other transactions contemplated by the Merger Agreement and documents related thereto. In connection with the Business Combination, RTPZ will change its name to “Hippo Holdings Inc.”

As a result of and upon the effective time of the Domestication, among other things, (1) each then issued and outstanding share of RTPZ Class A ordinary shares, par value $0.0001 per share, of RTPZ (the “RTPZ Class A ordinary shares”), will convert automatically, on a one-for-one basis, into a share of common stock, par value $0.0001 per share, of Hippo Holdings (the “Hippo Holdings common stock”), (2) each of the then issued and outstanding Class B ordinary shares, par value $0.0001 per share, of RTPZ (the “RTPZ Class B ordinary shares”), will convert automatically, on a one-for-one basis, into a share of Hippo Holdings common stock (which shares are not being registered pursuant to this proxy statement/prospectus), (3) each then issued and outstanding warrant of RTPZ (the “RTPZ warrants”) will convert automatically into a warrant to acquire one share of Hippo Holdings common stock (the “Hippo Holdings warrants”) pursuant to the Warrant Agreement, dated as of November 18, 2020 (the “Warrant Agreement”), between RTPZ and Continental Stock Transfer & Trust Company (“Continental”), as warrant agent, and (4) each then issued and outstanding unit of RTPZ (the “RTPZ units”) will separate automatically into one share of Hippo Holdings common stock, on a one-for-one basis, and one-fifth of one Hippo Holdings warrant. Accordingly, this proxy statement/prospectus covers (1) 28,750,000 shares of Hippo Holdings common stock to be issued in the Domestication and (2) 4,600,000 Hippo Holdings warrants to be issued in the Domestication.

Immediately prior to the Effective Time, (i) each share of Hippo preferred stock will be converted into shares of Hippo common stock at the then-effective conversion rate as calculated pursuant to the terms of the Hippo Amended and Restated Certificate of Incorporation , (ii) the Hippo warrants will be exercised in full on a cash or cashless basis or terminated without exercise, as applicable, in accordance with their respective terms, and (iii) the Hippo notes will be automatically converted into shares of Hippo common stock in accordance with their respective terms. Subsequently, at the Effective Time, among other things, all outstanding shares of Hippo common stock as of immediately prior to the Effective Time, and, together with shares of Hippo common stock reserved in respect of Hippo options outstanding as of immediately prior to the Effective Time that will be converted into options based on Hippo Holdings common stock, will be cancelled in exchange for the right to receive, or the reservation of an aggregate of 552,200,000 shares of Hippo Holdings common stock (at a deemed value of $10.00 per share), which, in the case of Hippo options, will be shares underlying options based on Hippo Holding common stock, representing a pre-transaction equity value of Hippo of $5.522 billion (such total number of shares of Hippo Holdings common stock, the “Aggregate Merger Consideration”). The portion of the Aggregate Merger Consideration reflecting the conversion of the Hippo options is calculated


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assuming that all Hippo Holdings options are net-settled (although Hippo Holdings options may by their terms be cash-settled, resulting in additional dilution and, therefore, a reduced Exchange Ratio).

All Hippo options outstanding as of immediately prior to the Mergers will be converted into options to purchase shares of Hippo Holdings common stock (“Hippo Holdings Options”). Accordingly, this proxy statement/prospectus also relates to the resale of 53,030,285 shares of Hippo Holdings common stock acquired pursuant to the exercise of the Hippo Holdings options following the Mergers (the “Resale Shares”). The holders of the Resale Shares may from time to time sell, transfer or otherwise dispose of any or all of their Resale Shares in a number of different ways and at varying prices, and we will not receive any proceeds from such transactions. See “BCA Proposal  Consideration  Treatment of Hippo Options.”

It is anticipated that, following the Business Combination, (1) existing stockholders of Hippo will own 86.8% of outstanding Hippo Holdings common stock, (2) the Hippo PIPE Investors will own 1.6% of outstanding Hippo Holdings common stock, (3) the Third Party PIPE Investors will own 7.1% of outstanding Hippo Holdings common stock, (4) existing public shareholders of RTPZ (Class A ordinary shares) will own 3.6 % of outstanding Hippo Holdings common stock and (5) the Sponsor and the current independent directors of RTPZ, as holders of the RTPZ Class B ordinary shares, will collectively own 0.9% of outstanding Hippo Holdings common stock. These percentages assume (i) that no public shareholders of RTPZ exercise their redemption rights in connection with the Mergers, (ii) the vesting and exercise (on a net share basis) of all Hippo Holdings options for shares of Hippo Holdings common stock, (iii) that Hippo Holdings issues 55,000,000 shares of Hippo Holdings common stock to the PIPE Investors in connection with the PIPE Investment, and (iv) that, pursuant to the Merger Agreement, Hippo Holdings will redeem an aggregate of 10,000,000 shares of Hippo Holdings common stock from certain stockholders of Hippo immediately following the Business Combination.

The Third Party PIPE Investors have agreed to purchase 44,100,000 shares of Hippo Holdings common stock, at $10.00 per share, for approximately $441,000,000 of gross proceeds. Reinvent Capital Fund has agreed to purchase 1,000,000 shares of Hippo Holdings common stock, at $10.00 per share, for approximately $10,000,000 of gross proceeds. The Hippo PIPE Investors have agreed to purchase 9,900,000 shares of Hippo Holdings common stock, at $10.00 per share, for approximately $99,000,000 of gross proceeds. If the actual facts are different from these assumptions, the percentage ownership retained by RTPZ’s existing shareholders in the combined company will be different.

The RTPZ units, RTPZ Class A ordinary shares and RTPZ warrants are currently listed on the New York Stock Exchange (“NYSE”) under the symbols “RTPZ.U,” “RTPZ” and “RTPZ WS,” respectively. RTPZ will apply for listing, to be effective at the time of the Business Combination, of Hippo Holdings common stock and Hippo Holdings warrants on the NYSE under the proposed symbols “HIPO” and “HIPO.WS”, respectively. It is a condition of the consummation of the Business Combination described above that RTPZ receives confirmation from the NYSE that the securities have been conditionally approved for listing on the NYSE, but there can be no assurance such listing conditions will be met or that RTPZ will obtain such confirmation from the NYSE. If such listing conditions are not met or if such confirmation is not obtained, the Business Combination described above will not be consummated unless the NYSE condition set forth in the Merger Agreement is waived by the applicable parties.

 

 

This proxy statement/prospectus provides shareholders of RTPZ with detailed information about the proposed business combination and other matters to be considered at the extraordinary general meeting of RTPZ. We encourage you to read this entire document, including the Annexes and other documents referred to herein, carefully and in their entirety. You should also carefully consider the risk factors described in “Risk Factors beginning on page 28 of this proxy statement/prospectus.

NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES REGULATORY AGENCY HAS APPROVED OR DISAPPROVED THE TRANSACTIONS DESCRIBED IN THIS PROXY STATEMENT/PROSPECTUS, PASSED UPON THE MERITS OR FAIRNESS OF THE BUSINESS COMBINATION OR RELATED TRANSACTIONS OR PASSED UPON THE ADEQUACY OR ACCURACY OF THE DISCLOSURE IN THIS PROXY STATEMENT/PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY CONSTITUTES A CRIMINAL OFFENSE.

This proxy statement/prospectus is dated                 , 2021, and is first being

mailed to RTPZ’s shareholders on or about                , 2021.


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REINVENT TECHNOLOGY PARTNERS Z

A Cayman Islands Exempted Company

(Company Number 366701)

215 Park Avenue, Floor 11

New York, New York 10003

Dear Reinvent Technology Partners Z Shareholders and Public Warrant Holders:

You are cordially invited to attend the extraordinary general meeting (the “extraordinary general meeting”) and/or the extraordinary general meeting of public warrant holders (the “Warrant Holders Meeting”) of Reinvent Technology Partners Z, a Cayman Islands exempted company (“RTPZ” and, after the Domestication, as described below, “Hippo Holdings”), to be held at 9:00 a.m. Eastern Time and 10:00 a.m. Eastern Time, respectively, on July 29, 2021, at the offices of Sullivan & Cromwell LLP located at 125 Broad Street, New York, New York 10004 and virtually via live webcast at https://www.cstproxy.com/reinventtechnologypartnersz/2021, or at such other time, on such other date and at such other place to which the meeting may be adjourned. You will be permitted to attend the extraordinary general meeting and/or the Warrant Holders Meeting in person at the offices of Sullivan & Cromwell LLP only to the extent consistent with, or permitted by, applicable law and directives of public health authorities. Based on current guidance, we do not anticipate being able to accommodate shareholders who wish to attend in person, and we strongly urge you to attend the extraordinary general meeting and/or the Warrant Holders Meeting virtually.

Only shareholders who held ordinary shares of RTPZ at the close of business on June 21, 2021 (the “Record Date”) will be entitled to vote at the extraordinary general meeting and at any adjournments and postponements thereof. Only warrant holders who held public warrants of RTPZ (the “Public Warrants,” and such holders, the “Public Warrant Holders”) at the close of business on June 21, 2021 will be entitled to vote at the Warrant Holders Meeting and at any adjournments and postponements thereof.

At the extraordinary general meeting, RTPZ shareholders will be asked to consider and vote upon a proposal to approve and adopt the Agreement and Plan of Merger, dated as of March 3, 2021 (as the same may be amended, the “Merger Agreement”), by and among RTPZ, RTPZ Merger Sub Inc. (“Merger Sub”) and Hippo Enterprises Inc. (“Hippo”), a copy of which is attached to this proxy statement/prospectus as Annex A. The Merger Agreement provides that, among other things, in accordance with the terms and subject to the conditions of the Merger Agreement as more fully described elsewhere in this proxy statement/prospectus, (a) Merger Sub will merge with and into Hippo, the separate corporate existence of Merger Sub will cease and Hippo will be the surviving corporation and a wholly owned subsidiary of RTPZ (the “First Merger”), and (b) immediately following the First Merger, Hippo (as the surviving corporation of the First Merger) will merge with and into RTPZ, the separate corporate existence of Hippo will cease and Hippo Holdings will be the surviving corporation (the “Second Merger” and, together with the First Merger, the “Mergers”).

As a condition to the consummation of the Mergers, the board of directors of RTPZ has unanimously approved a change of RTPZ’s jurisdiction of incorporation by deregistering as an exempted company in the Cayman Islands and continuing and domesticating as a corporation incorporated under the laws of the State of Delaware (the “Domestication” and, together with the Mergers, the “Business Combination”). As described in this proxy statement/prospectus, you will be asked to consider and vote upon a proposal to approve the Domestication (the “Domestication Proposal”). In connection with the consummation of the Business Combination, RTPZ will change its name to “Hippo Holdings Inc.”

As a result of and upon the effective time of the Domestication, (1) each of the then issued and outstanding Class A ordinary shares, par value $0.0001 per share, of RTPZ (the “RTPZ Class A ordinary shares”), will convert automatically, on a one-for-one basis, into a share of common stock, par value $0.0001 per share, of Hippo Holdings (the “Hippo Holdings common stock”), (2) each of the then issued and outstanding Class B ordinary shares, par value $0.0001 per share, of RTPZ (the “RTPZ Class B ordinary shares”), will convert automatically, on a one-for-one basis, into a share of Hippo Holdings common stock, (3) each then issued and outstanding warrant of RTPZ (the “RTPZ warrants”) will convert automatically into a warrant to acquire one


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share of Hippo Holdings common stock (the “Hippo Holdings warrants”) pursuant to the Warrant Agreement, dated as of November 18, 2020 (the “Warrant Agreement”), between RTPZ and Continental Stock Transfer & Trust Company (“Continental”), as warrant agent, and (4) each then issued and outstanding unit of RTPZ (the “RTPZ units”) will separate automatically into one share of Hippo Holdings common stock, on a one-for-one basis, and one-fifth of one Hippo Holdings warrant. As used herein, “public shares” shall mean the RTPZ Class A ordinary shares (including those that underlie the RTPZ units) that were registered pursuant to the Registration Statement on Form S-1 (333-249799) and the shares of Hippo Holdings common stock issued as a matter of law upon the conversion thereof on the effective date of the Domestication. For further details, see “Domestication Proposal.”

In addition to the BCA Proposal and the Domestication Proposal, you will also be asked to consider and vote upon (1) four separate proposals to approve material differences between RTPZ’s Amended and Restated Memorandum and Articles of Association (as may be amended from time to time, the “Cayman Constitutional Documents”) and the proposed certificate of incorporation and bylaws of Hippo Holdings (collectively, the “Organizational Documents Proposals”), (2) a proposal to approve for purposes of complying with the applicable provisions of NYSE Listing Rule 312.03, the issuance of Hippo Holdings common stock to (a) the PIPE Investors, including Reinvent Capital Fund LP, an affiliate of RTPZ (“Reinvent Capital Fund”) and the Hippo PIPE Investors, pursuant to the PIPE Investment and (b) the Hippo stockholders pursuant to the Merger Agreement (the “Share Issuance Proposal”), (3) a proposal to approve and adopt the Hippo Holdings Inc. 2021 Incentive Award Plan (the “Incentive Award Plan Proposal”), (4) a proposal to approve and adopt the Hippo Holdings Inc. 2021 Employee Stock Purchase Plan (the “ESPP Proposal”) and (5) a proposal to approve the adjournment of the extraordinary general meeting to a later date or dates, if necessary, to permit further solicitation and vote of proxies in the event that there are insufficient votes for the approval of one or more proposals at the extraordinary general meeting (the “Adjournment Proposal”). In addition, RTPZ Class B ordinary shareholders will be asked to vote on a proposal to elect 8 directors who, upon consummation of the Business Combination, will be the directors of Hippo Holdings (the “Director Election Proposal”). The Business Combination will be consummated only if the BCA Proposal (as defined below), the Domestication Proposal, the Organizational Documents Proposals, the Share Issuance Proposal, the Incentive Award Plan Proposal, ESPP Proposal and the Director Election Proposal (collectively, the “Condition Precedent Proposals”) are approved at the extraordinary general meeting. Each of the Condition Precedent Proposals is cross-conditioned on the approval of each other. The Adjournment Proposal is not conditioned upon the approval of any other proposal. Each of these proposals is more fully described in this proxy statement/prospectus, which each shareholder is encouraged to read carefully and in its entirety.

At the Warrant Holders Meeting, Public Warrant Holders will be asked to vote on the following proposals, as more fully described in this proxy statement/prospectus: (i) a proposal to amend the Warrant Agreement such that the exercise period for the warrants will commence 30 days after the first date on which RTPZ completes the Business Combination (such amendment, the “Warrant Amendment” and such proposal, the “Warrant Amendment Proposal”) and (ii) a proposal to approve the adjournment of the Warrant Holders Meeting to a later date or dates, if necessary, to permit further solicitation and vote of proxies in the event that there are insufficient votes for the approval of the Warrant Amendment Proposal (the “Warrant Holders Adjournment Proposal,” and together with the Warrant Amendment Proposal, the “Warrant Holder Proposals”). The Warrant Amendment Proposal is conditioned on the approval of the Condition Precedent Proposals. However, approval of the Warrant Amendment is not a condition to the consummation of the Business Combination. Accordingly, the Business Combination can be completed even if the Warrant Amendment Proposal is not approved. The Warrant Holders Adjournment Proposal is not conditioned on the approval of any other proposal.

Immediately prior to the Effective Time, (i) each share of Hippo preferred stock will be converted into shares of Hippo common stock at the then-effective conversion rate as calculated pursuant to the terms of the Hippo Amended and Restated Certificate of Incorporation , (ii) the Hippo warrants will be exercised in full on a cash or cashless basis or terminated without exercise, as applicable, in accordance with their respective terms, and (iii) the Hippo notes will be automatically converted into shares of Hippo common stock in accordance with their respective terms. Subsequently, at the Effective Time, among other things, all outstanding shares of Hippo common stock as of immediately prior to the Effective Time, and, together with shares of Hippo common stock


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reserved in respect of Hippo options outstanding as of immediately prior to the Effective Time that will be converted into options based on Hippo Holdings common stock, will be cancelled in exchange for the right to receive, or the reservation of an aggregate of 552,200,000 shares of Hippo Holdings common stock (at a deemed value of $10.00 per share), which, in the case of Hippo options, will be shares underlying options based on Hippo Holding common stock, representing a pre-transaction equity value of Hippo of $5.522 billion. The portion of the Aggregate Merger Consideration reflecting the conversion of the Hippo options is calculated assuming that all Hippo Holdings options are net-settled (although Hippo Holdings options may by their terms be cash-settled, resulting in additional dilution and, therefore, a reduced Exchange Ratio).

In connection with the Business Combination, certain related agreements have been, or will be entered into on or prior to the date of the Closing of the Business Combination (the “Closing Date”), including (i) the Sponsor Support Agreement, (ii) the Hippo Support Agreement, (iii) the Sponsor Agreement, (iv) the Lock-Up Agreements, (v) the Registration Rights Agreement and (vi) the PIPE Subscription Agreements. For additional information, see “BCA Proposal  Related Agreements” in this proxy statement/prospectus.

Pursuant to the Cayman Constitutional Documents, a holder (a “public shareholder”) of public shares, which excludes shares held by the Sponsor and the independent directors of RTPZ, may request that RTPZ redeem all or a portion of such shareholder’s public shares for cash if the Business Combination is consummated. Holders of units must elect to separate the units into the underlying public shares and warrants prior to exercising redemption rights with respect to the public shares. If holders hold their units in an account at a brokerage firm or bank, holders must notify their broker or bank that they elect to separate the units into the underlying public shares and warrants, or if a holder holds units registered in its own name, the holder must contact the transfer agent directly and instruct it to do so. Public shareholders may elect to redeem their public shares even if they vote “for” the BCA Proposal or any other Condition Precedent Proposal. If the Business Combination is not consummated, the public shares will be returned to the respective holder, broker or bank. If the Business Combination is consummated, and if a public shareholder properly exercises its right to redeem all or a portion of the public shares that it holds and timely delivers its shares to Continental, RTPZ’s transfer agent, Hippo Holdings will redeem such public shares for a per-share price, payable in cash, equal to the pro rata portion of the trust account established at the consummation of our initial public offering (the “trust account”), calculated as of two business days prior to the consummation of the Business Combination. For illustrative purposes, as of March 31, 2021, this would have amounted to approximately $10.00 per issued and outstanding public share. If a public shareholder exercises its redemption rights in full, then it will be electing to exchange its public shares for cash and will no longer own public shares. The redemption takes place following the Domestication and, accordingly, it is shares of Hippo Holdings common stock that will be redeemed immediately after consummation of the Business Combination. See “Extraordinary General Meeting of RTPZ  Redemption Rights” in this proxy statement/prospectus for a detailed description of the procedures to be followed if you wish to redeem your public shares for cash.

Notwithstanding the foregoing, a public shareholder, together with any affiliate of such public shareholder or any other person with whom such public shareholder is acting in concert or as a “group” (as defined in Section 13(d)(3) of the Securities Exchange Act of 1934, as amended (“Exchange Act”)), will be restricted from redeeming its public shares with respect to more than an aggregate of 15% of the public shares. Accordingly, if a public shareholder, alone or acting in concert or as a group, seeks to redeem more than 15% of the public shares, then any such shares in excess of that 15% limit would not be redeemed for cash.

The Sponsor and each director and officer of RTPZ have agreed to, among other things, vote in favor of the Merger Agreement and the transactions contemplated thereby, and to waive their redemption rights in connection with the consummation of the Business Combination with respect to any RTPZ ordinary shares held by them, in each case, subject to the terms and conditions contemplated by the Sponsor Support Agreement, dated as of March 3, 2021, a copy of which is attached as Annex F to this proxy statement/prospectus (the “Sponsor Support Agreement”). The ordinary shares held by the Sponsor will be excluded from the pro rata calculation used to determine the per-share redemption price. As of the date of this proxy statement/prospectus, the Sponsor and RTPZ’s independent directors collectively own 20.0% of the issued and outstanding RTPZ ordinary shares.


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The Merger Agreement provides that the obligations of Hippo to consummate the Mergers are conditioned on, among other things, that as of the Closing, the amount of cash available in (x) the trust account, after deducting (i) the amount required to satisfy RTPZ’s obligations to its shareholders (if any) that exercise their rights to redeem their RTPZ Class A ordinary shares pursuant to the Cayman Constitutional Documents, (ii) any deferred underwriting commissions being held in the Trust Account and (iii) any unpaid transaction expenses of RTPZ or its affiliates (to the extent owed by RTPZ) (but prior to payment of any other transaction expenses) plus (y) the gross proceeds of the PIPE Investment, is at least equal to $450,000,000 (the “Minimum Cash Condition”). This condition is for the sole benefit of Hippo. If such condition is not met, and such condition is not or cannot be waived under the terms of the Merger Agreement, then the Merger Agreement could terminate and the proposed Business Combination may not be consummated. In addition, pursuant to the Cayman Constitutional Documents, in no event will RTPZ redeem public shares in an amount that would cause Hippo Holdings’ net tangible assets (as determined in accordance with Rule 3a51-1(g)(1) of the Exchange Act) to be less than $5,000,001.

The Merger Agreement is also subject to the satisfaction or waiver of certain other closing conditions as described in this proxy statement/prospectus. There can be no assurance that the parties to the Merger Agreement would waive any such provision of the Merger Agreement.

RTPZ is providing this proxy statement/prospectus and accompanying proxy cards to RTPZ’s shareholders and Public Warrant Holders in connection with the solicitation of proxies to be voted at the extraordinary general meeting and/or Warrant Holders Meeting and at any adjournments of the extraordinary general meeting or Warrant Holders Meeting. Information about the extraordinary general meeting, Warrant Holders Meeting, the Business Combination and other related business to be considered by RTPZ’s shareholders and Public Warrant Holders at the extraordinary general meeting and/or Warrant Holders Meeting is included in this proxy statement/prospectus. Whether or not you plan to attend the extraordinary general meeting and/or Warrant Holders Meeting, all of RTPZ’s shareholders and Public Warrant Holders are urged to read this proxy statement/prospectus, including the Annexes and other documents referred to therein, carefully and in their entirety. You should also carefully consider the risk factors described in “Risk Factors” beginning on page 28 of this proxy statement/prospectus.

After careful consideration, the board of directors of RTPZ has unanimously approved the Business Combination and unanimously recommends that shareholders vote “FOR” adoption of the Merger Agreement, and approval of the transactions contemplated thereby, including the Business Combination, and “FOR” all other proposals presented to RTPZ’s shareholders in this proxy statement/prospectus. The board of directors of RTPZ has also unanimously approved the Warrant Amendment and unanimously recommends that Public Warrant Holders vote “FOR” the Warrant Amendment Proposal. When you consider the recommendation of these proposals by the board of directors of RTPZ, you should keep in mind that RTPZ’s directors and officers have interests in the Business Combination that may conflict with your interests as a shareholder and/or a Public Warrant Holder. See the section entitled “BCA Proposal  Interests of RTPZ’s Directors and Executive Officers in the Business Combination” in this proxy statement/prospectus for a further discussion of these considerations.

The approval of each of the Domestication Proposal and Organizational Documents Proposals requires the affirmative vote of holders of at least two-thirds of the ordinary shares represented in person or by proxy and entitled to vote thereon and who vote at the extraordinary general meeting. The BCA Proposal, the Share Issuance Proposal, the Incentive Award Plan Proposal, the ESPP Proposal and the Adjournment Proposal require the affirmative vote of a majority of the ordinary shares represented in person or by proxy and entitled to vote thereon and who vote at the extraordinary general meeting. Under the terms of the Cayman Constitutional Documents, only the holders of the RTPZ Class B ordinary shares are entitled to vote on the Director Election Proposal, which is expected to be approved by the Sponsor and RTPZ’s independent directors prior to the extraordinary general meeting.

The Warrant Amendment Proposal must be approved by the holders of at least 50% of RTPZ’s outstanding Public Warrants. The approval of the Warrant Holders Adjournment Proposal requires the affirmative vote of a majority of the votes cast by the Public Warrant Holders present or represented by proxy and entitled to vote at the Warrant Holders Meeting.


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Your vote is very important. Whether or not you plan to attend the extraordinary general meeting and/or Warrant Holders Meeting, please vote as soon as possible by following the instructions in this proxy statement/prospectus to make sure that your shares and/or Public Warrants are represented at the extraordinary general meeting and/or Warrant Holders Meeting. If you hold your shares or Public Warrants in “street name” through a bank, broker or other nominee, you will need to follow the instructions provided to you by your bank, broker or other nominee to ensure that your shares and/or Public Warrants are represented and voted at the extraordinary general meeting and/or Warrant Holders Meeting. The transactions contemplated by the Merger Agreement will be consummated only if the Condition Precedent Proposals are approved at the extraordinary general meeting. Each of the Condition Precedent Proposals is cross-conditioned on the approval of each other. The Warrant Amendment Proposal is conditioned upon the approval of the Condition Precedent Proposals. The Condition Precedent Proposals are not conditioned upon the approval of the Warrant Amendment Proposal. Accordingly, the Business Combination can be consummated even if the Warrant Holder Amendment Proposal is not approved. The Adjournment Proposal and the Warrant Holders Adjournment Proposal are not conditioned upon the approval of any other proposal set forth in this proxy statement/prospectus.

If you sign, date and return your proxy card(s) without indicating how you wish to vote, your proxy will be voted FOR each of the proposals presented at the extraordinary general meeting and/or Warrant Holders Meeting. If you fail to return your proxy card(s) or fail to instruct your bank, broker or other nominee how to vote, and do not attend the extraordinary general meeting and/or Warrant Holders Meeting in person, the effect will be, among other things, that your shares will not be counted for purposes of determining whether a quorum is present at the extraordinary general meeting and/or Warrant Holders Meeting and will not be voted. An abstention or broker non-vote will be counted towards the quorum requirement but will not count as a vote cast at the extraordinary general meeting and/or Warrant Holders Meeting. If you are a shareholder of record and/or Public Warrant Holder of record and you attend the extraordinary general meeting and/or Warrant Holders Meeting and wish to vote in person, you may withdraw your proxy and vote in person.

TO EXERCISE YOUR REDEMPTION RIGHTS, YOU MUST DEMAND IN WRITING THAT YOUR PUBLIC SHARES ARE REDEEMED FOR A PRO RATA PORTION OF THE FUNDS HELD IN THE TRUST ACCOUNT AND DELIVER YOUR SHARES TO RTPZ’S TRANSFER AGENT AT LEAST TWO BUSINESS DAYS PRIOR TO THE VOTE AT THE GENERAL MEETING. YOU MAY DELIVER YOUR SHARES BY EITHER DELIVERING YOUR SHARE CERTIFICATE TO THE TRANSFER AGENT OR BY DELIVERING YOUR SHARES ELECTRONICALLY USING THE DEPOSITORY TRUST COMPANY’S DWAC (DEPOSIT WITHDRAWAL AT CUSTODIAN) SYSTEM. IF THE BUSINESS COMBINATION IS NOT COMPLETED, THEN THESE SHARES WILL BE RETURNED TO YOU OR YOUR ACCOUNT. IF YOU HOLD THE SHARES IN STREET NAME, YOU WILL NEED TO INSTRUCT THE ACCOUNT EXECUTIVE AT YOUR BANK OR BROKER TO WITHDRAW THE SHARES FROM YOUR ACCOUNT IN ORDER TO EXERCISE YOUR REDEMPTION RIGHTS.

On behalf of RTPZ’s board of directors, I would like to thank you for your support and look forward to the successful completion of the Business Combination.

Sincerely,

Michael Thompson

Chief Executive Officer, Chief Financial Officer and Director

NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES REGULATORY AGENCY HAS APPROVED OR DISAPPROVED THE TRANSACTIONS DESCRIBED IN THIS PROXY STATEMENT/PROSPECTUS, PASSED UPON THE MERITS OR FAIRNESS OF THE BUSINESS COMBINATION OR RELATED TRANSACTIONS OR PASSED UPON THE ADEQUACY OR ACCURACY OF THE DISCLOSURE IN THIS PROXY STATEMENT/PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY CONSTITUTES A CRIMINAL OFFENSE.

This proxy statement/prospectus is dated                 , 2021 and is first being mailed to shareholders on or about                 , 2021.


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REINVENT TECHNOLOGY PARTNERS Z

A Cayman Islands Exempted Company

(Company Number 366701)

215 Park Avenue, Floor 11

New York, New York 10003

NOTICE OF EXTRAORDINARY GENERAL MEETING

TO BE HELD ON JULY 29, 2021

TO THE SHAREHOLDERS OF REINVENT TECHNOLOGY PARTNERS Z:

NOTICE IS HEREBY GIVEN that an extraordinary general meeting (the “extraordinary general meeting”) of Reinvent Technology Partners Z, a Cayman Islands exempted company , company number 366701 (“RTPZ”), will be held at 9:00 a.m., Eastern Time, on July 29, 2021, at the offices of Sullivan & Cromwell LLP located at 125 Broad Street, New York, NY 10004 and virtually via live webcast at https://www.cstproxy.com/reinventtechnologypartnersz/2021. You are cordially invited to attend the extraordinary general meeting, which will be held for the following purposes:

 

  

Proposal No. 1  The BCA Proposal — to consider and vote upon a proposal to approve by ordinary resolution and adopt the Agreement and Plan of Merger, dated as of March 3, 2021 (the “Merger Agreement”), by and among RTPZ, RTPZ Merger Sub Inc. (“Merger Sub”) and Hippo Enterprises Inc. (“Hippo”), a copy of which is attached to this proxy statement/prospectus statement as Annex A. The Merger Agreement provides that, among other things, in accordance with the terms and subject to the conditions of the Merger Agreement as more fully described elsewhere in this proxy statement/prospectus, (a) Merger Sub will merge with and into Hippo, the separate corporate existence of Merger Sub will cease and Hippo will be the surviving corporation and a wholly owned subsidiary of RTPZ (the “First Merger”), and (b) immediately following the First Merger, Hippo (as the surviving corporation of the First Merger) will merge with and into RTPZ, the separate corporate existence of Hippo will cease and Hippo Holdings will be the surviving corporation (the “Second Merger” and, together with the First Merger, the “Mergers”) (the “BCA Proposal”);

 

  

Proposal No. 2  The Domestication Proposal — to consider and vote upon a proposal to approve by special resolution, the change of RTPZ’s jurisdiction of incorporation by deregistering as an exempted company in the Cayman Islands and continuing and domesticating as a corporation incorporated under the laws of the State of Delaware (the “Domestication” and, together with the Mergers, the “Business Combination”) (the “Domestication Proposal”);

 

  

Organizational Documents Proposals — to consider and vote upon the following four separate proposals (collectively, the “Organizational Documents Proposals”) to approve by special resolution, the following material differences between RTPZ’s Amended and Restated Memorandum and Articles of Association (as may be amended from time to time, the “Cayman Constitutional Documents”) and the proposed new certificate of incorporation (“Proposed Certificate of Incorporation”) and the proposed new bylaws (“Proposed Bylaws”) of Reinvent Technology Partners Z (a corporation that will be incorporated in the State of Delaware upon the filing with and acceptance by the Secretary of State of Delaware of the certificate of domestication in accordance with Section 388 of the Delaware General Corporation Law (the “DGCL”)), which will be renamed “Hippo Holdings Inc.” in connection with the Business Combination (RTPZ after the Domestication, including after such change of name, is referred to herein as “Hippo Holdings”):

 

 (A)

Proposal No. 3  Organizational Documents Proposal A — to authorize the change in the authorized capital stock of RTPZ from 500,000,000 Class A ordinary shares, par value $0.0001 per share (the “RTPZ Class A ordinary shares”), 50,000,000 Class B ordinary shares, par value $0.0001 per share (the “Class B ordinary shares” and, together with the Class A ordinary shares, the “ordinary shares”), and 5,000,000 preferred shares, par value $0.0001 per share (the “RTPZ preferred shares”), to 2,000,000,000 shares of common stock, par value $0.0001 per share, of Hippo Holdings (the “Hippo Holdings common stock”) and 10,000,000 shares of preferred stock,


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 par value $0.0001 per share, of Hippo Holdings (the “Hippo Holdings preferred stock”) (“Organizational Documents Proposal A”);

 

 (B)

Proposal No. 4  Organizational Documents Proposal B — to authorize the board of directors of Hippo Holdings to issue any or all shares of Hippo Holdings preferred stock in one or more classes or series, with such terms and conditions as may be expressly determined by Hippo Holdings’ board of directors and as may be permitted by the DGCL (“Organizational Documents Proposal B”);

 

 (C)

Proposal No. 5  Organizational Documents Proposal C — to provide that Hippo Holdings board of directors be divided into three classes with only one class of directors being elected in each year and each class serving a three-year term (“Organizational Documents Proposal C”); and

 

 (D)

Proposal No. 6  Organizational Documents Proposal D — to authorize all other changes in connection with the replacement of Cayman Constitutional Documents with the Proposed Certificate of Incorporation and Proposed Bylaws in connection with the consummation of the Business Combination (copies of which are attached to this proxy statement/prospectus as Annex B and Annex C, respectively), including (1) changing the corporate name from “Reinvent Technology Partners Z” to “Hippo Holdings Inc.”, (2) making Hippo Holdings’ corporate existence perpetual, (3) adopting Delaware as the exclusive forum for certain stockholder litigation, (4) electing not to be governed by Section 203 of the DGCL and, instead, be governed by a provision substantially similar to Section 203 of the DGCL, and (5) removing certain provisions related to RTPZ’s status as a blank check company that will no longer be applicable upon consummation of the Business Combination (“Organizational Documents Proposal D”);

 

  

Proposal No. 7  The Director Election Proposal — for holders of RTPZ Class B ordinary shares, to consider and vote upon a proposal to elect 8 directors who, upon consummation of the Business Combination, will be the directors of Hippo Holdings (the “Director Election Proposal”);

 

  

Proposal No. 8  The Share Issuance Proposal — to consider and vote upon a proposal to approve by ordinary resolution for purposes of complying with the applicable provisions of NYSE Listing Rule 312.03, the issuance of Hippo Holdings common stock to (a) the PIPE Investors, including the Sponsor Related PIPE Investors and the Hippo PIPE Investors, pursuant to the PIPE Investment and (b) the Hippo stockholders pursuant to the Merger Agreement (the “Share Issuance Proposal”);

 

  

Proposal No. 9  The Incentive Award Plan Proposal — to consider and vote upon a proposal to approve by ordinary resolution, the Hippo Holdings Inc. 2021 Incentive Award Plan attached to this proxy statement/prospectus as Annex D (the “Incentive Award Plan Proposal”);

 

  

Proposal No. 10  The ESPP Proposal — to consider and vote upon a proposal to approve by ordinary resolution, the Hippo Holdings Inc. 2021 Employee Stock Purchase Plan attached to this proxy statement/prospectus as Annex E (the “ESPP Proposal”); and

 

  

Proposal No. 11  The Adjournment Proposal — to consider and vote upon a proposal to approve the adjournment of the extraordinary general meeting to a later date or dates, if necessary, to permit further solicitation and vote of proxies in the event that there are insufficient votes for the approval of one or more proposals at the extraordinary general meeting (the “Adjournment Proposal”).

Each of Proposals No. 1 through 10 (collectively, the “Condition Precedent Proposals”) is cross-conditioned on the approval of each other. The Adjournment Proposal is not conditioned upon the approval of any other proposal set forth in this proxy statement/prospectus.

These items of business are described in this proxy statement/prospectus, which we encourage you to read carefully and in its entirety before voting.

Only holders of record of ordinary shares at the close of business on June 21, 2021 are entitled to notice of and to vote and have their votes counted at the extraordinary general meeting and any adjournments of the extraordinary general meeting.


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RTPZ is also holding the Warrant Holders Meeting for the Public Warrant Holders to consider and vote upon (i) a proposal to amend the Warrant Agreement, dated as of November 18, 2020 (the “Warrant Agreement”), between RTPZ and Continental Stock Transfer & Trust Company (“Continental”), as warrant agent, such that the exercise period for the warrants will commence 30 days after the first date on which RTPZ completes the Business Combination (such amendment, the “Warrant Amendment” and such proposal, the “Warrant Amendment Proposal”) and (ii) a proposal to approve the adjournment of the Warrant Holders Meeting to a later date or dates, if necessary, to permit further solicitation and vote of proxies in the event that there are insufficient votes for the approval of the Warrant Amendment Proposal (the “Warrant Holders Adjournment Proposal”). The Warrant Amendment Proposal is conditioned upon the approval of Proposals No. 1 through 10. The Warrant Holders Adjournment Proposal is not conditioned upon the approval of any other proposal set forth in this proxy statement/prospectus.

This proxy statement/prospectus and accompanying extraordinary general meeting proxy card is being provided to RTPZ’s shareholders in connection with the solicitation of proxies to be voted at the extraordinary general meeting and at any adjournments of the extraordinary general meeting. Whether or not you plan to attend the extraordinary general meeting, all of RTPZs shareholders are urged to read this proxy statement/prospectus, including the Annexes and the documents referred to herein, carefully and in their entirety. You should also carefully consider the risk factors described in Risk Factors beginning on page 28 of this proxy statement/prospectus.

After careful consideration, the board of directors of RTPZ has unanimously approved the Business Combination and unanimously recommends that shareholders vote “FOR” adoption of the Merger Agreement, and approval of the transactions contemplated thereby, including the Business Combination, and “FOR” all other proposals presented to RTPZ’s shareholders in this proxy statement/prospectus. When you consider the recommendation of these proposals by the board of directors of RTPZ, you should keep in mind that RTPZ’s directors and officers have interests in the Business Combination that may conflict with your interests as a shareholder. See the section entitled “BCA Proposal  Interests of RTPZ’s Directors and Executive Officers in the Business Combination” in this proxy statement/prospectus for a further discussion of these considerations.

Pursuant to the Cayman Constitutional Documents, a holder of public shares (as defined herein) (a “public shareholder”) may request of RTPZ that Hippo Holdings redeem all or a portion of its public shares for cash if the Business Combination is consummated. As a holder of public shares, you will be entitled to receive cash for any public shares to be redeemed only if you:

 

 i.

(a) hold public shares, or (b) if you hold public shares through units, elect to separate your units into the underlying public shares and Public Warrants prior to exercising your redemption rights with respect to the public shares;

 

 ii.

submit a written request to Continental, RTPZ’s transfer agent, that Hippo Holdings redeem all or a portion of your public shares for cash; and

 

 iii.

deliver your public shares to Continental, RTPZ’s transfer agent, physically or electronically through The Depository Trust Company (“DTC”).

Holders must complete the procedures for electing to redeem their public shares in the manner described above prior to 5:00 p.m., Eastern Time, on July 27, 2021 (two business days before the extraordinary general meeting) in order for their shares to be redeemed.

Holders of units must elect to separate the units into the underlying public shares and Public Warrants prior to exercising redemption rights with respect to the public shares. If holders hold their units in an account at a brokerage firm or bank, holders must notify their broker or bank that they elect to separate the units into the underlying public shares and Public Warrants, or if a holder holds units registered in its own name, the holder must contact Continental directly and instruct them to do so. Public shareholders may elect to redeem public shares regardless of if or how they vote in respect of the BCA Proposal. If the Business Combination is not consummated, the public shares will be returned to the respective holder, broker or bank.


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If the Business Combination is consummated, and if a public shareholder properly exercises its right to redeem all or a portion of the public shares that it holds and timely delivers its certificates for public shares (if any) and any other required redemption forms to Continental, RTPZ’s transfer agent, Hippo Holdings will redeem such public shares for a per-share price, payable in cash, equal to the pro rata portion of the trust account established at the consummation of our initial public offering (the “trust account”), calculated as of two business days prior to the consummation of the Business Combination. For illustrative purposes, as of March 31, 2021, this would have amounted to approximately $10.00 per issued and outstanding public share. If a public shareholder exercises its redemption rights in full, then it will be electing to exchange its public shares for cash and will no longer own public shares. The redemption takes place following the Domestication and, accordingly, it is shares of Hippo Holdings common stock that will be redeemed promptly after consummation of the Business Combination. See “Extraordinary General Meeting of RTPZ  Redemption Rights” in this proxy statement/prospectus for a detailed description of the procedures to be followed if you wish to redeem your public shares for cash.

Notwithstanding the foregoing, a public shareholder, together with any affiliate of such public shareholder or any other person with whom such public shareholder is acting in concert or as a “group” (as defined in Section 13(d)(3) of the Securities Exchange Act of 1934, as amended (“Exchange Act”)), will be restricted from redeeming its public shares with respect to more than an aggregate of 15% of the public shares. Accordingly, if a public shareholder, alone or acting in concert or as a group, seeks to redeem more than 15% of the public shares, then any such shares in excess of that 15% limit would not be redeemed for cash.

Reinvent Sponsor Z LLC, a Cayman Islands limited liability company and shareholder of RTPZ (the “Sponsor”), and each director and officer of RTPZ have agreed to, among other things, vote in favor of the Merger Agreement and the transactions contemplated thereby, and to waive their redemption rights in connection with the consummation of the Business Combination with respect to any ordinary shares held by them, in each case, subject to the terms and conditions contemplated by the Sponsor Support Agreement, dated as of March 3, 2021, a copy of which is attached to this proxy statement/prospectus statement as Annex F (the “Sponsor Support Agreement”). The ordinary shares held by the Sponsor will be excluded from the pro rata calculation used to determine the per-share redemption price. As of the date of this proxy statement/prospectus, the Sponsor and RTPZ’s independent directors collectively own 20.0% of the issued and outstanding ordinary shares.

The Merger Agreement provides that the obligations of Hippo to consummate the Mergers are conditioned on, among other things, that as of the Closing, the amount of cash available in (x) the trust account, after deducting (i) the amount required to satisfy our obligations to our shareholders (if any) that exercise their rights to redeem their RTPZ Class A Ordinary Shares pursuant to the Cayman Constitutional Documents, (ii) any deferred underwriting commissions being held in the Trust Account and (iii) any unpaid transaction expenses of RTPZ or its affiliates (to the extent owed by RTPZ) (but prior to payment of any other transaction expenses) (the “Trust Amount”) plus (y) the gross proceeds of the PIPE Investment, is at least equal to $450,000,000 (the “Minimum Cash Condition”). This condition is for the sole benefit of Hippo. If such condition is not met, and such condition is not or cannot be waived under the terms of the Merger Agreement, then the Merger Agreement could terminate and the proposed Business Combination may not be consummated. In addition, pursuant to the Cayman Constitutional Documents, in no event will RTPZ redeem public shares in an amount that would cause Hippo Holdings’ net tangible assets (as determined in accordance with Rule 3a51-1(g)(1) of the Exchange Act) to be less than $5,000,001.

The Merger Agreement is also subject to the satisfaction or waiver of certain other closing conditions as described in this proxy statement/prospectus. There can be no assurance that the parties to the Merger Agreement would waive any such provision of the Merger Agreement.

The approval of each of the Domestication Proposal and Organizational Documents Proposals requires the affirmative vote of holders of at least two-thirds of the ordinary shares represented in person or by proxy and entitled to vote thereon and who vote at the extraordinary general meeting. The BCA Proposal, the Share Issuance Proposal, the Incentive Award Plan Proposal, the ESPP Proposal and the Adjournment Proposal require the affirmative vote of a majority of the ordinary shares represented in person or by proxy and entitled to vote


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thereon and who vote at the extraordinary general meeting. Under the terms of the Cayman Constitutional Documents, only the holders of the RTPZ Class B ordinary shares are entitled to vote on the Director Election Proposal, which is expected to be approved by the Sponsor and RTPZ’s independent directors prior to the extraordinary general meeting.

Your vote is very important. Whether or not you plan to attend the extraordinary general meeting, please vote as soon as possible by following the instructions in this proxy statement/prospectus to make sure that your shares are represented at the extraordinary general meeting. If you hold your shares in “street name” through a bank, broker or other nominee, you will need to follow the instructions provided to you by your bank, broker or other nominee to ensure that your shares are represented and voted at the extraordinary general meeting. The transactions contemplated by the Merger Agreement will be consummated only if the Condition Precedent Proposals are approved at the extraordinary general meeting. Each of the Condition Precedent Proposals is cross-conditioned on the approval of each other. The Adjournment Proposal is not conditioned upon the approval of any other proposal set forth in this proxy statement/prospectus.

If you sign, date and return your extraordinary general meeting proxy card without indicating how you wish to vote, your proxy will be voted FOR each of the proposals presented at the extraordinary general meeting. If you fail to return your extraordinary general meeting proxy card or fail to instruct your bank, broker or other nominee how to vote, and do not attend the extraordinary general meeting in person, the effect will be, among other things, that your shares will not be counted for purposes of determining whether a quorum is present at the extraordinary general meeting and will not be voted. An abstention or broker non-vote will be counted towards the quorum requirement but will not count as a vote cast at the extraordinary general meeting. If you are a shareholder of record and you attend the extraordinary general meeting and wish to vote in person, you may withdraw your proxy and vote in person.

Your attention is directed to the remainder of the proxy statement/prospectus following this notice (including the Annexes and other documents referred to herein) for a more complete description of the proposed Business Combination and related transactions and each of the proposals. You are encouraged to read this proxy statement/prospectus carefully and in its entirety, including the Annexes and other documents referred to herein. If you have any questions or need assistance voting your ordinary shares, please contact Morrow Sodali LLC, our proxy solicitor, by calling 800-662-5200 or banks and brokers can call collect at 203-658-9400, or by emailing RTPZ@investor.morrowsodali.com.

Thank you for your participation. We look forward to your continued support.

By Order of the Board of Directors of Reinvent Technology Partners Z,

, 2021

Michael Thompson

Chief Executive Officer, Chief Financial Officer and Director

TO EXERCISE YOUR REDEMPTION RIGHTS, YOU MUST DEMAND IN WRITING THAT YOUR PUBLIC SHARES ARE REDEEMED FOR A PRO RATA PORTION OF THE FUNDS HELD IN THE TRUST ACCOUNT AND DELIVER YOUR SHARES TO RTPZ’S TRANSFER AGENT AT LEAST TWO BUSINESS DAYS PRIOR TO THE VOTE AT THE EXTRAORDINARY GENERAL MEETING. YOU MAY DELIVER YOUR SHARES BY EITHER DELIVERING YOUR SHARE CERTIFICATE (IF ANY) TO THE TRANSFER AGENT OR BY TENDERING YOUR SHARES ELECTRONICALLY USING THE DEPOSITORY TRUST COMPANY’S DWAC (DEPOSIT WITHDRAWAL AT CUSTODIAN) SYSTEM. IF THE BUSINESS COMBINATION IS NOT CONSUMMATED, THEN THESE SHARES WILL BE RETURNED TO YOU OR YOUR ACCOUNT. IF YOU HOLD THE SHARES IN STREET NAME, YOU WILL NEED TO INSTRUCT THE ACCOUNT EXECUTIVE AT YOUR BANK OR BROKER TO WITHDRAW THE SHARES FROM YOUR ACCOUNT IN ORDER TO EXERCISE YOUR REDEMPTION RIGHTS.


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REINVENT TECHNOLOGY PARTNERS

A Cayman Islands Exempted Company

(Company Number 366701)

215 Park Avenue, Floor 11

New York, New York 10003

NOTICE OF EXTRAORDINARY GENERAL MEETING OF PUBLIC WARRANT HOLDERS

TO BE HELD ON July 29, 2021

TO THE PUBLIC WARRANT HOLDERS OF REINVENT TECHNOLOGY PARTNERS Z:

NOTICE IS HEREBY GIVEN that an extraordinary general meeting (the “Warrant Holders Meeting”) of the holders of public warrants (such warrants, the “Public Warrants” and such holders, the “Public Warrant Holders”) of Reinvent Technology Partners Z, a Cayman Islands exempted company, company number 366701 (“RTPZ”), will be held at 10:00 a.m., Eastern Time, on July 29, 2021, at the offices of Sullivan & Cromwell LLP located at 125 Broad Street, New York, NY 10004 and virtually via live webcast at https://www.cstproxy.com/reinventtechnologypartnersz/2021. You are cordially invited to attend the Warrant Holders Meeting, which will be held for the following purposes:

 

  

Proposal No. 1  The Warrant Amendment Proposal — to consider and vote upon a proposal to amend the Warrant Agreement, dated as of November 18, 2020 (the “Warrant Agreement”), between RTPZ and Continental Stock Transfer & Trust Company (“Continental”), as warrant agent, such that the exercise period for the warrants will commence 30 days after the first date on which RTPZ completes the Business Combination (such amendment, the “Warrant Amendment” and such proposal, the “Warrant Amendment Proposal”); and

 

  

Proposal No. 2  The Warrant Holders Adjournment Proposal — to consider and vote upon a proposal to approve the adjournment of the Warrant Holders Meeting to a later date or dates, if necessary, to permit further solicitation and vote of proxies in the event that there are insufficient votes for the approval of the Warrant Amendment Proposal (the “Warrant Holders Adjournment Proposal”).

These Warrant Holder Proposals are described in this proxy statement/prospectus, which we encourage you to read in its entirety before voting.

Only Public Warrant Holders at the close of business on June 21, 2021 (the “Record Date”) are entitled to notice of and to vote and have their votes counted at the Warrant Holders Meeting and any adjournments of the Warrant Holders Meeting.                

This proxy statement/prospectus and accompanying Warrant Holders Meeting proxy card is being provided to RTPZ’s Public Warrant Holders in connection with the solicitation of proxies to be voted at the Warrant Holders Meeting and at any adjournments of the Warrant Holders Meeting. Whether or not you plan to attend the Warrant Holders Meeting, all of RTPZ’s shareholders are urged to read this proxy statement/prospectus, including the Annexes and the documents referred to herein, carefully and in their entirety. You should also carefully consider the risk factors described in “Risk Factors” beginning on page 28 of this proxy statement/prospectus.

After careful consideration, the board of directors of RTPZ unanimously approved the Warrant Holder Proposals and unanimously recommends that the Public Warrant Holders vote “FOR” the Warrant Amendment Proposal and “FOR” the Warrant Holders Adjournment Proposal, if presented. When you consider the recommendation of these proposals by the board of directors of RTPZ, you should keep in mind that RTPZ’s directors and officers have interests in the Business Combination that may conflict with your interests as a Public Warrant Holder. See the section entitled “BCA Proposal  Interests of RTPZ’s Directors and Executive Officers in the Business Combination” in this proxy statement/prospectus for a further discussion of these considerations.

Pursuant to the Warrant Agreement, the Warrant Amendment is required to be approved by (i) at least 50% of the then outstanding Public Warrants and (ii) at least 50% of the then outstanding private placement warrants.


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Prior to the date hereof, the Sponsor, as holder of 100% of the private placement warrants, has approved the Warrant Amendment. As such, the Warrant Amendment Proposal must be approved by the holders of at least 50% of RTPZ’s outstanding Public Warrants. The approval of the Warrant Holders Adjournment Proposal requires the affirmative vote of a majority of the votes cast by the Public Warrant Holders present or represented by proxy and entitled to vote at the Warrant Holders Meeting. The Warrant Amendment will only become effective if the Business Combination is completed. If the Business Combination is not completed, the Warrant Amendment will not become effective, even if the Public Warrant Holders have approved the Warrant Amendment Proposal.

Your vote is very important. Whether or not you plan to attend the Warrant Holders Meeting, please vote as soon as possible by following the instructions in this proxy statement/prospectus to make sure that your Public Warrants are represented at the Warrant Holders Meeting. If you hold your Public Warrants in “street name” through a bank, broker or other nominee, you will need to follow the instructions provided to you by your bank, broker or other nominee to ensure that your Public Warrants are represented and voted at the Warrant Holders Meeting. The Warrant Amendment Proposal is conditioned on the Condition Precedent Proposals further described in the proxy statement/prospectus. The Warrant Holders Adjournment Proposal is not conditioned upon the approval of any other proposal set forth in this proxy statement/prospectus.

If you sign, date and return your Warrant Holders Meeting proxy card without indicating how you wish to vote, your proxy will be voted FOR each of the proposals presented at the Warrant Holders Meeting. If you fail to return your Warrant Holders Meeting proxy card or fail to instruct your bank, broker or other nominee how to vote, and do not attend the Warrant Holders Meeting, the effect will be, among other things, that your Public Warrants will not be voted. An abstention or broker non-vote will not count as a vote cast at the Warrant Holders Meeting. If you are a Public Warrant Holder of record and you attend the Warrant Holders Meeting and wish to vote, you may withdraw your proxy and vote at the Warrant Holders Meeting.

Your attention is directed to the remainder of the proxy statement/prospectus following this notice (including the Annexes and other documents referred to herein) for a more complete description of the proposed Business Combination and related transactions and each of the proposals. You are encouraged to read this proxy statement/prospectus carefully and in its entirety, including the Annexes and other documents referred to herein. If you have any questions or need assistance voting your Public Warrants, please contact Morrow Sodali LLC, our proxy solicitor, by calling 800-662-5200 or banks and brokers can call collect at 203-658-9400, or by emailing RTPZ@investor.morrowsodali.com.

Thank you for your participation. We look forward to your continued support.

By Order of the Board of Directors of Reinvent Technology Partners Z,

                , 2021

Michael Thompson

Chief Executive Officer, Chief Financial Officer and Director


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TABLE OF CONTENTS

 

   Page 

TRADEMARKS

   iii 

MARKET AND INDUSTRY DATA

   iv 

SELECTED DEFINITIONS

   v 

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

   x 

QUESTIONS AND ANSWERS FOR SHAREHOLDERS AND PUBLIC WARRANT HOLDERS OF RTPZ

   xiii 

SUMMARY OF THE PROXY STATEMENT/PROSPECTUS

   1 

SELECTED HISTORICAL FINANCIAL INFORMATION OF RTPZ

   22 

SELECTED HISTORICAL FINANCIAL AND OPERATING DATA OF HIPPO

   23 

SELECTED UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION

   24 

COMPARATIVE PER SHARE DATA

   26 

MARKET PRICE AND DIVIDEND INFORMATION

   27 

RISK FACTORS

   28 

EXTRAORDINARY GENERAL MEETING AND WARRANT HOLDERS MEETING OF RTPZ

   87 

BCA PROPOSAL

   97 

DOMESTICATION PROPOSAL

   137 

ORGANIZATIONAL DOCUMENTS PROPOSALS

   140 

ORGANIZATIONAL DOCUMENTS PROPOSAL A

   143 

ORGANIZATIONAL DOCUMENTS PROPOSAL B

   145 

ORGANIZATIONAL DOCUMENTS PROPOSAL C

   147 

ORGANIZATIONAL DOCUMENTS PROPOSAL D

   149 

DIRECTOR ELECTION PROPOSAL

   153 

SHARE ISSUANCE PROPOSAL

   155 

INCENTIVE AWARD PLAN PROPOSAL

   157 

ESPP PROPOSAL

   165 

ADJOURNMENT PROPOSAL

   169 

WARRANT HOLDER PROPOSAL 1: WARRANT AMENDMENT PROPOSAL

   170 

WARRANT HOLDER PROPOSAL 2: WARRANT HOLDERS ADJOURNMENT PROPOSAL

   172 

U.S. FEDERAL INCOME TAX CONSIDERATIONS

   173 

UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION

   184 

INFORMATION ABOUT RTPZ

   200 

RTPZ MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

   210 

INFORMATION ABOUT HIPPO

   215 

HIPPO MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

   239 

MANAGEMENT OF HIPPO HOLDINGS FOLLOWING THE BUSINESS COMBINATION

   277 

EXECUTIVE COMPENSATION

   282 

BENEFICIAL OWNERSHIP OF SECURITIES

   287 

CERTAIN RELATIONSHIPS AND RELATED PERSON TRANSACTIONS

   291 

COMPARISON OF CORPORATE GOVERNANCE AND SHAREHOLDER RIGHTS

   300 

DESCRIPTION OF HIPPO HOLDINGS SECURITIES

   302 

SECURITIES ACT RESTRICTIONS ON RESALE OF HIPPO HOLDINGS SECURITIES

   313 

STOCKHOLDER PROPOSALS AND NOMINATIONS

   314 

SHAREHOLDER COMMUNICATIONS

   315 

LEGAL MATTERS

   316 

EXPERTS

   317 

DELIVERY OF DOCUMENTS TO SHAREHOLDERS

   318 

 

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TRADEMARKS

This document contains references to trademarks and service marks belonging to other entities. Solely for convenience, trademarks and trade names referred to in this proxy statement/prospectus may appear without the ® or TM symbols, but such references are not intended to indicate, in any way, that the applicable licensor will not assert, to the fullest extent under applicable law, its rights to these trademarks and trade names. RTPZ does not intend its use or display of other companies’ trade names, trademarks or service marks to imply a relationship with, or endorsement or sponsorship of it by, any other companies.

 

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MARKET AND INDUSTRY DATA

This proxy statement/prospectus includes industry and market data obtained from periodic industry publications, third-party studies and surveys, including from McKinsey & Company, William Blair & Company, Morgan Stanley Research, the Boston Consulting Group, Statista, Inc., and the Insurance Information Institute, as well as from filings of public companies in our industry and internal company surveys. These sources include government and industry sources. Industry publications and surveys generally state that the information contained therein has been obtained from sources believed to be reliable. Although we believe the industry and market data to be reliable as of the date of this proxy statement/prospectus, this information could prove to be inaccurate. Industry and market data could be wrong because of the method by which sources obtained their data and because information cannot always be verified with complete certainty due to the limits on the availability and reliability of raw data, the voluntary nature of the data gathering process and other limitations and uncertainties. Each publication, study and report speaks as of its original publication date (and not as of the date of this proxy statement/prospectus). Certain of these publications, studies and reports were published before the COVID-19 pandemic and therefore do not reflect any impact of COVID-19 on any specific market or globally. In addition, we do not know all of the assumptions regarding general economic conditions or growth that were used in preparing the forecasts from the sources relied upon or cited herein.

 

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SELECTED DEFINITIONS

Unless otherwise stated in this proxy statement/prospectus or the context otherwise requires, references to:

 

  

“Aggregate Merger Consideration” are to 552,200,000 shares of Hippo Holdings common stock;

 

  

“Business Combination” are to the Domestication together with the Mergers;

 

  

“Cayman Constitutional Documents” are to RTPZ’s Amended and Restated Memorandum of Association under Cayman Islands Companies Law (the “Existing Memorandum”) and RTPZ’s current Articles of Association (the “Existing Articles”), each as amended from time to time;

 

  

“Cayman Islands Companies Law” are to the Cayman Islands Companies Act (As Revised);

 

  

“Closing” are to the closing of the Business Combination;

 

  

“Closing Date” are to the date of the Closing;

 

  

“Code” is to the Internal Revenue Code of 1986, as amended;

 

  

“Committed PIPE Investment Amount” is to $550,000,000, in respect of shares to be purchased by the PIPE Investors pursuant to the Subscription Agreements;

 

  

“Company,” “we,” “us” and “our”, unless otherwise noted, are to RTPZ prior to its domestication as a corporation in the State of Delaware and to Hippo Holdings after RTPZ’s domestication as a corporation incorporated in the State of Delaware, including after its change of name to Hippo Holdings Inc.;

 

  

“Condition Precedent Approvals” are to approval at the extraordinary general meeting of the Condition Precedent Proposals;

 

  

“Condition Precedent Proposals” are to the BCA Proposal, the Domestication Proposal, the Organizational Documents Proposals, the Director Election Proposal, the Share Issuance Proposal, the Incentive Award Plan Proposal and the ESPP Proposal, collectively;

 

  

“Continental” are to Continental Stock Transfer & Trust Company;

 

  

“DGCL” are to the General Corporation Law of the State of Delaware;

 

  

“Domestication” are to the domestication of Reinvent Technology Partners Z as a corporation incorporated in the State of Delaware;

 

  

“Effective Time” are to the effective time of the First Merger;

 

  

“ESPP” are to the Hippo Holdings Inc. 2021 Employee Stock Purchase Plan attached to this proxy statement/prospectus as Annex E;

 

  

“Exchange Act” are to the Securities Exchange Act of 1934, as amended;

 

  

“Exchange Ratio” are to the quotient obtained by dividing (i) the Aggregate Merger Consideration by (ii) the aggregate fully-diluted number of shares of Hippo common stock issued and outstanding immediately prior to the First Merger;

 

  

“First Merger” is to the merger of Merger Sub with and into Hippo, with Hippo surviving the merger as a wholly owned subsidiary of RTPZ;

 

  

“Founder Shares” are to the 5,750,000 RTPZ Class B ordinary shares purchased by the Sponsor in a private placement prior to the initial public offering for an aggregate purchase price of $25,000 (or approximately $0.004 per share), and the RTPZ Class A ordinary shares that will be issued upon the conversion thereof;

 

  

“GAAP” are to accounting principles generally accepted in the United States of America;

 

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“Hippo” are to Hippo Enterprises Inc. and its consolidated subsidiaries and businesses, including Hippo Analytics Inc., its predecessor in interest, and Spinnaker Insurance Company, prior to the Business Combination;

 

  

“Hippo capital stock” are to shares of Hippo common stock and Hippo preferred stock;

 

  

“Hippo common stock” are to shares of Hippo common stock, par value $0.00001 per share;

 

  

“Hippo Holdings Inc.” or “Hippo Holdings” are to RTPZ after the Domestication and its name change from Reinvent Technology Partners Z;

 

  

“Hippo Holdings common stock” are to shares of Hippo Holdings common stock, par value $0.0001 per share;

 

  

“Hippo Holdings options” are to options to purchase shares of Hippo Holdings common stock;

 

  

“Hippo Note Conversion” is to the automatic conversion of the Hippo Notes into a number of shares of Hippo capital stock in accordance with their terms prior to the Effective Time;

 

  

“Hippo notes” are to the convertible promissory notes issued by Hippo and convertible into shares of Hippo common stock;

 

  

“Hippo options” are to options to purchase shares of Hippo common stock;

 

  

“Hippo Preferred Conversion” are to the automatic conversion of each share of Hippo preferred stock into a share of Hippo common stock immediately prior to the Effective Time;

 

  

“Hippo preferred stock” are to the Series A-1 preferred stock, Series A-2 preferred stock, Series B preferred stock, Series C-1 preferred stock, Series C preferred stock, Series D preferred stock and Series E preferred stock of Hippo;

 

  

“Hippo Stockholder Approval” is to the approval of the Merger Agreement and the transactions contemplated thereby, including the Mergers, by the affirmative vote or written consent of the holders of at least (i) a majority of the outstanding shares of Hippo capital stock and (ii) a majority of the outstanding shares of Hippo preferred stock, voting as a single class;

 

  

“Hippo Support Agreement” are to that certain Support Agreement, dated March 3, 2021, by and among RTPZ, certain stockholders of Hippo and Hippo, as amended and modified from time to time;

 

  

“Hippo warrants” are to the outstanding warrants to purchase shares of Hippo capital stock;

 

  

“Hippo Warrant Settlement” are to the exercise or termination of the Hippo warrants prior to the Effective Time;

 

  

“HSR Act” are to the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended;

 

  

“Incentive Award Plan” are to the Hippo Holdings Inc. 2021 Incentive Award Plan attached to this proxy statement/prospectus as Annex D;

 

  

“initial public offering” are to RTPZ’s initial public offering that was consummated on November 23, 2020;

 

  

“IPO registration statement” are to the Registration Statement on Form S-1 (333-249799) filed by RTPZ in connection with its initial public offering, which became effective on November 18, 2020;

 

  

“IRS” are to the U.S. Internal Revenue Service;

 

  

“JOBS Act” are to the Jumpstart Our Business Startups Act of 2012;

 

  

“Liquidation Date” are to November 23, 2022 (or February 23, 2023, if RTPZ has executed a letter of intent, agreement in principle or definitive agreement for an initial business combination within 24 months from the closing of the initial public offering but has not completed the initial business combination within such 24-month period or, if such date is extended at a duly called extraordinary general meeting, such later date);

 

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“Mergers” are to the First Merger and the Second Merger;

 

  

“Merger Sub” means RTPZ Merger Sub Inc., a Delaware corporation and a direct wholly owned subsidiary of RTPZ;

 

  

“Minimum Cash Condition” are to the Trust Amount and the PIPE Investment Amount, in the aggregate, being equal to or greater than $450 million;

 

  

“NYSE” are to the New York Stock Exchange;

 

  

“ordinary shares” are to the RTPZ Class A ordinary shares and the RTPZ Class B ordinary shares, collectively;

 

  

“person” are to any individual, firm, corporation, partnership, limited liability company, incorporated or unincorporated association, joint venture, joint stock company, governmental authority or instrumentality or other entity of any kind;

 

  

“PIPE Investment” are to the purchase of shares of Hippo Holdings common stock pursuant to the Subscription Agreements;

 

  

“PIPE Investment Amount” are to the aggregate gross proceeds received by RTPZ prior to or substantially concurrently with Closing for the shares purchased in the PIPE Investment;

 

  

“PIPE Investors” are to those certain investors participating in the PIPE Investment pursuant to the Subscription Agreements;

 

  

“private placement warrants” are to the RTPZ private placement warrants outstanding as of the date of this proxy statement/prospectus and the warrants of Hippo Holdings issued as a matter of law upon the conversion thereof at the time of the Domestication;

 

  

“pro forma” are to giving pro forma effect to the Business Combination;

 

  

“Proposed Bylaws” are to the proposed bylaws of Hippo Holdings upon the effective date of the Domestication attached to this proxy statement/prospectus as Annex C;

 

  

“Proposed Certificate of Incorporation” are to the proposed certificate of incorporation of Hippo Holdings upon the effective date of the Domestication attached to this proxy statement/prospectus as Annex B;

 

  

“Proposed Organizational Documents” are to the Proposed Certificate of Incorporation and the Proposed Bylaws;

 

  

“public shareholders” are to holders of public shares, whether acquired in RTPZ’s initial public offering or acquired in the secondary market;

 

  

“public shares” are to the RTPZ Class A ordinary shares (including those that underlie the units) that were offered and sold by RTPZ in its initial public offering and registered pursuant to the IPO registration statement or the shares of Hippo Holdings common stock issued as a matter of law upon the conversion thereof at the time of the Domestication, as the context requires;

 

  

“public warrants” are to the redeemable warrants (including those that underlie the units) that were offered and sold by RTPZ in its initial public offering and registered pursuant to the IPO registration statement or the redeemable warrants of Hippo Holdings issued as a matter of law upon the conversion thereof at the time of the Domestication, as the context requires;

 

  

“redemption” are to each redemption of public shares for cash pursuant to the Cayman Constitutional Documents and the Proposed Organizational Documents;

 

  

“Registration Rights Agreement” are to the Registration Rights Agreement to be entered into at Closing, by and among Hippo Holdings, the Sponsor and the other holders of RTPZ Class B ordinary shares, certain former stockholders of Hippo, and Reinvent Capital Fund, attached to this proxy statement/prospectus as Annex J;

 

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“RTPZ” are to Reinvent Technology Partners Z prior to its domestication as a corporation in the State of Delaware;

 

  

“RTPZ Class A ordinary shares” are to RTPZ’s Class A ordinary shares, par value $0.0001 per share;

 

  

“RTPZ Class B ordinary shares” are to RTPZ’s Class B ordinary shares, par value $0.0001 per share;

 

  

“RTPZ units” and “units” are to the units of RTPZ, each unit representing one RTPZ Class A ordinary share and one-fifth of one redeemable warrant to acquire one RTPZ Class A ordinary share, that were offered and sold by RTPZ in its initial public offering and registered pursuant to the IPO registration statement (less the number of units that have been separated into the underlying public shares and underlying warrants upon the request of the holder thereof);

 

  

“Sarbanes Oxley Act” are to the Sarbanes-Oxley Act of 2002;

 

  

“SEC” are to the United States Securities and Exchange Commission;

 

  

“Secondary Transaction” is the transaction pursuant to the Merger Agreement, whereby immediately after the effective date of the Closing, Hippo will redeem Hippo Holdings common stock from certain common stockholders worth $100.0 million at a purchase price of $10.00 per share.

 

  

“Second Merger” is to the merger of Hippo (as the surviving corporation of the First Merger) with and into Hippo Holdings, with Hippo Holdings surviving the merger;

 

  

“Securities Act” are to the Securities Act of 1933, as amended;

 

  

“Sponsor” are to Reinvent Sponsor Z LLC, a Cayman Islands limited liability company;

 

  

“Sponsor Agreement” are to that certain Sponsor Agreement, dated March 3, 2021, by and between RTPZ and Hippo, as amended and modified from time to time, attached to this proxy statement/prospectus as Annex I;

 

  

“Sponsor Shares” are to the Class B ordinary shares beneficially owned by the Sponsor as of the Domestication;

 

  

“Sponsor Support Agreement” are to that certain Support Agreement, dated March 3, 2021, by and among RTPZ, the Sponsor, each officer and director of RTPZ, and Hippo, as amended and modified from time to time, attached to this proxy statement/prospectus as Annex F;

 

  

“Subscription Agreements” are to the subscription agreements pursuant to which the PIPE Investment will be consummated;

 

  

“Third-Party PIPE Investment” are to any PIPE Investment made by a Third-Party PIPE Investor;

 

  

“Third-Party PIPE Investment Amount” are to the aggregate gross purchase price received by RTPZ prior to or substantially concurrently with Closing for the shares in the Third-Party PIPE Investment.

 

  

“Third-Party PIPE Investor” are to any PIPE Investor who is not (i) Reinvent Capital Fund, (ii) the Sponsor, or (iii) a Hippo PIPE Investor;

 

  

“Transaction Approvals” are to approval at the extraordinary general meeting of the Transaction Proposals;

 

  

“Treasury Regulations” are to the regulations promulgated under the Code by the United States Department of the Treasury (whether in final, proposed or temporary form), as the same may be amended from time to time;

 

  

“trust account” are to the trust account established at the consummation of RTPZ’s initial public offering at JPMorgan Chase Bank, N.A. and maintained by Continental, acting as trustee;

 

  

“Trust Agreement” are to the Investment Management Trust Agreement, dated November 18, 2020, by and between RTPZ and Continental, as trustee;

 

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“Trust Amount” are to the amount of cash available in the trust account as of the Closing, after deducting (i) the amount required to satisfy our obligations to our shareholders (if any) that exercise their rights to redeem their RTPZ Class A ordinary shares pursuant to the Cayman Constitutional Documents, (ii) any deferred underwriting commissions being held in the trust account and (iii) any unpaid transaction expenses of RTPZ or its affiliates (to the extent owed by RTPZ) (but prior to payment of any other transaction expenses);

 

  

“Warrant Agreement” is to the Warrant Agreement, dated as of November 18, 2020, by and between RTPZ and Continental, as warrant agent;

 

  

“warrants” are to the public warrants and the private placement warrants.

Unless otherwise stated in this proxy statement/prospectus or the context otherwise requires, all references in this proxy statement/prospectus to RTPZ Class A ordinary shares or warrants include such securities underlying the units.

 

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CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

This proxy statement/prospectus contains statements that are forward-looking and as such are not historical facts. This includes, without limitation, statements regarding the financial position, business strategy and the plans and objectives of management for future operations, including as they relate to the potential Business Combination. These statements constitute projections, forecasts and forward-looking statements, and are not guarantees of performance. Such statements can be identified by the fact that they do not relate strictly to historical or current facts. When used in this proxy statement/prospectus, words such as “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “might,” “plan,” “possible,” “potential,” “predict,” “project,” “should,” “strive,” “would” and similar expressions may identify forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking. When the RTPZ discusses its strategies or plans, including as they relate to the potential Business Combination, it is making projections, forecasts or forward-looking statements. Such statements are based on the beliefs of, as well as assumptions made by and information currently available to, the RTPZ’s management.

Forward-looking statements in this proxy statement/prospectus and in any document incorporated by reference in this proxy statement/prospectus may include, for example, statements about:

 

  

RTPZ’s ability to complete the Business Combination or, if RTPZ does not consummate such Business Combination, any other initial business combination;

 

  

satisfaction or waiver (if applicable) of the conditions to the Mergers, including, among other things:

 

  

the satisfaction or waiver of certain customary closing conditions, including, among others, (i) approval of the Business Combination and related agreements and transactions by the respective shareholders of RTPZ and Hippo, (ii) effectiveness of the registration statement of which this proxy statement/prospectus forms a part, (iii) the completion of the Domestication, (iv) the receipt of certain regulatory approvals (including, but not limited to, approval for listing on NYSE of the shares of Hippo Holdings common stock to be issued in connection with the Mergers, the expiration or early termination of the waiting period or periods under the HSR Act and the receipt of insurance regulatory approvals or exemptions), (v) that RTPZ have at least $5,000,001 of net tangible assets upon Closing and (vi) the absence of any injunctions;

 

  

the Minimum Cash Condition;

 

  

the occurrence of any other event, change or other circumstances that could give rise to the termination of the Merger Agreement;

 

  

the projected financial information, anticipated growth rate, and market opportunity of Hippo Holdings;

 

  

the ability to obtain or maintain the listing of Hippo Holdings common stock and Hippo Holdings warrants on NYSE following the Business Combination;

 

  

our public securities’ potential liquidity and trading;

 

  

our ability to raise financing in the future;

 

  

our success in retaining or recruiting, or changes required in, our officers, key employees or directors following the completion of the Business Combination;

 

  

RTPZ officers and directors allocating their time to other businesses and potentially having conflicts of interest with RTPZ’s business or in approving the Business Combination;

 

  

the use of proceeds not held in the trust account or available to us from interest income on the trust account balance;

 

  

the impact of the regulatory environment and complexities with compliance related to such environment; and

 

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factors relating to the business, operations and financial performance of Hippo and its subsidiaries, including:

 

  

Hippo’s future results of operations and financial positions;

 

  

Hippo’s ability to attract, retain, and expand its customer base;

 

  

Hippo’s ability to maintain and enhance its brand and reputation;

 

  

Hippo’s lack of operating history and ability to attain profitability;

 

  

Hippo’s ability to effectively manage the growth of its business;

 

  

the effects of seasonal trends on Hippo’s results of operation;

 

  

Hippo’s ability to attain greater value from each customer;

 

  

Hippo’s ability to compete effectively in its industry;

 

  

Hippo’s ability to maintain reinsurance contracts;

 

  

Hippo’s ability to utilize its proprietary technology;

 

  

Hippo’s ability to underwrite risks accurately and charge profitable rates;

 

  

Hippo’s ability to protect its intellectual property;

 

  

Hippo’s ability to expand its product offerings or improve existing ones;

 

  

Hippo’s ability to attract and retain personnel;

 

  

potential harm caused by misappropriation of Hippo’s data and compromises in cybersecurity;

 

  

potential harm caused by changes in internet search engines’ methodologies;

 

  

Hippo’s ability to raise additional capital;

 

  

fluctuations in Hippo’s results of operation and operating metrics;

 

  

Hippo’s ability to receive, process, store, use and share data, and compliance with laws and regulations related to data privacy and data security;

 

  

Hippo’s ability to stay in compliance with laws and regulation that currently apply, or become applicable, to Hippo’s business both in the United States and internationally;

 

  

Hippo’s inability to predict the lasting impacts of COVID-19 to its business in particular, and the global economy generally;

 

  

Hippo’s expected uses of the cash on its balance sheet upon completion of the Business Combination; and

 

  

other factors detailed under the section entitled “Risk Factors” and elsewhere in this proxy statement/prospectus.

The forward-looking statements contained in this proxy statement/prospectus and in any document incorporated by reference in this proxy statement/prospectus are based on current expectations and beliefs concerning future developments and their potential effects on us or Hippo. There can be no assurance that future developments affecting us or Hippo will be those that RTPZ or Hippo have anticipated. These forward-looking statements involve a number of risks, uncertainties (some of which are beyond RTPZ’s control or the control of Hippo) or other assumptions that may cause actual results or performance to be materially different from those expressed or implied by these forward-looking statements. These risks and uncertainties include, but are not limited to, those factors described under the heading “Risk Factors” beginning on page 28 of this proxy statement/prospectus. Should one or more of these risks or uncertainties materialize, or should any of our assumptions prove incorrect, actual results may vary in material respects from those projected in these forward-

 

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looking statements. RTPZ and Hippo undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws.

Before any RTPZ shareholder grants its proxy or instructs how its vote should be cast or votes on the proposals to be put to the extraordinary general meeting, such stockholder should be aware that the occurrence of the events described in the “Risk Factors” section and elsewhere in this proxy statement/prospectus may adversely affect us.

 

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QUESTIONS AND ANSWERS FOR SHAREHOLDERS AND

PUBLIC WARRANT HOLDERS OF RTPZ

The questions and answers below highlight only selected information from this document and only briefly address some commonly asked questions about the proposals to be presented at the extraordinary general meeting and Warrant Holders Meeting, including with respect to the proposed Business Combination. The following questions and answers do not include all the information that is important to RTPZ’s shareholders and public warrant holders. RTPZ urges shareholders and public warrant holders to read this proxy statement/prospectus, including the Annexes and the other documents referred to herein, carefully and in their entirety to fully understand the proposed Business Combination and the voting procedures for the extraordinary general meeting and Warrant Holders Meeting, which will be held at 9:00 a.m., Eastern Time and 10:00 a.m., Eastern Time, respectively, on July 29, 2021, at the offices of Sullivan & Cromwell LLP located at 125 Broad Street, New York, New York 10004 and virtually via live webcast at https://www.cstproxy.com/reinventtechnologypartnersz/2021. You will be permitted to attend the extraordinary general meeting and/or the Warrant Holders Meeting in person at the offices of Sullivan & Cromwell LLP only to the extent consistent with, or permitted by, applicable law and directives of public health authorities. Based on current guidance, we do not anticipate being able to accommodate shareholders who wish to attend in person, and we strongly urge you to attend the extraordinary general meeting and/or the Warrant Holders Meeting virtually. To participate in the extraordinary general meeting and/or Warrant Holders Meeting, visit https://www.cstproxy.com/reinventtechnologypartnersz/2021 and enter the 12 digit control number included on your proxy card. You may register for the meetings as early as 5:00 p.m., Eastern Time, on July 23, 2021. If you hold your shares and/or public warrants through a bank, broker or other nominee, you will need to take additional steps to participate in the meeting, as described in this proxy statement.

 

Q:

Why am I receiving this proxy statement/prospectus?

 

A:

RTPZ shareholders are being asked to consider and vote upon, among other proposals, a proposal to approve and adopt the Merger Agreement and approve the Business Combination. The Merger Agreement provides that, among other things, in accordance with the terms and subject to the conditions of the Merger Agreement as more fully described elsewhere in this proxy statement/prospectus, (a) Merger Sub will merge with and into Hippo, the separate corporate existence of Merger Sub will cease and Hippo will be the surviving corporation and a wholly owned subsidiary of Hippo Holdings (the “First Merger”), and (b) immediately following the First Merger, Hippo (as the surviving corporation of the First Merger) will merge with and into Hippo Holdings, the separate corporate existence of Hippo will cease and Hippo Holdings will be the surviving corporation (the “Second Merger” and, together with the First Merger, the “Mergers”). See the section entitled “BCA Proposal” for more detail.

A copy of the Merger Agreement is attached to this proxy statement/prospectus as Annex A and you are encouraged to read it in its entirety.

As a condition to the Mergers, at least one day prior to the Closing Date, RTPZ will change its jurisdiction of incorporation by effecting a deregistration under the Cayman Islands Companies Law and a domestication under Section 388 of the DGCL, pursuant to which RTPZ’s jurisdiction of incorporation will be changed from the Cayman Islands to the State of Delaware and its name will be changed to “Hippo Holdings Inc.” As a result of and upon the effective time of the Domestication, (1) each of the then issued and outstanding RTPZ Class A ordinary shares will convert automatically, on a one-for-one basis, into a share of Hippo Holdings common stock; (2) each of the then issued and outstanding RTPZ Class B ordinary shares will convert automatically, on a one-for-one basis, into a share of Hippo Holdings common stock; (3) each then issued and outstanding RTPZ warrant will convert automatically into a Hippo Holdings warrant, pursuant to the Warrant Agreement; and (4) each then issued and outstanding RTPZ unit will separate automatically into one share of Hippo Holdings common stock, on a one-for-one basis, and one-fifth of one Hippo Holdings warrant. See “Domestication Proposal” for additional information.

 

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The provisions of the Proposed Organizational Documents will differ materially from the Cayman Constitutional Documents. Please see “What amendments will be made to the current constitutional documents of RTPZ?” below.

RTPZ’s public warrant holders are being asked to consider and vote upon the Warrant Amendment Proposal to amend the terms of the Warrant Agreement, such that the exercise period for the warrants will commence 30 days after the first date on which RTPZ completes the Business Combination (such amendment, the “Warrant Amendment” and such proposal the “Warrant Amendment Proposal”). See the section entitled “Warrant Holder Proposal 1: The Warrant Amendment Proposal.

RTPZ’s public warrant holders are also being asked to consider and vote upon the Warrant Holders Adjournment Proposal to adjourn the Warrant Holders Meeting to a later date or dates, including, if necessary, to permit further solicitation and vote of proxies in the event that there are insufficient votes for the approval of the Warrant Amendment Proposal (the “Warrant Holders Adjournment Proposal” and together with the Warrant Amendment, the “Warrant Holder Proposals”). See the section entitled “Warrant Holder Proposal 2: The Warrant Holders Adjournment Proposal.

THE VOTE OF SHAREHOLDERS AND PUBLIC WARRANT HOLDERS IS IMPORTANT. SHAREHOLDERS AND PUBLIC WARRANT HOLDERS ARE ENCOURAGED TO VOTE AS SOON AS POSSIBLE AFTER CAREFULLY REVIEWING THIS PROXY STATEMENT/PROSPECTUS, INCLUDING THE ANNEXES AND THE ACCOMPANYING FINANCIAL STATEMENTS OF RTPZ AND HIPPO, CAREFULLY AND IN ITS ENTIRETY.

 

Q:

What proposals are shareholders of RTPZ being asked to vote upon?

 

A:

At the extraordinary general meeting, RTPZ is asking holders of ordinary shares to consider and vote upon:

 

  

a proposal to approve by ordinary resolution and adopt the Merger Agreement (the “BCA Proposal”);

 

  

a proposal to approve by special resolution the Domestication (the “Domestication Proposal”);

 

  

the following four separate proposals (collectively, the “Organizational Documents Proposals”) to approve by special resolution the following material differences between the Cayman Constitutional Documents and the Proposed Organizational Documents:

 

  

to authorize the change in the authorized capital stock of RTPZ from (i) 500,000,000 RTPZ Class A ordinary shares, 50,000,000 RTPZ Class B ordinary shares and 5,000,000 preferred shares, each par value $0.0001 per share, to (ii) 2,000,000,000 shares of Hippo Holdings common stock and 10,000,000 shares of Hippo Holdings preferred stock;

 

  

to authorize the board of directors of Hippo Holdings to issue any or all shares of Hippo Holdings preferred stock in one or more classes or series, with such terms and conditions as may be expressly determined by the Hippo Holdings’ board of directors and as may be permitted by the DGCL;

 

  

to divide the Hippo Holdings’ board of directors into three classes with only one class of directors being elected in each year and each class serving a three-year term; and

 

  

to authorize all other changes in connection with the replacement of the Cayman Constitutional Documents with the Proposed Organizational Documents in connection with the consummation of the Business Combination (copies of which are attached to this proxy statement/prospectus as Annex B and Annex C, respectively), including (1) changing the corporate name from “Reinvent Technology Partners Z” to “Hippo Holdings Inc.,” (2) making Hippo Holdings’ corporate existence perpetual, (3) adopting Delaware as the exclusive forum for certain stockholder litigation, (4) electing not to be governed by Section 203 of the DGCL and, instead, to be governed by a provision substantially similar to Section 203 of the DGCL, and (5) removing certain provisions related to RTPZ’s status as a blank check company that will no longer be applicable upon consummation of the Business Combination;

 

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for holders of RTPZ Class B ordinary shares, consider and vote upon a proposal to approve by ordinary resolution the election of 8 directors to serve staggered terms, who, upon consummation of the Business Combination, will be the directors of Hippo Holdings (the “Director Election Proposal”);

 

  

a proposal to approve by ordinary resolution for purposes of complying with the applicable provisions of NYSE Listing Rule 312.03, the issuance of Hippo Holdings common stock to (a) the PIPE Investors, including Reinvent Capital Fund LP (“Reinvent Capital Fund”) and the Hippo PIPE Investors, in connection with the PIPE Investment and (b) the Hippo stockholders pursuant to the Merger Agreement (the “Share Issuance Proposal”);

 

  

a proposal to approve by ordinary resolution Incentive Award Plan (the “Incentive Award Plan Proposal”);

 

  

a proposal to approve by ordinary resolution the ESPP (the “ESPP Proposal”); and

 

  

a proposal to approve the adjournment of the extraordinary general meeting to a later date or dates, if necessary, to permit further solicitation and vote of proxies in the event that there are insufficient votes for the approval of one or more proposals at the extraordinary general meeting (the “Adjournment Proposal”).

If RTPZ’s shareholders do not approve each of the Condition Precedent Proposals, then unless certain conditions in the Merger Agreement are waived by the applicable parties to the Merger Agreement, the Merger Agreement could terminate and the Business Combination may not be consummated. See “BCA Proposal,” “Domestication Proposal,” “Organizational Documents Proposals,” “Director Election Proposal,” “Share Issuance Proposal,” “Incentive Award Plan Proposal,” “ESPP Proposal” and “Adjournment Proposal.”

RTPZ will hold the extraordinary general meeting to consider and vote upon these proposals. This proxy statement/prospectus contains important information about the Business Combination and the other matters to be acted upon at the extraordinary general meeting. Shareholders of RTPZ should read it carefully.

After careful consideration, RTPZ’s board of directors has determined that the BCA Proposal, the Domestication Proposal, each of the Organizational Documents Proposals, the Director Election Proposal, the Share Issuance Proposal, the Incentive Award Plan Proposal, the ESPP Proposal and the Adjournment Proposal are in the best interests of RTPZ and its shareholders, and unanimously recommends that you vote or give instruction to vote “FOR” each of those proposals.

The existence of financial and personal interests of one or more of RTPZ’s directors may result in a conflict of interest on the part of such director(s) between what he, she or they may believe is in the best interests of RTPZ and its shareholders and what he, she or they may believe is best for himself, herself or themselves in determining to recommend that shareholders vote for the proposals. In addition, RTPZ’s directors and officers have interests in the Business Combination that may conflict with your interests as a shareholder. See the section entitled “BCA Proposal  Interests of RTPZ’s Directors and Executive Officers in the Business Combination” for a further discussion of these considerations.

 

Q:

Why is RTPZ holding the Warrant Holders Meeting?

 

A:

RTPZ is holding the Warrant Holders Meeting to seek approval from the public warrant holders to amend the Warrant Agreement to provide that the exercise period for the warrants will commence 30 days after the first date on which RTPZ completes the Business Combination. A summary of the Warrant Amendment Proposal is set forth in the section entitled “Warrant Holder Proposal 1: The Warrant Amendment Proposal” of this proxy statement/prospectus and a complete copy of the Amendment to the Warrant Agreement is attached hereto as Annex H.

The board of directors of RTPZ believes it is in the best interests of RTPZ and the warrant holders that the warrants be exercisable 30 days after the completion of the Business Combination. By allowing the warrant

 

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holders to exercise the warrants 30 days after the completion of the Business Combination (as opposed to the later of 12 months from the closing of RTPZ’s initial public offering or 30 days after the completion of a business combination), RTPZ is providing the warrant holders with the opportunity to realize any upside potential earlier. If the warrants are exercised or redeemed by RTPZ pursuant to the Warrant Agreement, RTPZ would also have more certainty as to its capital structure as the warrants would no longer be outstanding. See also “Risk Factors — Risks Related to the Business Combination and RTPZ — Pursuant to the terms of the Warrant Amendment, the warrants will become exercisable, and we will have the ability to redeem the warrants (subject to certain conditions), at any time commencing on the date that is 30 days after the completion of the Business Combination.”

In addition, at the Warrant Holders Meeting, the public warrant holders will also be asked to approve a proposal to approve the adjournment of the Warrant Holders Meeting to a later date or dates, including, if necessary, to permit further solicitation and vote of proxies in the event that there are insufficient votes for the approval of the Warrant Amendment Proposal. This is referred to herein as the Warrant Holders Adjournment Proposal. This proposal will only be presented at the Warrant Holders Meeting if there are not sufficient votes to approve the Warrant Amendment Proposal.

 

Q:

What proposals are public warrant holders being asked to vote upon?

 

A:

At the Warrant Holders Meeting, the public warrant holders are being asked to vote on the following Warrant Holder Proposals:

 

  

a proposal to amend the Warrant Agreement such that the exercise period for the warrants will commence 30 days after the first date on which RTPZ completes the Business Combination; and

 

  

a proposal to approve the adjournment of the Warrant Holders Meeting to a later date or dates, if necessary, to permit further solicitation and vote of proxies in the event that there are insufficient votes for the approval of the Warrant Amendment Proposal.

RTPZ will hold the Warrant Holders Meeting to consider and vote upon these proposals. This proxy statement/prospectus contains important information about the Warrant Amendment and the other matters to be acted upon at the Warrant Holders Meeting. Public warrant holders of RTPZ should read it carefully.

After careful consideration, RTPZ’s board of directors has determined that the Warrant Amendment Proposal and Warrant Holders Adjournment Proposal are in the best interests of RTPZ and its public warrant holders, and unanimously recommends that you vote or give instruction to vote “FOR” each of those proposals.

 

Q:

Are the proposals conditioned on one another?

 

A:

Yes. The Business Combination is conditioned on the approval of each of the Condition Precedent Proposals at the extraordinary general meeting. Each of the Condition Precedent Proposals is cross-conditioned on the approval of each other. The Warrant Amendment Proposal is conditioned upon the approval of each of the Condition Precedent Proposals. The Condition Precedent Proposals are not conditioned upon the approval of the Warrant Amendment Proposal. Approval of the Warrant Amendment is not a condition to the consummation of the Business Combination. Accordingly, the Business Combination can be completed even if the Warrant Amendment Proposal is not approved. The Adjournment Proposal and the Warrant Holders Adjournment Proposal are not conditioned upon the approval of any other proposal.

 

Q:

Why is RTPZ proposing the Business Combination?

 

A:

RTPZ was organized to effect a merger, share exchange, asset acquisition, share purchase, reorganization or similar business combination, with one or more businesses or entities.

 

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Hippo is a different kind of home protection company, built from the ground up to provide a new standard of care and protection for homeowners. Its goal is to make homes safer and better protected so customers spend less time worrying about the burdens of homeownership and more time enjoying their homes and the life within. Harnessing real-time data, smart home technology, and a growing suite of home services, Hippo has created an integrated home protection platform.

Based on its due diligence investigations of Hippo and the industry in which it operates, including the financial and other information provided by Hippo in the course of RTPZ’s due diligence investigations, the RTPZ board of directors believes that the Business Combination with Hippo is in the best interests of RTPZ and its shareholders and presents an opportunity to increase shareholder value. However, there is no assurance of this. See “BCA Proposal  RTPZ’s Board of Directors’ Reasons for the Business Combination” for additional information.

Although RTPZ’s board of directors believes that the Business Combination with Hippo presents a unique business combination opportunity and is in the best interests of RTPZ and its shareholders, the board of directors did consider the following potentially material negative factors in arriving at that conclusion:

 

  

Macroeconomic Risks. Macroeconomic uncertainty, including the potential impact of the COVID-19 pandemic and the Texas winter storms in February 2021, and the direct and indirect effects those events could have on the combined company’s financial condition and operations;

 

  

Business Plan and Projections May Not Be Achieved. The risk that Hippo may not be able to execute on the business plan, and realize the financial performance as set forth in the financial projections, in each case as presented to the management of RTPZ;

 

  

Limited Operating History and Historical Net Losses. The fact that Hippo has a relatively limited operating history, and has incurred net losses on an annual basis since its incorporation in 2015;

 

  

Redemption Risk. The potential a significant number of RTPZ stockholders could elect to redeem their public shares for cash prior to the consummation of the Business Combination, which may impair or inhibit the ability of RTPZ to consummate the Business Combination;

 

  

Stockholder Votes. The risk that RTPZ’s stockholders or Hippo’s stockholders may not vote to approve the Business Combination;

 

  

Closing Conditions. The fact that the completion of the Business Combination is conditioned on the satisfaction of certain closing conditions that are not within RTPZ’s control;

 

  

Regulatory Approvals. The fact that regulatory and other approvals or exemptions are required in connection with the Mergers, and the risk that such regulatory approvals or exemptions will not be received in a timely manner or may impose unacceptable conditions;

 

  

Litigation. The potential for legal claims challenging the Business Combination;

 

  

Public Company and Listing Risks. The challenges associated with preparing Hippo, a private entity, for the applicable disclosure and listing requirements to which the combined company will be subject as a publicly traded company on the NYSE;

 

  

Benefits May Not Be Achieved. The risk that the potential benefits of the Business Combination may not be fully achieved or may not be achieved;

 

  

Diversion of Hippo’s Resources.    The diversion of Hippo’s focus and resources from other strategic opportunities and operational matters while working to consummate and implement the Business Combination;

 

  

Liquidation of RTPZ. The risks and costs to RTPZ if the Business Combination is not completed, including the risk of diverting management focus and resources from other business combination opportunities, which could result in RTPZ being unable to effect a business combination by November 23, 2022 (or February 23, 2023 if RTPZ has executed a letter of intent, agreement in

 

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principle or definitive agreement for an initial business combination by November 23, 2022 but has not completed the initial business combination by then);

 

  

Growth Initiatives May Not Be Achieved. The risk that Hippo’s growth initiatives may not be fully achieved or may not be achieved within the expected time frame;

 

  

No Third-Party Valuation. RTPZ’s decision not to obtain a third-party valuation or fairness opinion in connection with the Business Combination;

 

  

Insider Participation in the Secondary Transaction. The fact that certain existing stockholders of Hippo, including members of Hippo’s senior management team, are participating in the Secondary Transaction;

 

  

RTPZ Stockholders Receiving a Minority Position in Hippo. The risks associated with the minority position in Hippo that RTPZ stockholders will hold following consummation of the Business Combination; and

 

  

Costs. Anticipated costs related to the Business Combination.

These factors are discussed in greater detail in the section entitled “BCA Proposal — RTPZ’s Board of Directors’ Reasons for the Business Combination,” as well as in the sections entitled “Risk Factors — Risks Related to Our Business.”

 

Q:

What will Hippo stockholders receive in return for RTPZ’s acquisition of all of the issued and outstanding equity interests of Hippo?

 

A:

Immediately prior to the Effective Time, (i) each share of Hippo preferred stock will be converted into shares of Hippo common stock at the then-effective conversion rate as calculated pursuant to the terms of the Hippo Amended and Restated Certificate of Incorporation, (ii) the Hippo warrants will be exercised in full on a cash or cashless basis or terminated without exercise, as applicable, in accordance with their respective terms, and (iii) the Hippo notes will be automatically converted into shares of Hippo common stock in accordance with their respective terms. Subsequently, at the Effective Time, among other things, all outstanding shares of Hippo common stock as of immediately prior to the Effective Time, and, together with shares of Hippo common stock reserved in respect of Hippo options outstanding as of immediately prior to the Effective Time that will be converted into options based on Hippo Holdings common stock, will be cancelled in exchange for the right to receive, or the reservation of an aggregate of 552,200,000 shares of Hippo Holdings common stock (at a deemed value of $10.00 per share), which, in the case of Hippo options, will be shares underlying options based on Hippo Holding common stock, representing a pre-transaction equity value of Hippo of $5.522 billion. The portion of the Aggregate Merger Consideration reflecting the conversion of the Hippo options is calculated assuming that all Hippo Holdings options are net-settled (although Hippo Holdings options may by their terms be cash-settled, resulting in additional dilution and, therefore, a reduced Exchange Ratio). For further details, see “BCA Proposal  The Merger Agreement  Consideration  Aggregate Merger Consideration.”

 

Q:

What is the value of the consideration to be received in the Mergers?

 

A:

The exact value of the consideration to be received by holders of equity interests of Hippo at the Closing will depend on the price of RTPZ ordinary shares as of such time and the aggregate fully diluted number of shares of Hippo common stock as of such time, and will not be known with certainty until the Closing.

For informational purposes only, assuming (i) a purchase price of $5.522 billion, (ii) aggregate fully diluted number of shares of Hippo common stock as of Closing of 80,151,511 (and a resulting Exchange Ratio of approximately 6.95948) and (iii) a market price of RTPZ ordinary shares of $9.93 per share (based on the closing price of RTPZ ordinary shares on the NYSE on June 30, 2021), if the Closing had occurred on June 30, 2021, then, giving effect to the Domestication, each share of Hippo common stock would have

 

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been canceled and converted into the right to receive 6.95948 shares of Hippo Holdings common stock with an aggregate market value (based on the market price of RTPZ ordinary shares as of such date) of $9.93.

We have provided the above calculations for informational purposes only based on the assumptions set forth above. The actual Exchange Ratio will be determined at the Closing pursuant to the formula and terms set forth in the Merger Agreement. The aggregate fully diluted number of shares of Hippo common stock as of Closing and the market price of RTPZ ordinary shares assumed for purposes of the foregoing illustration are each subject to change, and the actual values for such inputs at the time of the Closing could result in the actual Exchange Ratio and the value of the consideration to be received by holders of equity interests in Hippo being more or less than the amounts reflected above. We urge you to obtain current market quotations for RTPZ ordinary shares.

The 23,000,000 shares of Hippo Holdings common stock into which the 23,000,000 RTPZ Class A ordinary shares collectively held by RTPZ’s public shareholders will automatically convert in connection with the Mergers (as a direct result of the Domestication), if unrestricted and freely tradable, would have had an aggregate market value of approximately $228.39 million based upon the closing price of $9.93 per share on the NYSE on June 30, 2021, the most recent practicable date prior to the date of this proxy statement/prospectus. The 4,600,000 Hippo Holdings warrants into which the 4,600,000 public warrants will automatically convert in connection with the Mergers (as a direct result of the Domestication), if unrestricted and freely tradable, would have had an aggregate market value of $8,326,000 based upon the closing price of $1.81 per warrant on the NYSE on June 30, 2021, the most recent practicable date prior to the date of this proxy statement/prospectus. Based on the above assumed prices, the aggregate value RTPZ public shareholders and public warrant holders will receive with the Business Combination and related transactions is $236.716 million. The 5,750,000 shares of Hippo Holdings common stock into which the 5,750,000 Founder Shares held by the Sponsor and RTPZ’s independent directors will automatically convert in connection with the Mergers (as a direct result of the Domestication), if unrestricted, fully vested and freely tradable, would have had an aggregate market value of $57.098 million based upon the closing price of $9.93 per share on the NYSE on June 30, 2021, the most recent practicable date prior to the date of this proxy statement/prospectus. The 120,000 shares of Hippo Holdings common stock into which the 120,000 Founder Shares held by RTPZ’s independent directors will automatically convert in connection with the Mergers (as a direct result of the Domestication), if unrestricted and freely tradable, would have had an aggregate market value of $1.192 million based upon the closing price of $9.93 per share on the NYSE on June 30, 2021, the most recent practicable date prior to the date of this proxy statement/prospectus. The 4,400,000 Hippo Holdings warrants into which the 4,400,000 private placement warrants held by the Sponsor will automatically convert in connection with the Mergers (as a direct result of the Domestication), if unrestricted and freely tradable, would have had an aggregate market value of $7.964 million based upon the closing price of $1.81 per warrant on the NYSE on June 30, 2021, the most recent practicable date prior to the date of this proxy statement/prospectus. Reinvent Capital Fund, an affiliate of RTPZ, has subscribed for $10,000,000 of the PIPE Investment, for which it will receive 1,000,000 shares of Hippo Holdings common stock, which, if unrestricted and freely tradable, would have had an aggregate market value of $9.93 million based upon the closing price of $9.93 per share on the NYSE on June 30, 2021, the most recent practicable date prior to the date of this proxy statement/prospectus. Based on the current price, the aggregate value Sponsor, RTPZ’s independent directors, and Reinvent Capital Fund will receive with the Business Combination and related transactions is $74.992 million, of which $55.906 million will be subject to a lock-up and price vesting.

 

Q:

What equity stake will current RTPZ shareholders and Hippo stockholders hold in Hippo Holdings immediately after the consummation of the Business Combination?

 

A:

As of the date of this proxy statement/prospectus, there are 28,750,000 ordinary shares issued and outstanding, which includes the 5,750,000 Founder Shares held by the Sponsor and RTPZ’s independent directors and 23,000,000 public shares. As of the date of this proxy statement/prospectus, there are 9,000,000 warrants outstanding, which includes the 4,400,000 private placement warrants held by the

 

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 Sponsor and 4,600,000 public warrants. Each whole warrant entitles the holder thereof to purchase one RTPZ Class A ordinary share and, following the Domestication, will entitle the holder thereof to purchase one share of Hippo Holdings common stock.

It is anticipated that, following the Business Combination, (1) existing stockholders of Hippo will own 86.8% of outstanding Hippo Holdings common stock, (2) the Hippo PIPE Investors will own 1.6% of outstanding Hippo Holdings common stock, (3) the Third Party PIPE Investors and Reinvent Capital Fund will own 7.1% of outstanding Hippo Holdings common stock, (4) existing public shareholders of RTPZ (Class A ordinary shares) will own 3.6% of outstanding Hippo Holdings common stock and (5) the Sponsor and the current independent directors of RTPZ, as holders of the RTPZ Class B ordinary shares, will collectively own 0.9% of outstanding Hippo Holdings common stock. These percentages assume (i) that no public shareholders of RTPZ exercise their redemption rights in connection with the Mergers, (ii) the vesting and exercise (on a net share basis) of all Hippo Holdings options for shares of Hippo Holdings common stock, (iii) that Hippo Holdings issues 55,000,000 shares of Hippo Holdings common stock to the PIPE Investors in connection with the PIPE Investment, and (iv) that, pursuant to the Merger Agreement, Hippo Holdings will redeem an aggregate of 10,000,000 shares of Hippo Holdings common stock from certain stockholders of Hippo immediately following the Business Combination. If the actual facts are different from these assumptions, the percentage ownership retained by the Company’s existing shareholders in the combined company will be different.

The Third Party PIPE Investors have agreed to purchase 44,100,000 shares of Hippo Holdings common stock, at $10.00 per share, for approximately $441 million of gross proceeds. Reinvent Capital Fund has agreed to purchase 1,000,000 shares of Hippo Holdings common stock, at $10.00 per share, for approximately $10 million of gross proceeds. The Hippo PIPE Investors have agreed to purchase 9,900,000 shares of Hippo Holdings common stock, at $10.00 per share, for approximately $99 million of gross proceeds. If the actual facts are different from these assumptions, the percentage ownership retained by RTPZ’s existing shareholders in the combined company will be different.

The following table illustrates varying ownership levels in Hippo Holdings immediately following the consummation of the Business Combination based on the assumptions above.

 

   Assuming No
Redemptions
(Shares)(4)
   %
Ownership
  Assuming
Maximum
Redemptions
(Shares)(4)
   %
Ownership
 

Hippo stockholders(1)(2)

   547,700,896    86.8  547,700,896    90.1

PIPE Investors — Existing Hippo stockholders

   9,900,000    1.6  9,900,000    1.6

PIPE Investors(3)(5)

   45,100,000    7.1  45,100,000    7.4

Class A ordinary shares

   23,000,000    3.6  —      0.0

Class B ordinary shares(5)

   5,750,000    0.9  5,750,000    0.9
  

 

 

    

 

 

   

Pro Forma common stock at March, 31 2021

   631,450,896     608,450,896   
  

 

 

    

 

 

   

 

 (1)

The number of outstanding shares in the table above assumes the issuance of approximately 55.3 million shares of Hippo common stock underlying rollover options that do not represent legally outstanding shares of Hippo common stock at Closing.

 (2)

The Hippo stockholders’ shares have also been reduced by 10 million shares to account for the Secondary Transaction, whereby Hippo Holdings would buy back 10 million shares for $100.0 million from certain Hippo stockholders, that is expected to occur immediately after the Closing.

 (3)

This includes $10.0 million of investment from Reinvent Capital Fund and remaining $441.0 million from Third Party PIPE investors.

 (4)

The two levels of redemptions assumed in the unaudited pro forma condensed combined balance sheet and statement of operations are based on the assumption that there are no adjustments for the

 

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 outstanding RTPZ warrants issued in connection with its initial public offering as such securities are not exercisable until 30 days after the Closing (assuming the Warrant Amendment Proposal is approved).
 (5)

Through the Class B ordinary shares, the Sponsor and its related entities will own 0.54% assuming no redemptions, and 0.55% assuming maximum redemptions of Hippo Holdings common stock outstanding immediately following the consummation of the Business Combination.

For further details, see “BCA Proposal  The Merger Agreement  Consideration  Aggregate Merger Consideration.”

 

Q:

What is the maximum number of shares that may be redeemed in order for RTPZ to satisfy the Minimum Cash Condition?

 

A:

Assuming the PIPE Investment is completed in full, it is expected that the Minimum Cash Condition will be satisfied even if all holders redeem in full.

 

Q:

How has the announcement of the Business Combination affected the trading price of the RTPZ Class A ordinary shares?

 

A:

On March 3, 2021, the trading date before the public announcement of the Business Combination, RTPZ’s public units, Class A ordinary shares and public warrants closed at $11.82, $11.11 and $3.40, respectively. On June 30, 2021, the most recent practicable date prior to the date of this proxy statement/prospectus, RTPZ’s public units, Class A ordinary shares and public warrants closed at $10.28, $9.93 and $1.81, respectively.

 

Q:

Will the Company obtain new financing in connection with the Business Combination?

 

A:

Yes. The PIPE Investors have agreed to purchase in the aggregate 55,000,000 shares of Hippo Holdings common stock, for $550,000,000 of gross proceeds, in the PIPE Investment, $10,000,000 of which is expected to be funded by Reinvent Capital Fund. The PIPE Investment is contingent upon, among other things, the closing of the Business Combination. See “BCA Proposal  Related Agreements  Subscription Agreements.”

 

Q:

Why is RTPZ proposing the Domestication?

 

A:

Our board of directors believes that there are significant advantages to us that will arise as a result of a change of RTPZ’s domicile to Delaware. Further, RTPZ’s board of directors believes that any direct benefit that the DGCL provides to a corporation also indirectly benefits its stockholders, who are the owners of the corporation. RTPZ’s board of directors believes that there are several reasons why a reincorporation in Delaware is in the best interests of the Company and its shareholders, including, (i) the prominence, predictability and flexibility of the DGCL, (ii) Delaware’s well-established principles of corporate governance and (iii) the increased ability for Delaware corporations to attract and retain qualified directors. Each of the foregoing are discussed in greater detail in the section entitled “Domestication Proposal Reasons for the Domestication.”

To effect the Domestication, RTPZ will file a notice of deregistration with the Cayman Islands Registrar of Companies, together with the necessary accompanying documents, and file a certificate of incorporation and a certificate of corporate domestication with the Secretary of State of the State of Delaware, under which RTPZ will be domesticated and continue as a Delaware corporation.

The approval of the Domestication Proposal is a condition to the closing of the Mergers under the Merger Agreement. The approval of the Domestication Proposal requires a special resolution under the Cayman Islands Companies Law, being the affirmative vote of holders of at least two-thirds of the ordinary shares

 

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represented in person or by proxy and entitled to vote thereon and who vote at the extraordinary general meeting. Abstentions and broker non-votes, while considered present for the purposes of establishing a quorum, will not count as votes cast at the extraordinary general meeting.

 

Q:

What amendments will be made to the current constitutional documents of RTPZ?

 

A:

The consummation of the Business Combination is conditioned, among other things, on the Domestication. Accordingly, in addition to voting on the Business Combination, RTPZ’s shareholders are also being asked to consider and vote upon a proposal to approve the Domestication and replace RTPZ’s Cayman Constitutional Documents, in each case, under the Cayman Islands Companies Law, with the Proposed Organizational Documents, in each case, under the DGCL, which differ materially from the Cayman Constitutional Documents in the following respects:

 

   

The Cayman Constitutional Documents

  

The Proposed Organizational
Documents

Authorized Shares

Organizational Documents

Proposal A)

  The Cayman Constitutional Documents authorize 555,000,000 shares, consisting of 500,000,000 RTPZ Class A ordinary shares, 50,000,000 RTPZ Class B ordinary shares and 5,000,000 preferred shares.  The Proposed Organizational Documents authorize 2,010,000,000 shares, consisting of 2,000,000,000 shares of Hippo Holdings common stock and 10,000,000 shares of Hippo Holdings preferred stock.
  See paragraph 5 of the Existing Memorandum.  See Article Fourth of the Proposed Certificate of Incorporation.

Authorize the Board of

Directors to Issue Preferred

Stock Without Stockholder

Consent (Organizational

Documents Proposal B)

  The Cayman Constitutional Documents authorize the issuance of 5,000,000 preferred shares with such designation, rights and preferences as may be determined from time to time by RTPZ’s board of directors. Accordingly, RTPZ’s board of directors is empowered under the Cayman Constitutional Documents, without shareholder approval, to issue preferred shares with dividend, liquidation, redemption, voting or other rights which could adversely affect the voting power or other rights of the holders of ordinary shares (except to the extent it may affect the ability of RTPZ to carry out a conversion of RTPZ Class B ordinary shares on the Closing Date, as contemplated by the Existing Articles).  The Proposed Organizational Documents authorize the Board to issue all or any shares of preferred stock in one or more series and to fix for each such series such voting powers, full or limited, and such designations, preferences and relative, participating, optional or other special rights and such qualifications, limitations or restrictions thereof, as the Board may determine.
  See paragraph 5 of the Existing Memorandum and Articles 3 and 17 of the Existing Articles.  See Article Fifth, subsection (B) of the Proposed Certificate of Incorporation.

 

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The Cayman Constitutional Documents

  

The Proposed Organizational
Documents

Classified Board

(Organizational

Documents Proposal C)

  The Cayman Constitutional Documents provide that RTPZ board of directors shall be composed of one class.  The Proposed Organizational Documents provide that the Board be divided into three classes with only one class of directors being elected in each year and each class serving a three-year term.
  See Article 29 of the Existing Articles.  See Article Seventh of the Proposed Certificate of Incorporation.

Corporate Name

(Organizational

Documents Proposal D)

  The Cayman Constitutional Documents provide that the name of the company is “Reinvent Technology Partners Z”  The Proposed Organizational Documents provide that the name of the corporation will be “Hippo Holdings Inc.”
  See paragraph 1 of the Existing Memorandum.  See Article First of the Proposed Certificate of Incorporation.

Perpetual Existence

(Organizational

Documents Proposal D)

  The Cayman Constitutional Documents provide that if RTPZ does not consummate a business combination (as defined in the Cayman Constitutional Documents) by November 23, 2022 (or February 23, 2023 if RTPZ has executed a letter of intent, agreement in principle or definitive agreement for an initial business combination within 24 months from the closing of the initial public offering but has not completed the initial business combination within such 24-month period or if such date is extended at a duly called extraordinary general meeting, such later date), RTPZ will cease all operations except for the purposes of winding up and will redeem the public shares and liquidate RTPZ’s trust account.  The Proposed Organizational Documents do not include any provisions relating to Hippo Holdings’ ongoing existence; the default under the DGCL will make Hippo Holdings’ existence perpetual.
  See Article 49 of the Existing Articles.  Default rule under the DGCL.

Exclusive Forum

(Organizational

Documents Proposal D)

  The Cayman Constitutional Documents do not contain a provision adopting an exclusive forum for certain shareholder litigation.  The Proposed Organizational Documents adopt Delaware as the exclusive forum for certain stockholder litigation.

 

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The Cayman Constitutional Documents

  

The Proposed Organizational
Documents

    See Article Twelfth of the Proposed Certificate of Incorporation.

Takeovers by Interested

Stockholders

(Organizational

Documents Proposal D)

  The Cayman Constitutional Documents do not provide restrictions on takeovers of RTPZ by a related shareholder following a business combination.  The Proposed Organizational Documents will have Hippo Holdings elect not to be governed by Section 203 of the DGCL relating to takeovers by interested stockholders but will provide other similar restrictions regarding takeovers by interested stockholders.
    See Article Tenth of the Proposed Certificate of Incorporation.

Provisions Related to

Status as Blank Check

Company (Organizational Documents Proposal D)

  The Cayman Constitutional Documents include various provisions related to RTPZ’s status as a blank check company prior to the consummation of a business combination.  The Proposed Organizational Documents do not include such provisions related to RTPZ’s status as a blank check company, which no longer will apply upon consummation of the Mergers, as RTPZ will cease to be a blank check company at such time
  See Article 49 of the Existing Articles.  

 

Q:

How will the Domestication affect my ordinary shares, warrants and units?

 

A:

As a result of and upon the effective time of the Domestication, (1) each of the then issued and outstanding RTPZ Class A ordinary shares, will convert automatically, on a one-for-one basis, into a share of Hippo Holdings common stock, (2) each of the then issued and outstanding RTPZ Class B ordinary shares, will convert automatically, on a one-for-one basis, into a share of Hippo Holdings common stock, (3) each then issued and outstanding RTPZ warrant will convert automatically into a Hippo Holdings warrant pursuant to the Warrant Agreement and (4) each then issued and outstanding RTPZ unit will separate automatically into one share of Hippo Holdings common stock, on a one-for-one basis, and one-fifth of one Hippo Holdings warrant. See “Domestication Proposal” for additional information.

 

Q:

What are the U.S. federal income tax consequences of the Domestication?

 

A:

As discussed more fully under “U.S. Federal Income Tax Considerations,” based on, and subject to, the assumptions, qualifications and limitations set forth in the opinion included as Exhibit 8.1 hereto, it is the opinion of Sullivan & Cromwell LLP that the Domestication will constitute a reorganization within the meaning of Section 368(a)(l)(F) of the Code. Assuming that the Domestication so qualifies, U.S. Holders (as defined in “U.S. Federal Income Tax Considerations”) will be subject to Section 367(b) of the Code and, as a result:

 

  

A U.S. Holder whose RTPZ Class A ordinary shares have a fair market value of less than $50,000 on the date of the Domestication will not recognize any gain or loss and will not be required to include any part of RTPZ’s earnings in income;

 

  

A U.S. Holder whose RTPZ Class A ordinary shares have a fair market value of $50,000 or more and who, on the date of the Domestication, owns (actually or constructively) less than 10% of the total

 

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combined voting power of all classes of RTPZ stock entitled to vote and less than 10% of the total value of all classes of RTPZ stock will generally recognize gain (but not loss) on the exchange of RTPZ Class A ordinary shares for Hippo Holdings common stock pursuant to the Domestication. As an alternative to recognizing gain, such U.S. Holder may file an election to include in income as a deemed dividend the “all earnings and profits amount” (as defined in the Treasury Regulations under Section 367 of the Code) attributable to its RTPZ Class A ordinary shares provided certain other requirements are satisfied; and

 

  

A U.S. Holder who, on the date of the Domestication, owns (actually or constructively) 10% or more of the total combined voting power of all classes of RTPZ stock entitled to vote or 10% or more of the total value of all classes of RTPZ stock will generally be required to include in income as a deemed dividend “all earnings and profits amount” (as defined in the Treasury Regulations under Section 367 of the Code) attributable to its RTPZ Class A ordinary shares.

RTPZ does not expect to have significant cumulative earnings and profits, if any, on the date of the Domestication. If RTPZ’s cumulative net earnings and profits through the date of the Domestication is less than or equal to zero, then a U.S. Holder should not be required to include in gross income an all earnings and profits amount with respect to its RTPZ Class A ordinary shares.

As discussed more fully under “U.S. Federal Income Tax Considerations,” RTPZ believes that it is likely classified as a “passive foreign investment company” (“PFIC”) for U.S. federal income tax purposes. In such case, notwithstanding the foregoing U.S. federal income tax consequences of the Domestication, proposed Treasury Regulations under Section 1291(f) of the Code (which have a retroactive effective date), if finalized in their current form, generally would require a U.S. Holder to recognize gain on the exchange of RTPZ Class A ordinary shares or warrants for Hippo Holdings common stock or warrants pursuant to the Domestication. Any such gain would be taxable income with no corresponding receipt of cash in the Domestication. The tax on any such gain would be imposed at the rate applicable to ordinary income and an interest charge would apply based on a complex set of rules. However, it is difficult to predict whether, in what form, and with what effective date, final Treasury Regulations under Section 1291(f) of the Code may be adopted and how any such Treasury Regulations would apply. Importantly, however, U.S. Holders that make or have made certain elections discussed further under “U.S. Federal Income Tax Considerations  PFIC Considerations — QEF Election and Mark-to-Market Election” with respect to their RTPZ Class A ordinary shares are generally not subject to the same gain recognition rules under the currently proposed Treasury Regulations under Section 1291(f) of the Code. Currently, there are no elections available with respect to RTPZ warrants, and the application of the PFIC rules to RTPZ warrants is unclear. For a more complete discussion of the potential application of the PFIC rules to U.S. Holders as a result of the Domestication, see “U.S. Federal Income Tax Considerations.”

Each U.S. Holder of RTPZ Class A ordinary shares or warrants is urged to consult its own tax advisor concerning the application of the PFIC rules, including the proposed Treasury Regulations, to the exchange of RTPZ Class A ordinary shares and warrants for Hippo Holdings common stock and warrants pursuant to the Domestication.

Additionally, the Domestication may cause non-U.S. Holders (as defined in “U.S. Federal Income Tax Considerations”) to become subject to U.S. federal income withholding taxes on any amounts treated as dividends paid in respect of such non-U.S. Holder’s Hippo Holdings common stock after the Domestication.

The tax consequences of the Domestication are complex and will depend on a holder’s particular circumstances. All holders are urged to consult their tax advisor regarding the tax consequences to them of the Domestication, including the applicability and effect of U.S. federal, state, local and non-U.S. tax laws. For a more complete discussion of the U.S. federal income tax considerations of the Domestication, see “U.S. Federal Income Tax Considerations.”

 

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Q:

Do I have redemption rights?

 

A:

If you are a holder of public shares, you have the right to request that we redeem all or a portion of your public shares for cash provided that you follow the procedures and deadlines described elsewhere in this proxy statement/prospectus. Public shareholders may elect to redeem all or a portion of the public shares held by them regardless of if or how they vote in respect of the BCA Proposal. If you wish to exercise your redemption rights, please see the answer to the next question: “How do I exercise my redemption rights?

Notwithstanding the foregoing, a public shareholder, together with any affiliate of such public shareholder or any other person with whom such public shareholder is acting in concert or as a “group” (as defined in Section 13(d)(3) of the Exchange Act), will be restricted from redeeming its public shares with respect to more than an aggregate of 15% of the public shares. Accordingly, if a public shareholder, alone or acting in concert or as a group, seeks to redeem more than 15% of the public shares, then any such shares in excess of that 15% limit would not be redeemed for cash.

The Sponsor and RTPZ’s independent directors have agreed to waive their redemption rights with respect to all of the Founder Shares in connection with the consummation of the Business Combination. The Founder Shares will be excluded from the pro rata calculation used to determine the per-share redemption price.

 

Q:

How do I exercise my redemption rights?

 

A:

If you are a public shareholder and wish to exercise your right to redeem the public shares, you must:

 

 i.

(a) hold public shares, or (b) if you hold public shares through units, elect to separate your units into the underlying public shares and public warrants prior to exercising your redemption rights with respect to the public shares;

 

 ii.

submit a written request to Continental, RTPZ’s transfer agent, that Hippo Holdings redeem all or a portion of your public shares for cash; and

 

 iii.

deliver your certificates for public shares (if any) and any other required redemption forms to Continental, RTPZ’s transfer agent, physically or electronically through The Depository Trust Company (“DTC”).

Holders must complete the procedures for electing to redeem their public shares in the manner described above prior to 5:00��p.m., Eastern Time, on July 27, 2021 (two business days before the extraordinary general meeting) in order for their shares to be redeemed.

The address of Continental, RTPZ’s transfer agent, is listed under the question “Who can help answer my questions?” below.

Holders of units must elect to separate the units into the underlying public shares and public warrants prior to exercising redemption rights with respect to the public shares. If holders hold their units in an account at a brokerage firm or bank, holders must notify their broker or bank that they elect to separate the units into the underlying public shares and public warrants, or if a holder holds units registered in its own name, the holder must contact Continental, RTPZ’s transfer agent, directly and instruct them to do so.

Public shareholders will be entitled to request that their public shares be redeemed for a pro rata portion of the amount then on deposit in the trust account calculated as of two business days prior to the consummation of the Business Combination including interest earned on the funds held in the trust account and not previously released to us (net of taxes payable). For illustrative purposes, as of March 31, 2021, this would have amounted to approximately $10.00 per issued and outstanding public share. However, the proceeds deposited in the trust account could become subject to the claims of RTPZ’s creditors, if any, which could

 

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have priority over the claims of the public shareholders, regardless of whether such public shareholder votes or, if they do vote, irrespective of if they vote for or against the BCA Proposal. Therefore, the per share distribution from the trust account in such a situation may be less than originally expected due to such claims. Whether you vote, and if you do vote, irrespective of how you vote, on any proposal, including the BCA Proposal, will have no impact on the amount you will receive upon exercise of your redemption rights. It is expected that the funds to be distributed to public shareholders electing to redeem their public shares will be distributed promptly after the consummation of the Business Combination.

Any request for redemption, once made by a holder of public shares, may not be withdrawn once submitted to RTPZ unless the board of directors of RTPZ determines (in their sole discretion) to permit the withdrawal of such redemption request (which they may do in whole or in part). If you deliver your certificates for public shares (if any) and any other required redemption forms to Continental, RTPZ’s transfer agent, and later decide prior to the extraordinary general meeting not to elect redemption, you may request that RTPZ’s transfer agent return the shares (physically or electronically) to you. You may make such request by contacting Continental, RTPZ’s transfer agent, at the phone number or address listed at the end of this section.

Any corrected or changed written exercise of redemption rights must be received by Continental, RTPZ’s transfer agent, prior to the vote taken on the BCA Proposal at the extraordinary general meeting. No request for redemption will be honored unless the holder’s public shares have been delivered (either physically or electronically) to Continental, RTPZ’s agent, at least two business days prior to the vote at the extraordinary general meeting.

If a holder of public shares properly makes a request for redemption and the public shares are delivered as described above, then, if the Business Combination is consummated, Hippo Holdings will redeem the public shares for a pro rata portion of funds deposited in the trust account, calculated as of two business days prior to the consummation of the Business Combination. The redemption will take place following the Domestication and, accordingly, it is shares of Hippo Holdings common stock that will be redeemed immediately after consummation of the Business Combination.

If you are a holder of public shares and you exercise your redemption rights, such exercise will not result in the loss of any warrants that you may hold.

 

Q:

If I am a holder of units, can I exercise redemption rights with respect to my units?

 

A:

No. Holders of issued and outstanding units must elect to separate the units into the underlying public shares and public warrants prior to exercising redemption rights with respect to the public shares. If you hold your units in an account at a brokerage firm or bank, you must notify your broker or bank that you elect to separate the units into the underlying public shares and public warrants, or if you hold units registered in your own name, you must contact Continental, RTPZ’s transfer agent, directly and instruct them to do so. You are requested to cause your public shares to be separated and delivered to Continental, RTPZ’s transfer agent, by 5:00 p.m., Eastern Time, on July 27, 2021 (two business days before the extraordinary general meeting) in order to exercise your redemption rights with respect to your public shares.

 

Q:

What are the U.S. federal income tax consequences of exercising my redemption rights?

 

A:

It is expected that a U.S. Holder (as defined in “U.S. Federal Income Tax Considerations”) that exercises its redemption rights to receive cash from the trust account in exchange for its Hippo Holdings common stock will generally be treated as selling such Hippo Holdings common stock resulting in the recognition of capital gain or capital loss. There may be certain circumstances, however, in which the redemption may be treated as a distribution for U.S. federal income tax purposes depending on the amount of Hippo Holdings common stock that such U.S. Holder owns or is deemed to own (including through the ownership of warrants). For a more complete discussion of the U.S. federal income tax considerations of an exercise of redemption rights, see “U.S. Federal Income Tax Considerations.”

 

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Additionally, because the Domestication will occur immediately prior to the redemption of any shareholder, U.S. Holders exercising redemption rights will be subject to the potential tax consequences of Section 367 of the Code as well as the potential tax consequences of the U.S. federal income tax rules relating to PFICs. The tax consequences of Section 367 of the Code and the PFIC rules are discussed more fully below under “U.S. Federal Income Tax Considerations.”

All holders considering exercising redemption rights are urged to consult their tax advisor on the tax consequences to them of an exercise of redemption rights, including the applicability and effect of U.S. federal, state, local and non-U.S. tax laws.

 

Q:

What happens to the funds deposited in the trust account after consummation of the Business Combination?

 

A:

Following the closing of RTPZ’s initial public offering, a total of $230,000,000, comprised of proceeds from RTPZ’s initial public offering and the sale of the private placement warrants was placed in the trust account. As of March 31, 2021, funds in the trust account totaled $230,000,000 and were comprised entirely of U.S. government treasury obligations with a maturity of 185 days or less or of money market funds meeting certain conditions under Rule 2a-7 under the Investment Company Act of 1940, as amended (the “Investment Company Act”), which invest only in direct U.S. government treasury obligations. These funds will remain in the trust account, except for the withdrawal of interest to fund our working capital requirements, subject to an annual limit of $165,000 and/or to pay taxes, if any, until the earliest of (1) the completion of a business combination (including the closing of the Business Combination), (2) the redemption of any public shares properly tendered in connection with a shareholder vote to amend the Cayman Constitutional Documents to modify the substance or timing of RTPZ’s obligation to redeem 100% of the public shares if it does not complete a business combination by the Liquidation Date or with respect to any other provision relating to stockholders’ rights or pre-business combination activity, and (3) the redemption of all of the public shares if RTPZ is unable to complete a business combination by the Liquidation Date, subject to applicable law.

Upon consummation of the Business Combination, the funds deposited in the trust account will be released to pay holders of RTPZ public shares who properly exercise their redemption rights; to pay transaction fees and expenses associated with the Business Combination; and for working capital and general corporate purposes of Hippo Holdings following the Business Combination. See “Summary of the Proxy Statement/Prospectus  Sources and Uses of Funds for the Business Combination.”

 

Q:

What happens if a substantial number of the public shareholders vote in favor of the BCA Proposal and exercise their redemption rights?

 

A:

Our public shareholders are not required to vote in respect of the Business Combination in order to exercise their redemption rights. Accordingly, the Business Combination may be consummated even though the funds available from the trust account and the number of public shareholders are reduced as a result of redemptions by public shareholders.

The Merger Agreement provides that the obligations of Hippo to consummate the Mergers are conditioned on, among other things, the satisfaction of the Minimum Cash Condition. If such condition is not met, and such condition is not or cannot be waived under the terms of the Merger Agreement, then the Merger Agreement could terminate and the proposed Business Combination may not be consummated. There can be no assurance that Hippo could and would waive the Minimum Cash Condition. In addition, pursuant to the Cayman Constitutional Documents, in no event will we redeem public shares in an amount that would cause Hippo Holdings’ net tangible assets (as determined in accordance with Rule 3a5 1-1 (g)(1) of the Exchange Act) to be less than $5,000,001.

 

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Q:

What conditions must be satisfied to complete the Business Combination?

 

A:

The Merger Agreement is subject to the satisfaction or waiver of certain customary closing conditions, including, among others, (i) approval by RTPZ’s shareholders of the Business Combination and related agreements and transactions, (ii) receipt of the Company Equityholder Approval (as defined in the Merger Agreement), (iii) the effectiveness of the Registration Statement of which this proxy statement/prospectus forms a part, (iv) the completion of the Domestication, (v) the receipt of certain regulatory approvals (including, but not limited to, approval for listing on NYSE of the shares of Hippo Holdings common stock to be issued in connection with the Mergers, the expiration or early termination of the waiting period or periods under the HSR Act and the receipt of insurance regulatory approvals or exemptions), (vi) that Hippo Holdings has at least $5,000,001 of net tangible assets upon Closing and (vii) the absence of any injunctions.

In addition, the obligations of Hippo to consummate the Mergers are conditioned on, among other things, the satisfaction of the Minimum Cash Condition, and the obligations of RTPZ and Merger Sub to consummate, or cause to be consummated, the Mergers are conditioned on, among other things, the absence of a Company Material Adverse Effect (as defined in the Merger Agreement).

For more information about conditions to the consummation of the Business Combination, see “BCA Proposal  The Merger Agreement.”

 

Q:

When do you expect the Business Combination to be completed?

 

A:

It is currently expected that the Business Combination will be consummated in mid-2021. This date depends, among other things, on the approval of the proposals to be put to RTPZ shareholders at the extraordinary general meeting. However, such meetings could be adjourned if the Adjournment Proposal is adopted at the extraordinary general meeting, and RTPZ elects to adjourn the extraordinary general meeting to a later date or dates, if necessary, to permit further solicitation and vote of proxies in the event that there are insufficient votes for the approval of one or more proposals at the extraordinary general meeting. For a description of the conditions for the completion of the Business Combination, see “BCA Proposal  The Merger Agreement.”

 

Q:

What happens if the Business Combination is not consummated?

 

A:

RTPZ will not complete the Domestication to Delaware unless all other conditions to the consummation of the Business Combination have been satisfied or waived by the parties in accordance with the terms of the Merger Agreement. If RTPZ is not able to complete the Business Combination with Hippo by the Liquidation Date and is not able to complete another business combination by such date, RTPZ will: (1) cease all operations except for the purpose of winding up; (2) as promptly as reasonably possible, but not more than 10 business days thereafter, redeem the public shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including interest (less up to $100,000 of interest to pay dissolution expenses and which interest shall be net of taxes payable), divided by the number of then issued and outstanding public shares, which redemption will completely extinguish public shareholders’ rights as shareholders (including the right to receive further liquidating distributions, if any), subject to applicable law; and (3) as promptly as reasonably possible following such redemption, subject to the approval of our remaining shareholders and our board, dissolve and liquidate, subject in each case to our obligations under Cayman Islands law to provide for claims of creditors and the requirements of other applicable law.

 

Q:

Do I have appraisal rights in connection with the proposed Business Combination and the proposed Domestication?

 

A:

Neither RTPZ’s shareholders nor RTPZ’s warrant holders have appraisal rights in connection with the Business Combination or the Domestication under the Cayman Islands Companies Law or under the DGCL.

 

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Q:

What do I need to do now?

 

A:

RTPZ urges you to read this proxy statement/prospectus, including the Annexes and the documents referred to herein, carefully and in their entirety and to consider how the Business Combination will affect you as a shareholder or how the Warrant Amendment will affect you as a public warrant holder. RTPZ’s shareholders and public warrant holders should then vote as soon as possible in accordance with the instructions provided in this proxy statement/prospectus and on the enclosed proxy cards, as applicable.

 

Q:

How do I vote?

 

A:

If you are a holder of record of ordinary shares and/or public warrants on the record date for the extraordinary general meeting and/or Warrant Holders Meeting, respectively, you may vote in person or virtually at the extraordinary general meeting and/or Warrant Holders Meeting, respectively, or by submitting a proxy for the extraordinary general meeting and/or Warrant Holders Meeting, respectively. You may submit your proxy by completing, signing, dating and returning the enclosed proxy cards, as applicable, in the accompanying pre-addressed postage-paid envelope. If you hold your shares or public warrants in “street name,” which means your shares or public warrants are held of record by a broker, bank or nominee, you should contact your broker, bank or nominee to ensure that votes related to the shares and/or public warrants you beneficially own are properly counted. In this regard, you must provide the broker, bank or nominee with instructions on how to vote your shares and/or public warrants or, if you wish to virtually attend the extraordinary general meeting and/or Warrant Holders Meeting and vote in person, obtain a valid proxy from your broker, bank or nominee.

 

Q:

If my shares and/or public warrants are held in “street name,” will my broker, bank or nominee automatically vote my shares and/or public warrants for me?

 

A:

No. If your shares and/or public warrants are held in a stock brokerage account or by a bank or other nominee, you are considered the “beneficial holder” of the shares and/or public warrants held for you in what is known as “street name.” If this is the case, this proxy statement/prospectus may have been forwarded to you by your brokerage firm, bank or other nominee, or its agent, and you may need to obtain a proxy form from the institution that holds your shares and/or public warrants and follow the instructions included on that form regarding how to instruct your broker, bank or nominee as to how to vote your shares and/or public warrants. Under the rules of various national and regional securities exchanges, your broker, bank, or nominee cannot vote your shares and/or public warrants with respect to non-discretionary matters unless you provide instructions on how to vote in accordance with the information and procedures provided to you by your broker, bank, or nominee. We believe all the proposals presented to the shareholders and public warrant holders will be considered non-discretionary and therefore your broker, bank, or nominee cannot vote your shares and/or public warrants without your instruction. Your bank, broker, or other nominee can vote your shares and/or public warrants only if you provide instructions on how to vote. As the beneficial holder, you have the right to direct your broker, bank or other nominee as to how to vote your shares and/or public warrants and you should instruct your broker to vote your shares and/or public warrants in accordance with directions you provide. If you do not provide voting instructions to your broker on a particular proposal on which your broker does not have discretionary authority to vote, your shares or public warrants, as applicable, will not be voted on that proposal. This is called a “broker non-vote.” Abstentions and broker non-votes, while considered present for the purposes of establishing a quorum at the extraordinary general meeting, will not count as votes cast at the extraordinary general meeting, and otherwise will have no effect on a particular proposal. Abstentions and broker non-votes will be considered present for the purposes of establishing a quorum at the Warrant Holders Meeting and will have (i) the same effect as a vote against the Warrant Amendment Proposal and (ii) no effect on the Warrant Holder Adjournment Proposal, if presented.

 

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Q:

When and where will the extraordinary general meeting be held?

 

A:

The extraordinary general meeting will be held at 9:00 a.m., Eastern Time, on July 29, 2021, at the offices of Sullivan & Cromwell LLP located at 125 Broad St, New York, NY 10004 and virtually via live webcast at https://www.cstproxy.com/reinventtechnologypartnersz/2021, or such other date, time and place to which such meeting may be adjourned or postponed, to consider and vote upon the proposals. You will be permitted to attend the extraordinary general meeting in person at the offices of Sullivan & Cromwell LLP only to the extent consistent with, or permitted by, applicable law and directives of public health authorities. Based on current guidance, we do not anticipate being able to accommodate shareholders who wish to attend in person, and we strongly urge you to attend the extraordinary general meeting virtually.

 

Q:

When and where will the Warrant Holders Meeting be held?

 

A:

The Warrant Holders Meeting will be held at 10:00 a.m., Eastern Time, on July 29, 2021, at the offices of Sullivan & Cromwell LLP located at 125 Broad St, New York, NY 10004 and virtually via live webcast at https://www.cstproxy.com/reinventtechnologypartnersz/2021, or such other date, time and place to which such meeting may be adjourned or postponed, to consider and vote upon the proposals. You will be permitted to attend the Warrant Holders Meeting in person at the offices of Sullivan & Cromwell LLP only to the extent consistent with, or permitted by, applicable law and directives of public health authorities. Based on current guidance, we do not anticipate being able to accommodate shareholders who wish to attend in person, and we strongly urge you to attend the Warrant Holders Meeting virtually.

 

Q:

Who is entitled to vote at the extraordinary general meeting?

 

A:

RTPZ has fixed June 21, 2021 as the record date for the extraordinary general meeting. If you were a shareholder of RTPZ at the close of business on the record date, you are entitled to vote on matters that come before the extraordinary general meeting. However, a shareholder may only vote his or her shares if he or she is present in person virtually or is represented by proxy at the extraordinary general meeting.

 

Q:

Who is entitled to vote at the Warrant Holders Meeting?

 

A:

RTPZ has fixed June 21, 2021 as the record date for the Warrant Holders Meeting. If you were a public warrant holder of RTPZ at the close of business on the record date, you are entitled to vote on matters that come before the Warrant Holders Meeting. However, a public warrant holder may only vote his or her public warrants if he or she is present in person virtually or is represented by proxy at the Warrant Holders Meeting.

 

Q:

How many votes do I have?

 

A:

RTPZ shareholders are entitled to one vote at the extraordinary general meeting for each ordinary share held of record as of the record date. As of the close of business on the record date for the extraordinary general meeting, there were 28,750,000 ordinary shares issued and outstanding, of which 23,000,000 were issued and outstanding public shares. Public warrant holders are entitled to one vote at the Warrant Holders Meeting for each public warrant held of record as of the record date. As of the close of business on the record date for the Warrant Holders Meeting, there were 9,000,000 warrants issued and outstanding, of which 4,600,000 were issued and outstanding public warrants.

 

Q:

What constitutes a quorum?

 

A:

A quorum of RTPZ shareholders or public warrant holders, as applicable, is necessary to hold a valid meeting. A quorum will be present at the extraordinary general meeting if the holders of a majority of the issued and outstanding ordinary shares entitled to vote at the extraordinary general meeting are represented

 

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 in person or by proxy. A quorum will be present at the Warrant Holders Meeting if a majority of the warrants outstanding and entitled to vote at the Warrant Holders Meeting is represented virtually or by proxy. As of the record date for the extraordinary general meeting, 14,375,001 ordinary shares would be required to achieve a quorum. As of the record date for the Warrant Holders Meeting, 4,500,001 warrants would be required to achieve a quorum.

 

Q:

What vote is required to approve each proposal at the extraordinary general meeting and Warrant Holders Meeting?

 

A:

The following votes are required for each proposal at the extraordinary general meeting:

 

 i.

BCA Proposal: The approval of the BCA Proposal requires an ordinary resolution under Cayman Islands Companies Law, being the affirmative vote of the holders of a majority of the ordinary shares who, being present in person or by proxy and entitled to vote at the extraordinary general meeting, vote at the extraordinary general meeting.

 

 ii.

Domestication Proposal: The approval of the Domestication Proposal requires a special resolution under Cayman Islands Companies Law, being the affirmative vote of holders of at least two-thirds of the ordinary shares who, being present in person or by proxy and entitled to vote at the extraordinary general meeting, vote at the extraordinary general meeting.

 

 iii.

Organizational Documents Proposals: The separate approval of each of the Organizational Documents Proposals requires a special resolution under Cayman Islands Companies Law, being the affirmative vote of holders of at least two-thirds of the ordinary shares who, being present in person or by proxy and entitled to vote at the extraordinary general meeting, vote at the extraordinary general meeting.

 

 iv.

Director Election Proposal: The approval of the Director Election Proposal requires an ordinary resolution under Cayman Islands Companies Law, being the affirmative vote of the holders of a majority of the RTPZ Class B ordinary shares who, being present in person or by proxy and entitled to vote at the extraordinary general meeting, vote at the extraordinary general meeting.

 

 v.

Share Issuance Proposal: The approval of the Share Issuance Proposal requires an ordinary resolution under Cayman Islands Companies Law, being the affirmative vote of the holders of a majority of the ordinary shares who, being present in person or by proxy and entitled to vote at the extraordinary general meeting, vote at the extraordinary general meeting.

 

 vi.

Incentive Award Plan Proposal: The approval of the Incentive Award Plan Proposal requires an ordinary resolution under Cayman Islands Companies Law, being the affirmative vote of the holders of a majority of the ordinary shares who, being present in person or by proxy and entitled to vote at the extraordinary general meeting, vote at the extraordinary general meeting.

 

 vii.

ESPP Proposal: The approval of the ESPP Proposal requires an ordinary resolution under Cayman Islands Companies Law, being the affirmative vote of the holders of a majority of the ordinary shares who, being present in person or by proxy and entitled to vote at the extraordinary general meeting, vote at the extraordinary general meeting.

 

 viii.

Adjournment Proposal: The approval of the Adjournment Proposal requires an ordinary resolution under Cayman Islands Companies Law, being the affirmative vote of the holders of a majority of the ordinary shares who, being present in person or by proxy and entitled to vote at the extraordinary general meeting, vote at the extraordinary general meeting.

The following votes are required for each proposal at the Warrant Holders Meeting:

 

 i.

Warrant Amendment Proposal: The approval of the Warrant Amendment Proposal requires the affirmative vote of the holders of at least 50% of RTPZ’s outstanding public warrants.

 

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 ii.

Warrant Holders Adjournment Proposal: The approval of the Warrant Holders Adjournment Proposal requires the affirmative vote of a majority of the votes cast by the public warrant holders present or represented by proxy and entitled to vote at the Warrant Holders Meeting.

 

Q:

What are the recommendations of RTPZ’s board of directors?

 

A:

RTPZ’s board of directors believes that the BCA Proposal and the other proposals to be presented at the extraordinary general meeting are in the best interest of RTPZ’s shareholders, and the Warrant Amendment Proposal and Warrant Holders Adjournment Proposal are in the best interests of RTPZ and its public warrant holders, and unanimously recommends that you vote or give instruction to vote “FOR” the BCA Proposal, “FOR” the Domestication Proposal, “FOR” each of the separate Organizational Documents Proposals, “FOR” the Director Election Proposal, “FOR” the Share Issuance Proposal, “FOR” the Incentive Award Plan Proposal, “FOR” the ESPP Proposal, “FOR” the Adjournment Proposal, “FOR” the Warrant Amendment Proposal and “FOR” the Warrant Holders Adjournment Proposal, in each case, if presented to the extraordinary general meeting or Warrant Holders Meeting, as applicable.

The existence of financial and personal interests of one or more of RTPZ’s directors may result in a conflict of interest on the part of such director(s) between what he, she or they may believe is in the best interests of RTPZ and its shareholders and what he, she or they may believe is best for himself, herself or themselves in determining to recommend that shareholders vote for the proposals. In addition, RTPZ’s officers have interests in the Business Combination that may conflict with your interests as a shareholder. See the section entitled “BCA Proposal  Interests of RTPZ’s Directors and Executive Officers in the Business Combination” for a further discussion of these considerations.

 

Q:

How do the Sponsor and the RTPZ directors and officers intend to vote their shares?

 

A:

Unlike some other blank check companies in which the initial shareholders agree to vote their shares in accordance with the majority of the votes cast by the public shareholders in connection with an initial business combination, the Sponsor and RTPZ’s directors and officers have agreed to vote all of their Founder Shares and any other public shares they may hold in favor of all the proposals being presented at the extraordinary general meeting. As of the date of this proxy statement/prospectus, the Sponsor and RTPZ’s independent directors collectively own 20.0% of the issued and outstanding ordinary shares.

At any time at or prior to the Business Combination, subject to applicable securities laws (including with respect to material nonpublic information), the Sponsor, the existing stockholders of Hippo or our or their respective directors, officers, advisors or respective affiliates may (i) purchase public shares from institutional and other investors who vote, or indicate an intention to vote, against any of the Condition Precedent Proposals, or elect to redeem, or indicate an intention to redeem, public shares, (ii) execute agreements to purchase such shares from such investors in the future or (iii) enter into transactions with such investors and others to provide them with incentives to acquire public shares, vote their public shares in favor of the Condition Precedent Proposals or not redeem their public shares. Such a purchase may include a contractual acknowledgement that such shareholder, although still the record holder of RTPZ’s shares, is no longer the beneficial owner thereof and therefore agrees not to exercise its redemption rights. In the event that the Sponsor, the existing stockholders of Hippo or our or their respective directors, officers, advisors, or respective affiliates purchase shares in privately negotiated transactions from public shareholders who have already elected to exercise their redemption rights, such selling shareholders would be required to revoke their prior elections to redeem their shares. The purpose of such share purchases and other transactions would be to (x) increase the likelihood of approving the Condition Precedent Proposals and (y) limit the number of public shares electing to redeem, including to satisfy any redemption threshold.

Entering into any such arrangements may have a depressive effect on RTPZ’s ordinary shares (e.g., by giving an investor or holder the ability to effectively purchase shares at a price lower than market, such investor or holder may therefore become more likely to sell the shares he or she owns, either at or prior to

 

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the Business Combination). If such transactions are effected, the consequence could be to cause the Business Combination to be consummated in circumstances where such consummation could not otherwise occur. Purchases of shares by the persons described above would allow them to exert more influence over the approval of the proposals to be presented at the extraordinary general meeting and would likely increase the chances that such proposals would be approved. RTPZ will file or submit a Current Report on Form 8-K to disclose any material arrangements entered into or significant purchases made by any of the aforementioned persons that would affect the vote on the proposals to be put to the extraordinary general meeting or the redemption threshold. Any such report will include descriptions of any arrangements entered into or significant purchases by any of the aforementioned persons.

The existence of financial and personal interests of one or more of RTPZ’s directors may result in a conflict of interest on the part of such director(s) between what he, she or they may believe is in the best interests of RTPZ and its shareholders and what he, she or they may believe is best for himself or themselves in determining to recommend that shareholders vote for the proposals. In addition, RTPZ’s directors and officers have interests in the Business Combination that may conflict with your interests as a shareholder. See the section entitled “BCA Proposal  Interests of RTPZ’s Directors and Executive Officers in the Business Combination” for a further discussion of these considerations.

 

Q:

What happens if I sell my RTPZ ordinary shares and/or public warrants before the extraordinary general meeting?

 

A:

The record date for the extraordinary general meeting and Warrant Holders Meeting is earlier than the date of the extraordinary general meeting and Warrant Holders Meeting and earlier than the date that the Business Combination is expected to be completed. If you transfer your public shares and/or public warrants after the applicable record date, but before the extraordinary general meeting and Warrant Holders Meeting, unless you grant a proxy to the transferee, you will retain your right to vote at such extraordinary general meeting and Warrant Holders Meeting, as applicable, but the transferee, and not you, will have the ability to redeem such shares (if time permits).

 

Q:

May I change my vote after I have mailed my signed proxy card(s)?

 

A:

Yes. Shareholders and public warrant holders may send later-dated, signed proxy card(s) to RTPZ’s Secretary at RTPZ’s address set forth below so that such proxy card(s) are received by RTPZ’s Secretary prior to the vote at the extraordinary general meeting or Warrant Holders Meeting, as applicable (which are scheduled to take place on July 29, 2021) or virtually attend the extraordinary general meeting or Warrant Holders Meeting, as applicable, and vote. Shareholders and public warrant holders also may revoke their proxy by sending a notice of revocation to RTPZ’s Secretary, which must be received by RTPZ’s Secretary prior to the vote at the extraordinary general meeting or Warrant Holders Meeting, as applicable. However, if your shares and/or public warrants are held in “street name” by your broker, bank or another nominee, you must contact your broker, bank or other nominee to change your vote.

 

Q:

What happens if I fail to take any action with respect to the extraordinary general meeting?

 

A:

If you fail to take any action with respect to the extraordinary general meeting and the Business Combination is approved by shareholders and the Business Combination is consummated, you will become a stockholder or warrant holder of Hippo Holdings. If you fail to take any action with respect to the extraordinary general meeting and the Business Combination is not approved, you will remain a shareholder or warrant holder of RTPZ. However, if you fail to vote with respect to the extraordinary general meeting, you will nonetheless be able to elect to redeem your public shares in connection with the Business Combination (if time permits).

 

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Q:

What should I do with my share certificates, warrant certificates or unit certificates?

 

A:

Our shareholders who exercise their redemption rights must deliver (either physically or electronically) their share certificates to Continental, RTPZ’s transfer agent, prior to the extraordinary general meeting.

Holders must complete the procedures for electing to redeem their public shares in the manner described above prior to 5:00 p.m., Eastern Time, on July 27, 2021 (two business days before the extraordinary general meeting) in order for their shares to be redeemed.

Our warrant holders should not submit the certificates relating to their warrants. Public shareholders who do not elect to have their public shares redeemed for the pro rata share of the trust account should not submit the certificates relating to their public shares.

Upon the Domestication, holders of RTPZ units, Class A ordinary shares, Class B ordinary shares and warrants will receive shares of Hippo Holdings common stock and Hippo Holdings warrants, as the case may be, without needing to take any action and, accordingly, such holders should not submit any certificates relating to their units, Class A ordinary shares (unless such holder elects to redeem the public shares in accordance with the procedures set forth above), Class B ordinary shares or warrants.

 

Q:

What should I do if I receive more than one set of voting materials?

 

A:

Shareholders and public warrant holders may receive more than one set of voting materials, including multiple copies of this proxy statement/prospectus and multiple proxy cards or voting instruction cards. For example, if you hold your shares and/or public warrants in more than one brokerage account, you will receive a separate voting instruction card for each brokerage account in which you hold shares and/or public warrants. If you are a holder of record and your shares and/or public warrants are registered in more than one name, you will receive more than one proxy card for each applicable meeting. Please complete, sign, date and return each proxy card and voting instruction card that you receive in order to cast a vote with respect to all of your ordinary shares and/or public warrants.

 

Q:

Who will solicit and pay the cost of soliciting proxies for the extraordinary general meeting and Warrant Holders Meeting?

 

A:

RTPZ will pay the cost of soliciting proxies for the extraordinary general meeting and Warrant Holders Meeting. RTPZ has engaged Morrow Sodali LLC (“Morrow”) to assist in the solicitation of proxies for the extraordinary general meeting and Warrant Holders Meeting. RTPZ has agreed to pay Morrow a fee of $30,000, plus disbursements (to be paid with non-trust account funds). RTPZ will also reimburse banks, brokers and other custodians, nominees and fiduciaries representing beneficial owners of RTPZ Class A ordinary shares and public warrants for their expenses in forwarding soliciting materials to beneficial owners of RTPZ Class A ordinary shares and public warrant holders and in obtaining voting instructions from those owners. RTPZ’s directors and officers may also solicit proxies by telephone, by facsimile, by mail, on the Internet or in person. They will not be paid any additional amounts for soliciting proxies.

 

Q:

Where can I find the voting results of the extraordinary general meeting and Warrant Holders Meeting?

 

A:

The preliminary voting results will be expected to be announced at the extraordinary general meeting and Warrant Holders Meeting, as applicable. RTPZ will publish final voting results of the extraordinary general meeting and Warrant Holders Meeting in a Current Report on Form 8-K within four business days after the extraordinary general meeting and Warrant Holders Meeting.

 

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Q:

Who can help answer my questions?

 

A:

If you have questions about the Business Combination or if you need additional copies of the proxy statement/prospectus, any document incorporated by reference in this proxy statement/prospectus or the enclosed proxy cards, you should contact:

Morrow Sodali LLC

470 West Avenue, 3rd Floor

Stamford, Connecticut 06902

Individuals call toll-free: 800-662-5200

Banks and Brokerage Firms, please call 203-658-9400

Email: RTPZ@investor.morrowsodali.com

You also may obtain additional information about RTPZ from documents filed with the SEC by following the instructions in the section entitled “Where You Can Find More Information” If you are a holder of public shares and you intend to seek redemption of your public shares, you will need to deliver your certificates for public shares (if any) and any other required redemption forms (either physically or electronically) to Continental, RTPZ’s transfer agent, at the address below prior to the extraordinary general meeting. Holders must complete the procedures for electing to redeem their public shares in the manner described above prior to 5:00 p.m., Eastern Time, on July 27, 2021 (two business days before the extraordinary general meeting) in order for their shares to be redeemed. If you have questions regarding the certification of your position or delivery of your stock, please contact:

Continental Stock Transfer & Trust Company

1 State Street, 30th Floor

New York, NY 10004

Attention: Mark Zimkind, Senior Vice President & Director of Shareholder Services

Email: mzimkind@continentalstock.com

 

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SUMMARY OF THE PROXY STATEMENT/PROSPECTUS

This summary highlights selected information from this proxy statement/prospectus and does not contain all of the information that is important to you. To better understand the proposals to be submitted for a vote at the extraordinary general meeting, including the Business Combination, you should read this proxy statement/ prospectus, including the Annexes and other documents referred to herein, carefully and in their entirety. The Merger Agreement is the primary legal document that governs the Business Combination and the other transactions that will be undertaken in connection with the Business Combination. The Merger Agreement is also described in detail in this proxy statement/prospectus in the section entitled “BCA Proposal — The Merger Agreement.”

Unless otherwise specified, all share calculations (1) assume no exercise of redemption rights by the public shareholders in connection with the Business Combination and (2) do not include any shares issuable upon the exercise of the warrants.

The Parties to the Business Combination

RTPZ

RTPZ is a blank check company incorporated on October 2, 2020 as a Cayman Islands exempted company for the purpose of effecting a merger, share exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more businesses. RTPZ has neither engaged in any operations nor generated any revenue to date. Based on RTPZ’s business activities, it is a “shell company” as defined under the Exchange Act because it has no operations and nominal assets consisting almost entirely of cash.

On November 23, 2020, RTPZ consummated its initial public offering of its units, with each unit consisting of one RTPZ Class A ordinary share and one-fifth of one public warrant, which included the full exercise by the underwriters of the over-allotment option. Simultaneously with the closing of the initial public offering, RTPZ completed the private sale of 4,400,000 private placement warrants to the Sponsor at a purchase price of $1.50 per private placement warrant, generating gross proceeds to RTPZ of $6.6 million. The private placement warrants are identical to the warrants sold as part of the units in RTPZ’s initial public offering except that, so long as they are held by the Sponsor or its permitted transferees, they: (i) are not redeemable by RTPZ (except in certain redemption scenarios when the price per Class A ordinary share equals or exceeds $10.00 (as adjusted)), (ii) may be exercised on a cashless basis and (iii) are entitled to registration rights (including the ordinary shares issuable upon exercise of the private placement warrants). Additionally, the purchasers have agreed not to transfer, assign or sell any of the private placement warrants, including the RTPZ Class A ordinary shares issuable upon exercise of the private placement warrants (except to certain permitted transferees), until 30 days after the completion of RTPZ’s initial business combination.

Following the closing of RTPZ’s initial public offering, a total of $230,000,000 ($10.00 per unit) of the net proceeds from the initial public offering and the sale of the private placement warrants was placed in the trust account. The proceeds held in the trust account may be invested by the trustee only in U.S. government treasury obligations with a maturity of 185 days or less or in money market funds meeting certain conditions under Rule 2a-7 under the Investment Company Act, which invest only in direct U.S. government treasury obligations. As of March 31, 2021, funds in the trust account totaled $230,000,000. These funds will remain in the trust account, except for the withdrawal of interest to fund RTPZ’s working capital requirements, subject to an annual limit of $165,000 and/or to pay taxes, if any, until the earliest of (i) the completion of a business combination (including the closing of the Business Combination), (ii) the redemption of any public shares properly tendered in connection with a shareholder vote to amend the Cayman Constitutional Documents to modify the substance or timing of RTPZ’s obligation to redeem 100% of the public shares if it does not complete a business combination by the Liquidation Date or with respect to any other provision relating to stockholders’ rights or


 

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pre-business combination activity, and (iii) the redemption of all of the public shares if RTPZ is unable to complete a business combination by the Liquidation Date, subject to applicable law.

The RTPZ units, RTPZ Class A ordinary shares and RTPZ warrants are currently listed on the New York Stock Exchange (“NYSE”) under the symbols “RTPZ.U,” “RTPZ” and “RTPZ WS,” respectively.

RTPZ’s principal executive office is located at 215 Park Avenue, Floor 11, New York, NY 10003. Its telephone number is (212) 457-1272. RTPZ’s corporate website address is https://z.reinventtechnologypartners.com. RTPZ’s website and the information contained on, or that can be accessed through, the website is not deemed to be incorporated by reference in, and is not considered part of, this proxy statement/prospectus.

Merger Sub

RTPZ Merger Sub Inc. (“Merger Sub”) is a Delaware corporation and a wholly owned subsidiary of RTPZ. The Merger Sub does not own any material assets or operate any business.

Hippo

Hippo is a Delaware corporation incorporated in 2015. Hippo is a different kind of home protection company, built from the ground up to provide a new standard of care and protection for homeowners. Hippo’s goal is to make homes safer and better protected so customers spend less time worrying about the burdens of homeownership and more time enjoying their homes and the life within. Harnessing real-time data, smart home technology, and a growing suite of home services, Hippo has created an integrated home protection platform.

The home insurance industry has long been defined by incumbents that Hippo believes deliver a passive, high-friction experience to policyholders. Hippo views these incumbents as constrained by outdated captive-agent distribution models, legacy technology, and strong incentives not to disrupt their businesses. Accordingly, the industry has not seen meaningful innovation in decades. Hippo believes this results in a flawed customer experience that creates a transactional, adversarial relationship—one that pits insurance companies and their “policyholders” against each other in a zero-sum game. The outcome of this misalignment is an experience that is out of touch with the needs of modern homeowners.

Modern technology provides an opportunity to transform the $105 billion U.S. home insurance industry, enabling advancements and efficiencies across the customer lifecycle. Hippo believes there is significant opportunity in this market, expected to reach nearly $140 billion by 2025, for a digital-first, customer-centric company like Hippo.

Hippo harnesses technology and data to fundamentally rebuild the home insurance experience around the customer’s needs at every stage of the relationship. Hippo facilitates an active partnership with its customers to help prevent losses, which in turn creates better results for Hippo and the customer.

 

  

Hippo makes policies fast and easy to buy.

 

  

Hippo’s policies are designed for the modern homeowner.

 

  

Hippo has designed a proactive, human approach to claims, enabled by technology.

Beyond a core insurance experience that is simple, intuitive, and human, Hippo focuses its resources on its true promise: better outcomes for homeowners. Hippo has created an integrated home protection platform, which offers a growing suite of proactive features designed to prevent loss and provide greater peace of mind.

 

  

Hippo has pioneered what it believes is the most widely adopted Smart Home program in the U.S. industry.

 

  

Hippo proactively helps its customers maintain and protect their homes.


 

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Hippo’s intuitive and proactive protection is designed to reduce the likelihood of a loss, while also deepening its customer relationships, and improving loyalty and retention. Hippo’s customers rate Hippo 4.9 out of 5 stars (based on reviews collected by Hippo on its web page) and reward Hippo with a 90-day average overall Net Promoter Score of 75, according to a third party survey (vs. the insurance industry average of 35 in 2020, according to data from Statista, Inc.).

This partnership is designed to create a virtuous cycle. By helping to make homes safer, Hippo helps deliver better risk outcomes and increase customer loyalty, which improves Hippo’s customer lifetime value (“LTV”). This enables Hippo to invest in expanding its product offering, customer value proposition, and marketing programs, which should attract more customers. Growth in customers generates more data and insights to fuel further innovation in Hippo’s product experience and improved underwriting precision. This is designed to result in even safer homes and more loyal customers. Hippo believes this virtuous cycle, combined with Hippo’s significant existing scale, deep partnerships, and compelling unit economics, will propel Hippo to its goal of becoming a trusted household name synonymous with home protection.

Aligned Interest: When our Customers Win, We Win

 

 

LOGO

The success of Hippo’s strategy is demonstrated in its financial and operating metrics. Over its history, Hippo has grown consistently while also reducing loss frequency and improving premium retention.

 

 

LOGO

 

(1)

Spinnaker and North American Advantage Insurance Services LLC (“NAAIS”) are presented on a pro forma basis as of January 1, 2018. For more information please see “Recent Acquisition: Spinnaker Insurance Company.”


 

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(2)

Frequency defined as number of claims divided by the total number of units of exposure, where a unit of exposure is defined as one policy year earned. For example, one policy in force written 24 months ago, represents 2x units of exposure. The cohorts are 12-month cohorts starting on 8/1 of each calendar year.

Since its inception, Hippo has incurred operating losses, including net losses attributable to Hippo of $141.5 million for the year ended December 31, 2020. Hippo had an accumulated deficit of $256.6 million as of December 31, 2020. It expects to continue to incur operating losses for the foreseeable future due to continued investments that it intends to make in its business and, as a result, it may require additional capital resources to grow its business. For a discussion of risks applicable to Hippo’s business, including with respect to its history of net losses and its ability to grow its business, please see the section entitled “Risk Factors - Risks Relating to Hippo’s Business.”

Hippo’s principal executive office is located at 150 Forest Avenue, Palo Alto, California 94301. Hippo’s telephone number is (650) 294-8463.

Proposals to be Put to the Shareholders of RTPZ at the Extraordinary General Meeting

The following is a summary of the proposals to be put to the extraordinary general meeting of RTPZ and certain transactions contemplated by the Merger Agreement. Each of the proposals below, except the Adjournment Proposal, is cross-conditioned on the approval of each other. The Adjournment Proposal is not conditioned upon the approval of any other proposal set forth in this proxy statement/prospectus. The transactions contemplated by the Merger Agreement will be consummated only if the Condition Precedent Proposals are approved at the extraordinary general meeting.

BCA Proposal

As discussed in this proxy statement/prospectus, RTPZ is asking its shareholders to approve by ordinary resolution and adopt the Agreement and Plan of Merger, dated as of March 3, 2021, by and among RTPZ, Merger Sub and Hippo (the “Merger Agreement”), a copy of which is attached to this proxy statement/prospectus as Annex A. The Merger Agreement provides for, among other things, following the Domestication of RTPZ to Delaware as described below (including the change of RTPZ’s name to “Hippo Holdings Inc.”), (i) the merger of Merger Sub with and into Hippo (the “First Merger”), with Hippo surviving the merger as a wholly owned subsidiary of RTPZ, immediately followed by (ii) the merger of the surviving corporation of the First Merger with and into RTPZ, with RTPZ surviving the merger (the “Second Merger” and, together with the First Merger, the “Mergers”), in accordance with the terms and subject to the conditions of the Merger Agreement as more fully described elsewhere in this proxy statement/prospectus. After consideration of the factors identified and discussed in the section entitled “BCA Proposal — RTPZ’s Board of Directors’ Reasons for the Business Combination,” RTPZ’s board of directors concluded that the Business Combination met all of the requirements disclosed in the prospectus for RTPZ’s initial public offering, including that the business of Hippo and its subsidiaries had a fair market value equal to at least 80% of the net assets held in trust (net of amounts disbursed to management for working capital purposes and excluding the amount of any deferred underwriting discount held in trust). For more information about the transactions contemplated by the Merger Agreement, see “BCA Proposal.”

Aggregate Merger Consideration

As a result of and upon the Closing, among other things, all outstanding shares of Hippo common stock (after giving effect to the Hippo Warrant Settlement, the Hippo Preferred Conversion, and the Hippo Note Conversion, as more fully described elsewhere in this proxy statement/prospectus) as of immediately prior to the effective time of the Mergers and, together with shares of Hippo common stock reserved in respect of Hippo options outstanding as of immediately prior to the Closing that will be converted into awards based on Hippo Holdings common stock, as discussed in the following section, will be cancelled in exchange for the right to


 

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receive the Aggregate Merger Consideration. Specifically, each share of Hippo common stock and each share of Hippo preferred stock will be canceled and converted into the right to receive a number of shares of Hippo Holdings common stock equal to the Exchange Ratio. The portion of the Aggregate Merger Consideration reflecting the conversion of the Hippo options is calculated assuming that all Hippo Holdings options are net-settled (although Hippo Holdings options may by their terms be cash-settled, resulting in additional dilution). An additional 55,000,000 shares of Hippo Holdings common stock will be purchased (at a price of $10.00 per share) at the Closing by the PIPE Investors in connection with the PIPE Investment. For further details, see “BCA Proposal — The Merger Agreement — Consideration — Aggregate Merger Consideration.”

Closing Conditions

The Merger Agreement is subject to the satisfaction or waiver of certain customary closing conditions, including, among others, (i) approval of the Business Combination and related agreements and transactions by the respective shareholders of RTPZ and Hippo, (ii) effectiveness of the registration statement of which this proxy statement/prospectus forms a part, (iii) the completion of the Domestication, (iv) the receipt of certain regulatory approvals (including, but not limited to, approval for listing on NYSE of the shares of Hippo Holdings common stock to be issued in connection with the Mergers, the expiration or early termination of the waiting period or periods under the HSR Act and the receipt of insurance regulatory approvals or exemptions), (v) that RTPZ have at least $5,000,001 of net tangible assets upon Closing and (vi) the absence of any injunctions.

In addition, the obligations of Hippo to consummate the Mergers are conditioned on, among other things, the satisfaction of the Minimum Cash Condition. Other conditions to RTPZ’s obligations to consummate the Mergers include, among others, that as of the Closing, (i) the Amended and Restated Certificate of Incorporation of Hippo shall have been duly filed with and accepted by the Delaware Secretary of State and (ii) there shall not have occurred any Company Material Adverse Effect (as defined in the Merger Agreement) after the date of the Merger Agreement that is continuing.

The Minimum Cash Condition is for the sole benefit of Hippo. If such condition is not met, and such condition is not or cannot be waived under the terms of the Merger Agreement, then the Merger Agreement could terminate and the proposed Business Combination may not be consummated. In addition, pursuant to the Cayman Constitutional Documents, in no event will RTPZ redeem public shares in an amount that would cause Hippo Holdings’ net tangible assets (as determined in accordance with Rule 3a51-1(g)(1) of the Exchange Act) to be less than $5,000,001.

For further details, see “BCA Proposal — The Merger Agreement.

Domestication Proposal

As discussed in this proxy statement/prospectus, if the BCA Proposal is approved, then RTPZ will ask its shareholders to approve by special resolution the Domestication Proposal. As a condition to closing the Business Combination pursuant to the terms of the Merger Agreement, the board of directors of RTPZ has unanimously approved the Domestication Proposal. The Domestication Proposal, if approved, will authorize a change of RTPZ’s jurisdiction of incorporation from the Cayman Islands to the State of Delaware. Accordingly, while RTPZ is currently governed by the Cayman Islands Companies Act, upon the Domestication, Hippo Holdings will be governed by the DGCL. There are differences between Cayman Islands corporate law and Delaware corporate law as well as the Cayman Constitutional Documents and the Proposed Organizational Documents. Accordingly, RTPZ encourages shareholders to carefully review the information in “Comparison of Corporate Governance and Shareholder Rights.”

As a result of and upon the effective time of the Domestication, (i) each of the then issued and outstanding RTPZ Class A ordinary shares will convert automatically, on a one-for-one basis, into a share of Hippo


 

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Holdings’ common stock; (ii) each of the then issued and outstanding RTPZ Class B common shares will convert automatically, on a one-for-one basis, into a share of Hippo Holdings’ common stock; (iii) each then issued and outstanding RTPZ warrant will convert automatically into a Hippo Holdings warrant, pursuant to the Warrant Agreement; and (iv) each RTPZ unit will separate automatically into a share of Hippo Holdings common stock, on a one-for-one basis, and one-fifth of one Hippo Holdings warrant.

For further details, see “Domestication Proposal.”

Organizational Documents Proposals

If the BCA Proposal and the Domestication Proposal are approved, RTPZ will ask its shareholders to approve by special resolution four separate proposals (collectively, the “Organizational Documents Proposals”) in connection with the replacement of the Cayman Constitutional Documents, under the Cayman Islands Companies Act, with the Proposed Organizational Documents, under the DGCL. RTPZ’s board has unanimously approved each of the Organizational Documents Proposals and believes such proposals are necessary to adequately address the needs of Hippo Holdings after the Business Combination. Approval of each of the Organizational Documents Proposals is a condition to the consummation of the Business Combination. A brief summary of each of the Organizational Documents Proposals is set forth below. These summaries are qualified in their entirety by reference to the complete text of the Proposed Organizational Documents.

 

 (A)

Organizational Documents Proposal A — to authorize the change in the authorized capital stock of RTPZ from 500,000,000 Class A ordinary shares, 50,000,000 Class B ordinary shares, and 5,000,000 preferred shares, par value $0.0001 per share, to 2,000,000,000 shares of Hippo Holdings common stock and 10,000,000 shares of preferred stock, par value $0.0001 per share, of Hippo Holdings (the “Hippo Holdings preferred stock”);

 

 (B)

Organizational Documents Proposal B — to authorize the board of directors of Hippo Holdings to issue any or all shares of Hippo Holdings preferred stock in one or more classes or series, with such terms and conditions as may be expressly determined by Hippo Holdings’ board of directors and as may be permitted by the DGCL;

 

 (C)

Organizational Documents Proposal C — to provide that the Hippo Holdings board of directors be divided into three classes with only one class of directors being elected in each year and each class serving a three-year term; and

 

 (D)

Organizational Documents Proposal D — to authorize all other changes in connection with the replacement of Cayman Constitutional Documents with the Proposed Organizational Documents in connection with the consummation of the Business Combination (copies of which are attached to this proxy statement/prospectus as Annex B and Annex C, respectively), including (1) changing the corporate name from “Reinvent Technology Partners Z” to “Hippo Holdings Inc.,” (2) making Hippo Holdings’ corporate existence perpetual, (3) adopting Delaware as the exclusive forum for certain stockholder litigation, (4) electing not to be governed by Section 203 of the DGCL and, instead, be governed by a provision substantially similar to Section 203 of the DGCL, and (5) removing certain provisions related to RTPZ’s status as a blank check company that will no longer be applicable upon consummation of the Business Combination, all of which RTPZ’s board of directors believes are necessary to adequately address the needs of Hippo Holdings after the Business Combination,

The Proposed Organizational Documents differ in certain material respects from the Cayman Constitutional Documents and RTPZ encourages shareholders to carefully review the information set out in the section entitled “Organizational Documents Proposals” and the full text of the Proposed Organizational Documents of Hippo Holdings.


 

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Director Election Proposal

Assuming the BCA Proposal, the Domestication Proposal and each of the Organizational Documents Proposals are approved, RTPZ’s Class B ordinary shareholders are also being asked to approve by ordinary resolution the Director Election Proposal. Pursuant to the Sponsor Support Agreement, the Sponsor and RTPZ’s independent directors, as holders of 100% of the RTPZ Class B ordinary shares, agreed to vote in favor of the Merger Agreement and the transactions contemplated thereby. Therefore, the Director Election Proposal is expected to be approved by the Sponsor and RTPZ’s independent directors prior to the extraordinary general meeting. Upon the consummation of the Business Combination, the Board will consist of (i) a director selected by RTPZ (subject to Hippo’s reasonable approval), (ii) directors designated by Hippo, as listed in the section titled “Management of Hippo Holdings Following the Business Combination,” subject to NYSE requirements and (iii) Michael Thompson as a board observer. For additional information on the proposed directors, see “Director Election Proposal.”

Share Issuance Proposal

Assuming the BCA Proposal, the Domestication Proposal, each of the Organizational Documents Proposals and the Director Election Proposal are approved, RTPZ’s shareholders are also being asked to approve by ordinary resolution the Share Issuance Proposal. For additional information, see “Share Issuance Proposal.”

Incentive Award Plan Proposal

Assuming the BCA Proposal, the Domestication Proposal, each of the Organizational Documents Proposals, the Director Election Proposal and the Share Issuance Proposal are approved, RTPZ’s shareholders are also being asked to approve by ordinary resolution the Incentive Award Plan, in order to comply with NYSE Listing Rule 312.03(a) and the Code. For additional information, see “Incentive Award Plan Proposal.”

ESPP Proposal

Assuming the BCA Proposal, the Domestication Proposal, each of the Organizational Documents Proposals, the Director Election Proposal, the Share Issuance Proposal and the Incentive Award Plan Proposal are approved, RTPZ’s shareholders are also being asked to approve by ordinary resolution the ESPP, in order to comply with NYSE Listing Rule 312.03(a) and the Code. For additional information, see “ESPP Proposal.”

Adjournment Proposal

If, based on the tabulated vote, there are not sufficient votes at the time of the extraordinary general meeting to authorize RTPZ to consummate the Business Combination (because any of the Condition Precedent Proposals have not been approved), RTPZ’s board of directors may submit a proposal to adjourn the extraordinary general meeting to a later date or dates, if necessary, to permit further solicitation and vote of proxies. For additional information, see “Adjournment Proposal.”

Related Agreements

This section describes certain additional agreements entered into or to be entered into pursuant to the Merger Agreement. For additional information, see “BCA Proposal — Related Agreements.”

Sponsor Support Agreement

In connection with the execution of the Merger Agreement, RTPZ entered into the Sponsor Support Agreement with the Sponsor, each officer and director of RTPZ, and Hippo, a copy of which is attached to this proxy statement/prospectus as Annex F.


 

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Pursuant to the Sponsor Support Agreement, the Sponsor and each director and officer of RTPZ (representing as of the date hereof approximately 20.0% of the outstanding RTPZ ordinary shares) agreed to, among other things, vote in favor of the Merger Agreement and the transactions contemplated thereby, in each case, subject to the terms and conditions contemplated by the Sponsor Support Agreement. For additional information, see “BCA Proposal — Related Agreements — Sponsor Support Agreement.

Hippo Support Agreement

In connection with the execution of the Merger Agreement, RTPZ entered into the Hippo Support Agreement with Hippo, each officer and director of Hippo and certain stockholders of Hippo, a copy of which is attached to this proxy statement/prospectus as Annex G.

Pursuant to the Hippo Support Agreement, the Hippo stockholders party thereto agreed to, among other things, vote in favor of the Merger Agreement and the transactions contemplated thereby, in each case, subject to the terms and conditions contemplated by the Hippo Support Agreement. For additional information, see “BCA Proposal — Related Agreements — Sponsor Support Agreement.

Registration Rights Agreement

The Merger Agreement contemplates that, at the Closing, Hippo Holdings, the Sponsor and the other holders of RTPZ Class B ordinary shares, certain former stockholders of Hippo, including certain of Hippo’s directors and officers, and Reinvent Capital Fund, will enter into the Registration Rights Agreement, a copy of which is attached to this proxy statement/prospectus as Annex J, pursuant to which Hippo Holdings will agree to register for resale, pursuant to Rule 415 under the Securities Act, certain shares of Hippo Holdings common stock and other equity securities of Hippo Holdings that are held by the parties thereto from time to time. For additional information, see “BCA Proposal — Related Agreements — Registration Rights Agreement.

PIPE Subscription Agreements

In connection with the execution of the Merger Agreement, RTPZ entered into Subscription Agreements with the PIPE Investors, pursuant to which the PIPE Investors agreed to purchase, in the aggregate, 55,000,000 shares of Hippo Holdings common stock at $10.00 per share for an aggregate commitment amount of $550,000,000. The obligation of the parties to consummate the purchase and sale of the shares covered by the Subscription Agreement is conditioned upon (a) there not being in force any law, rule, regulation, injunction or order enjoining or prohibiting the issuance and sale of the shares covered by the Subscription Agreement, (b) all conditions precedent to the closing of the transactions contemplated by the Merger Agreement having been satisfied or waived, among other things, (c) certain representations and warranties set forth in the Subscription Agreements being true and correct as of the Closing, subject in certain cases to qualifiers based on materiality or material adverse effect, as set forth in the Subscription Agreements, and (d) the performance and satisfaction of certain covenants, agreements and conditions set forth in the Subscription Agreements. The closings under the Subscription Agreements will occur substantially concurrently with the Closing. For additional information, see “BCA Proposal — Related Agreements — PIPE Subscription Agreements.

Sponsor Agreement

On March 3, 2021, the Sponsor entered into the Sponsor Agreement with RTPZ and Hippo, a copy of which is attached to this proxy statement/prospectus as Annex I, pursuant to which the parties thereto agreed to, among other things, (i) certain vesting terms with respect to the ordinary shares beneficially owned by the Sponsor as of the Domestication, (ii) the Sponsor lock-up described under the “Lock-up Agreements” section below, (iii) in addition to the existing exercise provisions in the Warrant Agreement, the mandatory exercise of the private


 

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placement warrants if (a) Hippo Holdings elects to redeem the public warrants and (b) the last reported sales price of Hippo Holdings common stock for any 20 trading days within a period of 30 consecutive trading days exceeds $25.00 per share, and (c) there is an effective registration statement covering the issuance of shares of Hippo Holdings common stock issuable upon exercise of the private placement warrants, and a current prospectus relating thereto, available at the time of such exercise; and (iv) certain rights of Sponsor with respect to board representation of Hippo Holdings following the Closing, in each case, on the terms and subject to the conditions set forth in the Sponsor Agreement.

Lock-up Agreements

The Merger Agreement contemplates that, at the Closing, Hippo Holdings will enter into Lock-Up Agreements with (i) the Company Directors and Officers (as defined in the Merger Agreement) (the “Company D&O Lock-Up Agreement”), and (ii) the Major Company Equityholders (as defined in the Merger Agreement) (the “Major Company Equityholders Lock-Up Agreement”).

The Company D&O Lock-Up Agreement contains certain restrictions on transfer with respect to shares of Hippo Holdings common stock held by the Company Directors and Officers immediately following the Closing (other than shares purchased in the public market or in the PIPE Investment) and the shares of Hippo Holdings common stock issuable to the Company Directors and Officers upon settlement or exercise of restricted stock units, stock options or other equity awards outstanding as of immediately following the Closing in respect of equity awards of Hippo outstanding immediately prior to the Closing (the “D&O Lock-up Shares”). Such restrictions begin at the Closing and end in tranches of 25% of the D&O Lock-up Shares at each of (i) the date that is six months after the Closing, (ii) the one-year anniversary of the Closing, (iii) the date that is 18 months after the Closing, and (iv) the two-year anniversary of the Closing. If, after Closing, Hippo Holdings completes a transaction that results in a change of control, the D&O Lock-up Shares are released from restriction immediately prior to such change of control.

Pursuant to the Sponsor Agreement, the shares of Hippo Holdings common stock (other than shares purchased in the public market or in the PIPE Investment) held by Sponsor are subject to the same restrictions and releases as the D&O Lock-up Shares.

The Major Company Equityholders Lock-Up Agreement contains certain restrictions on transfer with respect to shares of RTPZ Common Stock held by the Major Company Equityholders immediately following the Closing (other than shares purchased in the public market or in the PIPE Investment) (the “Major Company Equityholders Lock-up Shares”). Such restrictions begin at the Closing and end in tranches of 50% of the Major Company Equityholders Lock-up Shares at each of (i) the date that is six months after the Closing and (ii) the one-year anniversary of the Closing. If, after Closing, Hippo Holdings completes a transaction that results in a change of control, the Major Company Equityholders Lock-up Shares are released from restriction immediately prior to such change of control.

Proposals to be Put to the Public Warrant Holders of RTPZ at the Warrant Holders Meeting

The following is a summary of the proposals to be put to the Warrant Holders Meeting. The Warrant Amendment Proposal is conditioned on the approval of the Condition Precedent Proposals. The Warrant Holders Adjournment Proposal is not conditioned upon the approval of any other proposal set forth in this proxy statement/prospectus.

Warrant Amendment Proposal

RTPZ is proposing that its public warrant holders approve a proposal to amend the Warrant Agreement such that the exercise period for the warrants will commence 30 days after the first date on which RTPZ completes the


 

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Business Combination. A summary of the Warrant Amendment Proposal is set forth in the section entitled “Warrant Holder Proposal 1: The Warrant Amendment Proposal” of this proxy statement/prospectus and a complete copy of the Amendment to the Warrant Agreement is attached hereto as Annex H.

Warrant Holders Adjournment Proposal

The Warrant Holders Adjournment Proposal, if adopted, will allow the RTPZ board to adjourn the Warrant Holders Meeting to a later date or dates, including, if necessary to permit further solicitation and vote of proxies if it is determined by RTPZ that more time is necessary or appropriate to approve the Warrant Amendment Proposal. A summary of the Warrant Holders Adjournment Proposal is set forth in the section entitled “Warrant Holder Proposal 2: The Warrant Holders Adjournment Proposal” of this proxy statement/prospectus.

Ownership of Hippo Holdings following Business Combination

As of the date of this proxy statement/prospectus, there are (i) 500,000,000 shares of RTPZ Class A Common Stock authorized, of which 23,000,000 shares are issued and outstanding, (ii) 50,000,000 shares of RTPZ Class B Common Stock authorized, of which 5,750,000 shares are issued and outstanding, and (iii) 5,000,000 preferred shares, par value $0.0001, authorized, of which no shares are issued and outstanding. As of the date of this proxy statement/prospectus, there are 4,600,000 public warrants and 4,400,000 private warrants issued and outstanding, which are not exercisable until the later of (x) November 23, 2021 and (y) thirty (30) days after the Closing. Each whole warrant entitles the holder thereof to purchase one RTPZ Class A ordinary share and, following the Domestication, will entitle the holder thereof to purchase one share of Hippo Holdings common stock.

It is anticipated that, following the Business Combination, (1) existing stockholders of Hippo will own 86.8% of outstanding Hippo Holdings common stock, (2) the Hippo PIPE Investors will own 1.6% of outstanding Hippo Holdings common stock, (3) the Third Party PIPE Investors and Reinvent Capital Fund will own 7.1% of outstanding Hippo Holdings common stock, (4) existing public shareholders of RTPZ (Class A ordinary shares) will own 3.6% of outstanding Hippo Holdings common stock and (5) the Sponsor and the current independent directors of RTPZ, as holders of the RTPZ Class B ordinary shares, will collectively own 0.9% of outstanding Hippo Holdings common stock. These percentages assume (i) that no public shareholders of RTPZ exercise their redemption rights in connection with the Mergers, (ii) the vesting and exercise (on a net share basis) of all Hippo Holdings options for shares of Hippo Holdings common stock, (iii) that Hippo Holdings issues 55,000,000 shares of Hippo Holdings common stock to the PIPE Investors in connection with the PIPE Investment, and (iv) that, pursuant to the Merger Agreement, Hippo Holdings will redeem an aggregate of 1,000,000 shares of Hippo Holdings common stock from certain stockholders of Hippo immediately following the Business Combination. If the actual facts are different from these assumptions, the percentage ownership retained by the Company’s existing shareholders in the combined company will be different.

The Third Party PIPE Investors have agreed to purchase 44,100,000 shares of Hippo Holdings common stock, at $10.00 per share, for approximately $441 million of gross proceeds. Reinvent Capital Fund has agreed to purchase 1,000,000 shares of Hippo Holdings common stock, at $10.00 per share, for approximately $10 million of gross proceeds. The Hippo PIPE Investors have agreed to purchase 9,900,000 shares of Hippo Holdings common stock, at $10.00 per share, for approximately $99 million of gross proceeds. If the actual facts are different from these assumptions, the percentage ownership retained by RTPZ’s existing shareholders in the combined company will be different.


 

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The following table illustrates varying ownership levels in Hippo Holdings immediately following the consummation of the Business Combination based on the assumptions above.

 

   Assuming No
Redemptions
(Shares)(4)
   %
Ownership
  Assuming
Maximum
Redemptions
(Shares)(4)
   %
Ownership
 

Hippo stockholders(1)(2)

   547,700,896    86.8  547,700,896    90.1

PIPE Investors — Existing Hippo stockholders

   9,900,000    1.6  9,900,000    1.6

PIPE Investors(3)(5)

   45,100,000    7.1  45,100,000    7.4

Class A ordinary shares

   23,000,000    3.6  —      0.0

Class B ordinary shares(5)

   5,750,000    0.9  5,750,000    0.9
  

 

 

    

 

 

   

Pro Forma common stock at March, 31 2021

   631,450,896     608,450,896   
  

 

 

    

 

 

   

 

(1)

The number of outstanding shares in the table above assumes the issuance of approximately 55.3 million shares of Hippo common stock underlying rollover options that do not represent legally outstanding shares of Hippo common stock at Closing.

(2)

The Hippo stockholders’ shares have also been reduced by 10 million shares to account for the Secondary Transaction, whereby Hippo Holdings would buy back 10 million shares for $100.0 million from certain Hippo stockholders, that is expected to occur immediately after the Closing.

(3)

This includes $10.0 million of investment from Reinvent Capital Fund and remaining $441.0 million from Third Party PIPE investors.

(4)

The two levels of redemptions assumed in the unaudited pro forma condensed combined balance sheet and statement of operations are based on the assumption that there are no adjustments for the outstanding RTPZ warrants issued in connection with its initial public offering as such securities are not exercisable until 30 days after the Closing (assuming the Warrant Amendment Proposal is approved).

(5)

Through the Class B ordinary shares, the Sponsor and its related entities will own 0.54% assuming no redemptions, and 0.55% assuming maximum redemptions of Hippo Holdings common stock outstanding immediately following the consummation of the Business Combination.


 

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The following two charts illustrate RTPZ’s and Hippo’s corporate organizational structure, respectively. The charts reflect only certain of Hippo’s subsidiaries and have been simplified for illustrative purposes.

Current Organizational Structure of Hippo

 

 

 

LOGO

Current Organizational Structure of RTPZ

 

 

 

LOGO


 

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The following charts illustrate the corporate organizational structure of Hippo Holdings after giving effect to the Business Combination, assuming no redemptions by public shareholders of RTPZ and assuming maximum redemptions. The charts reflect only certain of Hippo Holdings’ subsidiaries and have been simplified for illustrative purposes.

Organizational Structure of Hippo Holdings Following the Business Combination Assuming No Redemptions

 

 

 

LOGO

Organizational Structure of Hippo Holdings Following the Business Combination Assuming Maximum Redemptions

 

 

 

LOGO


 

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Date, Time and Place of Extraordinary General Meeting of RTPZ’s Shareholders

The extraordinary general meeting of the shareholders of RTPZ will be held at 9:00 a.m., Eastern Time, on July 29, 2021, at the offices of Sullivan & Cromwell LLP located at 125 Broad Street, New York, New York 10004 and virtually via live webcast at https://www.cstproxy.com/reinventtechnologypartnersz/2021, to consider and vote upon the proposals to be put to the extraordinary general meeting, including if necessary, the Adjournment Proposal, to permit further solicitation and vote of proxies if, based upon the tabulated vote at the time of the extraordinary general meeting, each of the Condition Precedent Proposals have not been approved.

You will be permitted to attend the extraordinary general meeting in person at the offices of Sullivan & Cromwell LLP only to the extent consistent with, or permitted by, applicable law and directives of public health authorities. Based on current guidance, we do not anticipate being able to accommodate shareholders who wish to attend in person, and we strongly urge you to attend the extraordinary general meeting virtually.

Date, Time and Place of the Warrant Holders Meeting

The Warrant Holders Meeting will be held at 10:00 a.m., Eastern Time, on July 29, 2021, at the offices of Sullivan & Cromwell LLP located at 125 Broad Street, New York, New York 10004 and virtually via live webcast at https://www.cstproxy.com/reinventtechnologypartnersz/2021, to consider and vote upon the proposals to be put to the Warrant Holders Meeting, including if necessary, the Warrant Holders Adjournment Proposal, to permit further solicitation and vote of proxies if, based upon the tabulated vote at the time of the Warrant Holders Meeting, the Warrant Amendment Proposal has not been approved.

You will be permitted to attend the Warrant Holders Meeting in person at the offices of Sullivan & Cromwell LLP only to the extent consistent with, or permitted by, applicable law and directives of public health authorities. Based on current guidance, we do not anticipate being able to accommodate shareholders who wish to attend in person, and we strongly urge you to attend the Warrant Holders Meeting virtually.

Voting Power; Record Date

RTPZ shareholders and public warrant holders will be entitled to vote or direct votes to be cast at the extraordinary general meeting and Warrant Holders Meeting, respectively, if they owned ordinary shares and public warrants, respectively, at the close of business on June 21, 2021, which is the “record date” for the extraordinary general meeting and Warrant Holders Meeting. Shareholders will have one vote for each ordinary share owned at the close of business on the record date. If your shares are held in “street name” or are in a margin or similar account, you should contact your broker to ensure that votes related to the shares you beneficially own are properly counted. RTPZ warrants do not have voting rights in the extraordinary general meeting. As of the close of business on the record date, there were 28,750,000 ordinary shares issued and outstanding, of which 23,000,000 were issued and outstanding public shares. Public warrant holders will have one vote for each public warrant owned at the close of business on the record date. If you hold your public warrants in “street name” through a bank, broker or other nominee, you will need to follow the instructions provided to you by your bank, broker or other nominee to ensure that your public warrants are represented and voted at the Warrant Holders Meeting. As of the close of business on such record date, there were 4,600,000 public warrants outstanding.

Quorum and Vote of RTPZ Shareholders

A quorum of RTPZ shareholders or public warrant holders, as applicable, is necessary to hold a valid meeting. A quorum will be present at the RTPZ extraordinary general meeting if a majority of the issued and outstanding ordinary shares entitled to vote at the extraordinary general meeting are represented in person or by proxy. A quorum will be present at the Warrant Holders Meeting if a majority of the warrants outstanding and


 

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entitled to vote at the Warrant Holders Meeting is represented virtually or by proxy. Abstentions and broker non-votes, while considered present for the purposes of establishing a quorum, will not count as votes cast at the extraordinary general meeting. As of the record date for the extraordinary general meeting, 14,375,001 ordinary shares would be required to achieve a quorum. As of the record date for the Warrant Holders Meeting, 4,500,001 warrants would be required to achieve a quorum.

The Sponsor and RTPZ’s directors and officers have agreed to vote all of their Founder Shares and any public shares they may hold in favor of the proposals being presented at the extraordinary general meeting. As of the date of this proxy statement/prospectus, the Sponsor and RTPZ’s independent directors collectively own 20.0% of the issued and outstanding ordinary shares.

The proposals presented at the extraordinary general meeting require the following votes:

 

  

BCA Proposal: The approval of the BCA Proposal requires an ordinary resolution under Cayman Islands Companies Law, being the affirmative vote of the holders of a majority of the ordinary shares who, being present in person or by proxy and entitled to vote at the extraordinary general meeting, vote at the extraordinary general meeting.

 

  

Domestication Proposal: The approval of the Domestication Proposal requires a special resolution under Cayman Islands Companies Law, being the affirmative vote of holders of at least two-thirds of the ordinary shares who, being present in person or by proxy and entitled to vote at the extraordinary general meeting, vote at the extraordinary general meeting.

 

  

Organizational Documents Proposals: The separate approval of each of the Organizational Documents Proposals requires a special resolution under Cayman Islands Companies Law, being the affirmative vote of holders of at least two-thirds of the ordinary shares who, being present in person or by proxy and entitled to vote at the extraordinary general meeting, vote at the extraordinary general meeting.

 

  

Director Election Proposal: The approval of the Director Election Proposal requires an ordinary resolution under Cayman Islands Companies Law, being the affirmative vote of the holders of a majority of the RTPZ Class B ordinary shares who, being present in person or by proxy and entitled to vote at the extraordinary general meeting, vote at the extraordinary general meeting.

 

  

Share Issuance Proposal: The approval of the Share Issuance Proposal requires an ordinary resolution under Cayman Islands Companies Law, being the affirmative vote of the holders of a majority of the ordinary shares who, being present in person or by proxy and entitled to vote at the extraordinary general meeting, vote at the extraordinary general meeting.

 

  

Incentive Award Plan Proposal: The approval of the Incentive Award Plan Proposal requires an ordinary resolution under Cayman Islands law, being the affirmative vote of the holders of a majority of the ordinary shares who, being present in person or by proxy and entitled to vote at the extraordinary general meeting, vote at the extraordinary general meeting.

 

  

ESPP Proposal: The approval of the ESPP Proposal requires an ordinary resolution under Cayman Islands Companies Law, being the affirmative vote of the holders of a majority of the ordinary shares who, being present in person or by proxy and entitled to vote at the extraordinary general meeting, vote at the extraordinary general meeting.

 

  

Adjournment Proposal: The approval of the Adjournment Proposal requires an ordinary resolution under Cayman Islands Companies Law, being the affirmative vote of the holders of a majority of the ordinary shares who, being present in person or by proxy and entitled to vote at the extraordinary general meeting, vote at the extraordinary general meeting.


 

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The proposals presented at the Warrant Holders Meeting require the following votes:

 

  

Warrant Amendment Proposal: The approval of the Warrant Amendment Proposal requires the affirmative vote of the holders of at least 50% of RTPZ’s outstanding public warrants.

 

  

Warrant Holders Adjournment Proposal: The approval of the Warrant Holders Adjournment Proposal requires the affirmative vote of a majority of the votes cast by the public warrant holders present or represented by proxy and entitled to vote at the Warrant Holders Meeting.

Redemption Rights

Pursuant to the Cayman Constitutional Documents, a public shareholder may request of RTPZ that Hippo Holdings redeem all or a portion of its public shares for cash if the Business Combination is consummated. As a holder of public shares, you will be entitled to receive cash for any public shares to be redeemed only if you:

 

  

hold public shares or (b) if you hold public shares through units, you elect to separate your units into the underlying public shares and public warrants prior to exercising your redemption rights with respect to the public shares;

 

  

submit a written request to Continental, RTPZ’s transfer agent, that Hippo Holdings redeem all or a portion of your public shares for cash; and

 

  

deliver your certificates for public shares (if any) and any other required redemption forms to Continental, RTPZ’s transfer agent, physically or electronically through DTC.

Holders must complete the procedures for electing to redeem their public shares in the manner described above prior to 5:00 p.m., Eastern Time, on July 27, 2021 (two business days before the extraordinary general meeting) in order for their shares to be redeemed.

Holders of units must elect to separate the units into the underlying public shares and public warrants prior to exercising redemption rights with respect to the public shares. If holders hold their units in an account at a brokerage firm or bank, holders must notify their broker or bank that they elect to separate the units into the underlying public shares and public warrants, or if a holder holds units registered in its own name, the holder must contact Continental, RTPZ’s transfer agent, directly and instruct them to do so. Public shareholders may elect to redeem all or a portion of the public shares held by them regardless of if or how they vote in respect of the BCA Proposal. If the Business Combination is not consummated, the public shares will be returned to the respective holder, broker or bank. If the Business Combination is consummated, and if a public shareholder properly exercises its right to redeem all or a portion of the public shares that it holds and timely delivers its certificates for public shares (if any) and any other required redemption forms to Continental, RTPZ’s transfer agent, Hippo Holdings will redeem such public shares for a per-share price, payable in cash, equal to the pro rata portion of the trust account, calculated as of two business days prior to the consummation of the Business Combination. For illustrative purposes, as of March 31, 2021, this would have amounted to approximately $10.00 per issued and outstanding public share. If a public shareholder exercises its redemption rights in full, then it will be electing to exchange its public shares for cash and will no longer own public shares. The redemption takes place following the Domestication and, accordingly, it is shares of Hippo Holdings common stock that will be redeemed immediately after consummation of the Business Combination. See “Extraordinary General Meeting of RTPZ — Redemption Rights” in this proxy statement/prospectus for a detailed description of the procedures to be followed if you wish to redeem your public shares for cash.

Notwithstanding the foregoing, a public shareholder, together with any affiliate of such public shareholder or any other person with whom such public shareholder is acting in concert or as a “group” (as defined in


 

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Section 13(d)(3) of the Exchange Act), will be restricted from redeeming its public shares with respect to more than an aggregate of 15% of the public shares. Accordingly, if a public shareholder, alone or acting in concert or as a group, seeks to redeem more than 15% of the public shares, then any such shares in excess of that 15% limit would not be redeemed for cash.

The Sponsor and all of RTPZ’s directors and officers have agreed to vote all of their Founder Shares and any public shares they may hold in favor of the Business Combination, regardless of how our public shareholders vote. Unlike some other blank check companies in which the initial shareholders agree to vote their shares in accordance with the majority of the votes cast by the public shareholders in connection with an initial business combination, the Sponsor and all of RTPZ’s directors and officers have agreed to, among other things, vote in favor of the Merger Agreement and the transactions contemplated thereby, in each case, subject to the terms and conditions contemplated by the Sponsor Support Agreement. As of the date of this proxy statement/prospectus, the Sponsor and RTPZ’s independent directors collectively own 20.0% of the issued and outstanding ordinary shares.

Holders of the warrants will not have redemption rights with respect to the warrants.

Appraisal Rights

Neither RTPZ shareholders nor RTPZ warrant holders have appraisal rights in connection with the Business Combination or the Domestication under the Cayman Islands Companies Law or under the DGCL.

Proxy Solicitation

Proxies may be solicited by mail, telephone or in person. RTPZ has engaged Morrow Sodali LLC to assist in the solicitation of proxies.

If a shareholder or public warrant holder grants a proxy, it may still vote in person if it revokes its proxy before the extraordinary general meeting or the Warrant Holders Meeting, as applicable. A shareholder or public warrant holder also may change its vote by submitting a later-dated proxy as described in the section entitled “Extraordinary General Meeting and Warrant Holders Meeting of RTPZ — Revoking Your Proxy.”

Interests of RTPZ’s Directors and Executive Officers in the Business Combination

When you consider the recommendation of RTPZ’s board of directors in favor of approval of the proposals in this proxy statement/prospectus, you should keep in mind that the Sponsor and RTPZ’s directors and executive officers have interests in the Business Combination that may be different from, or in addition to, those of RTPZ shareholders and warrant holders generally. The board of directors of RTPZ was aware of and considered these interests, among other matters, in reaching the determination to approve the terms of the Business Combination and in recommending to RTPZ’s shareholders that they vote to approve the Business Combination. See the section entitled “BCA Proposal — Interests of RTPZ’s Directors and Executive Officers in the Business Combination” for a further discussion of these considerations.

Interests of Hippo’s Directors and Executive Officers in the Business Combination

When you consider the recommendation of RTPZ’s board of directors in favor of approval of the proposals in this proxy statement/prospectus, you should keep in mind that Hippo’s directors and executive officers may have interests in the Business Combination that may be different from, or in addition to, those of RTPZ shareholders and warrant holders generally. The board of directors of RTPZ was aware of and considered these interests, among other matters, in reaching the determination to approve the terms of the Business Combination


 

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and in recommending to RTPZ’s shareholders that they vote to approve the Business Combination. See the section entitled “BCA Proposal — Interests of Hippo’s Directors and Executive Officers in the Business Combination” for a further discussion of these considerations.

Recommendation to Shareholders of RTPZ

RTPZ’s board of directors believes that the BCA Proposal and the other proposals to be presented at the extraordinary general meeting are in the best interest of RTPZ’s shareholders and unanimously recommends that its shareholders vote “FOR” the BCA Proposal, “FOR” the Domestication Proposal, “FOR” the Share Issuance Proposal, “FOR” each of the separate Organizational Documents Proposals, “FOR” the Director Election Proposal, “FOR” the Incentive Award Plan Proposal, “FOR” the ESPP Proposal and “FOR” the Adjournment Proposal, in each case, if presented to the extraordinary general meeting.

RTPZ’s board of directors believes that the Warrant Amendment Proposal is in the best interest of RTPZ’s public warrant holders and unanimously recommends that its public warrant holders vote “FOR” the Warrant Amendment Proposal and “FOR” the Warrant Holders Adjournment Proposal, if presented to the Warrant Holders Meeting.

Sources and Uses of Funds for the Business Combination

The following table summarizes the sources and uses for funding the Business Combination. These figures assume (i) that no public shareholders exercise their redemption rights in connection with the Business Combination and (ii) that Hippo Holdings issues or, as applicable, reserves for issuance in respect of Hippo options outstanding as of immediately prior to the Closing that will be converted into options based on Hippo Holdings common stock, an aggregate of 547,700,896 shares of Hippo Holdings common stock as the Aggregate Merger Consideration pursuant to the Merger Agreement (assuming that all Hippo Holdings options are net-settled). If the actual facts are different from these assumptions, the below figures will be different.

(in millions)

 

Sources

    

Uses

    

Cash and investments held in Trust Account (1)

 $230.1  Cash to balance sheet  $636.5 

PIPE Investment (2)

  550.0  Transaction expenses   43.6 
  Redemption of Hippo common stock   100.0 
 

 

 

    

 

 

 

Total Sources

 $780.1  Total Uses  $780.1 

 

(1)

Calculated as of March 31, 2021.

(2)

Shares issued in the PIPE Investment were priced at $10.00 per share.

U.S. Federal Income Tax Considerations

For a discussion summarizing the U.S. federal income tax considerations of the Domestication and exercise of redemption rights, please see “U.S. Federal Income Tax Considerations.”

Expected Accounting Treatment

The Domestication

There will be no accounting effect or change in the carrying amount of the consolidated assets and liabilities of the Company as a result of the Domestication. The business, capitalization, assets and liabilities and financial


 

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statements of Hippo Holdings immediately following the Domestication will be the same as those of RTPZ immediately prior to the Domestication.

The Business Combination

We expect the Business Combination to be accounted for as a reverse recapitalization in accordance with GAAP. Under the guidance in ASC 805, RTPZ is expected to be treated as the “acquired” company for financial reporting purposes. Accordingly, the Business Combination is expected to be reflected as the equivalent of Hippo issuing stock for the net assets of RTPZ, accompanied by a recapitalization whereby no goodwill or other intangible assets are recorded. Operations prior to the Business Combination will be those of Hippo.

Regulatory Matters

Completion of the Business Combination is subject to approval under the HSR Act and to the receipt of approvals or exemptions from insurance regulatory authorities. Each of Hippo and RTPZ have agreed to use their respective reasonable best efforts to obtain any necessary or advisable clearance, approval, consent, exemption, or governmental authorizations in order to consummate the transactions contemplated by the Merger Agreement. See the section entitled “BCA Proposal — Regulatory Matters” for additional detail.

Emerging Growth Company

RTPZ is an “emerging growth company,” as defined in Section 2(a) of the Securities Act, as modified by the JOBS Act, and it may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies, including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in RTPZ’s periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved.

Further, section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such election to opt out is irrevocable. RTPZ has elected not to opt out of such extended transition period, which means that when a standard is issued or revised and it has different application dates for public or private companies, RTPZ, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of RTPZ’s financial statements with certain other public companies difficult or impossible because of the potential differences in accounting standards used.

RTPZ will remain an emerging growth company until the earlier of: (1) the last day of the fiscal year (a) following the fifth anniversary of the closing of RTPZ’s initial public offering, (b) in which RTPZ has total annual gross revenue of at least $1.07 billion or (c) in which RTPZ is deemed to be a large accelerated filer, which means the market value of RTPZ’s common equity that is held by non-affiliates exceeds $700 million as of the end of the prior fiscal year’s second fiscal quarter; and (2) the date on which RTPZ has issued more than $1.00 billion in non-convertible debt securities during the prior three-year period. References herein to “emerging growth company” shall have the meaning associated with it in the JOBS Act.


 

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Risk Factors

In evaluating the proposals to be presented at the RTPZ extraordinary general meeting, you should carefully read this proxy statement/prospectus and especially consider the factors discussed in the section entitled “Risk Factors.” Such risks include, but are not limited to:

Risks relating to Hippo’s business and industry, including that:

 

  

We have a history of net losses and we may not achieve or maintain profitability in the future.

 

  

Our success and ability to grow our business depend on retaining and expanding our customer base. If we fail to add new customers or retain current customers, our business, revenue, operating results and financial condition could be harmed.

 

  

The “Hippo” brand may not become as widely known as incumbents’ or other competitors’ brands or the brand may become tarnished.

 

  

Denial of claims or our failure to accurately and timely pay claims could materially and adversely affect our business, financial condition, results of operations and prospects.

 

  

Our limited operating history makes it difficult to evaluate our current business performance, implementation of our business model and our future prospects.

 

  

We may not be able to manage our growth effectively.

 

  

Intense competition in the segments of the insurance industry in which we operate could negatively affect our ability to attain or increase profitability.

 

  

Reinsurance may be unavailable at current coverage, limits or pricing, which may limit our ability to write new or renew existing business. Furthermore, reinsurance subjects our insurance company subsidiaries to counterparty credit and performance risk and may not be adequate to protect us against losses, which could have a material effect on our results of operations and financial condition.

 

  

Failure to maintain our risk-based capital at the required levels could adversely affect the ability of our insurance subsidiaries to maintain regulatory authority to conduct our business.

 

  

Failure to maintain our financial strength ratings could adversely affect the ability of our insurance company subsidiaries to conduct our business as currently conducted.

 

  

If we are unable to expand our product offerings, our prospects for future growth may be adversely affected.

 

  

Our proprietary technology, which relies on third party data, may not operate properly or as we expect it to.

 

  

Our technology platform may not operate properly or as we expect it to operate.

 

  

Our future success depends on our ability to continue to develop and implement our technology, and to maintain the confidentiality of this technology.

Risks relating to RTPZ and the Business Combination, including that:

 

  

The public shareholders will experience significant and immediate dilution as a consequence of the issuance of Hippo Holdings common stock as consideration in the Business Combination and the PIPE Investment and due to future issuances pursuant to the Incentive Award Plan. Having a minority share position may reduce the influence that RTPZ’s current shareholders have on the management of Hippo Holdings.


 

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After Closing, warrants will become exercisable for Hippo Holdings common stock, which would increase the number of shares eligible for future resale in the public market and result in dilution to RTPZ’s shareholders.

 

  

Neither the RTPZ board of directors nor any committee thereof obtained a third party valuation in determining whether or not to pursue the Business Combination.

 

  

Since the Sponsor and RTPZ’s directors and executive officers have interests that are different, or in addition to (and which may conflict with), the interests of RTPZ’s shareholders, a conflict of interest may have existed in determining whether the Business Combination with Hippo is appropriate as RTPZ’s initial business combination.

 

  

Future resales of common stock after the consummation of the Business Combination may cause the market price of Hippo Holdings’ securities to drop significantly, even if Hippo Holdings’ business is doing well.

 

  

Hippo Holdings may be subject to securities litigation, which is expensive and could divert management attention.


 

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SELECTED HISTORICAL FINANCIAL INFORMATION OF RTPZ

The selected historical condensed statements of operations data of RTPZ for the period from October 2, 2020 (date of inception) to December 31, 2020 and the condensed balance sheet data as of December 31, 2020 are derived from RTPZ’s audited annual condensed financial statements, as restated, included elsewhere in this proxy statement/prospectus. The selected historical condensed statements of operations data of RTPZ for the three months ended March 31, 2021 and the condensed balance sheet data as of March 31, 2021 are derived from RTPZ’s unaudited interim financial statements included elsewhere in this proxy statement/prospectus. You should read the following summary financial information in conjunction with the section titled “RTPZ’s Discussion and Analysis of Financial Condition and Results of Operations” and RTPZ’s financial statements, as restated, and related notes appearing elsewhere in this proxy statement/prospectus.

We have neither engaged in any operations nor generated any revenue to date. Our only activities from inception through March 31, 2021 were organizational activities and those necessary to complete our initial public offering and identifying a target company for a business combination. We do not expect to generate any operating revenue until after the consummation of the Business Combination.

 

   Three months
ended
March 31, 2021
  Period from
October 2, 2020
(inception)
through
December 31,
2020
(As Restated)
 
   (unaudited)  (audited) 

Statement of Operations Data:

   

General and administrative expenses

  $1,456,122  $250,366 
  

 

 

  

 

 

 

Loss from operations

   (1,456,122  (250,366

Other income (expense)

   

Unrealized gain on investments held in Trust Account

   52,917   18,693 

Financing costs – derivative warrant liabilities

   —     (374,490

Change in fair value of derivative warrant liabilities

   (1,058,630  (866,050
  

 

 

  

 

 

 

Total other income (expense)

   (1,005,713  (1,221,847
  

 

 

  

 

 

 

Net loss

  $(2,461,835 $(1,472,213
  

 

 

  

 

 

 

Basic and diluted weighted average shares outstanding Class A ordinary shares

   23,000,000   23,000,000 
  

 

 

  

 

 

 

Basic and diluted net loss per ordinary share

  $—    $—   
  

 

 

  

 

 

 

Basic and diluted weighted average shares outstanding Class B ordinary shares

   5,750,000   5,750,000 
  

 

 

  

 

 

 

Basic and diluted net loss per ordinary share

  $(0.43 $(0.26
  

 

 

  

 

 

 
   As of March 31,
2021
  As of
December 31,
2020
(As Restated)
 
   (unaudited)  (audited) 

Balance Sheet Data:

   

Total cash

  $214,015  $622,985 

Total assets

   231,219,945   231,716,367 

Total liabilities

   23,834,287   21,868,874 

Total shareholder’s equity

   5,000,008   5,000,003 

 

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SELECTED HISTORICAL FINANCIAL AND OPERATING DATA OF HIPPO

The selected historical consolidated statements of operations data of Hippo for the years ended December 31, 2020 and 2019 and the historical consolidated balance sheet data as of December 31, 2020 and 2019 are derived from Hippo’s audited consolidated financial statements included elsewhere in this proxy statement/prospectus. The selected historical consolidated statements of operations data of Hippo for the three months ended March 31, 2021 and 2020 and the historical consolidated balance sheet data as of March 31, 2021 are derived from Hippo’s unaudited consolidated financial statements included elsewhere in this proxy statement/prospectus.

Hippo’s historical results are not necessarily indicative of the results that may be expected in the future. You should read the following selected historical consolidated financial data together with “Hippo’s Management’s Discussion and Analysis of Financial Condition and Results of Operations” and Hippo’s consolidated financial statements and related notes included elsewhere in this proxy statement/prospectus. In addition, you should read the historical audited financial statements of Spinnaker Insurance Company as of and for the year ended December 31, 2019, and the respective notes thereto, and the historical unaudited financial statements of Spinnaker as of and for the period ended June 30, 2020 included elsewhere in this proxy statement/prospectus.

 

in millions, except per share amounts

  As of and for the
three-month period
ended

March 31
   As of and for the
year ended
December 31
 
   2021   2020   2020   2019 

Statement of Operations Data

        

Total revenue

  $17.0   $10.2   $51.6   $34.7 

Total expenses

   211.8    34.1    194.8    117.7 

Net loss attributable to common stockholders

   (195.2   (23.9   (141.5   (83.1

Basic and diluted net loss per share attributable to common stockholders

   (14.14   (1.97   (11.32   (7.80

Balance Sheet Data

        

Total assets

   1,085.8      979.4    170.5 

Total liabilities (1)

   1,131.0      834.1    58.5 

Total shareholders’ deficit (1)

   (390.0     (199.5   (78.3

Cash Flow Data

        

Net cash used in operating activities

   (15.5   (14.9   (65.4   (29.1

Net cash (used in) provided by investing activities

   (9.0   36.0    (2.3   (72.3

Net cash provided by financing activities

  $0.2   $3.5   $518.1   $101.4 

 

(1)

This excludes $344.8 million of redeemable convertible preferred stock classified as mezzanine equity as of March 31, 2021 and December 31, 2020, and $190.3 million of redeemable convertible preferred stock as of December 31, 2019.


 

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SELECTED UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION

The following selected unaudited pro forma condensed combined financial information (the “Summary Pro Forma Information”) presents the pro forma effects of the following transactions, collectively referred to as “Transactions” and other related events as described in Note 1 to the accompanying Notes to the unaudited pro forma combined financial statements:

 

  

The Business Combination; and

 

  

The acquisition of Spinnaker Insurance Company (“Spinnaker”) by Hippo on August 31, 2020 (“Spinnaker Transaction”).

The Business Combination is expected to be accounted for as a reverse recapitalization in accordance with GAAP. Under the guidance in ASC 805, RTPZ is expected to be treated as the “acquired” company for financial reporting purposes. Accordingly, the Business Combination is expected to be reflected as the equivalent of Hippo issuing stock for the net assets of RTPZ, accompanied by a recapitalization whereby no goodwill or other intangible assets are recorded. Operations prior to the Business Combination will be those of Hippo.

The Spinnaker Transaction was accounted for as an acquisition in accordance with GAAP and Hippo was treated as the accounting acquiror.

The Summary unaudited pro forma condensed combined balance sheet data as of March 31, 2021 gives effect to the Business Combination as if it had occurred on March 31, 2021. The summary unaudited pro forma condensed combined statements of operations data for the three months ended March 31, 2021 and the year ended December 31, 2020 give effect to the Transaction as if it had occurred on January 1, 2020.

The Summary Pro Forma Information has been derived from, and should be read in conjunction with, the more detailed unaudited pro forma condensed combined financial information of the post-combination company appearing elsewhere in this proxy statement/prospectus and the accompanying notes to the unaudited pro forma condensed combined financial information. The unaudited pro forma condensed combined financial information is based upon, and should be read in conjunction with, the historical financial statements and related notes of RTPZ and Hippo for the applicable periods included in this proxy statement/prospectus. The Summary Pro Forma Information has been presented for informational purposes only and is not necessarily indicative of what the post-combination company’s financial position or results of operations actually would have been had the Business Combination and Spinnaker Transaction been completed as of the dates indicated. In addition, the Summary Pro Forma Information does not purport to project the future financial position or operating results of the post-combination company.

The Summary Pro Forma Information is presented in two scenarios: (1) assuming no redemptions, and (2) assuming maximum redemptions. The no redemptions scenario assumes that no RTPZ shareholders elect to redeem their Class A ordinary shares (or Class A common stock) for a pro rata portion of cash in the trust account, and thus the full amount held in the trust account as of Closing is available for the Business Combination. The maximum redemptions scenario assumes that RTPZ shareholders redeem the maximum number of their Class A ordinary shares (or Class A common stock) for a pro rata portion of cash in the trust account. In both scenarios, the amount of cash available is sufficient to satisfy the Minimum Cash Condition.


 

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Selected Unaudited Pro Forma Condensed Combined Financial Information

(in millions, except share and per share data)

 

   Pro Forma Combined
(Assuming No
Redemptions)
   Pro Forma Combined
(Assuming Maximum
Redemptions)
 

Balance Sheet Data as of March 31, 2021

    

Total assets

  $1,711.3   $1,481.2 

Total liabilities

  $577.6   $577.6 

Total stockholder’s equity

  $1,133.7   $903.6 

Selected Unaudited Pro Forma Condensed Combined Statement of Operations Data

    

For the Three Months Ended March 31, 2021

    

Revenue

  $17.0   $17.0 

Net loss

  $(41.3  $(41.3

Net loss per share - Hippo Holdings common stock - basic and diluted

  $(0.07  $(0.07

Weighted-average Hippo Holdings common shares outstanding - basic and diluted

   576,150,772    553,150,772 

For the Year Ended December 31, 2020

    

Revenue

  $50.1   $50.1 

Net loss

  $(124.4  $(124.4

Net loss per share - Hippo Holdings common stock - basic and diluted

  $(0.22  $(0.22

Weighted-average Hippo Holdings common shares outstanding - basic and diluted

   576,150,772    553,150,772 

 

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COMPARATIVE PER SHARE DATA

The following table sets forth summary historical comparative share information for RTPZ and Hippo and unaudited pro forma condensed combined per share information after giving effect to the Business Combination, assuming two redemption scenarios as follows: (1) assuming no redemptions, and (2) assuming maximum redemptions. The no redemptions scenario assumes that no RTPZ shareholders elect to redeem their Class A ordinary shares (or Class A common stock) for a pro rata portion of cash in the Trust Account, and thus the full amount held in the Trust Account as of Closing is available for the Business Combination. The maximum redemptions scenario assumes that RTPZ shareholders redeem the maximum number of their Class A ordinary shares (or Class A common stock) for a pro rata portion of cash in the Trust Account. In both scenarios, the amount of cash available is sufficient to satisfy the minimum cash condition of $450.0 million in the Merger Agreement.

The pro forma book value information reflects the Business Combination as if it had occurred on March 31, 2021. The weighted average shares outstanding and net earnings per share information for the three months ended March 31, 2021 and for the year ended December 31, 2020 reflect the Business Combination as if it had occurred on January 1, 2020.

This information is only a summary and should be read in conjunction with the historical financial statements of RTPZ and Hippo and related notes included elsewhere in this proxy statement/prospectus. The unaudited pro forma combined per share information of RTPZ and Hippo is derived from, and should be read in conjunction with, the unaudited pro forma condensed combined financial statements and related notes included elsewhere in this proxy statement/prospectus.

The unaudited pro forma combined loss per share information below does not purport to represent the loss per share which would have occurred had the companies been combined during the periods presented, nor earnings or loss per share for any future date or period.

 

        Combined Pro Forma  Hippo Equivalent
Per Share Pro Forma(2)
 
  Hippo
(Historical)
  RTPZ
(Historical)
  Assuming No
Redemptions
  Assuming
Maximum
Redemptions
  Assuming No
Redemptions
  Assuming
Maximum
Redemptions
 

As of and for the Three Months Ended March 31, 2021

      

Book value per share(1)

 $(28.26 $0.17  $1.97  $1.63  $13.66  $11.34 

Weighted averages shares outstanding - basic and diluted

  13,800,074      

Net loss per share - basic and diluted

 $(14.14     

Weighted average shares outstanding of Class A ordinary shares - basic and diluted

   23,000,000     

Net loss per share of Class A ordinary shares - basic and diluted

  $—       

Weighted average shares outstanding of Class B ordinary shares - basic and diluted

   5,750,000     

Net loss per share of Class B ordinary shares - basic and diluted

  $(0.43    

Weighted average shares outstanding of Hippo Holdings common stock - basic and diluted

    576,150,772   553,150,772   

Net loss per share of Hippo Holdings common stock - basic and diluted

   $(0.07 $(0.07 $(0.50 $(0.52

As of and for the Year ended December 31, 2020

      

Weighted averages shares outstanding - basic and diluted

  12,495,509      

Net loss per share - basic and diluted

 $(11.32     

Weighted average shares outstanding of Class A ordinary shares - basic and diluted

   23,000,000     

Net loss per share of Class A ordinary shares - basic and diluted

  $—       

Weighted average shares outstanding of Class B ordinary shares - basic and diluted

   5,750,000     

Net loss per share of Class B ordinary shares - basic and diluted

  $(0.26    

Weighted average shares outstanding of Hippo Holdings common stock - basic and diluted

    576,150,772   553,150,772   

Net loss per share of Hippo Holdings common stock - basic and diluted

   $(0.22 $(0.22 $(1.50 $(1.56

 

(1)

Book value per share = Total equity excluding preferred stock and shares subject to redemption

(2)

The equivalent pro forma basic and diluted per share data for Hippo is calculated by multiplying the combined pro forma per share data by the 6.9413 Exchange Ratio, after adjusting for reference price of $10.00 per share.


 

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MARKET PRICE AND DIVIDEND INFORMATION

RTPZ units, Class A ordinary shares and public warrants are currently listed on the NYSE under the symbols “RTPZ.U,” “RTPZ” and “RTPZ WS,” respectively.

The most recent closing prices of the RTPZ units, RTPZ Class A ordinary shares and RTPZ warrants as of March 3, 2021, the last trading day before announcement of the execution of the Merger Agreement, were $11.82, $11.11 and $3.40, respectively. As of June 21, 2021, the record date for the extraordinary general meeting, the most recent closing price for each RTPZ unit, RTPZ Class A ordinary share and RTPZ warrant was $10.30, $10.01 and $1.62, respectively.

Holders of the RTPZ units, RTPZ Class A ordinary shares and RTPZ public warrants should obtain current market quotations for their securities. The market price of RTPZ’s securities could vary at any time before the Business Combination.

Holders

As of the date of this proxy statement/prospectus there was one holder of record of RTPZ’s Class A ordinary shares, five holders of record of RTPZ’s Class B ordinary shares, two holders of record of RTPZ units and one holder of record of RTPZ warrants. See “Beneficial Ownership of Securities.”

As of the date of this proxy statement/prospectus, the number of record holders of Hippo’s common stock was 274.

Dividend Policy

RTPZ has not paid any cash dividends on its Class A ordinary shares to date and does not intend to pay cash dividends prior to the completion of the Business Combination. The payment of cash dividends in the future will be dependent upon the revenues and earnings, if any, capital requirements and general financial condition of RTPZ Technologies subsequent to completion of the Business Combination. The payment of any cash dividends subsequent to the Business Combination will be within the discretion of Hippo Holdings’ board of directors. RTPZ’s board of directors is not currently contemplating and does not anticipate declaring stock dividends nor is it currently expected that Hippo Holdings’ board of directors will declare any dividends in the foreseeable future. Further, the ability of Hippo Holdings to declare dividends may be limited by the terms of financing or other agreements entered into by Hippo Holdings or its subsidiaries from time to time.

Price Range of Hippo’s Securities

Historical market price information regarding Hippo is not provided because there is no public market for Hippo’s securities. For information regarding Hippo’s liquidity and capital resources, see “Hippo Management’s Discussion and Analysis of Financial Condition and Results of Operations  Liquidity and Capital Resources.”


 

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RISK FACTORS

RTPZ shareholders should carefully consider the following risk factors, together with all of the other information included in this proxy statement/prospectus, before they decide whether to vote or instruct their vote to be cast to approve the relevant proposals described in this proxy statement/prospectus.

Investing in Hippo Holdings common stock involves a high degree of risk. You should carefully consider the following risks, together with all of the other information contained in this proxy statement/prospectus, before deciding to invest in Hippo Holdings common stock. Hippo Holdings’ business, financial condition, results of operations or prospects could be materially and adversely affected by any of these risks or uncertainties, as well as by risks or uncertainties not currently known to RTPZ or Hippo, or that RTPZ and Hippo do not currently believe are material. In that case, the trading price of Hippo Holdings common stock could decline, and you may lose all or part of your investment.

Risks Relating to Hippo’s Business

Unless the context otherwise requires, all references in this subsection to the “Company,” “we,” “us” or “our” refer to the business of Hippo Enterprises Inc. and its subsidiaries prior to the consummation of the Business Combination, which will be the business of Hippo Holdings and its subsidiaries following the consummation of the Business Combination.

We have a history of net losses and we may not achieve or maintain profitability in the future.

We have incurred net losses on an annual basis since our incorporation in 2015 and had an accumulated deficit of $115.1 million, $256.6 million and $451.9 million as of December 31, 2019, December 31, 2020 and March 31, 2021, respectively. We incurred net losses of $83.1 million and $141.5 million in the years ended December 31, 2019 and December 31, 2020, respectively. We also incurred net losses of $195.2 million for the three months ended March 31, 2021. We expect to make significant investments to further develop and expand our business. In particular, we expect to continue to expend substantial financial and other resources on marketing and advertising as part of our strategy to increase our customer base. The marketing and advertising expenses that we incur are typically expensed immediately while most revenues that they generate are recognized ratably over the 12-month term of each insurance policy that we write. This timing difference can therefore result in expenses that exceed the related revenue generated in any given year and create a net loss. In addition, we expect to continue to increase our headcount significantly in the coming years. As a public company, we will also incur significant legal, accounting and other expenses that we did not incur as a private company. We expect that our net loss will increase in the near term as we continue to make such investments to grow our business. Despite these investments, we may not succeed in increasing our revenue on the timeline that we expect or in an amount sufficient to lower our net loss and ultimately become profitable. Moreover, if our revenue declines, we may not be able to reduce costs in a timely manner because many of our costs are fixed, at least in the short term. In addition, if we reduce variable costs to respond to losses, this may limit our ability to sign up new customers and grow our revenues. Accordingly, we may not achieve or maintain profitability and we may continue to incur significant losses in the future.

Our success and ability to grow our business depend on retaining and expanding our customer base. If we fail to add new customers or retain current customers, our business, revenue, operating results and financial condition could be harmed.

We believe that growth of our business and revenue depends upon our ability to continue to grow our business in the geographic markets that we currently serve by retaining our existing customers and adding new customers in our current as well as new geographic markets and new insurance and non-insurance home-related products. Expanding into new geographic markets and introducing new products takes time, requires us to navigate and comply with extensive regulations, and may occur more slowly than we expect or than it has occurred in the past. If we lose customers, our value will diminish. In particular, while loss performance has

 

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improved over time as more customers renew their policies and remain customers for longer, a future loss of customers could lead to higher loss ratios or loss ratios that cease to decline or declining revenue, any of which would adversely impact our profitability. If we fail to remain competitive on customer experience, pricing, or insurance coverage options, our ability to grow and retain our business may also be adversely affected. In addition, we may fail to accurately predict risk segmentation of new and renewal customers or potential customers, which could also reduce our profitability.

While a key part of our business strategy is to retain and add customers in our existing markets, we also intend to expand our operations into new markets and new products. In doing so, we may incur losses or otherwise fail to enter new markets or introduce new products successfully. Our expansion into new markets and new products may place us in unfamiliar competitive environments and involve various risks, including competition, government regulation, the need to invest significant resources, and the possibility that returns on such investments will not be achieved for several years or at all.

There are many factors that could negatively affect our ability to grow our customer base, including if:

 

  

we fail to effectively use search engines, social media platforms, content-based online advertising, and other online sources for generating traffic to our website;

 

  

potential customers in a particular marketplace or more generally do not meet our underwriting guidelines;

 

  

our products are not competitive in terms of customer experience, pricing, or insurance coverage options;

 

  

our competitors mimic our digital platform or develop other innovative services, causing current and potential customers to purchase their insurance products instead of our products;

 

  

we lose customers to new market entrants and/or existing competitors;

 

  

we do not obtain regulatory approvals necessary for expansion into new markets or in relation to our products (such as line, form, underwriting and rating approvals) or such approvals contain conditions that impose restrictions on our operations (such as limitations on growth);

 

  

our digital platform experiences disruptions;

 

  

we suffer reputational harm to our brand resulting from negative publicity, whether accurate or inaccurate;

 

  

we fail to expand geographically;

 

  

we fail to offer new and competitive products, to provide effective updates to our existing products or to keep pace with technological improvements in our industry;

 

  

we are unable to maintain traditional retail agent relationships;

 

  

customers have difficulty installing, updating or otherwise accessing our website on mobile devices or web browsers as a result of actions by us or third parties;

 

  

customers are unable or unwilling to adopt or embrace new technology;

 

  

technical or other problems frustrate the customer experience, particularly if those problems prevent us from generating quotes or paying claims in a fast and reliable manner; or

 

  

we are unable to address customer concerns regarding the content, data privacy, and security generally or for our digital platform specifically.

Our inability to overcome these challenges could impair our ability to attract new customers and retain existing customers, and could have a material adverse effect on our business, revenue, operating results and financial condition.

 

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The “Hippo” brand may not become as widely known as incumbents’ or other competitors’ brands or the brand may become tarnished.

Many of our competitors have brands that are well recognized. We spend considerable money and other resources to create brand awareness and build our reputation. We may not be able to build brand awareness, and our efforts at building, maintaining, and enhancing our reputation could fail. Complaints or negative publicity about our business practices, our marketing and advertising campaigns, our compliance with applicable laws and regulations, the integrity of the data that we provide to consumers or business partners, data privacy and security issues, and other aspects of our business, whether valid or not, could diminish confidence in our brand, which could adversely affect our reputation and business. As we expand our product offerings and enter new markets, we need to establish our reputation with new customers, and to the extent we are not successful in creating positive impressions, our business in these newer markets could be adversely affected. There can be no assurance that we will be able to maintain or enhance our reputation, and failure to do so could materially adversely affect our business, results of operations and financial condition. If we are unable to maintain or enhance consumer awareness of our brand cost-effectively, our business, results of operations and financial condition could be materially adversely affected.

Denial of claims or our failure to accurately and timely pay claims could materially and adversely affect our business, financial condition, results of operations and prospects.

We must accurately and timely evaluate and pay claims that are made under our policies. Many factors affect our ability to pay claims accurately and timely, including the efficiency of our claims processing, the training and experience of our claims adjusters, including our third-party claims administrators and adjusters, and our ability to develop or select and implement appropriate procedures and systems to support our claims functions.

The speed by which our technology allows us to process and pay claims is a differentiating factor for our business and an increase in the average time to process claims could undermine our reputation and position in the insurance marketplace. Any failure to pay claims accurately or timely could also lead to regulatory and administrative actions or material litigation, loss or reduction in reinsurance recoverable, or result in damage to our reputation, any one of which could materially and adversely affect our business, financial condition, results of operations, and prospects.

If our claims adjusters or third-party claims administrators are unable to effectively process our volume of claims, our ability to grow our business while maintaining high levels of customer satisfaction could be compromised, which in turn, could adversely affect our reputation and operating margins.

Our limited operating history makes it difficult to evaluate our current business performance, implementation of our business model and our future prospects.

Hippo launched its business to sell homeowners insurance in 2015, began selling policies as an insurance producer in 2017, and began underwriting and retaining risks under insurance policies as an insurance company in 2020. Due to Hippo’s limited operating history and the rapid growth it has experienced since it began operations, our operating results are hard to predict, and Hippo’s historical results may not be indicative of, or comparable to, our future results. We also cannot provide any assurance that the data that we collect will provide useful measures for evaluating our business model. Our inability to adequately assess our performance and growth could have a material adverse effect on our brand, business, financial condition and results of operations.

We may not be able to manage our growth effectively.

Hippo’s revenue grew from $34.7 million for the year ended December 31, 2019 to $51.6 million for the year ended December 31, 2020. Hippo’s total employees grew from 215 as of December 31, 2019, to 399 as of

 

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December 31, 2020 and to 482 as of March 31, 2021. In addition, from December 31, 2019 to March 31, 2021, Hippo expanded from offering Hippo insurance policies in 20 states to 34 states. Hippo’s rapid growth has placed and may continue to place significant demands on our management and our operational and financial resources. Hippo has hired and we expect to continue hiring additional personnel to support our rapid growth. Our corporate and organizational structure is becoming more complex as we continue to acquire companies, add additional insurance and non-insurance products, expand our operations and add and integrate more employees. We will need to enhance our operational, legal and compliance, financial and management controls as well as our reporting systems and procedures to account for our Company’s growth. We will require significant capital expenditures and the allocation of valuable management resources to grow and change in these areas without undermining our corporate culture of rapid innovation, teamwork and attention to the insurance-buying experience for the customer. If we cannot manage our growth effectively to maintain the accuracy, quality and efficiency of our customers’ insurance-buying experience, as well as their experience as ongoing customers, our business could be harmed as a result, and our results of operations and financial condition could be materially and adversely affected.

Intense competition in the segments of the insurance industry in which we operate could negatively affect our ability to attain or increase profitability.

The homeowners insurance market is highly competitive with carriers competing through product coverage, reputation, financial strength, advertising, price, customer service and distribution.

We face significant competition from traditional insurance companies for homeowners. Competitors include companies such as Allstate, Farmers, Liberty Mutual, State Farm and Travelers. These companies are larger than us and have significant competitive advantages over us, including greater name recognition, higher financial strength ratings, greater resources, additional access to capital and more types of insurance coverage to offer, such as auto, umbrella and life, than we currently do (or expect to offer in the future). Our future growth will depend in large part on our ability to grow our homeowners insurance business in which traditional insurance companies retain certain advantages. In particular, unlike us, many of these competitors offer consumers the ability to purchase homeowners insurance and multiple other types of insurance coverage and “bundle” them together into one policy and, in certain circumstances, include an umbrella liability policy for additional coverage at competitive prices. Although we expect to continue to grow vertically and offer additional home-related products (including non-insurance products), we do not currently expect to expand into other types of insurance. New insurance and non-insurance products could take months or years to be approved by regulatory authorities, or may not be approved at all.

Moreover, as we expand into new lines of business and offer additional non-insurance home-related products beyond homeowners insurance, we could face intense competition from companies that are already established in such markets. In non-insurance products we face competition from large technology companies, such as Alphabet and Amazon, that have significant resources and long standing relationships with customers across a variety of products.

Further various large technology companies that have recently started operating in adjacent insurance categories that may in the future offer homeowners insurance products. Technology companies may in the future begin operating and offering products at better and more competitive customer experience, pricing, and insurance coverage options than us, which could cause our results of operations and financial condition to be materially and adversely affected. In addition, traditional insurance companies may seek to adapt their businesses to sell insurance by offering modernized coverage or non-insurance products like we do, including offering home care and maintenance products. Given their size, resources, customer penetration and other competitive advantages, they may be able to erode any market advantage we may currently have over them.

We also face competition from existing and new “insurtech” insurance companies, such as Lemonade, and “insurtech” agencies whose use of digital platforms including for sales, underwriting and claims is similar to

 

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ours. These competitors may be able to introduce new sales, underwriting and claims systems that are viewed more attractively than ours by insurance consumers. These models require significantly less infrastructure and capital expenditures than traditional insurance business and can be operated without the need to be licensed as an insurance company (as we did prior to our acquisition of Spinnaker). Accordingly, the barriers of entry for new insurtech companies may be low and competitors may be able to begin operating and build scale quickly.

Reinsurance may be unavailable at current coverage, limits or pricing, which may limit our ability to write new or renew existing business. Furthermore, reinsurance subjects our insurance company subsidiaries to counterparty credit and performance risk and may not be adequate to protect us against losses, which could have a material effect on our results of operations and financial condition.

Reinsurance is a contract by which an insurer, which may be referred to as the ceding insurer, agrees with a second insurer, called a reinsurer, that the reinsurer will cover a portion of the losses incurred by the ceding insurer in the event a claim is made under a policy issued by the ceding insurer, in exchange for a premium. The insurance companies that underwrite our insurance products including, but not limited to, our subsidiary Spinnaker, purchase reinsurance to help manage their exposure to property and casualty insurance risks including attritional and catastrophic risks. Although our reinsurance counterparties are liable to us according to the terms of the reinsurance contracts, we remain primarily liable to our customers as the direct insurer on all risks reinsured. As a result, reinsurance does not eliminate or limit in any way the obligation of insurance companies that underwrite Hippo insurance products, including Spinnaker, to pay claims, and we are subject to the risk that one or more reinsurers will be unable or unwilling to honor its obligations, or that the reinsurers will not pay in a timely fashion. Reinsurers may become financially unsound by the time they are called upon to pay amounts due, which may not occur for many years, in which case we may have no legal ability to recover what is due to us under our agreement with such reinsurers. Any disputes with reinsurers regarding coverage under reinsurance contracts could be time consuming, costly and uncertain of success.

Our primary non-catastrophe associated reinsurance contracts generally have a fixed term and caps on liability. Each reinsurer’s share in the interest and liabilities related to the reinsurance contract varies, and the reinsurers are severally, but not jointly, liable under the applicable reinsurance contract. Further, these reinsurance agreements may not be required to cover renewals of policies that the insurance carrier is required by law to renew or write, and we may not be able to lawfully cancel or non-renew insurance policies in a manner that assures ongoing reinsurance protection under our reinsurance contracts.

We may change the structure of our reinsurance arrangements in the future, which may impact our overall risk profile and financial and capital condition. We may be unable to negotiate new reinsurance contracts to provide continuous coverage or negotiate reinsurance on the same coverage, limits, pricing or other terms as are currently available, as such availability depends in part on factors outside of our control. The existing or new contracts may not provide sufficient reinsurance protection. Market forces and external factors, such as significant losses from hurricanes, wildfires, severe weather, or terrorist attacks or an increase in capital requirements, impact the availability coverage, limits and pricing of the reinsurance we purchase. If we are unable to maintain our current level of reinsurance coverage, extend our expiring reinsurance contracts or purchase new reinsurance protection with the coverage, limits, and pricing and in the amounts that we consider sufficient, we would have to either accept an increase in our retained risk exposure, reduce our insurance writings or develop or seek other alternatives.

The unavailability of acceptable and sufficient reinsurance protection would have an adverse impact on our business model, which depends on reinsurance companies to absorb a portion of the losses incurred by our insurance carriers. If our affiliated and unaffiliated insurance carriers are unable to obtain adequate reinsurance at reasonable rates, we would have to increase our retained risk exposure or reduce the level of our underwriting commitments, each of which could have a material adverse effect upon our business volume and profitability. Alternately, if available, we could elect to pay higher than desired rates for reinsurance coverage, which could have a material adverse effect upon our profitability until policy premium rates could be raised, in most cases subject to prior approval by state insurance regulators, to offset this additional cost.

 

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Failure to maintain our risk-based capital at the required levels could adversely affect the ability of our insurance subsidiaries to maintain regulatory authority to conduct our business.

Our insurance company subsidiaries must maintain sufficient capital to comply with insurance regulatory requirements and maintain authority to conduct our business. The National Association of Insurance Commissioners (“NAIC”) has developed a system to test the adequacy of statutory capital of U.S.-based insurers, known as risk-based capital that all states have adopted. This system establishes the minimum amount of capital necessary for an insurance company to support its overall business operations. It identifies insurance companies including property-casualty insurers, that may not be inadequately capitalized by looking at certain inherent risks of each insurer’s assets and liabilities and its mix of net written premiums. Insurers falling below a calculated threshold may be subject to varying degrees of regulatory action, including supervision, rehabilitation or liquidation. Moreover, as a relatively new entrant to the insurance industry, we currently face restrictions in Florida and New York with regard to minimum capital requirements, and may face additional capital requirements as compared to those of our larger and more established competitors. Failure to maintain adequate risk-based capital at the required levels could adversely affect the ability of our insurance company subsidiaries to maintain regulatory authority to conduct their business.

Failure to maintain our financial strength ratings could adversely affect the ability of our insurance company subsidiaries to conduct our business as currently conducted.

Financial strength ratings are an important factor in evaluating and establishing the competitive position of insurance companies. These ratings represent the independent opinion of an insurer’s financial strength, operating performance and ability to meet policyholder obligations. Rating agencies could downgrade or change the outlook on ratings due to:

 

  

changes in the financial profile of one of our insurance companies;

 

  

changes in a rating agency’s determination of the amount of capital required to maintain a particular rating; or

 

  

increases in the perceived risk of our investment portfolio, a reduced confidence in management or our business strategy, or other considerations that may or may not be under our control.

A downgrade in Spinnaker’s financial strength ratings could have a material effect on our sales, competitiveness, customer retention, the marketability of our product offerings, liquidity, access to and cost of borrowing, results of operations and financial condition.

If we are unable to underwrite risks accurately and charge competitive yet profitable rates to our customers, our business, results of operations and financial condition will be adversely affected.

In general, the premiums for our insurance policies are established at the time a policy is issued and, therefore, before all of our underlying costs are known. The accuracy of our pricing is subject to our ability to adequately assess risks, estimate losses and comply with state insurance regulations. Like other insurance companies, we rely on estimates and assumptions in setting our premium rates. We also utilize the data that we gather through our interactions with our customers, as evaluated and curated by our proprietary technology.

Establishing adequate premium rates is necessary, together with investment income, if any, to generate sufficient revenue to offset losses, loss adjustment expenses (“LAE”), acquisition expenses and other costs. If we do not accurately assess the risks that we underwrite, we may not charge adequate premiums to cover our losses and expenses, which would adversely affect our results of operations and our profitability. Moreover, if we determine that our prices are too low, insurance regulations may preclude us from being able to non-renew insurance contracts, non-renew customers, or raise prices. Alternatively, we could set our premiums too high, which could reduce our competitiveness and lead to lower revenues, which could have a material adverse effect on our business, results of operations and financial condition.

 

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Pricing involves the acquisition and analysis of historical loss data and the projection of future trends, loss costs and expenses, and inflation trends, among other factors, for each of our products in multiple risk tiers and many different markets. In order to accurately price our policies, we must, among other factors:

 

  

collect and properly and accurately analyze a substantial volume of data from our customers;

 

  

develop, test and apply appropriate actuarial projections and rating formulas;

 

  

review and evaluate competitive product offerings and pricing dynamics;

 

  

closely monitor and timely recognize changes in trends; and

 

  

project both frequency and severity of our customers’ losses with reasonable accuracy.

There are no assurances that we will have success in implementing our pricing methodology accurately in accordance with our assumptions. Our ability to accurately price our policies is subject to a number of risks and uncertainties, including, but not limited to:

 

  

insufficient, inaccurate or unreliable data;

 

  

incorrect or incomplete analysis of available data;

 

  

uncertainties generally inherent in estimates and assumptions;

 

  

our failure to implement appropriate actuarial projections and rating formulas or other pricing methodologies;

 

  

incorrect or incomplete analysis of the competitive environment;

 

  

regulatory constraints on rate increases or coverage limitations;

 

  

our failure to accurately estimate investment yields and the duration of our liability for loss and loss adjustment expenses; and

 

  

unanticipated litigation, court decisions, and legislative or regulatory actions or changes to the existing regulatory landscape.

To address the potential errors or desired or required changes in our current premium rates, we may be compelled to increase the amount allocated to cover policy claims, increased expenses, or to address other economic factors resulting in an increase in future premium rates or to additionally or alternatively adopt different underwriting standards. Any of these changes may result in a decline in new business and renewals and, as a result, have a material adverse effect on our business, results of operations and financial condition.

Our proprietary technology, which relies on third party data, may not operate properly or as we expect it to.

We utilize the third party data gathered from the insurance application process to determine whether or not to write a particular policy and, if so, how to price that particular policy. The continuous development, maintenance and operation of our technology is expensive and complex, and may involve unforeseen difficulties including material performance problems, undetected defects or errors, for example, with new capabilities incorporating artificial intelligence. We may encounter technical obstacles, and it is possible that we may discover additional problems that prevent our technology from operating properly. If our data analytics do not function reliably, we may incorrectly price insurance products for our customers or incorrectly pay or deny claims made by our customers. Either of these situations could result in customer dissatisfaction with us, which could cause customers to cancel their insurance policies with us, prevent prospective customers from obtaining new insurance policies, or cause us to underprice policies or overpay claims. Any of these eventualities could result in a material and adverse effect on our business, results of operations and financial condition.

Our technology platform may not operate properly or as we expect it to operate.

We utilize our technology platform and gather customer data in order to determine whether or not to write and how to price our insurance products. Additionally, our claims operation utilizes our technology platform to

 

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manage claims and we intend to expand our technology platform to further support the processing of some or all of our claims. Our technology platform is expensive and complex, its continuous development, maintenance and operation may entail unforeseen difficulties including material performance problems or undetected defects or errors. We may encounter technical obstacles, and it is possible that we may discover additional problems that prevent our technology from operating properly. If our platform does not function reliably, we may incorrectly select or renew our customers, price insurance and non-insurance products for our customers or incorrectly pay or deny claims made by our customers. These errors could result in selecting an uneconomic mix of customers; in customer dissatisfaction with us, which could cause customers to cancel or fail to renew their insurance policies or non-insurance products with us or make it less likely that prospective customers obtain new insurance policies; in causing us to underprice policies or overpay claims; or in causing us to incorrectly deny policyholder claims and become subject to liability. Additionally, technology platform errors could result in failure to comply with applicable laws and regulations including, but not limited to, unintentional noncompliance with our rate and form filings, cancellation and non-renewal requirements, unfair trade and claims practices and non-discrimination, which could subject us to legal or regulatory liability and harm our brand and reputation. Any of these eventualities could result in a material adverse effect on our business, results of operations and financial condition.

While we believe our by-peril pricing model to be more fair to consumers than multi-peril pricing models, it may yield results that customers find unfair. For instance, we may quote certain homeowners higher premiums than our competitors, if our pricing model determines that the customer is higher risk even though their higher-risk classification has not resulted in a claim on an individual basis. Such perception of unfairness could negatively impact our brand and reputation.

Our future success depends on our ability to continue to develop and implement our technology, and to maintain the confidentiality of this technology.

Changes to existing regulations, their interpretation or implementation, or new regulations could impede our use of this technology, or require that we disclose our proprietary technology to our competitors, which could impair our competitive position and result in a material adverse effect on our business, results of operations, and financial condition.

New legislation or legal requirements may affect how we communicate with our customers, which could have a material adverse effect on our business model, financial condition, and results of operations.

State and federal lawmakers, and insurance regulators are focusing upon the use of artificial intelligence broadly, including concerns about transparency, deception, and fairness in particular. Changes in laws or regulations, or changes in the interpretation of laws or regulations by a regulatory authority, specific to the use of artificial intelligence, may decrease our revenues and earnings and may require us to change the manner in which we conduct some aspects of our business. In addition, our business and operations are subject to various U.S. federal, state, and local consumer protection laws, including laws which place restrictions on the use of automated tools and technologies to communicate with wireless telephone subscribers or consumers generally. Although we have taken steps to comply with these laws, no assurance can be given that we will not be exposed to civil litigation or regulatory enforcement. Further, to the extent that any changes in law or regulation further restrict the ways in which we solicit, underwrite, or communicate with prospective or current customers before or during onboarding, customer care, or claims management, these restrictions could result in a material reduction in our customer acquisition and retention, reducing the growth prospects of our business, and adversely affecting our financial condition and future cash flows.

 

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We rely on external data and our digital platform to collect and evaluate information that we utilize in producing, pricing and underwriting our insurance policies (in accordance with the rates, rules, and forms filed with our regulators, where required), managing claims and customer support, and improving business processes. Any legal or regulatory requirements that might restrict our ability to collect or utilize this data or our digital platform, or an outage by a data vendor could thus materially and adversely affect our business, financial condition, results of operations and prospects.

We use external data and our digital platform to collect and evaluate data points that we utilize in marketing, producing, pricing and underwriting certain of our insurance policies, managing claims and customer support, and improving business processes. To the extent such data points are utilized in the underwriting or rating of our insurance products these may be subject to prior regulatory filing, review and approval. If federal or state regulators were to determine that the type or source of data we collect, the process we use for collecting this data or how we use it results in failure to comply with applicable laws and regulations including, but not limited to, unfair trade and claims practices or non-discrimination laws, or otherwise violates existing laws and regulations these could limit, prohibit or restrict our collection or use of this data.

In the U.S., the federal Gramm-Leach-Bliley Act and certain federal and state laws and regulations specifically aimed at insurance companies require providers of insurance products to consumers to implement certain measures, including requirements to disclose their privacy practices to consumers, allow consumers to opt-in or opt-out, depending on the state, of the sharing of certain personal information with unaffiliated third parties, and maintain certain security controls to protect their information. State legislatures and regulators have and continue to issue regulations or pass legislation imposing requirements on insurance activities regarding the use of external data sources based on concerns about the potential for unfair discrimination, data privacy, and lack of consumer transparency associated with the use of external consumer data. If such laws or regulations were enacted federally or in a large number of states in which we operate, it could impact the integrity of our pricing and underwriting processes, as well as our customer service and claims management practices. A determination by federal or state regulators that the data points we utilize or the process we use for collecting this data unfairly discriminates against or violates the data privacy of some groups of people could also subject us to fines and other sanctions, including, but not limited to, disciplinary action, revocation and suspension of licenses, and withdrawal of product forms. Any such event could, in turn, materially and adversely affect our business, financial condition, results of operations and prospects, and make it harder for us to be profitable over time. Although we have implemented policies and procedures into our business operations that we feel are appropriately calibrated to our automation-driven operations, these policies and procedures may prove inadequate, resulting in a greater likelihood of inadvertent legal or compliance failures.

Additionally, existing laws, future laws, and evolving attitudes about data privacy protection may impair our ability to collect, use, and maintain data points of sufficient type or quantity to continue to develop our technology in accordance with the current plans. For more information, see the below risk factor — “We are subject to laws and regulations concerning our collection, processing, storage, sharing, disclosure and use of customer information and other sensitive data, and our actual or perceived failure to comply with data privacy and security laws and regulations could damage our reputation and brand and harm our business and operating results.

Further, an outage from one of our data vendors could have a material adverse effect on our business, revenue, operating results and financial condition, especially if the outage frustrates the customer experience or prevents us from generating quotes, selling policies or paying claims.

 

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We depend on search engines, content based online advertising, other online sources to attract consumers to our website, which may be affected by third party interference beyond our control. In addition, our producer and partner distribution channels are significant sources of new customers and could be impacted by third party interference or other factors. As we grow our customer acquisition costs may increase.

Our success depends on our ability to attract potential consumers to our website and convert them into customers in a cost-effective manner. We depend, in large part, on search engines, content-based online advertising and other online sources for traffic to our website, including, to a lesser extent, our social media platforms.

With respect to search engines, we are included in search results as a result of both paid search listings, where we purchase specific search terms that result in the inclusion of our advertisement, and free search listings, which depend on algorithms used by search engines. For paid search listings, if one or more of the search engines or other online sources on which we rely for purchased listings modifies or terminates its relationship with us, our expenses could rise, we could lose consumers and traffic to our website could decrease, any of which could have a material adverse effect on our business, results of operations and financial condition. For free search listings, if search engines on which we rely for algorithmic listings modify their algorithms, our websites may appear less prominently or not at all in search results, which could result in reduced traffic to our websites.

Our ability to maintain and increase the number of consumers directed to our products from digital platforms is not entirely within our control. Search engines, social media platforms and other online sources often revise their algorithms and introduce new advertising products. If one or more of the search engines or other online sources on which we rely for traffic to our website were to modify its general methodology for how it displays our advertisements or keyword search results, resulting in fewer consumers clicking through to our website, our business and operating results are likely to suffer. In addition, if our online display advertisements are no longer effective or are not able to reach certain consumers due to consumers’ use of ad-blocking software, or if our competitors bid more aggressively on online advertisements, our business and operating results could suffer.

Additionally, changes in regulations could limit the ability of search engines and social media platforms, including, but not limited to, Google and Facebook, to collect data from customers and engage in targeted advertising, making them less effective in disseminating our advertisements to our target customers. For example, the proposed Designing Accounting Safeguards to Help Broaden Oversight and Regulations on Data (DASHBOARD) Act would mandate annual disclosure to the SEC of the type and “aggregate value” of user data used by harvesting companies, such as, but not limited to, Facebook, Google and Amazon, including how revenue is generated by user data and what measures are taken to protect the data. If the costs of advertising on search engines and social media platforms increase, we may incur additional marketing expenses or be required to allocate a larger portion of our marketing spend to other channels and our business and operating results could be adversely affected. Similarly, insurance brokerage and distribution regulation may limit our ability to rely on third party digital technology platforms to provide a link to our insurance platform through an application programming interface (“API”), if the third party distribution platforms are unable to continue to link to our insurance products pursuant to insurance law and regulations.

Besides online direct-to-consumer channels, we also leverage other channels to secure customers, which benefits our growth and long-term vision of meeting customers where and when they want to buy. We utilize multiple indirect channels, including agency channels and partner channels, among others, which could be disrupted for a variety of reasons.

The insurance producers we work with also have a direct relationship with their customers and could be incentivized to move them to a competitor. While we have gained significant traction within this channel, due to our innovation, relationships and technology, we could lose market share through our competitors’ innovation or new products. Competitors may also increase their commissions to increase their ability to attract specific risk-groups or geographic areas which could slow our ability to grow and increase profitability.

 

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Our partners may attempt to recreate our capabilities independently or move their business to a new insurance partner or add additional insurance partners. Competitors could also develop innovative approaches or significant incentives that could impact our ability to grow, optimize channel economics or build new relationships.

We may require additional capital to grow our business, which may not be available on terms acceptable to us or at all.

To the extent that our present capital (including the funds generated by this transaction) is insufficient to meet future operating requirements (including regulatory capital requirements) or to cover losses, we may need to raise additional funds through financings or curtail our projected growth. Many factors will affect our capital needs as well as their amount and timing, including our growth and profitability, risk retained and the availability of reinsurance, as well as market disruptions and other developments.

Historically, Hippo has funded its operations, marketing expenditures and capital expenditures primarily through equity issuances, including through convertible note financings. Going forward, we intend to evaluate financing opportunities from time to time, and our ability to obtain financing will depend, among other things, on our development efforts, business plans and operating performance, and the condition of the capital markets at the time we seek financing. In addition, regulatory bodies may be required to approve additional equity, equity-linked, or debt issuances or other forms of financing that we may wish to pursue, and we cannot be certain that these approvals can be obtained. We cannot be certain that additional financing will be available to us on favorable terms, or at all.

If we raise additional funds through the issuance of equity, equity-linked or debt securities, those securities may have rights, preferences or privileges senior to those of our common stock, and our existing stockholders may experience dilution. Any debt financing secured by us in the future could require that a substantial portion of our operating cash flow be devoted to the payment of interest and principal on such indebtedness, which may decrease available funds for other business activities, and could involve restrictive covenants relating to our capital-raising activities and other financial and operational matters, which may make it more difficult for us to obtain additional capital and to pursue business opportunities.

If we are unable to obtain adequate financing or financing on terms satisfactory to us, when we require it, our ability to continue to support our business growth, maintain minimum amounts of risk-based capital and to respond to business challenges could be significantly limited, and our business, results of operations and financial condition could be adversely affected.

Interruptions or delays in the services provided by our providers of third-party technology platforms or our internet service providers could impair the operability of our website and may cause our business to suffer.

We currently rely on multiple providers of cloud infrastructure services, including Google Cloud Platform (“GCP”), Amazon Web Services (“AWS”), Salesforce.com (“SFDC”) and others (together — “Cloud Platforms”). We rely on the internet and, accordingly, depend on the continuous, reliable and secure operation of internet servers, related hardware and software, and network infrastructure. Our operations depend on protecting the virtual cloud infrastructure hosted in Cloud Platforms by maintaining its configuration, architecture, and interconnection specifications, as well as the information stored in these virtual data centers and which third-party internet service providers transmit. Furthermore, we have no physical access or control over the services provided by our Cloud Platforms. Although we have disaster recovery plans that utilize multiple Cloud Platforms locations, the data centers that we use are vulnerable to damage or interruption from human error, intentional bad acts, earthquakes, floods, fires, severe storms, war, terrorist attacks, power losses, hardware failures, systems failures, telecommunications failures, and similar events, many of which are beyond our control, any of which could disrupt our services, prevent customers from accessing our products, destroy customer data, or prevent us from being able to continuously back up and record data. In the event of significant physical damage to one of

 

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these data centers, it may take a significant period of time to achieve full resumption of our services, and our disaster recovery planning may not account for all eventualities. Further, a prolonged Cloud Platform service disruption affecting our website for any of the foregoing reasons could damage our reputation with current and potential customers, expose us to liability, cause us to lose customers, or otherwise harm our business. In addition, any changes to our Cloud Platforms’ service levels may adversely affect our ability to meet the requirements of our customers. As our platform’s continuing and uninterrupted performance is critical to our success, sustained or repeated system failures would reduce the attractiveness of our offerings. We may also incur significant costs for using alternative platforms or taking other actions in preparation for, or in reaction to, events that damage the Cloud Platform services we use. Damage or interruptions to these data centers could harm our business. Moreover, negative publicity arising from these types of disruptions could damage our reputation and may adversely impact use of our website. Insurance coverage may not be sufficient to compensate us for the potentially significant losses, including the potential harm to the future growth of our business that may result from interruptions in our services or products.

Our usage of Cloud Platforms enables us to order and reserve server capacity in varying amounts and sizes distributed across multiple regions. Our Cloud Platform approach provides us with computing and storage capacity pursuant to an agreement that continues until terminated by either party. Our Cloud Platform providers may terminate the agreement for multiple reasons (including, but not limited to, requirement to comply with a government request, security risk to others, breach of payment obligations or breach of contract). Termination of a Cloud Platform agreement may harm our ability to access data centers we need to host our website or to do so on terms as favorable as those we have today.

As we continue to expand the number of customers to whom we provide our products and services, we may not be able to scale our technology to accommodate the increased capacity requirements, which may result in interruptions or delays in service. In addition, the failure of Cloud Platforms’ data centers or third-party internet service providers to meet our capacity requirements could result in interruptions or delays in access to our website or impede our ability to scale our operations. In the event that one or more of our Cloud Platform service agreements are terminated, or there is a lapse of service, interruption of internet service provider connectivity or damage to such facilities, we could experience interruptions in access to our website as well as delays and additional expense in arranging new facilities and services, which could harm our business, results of operations, and financial condition.

Security incidents or real or perceived errors, failures or bugs in our systems or website could impair our operations, result in loss of personal customer information, damage our reputation and brand, and harm our business and operating results.

Our continued success is dependent on our systems, applications, and software continuing to operate and to meet the changing needs of our customers and users. We rely on our technology and engineering staff and vendors to successfully implement changes to and maintain our systems and services in an efficient and secure manner. Like all information systems and technology, our website may contain material errors, failures, vulnerabilities or bugs, particularly when new features or capabilities are released, and may be subject to computer viruses or malicious code, break-ins, phishing impersonation attacks, attempts to overload our servers with denial-of-service or other attacks, ransomware and similar incidents or disruptions from unauthorized use of our computer systems, as well as unintentional incidents causing data leakage, any of which could lead to interruptions, delays or website shutdowns, or could cause loss of critical data, or the unauthorized disclosure, access, acquisition, alteration or use of personal or other confidential information.

In the ordinary course of business, we collect, store, and transmit information, including personal information, in relation to our current, past or potential customers, business partners, staff and contractors. We could be subject to a cyber-incident or other adverse event that threatens the security, confidentiality, integrity or availability of our information resources, including intentional attacks or unintentional events where parties gain unauthorized access to systems to disrupt operations, corrupt data or steal confidential information about

 

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subscribers, vendors and employees. For example, unauthorized parties could steal or access our customers’ names, email addresses, physical addresses, phone numbers and other information that we collect when providing insurance quotes. Outside parties may also attempt to fraudulently induce employees or customers to disclose sensitive information in order to gain access to our information or customers’ information. Further, our vendors are also susceptible to data breaches, including our payment processing vendors who handle customer credit card numbers or other payment information. While we use encryption and authentication technology licensed from third parties designed to effect secure transmission of such information, we cannot guarantee the security of the transfer and storage of personal information. Because the techniques used to obtain unauthorized access, disable or degrade service, or sabotage systems change frequently, often they are not recognized until launched against a target, and may originate from less regulated and remote areas around the world, we may be unable to proactively address these techniques or to implement adequate preventative measures. Despite our efforts and processes to prevent breaches, our products and services, as well as our servers, computer systems, and those of third parties that we use in our operations are vulnerable to cybersecurity risks, including cyber-attacks such as viruses and worms, phishing attacks, denial-of-service attacks, physical or electronic break-ins, third-party or employee theft or misuse, and similar disruptions from unauthorized tampering with our servers and computer systems or those of third parties that we use in our operations, which could lead to interruptions, delays, loss of critical data, unauthorized access to subscriber data, and loss of consumer confidence. In addition, we may be the target of email scams that attempt to acquire personal information or company assets.

Security breaches, including by hackers or insiders, or any other types of data security or privacy related incidents could expose confidential or personal information, which could result in potential regulatory investigations, fines, penalties, compliance orders, liability, litigation and remediation costs, as well as reputational harm, any of which could materially adversely affect our business and financial results. It could also trigger claims by affected third parties. Further, even if we do not ourselves experience a cyber-incident, hacking against our competitors or other companies could create the perception among our customers or potential customers that our digital platform is not safe to use.

If we experience compromises to our security that result in technology performance, integrity, or availability problems, the complete shutdown of our website or the loss or unauthorized disclosure, access, acquisition, alteration or use of confidential information, customers may lose trust and confidence in us, and customers may decrease the use of our website, or stop using our services entirely. Further, outside parties may attempt to fraudulently induce employees or customers to disclose sensitive information in order to gain access to our information or customers’ information. A significant impact on the performance, reliability, security, and availability of our systems, software, or services may harm our reputation, impair our ability to operate, retain existing customers or attract new customers, and expose us to legal claims and government action, each of which could have a material adverse impact on our financial condition, results of operations, and growth prospects.

Misconduct or fraudulent acts by employees, agents or third parties may expose us to financial loss, disruption of business, regulatory assessments and reputational harm.

Our company and the insurance industry are inherently susceptible to past and future misconduct or fraudulent activities by employees, representative agents, vendors, customers or other third parties. These activities could include fraud against the company, its employees and its customers through illegal or prohibited activities, or unauthorized acts or representations, unauthorized use or disclosure of personal or proprietary information.

Our success depends, in part, on our ability to establish and maintain relationships with quality and trustworthy service professionals.

We must continue to attract, retain and grow the number of skilled and reliable service professionals who can provide services across our products. In addition to skill and reliability, Hippo customers want to work with service professionals and claims adjusters whom they trust to work in their homes and with whom they feel safe.

 

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While we maintain screening processes to try to prevent unsuitable service professionals, these processes have limitations and, even with these safety measures, no assurances can be provided regarding the future behavior of any service provider. Inappropriate and/or unlawful behavior of service professionals generally, particularly any such behavior that compromises the trustworthiness of service providers and/or of the safety of our customers, could result in bad publicity and related damage to our reputation, detriment to our brands and brand-building efforts and/or actions by governmental and regulatory authorities, criminal proceedings and/or litigation. The occurrence of any of these events could, in turn, adversely affect our business, financial condition and results of operations.

We may be unable to prevent, monitor or detect fraudulent activity, including policy acquisitions or payments of claims that are fraudulent in nature.

If we fail to maintain adequate systems and processes to prevent, monitor and detect fraud, including employee fraud, agent fraud, fraudulent policy acquisitions, vendor fraud or fraudulent claims activity, or if inadvertent errors occur with such prevention, monitoring and detection systems due to human or computer error, our business could be materially adversely impacted. In the ordinary course of business in the insurance industry, we have experienced relatively isolated incidents of fraudulent activity that have not had a material impact on our business. However, we cannot be certain that our systems and processes will always be adequate in the face of increasingly sophisticated and ever-changing fraud schemes. We use a variety of tools to protect against fraud, but these tools may not always be successful at preventing such fraud.

We are periodically subject to examinations by our primary state insurance regulators, which could result in adverse examination findings and necessitate remedial actions.

Our primary insurance regulators are responsible for our supervision and examination. Spinnaker Insurance Company is currently domiciled in Illinois and “commercially domiciled” in Texas. Periodically, other insurance regulators perform examinations of insurance companies under their jurisdiction to assess compliance with applicable laws and regulations, financial condition and the conduct of regulated activities or may conduct targeted investigations. These examinations provide insurance regulators with a significant opportunity to review and scrutinize our business. If, as a result of an examination, an insurance regulator determines that our financial condition, capital resources, or other aspects of any of our operations are less than satisfactory, or that we are in violation of applicable laws or regulations, an insurance regulator could require us to take one or more remedial actions or otherwise subject us to regulatory scrutiny, impose fines and penalties, or take further actions. We cannot predict with precision the likelihood, nature, or extent of any necessary remedial actions, or financial impact if any, resulting from such an examination, or the associated costs of such remedial actions or regulatory scrutiny. Any regulatory or enforcement action or any regulatory order imposing remedial, injunctive, or other corrective action against us resulting from these examinations could have a material adverse effect on our business, reputation, financial condition or results of operations.

We are subject to laws and regulations concerning our collection, processing, storage, sharing, disclosure and use of customer information and other sensitive data, and our actual or perceived failure to comply with data privacy and security laws and regulations could damage our reputation and brand and harm our business and operating results.

In the ordinary course of business, we collect, store, and transmit information, including personal information, in relation to our current, past or potential customers, business partners, staff and contractors. In the U.S., there are numerous federal and state data privacy and protection laws and regulations governing the collection, use, disclosure, protection and other processing of personal information, including federal and state data privacy laws, data breach notification laws and consumer protection laws. For example, the California Consumer Privacy Act of 2018 (“CCPA”), which became effective in January 2020, created new privacy rights for consumer residing in the state and imposes obligations on companies that process their personal information, including an obligation to provide certain new disclosures to such residents. Specifically, among other things, the CCPA creates new consumer rights, and imposes corresponding obligations on covered businesses, relating to

 

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the access to, deletion of, and sharing of personal information collected by covered businesses, including California residents’ right to access and delete their personal information, opt out of certain sharing and sales of their personal information, and receive detailed information about how their personal information is used. The law exempts from certain requirements of the CCPA certain information that is collected, processed, sold, or disclosed pursuant to the California Financial Information Privacy Act, the federal Gramm-Leach-Bliley Act or the federal Driver’s Privacy Protection Act. The definition of “personal information” in the CCPA is broad and may encompass other information that we maintain beyond that excluded under the Gramm-Leach-Bliley Act, the Driver’s Privacy Protection Act or the California Financial Information Privacy Act exemption. Further, the CCPA allows for the California Attorney General to impose civil penalties for violations, as well as providing a private right of action for certain data breaches that result in the loss of personal information. This private right of action is expected to increase the likelihood of, and risks associated with, data breach litigation. In addition, it remains unclear how various provisions of the CCPA will be interpreted and enforced. California voters also recently passed the California Privacy Rights Act (“CPRA”), which will take effect on January 1, 2023. The CPRA significantly modifies the CCPA, including by imposing additional obligations on covered companies and expanding California consumers’ rights with respect to certain sensitive personal information, potentially resulting in further uncertainty and requiring us to incur additional costs and expenses in an effort to comply. Some observers have noted that the CCPA (and the CPRA) could mark the beginning of a trend toward more stringent privacy legislation in the United States, and multiple states have enacted, or are expected to enact, similar or more stringent laws. For example, in 2020, Nevada passed SB 220 which restricts the “selling” of personal information and, in 2021, Virginia passed the Consumer Data Protection Act (“CDPA”) which is set to take effect on January 1, 2023 and grants new privacy rights for Virginia residents. Additionally, we are subject to the federal Telephone Consumer Protection Act which restricts the making of telemarketing calls and the use of automatic telephone dialing systems. There is also discussion in Congress of a new comprehensive federal data protection and privacy law to which we likely would be subject if it is enacted. Such new laws and proposed legislation, if passed, could have conflicting requirements that could make compliance challenging, require us to expend significant resources to come into compliance, and restrict our ability to process certain personal information. The effects of the CCPA, and other similar state laws subsequently enacted, as well as possible future state or federal laws, are potentially significant and may require us to modify our data collection and processing practices and policies and to incur substantial costs and potential liability in an effort to comply with such legislation.

In the event of a data breach, we are also subject to breach notification laws in the jurisdictions in which we operate, including U.S. state laws, and the risk of litigation and regulatory enforcement actions. In addition, a number of federal and state laws and regulations relating to privacy affect and apply to the insurance industry specifically.

We may also face particular privacy, data security, and data protection risks in connection with requirements of the European Union’s (“E.U.”) General Data Protection Regulation 2016/679 (“GDPR”), the United Kingdom (“UK”) GDPR and UK Data Protection Act 2018 (which retains the GDPR in UK national law) and other data protection regulations in the E.U. and UK. Among other stringent requirements, the GDPR restricts transfers of data outside of the E.U. to third countries deemed to lack adequate privacy protections (such as the U.S.), unless an appropriate safeguard specified by the GDPR is implemented. A July 16, 2020 decision of the Court of Justice of the European Union invalidated a key mechanism for lawful data transfer to the U.S. and called into question the viability of its primary alternative. As such, the ability of companies to lawfully transfer personal data from the E.U. to the U.S. is presently uncertain. Other countries have enacted or are considering enacting similar cross-border data transfer rules or data localization requirements. These developments could limit our future ability to deliver our products in the E.U. and other foreign markets. In addition, any failure or perceived failure to comply with these rules may result in regulatory fines or penalties including orders that require us to change the way we process data.

Additionally, we are subject to the terms of our privacy policies and data privacy-related obligations to third parties. Any failure or perceived failure by us to comply with our privacy policies, our data privacy-related

 

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obligations to customers or other third parties, or our other data privacy-related legal obligations, may result in governmental or regulatory investigations, enforcement actions, regulatory fines, compliance orders, litigation or public statements against us by consumer advocacy groups or others, and could cause customers to lose trust in us, all of which could be costly and have an adverse effect on our business. In addition, new and changed rules and regulations regarding data privacy, data protection (in particular those that impact the use of artificial intelligence) and cross-border transfers of customer information could cause us to delay planned uses and disclosures of data to comply with applicable data privacy and data protection requirements. Moreover, if third parties that we work with violate applicable laws or our policies, such violations also may put personal information at risk, which may result in increased regulatory scrutiny and have a material adverse effect to our reputation, business and operating results.

We employ third-party licensed data, software, technologies and intellectual property for use in our business, and the inability to maintain these licenses, or errors or defects in the data, software, technologies and intellectual property we license could result in increased costs or reduced service levels, which would adversely affect our business, financial condition and results of operations.

Our business relies on certain third-party data, software, technology and intellectual property that we obtain under licenses from other companies including insurance industry proprietary information that we license from Insurance Services Office, Inc. (“ISO”). We anticipate that we will continue to rely on such third-party data, software, technology and intellectual property and we may license additional third-party data, software, technology and intellectual property in the future. We cannot assure that these third-party licenses, or support for such licensed software and technologies, will continue to be available to us on commercially reasonable terms, if at all. Although we believe that there are commercially reasonable alternatives to the third-party products we currently license, other than proprietary information provided by ISO, this may not always be the case, or it may be difficult or costly to replace. In addition, integration of new third-party products may require significant work and require substantial investment of our time and resources. Also, should ISO refuse to license its proprietary information to us on the same terms that it offers to our competitors and we are unable to find a comparable replacement, we could be placed at a significant competitive disadvantage. In the event that we cannot renew and/or expand existing licenses, we may be required to discontinue or limit our use of the products that include or incorporate the licensed software, technology or other intellectual property. Any of these results could harm our business, results of operations and financial condition.

Any errors or defects in third-party data, software, technology and intellectual property that we license could result in errors that could harm our brand and business. We also cannot be certain that our licensors are not infringing the intellectual property rights of others or that our licensors have sufficient rights to the licensed software and technology in all jurisdictions in which we may operate. If we are unable to obtain or maintain rights to any of this software or technology because of intellectual property infringement claims brought by third parties against our licensors or against us, our ability to develop our services containing such software or technology could be severely limited and our business could be harmed. Many of the risks associated with the use of third-party software, technology and other intellectual property cannot be eliminated, and these risks could negatively affect our business.

Failure to protect or enforce our intellectual property rights could harm our business, results of operations and financial condition.

Our success is dependent in part on protecting our intellectual property rights and technology, including any source code, proprietary information, data, processes and other forms of information, knowhow and technology. We rely on a combination of patents, copyrights, trademarks, service marks, and trade secret laws to establish and protect our intellectual property. We also seek to control access to our proprietary information by entering into a combination of invention assignment agreements and nondisclosure agreements with our employees, consultants and with our third-party providers and strategic partners. While these agreements will give us contractual remedies upon any unauthorized use or disclosure of our proprietary business information or

 

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intellectual property, we cannot assure you that these agreements will be effective in controlling access to, and use and distribution of, our platform and proprietary information and we may not always be able to effectively monitor or prevent such unauthorized use of disclosure.

We also seek to protect our proprietary information and intellectual property though contractual restrictions in our commercial agreements with third party licensees, partners and other third parties. However, some license provisions that protect against unauthorized use, copying, transfer and disclosure of our technology may be unenforceable under the laws of certain jurisdictions and foreign countries. Certain arrangements with joint development partners may limit our ability to protect, maintain, enforce or commercialize such intellectual property rights, including requiring agreement with or payment to our joint development partners before protecting, maintaining, licensing or initiating enforcement of such intellectual property rights, and may allow such joint development partners to register, maintain, enforce or license such intellectual property rights in a manner that may affect the value of the jointly-owned intellectual property or our ability to compete in the market.

We have filed, and may continue in the future to file, trademark and patent applications to protect certain of our innovations and intellectual property. However, we cannot guarantee that patents will issue on our pending patent applications or that we will be successful in registering our trademarks. Our existing intellectual property, and any intellectual property granted to us or that we otherwise acquire in the future, may be contested, circumvented or invalidated, and we may not be able to prevent third parties from infringing our rights to our intellectual property. Therefore, the exact effect of the protection of this intellectual property cannot be predicted with certainty. In addition, given the costs, effort, risks and downside of obtaining patent protection, including the requirement to ultimately disclose the invention to the public, we may choose not to seek patent protection for certain innovations. Any failure to adequately obtain such patent protection, or other intellectual property protection, could later prove to adversely impact our business.

While software and other of our proprietary works may be protected under copyright law, we have chosen not to register any copyrights in these works, and instead, primarily rely on protecting our software as a trade secret. In order to bring a copyright infringement lawsuit in the United States, the copyright must be registered. Accordingly, the remedies and damages available to us for unauthorized use of our software may be limited.

We currently hold various domain names relating to our brand, including hippoinsurance.com, among others. Failure to protect our domain names could adversely affect our reputation and brand and make it more difficult for users to find our website. We may be unable, without significant cost or at all, to prevent third parties from acquiring domain names that are similar to, infringe upon or otherwise decrease the value of our trademarks and other proprietary rights.

While we take precautions designed to protect our intellectual property, there are steps that we have not yet taken to protect our intellectual property on a global basis. Additionally, the steps that we have already taken to protect our intellectual property may not be sufficient or effective. Third parties may knowingly or unknowingly infringe our proprietary rights and third parties may challenge proprietary rights held by us and we may not be able to prevent infringement or misappropriation of our proprietary rights without incurring substantial expense. If third parties copy our technology and use our proprietary brand, content and information to create or enhance competing solutions and services, the value of our brand and other intangible assets may be diminished, competitors may be able to more effectively mimic our service and methods of operations, the perception of our business and service to customers and potential customers may become confused, and our ability to attract customers may be adversely affected. We may need to engage in litigation to enforce our rights. Litigation to protect and enforce our intellectual property rights could be costly, time-consuming and distracting to management and could result in the impairment or loss of portions of our intellectual property. Our efforts to enforce our intellectual property rights may be met with defenses, counterclaims and countersuits attacking the validity and enforceability of our intellectual property rights. Our inability to protect our proprietary technology against unauthorized copying or use, as well as any costly litigation or diversion of our management’s attention

 

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and resources, could impair the functionality of our platform, delay introductions of enhancements to our platform, result in our substituting inferior or more costly technologies into our platform or harm our reputation or brand.

Our services utilize third-party open source software components, which may pose particular risks to our proprietary software, technologies, products and services in a manner that could negatively affect our business.

The software powering our technology systems incorporates open source software and will continue to use open source software in the future. Use and distribution of open source software may entail greater risks than the use of third-party commercial software as open source licensors generally do not provide support, warranties, indemnification or other contractual protections regarding infringement claims or the quality of the code. To the extent that our services depend upon the successful operation of open source software, any undetected errors or defects in this open source software could prevent the deployment or impair the functionality of our platform, delay new solutions introductions, result in a failure of our platform, and injure our reputation. For example, undetected errors or defects in open source software could render it vulnerable to breaches or security attacks, and, in conjunction, make our systems more vulnerable to data breaches. In addition, the public availability of such software may make it easier for others to compromise our platform.

Furthermore, some open source licenses contain requirements that we make available source code for modifications or derivative works we create based upon the type of open source software we use, or grant other licenses to our intellectual property. If we combine our proprietary software with open source software in a certain manner, we could, under certain open source licenses, be required to release or license the source code of our proprietary software to the public. In the event that portions of our proprietary software are determined to be subject to an open source license, we could be required to publicly release the affected portions of our source code or re-engineer all or a portion of our technology systems, each of which could reduce or eliminate the value of our technology systems. Such risk could be difficult or impossible to eliminate and could adversely affect our business, financial condition, and results of operations.

We may be unable to prevent or address the misappropriation of our data.

From time to time, third parties may misappropriate our data through website scraping, bots or other means and aggregate this data on their websites with data from other companies. In addition, copycat websites may have attempted to and may in the future attempt to misappropriate data and imitate our brand or the functionality of our website. If we become aware of such websites, we intend to employ technological or legal measures in an attempt to halt their operations. However, we may be unable to detect all such websites in a timely manner and, even if we could, technological and legal measures may be insufficient to halt their operations. In some cases, particularly in the case of websites operating outside of the United States, our available remedies may not be adequate to protect us against the effect of the operation of such websites. Regardless of whether we can successfully enforce our rights against the operators of these websites, any measures that we may take could require us to expend significant financial or other resources, which could harm our business, results of operations or financial condition. In addition, to the extent that such activity creates confusion among consumers or advertisers, our brand and business could be harmed.

We rely on the experience and expertise of our founder, senior management team, highly-specialized insurance experts, key technical employees and other highly skilled personnel.

Our success depends upon the continued service of Assaf Wand, our co-founder, Chief Executive Officer and a member of our board of directors, and senior management team, highly-specialized insurance experts and key technical employees, as well as our ability to continue to attract and retain additional highly qualified personnel. Our future success depends on our continuing ability to identify, hire, develop, motivate, retain and integrate highly skilled personnel for all areas of our organization. If we are unable to attract the requisite

 

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personnel, our business and prospects may be adversely affected. Each of our co-founder, executive officers, specialized insurance experts, key technical personnel and other employees could terminate his or her relationship with us at any time. The loss of our co-founder or any other member of our senior management team, specialized insurance experts or key personnel might significantly delay or prevent the achievement of our strategic business objectives and could harm our business. We rely on a small number of highly-specialized insurance experts, the loss of any one of whom could have a disproportionate impact on our business. Competition in our industry for qualified employees is intense. Our compensation arrangements, such as our equity award programs, may not always be successful in attracting new employees and retaining and motivating our existing employees. Moreover, if and when the stock options or other equity awards are substantially vested, employees under such equity arrangements may be more likely to leave, particularly when the underlying shares have seen a value appreciation.

Furthermore, several members of our management team were hired recently. If we are not able to integrate these new team members or if they do not perform adequately, our business may be harmed.

We face significant competition for personnel, particularly in California, where our headquarters is located and in Texas, where many of our technical employees are located. To attract top talent, we have to offer, and believe we will need to continue to offer, competitive compensation and benefits packages. We may also need to increase our employee compensation levels in response to competitor actions. If we are unable to hire new employees quickly enough to meet our needs, or otherwise fail to effectively manage our hiring needs or successfully integrate new hires, including our recently hired management team members, our efficiency, ability to meet forecasts and our employee morale, productivity and retention could suffer, which in turn could have an adverse effect on our business, results of operations and financial condition.

If our customers were to claim that the policies they purchased failed to provide adequate or appropriate coverage, we could face claims that could harm our business, results of operations and financial condition.

Although we aim to provide adequate and appropriate coverage under each of our policies, customers could purchase policies that prove to be inadequate or inappropriate. If such customers were to bring a claim or claims alleging that we failed in our responsibilities to provide them with the type or amount of coverage that they sought to purchase, we could be found liable, resulting in an adverse effect on our business, results of operations and financial condition. While we maintain errors and omissions insurance coverage to protect us against such liability, such coverage may be insufficient or inadequate.

We may become subject to claims under Israeli law for remuneration or royalties for assigned invention rights by our Israel-based contractors or employees, which could result in litigation and adversely affect our business.

We enter into assignment of invention agreements with employees and contractors, pursuant to which such employees and contractors assign to us all rights to any inventions created during and as a result of their employment or engagement with us. Under the Israeli Patents Law, 5727-1967 (the “Israeli Patents Law”), inventions conceived by an employee during and as a result of such employee’s employment are regarded as “Service Inventions,” which belong to the employer absent an agreement between the employee and employer providing otherwise.

The Israeli Patents Law also provides that if there is no agreement between an employer and an employee determining whether the employee is entitled to receive consideration for service inventions and on what terms, this will be determined by the Israeli Compensation and Royalties Committee (the “Committee”), a body constituted under the Israel Patents Law. Current case law clarifies that the right to receive consideration for Service Inventions can be waived by the employee and that in certain circumstances, such waiver does not necessarily have to be explicit. The Committee will examine, on a case-by-case basis, the general contractual framework between the parties, using interpretation rules of general Israeli contract laws. Further, the Committee

 

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has not yet determined one specific formula for calculating this remuneration, but rather uses the criteria specified in the Israeli Patents Law.

In addition, with respect to contractors, there is no clear arrangement under the Israeli Patents Law with respect to contractors’ ownership in inventions developed by them. Therefore, it is considered best practice to include, in the contractor’s engagement agreement, a provision whereby the parties agree that the company engaging such contractor shall own all intellectual property rights conceived or developed by the contractor during and as a result of such contractor’s engagement with the company, including a clear and explicit assignment provision with respect thereto and a waiver to receive additional consideration.

Although we generally enter into agreements with our contractors and employees pursuant to which they (i) assign to us all rights in and to inventions developed by them during and as a result of their employment or engagement with us; and (ii) waive any right to receive royalties, compensation or additional consideration in connection therewith (including, with respect to employees, waiver under Section 134 of the Israeli Patents Law), we may face claims demanding remuneration in consideration for assigned inventions. As a consequence of such claims, we could be required to pay additional remuneration or royalties to our current or former contractors or employees, or be forced to litigate such monetary claims, which could negatively affect our business.

Our company culture has contributed to our success and if we cannot maintain this culture as we grow, our business could be harmed.

We believe that our company culture has been critical to our success. We not only seek to engender a trusting relationship between our brand and our customers, but also among our employees. Our ability to continue to cultivate and maintain this culture is essential to our growth and continued success. We face a number of challenges that may affect our ability to sustain our corporate culture, including:

 

  

failure to identify, attract, reward and retain people in leadership positions in our organization who share and further our culture, values and mission;

 

  

the increasing size and geographic diversity of our workforce, and our ability to promote a uniform and consistent culture across all our offices and employees;

 

  

competitive pressures to move in directions that may divert us from our mission, vision and values;

 

  

the continued challenges of a rapidly evolving industry; and

 

  

the increasing need to develop expertise in new areas of business that affect us.

Our unique culture is one of our core characteristics that helps us to attract and retain key personnel. If we are not able to maintain our culture, we would have to incur additional costs and find alternative methods to recruit key employees, which in turn could cause our business, results of operations and financial condition to be adversely affected.

Our exposure to loss activity and regulation may be greater in states where we currently have most of our customers or where we are domiciled.

Approximately 70% of our total generated premium for the year ended December 31, 2020 originated from customers in California and Texas. As a result of this concentration, if a significant catastrophe event or series of catastrophe events occur, such as a natural disaster, severe weather (such as the Texas hail storms in 2019 or the recent Texas winter storm), or the recent outbreak of a novel strain of coronavirus (“COVID-19”), and cause material losses in California and Texas, our business, financial condition and results of operation could be materially adversely affected. Further, as compared to our competitors who operate on a wider geographic scale, any adverse changes in the regulatory or legal environment affecting property and casualty insurance in California and Texas may expose us to more significant risks. In addition, as we are domiciled in Illinois, any adverse changes in the regulatory environment affecting property and casualty insurance in Illinois may also expose us to more significant risks.

 

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Our product development cycles are complex and subject to regulatory approval, and we may incur significant expenses before we generate revenues, if any, from new products.

Because our insurance products require regulatory approvals, development cycles can take time. Moreover, development projects can be technically challenging and expensive, and may be delayed or defeated by the inability to obtain licensing or other regulatory approvals. The nature of these development cycles may cause us to experience delays between the time we incur expenses associated with research and development and the time we generate revenues, if any, from such expenses. If we expend a significant amount of resources on research and development and our efforts do not lead to the successful introduction or improvement of products that are competitive in the marketplace, this could materially and adversely affect our business and results of operations. Additionally, anticipated customer demand for a product we are developing could decrease after the development cycle has commenced. Such decreased customer demand may cause us to fall short of our sales targets, and we may nonetheless be unable to avoid substantial costs associated with the product’s development. If we are unable to complete product development cycles successfully and in a timely fashion and generate revenues from such future products, the growth of our business may be harmed.

Our success depends upon the continued growth in the use of the internet for purchasing of insurance products.

We provide homeowners insurance products through our website that competes with traditional offline counterparts. While we also offer insurance through traditional, offline producers, the continued growth and acceptance of Hippo’s products and services will depend, to a large extent, on the continued growth in commercial use of the internet and our ability to innovate and distinguish our products and services from traditional markets.

Purchasers of insurance may develop the perception that purchasing insurance products online is not as effective as purchasing such products through a producer or other traditional offline methods, and the homeowners insurance markets may not migrate online as quickly as (or at the levels that) we expect. Moreover, if, for any reason, an unfavorable perception develops that data automation is less efficacious than traditional offline methods of purchasing insurance, underwriting, claims processing, and other functions that use data automation, our business, results of operations and financial condition could be adversely affected.

New lines of business or new products and services may subject us to additional risks.

From time to time, we may implement or acquire new lines of business, including those outside of the insurance industry, or offer new products and services within existing lines of business. There are risks and uncertainties associated with these efforts, particularly in instances where the markets are not fully developed or are evolving. In developing and marketing new lines of business and new products and services, we may invest significant time and resources. In addition, new business ventures may require different strategic management competencies and risk considerations compared to those of a traditional insurance company or compared to those of our existing management team. External factors, such as regulatory compliance obligations, competitive alternatives, and shifting market preferences, may also impact the successful implementation of a new line of business or a new product or service. Failure to successfully manage these risks in the development and implementation of new lines of business or new products or services could have an adverse effect on our business, results of operations and financial condition.

Litigation and legal proceedings filed by or against us and our subsidiaries could have a material adverse effect on our business, results of operations and financial condition.

Litigation and other proceedings may include, but are not limited to, complaints from or litigation by vendors, employees, customers, our insurance companies, or reinsurers, related to alleged breaches of contract or otherwise. As our market share increases, competitors may pursue litigation to require us to change our business practices or offerings and limit our ability to compete effectively. As is typical in the insurance industry, we

 

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continually face risks associated with litigation of various types arising in the normal course of our business operations, including disputes relating to insurance claims under our policies as well as other general commercial and corporate litigation. Although we are not currently involved in any material litigation with our customers, members of the insurance industry are the target of class action lawsuits and other types of litigation, some of which involve claims for substantial or indeterminate amounts, and the outcomes of which are unpredictable. This litigation is based on a variety of issues, including the sale of insurance, and unfair trade or claim settlement practices. In addition, because we utilize our own and third party data, it is possible that customers or consumer groups could bring individual or class action claims, and regulators could bring actions alleging that our methods of collecting data and pricing risk are impermissibly discriminatory. We cannot predict with any certainty whether we will be involved in such litigation in the future or what impact such litigation would have on our business. If we were to be involved in litigation and it was determined adversely, it could require us to pay significant damage amounts or to change aspects of our operations, either of which could have a material adverse effect on our financial results. Even claims without merit can be time-consuming and costly to defend and may divert management’s attention and resources away from our business and adversely affect our business, results of operations and financial condition. Additionally, lawsuits over claims that are not individually material could in the future become material if aggregated with a substantial number of similar lawsuits. In addition to increasing costs, a significant volume of customer complaints or litigation could adversely affect our brand and reputation, regardless of whether such allegations are valid or whether we are liable. We cannot predict with certainty the costs of defense, the costs of prosecution, applicability or adequacy of insurance coverage or the ultimate outcome of litigation or other proceedings filed by or against us, including remedies or damage awards, and adverse results in such litigation, and other proceedings may harm our business and financial condition. See “Business — Legal Proceedings.”

Claims by others that we infringed their proprietary technology or other intellectual property rights could result in litigation which are expensive to support, and if resolved adversely, could harm our business.

Companies in the internet and technology industries are frequently subject to litigation based on allegations of infringement or other violations of trademarks, copyrights, patents and other intellectual property rights. As we gain an increasingly high public profile, the possibility of intellectual property rights claims against us grows and, from time to time, third parties may assert claims of infringement of intellectual property rights against us. There can be no assurance that we will be successful in defending against these allegations or reaching a business resolution that is satisfactory to us. In addition, future litigation may involve patent holding companies or other adverse patent owners who have no relevant product or service revenue and against whom our own patents may therefore provide little or no deterrence or protection. Many potential litigants, including some of our competitors and patent-holding companies, may now and in the future have significantly larger and more mature patent portfolios than us and have the ability to dedicate substantial resources to assert their intellectual property rights. Any claim of infringement by a third party, even those without merit, could cause us to incur substantial costs defending against the claim, could distract our management from our business and could require us to cease use of such intellectual property. Furthermore, because of the substantial amount of discovery required in connection with intellectual property litigation, we risk compromising our confidential information during this type of litigation. We may be required to settle such litigation on terms that are unfavorable to us. Similarly, we may be subject to an unfavorable judgment which may not be reversible or is not reversed upon appeal. The terms of such settlement or judgment may require us to pay substantial damages, royalties or other fees, or subject us to an injunction or other restrictions that prevent us from using or distributing our intellectual property, or from operating under our brand, each of which could adversely affect our business, results of operations and financial condition. Even if third party allegations of infringement do not result in litigation or are resolved in our favor or without significant expenses, the time and resources necessary to resolve them could harm our business, results of operations, financial condition and reputation.

With respect to any intellectual property rights claim, we may have to seek out a license to continue operations found to violate such rights, which may not be available on favorable or commercially reasonable terms and may significantly increase our operating expenses. Some licenses may be non-exclusive, and therefore

 

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our competitors may have access to the same technology licensed to us. If a third party does not offer us a license to its intellectual property on reasonable terms, or at all, we may be required to develop alternative, non-infringing technology, which could require significant time (during which we would be unable to continue to offer our affected offerings), effort and expense and may ultimately not be successful. Any of these events could adversely affect our business, results of operations and financial condition.

If we are unable to make acquisitions and investments, or unable to successfully integrate them into our business, our business, results of operations and financial condition could be adversely affected.

As part of our business strategy, we will continue to consider a wide array of potential strategic transactions, including acquisitions of and organizations of new businesses, new technologies, services and other assets and strategic investments that complement our business. We may evaluate target companies and make acquisitions in the future. There is no assurance that such acquired or organized businesses will be successfully integrated into our existing business or generate substantial revenue.

Acquisitions involve numerous risks, any of which could harm our business and negatively affect our financial condition and results of operations, including:

 

  

intense competition for suitable acquisition targets, which could increase prices and adversely affect our ability to consummate deals on favorable or acceptable terms;

 

  

failure or material delay in closing a transaction, including as a result of regulatory review and approvals;

 

  

inadequacy of reserves for losses and loss expenses;

 

  

quality of their data and underwriting processes;

 

  

conditions imposed by regulatory agencies that make the realization of cost-savings through integration of operations more difficult;

 

  

difficulties in obtaining regulatory approvals on our ability to be an acquirer;

 

  

a need for additional capital that was not anticipated at the time of the acquisition;

 

  

transaction-related lawsuits or claims;

 

  

difficulties in integrating the technologies, operations, existing contracts and personnel of an acquired company;

 

  

difficulties in retaining key employees or business partners of an acquired company;

 

  

diversion of financial and management resources from existing operations or alternative acquisition opportunities;

 

  

failure to realize the anticipated benefits or synergies of a transaction;

 

  

failure to identify the problems, liabilities or other shortcomings or challenges of an acquired company or technology, including issues related to intellectual property, regulatory compliance practices, litigation, accounting practices, or employee or user issues;

 

  

risks that regulatory bodies may enact new laws or promulgate new regulations that are adverse to an acquired company or business;

 

  

theft of our trade secrets or confidential information that we share with potential acquisition candidates;

 

  

risk that an acquired company or investment in new offerings cannibalizes a portion of our existing business;

 

  

adverse market reaction to an acquisition;

 

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significant attention from management and disruption to our business; and

 

  

potential dilution in value to our stockholders.

If we fail to address the foregoing risks or other problems encountered in connection with past or future acquisitions of businesses, new technologies, services and other assets and strategic investments, or if we fail to successfully integrate such acquisitions or investments, our business, results of operations and financial condition could be adversely affected.

We may not be able to utilize a portion of our net operating loss carryforwards (“NOLs”) to offset future taxable income, which could adversely affect our net income and cash flows.

We are subject to federal and state income and non-income taxes in the United States. Tax laws, regulations, and administrative practices in various jurisdictions may be subject to significant change, with or without notice, due to economic, political and other conditions, and significant judgment is required in evaluating and estimating these taxes. Our effective tax rates could be affected by numerous factors, such as entry into new businesses and geographies, changes to our existing business and operations, acquisitions and investments and how they are financed, changes in our stock price, changes in our deferred tax assets and liabilities and their valuation, and changes in the relevant tax, accounting, and other laws, regulations, administrative practices, principles and interpretations. We are required to take positions regarding the interpretation of complex statutory and regulatory tax rules and on valuation matters that are subject to uncertainty, and IRS or other tax authorities may challenge the positions that we take.

As of December 31, 2020, we had U.S. federal and state NOL carryforwards of approximately $154.5 million and $41.5 million, respectively, available to offset our future taxable income, if any, prior to consideration of annual limitations that may be imposed under Section 382 of the Code, or otherwise. Of our U.S. federal NOL carryforwards, $9.2 million of losses will begin to expire in 2035 and $145.3 million of losses can be carried forward indefinitely. Under the Tax Cuts and Jobs Act of 2017, as modified by the Coronavirus Aid, Relief, and Economic Security Act, U.S. federal NOL carryforwards generated in taxable periods beginning after December 31, 2017, may be carried forward indefinitely, but the deductibility of such NOL carryforwards in taxable years beginning after December 31, 2020, is limited to 80% of taxable income.

We may be unable to fully use our NOL carryforwards, if at all. Under Section 382 of the Code, if a corporation undergoes an “ownership change” (generally defined as a greater than 50 percentage point change, by value, in the corporation’s equity ownership by certain shareholders or groups of shareholders over a rolling three-year period), the corporation’s ability to use its pre-ownership change NOLs to offset its post-ownership change income may be limited. We have experienced two historical ownership changes (in 2016 and 2018) and we may experience ownership changes in the future as a result of subsequent shifts in our stock ownership, including as a result of this transaction, some of which may be outside of our control. If we undergo a future ownership change, we may be prevented from fully utilizing our NOL carryforwards existing at the time of the ownership change prior to their expiration. Future regulatory changes could also limit our ability to utilize our NOL carryforwards. To the extent we are not able to offset future taxable income with our NOL carryforwards, our net income and cash flows may be adversely affected.

Our expansion strategy will subject us to additional costs and risks and our plans may not be successful.

Our success depends in significant part on our ability to expand into additional markets. Currently, Spinnaker Insurance Company is licensed to write limited lines of business in 50 states and the District of Columbia, and Hippo Analytics Inc. is licensed as an insurance agency in 50 states and the District of Columbia. We have targeted writing homeowners business across all 50 states, but we cannot guarantee that we will be able to provide nationwide coverage in the near term or at all. As of March 31, 2021, the Hippo insurance program was approved to be sold in 34 states. Moreover, one or more states could revoke our license to operate, or implement additional regulatory hurdles that could inhibit or limit our ability to obtain or maintain our license or grow our business in such states.

 

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As we seek to expand, we may incur significant operating expenses, although our expansion may not be successful for a variety of reasons, including because of, among other things:

 

  

barriers to obtaining the required government approvals, licenses or other authorizations, including seasoning or other limitations imposed by a state;

 

  

failures in identifying and entering into joint ventures with strategic partners or entering into joint ventures that do not produce the desired results;

 

  

challenges in, and the cost of, complying with various laws and regulatory standards, including with respect to the insurance business and insurance distribution, capital and outsourcing requirements, data privacy, tax and regulatory restrictions;

 

  

competition from incumbents that already own market share, better understand the market, may market and operate more effectively and may enjoy greater affinity or awareness; and

 

  

differing demand dynamics, which may make our product offerings less successful.

Expansion into new markets will require additional investments by us in both securing regulatory approvals and marketing. These incremental costs may include hiring additional personnel, as well as engaging third-party service providers and other research and development costs. If we grow our geographic footprint or product offering at a slower rate than expected, our business, results of operations and financial condition could be materially and adversely affected.

We are subject to payment processing risk.

We currently rely on a limited number of payment processing services, including the processing of payments from credit cards and debit cards, and our business would be disrupted if any of these vendors becomes unwilling or unable to provide these services to us and we are unable to find a suitable replacement on a timely basis. If we or our processing vendors fail to maintain adequate systems for the authorization and processing of credit card transactions, it could cause one or more of the major credit card companies to disallow our continued use of their payment products. In addition, if these systems fail to work properly and, as a result, we do not charge our customers’ credit cards on a timely basis or at all, our business, revenue, results of operations and financial condition could be harmed.

The payment methods that we offer also subject us to potential fraud and theft by criminals, who are becoming increasingly more sophisticated, seeking to obtain unauthorized access to or exploit weaknesses that may exist in the payment systems. If we fail to comply with applicable rules or requirements for the payment methods we accept, or if payment-related data are compromised due to a breach of data, we may be liable for significant costs incurred by payment card issuing banks and other third parties or subject to fines and higher transaction fees, or our ability to accept or facilitate certain types of payments may be impaired. In addition, our customers could lose confidence in certain payment types, which may result in a shift to other payment types or potential changes to our payment systems that may result in higher costs. If we fail to adequately control fraudulent credit card transactions, we may face civil liability, diminished public perception of our security measures, and significantly higher credit card-related costs, each of which could harm our business, results of operations and financial condition.

Risks Relating to Hippo’s Industry

Unless the context otherwise requires, all references in this subsection to the “Company,” “we,” “us” or “our” refer to the business of Hippo Enterprises Inc. and its subsidiaries prior to the consummation of the Business Combination, which will be the business of Hippo Holdings and its subsidiaries following the consummation of the Business Combination.

 

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The insurance business, including the market for homeowners insurance, is historically cyclical in nature, and we may experience periods with excess underwriting capacity and unfavorable premium rates, which could adversely affect our business.

Historically, insurance carriers writing homeowners insurance have experienced significant fluctuations in operating results due to competition, frequency and severity of catastrophic events, levels of capacity, adverse litigation trends, regulatory constraints, general economic conditions, and other factors. The supply of insurance is related to prevailing prices, the level of insured losses and the level of capital available to the industry that, in turn, may fluctuate in response to changes in rates of return on investments being earned in the insurance industry. As a result, the homeowners insurance business historically has been a cyclical industry characterized by periods of intense price competition due to excessive underwriting capacity as well as periods when shortages of capacity increased premium levels. Demand for insurance depends on numerous factors, including the frequency and severity of catastrophic events, levels of capacity, the introduction of new capital providers and general economic conditions. All of these factors fluctuate and may contribute to price declines generally in the insurance industry.

We cannot predict with certainty whether market conditions affecting the homeowners insurance market and the insurance market in general will improve, remain constant or deteriorate. Negative market conditions may impair our ability to underwrite insurance at rates we consider appropriate and commensurate relative to the risk assumed. Additionally, negative market conditions could result in a decline in policies sold, an increase in the frequency or severity of claims and premium defaults, and an uptick in the frequency of fraud including the falsification of claims. If we cannot underwrite insurance at appropriate rates, our ability to transact business will be materially and adversely affected. Any of these factors could lead to an adverse effect on our business, results of operations and financial condition.

Our actual incurred losses may be greater than our loss and loss adjustment expense reserves, which could have a material adverse effect on our financial condition and results of operations.

Our financial condition and results of operations depends on our ability to accurately assess potential Loss and Loss Adjustment Expenses under the terms of the policies we underwrite for homeowners. Reserves do not represent an exact calculation of liability. Rather, reserves represent an estimate of what the expected ultimate settlement and administration of claims will cost, and the ultimate liability may be greater or less than the current estimate. In our industry, there is always the risk that reserves may prove inadequate as it is possible for us to underestimate the cost of claims and claims administration.

We base our estimates on our assessment of known facts and circumstances, as well as estimates of future trends in claim severity, claim frequency, judicial theories of liability, and other factors. These variables are affected by both internal and external events that could increase our exposure to losses, including changes in the mix of customers and jurisdictions, changes in actuarial projections, claims handling procedures, inflation, severe weather, climate change, economic and judicial trends and legislative changes. Increases in claims severity can be impacted by increased costs including construction costs, availability of supplies, and other economic factors; and by litigation trends and precedent. We regularly monitor reserves using new information on reported claims and a variety of statistical techniques to update our current estimate. Our estimates could prove to be inadequate, and this underestimation could have a material adverse effect on our financial condition.

Recorded claim reserves, including case reserves and incurred but not reported (“IBNR”) claims reserves, are based on our estimates of losses after considering known facts and interpretations of the circumstances, including settlement agreements. Additionally, models that rely on the assumption that past loss development patterns will persist into the future are used. Internal factors are considered including our experience with similar cases, actual claims paid, historical trends involving claim payment patterns, pending levels of unpaid claims, loss management programs, product mix, contractual terms and changes in claim reporting, and settlement practices. External factors are also considered, such as court decisions, changes in law and litigation imposing

 

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unintended coverage. We also consider benefits, such as disallowing the use of benefit payment schedules, requiring coverage designed to cover losses that occur in a single policy period to losses that develop continuously over multiple policy periods or requiring the availability of multiple limits. Regulatory requirements and economic conditions are also considered.

Since reserves are estimates of the unpaid portion of losses that have occurred, including IBNR losses, the establishment of appropriate reserves, including reserves for catastrophes, is an inherently uncertain and complex process that is regularly refined to reflect current estimation processes and practices. The ultimate cost of losses may vary materially from recorded reserves and such variance may adversely affect our results of operations and financial condition as the reserves and reinsurance recoverables are reestimated.

If any of our insurance reserves should prove to be inadequate for the reasons discussed above, or for any other reason, we will be required to increase reserves, resulting in a reduction in our net income and stockholders’ equity in the period in which the deficiency is identified. Future loss experience substantially in excess of established reserves could also have a material adverse effect on future earnings and liquidity and financial strength rating, which would affect our ability to attract new business or to retain existing customers.

We are subject to extensive insurance industry regulations.

Currently, Spinnaker Insurance Company is licensed to write limited lines of business in 50 states and the District of Columbia, and Hippo Analytics Inc. is licensed as an insurance agency in 50 states and the District of Columbia. We have targeted writing homeowners business across all 50 states, but we cannot guarantee that we will be able to provide nationwide coverage in the near term or at all. As of March 31, 2021, the Hippo insurance program is approved to be sold in 34 states.

Each U.S. state regulator retains the authority to license insurance producers and insurance companies in their states, and a producer or company generally may not operate in a state in which it is not licensed. Accordingly, we are not permitted to sell or underwrite insurance to residents of the remaining states and territories of the United States for lines or products for which we are not authorized, which is likely to put us at a disadvantage among many of our competitors that have been in business much longer than us and are licensed to sell their insurance products in most, if not all, U.S. jurisdictions.

We are subject to extensive regulation and supervision in the states in which we transact business by the individual state insurance departments. This regulation is generally designed to protect the interests of consumers, and not necessarily the interests of insurers or producers, their shareholders or other investors. Numerous aspects of our insurance business are subject to regulation, including, but not limited to, premium rates, mandatory covered risks, limitations on the ability to non-renew or to cancel or elect not to renew business, prohibited exclusions, licensing and appointment of agents, restrictions on the size of risks that may be insured under a single policy, reserves and provisions for unearned premiums, losses and other obligations, deposits of securities for the benefit of customers, investments and capital, policy forms and coverages, advertising and other conduct, including restrictions on the use of credit information and other factors in underwriting, as well as other production, underwriting and claims practices. To the extent we decide to expand our current product offerings to include other insurance products, this would subject us to additional regulatory requirements and scrutiny in each state in which we elect to offer such products. States have also adopted legislation defining and prohibiting unfair methods of competition and unfair or deceptive acts and practices in the business of insurance. Prohibited practices include, but are not limited to, misrepresentations, false advertising, coercion, disparaging other insurers, unfair claims settlement procedures, discrimination in the business of insurance, and offering illegal inducements in connection with insurance sales. Noncompliance with any of such state statute may subject us to regulatory action by the relevant state insurance regulator, and, in certain states, private litigation. States also regulate various aspects of the contractual relationships between insurers and licensed agents and brokers.

Such laws, rules and regulations are usually overseen and enforced by the various state insurance departments, as well as through private rights of action and by state attorneys general. Such regulations or

 

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enforcement actions are often responsive to current consumer and political sensitivities, such as homeowners insurance rates and coverage forms, or which may arise after a major event. Such rules and regulations may result in rate suppression, limit our ability to manage our exposure to unprofitable or volatile risks, or lead to fines, premium refunds or other adverse consequences. The federal government also may regulate aspects of our businesses, such as the protection of consumer confidential information or the use of consumer insurance (credit) scores to underwrite and assess the risk of customers under the Fair Credit Reporting Act (“FCRA”). Among other things, the FCRA requires insurance companies to have a permissible purpose before obtaining and using a consumer report for underwriting purposes, as well as comply with related notice and recordkeeping requirements. Failure to comply with federal requirements under the FCRA or any other applicable federal laws would subject us to regulatory fines and other sanctions. In addition, given our short operating history to-date and rapid speed of growth, we are particularly vulnerable to regulators identifying errors in the policy forms we use, the rates we charge, and our customer communications. As a result of any such noncompliance, regulators could impose fines, rebates or other penalties, including cease-and-desist orders for an individual state, or all states, until the identified noncompliance is rectified.

Our ability to retain state licenses depends on our ability to meet licensing requirements enacted or promulgated in each state (sometimes based on model laws and regulations developed by the NAIC), subject to significant variations across states. If we are unable to satisfy the applicable licensing requirements of any particular state, we could lose our license to do business in such state, which would result in the temporary or permanent cessation of our operations in that state. Alternatively, if we are unable to satisfy applicable state licensing requirements, we may be subject to additional regulatory oversight, have our license suspended, face monetary penalties, or be subject to seizure of assets. Any such events could adversely affect our business, results of operations or financial condition.

In addition, as a condition to writing business in certain states, insurance companies are often required to participate in various pools or risk sharing mechanisms or to accept certain classes of risk, regardless of whether such risks meet their underwriting requirements for voluntary business. Some states also limit or impose restrictions on the ability of an insurer to withdraw from certain classes of business. Certain states impose significant restrictions on a company’s ability to materially reduce its exposures, non-renew, or to withdraw from certain lines of business. State insurance departments can impose significant charges on an insurer in connection with a market withdrawal or refuse to approve withdrawal plans including on the grounds that they could lead to market disruption. Laws and regulations that limit cancellation and non-renewal of policies or that subject withdrawal plans to prior approval requirements may significantly restrict our ability terminate unprofitable risks or to exit unprofitable markets. Such actions and related regulatory restrictions may limit our ability to reduce our potential exposure including, but not limited to, catastrophe events such as hurricane-related losses.

A regulatory environment that requires rate increases to be approved and that can dictate underwriting practices and mandate participation in loss sharing arrangements may adversely affect our results of operations and financial condition.

From time to time, political events and positions affect the insurance market, including efforts to reduce rates to a level that may prevent us from being profitable or may not allow us to reach targeted levels of profitability. For example, if our loss ratio compares favorably to that of the industry, state or provincial regulatory authorities may impose rate rollbacks, require us to pay premium refunds to policyholders, or challenge or otherwise delay our efforts to raise rates even if the property and casualty industry generally is not experiencing regulatory challenges to rate increases. Such challenges affect our ability to obtain approval for rate changes that may be required to achieve targeted levels of profitability and returns on equity. In particular and by way of example, due to the COVID-19 pandemic, state regulators and legislators are under increased political pressure to provide financial relief to policyholders through premium rebates or requiring insurers to pay claims arising from COVID-19 related losses, regardless of the applicable policy’s exclusions.

In addition, certain states have enacted laws that require an insurer conducting business in that state to participate in assigned risk plans, reinsurance facilities and joint underwriting associations. Certain states also

 

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require insurers to offer coverage to all consumers, often restricting an insurer’s ability to charge the price it might otherwise charge. In these markets, we may be compelled to underwrite significant amounts of business at lower-than-desired rates, possibly leading to an unacceptable return on equity. Laws and regulations of many states also limit an insurer’s ability to withdraw from one or more lines of insurance there, except pursuant to a plan that is approved by the state insurance department. Additionally, as addressed above, certain states require insurers to participate in guaranty funds for impaired or insolvent insurance companies. These funds periodically assess losses against all insurance companies doing business in the state. Our business, results of operations or financial condition could be adversely affected by any of these factors.

State insurance regulators impose additional reporting requirements regarding enterprise risk on insurance holding company systems, with which we must comply as an insurance holding company.

In the past decade, various state insurance regulators have increased their focus on risks within an insurer’s holding company system that may pose enterprise risk to the insurer. During the last approximately ten years, the NAIC adopted significant changes to the insurance holding company act and regulations (the “NAIC Amendments”). The NAIC Amendments are designed to respond to perceived gaps in the regulation of insurance holding company systems in the United States. One of the major changes is a requirement that an insurance holding company system’s ultimate controlling person submit annually to its lead state insurance regulator an “enterprise risk report” that identifies activities, circumstances or events involving one or more affiliates of an insurer that, if not remedied properly, are likely to have a material adverse effect upon the financial condition or liquidity of the insurer or its insurance holding company system as a whole. Other changes include requiring a controlling person to submit prior notice to its domiciliary insurance regulator of a divestiture of control, having detailed minimum requirements for cost sharing and management agreements between an insurer and its affiliates and expanding of the agreements between an insurer and its affiliates to be filed with its domiciliary insurance regulator.

The increasing adoption by states of cybersecurity regulations could impose additional compliance burdens on us and expose us to additional liability.

In response to the growing threat of cyber-attacks in the insurance industry, certain jurisdictions have adopted and others are considering new cybersecurity measures, including the adoption of cybersecurity regulations. On October 24, 2017, the NAIC adopted its Insurance Data Security Model Law, intended to serve as model legislation for states to enact in order to govern cybersecurity and data protection practices of insurers, insurance agents, and other licensed entities registered under state insurance laws. As of the summer of 2020, Alabama, Connecticut, Delaware, Indiana, Louisiana, Michigan, Mississippi, New Hampshire, Ohio, South Carolina, and Virginia have adopted versions of the NAIC Insurance Data Security Model Law, each with a different effective date, and other states may adopt versions of the NAIC Insurance Data Security Model Law in the future. Although we take steps to comply with financial industry cybersecurity regulations and believe we are materially compliant with their requirements, our failure to comply with new or existing cybersecurity regulations could result in regulatory actions and other penalties. In addition, efforts to comply with new or existing cybersecurity regulations could impose significant costs on our business, which could materially and adversely affect our business, financial condition or results of operations.

The COVID-19 pandemic has caused disruption to our operations and may negatively impact our business, key metrics, or results of operations in numerous ways that remain unpredictable.

In December 2019, COVID-19 was reported to have surfaced in Wuhan, China and in March 2020 was recognized as a pandemic by the World Health Organization. Public and private sector policies and initiatives to reduce the transmission of COVID-19, such as the imposition of travel restrictions and the adoption of remote working, could impact our operations if our employees are unable to work effectively, including because of illness, quarantines, government actions, facility closures, or other restrictions. We continue to assess and update our business continuity plans in the context of this pandemic, including taking steps to help keep our employees

 

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healthy and safe. The spread of COVID-19 has caused us to modify our business practices (including employee travel, employee work locations in certain cases and cancellation of physical participation in meetings, events and conferences and to increase our use of web based solutions for business processes like meetings and working remote solutions).

Beginning in early March 2020, the COVID-19 pandemic and the measures imposed to contain this pandemic have severely impacted businesses worldwide, including many in the insurance sector. Insurers of travel, events or business interruption may be directly and adversely affected by claims from COVID-19 or the lock-down it engendered. Other insurers, in lines of business that are not directly impacted by COVID-19, may nevertheless be dependent on office-based brokers, in-person inspections, or teams that are poorly equipped to work from home — all of which can translate into value erosion. Finally, the broader financial crisis may hurt insurers in other ways, too. With interest rates at all-time lows, we, along with many insurers, have seen a decline on the return on capital.

COVID-19 is expected to impact our loss ratios as homes are being used more intensively due to the remote working environment. Home infrastructure and equipment breakdown are occurring more frequently due to increased use. COVID 19 has delayed our recoverability of premiums where moratoriums have been imposed and has delayed the launch of some of our Hippo Home Care products. Due to the speed with which the COVID-19 situation is developing, the global breadth of its spread and the range of governmental and community reactions thereto, uncertainty around its duration and ultimate impact persists, and the related financial impact on our business could change and cannot be accurately predicted at this time.

Furthermore, COVID-19 has impacted and may further impact the broader economies of affected countries, including negatively impacting economic growth, the proper functioning of financial and capital markets, foreign currency exchange rates and interest rates. It is possible that the pandemic will cause an economic slowdown of potentially extended duration, and it is possible that it could cause a global recession. This could result in an increase in fraudulent claims or a decrease in home sales, an increase in costs associated with claims under our policies, as well as an increase in the number of customers experiencing difficulty paying premiums, any of which could have a material adverse effect on our business and results of operations. Given that the COVID-19 situation is continuing to develop (particularly as new strains of the virus emerge and create potential challenges to vaccination efforts), the global breadth of its spread and the range of governmental and community reactions thereto (including the availability and acceptance of vaccines), there is uncertainty around its duration and ultimate impact it will continue to have on our business. For a further discussion of the effects of COVID-19 on our business, see “Hippo Management’s Discussion and Analysis of Financial Condition and Results of Operations — COVID-19 Impact.”

Severe weather events and other catastrophes, including the effects of climate change, global pandemics and terrorism, are inherently unpredictable and may have a material adverse effect on our financial results and financial condition.

Our homeowners insurance business is exposed to the risk of severe weather conditions and other catastrophes. Severe weather events include, but are not limited to, winter storms, tornadoes, hurricanes, rain, hail and high winds. The incidence and severity of weather conditions are largely unpredictable. Catastrophes can be caused by various events, such as wildfires, tornadoes, tsunamis, hurricanes, tropical storms, earthquakes, windstorms, hailstorms, severe thunderstorms, fires, and other non-natural events such as explosions, civil unrest, terrorism or war. Additionally, seasonal weather patterns impact the level and amount of claims we receive. These patterns include hurricanes, wildfires, and coastal storms in the fall, cold weather patterns and changing home heating needs in the winter, and tornados and hailstorms in the spring and summer. The mix of geographic exposure and products within our customer base impacts our exposure to these weather patterns and as we diversify our base of premium such that our exposure more closely resembles the industry exposure, we should see the impact of these events on our business more closely resemble the impact on the broader industry.

The incidence and severity of severe weather conditions and catastrophes are inherently unpredictable and the occurrence of one catastrophe does not render the possibility of another catastrophe greater or lower. The

 

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extent of losses from a catastrophe is a function of both the total amount of insured exposure in the area affected by the event and the severity of the event. In particular, severe weather and other catastrophes could significantly increase our costs due to a surge in claims following such events and/or legal and regulatory changes in response to catastrophes that may impair our ability to limit our liability under our policies. Severe weather conditions and catastrophes can cause greater losses for us, which can cause our liquidity and financial condition to deteriorate. Resulting reductions in our capital could materially adversely affect our ability to underwrite new or renew existing insurance policies. In addition, we may not be able to obtain reinsurance coverage at reasonable rates and in amounts or with coverages adequate to mitigate the risks associated with severe weather conditions and other catastrophes. While we only work with reinsurers whom we believe have acceptable credit, if our reinsurers are unable to pay for the claims for which they are responsible, we could be exposed to additional liability, which could have a material adverse effect on our business and results of operations. Catastrophic losses, such as the recent storms in Texas, may result in our insurance companies incurring losses greater than those experienced in prior years, the expected level of losses including modeled losses, and current reinsurance limits.

Climate change may affect the occurrence of certain natural events, such as an increase in the frequency or severity of snow, wind and thunderstorm events, and tornado or hailstorm events due to increased convection in the atmosphere; more frequent wildfires in certain geographies; higher incidence of deluge flooding and the potential for an increase in severity of the hurricane events due to higher sea surface temperatures. Additionally, climate change may cause an impact on the demand, price and availability of homeowners insurance and reinsurance coverages, as well as the value of our investment portfolio. Due to significant variability associated with future changing climate conditions, we are unable to predict the impact climate change will have on our business.

We expect our results of operations to fluctuate on a quarterly and annual basis. In addition, our operating results and operating metrics are subject to seasonality and volatility, which could result in fluctuations in our quarterly revenues and operating results or in perceptions of our business prospects.

Our revenue and results of operations could vary significantly from period to period and may fail to match expectations as a result of a variety of factors, some of which are outside of our control. Our results may vary as a result of fluctuations in the number of customers purchasing our insurance products and fluctuations in the timing and amount of our expenses. In addition, the insurance industry, and particularly homeowners insurance, are subject to their own cyclical trends and uncertainties, including extreme weather which is often seasonal and may result in volatility in claims reporting and payment patterns. Fluctuations and variability across the industry may affect our revenue. As a result of the potential variations in our revenue and results of operations, period-to-period comparisons may not be meaningful and the results of any one period should not be relied on as an indication of future performance. In addition, our results of operations may not meet the expectations of investors or public market analysts who follow us, which may adversely affect our stock price.

We have experienced in the past, and expect to continue to experience, seasonal fluctuations in our revenues and resulting fluctuations in our rate of growth as a result of insurance spending patterns. Specifically, our revenues may be proportionately higher in our third fiscal quarter due to the seasonality of when homeowners purchase and move into new homes, which historically occurs at higher rates in the months of July, August and September. Accordingly, the amount of growth we experience may also be greater in the third quarter. As our business expands and matures, other seasonality trends may develop and the existing seasonality and customer behavior that we experience may change. Volatility in our key operating metrics or their rates of growth could have a negative impact on our financial results and investor perceptions of our business prospects and a failure to achieve our quarterly forecasts or to meet or exceed the expectations of research analysts or investors will cause our stock price to decline.

An overall decline in economic activity could have a material adverse effect on the financial condition and results of operations of our business.

The demand for property and casualty insurance generally rises as the overall level of household income increases and generally falls as household income decreases, affecting premiums, commissions and fees

 

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generated by our business. Some new accounts are sourced by referral sources tied to home closing transactions, and major slowdowns in the various housing markets we serve could impact our ability to generate new business. The economic activity that impacts property and casualty insurance is most closely correlated with employment levels, corporate revenue and asset values.

Our results of operations and financial condition may be adversely affected due to limitations in the analytical models used to assess and predict our exposure to catastrophe losses.

Along with others in the insurance industry, models developed internally and by third party vendors are used along with our own historical data in assessing property insurance exposure to catastrophe losses. These models assume various conditions and probability scenarios; however, they do not necessarily accurately predict future losses or measure losses currently incurred. Further, the accuracy of such models may be negatively impacted by changing climate conditions, including increased weather severity patterns. Catastrophe models use historical information and scientific research about natural events, such as hurricanes and earthquakes, as well as detailed information about our in-force business. This information is used in connection with pricing and risk management activities. However, since actual catastrophic events vary considerably, there are limitations with respect to its usefulness in predicting losses in any reporting period. Other limitations are evident in significant variations in estimates between models, material increases and decreases in results due to model changes and refinements of the underlying data elements and actual conditions that are not yet well understood or may not be properly incorporated into the models.

Our insurance company subsidiaries are subject to minimum capital and surplus requirements, and failure to meet these requirements could subject us to regulatory action.

Our insurance company subsidiaries are subject to risk based capital standards and other minimum capital and surplus requirements. The risk based capital standards, based upon the Risk Based Capital Model Act developed by the NAIC and adopted in all states, including our insurance subsidiaries’ states of domicile, require our insurance company subsidiaries to report results of risk based capital calculations to their domestic regulator. These risk based capital standards provide for different levels of regulatory attention depending upon the ratio of an insurance company’s total adjusted capital, as calculated in accordance with the NAIC’s RBC formula, to its authorized control level risk based capital. Authorized control level risk based capital is determined using the NAIC’s risk based capital formula, which measures the minimum amount of capital that an insurance company needs to support its overall business operations.

An insurance company with total adjusted capital that is less than 200% of its authorized control level risk based capital is at a company action level, which would require the insurance company to file a risk based capital plan that, among other things, contains proposals of corrective actions the company intends to take that are reasonably expected to result in the elimination of the company action level event. Additional action level events occur when the insurer’s total adjusted capital falls below 150%, 100%, and 70% of its authorized control level risk based capital. The lower the percentage, the more severe the regulatory response, including, in the event of a mandatory control level event (total adjusted capital falls below 70% of the insurer’s authorized control level risk based capital), placing the insurance company into receivership. As of March 31, 2021, Spinnaker Insurance Company’s risk based capital ratio was well in excess of minimum statutory requirements.

In addition, our insurance company subsidiaries are required to maintain certain minimum capital and surplus and generally must keep their net written premiums within specified multiples of its surplus that regulators customarily view as prudent. The insurance company subsidiaries could exceed these ratios if their volume increases faster than anticipated or if their surplus declines due to catastrophe or non-catastrophe losses or excessive underwriting and operational expenses.

Any failure by our insurance company subsidiaries to meet the applicable risk based capital or minimum statutory capital requirements or the writings ratio limitations regulators customarily use where we currently or

 

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may in the future conduct business could subject us to further examination or corrective action imposed by state regulators, including limitations on our writing of additional business, state supervision or liquidation.

Any changes in existing risk based capital requirements, minimum statutory capital requirements, or customary writings ratios may require us to increase our statutory capital levels, which we may be unable to do.

Our insurance company subsidiaries are subject to assessments and other surcharges from state guaranty funds, and mandatory state insurance facilities, which may reduce our profitability.

The insurance laws of many states subject property and casualty insurers doing business in those states to statutory property and casualty guaranty fund assessments. The purpose of a guaranty fund is to protect customers by requiring that solvent property and casualty insurers pay the insurance claims of insolvent insurers. These guaranty associations generally pay these claims by assessing solvent insurers proportionately based on each insurer’s share of voluntary premiums written in the state. While most guaranty associations provide for recovery of assessments through subsequent rate increases, surcharges or premium tax credits, there is no assurance that insurers will ultimately recover these assessments, which could be material, particularly following a large catastrophe or in markets which become disrupted.

Maximum contributions required by law in any one year vary by state. We cannot predict with certainty the amount of future assessments because they depend on factors outside our control, such as insolvencies of other insurance companies. Significant assessments could have a material adverse effect on our financial condition and results of operations.

Performance of our investment portfolio is subject to a variety of investment risks that may adversely affect our financial results.

Our results of operations depend, in part, on the performance of our investment portfolio. We seek to hold a diversified portfolio of investments in accordance with our investment policy and routinely reviewed by our investment committee. However, our investments are subject to general economic and market risks as well as risks inherent to particular securities.

Our primary market risk exposures are to changes in interest rates and overall debt markets given that a majority of our portfolio is invested in debt securities, treasury bills, municipal bonds and mortgage- and asset-backed securities. We have limited exposure to equities, but may in the future increase our portfolio’s allocation to equities. See “Hippo Management’s Discussion and Analysis of Financial Condition and Results of Operations — Quantitative and Qualitative Disclosure About Market Risk.” In recent years, interest rates have been at or near historic lows. A protracted low interest rate environment would continue to place pressure on our net investment income, particularly as it relates to fixed income securities and short-term investments, which, in turn, may adversely affect our operating results. Future increases in interest rates could cause the values of our fixed income securities portfolios to decline, with the magnitude of the decline depending on the duration of securities included in our portfolio and the amount by which interest rates increase. Some fixed income securities have call or prepayment options, which create possible reinvestment risk in declining rate environments. Other fixed income securities, such as mortgage-backed and asset-backed securities, carry prepayment risk or, in a rising interest rate environment, may not prepay as quickly as expected.

The value of our investment portfolio is subject to the risk that certain investments may default or become impaired due to deterioration in the financial condition of one or more issuers of the securities we hold, or due to deterioration in the financial condition of an insurer that guarantees an issuer’s payments on such investments. Downgrades in the credit ratings of fixed maturities also have a significant negative effect on the market valuation of such securities.

Such factors could reduce our net investment income and result in realized investment losses. Our investment portfolio is subject to increased valuation uncertainties when investment markets are illiquid. The

 

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valuation of investments is more subjective when markets are illiquid, thereby increasing the risk that the estimated fair value (i.e., the carrying amount) of the securities we hold in our portfolio does not reflect prices at which actual transactions would occur.

We may also invest in marketable equity securities. These securities are carried on the balance sheet at fair market value and are subject to potential losses and declines in market value.

Risks for all types of securities are managed through the application of our investment policy, which establishes investment parameters that include, but are not limited to, maximum percentages of investment in certain types of securities and minimum levels of credit quality, which we believe are within applicable guidelines established by the NAIC.

Although we seek to preserve our capital, we cannot be certain that our investment objectives will be achieved, and results may vary substantially over time. In addition, although we seek to employ investment strategies that are not correlated with our insurance and reinsurance exposures, losses in our investment portfolio may occur at the same time as underwriting losses and, therefore, exacerbate the adverse effect of the losses on us.

Unexpected changes in the interpretation of our coverage or provisions, including loss limitations and exclusions, in our policies could have a material adverse effect on our financial condition and results of operations.

There can be no assurances that specifically negotiated loss limitations or exclusions in our policies will be enforceable in the manner we intend. As industry practices and legal, judicial, social and other conditions change, unexpected and unintended issues related to claims and coverage may emerge. While these limitations and exclusions help us assess and mitigate our loss exposure, it is possible that a court or regulatory authority could nullify or void a limitation or exclusion or legislation could be enacted modifying or barring the use of such limitations or exclusions. These types of governmental actions could result in higher than anticipated Loss and Loss Adjustment Expenses, which could have a material adverse effect on our financial condition or results of operations. In addition, court decisions, such as the 1995 Montrose decision in which the California Supreme Court eliminated long standing coverage limitations by a narrow reading of policy exclusions In these cases, insurers are required to create and write new exclusions to establish the intended coverage. These types of cases and the issues they raise may adversely affect our business by either broadening coverage beyond our underwriting intent or by increasing the frequency or severity of claims. In some instances, these changes may not become apparent until sometime after we have issued insurance contracts that are affected by the changes. As a result, the full extent of liability under our insurance contracts may not be known for many years after a contract is issued.

Risks Relating to Ownership of Hippo Common Stock

Unless the context otherwise requires, all references in this subsection to the “Company,” “we,” “us” or “our” refer to the business of Hippo Enterprises Inc. and its subsidiaries prior to the consummation of the Business Combination, which will be the business of Hippo Holdings and its subsidiaries following the consummation of the Business Combination.

There may not be an active trading market for our common stock, which may make it difficult to sell shares of our common stock and there can be no assurance that the Company’s securities will be approved for listing on NYSE or that the Company will be able to comply with the continued listing standards of such exchange.

We intend to list the Hippo Holdings common stock and Hippo Holdings warrants on the NYSE under the symbols “HIPO” and “HIPO.WS,” respectively. However, it is possible that after the Business Combination, an active trading market will not develop or, if developed, that any market will not be sustained. This would make it

 

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difficult for you to sell shares of our common stock at an attractive price or at all. The market price per share of our common stock may not be indicative of the price at which shares of our common stock will trade in the public market after this transaction.

Further, the Company’s continued eligibility for listing may depend on the number of our shares that are redeemed. If, after the transaction, NYSE or Nasdaq delists the Company’s securities from trading on its exchange for failure to meet the listing standards, the Company and its stockholders could face significant negative consequences including:

 

  

limited availability of market quotations for the Company’s securities;

 

  

a determination that the Company’s common stock is a “penny stock” which will require brokers trading in the company common stock to adhere to more stringent rules, possibly resulting in a reduced level of trading activity in the secondary trading market for shares of the Company’s common stock;

 

  

a limited amount of analyst coverage; and

 

  

a decreased ability to issue additional securities or obtain additional financing in the future.

The market price of our common stock and warrants may be highly volatile, which could cause the value of your investment to decline.

Even if an active trading market develops following the Business Combination, the trading price of our common stock could be volatile, and you could lose all or part of your investment. The following factors, in addition to other factors described in this “Risk Factors” section and included elsewhere and incorporated by reference in this prospectus, may have a significant impact on the market price of our common stock:

 

  

the occurrence of severe weather conditions and other catastrophes;

 

  

our operating and financial performance, quarterly or annual earnings relative to similar companies;

 

  

publication of research reports or news stories about us, our competitors or our industry, or positive or negative recommendations or withdrawal of research coverage by securities analysts;

 

  

the public’s reaction to our press releases, our other public announcements and our filings with the SEC;

 

  

announcements by us or our competitors of acquisitions, business plans or commercial relationships;

 

  

any major change in our board of directors or senior management, including the departure of our founder;

 

  

sales of our common stock by us, our directors, executive officers, principal shareholders, our founder and/or the PIPE Investors, or expectations of such sales given the release of shares from applicable lock-ups over time;

 

  

adverse market reaction to any indebtedness we may incur or securities we may issue in the future;

 

  

short sales, hedging and other derivative transactions in our common stock;

 

  

exposure to capital market risks related to changes in interest rates, realized investment losses, credit spreads, equity prices, foreign exchange rates and performance of insurance-linked investments;

 

  

our creditworthiness, financial condition, performance, and prospects;

 

  

changes in the fair values of our financial instruments (including certain warrants assumed in connection with the Business Combination);

 

  

our dividend policy and whether dividends on our common stock have been, and are likely to be, declared and paid from time to time;

 

  

perceptions of the investment opportunity associated with our common stock relative to other investment alternatives;

 

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regulatory or legal developments;

 

  

changes in general market, economic and political conditions;

 

  

conditions or trends in our industry, geographies or customers;

 

  

changes in accounting standards, policies, guidance, interpretations or principles;

 

  

the impact of the COVID-19 pandemic on the Combined Company’s management, employees, partners, customers and operating results; and

 

  

threatened or actual litigation or government investigations.

In addition, broad market and industry factors may negatively affect the market price of our common stock, regardless of our actual operating performance, and factors beyond our control may cause our stock price to decline rapidly and unexpectedly. In the past, companies that have experienced volatility in the market price of their stock have been subject to securities class action litigation. We may be the target of this type of litigation in the future. Litigation of this type could result in substantial costs and diversion of management’s attention and resources, which could have a material adverse effect on our business, financial condition, results of operations or prospects. Any adverse determination in litigation could also subject us to significant liabilities.

If securities or industry analysts do not publish or cease publishing research or reports about us, our business or our markets, or if they adversely change their recommendations or publish negative reports regarding our business or our stock, our stock price and trading volume could materially decline.

The trading market for our common stock will be influenced by the research and reports that industry or securities analysts may publish about us, our business, our markets, or our competitors. We do not currently have research coverage by industry or securities analysts and we cannot provide any assurance that analysts will cover us or provide favorable coverage. If any of the analysts who may cover us adversely change their recommendation regarding our stock, or provide more favorable relative recommendations about our competitors, our stock price could materially decline. If any analyst who may cover us were to cease coverage of our company or fail to regularly publish reports on us, we could lose visibility in the financial markets, which in turn could cause our stock price or trading volume to materially decline.

Some provisions of our Proposed Organizational Documents and Delaware law may have anti-takeover effects that could discourage an acquisition of us by others, even if an acquisition would be beneficial to our stockholders, and may prevent attempts by our stockholders to replace or remove our current management.

Provisions in our Proposed Organizational Document, as well as provisions of the DGCL, could make it more difficult for a third party to acquire us or increase the cost of acquiring us, even if doing so would benefit our stockholders, including transactions in which stockholders might otherwise receive a premium for their shares. These provisions include:

 

  

our board of directors is classified into three classes of directors with staggered three-year terms, and directors are only able to be removed from office for cause;

 

  

nothing in our Proposed Certificate of Incorporation precludes future issuances without stockholder approval of the authorized but unissued shares of our common stock;

 

  

advance notice procedures apply for stockholders to nominate candidates for election as directors or to bring matters before an annual meeting of stockholders;

 

  

our stockholders will only be able to take action at a meeting of stockholders and not by written consent;

 

  

only our chairman of the board of directors, our chief executive officer, our president, or a majority of the board of directors are authorized to call a special meeting of stockholders;

 

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no provision in our Proposed Organizational Documents provides for cumulative voting, which limits the ability of minority stockholders to elect director candidates;

 

  

certain amendments to our Proposed Certificate of Incorporation will require the approval of two-thirds of the then outstanding voting power of our capital stock;

 

  

our Proposed Bylaws will provide that the affirmative vote of two-thirds of the then-outstanding voting power of our capital stock, voting as a single class, is required for stockholders to amend or adopt any provision of our bylaws;

 

  

our Proposed Certificate of Incorporation authorizes undesignated preferred stock, the terms of which may be established and shares of which may be issued, without the approval of the holders of our capital stock; and

 

  

certain litigation against us can only be brought in Delaware.

Our Proposed Certificate of Incorporation states that we shall not engage in a “business combination” with an “interested stockholder” for a period of three years after the date of the transaction in which the person became an interested stockholder, unless:

 

  

the business combination or transaction which resulted in the stockholder becoming an interested stockholder was approved by the board of directors prior to the time that the stockholder became an interested stockholder;

 

  

upon consummation of the transaction which resulted in the stockholder becoming an interested stockholder, the interested stockholder owned at least 85% of the voting stock of the corporation outstanding at the time the transaction commenced, excluding shares owned by directors who are also officers of the corporation and shares owned by employee stock plans in which employee participants do not have the right to determine confidentially whether shares held subject to the plan will be tendered in a tender or exchange offer; or

 

  

at or subsequent to the time the stockholder became an interested stockholder, the business combination was approved by the board of directors and authorized at an annual or special meeting of the stockholders, and not by written consent, by the affirmative vote of at least two-thirds of the outstanding voting stock which is not owned by the interested stockholder.

These anti-takeover defenses could discourage, delay or prevent a transaction involving a change in control of our company. These provisions could also discourage proxy contests and make it more difficult for you and other stockholders to elect directors of your choosing and cause us to take corporate actions other than those you desire. See “Description of Hippo Holdings Securities.”

Applicable insurance laws may make it difficult to effect a change of control.

Under applicable state insurance laws and regulations, no person may acquire control of a domestic insurance company until written approval is obtained from the state insurance commissioner on the proposed acquisition. Such approval would be contingent upon the state insurance commissioner’s consideration of a number of factors including, among others, the financial strength of the proposed acquiror, the acquiror’s plans for the future operations of the domestic insurer and any anti-competitive results that may arise from the consummation of the acquisition of control. For example, pursuant to both the Illinois Holding Company Act and the Texas Holding Company Act, a person must either (a) seek regulatory approval from the Director or Commissioner of each state’s insurance regulatory authority prior to acquiring direct or indirect “control” of a domestic insurer by filing a “Form A” application, or (b) obtain an exemption from such requirement from the relevant Director or Commissioner if the transaction does not result in the actual change of “control” as defined in the state’s Holding Company Act. We cannot predict with certainty whether a state will approve applications for exemptions or the timing of such decisions by the states, or whether regulators may impose conditions on or

 

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in connection with these applications that might be considered burdensome in nature. If a state insurance regulatory authority were to deny an application for an exemption, we would be required to seek the prior approval of the regulatory authority of the transaction pursuant to a Form A filing. These requirements may discourage potential acquisition proposals and may delay, deter, or prevent a change of control of our insurance company subsidiary, including through transactions that some or all of the stockholders might consider to be desirable.

Our Proposed Certificate of Incorporation designates the Court of Chancery of the State of Delaware as the exclusive forum for certain litigation that may be initiated by our stockholders, which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us.

Our Proposed Certificate of Incorporation provides that, to the fullest extent permitted by law, and unless Hippo Holdings consents in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware will be the sole and exclusive forum for (i) any derivative action or proceeding brought on our behalf, (ii) any action asserting a claim of breach of a fiduciary duty owed to us or our stockholders by any of our directors, officers, employees or agents, (iii) any action asserting a claim against us arising under the DGCL, (iv) any action, suit or proceeding as to which the DGCL confers jurisdiction on the Court of Chancery of the State of Delaware or (v) any action asserting a claim against us that is governed by the internal affairs doctrine. Notwithstanding the foregoing, the Proposed Certificate of Incorporation will provide that the exclusive forum provision will not apply to suits brought to enforce a duty or liability created by the Securities Act or the Exchange Act or any other claim for which the federal courts have exclusive jurisdiction. Section 22 of the Securities Act creates concurrent jurisdiction for federal and state courts over all suits brought to enforce any duty or liability created by the Securities Act or the rules and regulations thereunder. Similarly, Section 27 of the Exchange Act creates exclusive federal jurisdiction over all suits brought to enforce any duty or liability created by the Exchange Act or the rules and regulations thereunder.

These provisions may have the effect of discouraging lawsuits against our directors and officers. The enforceability of similar choice of forum provisions in other companies’ certificates of incorporation has been challenged in legal proceedings, and it is possible that, in connection with any applicable action brought against us, a court could find the choice of forum provisions contained in the Proposed Certificate of Incorporation to be inapplicable or unenforceable in such action.

Claims for indemnification by our directors and officers may reduce our available funds to satisfy successful third-party claims against us and may reduce the amount of money available to us.

Our amended and restated certificate of incorporation and amended and restated bylaws that will become effective upon the closing of this offering will provide that we will indemnify our directors and officers, in each case, to the fullest extent permitted by Delaware law. Delaware law provides that directors of a corporation will not be personally liable for monetary damages for any breach of fiduciary duties as directors, except liability for:

 

  

any breach of the director’s duty of loyalty to the corporation or its stockholders;

 

  

any act or omission not in good faith or that involves intentional misconduct or a knowing violation of law;

 

  

unlawful payments of dividends or unlawful stock repurchases or redemptions; or

 

  

any transaction from which the director derived an improper personal benefit.

Such limitation of liability does not apply to liabilities arising under federal securities laws and does not affect the availability of equitable remedies such as injunctive relief or rescission.

Our amended and restated bylaws that will be in effect upon the completion of this offering will provide that we are required to indemnify our directors and officers to the fullest extent permitted by Delaware law and may

 

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indemnify our other employees and agents. Our amended and restated bylaws will also provide that, on satisfaction of certain conditions, we will advance expenses incurred by a director or officer in advance of the final disposition of any action or proceeding, and permit us to secure insurance on behalf of any officer, director, employee or other agent for any liability arising out of his or her actions in that capacity regardless of whether we would otherwise be permitted to indemnify him or her under the provisions of Delaware law. We have entered and expect to continue to enter into agreements to indemnify our directors and executive officers. With certain exceptions, these agreements provide for indemnification for related expenses, including attorneys’ fees, judgments, fines and settlement amounts incurred by any of these individuals in connection with any action, proceeding or investigation. We believe that these amended and restated certificate of incorporation and amended and restated bylaws provisions and indemnification agreements are necessary to attract and retain qualified persons as directors and officers.

While we maintain directors’ and officers’ liability insurance, such insurance may not be adequate to cover all liabilities that we may incur, which may reduce our available funds to satisfy third-party claims and may adversely impact our cash position.

Taking advantage of the reduced disclosure requirements applicable to “emerging growth companies” may make our common stock less attractive to investors.

The JOBS Act provides that, so long as a company qualifies as an “emerging growth company,” it will, among other things:

 

  

be required to have only two years of audited financial statements and only two years of related selected financial data and Management’s Discussion and Analysis of Financial Condition and Results of Operations disclosure;

 

  

be exempt from the provisions of Section 404(b) of the Sarbanes-Oxley Act requiring that its independent registered public accounting firm provide an attestation report on the effectiveness of its internal control over financial reporting;

 

  

be exempt from the “say on pay” and “say on golden parachute” advisory vote requirements of the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”); and

 

  

be exempt from certain disclosure requirements of the Dodd-Frank Act relating to compensation of its executive officers and be permitted to omit the detailed compensation discussion and analysis from proxy statements and reports filed under the Exchange Act;

We currently intend to take advantage of each of the exemptions described above. Further, pursuant to Section 107 of the JOBS Act, as an emerging growth company, we have elected to take advantage of the extended transition period for complying with new or revised accounting standards until those standards would otherwise apply to private companies. As a result, our operating results and financial statements may not be comparable to the operating results and financial statements of other companies who have adopted the new or revised accounting standards. It is possible that some investors will find our common stock less attractive as a result, which may result in a less active trading market for our common stock and higher volatility in our stock price. We could be an emerging growth company for up to five years after this transaction. We cannot predict if investors will find our common stock less attractive if we elect to rely on these exemptions, or if taking advantage of these exemptions would result in less active trading or more volatility in the price of our common stock.

Failure to establish and maintain effective internal controls in accordance with Section 404 of the Sarbanes-Oxley Act could have a material adverse effect on our business and stock price.

We are not currently required to comply with the rules of the SEC implementing Section 404 of the Sarbanes-Oxley Act and are, therefore, not required to make a formal assessment of the effectiveness of our

 

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internal control over financial reporting for that purpose. Upon becoming a public company, we will be required to comply with the SEC’s rules implementing Sections 302 and 404 of the Sarbanes-Oxley Act, which will require management to certify financial and other information in our quarterly and annual reports and provide an annual management report on the effectiveness of controls over financial reporting. Although we will be required to disclose changes made in our internal controls and procedures on a quarterly basis, we will not be required to make our first annual assessment of our internal control over financial reporting pursuant to Section 404 until the year following our first annual report required to be filed with the SEC. As an emerging growth company, our independent registered public accounting firm will not be required to formally attest to the effectiveness of our internal control over financial reporting pursuant to Section 404 until the later of (i) the year following our first annual report required to be filed with the SEC or (ii) the date we are no longer an emerging growth company. At such time, our independent registered public accounting firm may issue a report that is adverse in the event it is not satisfied with the level at which our controls are documented, designed or operating.

As a private company, we do not currently have any internal audit function. To comply with the requirements of being a public company, we have undertaken various actions, and will need to take additional actions, such as implementing numerous internal controls and procedures and hiring additional accounting or internal audit staff or consultants. Testing and maintaining internal control can divert our management’s attention from other matters that are important to the operation of our business. Additionally, when evaluating our internal control over financial reporting, we may identify material weaknesses that we may not be able to remediate in time to meet the applicable deadline imposed upon us for compliance with the requirements of Section 404. If we identify any material weaknesses in our internal control over financial reporting or are unable to comply with the requirements of Section 404 in a timely manner or assert that our internal control over financial reporting is effective, or if our independent registered public accounting firm is unable to express an opinion as to the effectiveness of our internal control over financial reporting once we are no longer an emerging growth company, investors may lose confidence in the accuracy and completeness of our financial reports and the market price of our common stock could be negatively affected. We could also become subject to investigations by the SEC, the stock exchange on which our securities are listed or other regulatory authorities, which could require additional financial and management resources. In addition, if we fail to remedy any material weakness, our financial statements could be inaccurate and we could face restricted access to capital markets.

We depend on the ability of our subsidiaries to transfer funds to us to meet our obligations, and our insurance company subsidiaries ability to pay dividends to us is restricted by law.

We are a holding company that transacts a majority of our business through operating subsidiaries. Our ability to meet our operating and financing cash needs depends on the surplus and earnings of our subsidiaries, and upon the ability of our insurance subsidiaries to pay dividends to us.

Payments of dividends by our insurance company subsidiary are restricted by state insurance laws, including laws establishing minimum solvency and liquidity thresholds. The limitations are based on income and surplus determined in accordance with statutory accounting principles, not GAAP. The jurisdictions in which our current insurance company subsidiary is domiciled impose certain restrictions on the ability of our insurance company subsidiary to pay dividends to its parent. These restrictions are based, in part, on the prior year’s statutory income and surplus. In general, dividends up to specified levels are considered ordinary and may be paid by giving prior notice to regulators. Dividends in larger amounts, or extraordinary dividends, are subject to a thirty-day prior notice period unless the insurance commissioner of the relevant state of domicile approves the dividend during that prior notice period. Under the insurance laws of Illinois and Texas, an extraordinary dividend or distribution is defined as a dividend or distribution that, together with other dividends and distributions made within the preceding 12 months, exceeds the greater of (1) 10% of the insurer’s surplus as regards policyholders as of the preceding December 31 and (2) net income for the 12-month period ending the preceding December 31. In addition, dividends may be paid only from earned surplus of the insurance company.

 

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In addition, our insurance subsidiary could be subject to contractual restrictions in the future, including those imposed by indebtedness we may incur in the future. Our insurance subsidiary may also face competitive pressures in the future to maintain insurance financial stability or strength ratings. These restrictions and other regulatory requirements would affect the ability of our insurance subsidiary to make dividend payments and we may not receive dividends in the amounts necessary to meet our obligations.

We do not currently expect to pay any cash dividends.

We do not currently expect to pay any cash dividends on our common stock for the foreseeable future. Instead, we intend to retain future earnings, if any, for the future operation and expansion of our business. Any determination to pay dividends in the future will be at the discretion of our board of directors and will depend on our results of operations (including our ability to generate cash flow in excess of expenses and our expected or actual net income), liquidity, cash requirements, financial condition, retained earnings and collateral and capital requirements, general business conditions, contractual restrictions, legal, tax and regulatory limitations, the effect of a dividend or dividends upon our financial strength ratings, and other factors that our board of directors deems relevant. See “Dividend Policy.”

Because we are a holding company and all of our business is conducted through our subsidiaries, dividends, distributions and other payments from, and cash generated by, our subsidiaries will be our principal sources of cash to fund operations and pay dividends. Accordingly, our ability to pay dividends to our stockholders is dependent on the earnings and distributions of funds from our subsidiaries. Our ability to pay dividends may also be restricted by the terms of any future credit agreement or any of our future debt or preferred equity securities or our subsidiaries. Accordingly, if you purchase shares of our common stock in this transaction, realization of a gain on your investment will depend on the appreciation of the price of shares of our common stock, which may never occur. Investors seeking cash dividends in the foreseeable future should not purchase our common stock.

The requirements of being a public company, including compliance with the reporting requirements of the Exchange Act, the requirements of the Sarbanes-Oxley Act and the Dodd-Frank Act and the listing standards of NYSE, may strain our resources, increase our costs, and divert management’s attention, and we may be unable to comply with these requirements in a timely or cost-effective manner. In addition, key members of our management team have limited experience managing a public company.

As a public company, we will be subject to the reporting requirements of the Exchange Act, the requirements of the Sarbanes-Oxley Act, the Dodd-Frank Act and the listing standards of the NYSE. These requirements will place a strain on our management, systems and resources and we will incur significant legal, accounting, insurance and other expenses that we have not incurred as a private company. The Exchange Act will require us to file annual, quarterly and current reports with respect to our business and financial condition within specified time periods and to prepare a proxy statement with respect to our annual meeting of stockholders. The Sarbanes-Oxley Act will require that we maintain effective disclosure controls and procedures, and internal controls over financial reporting. The NYSE will require that we comply with various corporate governance requirements. To maintain and improve the effectiveness of our disclosure controls and procedures and internal controls over financial reporting, and comply with the Exchange Act and NYSE requirements, significant resources and management oversight will be required. This may divert management’s attention from other business concerns and lead to significant costs associated with compliance, which could have a material adverse effect on us and the price of our common stock.

We expect these reporting and corporate governance rules and regulations to increase our legal and financial compliance costs and to make some activities more time-consuming and costly, although we are currently unable to estimate these costs with certainty. These laws and regulations could also make it more difficult or costly for us to obtain certain types of insurance, including director and officer liability insurance, and we may be forced to accept reduced policy limits and coverage or incur substantially higher costs to obtain the same or similar coverage. These laws and regulations could also make it more difficult for us to attract and retain qualified

 

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persons to serve on our board of directors or its committees or as our executive officers. Advocacy efforts by stockholders and third parties may also prompt even more changes in governance and reporting requirements. We cannot predict or estimate the amount of additional costs we may incur or the timing of these costs. Furthermore, if we are unable to satisfy our obligations as a public company, we could be subject to delisting of our common stock, fines, sanctions and other regulatory action, and potentially civil litigation.

Many members of our management team have limited experience managing a publicly traded company, interacting with public company investors and complying with the increasingly complex laws pertaining to public companies. Our management team may not successfully or efficiently manage our transition to being a public company subject to significant regulatory oversight and reporting obligations under the federal securities laws and the continuous scrutiny of securities analysts and investors. These new obligations and constituents will require significant attention from our senior management and could divert their attention away from the day-to-day management of our business, which could adversely affect our business, results of operations and financial condition.

Sales of a substantial number of shares of our common stock by our existing stockholders in the public market could cause our stock price to fall.

After the Business Combination, sales of a substantial number of shares of our common stock in the public market or the perception that these sales might occur could significantly reduce the market price of our common stock and impair our ability to raise adequate capital through the sale of additional equity securities.

As discussed elsewhere in this proxy statement/prospectus, pursuant to the Lock-Up Agreements and the Sponsor Agreement, after the consummation of the Business Combination and subject to certain exceptions, the Sponsor, Company Directors and Officers, and the Major Company Equityholders will be contractually restricted from selling or transferring any of their shares of Hippo Holdings common stock (other than shares purchased in the public market or in the PIPE Investment) and the shares of Hippo Holdings common stock issuable to the Company Directors and Officers upon settlement or exercise of Hippo Holdings options or other equity awards outstanding as of immediately following the Closing (the “Lock-up Shares”). See “BCA Proposal — Related Agreements — Lock-up Agreements” and “BCA Proposal — Related Agreements — Sponsor Agreement” for further details. Hippo Holdings may permit the Sponsor, the Company Directors and Officers and/or the Major Company Equityholders to sell shares prior to the expiration of the lock-up agreements at any time in its sole discretion. Sales of these shares, or perceptions that they will be sold, could cause the trading price of our common stock to decline. After the lock-up agreements expire, the Lock-up Shares will be eligible for sale in the public market. If these additional shares of Hippo Holdings common stock are sold, or if it is perceived that they will be sold, in the public market, the trading price of Hippo Holdings common stock could decline.

Risks Related to the Business Combination and RTPZ

Unless the context otherwise requires, all references in this subsection to the “Company,” “we,” “us” or “our” refer to RTPZ prior to the consummation of the Business Combination.

The Sponsor and our directors and officers have agreed to vote their Founder Shares and any public shares they may hold in favor of the Business Combination, regardless of how RTPZ’s public shareholders vote.

Unlike some other blank check companies in which the initial shareholders agree to vote their shares in accordance with the majority of the votes cast by the public shareholders in connection with an initial business combination, the Sponsor and our directors and officers have agreed, pursuant to the terms of the Sponsor Support Agreement, to vote their Founder Shares and any public shares held by them in favor of the Business Combination. As a result, in addition to the Founder Shares, we would need 8,625,001, or 37.5% (assuming all issued and outstanding shares are voted), or 1,437,501, or 6.25% (assuming only the minimum number of shares representing a quorum are voted), of the 23,000,000 public shares sold in our initial public offering to be voted in

 

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favor of the Business Combination in order to have such Business Combination (including all the Condition Precedent Proposals) approved. We expect that the Sponsor and our directors and officers will own at least 20% of our issued and outstanding ordinary shares at the time of any such shareholder vote. Accordingly, if we seek shareholder approval of our initial Business Combination, it is more likely that the necessary shareholder approval will be received than would be the case if such persons agreed to vote their Founder Shares in accordance with the majority of the votes cast by our public shareholders.

Neither the RTPZ board of directors nor any committee thereof obtained a third party valuation in determining whether or not to pursue the Business Combination.

Neither the RTPZ board of directors nor any committee thereof is required to obtain an opinion that the price that we are paying for Hippo is fair to us from a financial point of view. Neither the RTPZ board of directors nor any committee thereof obtained a third party valuation in connection with the Business Combination. In analyzing the Business Combination, among other things, the RTPZ board of directors and management, together with its legal, financial and other advisors, conducted due diligence on Hippo. The RTPZ board of directors reviewed comparisons of selected financial data of Hippo with its peers in the industry and the financial terms set forth in the Merger Agreement, and concluded that the Business Combination was in the best interest of RTPZ’s shareholders. Accordingly, investors will be relying solely on the judgment of the RTPZ board of directors and management in valuing Hippo, and the RTPZ board of directors and management may not have properly valued such businesses. The lack of a third party valuation may also lead an increased number of shareholders to vote against the Business Combination or demand redemption of their shares, which could potentially impact our ability to consummate the Business Combination.

Our ability to seek an alternative business combination is limited even if we determined the Business Combination is no longer in our shareholders’ best interest.

If we do not obtain shareholder approval at the extraordinary general meeting, Hippo can continually obligate us to hold additional extraordinary general meetings to vote on the Condition Precedent Proposals until the earlier of such shareholder approval being obtained and the Agreement End Date. This could limit our ability to seek an alternative business combination that our shareholders may prefer after such initial vote.

Since the Sponsor and RTPZ’s directors and executive officers have interests that are different, or in addition to (and which may conflict with), the interests of our shareholders, a conflict of interest may have existed in determining whether the Business Combination with Hippo is appropriate as our initial business combination. Such interests include that Sponsor will lose its entire investment in us if our business combination is not completed.

When you consider the recommendation of RTPZ’s board of directors in favor of approval of the proposals in this proxy statement/prospectus, you should keep in mind that the Sponsor and RTPZ’s directors and officers have interests in such proposal that are different from, or in addition to, those of RTPZ shareholders and warrant holders generally. The existence of financial and personal interests of one or more of RTPZ’s directors may result in a conflict of interest on the part of such director(s) between what he, she or they may believe is in the best interests of RTPZ and its shareholders and what he, she or they may believe is best for himself, herself or themselves in determining to recommend that shareholders vote for the proposals. In addition, RTPZ’s officers have interests in the Business Combination that may conflict with your interests as a shareholder. See the section entitled “BCA ProposalInterests of RTPZ’s Directors and Officers in the Business Combination” for a further discussion of these considerations. These interests include, among other things, the interests listed below:

 

  

Prior to RTPZ’s initial public offering, the Sponsor purchased the Founder Shares, and, in October 2020, the Sponsor transferred 30,000 Founder Shares to each of Byron Auguste, Julie Hanna, Lee Linden, and Linda Rottenberg, RTPZ’s independent directors. If RTPZ does not consummate a business combination by the Liquidation Date, it would cease all operations except for the purpose of

 

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winding up, redeeming all of the outstanding public shares for cash and, subject to the approval of its remaining shareholders and its board of directors, dissolving and liquidating, subject in each case to its obligations under the Cayman Islands Companies Act to provide for claims of creditors and the requirements of other applicable law. In such event, the 5,750,000 Founder Shares owned by the Sponsor and RTPZ’s independent directors would be worthless because following the redemption of the public shares, RTPZ would likely have few, if any, net assets and because the Sponsor and RTPZ’s directors and officers have agreed to waive their respective rights to liquidating distributions from the trust account in respect of the 5,750,000 Founder Shares held by it if RTPZ fails to complete a business combination within the required period. Additionally, in such event, the 4,400,000 private placement warrants purchased by the Sponsor simultaneously with the consummation of RTPZ’s IPO for an aggregate purchase price of $6,600,000, will also expire worthless. Certain of RTPZ’s directors, Reid Hoffman and Mark Pincus, also have an economic interest in such private placement warrants and in the 5,750,000 Founder Shares owned by the Sponsor. The 5,750,000 shares of Hippo Holdings common stock into which the 5,750,000 Founder Shares held by the Sponsor and RTPZ’s independent directors will automatically convert in connection with the Mergers (as a direct result of the Domestication), if unrestricted, fully vested and freely tradable, would have had an aggregate market value of $57.098 million based upon the closing price of $9.93 per share on the NYSE on June 30, 2021, the most recent practicable date prior to the date of this proxy statement/ prospectus. However, given that such shares of Hippo Holdings common stock will be subject to certain restrictions, including those described above, RTPZ believes such shares have less value. The 120,000 shares of Hippo Holdings common stock into which the 120,000 Founder Shares held by RTPZ’s independent directors will automatically convert in connection with the Mergers (as a direct result of the Domestication), if unrestricted and freely tradable, would have had an aggregate market value of $1.192 million based upon the closing price of $9.93 per share on the NYSE on June 30, 2021, the most recent practicable date prior to the date of this proxy statement/ prospectus. The 4,400,000 Hippo Holdings warrants into which the 4,400,000 private placement warrants held by the Sponsor will automatically convert in connection with the Mergers (as a direct result of the Domestication), if unrestricted and freely tradable, would have had an aggregate market value of $7.964 million based upon the closing price of $1.81 per warrant on the NYSE on June 30, 2021, the most recent practicable date prior to the date of this proxy statement/prospectus.

 

  

Pursuant to the Sponsor Agreement, the Sponsor has the right to select, subject to Hippo Holdings’ reasonable consent, a director of Hippo Holdings for a two-year term. As such, in the future, that director may receive fees for serving as a director which may consist of cash or stock-based awards, and any other remuneration that Hippo Holdings’ board of directors determines to pay its non-employee directors.

 

  

The Sponsor (including its representatives and affiliates) and RTPZ’s directors and officers, are, or may in the future become, affiliated with entities that are engaged in a similar business to RTPZ. For example, certain officers and directors of RTPZ, who may be considered an affiliate of the Sponsor, have also recently incorporated Reinvent Technology Partners (“RTP”) and Reinvent Technology Partners Y (“RTPY”), each of which is a blank check company incorporated as a Cayman Islands exempted company for the purpose of effecting their respective initial business combinations. Mr. Hoffman and Mr. Pincus are Co-Lead Directors, Mr. Thompson is Chief Executive Officer, Chief Financial Officer and Director and David Cohen is Secretary of RTP and RTPY. The Sponsor and RTPZ’s directors and officers are not prohibited from sponsoring, or otherwise becoming involved with, any other blank check companies prior to RTPZ completing its initial business combination. Moreover, certain of RTPZ’s directors and officers have time and attention requirements for investment funds of which affiliates of the Sponsor are the investment managers. RTPZ’s directors and officers also may become aware of business opportunities which may be appropriate for presentation to RTPZ, and the other entities to which they owe certain fiduciary or contractual duties, including RTP and RTPY. Accordingly, they may have had conflicts of interest in determining to which entity a particular business opportunity should be presented. These conflicts may not be resolved in RTPZ’s

 

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favor and such potential business opportunities may be presented to other entities prior to their presentation to RTPZ, subject to applicable fiduciary duties under Cayman Islands Companies Act. RTPZ’s Cayman Constitutional Documents provide that RTPZ renounces its interest in any corporate opportunity offered to any director or officer of RTPZ.

 

  

RTPZ’s existing directors and officers will be eligible for continued indemnification and continued coverage under RTPZ’s directors’ and officers’ liability insurance after the Mergers and pursuant to the Merger Agreement.

 

  

Reinvent Capital Fund, an affiliate of RTPZ, subscribed for $10 million of the PIPE Investment, for which it will receive 1,000,000 shares of Hippo Holdings common stock. Each of Mr. Hoffman, Mr. Pincus, Mr. Thompson and Mr. Cohen has an economic interest in Reinvent Capital Fund. The 1,000,000 shares of Hippo Holdings common stock which Reinvent Capital Fund has subscribed for in the PIPE Investment, if unrestricted and freely tradable, would have had an aggregate market value of $9.93 million based upon the closing price of $9.93 per share on the NYSE on June 30, 2021, the most recent practicable date prior to the date of this proxy statement/prospectus. See “Certain Relationships and Related Person Transactions  RTPZ  Subscription Agreements”.

 

  

In the event that RTPZ fails to consummate a business combination within the prescribed time frame (pursuant to the Cayman Constitutional Documents), or upon the exercise of a redemption right in connection with the Business Combination, RTPZ will be required to provide for payment of claims of creditors that were not waived that may be brought against RTPZ within the ten years following such redemption. In order to protect the amounts held in RTPZ’s trust account, the Sponsor has agreed that it will be liable to RTPZ if and to the extent any claims by a third party (other than RTPZ’s independent auditors) for services rendered or products sold to RTPZ, or a prospective target business with which RTPZ has discussed entering into a transaction agreement, reduce the amount of funds in the trust account to below (i) $10.00 per public share or (ii) such lesser amount per public share held in the trust account as of the date of the liquidation of the trust account, due to reductions in value of the trust assets, in each case, net of the amount of interest which may be withdrawn to pay taxes, except as to any claims by a third party who executed a waiver of any and all rights to seek access to the trust account and except as to any claims under the indemnity of the underwriters of RTPZ’s initial public offering against certain liabilities, including liabilities under the Securities Act.

 

  

RTPZ’s officers and directors, and their affiliates are entitled to reimbursement of out-of-pocket expenses incurred by them in connection with certain activities on RTPZ’s behalf, such as identifying and investigating possible business targets and business combinations. However, if RTPZ fails to consummate a business combination by the Liquidation Date, they will not have any claim against the trust account for reimbursement. RTPZ’s officers and directors, and their affiliates, expect to incur (or guaranty) approximately $8.6 million of transaction expenses (excluding the deferred underwriting commissions being held in the trust account). Accordingly, RTPZ may not be able to reimburse these expenses if the Business Combination or another business combination, is not completed by such date.

 

  

Pursuant to the Registration Rights Agreement, the Sponsor, RTPZ’s independent directors and Reinvent Capital Fund will have customary registration rights, including demand and piggy-back rights, subject to cooperation and cut-back provisions with respect to the shares of Hippo Holdings common stock and warrants held by such parties following the consummation of the Business Combination.

The existence of financial and personal interests of one or more of RTPZ’s directors may result in a conflict of interest on the part of such director(s) between what he, she or they may believe is in the best interests of RTPZ and its shareholders and what he, she or they may believe is best for himself, herself or themselves in determining to recommend that shareholders vote for the proposals. In addition, RTPZ’s officers have interests in the Business Combination that may conflict with shareholder interests. See the section entitled BCA Proposal — Interests of RTPZ’s Directors and Officers in the Business Combination” for a further discussion of these considerations.

 

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The personal and financial interests of the Sponsor as well as RTPZ’s directors and officers may have influenced their motivation in identifying and selecting Hippo as a business combination target, completing an initial business combination with Hippo and influencing the operation of the business following the initial business combination. In considering the recommendations of RTPZ’s board of directors to vote for the proposals, its shareholders should consider these interests.

The exercise of RTPZ’s directors’ and executive officers’ discretion in agreeing to changes or waivers in the terms of the Business Combination may result in a conflict of interest when determining whether such changes to the terms of the Business Combination or waivers of conditions are appropriate and in RTPZ’s shareholders’ best interest.

In the period leading up to the Closing, events may occur that, pursuant to the Merger Agreement, would require RTPZ to agree to amend the Merger Agreement, to consent to certain actions taken by Hippo or to waive rights that RTPZ is entitled to under the Merger Agreement. Such events could arise because of changes in the course of Hippo’s business or a request by Hippo to undertake actions that would otherwise be prohibited by the terms of the Merger Agreement. In any of such circumstances, it would be at RTPZ’s discretion to grant its consent or waive those rights. The existence of financial and personal interests of one or more of the officers or directors described in the preceding risk factors (and described elsewhere in this proxy statement/prospectus) may result in a conflict of interest on the part of such officer(s) or director(s) between what he, she or they may believe is best for RTPZ and its shareholders and what he, she or they may believe is best for himself, herself or themselves in determining whether or not to take the requested action.

We and Hippo will incur significant transaction and transition costs in connection with the Business Combination.

We and Hippo have both incurred and expect to incur significant, non-recurring costs in connection with consummating the Business Combination and operating as a public company following the consummation of the Business Combination. We and Hippo may also incur additional costs to retain key employees. Certain transaction expenses incurred in connection with the Merger Agreement (including the Business Combination), including all legal, accounting, consulting, investment banking and other fees, expenses and costs, will be paid by Hippo Holdings following the closing of the Business Combination.

The announcement of the proposed Business Combination could disrupt Hippo’s relationships with its customers, suppliers, business partners and others, as well as its operating results and business generally.

Whether or not the Business Combination and related transactions are ultimately consummated, as a result of uncertainty related to the proposed transactions, risks relating to the impact of the announcement of the Business Combination on Hippo’s business include the following:

 

  

its employees may experience uncertainty about their future roles, which might adversely affect Hippo’s ability to retain and hire key personnel and other employees;

 

  

customers, suppliers, business partners and other parties with which Hippo maintains business relationships may experience uncertainty about its future and seek alternative relationships with third parties, seek to alter their business relationships with Hippo or fail to extend an existing relationship with Hippo; and

 

  

Hippo has expended and will continue to expend significant costs, fees and expenses for professional services and transaction costs in connection with the proposed Business Combination.

If any of the aforementioned risks were to materialize, they could lead to significant costs which may impact Hippo’s results of operations and cash available to fund its business.

 

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Subsequent to consummation of the Business Combination, we may be exposed to unknown or contingent liabilities and may be required to subsequently take write-downs or write-offs, restructuring and impairment or other charges that could have a significant negative effect on our financial condition, results of operations and our share price, which could cause you to lose some or all of your investment.

We cannot assure you that the due diligence conducted in relation to Hippo has identified all material issues or risks associated with Hippo, its business or the industry in which it competes. Furthermore, we cannot assure you that factors outside of Hippo’s and our control will not later arise. As a result of these factors, we may be exposed to liabilities and incur additional costs and expenses and we may be forced to later write-down or write-off assets, restructure our operations, or incur impairment or other charges that could result in our reporting losses. Even if our due diligence has identified certain risks, unexpected risks may arise and previously known risks may materialize in a manner not consistent with our preliminary risk analysis. If any of these risks materialize, this could have a material adverse effect on our financial condition and results of operations and could contribute to negative market perceptions about our securities or Hippo Holdings. Additionally, we have no indemnification rights against the Hippo stockholders under the Merger Agreement and all of the purchase price consideration will be delivered at the Closing.

Accordingly, any shareholders or warrant holders of RTPZ who choose to remain Hippo Holdings stockholders or warrant holders following the Business Combination could suffer a reduction in the value of their shares, warrants and units. Such shareholders or warrant holders are unlikely to have a remedy for such reduction in value unless they are able to successfully claim that the reduction was due to the breach by our directors or officers of a duty of care or other fiduciary duty owed to them, or if they are able to successfully bring a private claim under securities laws that the registration statement or proxy statement/prospectus relating to the Business Combination contained an actionable material misstatement or material omission.

The historical financial results of Hippo and unaudited pro forma financial information included elsewhere in this proxy statement/prospectus may not be indicative of what Hippo Holdings’ actual financial position or results of operations would have been.

The historical financial results of Hippo included in this proxy statement/prospectus do not reflect the financial condition, results of operations or cash flows that Hippo would have achieved as a standalone company during the periods presented or those Hippo Holdings will achieve in the future. This is primarily the result of the following factors: (i) Hippo Holdings will incur additional ongoing costs as a result of the Business Combination, including costs related to public company reporting, investor relations and compliance with the Sarbanes-Oxley Act; and (ii) Hippo Holdings’ capital structure will be different from that reflected in Hippo’s historical financial statements. Hippo Holdings’ financial condition and future results of operations could be materially different from amounts reflected in its historical financial statements included elsewhere in this proxy statement/prospectus, so it may be difficult for investors to compare Hippo Holdings’ future results to historical results or to evaluate its relative performance or trends in its business.

Similarly, the unaudited pro forma financial information in this proxy statement/prospectus is presented for illustrative purposes only and has been prepared based on a number of assumptions including, but not limited to, RTPZ being treated as the “acquired” company for financial reporting purposes in the Business Combination, the total debt obligations and the cash and cash equivalents of Hippo at Closing and the number of RTPZ Class A ordinary shares that are redeemed in connection with the Business Combination. Accordingly, such pro forma financial information may not be indicative of Hippo Holdings’ future operating or financial performance and Hippo Holdings’ actual financial condition and results of operations may vary materially from Hippo Holdings’ pro forma results of operations and balance sheet contained elsewhere in this proxy statement/prospectus, including as a result of such assumptions not being accurate. See “Unaudited Pro Forma Condensed Combined Financial Information.”

 

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The Hippo projected financial information considered by RTPZ may not be realized, which may adversely affect the market price of Hippo Holdings common stock following the completion of the Business Combination.

In performing its financial analyses, RTPZ relied on, among other things, certain information, including the forecasts and financial projections described in the section titled “BCA Proposal — Projected Financial Information”. The Hippo forecasts and financial projections were prepared by, or at the direction of, the management of Hippo. None of these projections or forecasts were prepared with a view towards public disclosure or compliance with the published guidelines of the SEC, U.S. GAAP or the guidelines established by the American Institute of Certified Public Accountants for preparation and presentation of financial forecasts. These projections and forecasts are inherently based on various estimates and assumptions that are subject to the judgment of those preparing them. These projections and forecasts are also subject to significant economic, competitive, industry and other uncertainties and contingencies, all of which are difficult or impossible to predict and many of which are beyond the control of Hippo. There can be no assurance that Hippo’s financial condition, including its cash flows or results of operations will be consistent with those set forth in such projections and forecasts, which could have an adverse impact on the market price of Hippo Holdings common stock or the financial position of Hippo following the Business Combination.

We have a specified maximum redemption threshold. This redemption threshold may make it more difficult for us to complete the Business Combination as contemplated.

The Merger Agreement provides that Hippo’s obligation to consummate the Business Combination is conditioned on, among other things, the satisfaction of the Minimum Cash Condition.

The Minimum Cash Condition is for the sole benefit of Hippo. If such condition is not met, and such condition is not or cannot be waived under the terms of the Merger Agreement, then the Merger Agreement could terminate and the proposed Business Combination may not be consummated. There can be no assurance that Hippo could and would waive the Minimum Cash Condition. In addition, pursuant to the Cayman Constitutional Documents, in no event will RTPZ redeem public shares in an amount that would cause Hippo Holdings’ net tangible assets (as determined in accordance with Rule 3a51-1(g)(1) of the Exchange Act) to be less than $5,000,001.

If such conditions are waived and the Business Combination is consummated with less than $450,000,000 in the aggregate from the trust account and the PIPE Investment, the cash held by Hippo Holdings and its subsidiaries (including Hippo) in the aggregate, after the Closing may not be sufficient to allow us to operate and meet our financial obligations as they become due. The additional exercise of redemption rights with respect to a large number of our public shareholders may make us unable to take such actions as may be desirable in order to optimize the capital structure of Hippo Holdings after consummation of the Business Combination and we may not be able to raise additional financing necessary to fund our expenses and liabilities after the Closing. Any such event in the future may negatively impact the analysis regarding our ability to continue as a going concern at such time.

The Sponsor may elect to purchase shares or warrants from public shareholders prior to the consummation of the Business Combination, which may influence the vote on the Business Combination and reduce the public “float” of our securities.

The Sponsor, Hippo or their directors, officers, advisors or respective affiliates may purchase public shares or warrants from institutional and other investors who vote, or indicate an intention to vote, against any of the Condition Precedent Proposals, or execute agreements to purchase such shares or warrants from such investors in the future, or they may enter into transactions with such investors and others to provide them with incentives to acquire public shares or warrants or vote their public shares in favor of the Condition Precedent Proposals, as discussed in “How do the Sponsor and the RTPZ directors and officers intend to vote their shares?”. Entering

 

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into any such arrangements may have a depressive effect on the ordinary shares (e.g., by giving an investor or holder the ability to effectively purchase shares or warrants at a price lower than market, such investor or holder may therefore become more likely to sell the shares he or she owns, either at or prior to the Business Combination). If such transactions are effected, the consequence could be to cause the Business Combination to be consummated in circumstances where such consummation could not otherwise occur. Purchases of shares or warrants by the persons described above would allow them to exert more influence over the approval of the proposals to be presented at the extraordinary general meeting and would likely increase the chances that such proposals would be approved. In addition, if such purchases are made, the public “float” of our securities and the number of beneficial holders of our securities may be reduced, possibly making it difficult to maintain or obtain the quotation, listing or trading of our securities on a national securities exchange.

In connection with the Closing, we are not registering the shares of Hippo Holdings common stock issuable upon exercise of the warrants under the Securities Act or any state securities laws at this time, and such registration may not be in place when an investor desires to exercise warrants, thus precluding such investor from being able to exercise its warrants and resell the underlying warrant shares.

We are not registering the shares of Hippo Holdings common stock issuable upon exercise of the warrants under the Securities Act or any state securities laws at this time. However, under the terms of the Warrant Agreement, we have agreed that, as soon as practicable, but in no event later than 15 business days after the closing of our initial business combination, we will use our commercially reasonable efforts to file with the SEC a registration statement covering the issuance of such shares, and we will use our commercially reasonable efforts to cause the same to become effective within 60 business days after the closing of our initial business combination and to maintain the effectiveness of such registration statement and a current prospectus relating to those shares of Hippo Holdings common stock until the warrants expire or are redeemed. We cannot assure you that we will be able to do so if, for example, any facts or events arise which represent a fundamental change in the information set forth in the registration statement or prospectus, the financial statements contained or incorporated by reference therein are not current, complete or correct or the SEC issues a stop order. If the shares issuable upon exercise of the warrants are not registered under the Securities Act in accordance with the above requirements, we will be required to permit holders to exercise their warrants on a cashless basis, in which case, the shares of Hippo Holdings common stock that you will receive upon cashless exercise will be based on a formula subject to a maximum amount of shares equal to 0.361 shares of Hippo Holdings common stock per warrant (subject to adjustment). However, no warrant will be exercisable for cash or on a cashless basis, and we will not be obligated to issue any shares to holders seeking to exercise their warrants, unless the issuance of the shares upon such exercise is registered or qualified under the securities laws of the state of the exercising holder or an exemption from registration is available. Notwithstanding the above, if Hippo Holdings’ common stock is at the time of any exercise of a warrant not listed on a national securities exchange such that they satisfy the definition of a “covered security” under Section 1 8(b)(1) of the Securities Act, we may, at our option, require holders of public warrants who exercise their warrants to do so on a “cashless basis” in accordance with Section 3(a)(9) of the Securities Act and, in the event we so elect, we will not be required to file or maintain in effect a registration statement, but we will use our commercially reasonable efforts to register or qualify the shares under applicable blue sky laws to the extent an exemption is not available. In no event will we be required to net cash settle any warrant, or issue securities or other compensation in exchange for the warrants in the event that we are unable to register or qualify the shares underlying the warrants under applicable state securities laws and no exemption is available. If the issuance of the shares upon exercise of the warrants is not so registered or qualified or exempt from registration or qualification, the holder of such warrant shall not be entitled to exercise such warrant and such warrant may have no value and expire worthless. In such event, holders who acquired their warrants as part of a purchase of units will have paid the full unit purchase price solely for the shares of Hippo Holdings common stock included in the units. There may be a circumstance where an exemption from registration exists for holders of our private placement warrants to exercise their warrants while a corresponding exemption does not exist for holders of the public warrants. In such an instance, the Sponsor and its permitted transferees (which may include our directors and executive officers) would be able to exercise their warrants and sell the ordinary shares underlying their warrants while holders of our public warrants would not be able to

 

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exercise their warrants and sell the underlying ordinary shares. If and when the warrants become redeemable by us, we may exercise our redemption right even if we are unable to register or qualify the underlying shares of Hippo Holdings common stock for sale under all applicable state securities laws. As a result, we may redeem the warrants as set forth above even if the holders are otherwise unable to exercise their warrants.

If third parties bring claims against us, the proceeds held in the trust account could be reduced and the per share redemption amount received by shareholders may be less than $10.00 per share (which was the offering price per unit in our initial public offering).

Our placing of funds in the trust account may not protect those funds from third-party claims against us. Although we will seek to have all vendors, service providers (other than our independent auditors), prospective target businesses and other entities with which we do business execute agreements with us waiving any right, title, interest or claim of any kind in or to any monies held in the trust account, there is no guarantee that they will execute such agreements or even if they execute such agreements that they would be prevented from bringing claims against the trust account, including, but not limited to, fraudulent inducement, breach of fiduciary responsibility or other similar claims, as well as claims challenging the enforceability of the waiver, in each case in order to gain advantage with respect to a claim against our assets, including the funds held in the trust account. If any third party refuses to execute an agreement waiving such claims to the monies held in the trust account, our management will perform an analysis of the alternatives available to it and will enter into an agreement with a third party that has not executed a waiver only if management believes that such third party’s engagement would be significantly more beneficial to us than any alternative.

Examples of possible instances where we may engage a third party that refuses to execute a waiver include the engagement of a third party consultant whose particular expertise or skills are believed by management to be significantly superior to those of other consultants that would agree to execute a waiver or in cases where management is unable to find a service provider willing to execute a waiver. In addition, there is no guarantee that such entities will agree to waive any claims they may have in the future as a result of, or arising out of, any negotiations, contracts or agreements with us and will not seek recourse against the trust account for any reason. Upon redemption of our public shares, if we have not completed our business combination within the required time period, or upon the exercise of a redemption right in connection with our business combination, we will be required to provide for payment of claims of creditors that were not waived that may be brought against us within the 10 years following redemption. Accordingly, the per share redemption amount received by public shareholders could be less than the $10.00 per public share initially held in the trust account, due to claims of such creditors.

The Sponsor has agreed that it will be liable to us if and to the extent any claims by a third party (other than our independent auditors) for services rendered or products sold to us, or a prospective target business with which we have discussed entering into a transaction agreement, reduce the amount of funds in the trust account to below (1) $10.00 per public share or (2) such lesser amount per public share held in the trust account as of the date of the liquidation of the trust account due to reductions in the value of the trust assets, in each case net of the interest which may be withdrawn to fund our working capital requirements, subject to an annual limit of $165,000 and/or to pay taxes, except as to any claims by a third party who executed a waiver of any and all rights to seek access to the trust account and except as to any claims under our indemnity of the underwriters of this offering against certain liabilities, including liabilities under the Securities Act. Moreover, in the event that an executed waiver is deemed to be unenforceable against a third party, the Sponsor will not be responsible to the extent of any liability for such third party claims. We have not independently verified whether the Sponsor has sufficient funds to satisfy its indemnity obligations and believe that the Sponsor’s only assets are securities of our company. The Sponsor may not have sufficient funds available to satisfy those obligations. We have not asked the Sponsor to reserve for such obligations, and therefore, no funds are currently set aside to cover any such obligations. As a result, if any such claims were successfully made against the trust account, the funds available for our business combination and redemptions could be reduced to less than $10.00 per public share. In such event, we may not be able to complete our business combination, and you would receive such lesser amount per

 

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share in connection with any redemption of your public shares. None of our directors or officers will indemnify us for claims by third parties including, without limitation, claims by vendors and prospective target businesses.

If, after we distribute the proceeds in the trust account to our public shareholders, we file a winding-up or bankruptcy petition or an involuntary winding-up or bankruptcy petition is filed against us that is not dismissed, a bankruptcy court may seek to recover such proceeds, and we and our board of directors may be exposed to claims of punitive damages.

If, after we distribute the proceeds in the trust account to our public shareholders, we file a winding-up or bankruptcy petition or an involuntary winding-up or bankruptcy petition is filed against us that is not dismissed, any distributions received by shareholders could be viewed under applicable debtor/creditor and/or insolvency laws as a voidable preference. As a result, a liquidator could seek to recover all amounts received by our shareholders. In addition, our board of directors may be viewed as having breached its fiduciary duty to our creditors or having acted in bad faith, thereby exposing it and us to claims of punitive damages, by paying public shareholders from the trust account prior to addressing the claims of creditors. We cannot assure you that claims will not be brought against us for these reasons.

If, before distributing the proceeds in the trust account to our public shareholders, we file a winding-up or bankruptcy petition or an involuntary winding-up or bankruptcy petition is filed against us that is not dismissed, the claims of creditors in such proceeding may have priority over the claims of our shareholders and the per share amount that would otherwise be received by our shareholders in connection with our liquidation may be reduced.

If, before distributing the proceeds in the trust account to our public shareholders, we file a winding-up or bankruptcy petition or an involuntary winding-up or bankruptcy petition is filed against us that is not dismissed, the proceeds held in the trust account could be subject to applicable insolvency law, and may be included in our liquidation estate and subject to the claims of third parties with priority over the claims of our shareholders. To the extent any liquidation claims deplete the trust account, the per share amount that would otherwise be received by our shareholders in connection with our liquidation would be reduced.

Our shareholders may be held liable for claims by third parties against us to the extent of distributions received by them upon redemption of their shares.

If we are forced to enter into an insolvent liquidation, any distributions received by shareholders could be viewed as an unlawful payment if it was proved that immediately following the date on which the distribution was made, we were unable to pay our debts as they fall due in the ordinary course of business. As a result, a liquidator could seek to recover all amounts received by our shareholders. Furthermore, our directors may be viewed as having breached their fiduciary duties to us or our creditors or may have acted in bad faith, and thereby exposing themselves and our company to claims, by paying public shareholders from the trust account prior to addressing the claims of creditors. We cannot assure you that claims will not be brought against us for these reasons.

Past performance by any member or members of our management team, any of their respective affiliates, or Reinvent Capital Fund may not be indicative of future performance of an investment in Hippo or Hippo Holdings.

Past performance by any member or members of our management team or any of their respective affiliates, including RTP, or Reinvent Capital Fund, is not a guarantee of success with respect to the Business Combination. You should not rely on the historical record of any member or members of our management team, any of their respective affiliates, RTP or Reinvent Capital Fund or any of the foregoing’s related investment’s performance, as indicative of the future performance of an investment in Hippo or Hippo Holdings or the returns Hippo or Hippo Holdings will, or are likely to, generate going forward.

 

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The public stockholders will experience significant and immediate dilution as a consequence of the issuance of Hippo Holdings common stock as consideration in the Business Combination and the PIPE Investment and due to future issuances pursuant to the Incentive Award Plan. Having a minority share position may reduce the influence that our current stockholders have on the management of Hippo Holdings.

It is anticipated that, following the Business Combination, (1) existing stockholders of Hippo will own 86.8% of outstanding Hippo Holdings common stock, (2) the Hippo PIPE Investors will own 1.6% of outstanding Hippo Holdings common stock, (3) the Third Party PIPE Investors and Reinvent Capital Fund will own 7.1% of outstanding Hippo Holdings common stock, (4) existing public shareholders of RTPZ (Class A ordinary shares) will own 3.6% of outstanding Hippo Holdings common stock and (5) the Sponsor and the current independent directors of RTPZ, as holders of the RTPZ Class B ordinary shares, will collectively own 0.9% of outstanding Hippo Holdings common stock. These percentages assume (i) that no public shareholders of RTPZ exercise their redemption rights in connection with the Mergers, (ii) the vesting and exercise (on a net share basis) of all Hippo Holdings options for shares of Hippo Holdings common stock, (iii) that Hippo Holdings issues 55,000,000 shares of Hippo Holdings common stock to the PIPE Investors in connection with the PIPE Investment, and (iv) that, pursuant to the Merger Agreement, Hippo Holdings will redeem an aggregate of 10,000,000 shares of Hippo Holdings common stock from certain stockholders of Hippo immediately following the Business Combination. If the actual facts are different from these assumptions, the percentage ownership retained by the Company’s existing shareholders in the combined company will be different.

The Third Party PIPE Investors have agreed to purchase 44,100,000 shares of Hippo Holdings common stock, at $10.00 per share, for approximately $441 million of gross proceeds. Reinvent Capital Fund has agreed to purchase 1,000,000 shares of Hippo Holdings common stock, at $10.00 per share, for approximately $10 million of gross proceeds. The Hippo PIPE Investors have agreed to purchase 9,900,000 shares of Hippo Holdings common stock, at $10.00 per share, for approximately $99 million of gross proceeds. If the actual facts are different from these assumptions, the percentage ownership retained by RTPZ’s existing shareholders in the combined company will be different.

In addition, Hippo employees and consultants hold, and after Business Combination, are expected to be granted, equity awards under the Incentive Award Plan and purchase rights under the ESPP. You will experience additional dilution when those equity awards and purchase rights become vested and settled or exercisable, as applicable, for shares of Hippo Holdings common stock.

The issuance of additional common stock will significantly dilute the equity interests of existing holders of RTPZ securities and may adversely affect prevailing market prices for our public shares or public warrants.

After Closing, warrants will become exercisable for Hippo Holdings common stock, which would increase the number of shares eligible for future resale in the public market and result in dilution to our shareholders.

Outstanding warrants to purchase an aggregate of 9,000,000 shares of Hippo Holdings common stock will become exercisable in accordance with the terms of the Warrant Agreement governing those securities. Under the current terms of the Warrant Agreement, these warrants will become exercisable at any time commencing on the later of 30 days after the completion of the Business Combination and 12 months from the closing of our initial public offering. If the Warrant Amendment Proposal is approved, the Warrant Agreement will be amended such that these warrants will become exercisable at any time commencing on the date that is 30 days after the completion of the Business Combination. The exercise price of these warrants will be $11.50 per share. To the extent such warrants are exercised, additional shares of Hippo Holdings common stock will be issued, which will result in dilution to the holders of Hippo Holdings common stock and increase the number of shares eligible for resale in the public market. Sales of substantial numbers of such shares in the public market or the fact that such warrants may be exercised could adversely affect the market price of Hippo Holdings common stock. However, there is no guarantee that the public warrants will ever be in the money prior to their expiration, and as such, the public warrants may expire worthless.

 

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We may redeem your unexpired warrants prior to their exercise at a time that is disadvantageous to you, thereby making your warrants worthless.

We have the ability to redeem the outstanding public warrants for cash at any time after they become exercisable and prior to their expiration, at a price of $0.01 per warrant if, among other things, the last reported sale price of Hippo Holdings’ common stock for any 20 trading days within a 30-trading day period ending on the third trading day prior to the date on which we send the notice of redemption to the warrant holders (the “Reference Value”) equals or exceeds $18.00 per share (as adjusted for share splits, share dividends, rights issuances, subdivisions, reorganizations, recapitalizations and the like). If and when the warrants become redeemable by us, we may exercise our redemption right even if we are unable to register or qualify the underlying securities for sale under all applicable state securities laws. As a result, we may redeem the warrants as set forth above even if the holders are otherwise unable to exercise the warrants. Redemption of the outstanding warrants as described above could force you to: (i) exercise your warrants and pay the exercise price therefor at a time when it may be disadvantageous for you to do so; (ii) sell your warrants at the then-current market price when you might otherwise wish to hold your warrants; or (iii) accept the nominal redemption price which, at the time the outstanding warrants are called for redemption, we expect would be substantially less than the market value of your warrants. None of the private placement warrants will be redeemable by us in such a case (subject to limited exceptions) so long as they are held by our Sponsor or its permitted transferees, but the Sponsor has agreed, in addition to the existing exercise provisions in the Warrant Agreement, to exercise the private placement warrants if (a) Hippo Holdings elects to redeem the public warrants held by Hippo Holdings’ public shareholders, (b) the Reference Value exceeds $25.00 per share, and (c) there is an effective registration statement covering the issuance of shares of Hippo Holdings common stock issuable upon exercise of the private placement warrants, and a current prospectus relating thereto, available at the time of such exercise.

In addition, we have the ability to redeem the outstanding warrants (including the private placement warrants if the Reference Value is less than $18.00 per share) for shares of Hippo Holdings common stock at any time after they become exercisable and prior to their expiration, at a price of $0.10 per warrant if, among other things, the Reference Value equals or exceeds $10.00 per share (as adjusted for share splits, share dividends, rights issuances, subdivisions, reorganizations, recapitalizations and the like). In such a case, the holders will be able to exercise their warrants prior to redemption for a number of shares of Hippo Holdings common stock determined based on the redemption date and the fair market value of our Hippo Holdings common stock. The value received upon exercise of the warrants (1) may be less than the value the holders would have received if they had exercised their warrants at a later time where the underlying share price is higher and (2) may not compensate the holders for the value of the warrants, including because the number of ordinary shares received is capped at 0.361 shares of Hippo Holdings common stock per warrant (subject to adjustment) irrespective of the remaining life of the warrants.

Pursuant to the terms of the Warrant Amendment, the warrants will become exercisable, and we will have the ability to redeem the warrants (subject to certain conditions), at any time commencing on the date that is 30 days after the completion of the Business Combination.

If the Warrant Amendment is approved by at least 50% of the outstanding public warrants and the Sponsor (as the holder of all of the private placement warrants), the Warrant Agreement will be amended such that the warrants will become exercisable at any time commencing on the date that is 30 days after the completion of the Business Combination, which means that we will have the ability to redeem the warrants at any time commencing on the date that is 30 days after the completion of the Business Combination as well (subject to certain conditions). Approval of the Warrant Amendment is not a condition to the consummation of the Business Combination. Accordingly, the Business Combination can be completed even if the Warrant Amendment is not approved.

 

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The NYSE may not list Hippo Holdings’ securities on its exchange, which could limit investors’ ability to make transactions in Hippo Holdings’ securities and subject Hippo Holdings to additional trading restrictions.

In connection with the Business Combination, in order to continue to maintain the listing of our securities on the NYSE, we will be required to demonstrate compliance with the NYSE’s initial listing requirements, which are more rigorous than the NYSE’s continued listing requirements. We will apply to have Hippo Holdings’ securities listed on the NYSE upon consummation of the Business Combination. We cannot assure you that we will be able to meet all initial listing requirements. Even if Hippo Holdings’ securities are listed on the NYSE, Hippo Holdings may be unable to maintain the listing of its securities in the future.

If Hippo Holdings fails to meet the initial listing requirements and the NYSE does not list its securities on its exchange, Hippo would not be required to consummate the Business Combination. In the event that Hippo elected to waive this condition, and the Business Combination was consummated without Hippo Holdings’ securities being listed on the NYSE or on another national securities exchange, Hippo Holdings could face significant material adverse consequences, including:

 

  

a limited availability of market quotations for Hippo Holdings’ securities;

 

  

reduced liquidity for Hippo Holdings’ securities;

 

  

a determination that Hippo Holdings common stock is a “penny stock” which will require brokers trading in Hippo Holdings common stock to adhere to more stringent rules and possibly result in a reduced level of trading activity in the secondary trading market for Hippo Holdings’ securities;

 

  

a limited amount of news and analyst coverage; and

 

  

a decreased ability to issue additional securities or obtain additional financing in the future.

The National Securities Markets Improvement Act of 1996, which is a federal statute, prevents or preempts the states from regulating the sale of certain securities, which are referred to as “covered securities.” If Hippo Holdings’ securities were not listed on the NYSE, such securities would not qualify as covered securities and we would be subject to regulation in each state in which we offer our securities because states are not preempted from regulating the sale of securities that are not covered securities.

RTPZ’s and Hippo’s ability to consummate the Business Combination, and the operations of Hippo Holdings following the Business Combination, may be materially adversely affected by the recent coronavirus (COVID-19) pandemic.

The COVID-19 outbreak has adversely affected, and other events (such as terrorist attacks, natural disasters or a significant outbreak of other infectious diseases or public health crises) could adversely affect, economies and financial markets worldwide, business operations and the conduct of commerce generally, and the business of Hippo or Hippo Holdings following the Business Combination could be adversely affected. The extent of such impact will depend on future developments, which are highly uncertain and cannot be predicted, including new information which may emerge concerning the severity of COVID-19 and the actions to contain COVID-19 or treat its impact, among others.

Finally, the outbreak of COVID-19 may also have the effect of heightening many of the other risks described in this “Risk Factors” section, such as those related to the market for our securities.

Our warrants are accounted for as liabilities and the changes in value of our warrants could have a material effect on our financial results.

On April 12, 2021, the Acting Director of the Division of Corporation Finance and Acting Chief Accountant of the SEC together issued a statement regarding the accounting and reporting considerations for warrants issued by special purpose acquisition companies entitled “Staff Statement on Accounting and Reporting Considerations

 

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for Warrants Issued by Special Purpose Acquisition Companies (‘SPACs’)” (the “SEC Statement”). Specifically, the SEC Statement focused on certain settlement terms and provisions related to certain tender offers following a business combination, which terms are similar to those contained in the warrant agreement governing our warrants. As a result of the SEC Statement, we reevaluated the accounting treatment of our 4,600,000 public warrants and 4,400,000 private placement warrants, and determined to classify the warrants as derivative liabilities measured at fair value, with changes in fair value each period reported in earnings.

As a result, included on our consolidated balance sheet as of March 31, 2021 are derivative liabilities related to embedded features contained within our warrants. Accounting Standards Codification 815, Derivatives and Hedging (“ASC 815”), provides for the remeasurement of the fair value of such derivatives at each balance sheet date, with a resulting non-cash gain or loss related to the change in the fair value being recognized in earnings in the statement of operations. As a result of the recurring fair value measurement, our consolidated financial statements and results of operations may fluctuate quarterly, based on factors, which are outside of our control. Due to the recurring fair value measurement, we expect that we will recognize non-cash gains or losses on our warrants each reporting period and that the amount of such gains or losses could be material. The impact of changes in fair value on earnings may have an adverse effect on the market price of our securities.

We have identified a material weakness in our internal control over financial reporting as of December 31, 2020. If we are unable to develop and maintain an effective system of internal control over financial reporting, we may not be able to accurately report our financial results in a timely manner, which may adversely affect investor confidence in us and materially and adversely affect our business and operating results.

Our management is responsible for establishing and maintaining adequate internal control over financial reporting designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with GAAP. Our management is likewise required, on a quarterly basis, to evaluate the effectiveness of our internal controls and to disclose any changes and material weaknesses identified through such evaluation in those internal controls.

Following the issuance of the SEC Statement, on May 10, 2021, our management and our audit committee concluded that, in light of the SEC Statement, it was appropriate to restate our previously issued audited financial statements as of and for the period ended December 31, 2020 (the “Restatement”). As part of such process, we identified a material weakness in our internal controls over financial reporting, as described in Note 2 to the Notes to Financial Statements entitled “Restatement of Financial Statements.”

A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented, or detected and corrected on a timely basis.

Effective internal controls are necessary for us to provide reliable financial reports and prevent fraud. We continue to evaluate steps to remediate the material weakness. These remediation measures may be time consuming and costly and there is no assurance that these initiatives will ultimately have the intended effects.

If we identify any new material weaknesses in the future, any such newly identified material weakness could limit our ability to prevent or detect a misstatement of our accounts or disclosures that could result in a material misstatement of our annual or interim financial statements. In such case, we may be unable to maintain compliance with securities law requirements regarding timely filing of periodic reports in addition to applicable stock exchange listing requirements, investors may lose confidence in our financial reporting and our stock price may decline as a result. We cannot assure you that the measures we have taken to date, or any measures we may take in the future, will be sufficient to avoid potential future material weaknesses.

 

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We may face litigation and other risks as a result of the material weakness in our internal control over financial reporting.

Following the issuance of the SEC Statement, our management and our audit committee concluded that it was appropriate to restate our previously issued audited financial statements as of December 31, 2020 and for the period from October 2, 2020 (inception) through December 31, 2020. As part of the Restatement, we identified a material weakness in our internal controls over financial reporting.

As a result of such material weakness, the Restatement, the change in accounting for the warrants, and other matters raised or that may in the future be raised by the SEC, we face potential for litigation or other disputes which may include, among others, claims invoking the federal and state securities laws, contractual claims or other claims arising from the Restatement and material weaknesses in our internal control over financial reporting and the preparation of our financial statements. As of the date of this proxy statement/prospectus, we have no knowledge of any such litigation or dispute. However, we can provide no assurance that such litigation or dispute will not arise in the future. Any such litigation or dispute, whether successful or not, could have a material adverse effect on our business, results of operations and financial condition or our ability to complete a Business Combination.

Risks Related to the Consummation of the Domestication

The Domestication may result in adverse tax consequences for holders of RTPZ Class A ordinary shares and warrants.

U.S. Holders (as defined in “U.S. Federal Income Tax Considerations”) may be subject to U.S. federal income tax as a result of the Domestication. Because the Domestication will occur immediately prior to the redemption of RTPZ Class A ordinary shares, U.S. Holders exercising redemption rights will be subject to the potential tax consequences of the Domestication. Additionally, non-U.S. Holders (as defined in “U.S. Federal Income Tax Considerations” below) may become subject to withholding tax on any amounts treated as dividends paid on Hippo Holdings common stock after the Domestication.

A U.S. Holder who on the day of the Domestication beneficially owns (actually or constructively) RTPZ Class A ordinary shares with a fair market value of less than $50,000 on the date of the Domestication will not recognize any gain or loss and will not be required to include any part of our earnings in income. A U.S. Holder who on the day of the Domestication beneficially owns (actually or constructively) RTPZ Class A ordinary shares with a fair market value of $50,000 or more, but less than 10% of the total combined voting power of all classes of RTPZ stock entitled to vote and less than 10% or more of the total value of all classes of RTPZ stock, generally will recognize gain (but not loss) in respect of the Domestication as if such U.S. Holder exchanged its RTPZ Class A ordinary shares for Hippo Holdings common stock in a taxable transaction, unless such U.S. Holder elects in accordance with applicable Treasury Regulations to include in income as a deemed dividend the “all earnings and profits amount” (as defined in the Treasury Regulations under Section 367 of the Code) attributable to the RTPZ Class A ordinary shares held directly by such U.S. Holder. A U.S. Holder who on the day of the Domestication beneficially owns (actually or constructively) 10% or more of the total combined voting power of all classes of RTPZ stock entitled to vote or 10% or more of the total value of all classes of RTPZ stock, will generally be required to include in income as a deemed dividend the “all earnings and profits amount” (as defined in the Treasury Regulations) attributable to the RTPZ Class A ordinary shares held directly by such U.S. Holder. RTPZ does not expect to have significant cumulative earnings and profits, if any, on the date of the Domestication. If RTPZ’s cumulative net earnings and profits through the date of the Domestication is less than or equal to zero, then a U.S. Holder should not be required to include in gross income an all earnings and profits amount with respect to its RTPZ Class A ordinary shares.

Additionally, proposed Treasury Regulations with a retroactive effective date have been promulgated under Section 1291(f) of the Code which generally require that, a U.S. person who disposes of stock of a PFIC

 

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(including for this purpose exchanging RTPZ warrants for newly issued Hippo Holdings warrants in the Domestication) must recognize gain equal to the excess of the fair market value of such PFIC stock over its adjusted tax basis, notwithstanding any other provision of the Code. Because we are a blank check company with no current active business, we believe that it is likely that RTPZ is classified as a PFIC for U.S. federal income tax purposes. As a result, these proposed Treasury Regulations, if finalized in their current form, would generally require a U.S. Holder of RTPZ Class A ordinary shares to recognize gain on the exchange of RTPZ Class A ordinary shares for Hippo Holdings common stock pursuant to the Domestication unless such U.S. Holder has made certain tax elections with respect to such U.S. Holder’s RTPZ Class A ordinary shares. Proposed Treasury Regulations, if finalized in their current form would also apply to a U.S. Holder who exchanges RTPZ warrants for newly issued Hippo Holdings warrants; currently, however, the election mentioned above does not apply to RTPZ warrants (for discussion regarding the unclear application of the PFIC rules to RTPZ warrants, see “U.S. Federal Income Tax Considerations - PFIC Considerations”). Any gain recognized from the application of the PFIC rules described above would be taxable income with no corresponding receipt of cash. The tax on any such gain would be imposed at the rate applicable to ordinary income and an interest charge would apply based on complex rules designed to offset the tax deferral to such U.S. Holder on the undistributed earnings, if any, of RTPZ. It is not possible to determine at this time whether, in what form, and with what effective date, final Treasury Regulations under Section 1291(f) of the Code may be adopted or how any such Treasury Regulations would apply.

Upon consummation of the Business Combination, the rights of holders of Hippo Holdings common stock arising under the DGCL as well as Proposed Organizational Documents will differ from and may be less favorable than the rights of holders of RTPZ Class A ordinary shares arising under the Cayman Islands Companies Law as well as our current memorandum and articles of association.

Upon consummation of the Business Combination, the rights of holders of Hippo Holdings common stock will arise under the Proposed Organizational Documents as well as the DGCL. Those new organizational documents and the DGCL contain provisions that differ in some respects from those in our current memorandum and articles of association and the Cayman Islands Companies Law and, therefore, some rights of holders of Hippo Holdings common stock could differ from the rights that holders of RTPZ Class A ordinary shares currently possess. For instance, while class actions are generally not available to shareholders under Cayman Islands Companies Law, such actions are generally available under the DGCL. This change could increase the likelihood that Hippo Holdings becomes involved in costly litigation, which could have a material adverse effect on Hippo Holdings.

In addition, there are differences between the new organizational documents of Hippo Holdings and the current constitutional documents of RTPZ. For a more detailed description of the rights of holders of Hippo Holdings common stock and how they may differ from the rights of holders of RTPZ Class A ordinary shares, please see “Comparison of Corporate Governance and Shareholder Rights.” The forms of the Proposed Certificate of Incorporation and the Proposed Bylaws of Hippo Holdings are attached as Annex B and Annex C, respectively, to this proxy statement/prospectus and we urge you to read them.

Risks if the Adjournment Proposal is Not Approved

If the Adjournment Proposal is not approved, and an insufficient number of votes have been obtained to authorize the consummation of the Business Combination and the Domestication, our board of directors will not have the ability to adjourn the extraordinary general meeting to a later date in order to solicit further votes, and, therefore, the Business Combination will not be approved, and, therefore, the Business Combination may not be consummated.

Our board of directors is seeking approval to adjourn the extraordinary general meeting to a later date or dates if, at the extraordinary general meeting, based upon the tabulated votes, there are insufficient votes to approve each of the Condition Precedent Proposals. If the Adjournment Proposal is not approved, our board of

 

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directors will not have the ability to adjourn the extraordinary general meeting to a later date and, therefore, will not have more time to solicit votes to approve the Condition Precedent Proposals. In such events, the Business Combination would not be completed.

Risks if the Domestication and the Business Combination are not Consummated

If we are not able to complete the Business Combination with Hippo by the Liquidation Date nor able to complete another business combination by such date, we would cease all operations except for the purpose of winding up and we would redeem our Class A ordinary shares and liquidate the trust account, in which case our public shareholders may only receive approximately $10.00 per share and our warrants will expire worthless.

Our ability to complete our initial business combination may be negatively impacted by general market conditions, volatility in the capital and debt markets and the other risks described herein. For example, the COVID-19 pandemic continues in the U.S. and, while the extent of the impact of the outbreak on RTPZ will depend on future developments, it could limit our ability to complete our initial business combination, including as a result of increased market volatility, decreased market liquidity and third-party financing being unavailable on terms acceptable to us or at all. Additionally, the outbreak of the COVID-19 may negatively impact Hippo Holdings’ business following the Business Combination.

If we are not able to complete the Business Combination with Hippo by the Liquidation Date, nor able to complete another business combination by such date, we will: (1) cease all operations except for the purpose of winding up; (2) as promptly as reasonably possible but not more than 10 business days thereafter, redeem the public shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including interest (less up to $100,000 of interest to pay dissolution expenses and which interest shall be net of taxes payable), divided by the number of then issued and outstanding public shares, which redemption will completely extinguish public shareholders’ rights as shareholders (including the right to receive further liquidating distributions, if any), subject to applicable law; and (3) as promptly as reasonably possible following such redemption, subject to the approval of our remaining shareholders and its board, dissolve and liquidate, subject in each case to its obligations under Cayman Islands law to provide for claims of creditors and the requirements of other applicable law. In such case, our public shareholders may only receive approximately $10.00 per share and our warrants will expire worthless.

You will not have any rights or interests in funds from the trust account, except under certain limited circumstances. To liquidate your investment, therefore, you may be forced to sell your public shares and/or public warrants, potentially at a loss.

Our public shareholders will be entitled to receive funds from the trust account only upon the earliest to occur of (1) our completion of an initial business combination (including the Closing), and then only in connection with those public shares that such public shareholder properly elected to redeem, subject to certain limitations; (2) the redemption of any public shares properly submitted in connection with a shareholder vote to amend the Cayman Constitutional Documents to (A) modify the substance and timing of our obligation to allow redemption in connection with our initial business combination or to redeem 100% of the public shares if we do not complete a business combination by the Liquidation Date or (B) with respect to any other provision relating to shareholders’ rights or pre-initial business combination activity; and (3) the redemption of the public shares if we have not completed an initial business combination by the Liquidation Date, subject to applicable law. In no other circumstances will a shareholder have any right or interest of any kind to or in the trust account. Holders of public warrants will not have any right to the proceeds held in the trust account with respect to the public warrants. Accordingly, to liquidate your investment, you may be forced to sell your public shares and/or public warrants, potentially at a loss.

 

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If we have not completed our initial business combination, our public shareholders may be forced to wait until after the Liquidation Date before redemption from the trust account.

If we have not completed our initial business combination by the Liquidation Date, we will distribute the aggregate amount then on deposit in the trust account (less up to $100,000 of the net interest to pay dissolution expenses and which interest shall be net of taxes payable), pro rata to our public shareholders by way of redemption and cease all operations except for the purposes of winding up of our affairs, as further described in this proxy statement/prospectus. Any redemption of public shareholders from the trust account shall be affected automatically by function of the Cayman Constitutional Documents prior to any voluntary winding up. If we are required to wind-up, liquidate the trust account and distribute such amount therein, pro rata, to our public shareholders, as part of any liquidation process, such winding up, liquidation and distribution must comply with the applicable provisions of the Cayman Islands Companies Law. In that case, investors may be forced to wait beyond the Liquidation Date, before the redemption proceeds of the trust account become available to them, and they receive the return of their pro rata portion of the proceeds from the trust account. We have no obligation to return funds to investors prior to the date of our redemption or liquidation unless, prior thereto, we consummate our initial business combination or amend certain provisions of our Cayman Constitutional Documents and only then in cases where investors have properly sought to redeem their public shares. Only upon our redemption or any liquidation will public shareholders be entitled to distributions if we have not completed our initial business combination within the required time period and do not amend certain provisions of our Cayman Constitutional Documents prior thereto.

If the net proceeds of our initial public offering not being held in the trust account are insufficient to allow us to operate through to the Liquidation Date and we are unable to obtain additional capital, we may be unable to complete our initial business combination, in which case our public shareholders may only receive $10.00 per share, and our warrants will expire worthless.

As of March 31, 2021, RTPZ had cash of $214,015 held outside the trust account, which is available for use by us to cover the costs associated with identifying a target business and negotiating a business combination and other general corporate uses. In addition, as of March 31, 2021, RTPZ had total current liabilities of $1,058,027.

The funds available to us outside of the trust account may not be sufficient to allow us to operate until the Liquidation Date, assuming that our initial business combination is not completed during that time. If we are required to seek additional capital, we would need to borrow funds from Sponsor, members of our management team or other third parties to operate or may be forced to liquidate. Neither the members of our management team nor any of their affiliates is under any further obligation to advance funds to RTPZ in such circumstances. Any such advances would be repaid only from funds held outside the trust account or from funds released to us upon completion of our initial business combination. If we are unable to obtain additional financing, we may be unable to complete our initial business combination. If we are unable to complete our initial business combination because we do not have sufficient funds available to us, we will be forced to cease operations and liquidate the trust account. Consequently, our public shareholders may only receive approximately $10.00 per share on our redemption of the public shares and the public warrants will expire worthless.

 

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EXTRAORDINARY GENERAL MEETING AND WARRANT HOLDERS MEETING OF RTPZ

General

RTPZ is furnishing this proxy statement/prospectus to our shareholders as part of the solicitation of proxies by our board of directors for use at the extraordinary general meeting and Warrant Holders Meeting of RTPZ, each to be held on July 29, 2021, and at any adjournments thereof. This proxy statement/prospectus is first being furnished to our shareholders and public warrant holders on or about                , 2021 in connection with the vote on the proposals described in this proxy statement/prospectus. This proxy statement/prospectus provides our shareholders and public warrant holders with information they need to know to be able to vote or instruct their vote to be cast at the extraordinary general meeting and/or Warrant Holders Meeting.

Date, Time and Place of Extraordinary General Meeting

The extraordinary general meeting will be held on July 29, 2021, at 9:00 a.m., Eastern Time, at the offices of Sullivan & Cromwell LLP located at 125 Broad Street, New York, New York 10004 and virtually via live webcast at https://www.cstproxy.com/reinventtechnologypartnersz/2021, or such other date, time and place to which such meeting may be adjourned or virtually postponed, to consider and vote upon the proposals.

You will be permitted to attend the extraordinary general meeting in person at the offices of Sullivan & Cromwell LLP only to the extent consistent with, or permitted by, applicable law and directives of public health authorities. Based on current guidance, we do not anticipate being able to accommodate shareholders who wish to attend in person, and we strongly urge you to attend the extraordinary general meeting virtually.

Date, Time and Place of Warrant Holders Meeting

The Warrant Holders Meeting will be held on July 29, 2021, at 10:00 a.m., Eastern Time, at the offices of Sullivan & Cromwell LLP located at 125 Broad Street, New York, New York 10004 and virtually via live webcast at https://www.cstproxy.com/reinventtechnologypartnersz/2021, or such other date, time and place to which such meeting may be adjourned or virtually postponed, to consider and vote upon the proposals.

You will be permitted to attend the Warrant Holders Meeting in person at the offices of Sullivan & Cromwell LLP only to the extent consistent with, or permitted by, applicable law and directives of public health authorities. Based on current guidance, we do not anticipate being able to accommodate shareholders who wish to attend in person, and we strongly urge you to attend the Warrant Holders Meeting virtually.

Purpose of the RTPZ Extraordinary General Meeting

At the extraordinary general meeting, RTPZ is asking holders of ordinary shares to:

 

  

consider and vote upon a proposal to approve by ordinary resolution and adopt the Merger Agreement attached to this proxy statement/prospectus statement as Annex A (the “BCA Proposal”);

 

  

consider and vote upon a proposal to approve by special resolution, assuming the BCA Proposal is approved and adopted, the change of RTPZ’s jurisdiction of incorporation by deregistering as an exempted company in the Cayman Islands and continuing and domesticating as a corporation incorporated under the laws of the State of Delaware (the “Domestication Proposal”);

 

  

consider and vote upon the following four separate proposals (collectively, the “Organizational Documents Proposals”) to approve by special resolution, assuming the BCA Proposal and the Domestication Proposal are approved and adopted, the following material differences between the Cayman Constitutional Documents and the Proposed Organizational Documents:

 

  

to authorize the change in the authorized capital stock of RTPZ from (i) 500,000,000 RTPZ Class A ordinary shares, 50,000,000 RTPZ Class B ordinary shares and 5,000,000 preferred shares, each par value $0.0001 per share, to (ii) 2,000,000,000 shares of Hippo Holdings common stock and 10,000,000 shares of Hippo Holdings preferred stock (“Organizational Documents Proposal A”);

 

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to authorize the board of directors of Hippo Holdings to issue any or all shares of Hippo Holdings preferred stock in one or more classes or series, with such terms and conditions as may be expressly determined by Hippo Holdings’ board of directors and as may be permitted by the DGCL (“Organizational Documents Proposal B”);

 

  

to provide that Hippo Holdings’ board of directors be divided into three classes with only one class of directors being elected in each year and each class serving a three-year term (“Organizational Documents Proposal C”);

 

  

to authorize all other changes in connection with the replacement of Cayman Constitutional Documents with the Proposed Organizational Documents in connection with the consummation of the Business Combination (copies of which are attached to this proxy statement/prospectus as Annex B and Annex C, respectively), including (1) changing the corporate name from “Reinvent Technology Partners Z” to “Hippo Holdings Inc.” (2) making Hippo Holdings’ corporate existence perpetual, (3) adopting Delaware as the exclusive forum for certain stockholder litigation, (4) electing not to be governed by Section 203 of the DGCL and, instead, to be governed by a provision substantially similar to Section 203 of the DGCL and (5) removing certain provisions related to RTPZ’s status as a blank check company that will no longer be applicable upon consummation of the Business Combination, all of which RTPZ’s board of directors believes is necessary to adequately address the needs of Hippo Holdings after the Business Combination (“Organizational Documents Proposal D”);

 

  

for holders of RTPZ Class B ordinary shares, consider and vote upon a proposal to approve by ordinary resolution, to elect 8 directors who, upon consummation of the Business Combination, will be the directors of Hippo Holdings (the “Director Election Proposal”);

 

  

consider and vote upon a proposal to approve by ordinary resolution for purposes of complying with the applicable provisions of NYSE Listing Rule 312.03 the issuance of Hippo Holdings common stock to (a) the PIPE Investors, including Reinvent Capital Fund and the Hippo PIPE Investors, pursuant to the PIPE Investment and (b) the holders of Hippo capital stock pursuant to the Merger Agreement (the “Share Issuance Proposal”);

 

  

consider and vote upon a proposal to approve by ordinary resolution, the Incentive Award Plan (the “Incentive Award Plan Proposal”);

 

  

consider and vote upon a proposal to approve by ordinary resolution, the ESPP (the “ESPP Proposal” and, collectively with the BCA Proposal, the Domestication Proposal, the Organizational Documents Proposals, the Share Issuance Proposal and the Incentive Award Plan Proposal, the “Condition Precedent Proposals”); and

 

  

consider and vote upon a proposal to approve the adjournment of the extraordinary general meeting to a later date or dates, if necessary, to permit further solicitation and vote of proxies in the event that there are insufficient votes for the approval of one or more proposals at the extraordinary general meeting (the “Adjournment Proposal”).

Each of the Condition Precedent Proposals is cross-conditioned on the approval of each other. The Adjournment Proposal is not conditioned upon the approval of any other proposal set forth in this proxy statement/prospectus.

Purpose of the RTPZ Warrant Holders Meeting

At the Warrant Holders Meeting, RTPZ is asking the public warrant holders to:

 

  

amend the Warrant Agreement such that the exercise period for the warrants will commence 30 days after the first date on which RTPZ completes the Business Combination; and

 

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approve the adjournment of the Warrant Holders Meeting to a later date or dates, if necessary, to permit further solicitation and vote of proxies in the event that there are insufficient votes for the approval of the Warrant Amendment Proposal.

The Warrant Amendment Proposal is conditioned upon the approval of each of the Condition Precedent Proposals. The Warrant Holders Adjournment Proposal is not conditioned upon the approval of any other proposal set forth in this proxy statement/prospectus.

Recommendation of RTPZ Board of Directors

RTPZ’s board of directors believes that the BCA Proposal and the other proposals to be presented at the extraordinary general meeting are in the best interest of RTPZ’s shareholders and unanimously recommends that its shareholders vote “FOR” the BCA Proposal, “FOR” the Domestication Proposal, “FOR” each of the separate Organizational Documents Proposals, “FOR” the Director Election Proposal, “FOR” the Share Issuance Proposal, “FOR” the Incentive Award Plan Proposal, “FOR” the ESPP Proposal and “FOR” the Adjournment Proposal, in each case, if presented to the extraordinary general meeting.

RTPZ’s board of directors believes the Warrant Amendment Proposal and the Warrant Holders Adjournment Proposal are in the best interest of RTPZ’s public warrant holders and unanimously recommends that its public warrant holders vote “FOR” the Warrant Amendment Proposal and “FOR” the Warrant Holders Adjournment Proposal, if it is presented at the Warrant Holders Meeting.

The existence of financial and personal interests of one or more of RTPZ’s directors may result in a conflict of interest on the part of such director(s) between what he, she or they may believe is in the best interests of RTPZ and its shareholders and what he, she or they may believe is best for himself, herself or themselves in determining to recommend that shareholders vote for the proposals. In addition, RTPZ’s officers have interests in the Business Combination that may conflict with your interests as a shareholder. See the section entitled “BCA Proposal - Interests of RTPZ’s Directors and Executive Officers in the Business Combination” for a further discussion of these considerations.

Record Date; Who is Entitled to Vote

RTPZ shareholders and public warrant holders will be entitled to vote or direct votes to be cast at the extraordinary general meeting and Warrant Holders Meeting, respectively, if they owned ordinary shares and public warrants, respectively, at the close of business on June 21, 2021, which is the “record date” for the extraordinary general meeting and the Warrant Holders Meeting. Shareholders will have one vote for each ordinary share owned at the close of business on the record date. If your shares are held in “street name” or are in a margin or similar account, you should contact your broker to ensure that votes related to the shares you beneficially own are properly counted. RTPZ warrants do not have voting rights in the extraordinary general meeting. As of the close of business on the record date, there were 28,750,000 ordinary shares issued and outstanding, of which 23,000,000 were issued and outstanding public shares.

Public warrant holders will have one vote at the Warrant Holders Meeting for each public warrant owned at the close of business on the record date. If you hold your public warrants in “street name” through a bank, broker or other nominee, you will need to follow the instructions provided to you by your bank, broker or other nominee to ensure that your public warrants are represented and voted at the Warrant Holders Meeting. As of the close of business on such record date, there were 4,600,000 public warrants outstanding.

The Sponsor and each director and officer of RTPZ have agreed to, among other things, vote in favor of the Merger Agreement and the transactions contemplated thereby, in each case, subject to the terms and conditions contemplated by the Sponsor Support Agreement, and waive their redemption rights in connection with the consummation of the Business Combination with respect to any ordinary shares held by them. The ordinary

 

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shares held by the Sponsor will be excluded from the pro rata calculation used to determine the per-share redemption price. As of the date of this proxy statement/prospectus, the Sponsor and RTPZ’s independent directors collectively own 20.0% of the issued and outstanding ordinary shares.

Quorum

A quorum of RTPZ shareholders and public warrant holders, as applicable, is necessary to hold valid meetings. A quorum will be present at the extraordinary general meeting if the holders of a majority of the issued and outstanding ordinary shares entitled to vote at the extraordinary general meeting are represented in person or by proxy. A quorum will be present at the Warrant Holders Meeting if a majority of the warrants outstanding and entitled to vote at the Warrant Holders Meeting is represented virtually or by proxy. As of the record date for the extraordinary general meeting, 14,375,001 ordinary shares would be required to achieve a quorum. As of the record date for the Warrant Holders Meeting, 4,500,001 warrants would be required to achieve a quorum.

Abstentions and Broker Non-Votes

Proxies that are marked “abstain” and proxies relating to “street name” shares that are returned to RTPZ but marked by brokers as “not voted” will be treated as shares and/or public warrants present for purposes of determining the presence of a quorum on all matters, but they will not be treated as shares and/or public warrants voted on the matter. Under the rules of various national and regional securities exchanges, your broker, bank, or nominee cannot vote your shares and/or public warrants with respect to non-discretionary matters unless you provide instructions on how to vote in accordance with the information and procedures provided to you by your broker, bank, or nominee. We believe all the proposals presented to the shareholders and public warrant Holders will be considered non-discretionary and therefore your broker, bank, or nominee cannot vote your shares without your instruction.

Abstentions and broker non-votes, while considered present for the purposes of establishing a quorum at the extraordinary general meeting, will not count as votes cast at the extraordinary general meeting, and otherwise will have no effect on a particular proposal presented at the extraordinary general meeting.

Abstentions will have the same effect as a vote against the Warrant Amendment Proposal, but will have no effect on the Warrant Holder Adjournment Proposal, if presented. Broker non-votes will have the same effect as a vote against the Warrant Amendment Proposal, but will have no effect on the Warrant Holder Adjournment Proposal, if presented.

Vote Required for Approval

The approval of the BCA Proposal requires an ordinary resolution under Cayman Islands Companies Law, being the affirmative vote of the holders of a majority of the ordinary shares who, being present in person or by proxy and entitled to vote at the extraordinary general meeting, vote at the extraordinary general meeting.

The approval of the Domestication Proposal requires a special resolution under Cayman Islands Companies Law, being the affirmative vote of holders of at least two-thirds of the ordinary shares who, being present in person or by proxy and entitled to vote at the extraordinary general meeting, vote at the extraordinary general meeting. The Domestication Proposal is conditioned on the approval of the BCA Proposal. Therefore, if the BCA Proposal is not approved, the Domestication Proposal will have no effect, even if approved by holders of ordinary shares.

The approval of each of the Organizational Documents Proposals requires a special resolution under Cayman Islands Companies Law, being the affirmative vote of holders of at least two-thirds of the ordinary shares who, being present in person or by proxy and entitled to vote at the extraordinary general meeting, vote at the extraordinary general meeting. Each of the Organizational Documents Proposals is conditioned on the

 

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approval of the Domestication Proposal, and, therefore, also conditioned on approval of the BCA Proposal. Therefore, if the BCA Proposal and the Domestication Proposal are not approved, Organizational Documents Proposal A will have no effect, even if approved by holders of ordinary shares.

The approval of the Director Election Proposal requires an ordinary resolution under Cayman Islands Companies Law, being the affirmative vote of the holders of a majority of the RTPZ Class B ordinary shares who, being present in person or by proxy and entitled to vote at the extraordinary general meeting, vote at the extraordinary general meeting. Pursuant to the Sponsor Support Agreement (as defined in this proxy statement/prospectus), the Sponsor and RTPZ’s independent directors, as holders of 100% of the RTPZ Class B ordinary shares, agreed to vote in favor of the Merger Agreement and the transactions contemplated thereby. Therefore, the Director Election Proposal is expected to be approved by the Sponsor and RTPZ’s independent directors prior to the extraordinary general meeting. However, the Director Election Proposal is conditioned on the approval of the Organizational Documents Proposals, and, therefore, also conditioned on approval of the BCA Proposal and the Domestication Proposal. Therefore, if the BCA Proposal, the Domestication Proposal and the Organizational Documents Proposals are not approved, the Director Election Proposal will have no effect, even if approved by holders of the RTPZ Class B ordinary shares.

The approval of the Share Issuance Proposal requires an ordinary resolution under Cayman Islands Companies Law, being the affirmative vote of the holders of a majority of the ordinary shares who, being present in person or by proxy and entitled to vote at the extraordinary general meeting, vote at the extraordinary general meeting. The Stock Issuance Proposal is conditioned on the approval of the Director Election Proposal, and, therefore, also conditioned on approval of the BCA Proposal, the Domestication Proposal and the Organizational Documents Proposals. Therefore, if the BCA Proposal, the Domestication Proposal, the Organizational Documents Proposals and the Director Election Proposal are not approved, the Stock Issuance Proposal will have no effect, even if approved by holders of ordinary shares.

The approval of the Incentive Award Plan Proposal requires an ordinary resolution under Cayman Islands Companies Law, being the affirmative vote of the holders of a majority of the ordinary shares who, being present in person or by proxy and entitled to vote at the extraordinary general meeting, vote at the extraordinary general meeting. The Incentive Award Plan Proposal is conditioned on the approval of the Share Issuance Proposal, and, therefore, also conditioned on approval of the BCA Proposal, the Domestication Proposal, the Organizational Documents Proposals and the Director Election Proposal. Therefore, if the BCA Proposal, the Domestication Proposal, the Organizational Documents Proposals, the Director Election Proposal and the Share Issuance Proposal are not approved, the Incentive Award Plan Proposal will have no effect, even if approved by holders of ordinary shares.

The approval of the ESPP Proposal requires an ordinary resolution under Cayman Islands Companies Law, being the affirmative vote of the holders of a majority of the ordinary shares who, being present in person or by proxy and entitled to vote at the extraordinary general meeting, vote at the extraordinary general meeting. The ESPP Proposal is conditioned on the approval of the Stock Issuance Proposal, and, therefore, also conditioned on approval of the BCA Proposal, the Domestication Proposal, the Organizational Documents Proposals and the Director Election Proposal. Therefore, if the BCA Proposal, the Domestication Proposal, the Organizational Documents Proposals, the Director Election Proposal and the Share Issuance Proposal are not approved, the ESPP Proposal will have no effect, even if approved by holders of ordinary shares.

The approval of the Adjournment Proposal requires an ordinary resolution under Cayman Islands Companies Law, being the affirmative vote of the holders of a majority of the ordinary shares who, being present in person or by proxy and entitled to vote at the extraordinary general meeting, vote at the extraordinary general meeting. The Adjournment Proposal is not conditioned upon any other proposal.

The approval of the Warrant Amendment Proposal requires the affirmative vote of the holders of at least 50% of RTP’s outstanding public warrants. The Warrant Amendment Proposal is conditioned on the approval of

 

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the Condition Precedent Proposals. Therefore, if the Condition Precedent Proposals are not approved, the Warrant Amendment Proposal will have no effect, even if approved by holders of the public warrants.

The approval of the Warrant Holders Adjournment Proposal requires the affirmative vote of a majority of the votes cast by the public warrant holders present or represented by proxy and entitled to vote at the Warrant Holders Meeting. The Warrant Holders Adjournment Proposal is not conditioned upon any other proposal.

Voting Your Shares and/or Public Warrants

Each RTPZ ordinary share and public warrant that you own in your name entitles you to one vote at the extraordinary general meeting and Warrant Holders Meeting, respectively. Each proxy card shows the number of ordinary shares and public warrants, as applicable, that you own. If your shares or public warrants are held in “street name” or are in a margin or similar account, you should contact your broker to ensure that votes related to the shares and/or public warrants you beneficially own are properly counted.

There are two ways to vote your ordinary shares and/or public warrants at the extraordinary general meeting and Warrant Holders Meeting, respectively:

 

  

You can vote by signing and returning the enclosed proxy card(s). If you vote by proxy card(s), your “proxy,” whose name is listed on the proxy card(s), will vote your shares and/or public warrants as you instruct on the proxy card(s). If you sign and return the proxy card(s) but do not give instructions on how to vote your shares and/or public warrants, your shares and/or public warrants will be voted as recommended by RTPZ’s board “FOR” the BCA Proposal, “FOR” the Domestication Proposal, “FOR” each of the separate Organizational Documents Proposals, “FOR” the Director Election Proposal, “FOR” the Stock Issuance Proposal, “FOR” the Incentive Award Plan Proposal, “FOR” the ESPP Proposal, “FOR” the Adjournment Proposal, “FOR” the Warrant Amendment Proposal and “FOR” the Warrant Holders Adjournment Proposal, in each case, if presented to the extraordinary general meeting or Warrant Holders Meeting, as applicable. Votes received after a matter has been voted upon at the extraordinary general meeting or Warrant Holders Meeting, as applicable, will not be counted. If your shares or public warrants, as applicable, are held in the name of your broker, bank or another nominee, you must get a valid legal proxy from the broker, bank or other nominee. That is the only way RTPZ can be sure that the broker, bank or nominee has not already voted your shares and/or public warrants.

Revoking Your Proxy

If you are a RTPZ shareholder and/or public warrant holder and you give a proxy, you may revoke it at any time before it is exercised by doing any one of the following:

 

  

you may send another proxy card with a later date;

 

  

you may notify RTPZ’s Secretary in writing before the extraordinary general meeting and/or Warrant Holders Meeting that you have revoked your proxy; or

 

  

you may attend the extraordinary general meeting and/or Warrant Holders Meeting, as applicable, revoke your proxy, and vote online, as indicated above.

Who Can Answer Your Questions About Voting Your Shares and/or Public Warrants

If you are a shareholder and/or public warrant holder and have any questions about how to vote or direct a vote in respect of your ordinary shares and/or public warrants, you may call Morrow Sodali LLC, RTPZ’s proxy solicitor, by calling 800-662-5200 or banks and brokers can call collect at 203-658-9400, or by emailing RTPZ@investor.morrowsodali.com.

 

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Redemption Rights

Pursuant to the Cayman Constitutional Documents, a public shareholder may request of RTPZ that Hippo Holdings redeem all or a portion of its public shares for cash if the Business Combination is consummated. As a holder of public shares, you will be entitled to receive cash for any public shares to be redeemed only if you:

 

  

(a) hold public shares, or (b) if you hold public shares through units, you elect to separate your units into the underlying public shares and public warrants prior to exercising your redemption rights with respect to the public shares;

 

  

submit a written request to Continental, RTPZ’s transfer agent, that Hippo Holdings redeem all or a portion of your public shares for cash; and

 

  

deliver your certificates for public shares (if any) and any other required redemption forms to Continental, RTPZ’s transfer agent, physically or electronically through DTC.

Holders must complete the procedures for electing to redeem their public shares in the manner described above prior to 5:00 p.m., Eastern Time, on July 27, 2021 (two business days before the extraordinary general meeting) in order for their shares to be redeemed.

Therefore, the election to exercise redemption rights occurs prior to the Domestication and the redemption is with respect to the Hippo Holdings public shares that an electing public shareholder holds after the Domestication. For the purposes of Article 49.3 of RTPZ’s memorandum and articles of association and the Cayman Islands Companies Law, the exercise of redemption rights shall be treated as an election to have such public shares repurchased for cash and references in this proxy statement/prospectus to “redemption” or “redeeming” shall be interpreted accordingly. Immediately following the Domestication and the consummation of the Business Combination, Hippo Holdings shall satisfy the exercise of redemption rights by redeeming the corresponding public shares issued to the public shareholders that validly exercised their redemption rights.

Holders of units must elect to separate the units into the underlying public shares and public warrants prior to exercising redemption rights with respect to the public shares. If holders hold their units in an account at a brokerage firm or bank, holders must notify their broker or bank that they elect to separate the units into the underlying public shares and public warrants, or if a holder holds units registered in its own name, the holder must contact Continental, RTPZ’s transfer agent, directly and instruct them to do so. Public shareholders may elect to redeem all or a portion of the public shares held by them, regardless of if or how they vote in respect of the BCA Proposal. If the Business Combination is not consummated, the public shares will be returned to the respective holder, broker or bank. If the Business Combination is consummated, and if a public shareholder properly exercises its right to redeem all or a portion of the public shares that it holds and timely delivers its certificates for public shares (if any) and any other required redemption forms to Continental, RTPZ’s transfer agent, Hippo Holdings will redeem such public shares for a per-share price, payable in cash, equal to the pro rata portion of the trust account, calculated as of two business days prior to the consummation of the Business Combination. For illustrative purposes, as of March 31, 2021, this would have amounted to approximately $10.00 per issued and outstanding public share. If a public shareholder exercises its redemption rights in full, then it will be electing to exchange its public shares for cash and will no longer own public shares. The redemption takes place following the Domestication and, accordingly, it is shares of Hippo Holdings common stock that will be redeemed immediately after consummation of the Business Combination.

If you hold the shares in “street name,” you will have to coordinate with your broker to have your shares certificated or delivered electronically. Hippo Holdings public shares that have not been delivered (either physically or electronically) in accordance with these procedures will not be redeemed for cash. There is a nominal cost associated with this tendering process and the act of certificating the shares or delivering them through DTC’s DWAC (deposit withdrawal at custodian) system. The transfer agent will typically charge the tendering broker $80 and it would be up to the broker whether or not to pass this cost on to the redeeming

 

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shareholder. In the event the proposed business combination is not consummated this may result in an additional cost to shareholders for the return of their shares.

Any request for redemption, once made by a holder of public shares, may not be withdrawn once submitted to RTPZ unless the board of directors of RTPZ determines (in their sole discretion) to permit the withdrawal of such redemption request (which they may do in whole or in part). If you deliver your certificates for public shares (if any) and any other required redemption forms to Continental, RTPZ’s transfer agent, and later decide prior to the extraordinary general meeting not to elect redemption, you may request that RTPZ’s transfer agent return the shares (physically or electronically) to you. You may make such request by contacting Continental, RTPZ’s transfer agent, at the phone number or address listed at the end of this section.

Any corrected or changed written exercise of redemption rights must be received by Continental, RTPZ’s transfer agent, prior to the vote taken on the BCA Proposal at the extraordinary general meeting. No request for redemption will be honored unless the holder’s certificates for public shares (if any) and any other required redemption forms have been delivered (either physically or electronically) to Continental, RTPZ’s agent, at least two business days prior to the vote at the extraordinary general meeting.

Notwithstanding the foregoing, a public shareholder, together with any affiliate of such public shareholder or any other person with whom such public shareholder is acting in concert or as a “group” (as defined in Section 13(d)(3) of the Exchange Act), will be restricted from redeeming its public shares with respect to more than an aggregate of 15% of the public shares. Accordingly, if a public shareholder, alone or acting in concert or as a group, seeks to redeem more than 15% of the public shares, then any such shares in excess of that 15% limit would not be redeemed for cash.

The Sponsor and each director and officer of RTPZ have agreed to, among other things, vote in favor of the Merger Agreement and the transactions contemplated thereby, in each case, subject to the terms and conditions contemplated by the Sponsor Support Agreement, and waive their redemption rights in connection with the consummation of the Business Combination with respect to any ordinary shares held by them. The ordinary shares held by the Sponsor will be excluded from the pro rata calculation used to determine the per-share redemption price. As of the date of this proxy statement/prospectus, the Sponsor and RTPZ’s independent directors collectively own 20.0% of the issued and outstanding ordinary shares.

Holders of the warrants will not have redemption rights with respect to the warrants.

The closing price of public shares on June 30, 2021, the most recent practicable date prior to the date of this proxy statement/prospectus, was $9.93. As of March 31, 2021, funds in the trust account totaled $230,000,000 and were comprised entirely of U.S. government treasury obligations with a maturity of 185 days or less or of money market funds meeting certain conditions under Rule 2a-7 under the Investment Company Act, which invest only in direct U.S. government treasury obligations, or approximately $10.00 per issued and outstanding public share.

Prior to exercising redemption rights, public shareholders should verify the market price of the public shares as they may receive higher proceeds from the sale of their public shares in the public market than from exercising their redemption rights if the market price per share is higher than the redemption price. RTPZ cannot assure its shareholders that they will be able to sell their public shares in the open market, even if the market price per share is higher than the redemption price stated above, as there may not be sufficient liquidity in its securities when its shareholders wish to sell their shares.

Appraisal Rights

Neither RTPZ’s shareholders nor RTPZ’s warrant holders have appraisal rights in connection with the Business Combination or the Domestication under the Cayman Islands Companies Law or under the DGCL.

 

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Proxy Solicitation Costs

RTPZ is soliciting proxies on behalf of its board of directors. This solicitation is being made by mail but also may be made by telephone or in person. RTPZ and its directors, officers and employees may also solicit proxies in person, by telephone or by other electronic means. RTPZ will bear the cost of the solicitation.

RTPZ has hired Morrow Sodali LLC to assist in the proxy solicitation process. RTPZ will pay that firm a fee of $30,000 plus disbursements. Such fee will be paid with non-trust account funds.

RTPZ will ask banks, brokers and other institutions, nominees and fiduciaries to forward the proxy materials to their principals and to obtain their authority to execute proxies and voting instructions. RTPZ will reimburse them for their reasonable expenses.

RTPZ Initial Shareholders

As of the date of this proxy statement/prospectus, there are 28,750,000 ordinary shares issued and outstanding, which includes the 5,750,000 Founder Shares held by the Sponsor and RTZP’s independent directors and 23,000,000 public shares. As of the date of this proxy statement/prospectus, there is outstanding an aggregate of 9,000,000 warrants, which includes the 4,400,000 private placement warrants held by the Sponsor and 4,600,000 public warrants.

The Sponsor and RTPZ’s directors and officers have agreed to vote all of their Founder Shares and any public shares they may hold in favor of the proposals being presented at the extraordinary general meeting.

At any time at or prior to the Business Combination, subject to applicable securities laws (including with respect to material nonpublic information), the Sponsor, the existing stockholders of Hippo or our or their respective directors, officers, advisors or respective affiliates may (i) purchase public shares from institutional and other investors who vote, or indicate an intention to vote, against any of the Condition Precedent Proposals, or elect to redeem, or indicate an intention to redeem, public shares, (ii) execute agreements to purchase such shares from such investors in the future, or (ii) enter into transactions with such investors and others to provide them with incentives to acquire public shares, vote their public shares in favor of the Condition Precedent Proposals or not redeem their public shares. Such a purchase may include a contractual acknowledgement that such shareholder, although still the record holder of RTPZ’s shares, is no longer the beneficial owner thereof and therefore agrees not to exercise its redemption rights. In the event that the Sponsor, the existing stockholders of Hippo or our or their respective directors, officers, advisors, or respective affiliates purchase shares in privately negotiated transactions from public shareholders who have already elected to exercise their redemption rights, such selling shareholders would be required to revoke their prior elections to redeem their shares. The purpose of such share purchases and other transactions would be to increase the likelihood of (1) satisfaction of the requirement that holders of a majority of the ordinary shares, represented in person or by proxy and entitled to vote at the extraordinary general meeting, vote in favor of the BCA Proposal, the Stock Issuance Proposal, Incentive Award Plan Proposal, the ESPP Proposal and the Adjournment Proposal, (2) satisfaction of the requirement that holders of at least two-thirds of the ordinary shares, represented in person or by proxy and entitled to vote at the extraordinary general meeting, vote in favor of the Domestication Proposal and the Organizational Documents Proposals, (3) satisfaction of the Minimum Cash Condition, (4) otherwise limiting the number of public shares electing to redeem and (5) RTPZ’s net tangible assets (as determined in accordance with Rule 3a51(g)(1) of the Exchange Act) being at least $5,000,001. Entering into any such arrangements may have a depressive effect on the ordinary shares (e.g., by giving an investor or holder the ability to effectively purchase shares at a price lower than market, such investor or holder may therefore become more likely to sell the shares he or she owns, either at or prior to the Business Combination).

If such transactions are effected, the consequence could be to cause the Business Combination to be consummated in circumstances where such consummation could not otherwise occur. Purchases of shares by the

 

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persons described above would allow them to exert more influence over the approval of the proposals to be presented at the extraordinary general meeting and would likely increase the chances that such proposals would be approved. We will file or submit a Current Report on Form 8-K to disclose any material arrangements entered into or significant purchases made by any of the aforementioned persons that would affect the vote on the proposals to be put to the extraordinary general meeting or the redemption threshold. Any such report will include descriptions of any arrangements entered into or significant purchases by any of the aforementioned persons.

 

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BCA PROPOSAL

Overview

RTPZ is asking its shareholders to approve by ordinary resolution and adopt the Merger Agreement. RTPZ shareholders should read carefully this proxy statement/prospectus in its entirety for more detailed information concerning the Merger Agreement, a copy of which is attached as Annex A to this proxy statement/prospectus. Please see the subsection entitled “The Merger Agreement” below for additional information and a summary of certain terms of the Merger Agreement. You are urged to read carefully the Merger Agreement in its entirety before voting on this proposal.

Because RTPZ is holding a shareholder vote on the Mergers, RTPZ may consummate the Mergers only if they are approved by the affirmative vote of the holders of a majority of ordinary shares that are voted at the extraordinary general meeting.

The Merger Agreement

This subsection of the proxy statement/prospectus describes the material provisions of the Merger Agreement, but does not purport to describe all of the terms of the Merger Agreement. The following summary is qualified in its entirety by reference to the complete text of the Merger Agreement, a copy of which is attached as Annex A to this proxy statement/prospectus. You are urged to read the Merger Agreement in its entirety because it is the primary legal document that governs the Merger.

The Merger Agreement contains representations, warranties and covenants that the respective parties made to each other as of the date of the Merger Agreement or other specific dates. The assertions embodied in those representations, warranties and covenants were made for purposes of the contract among the respective parties and are subject to important qualifications and limitations agreed to by the parties in connection with negotiating the Merger Agreement. The representations, warranties and covenants in the Merger Agreement are also modified in part by the underlying disclosure letters (the “disclosure letters”), which are not filed publicly and which are subject to a contractual standard of materiality different from that generally applicable to shareholders and were used for the purpose of allocating risk among the parties rather than establishing matters as facts. We do not believe that the disclosure letters contain information that is material to an investment decision. Additionally, the representations and warranties of the parties to the Merger Agreement may or may not have been accurate as of any specific date and do not purport to be accurate as of the date of this proxy statement/prospectus. Accordingly, no person should rely on the representations and warranties in the Merger Agreement or the summaries thereof in this proxy statement/prospectus as characterizations of the actual state of facts about RTPZ, Hippo or any other matter.

Structure of the Mergers

On March 3, 2021, RTPZ entered into the Merger Agreement with Merger Sub and Hippo, pursuant to which, among other things, following the Domestication (including the change of RTPZ’s name to “Hippo Holdings Inc.”), (i) Merger Sub will merge with and into Hippo, with Hippo surviving the First Merger as a wholly owned subsidiary of Hippo Holdings, and (ii) immediately following the First Merger, Hippo (as the surviving corporation of the First Merger) will merge with and into Hippo Holdings, the separate corporate existence of Hippo will cease, and Hippo Holdings will be the surviving corporation.

Prior to and as a condition of the Mergers, pursuant to the Domestication, RTPZ will change its jurisdiction of incorporation by effecting a deregistration under the Cayman Islands Companies Act and a domestication under Section 388 of the DGCL, pursuant to which RTPZ’s jurisdiction of incorporation will be changed from the Cayman Islands to the State of Delaware. For more information, see “The Domestication Proposal.”

 

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Immediately prior to the Effective Time, (i) each share Hippo preferred stock will convert into one share of Hippo common stock (such conversion, the “Hippo Preferred Conversion”), (ii) all of the outstanding Hippo warrants will be exercised in full or terminated (the “Hippo Warrant Settlement”), and (iii) all of the outstanding Hippo Notes will be automatically converted into shares of Hippo common stock in accordance with their respective terms (the “Hippo Note Conversion”).

Consideration

Aggregate Merger Consideration

As a result of and upon the Closing, among other things, all outstanding shares of Hippo common stock (after giving effect to the Hippo Preferred Conversion, the Hippo Warrant Settlement and the Hippo Note Conversion) as of immediately prior to the Effective Time, and, together with shares of Hippo common stock reserved in respect of Hippo options outstanding as of immediately prior to the Closing that will be converted into options based on Hippo Holdings common stock, as discussed in the following section, will be cancelled in exchange for the right to receive an aggregate of 552,200,000 shares of Hippo Holdings common stock (at a deemed value of $10.00 per share), which, in the case of Hippo options, will be shares underlying awards based on Hippo Holdings common stock, representing a pre-transaction equity value of Hippo of $5.522 billion. The portion of the Aggregate Merger Consideration reflecting the conversion of the Hippo options is calculated assuming that all Hippo Holdings options are net-settled (although Hippo Holdings options may by their terms be cash-settled, resulting in additional dilution). An additional 55,000,000 shares of Hippo Holdings common stock will be purchased (at a price of $10.00 per share) at the Closing by the PIPE Investors in connection with the PIPE Investment. The proceeds of the PIPE Investment, together with the amounts remaining in RTPZ’s trust account as of immediately following the consummation of the Mergers, will be retained by Hippo Holdings. For additional information on the Merger Agreement, see “BCA Proposal — The Merger Agreement.”

Treatment of Hippo Options

As a result of and upon the Closing (as defined below), among other things, all Hippo options will be converted into Hippo Holdings options. The portion of the Aggregate Merger Consideration reserved for the conversion of the Hippo options is counted using the treasury stock method.

Subject to the terms of the Merger Agreement, each Hippo Holdings Option will provide the right to purchase a number of whole shares of Hippo Holdings common stock (rounded down to the nearest whole share) equal to (i) the number of shares of Hippo common stock subject to the applicable Hippo Option multiplied by (ii) the Exchange Ratio. The exercise price for each Hippo Holdings Option will equal (i) the exercise price of the applicable Hippo Option divided by (ii) the Exchange Ratio (rounded up to the nearest whole cent).

Immediately prior to the Closing, the board of directors of Hippo shall amend the Hippo Enterprises Inc. 2019 Stock Option and Grant Plan (the “2019 Plan”) and take all other necessary actions, effective as of immediately prior to the Closing, in order to provide that no new Hippo Options will be granted under the 2019 Plan.

Closing

In accordance with the terms and subject to the conditions of the Merger Agreement, the Closing will take place at 10:00 a.m., Eastern Time, on the date that is the second business day after the satisfaction or waiver of the conditions set forth in the Merger Agreement (other than those conditions that by their nature are to be satisfied at the Closing, but subject to the satisfaction or waiver of those conditions), unless another time or date is mutually agreed to in writing by the parties. The date on which the Closing actually occurs is referred to as the “Closing Date.”

 

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Representations and Warranties

The Merger Agreement contains representations and warranties of RTPZ, Merger Sub and Hippo, certain of which are qualified by materiality and material adverse effect (as defined below) and may be further modified and limited by the disclosure letters. See “— Material Adverse Effect” below. The representations and warranties of RTPZ are also qualified by information included in RTPZ’s public filings, filed or submitted to the SEC on or prior to the date of the Merger Agreement (subject to certain exceptions contemplated by the Merger Agreement).

Representations and Warranties of Hippo

Hippo has made representations and warranties relating to, among other things, company organization, subsidiaries, due authorization, no conflict, governmental authorities and consents, capitalization of Hippo and its subsidiaries, financial statements, insurance subsidiaries, statutory statements, insurance contracts, reinsurance, risk-based capital, producers, company producers, regulatory examinations, agreements with insurance regulators, undisclosed liabilities, litigation and proceedings, legal compliance, contracts and no defaults, Hippo benefit plans, employment and labor relations, taxes, brokers’ fees, insurance, licenses, tangible personal property, real property, intellectual property, data privacy and cybersecurity, environmental matters, absence of changes, anti-corruption compliance, sanctions and international trade compliance, information supplied and vendors.

The representations and warranties of Hippo identified as fundamental under the terms of the Merger Agreement are those made pursuant to: the first and second sentences of Section 4.1 of the Merger Agreement (Company Organization), the first and second sentences of Section 4.2 of the Merger Agreement (Subsidiaries), Section 4.3 of the Merger Agreement (Due Authorization), Section 4.6 of the Merger Agreement (Capitalization of Hippo), Section 4.7 of the Merger Agreement (Capitalization of Subsidiaries) and Section 4.25 of the Merger Agreement (Brokers’ Fees) (collectively, the “Hippo Fundamental Representations”).

Representations and Warranties of RTPZ and Merger Sub

RTPZ and Merger Sub have made representations and warranties relating to, among other things, company organization, due authorization, no conflict, litigation and proceedings, SEC filings, internal controls, listing, financial statements, governmental authorities and consents, trust account, Investment Company Act and JOBS Act, absence of changes, no undisclosed liabilities, capitalization, brokers’ fees, indebtedness, taxes, business activities, stock market quotation, registration statement and proxy statement and proxy statement/registration statement and no outside reliance.

Survival of Representations and Warranties

Except in the case of claims against a person in respect of such person’s actual fraud, the representations and warranties of the respective parties to the Merger Agreement generally will not survive the Closing.

Material Adverse Effect

Under the Merger Agreement, certain representations and warranties of Hippo are qualified in whole or in part by a material adverse effect standard for purposes of determining whether a breach of such representations and warranties has occurred. Under the Merger Agreement, certain representations and warranties of RTPZ are qualified in whole or in part by a standard based on a material adverse effect on the ability of RTPZ to enter into and perform its obligations under the Merger Agreement for purposes of determining whether a breach of such representations and warranties has occurred.

Pursuant to the Merger Agreement, a material adverse effect with respect to Hippo (“Hippo Material Adverse Effect”) means any event, state of facts, development, circumstance, occurrence or effect (collectively,

 

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“Events”) that (i) has had, or would reasonably be expected to have, individually or in the aggregate, a material adverse effect on the business, assets, results of operations or financial condition of Hippo and its subsidiaries, taken as a whole or (ii) does or would reasonably be expected to, individually or in the aggregate, prevent the ability of Hippo to consummate the Mergers.

However, in no event would any of the following, alone or in combination, be deemed to constitute, or be taken into account in determining whether there has been or will be, a “Hippo Material Adverse Effect”:

 

 (i)

any change in applicable laws or GAAP or any COVID-19 Measures (as defined in the Merger Agreement) or any interpretation thereof following the date of the Merger Agreement;

 

 (ii)

any change in interest rates or economic, political, business or financial market conditions generally;

 

 (iii)

the taking of any action required by the Merger Agreement;

 

 (iv)

any natural disaster (including hurricanes, storms, tornados, flooding, wildfires, earthquakes, volcanic eruptions or similar occurrences), pandemic, outbreak of disease or illness or public health event (including COVID-19) or change in climate;

 

 (v)

any acts of terrorism or war, the outbreak or escalation of hostilities, geopolitical conditions, civil unrest, local, national or international political conditions;

 

 (vi)

any failure of Hippo to meet any projections or forecasts (provided that this clause will not prevent a determination that any Event not otherwise excluded from this definition of Hippo Material Adverse Effect underlying such failure to meet projections or forecasts has resulted in a Hippo Material Adverse Effect);

 

 (vii)

any Events generally applicable to the industries or markets in which Hippo and its subsidiaries operate;

 

 (viii)

the announcement of the Merger Agreement and consummation of the transactions contemplated thereby, including any termination of, reduction in or similar adverse impact (but in each case only to the extent attributable to such announcement or consummation) on relationships, contractual or otherwise, with any landlords, customers, suppliers, distributors, partners or employees of Hippo and its subsidiaries (it being understood that this clause will be disregarded for purposes of the representation and warranty in Section 4.4 of the Merger Agreement and the corresponding condition to Closing); or

 

 (ix)

any action taken by, or at the written request of, RTPZ or Merger Sub.

Any Event referred to in clauses (i), (ii), (iv), (v) or (vii) above may be taken into account in determining if a Hippo Material Adverse Effect has occurred to the extent it has a disproportionate and adverse effect on the business, assets, results of operations or financial condition of Hippo and its subsidiaries, taken as a whole, relative to similarly situated companies in the industry in which Hippo and its subsidiaries conduct their respective operations (which shall include the insurance and insurance technology industries generally), but only to the extent of the incremental disproportionate effect on Hippo and its subsidiaries, taken as a whole, relative to similarly situated companies in the industry in which Hippo and its subsidiaries conduct their respective operations.

Covenants and Agreements

Hippo has made covenants relating to, among other things, conduct of its business, inspection, preparation and delivery of certain audited and unaudited financial statements, affiliate agreements and no solicitation of acquisition proposals.

RTPZ has made covenants relating to, among other things, employee matters, trust account proceeds and related available equity, listing, no solicitation of business combination proposals, conduct of its business, post-

 

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closing directors and officers, domestication, indemnification and insurance, RTPZ public filings, PIPE Investment subscriptions and stockholder litigation.

Conduct of Business by Hippo

Hippo has agreed that from the date of the Merger Agreement through the earlier of the Closing or the termination of the Merger Agreement (the “Interim Period”), it will, and will cause its subsidiaries to, except as otherwise explicitly contemplated by the Merger Agreement or the Ancillary Agreements (as defined below), as consented to by RTPZ in writing (which consent will not be unreasonably conditioned, withheld, delayed or denied) or as required by applicable law (including COVID-19 Measures), use commercially reasonable efforts to (x) operate the business of Hippo in the ordinary course and (y) preserve intact Hippo’s present business organization, retain Hippo’s current officers, and preserve Hippo’s relationships with its key suppliers and customers (if applicable).

During the Interim Period, Hippo has also agreed not to, and to cause its subsidiaries not to, except as otherwise contemplated by the Merger Agreement, including the Hippo disclosure letter thereto (the “Hippo Disclosure Letter”), as consented to by RTPZ in writing (which consent will not be unreasonably conditioned, withheld, delayed or denied) or as required by applicable law (including COVID-19 Measures):

 

  

change or amend the governing documents of Hippo or any of Hippo’s subsidiaries or form or cause to be formed any new subsidiary of Hippo (other than the formation of a wholly owned subsidiary of Hippo and any change or amendment of the governing documents of any of Hippo’s subsidiaries made in the ordinary course of business);

 

  

make or declare any dividend or distribution to the equityholders of Hippo or make any other distributions in respect of any shares of Hippo’s capital stock or the equity interests of Hippo or any of its subsidiaries;

 

  

split, combine, reclassify, recapitalize or otherwise amend any terms of any shares or series of Hippo’s or any of its subsidiaries’ capital stock or equity interests, except for any such transaction by a wholly owned subsidiary of Hippo that remains a wholly owned subsidiary of Hippo after consummation of such transaction;

 

  

purchase, repurchase, redeem or otherwise acquire any issued and outstanding share capital, outstanding shares of capital stock, membership interests or other equity interests of Hippo or its subsidiaries, except for (i) the acquisition by Hippo or any of its subsidiaries of any shares of capital stock, membership interests or other equity interests of Hippo or its subsidiaries in connection with the forfeiture or cancellation of such interests, (ii) transactions between Hippo and any wholly-owned subsidiary of Hippo or between wholly owned subsidiaries of Hippo or (iii) purchases or redemptions pursuant to exercises of Hippo Options or Hippo Warrants issued and outstanding as of the date of the Merger Agreement (or, with respect to Hippo Options, issued in compliance with the Merger Agreement) or the withholding of shares to satisfy net settlement or tax obligations with respect to Hippo Options or Hippo Warrants outstanding as of the date of the Merger Agreement (or, with respect to Hippo Options, issued in compliance with the Merger Agreement) in accordance with the terms of such Hippo Options or Hippo Warrants;

 

  

enter into, modify in any material respect or terminate (other than expiration in accordance with its terms) any material contracts or real property leases, other than in the ordinary course of business or as required by law;

 

  

sell, assign, transfer, convey, lease or otherwise dispose of, or create or incur any lien (except for certain permitted liens as set forth in the Merger Agreement) on any material tangible assets or properties of Hippo or its subsidiaries, except for (i) dispositions of obsolete or worthless equipment (ii) transactions among Hippo and its wholly owned subsidiaries or among its wholly owned subsidiaries and (iii) transactions in the ordinary course of business;

 

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acquire any ownership interest in any real property;

 

  

other than as required by law or an existing Hippo benefit plan, (i) grant any severance, retention, change in control or termination or similar pay, except in connection with the promotion, hiring or termination of employment of any employee of Hippo or its subsidiaries that is not a Key Company Employee (as defined in the Merger Agreement) in the ordinary course of business, (ii) hire or terminate the employment of any Key Company Employee, other than terminations of employment for cause or due to death or disability, (iii) terminate, adopt, enter into or materially amend any Hippo benefit plan, except as permitted under the Merger Agreement, (iv) increase the cash compensation or bonus opportunity of any employee, officer, director or other individual service provider, except in the ordinary course of business, (v) take any action to amend or waive any performance or vesting criteria or to accelerate the time of payment of vesting of any compensation or benefit payable by Hippo or any of Hippo’s subsidiaries, except in the ordinary course of business for employees other than Key Company Employees or (vi) forgive any loans or issue any loans to employees, officers, directors or other individual service providers of Hippo or any of Hippo’s subsidiaries;

 

  

acquire by merger or consolidation with, or merge or consolidate with, or purchase substantially all or a material portion of the assets of, any corporation, partnership, association, joint venture or other business organization or division thereof;

 

  

(i) issue or sell any debt securities or warrants or other rights to acquire any debt securities of Hippo or any subsidiary of Hippo or otherwise incur or assume any indebtedness, or (ii) guarantee any indebtedness of another person, except, in each case, in the ordinary course of business in amounts not to exceed $2,500,000 individually or $10,000,000 in the aggregate or in respect of any such debt securities, warrants, rights to acquire debt securities, indebtedness or guarantee of indebtedness between Hippo and any subsidiary of Hippo, on the one hand, and any other subsidiary of Hippo, on the other hand;

 

  

(i) make or change any material election in respect of material taxes, (ii) materially amend, modify or otherwise change any filed material tax return, (iii) adopt or request permission of any taxing authority to change any accounting method in respect of material taxes, (iv) enter into any closing agreement in respect of material taxes or enter into any tax sharing or similar agreement, (v) settle any claim or assessment in respect of material taxes, (vi) surrender or allow to expire any right to claim a refund of material taxes or (vii) consent to any extension or waiver of the limitation period applicable to any claim or assessment in respect of material taxes;

 

  

take any action, or knowingly fail to take any action, where such action or failure to act could reasonably be expected to prevent the Mergers from qualifying as a “reorganization” within the meaning of Section 368(a) of the Code and the Treasury Regulations;

 

  

(i) issue any additional shares of Hippo capital stock or securities exercisable for or convertible into shares of Hippo capital stock, other than (a) upon the exercise of Hippo Options pursuant to their terms in the ordinary course of business under the 2019 Plan and applicable award agreements or (b) upon the exercise of Hippo Warrants or conversion of Hippo Notes, in each case, outstanding on the date of the Merger Agreement, or (ii) grant any additional Hippo Options or other equity or equity-based compensation, except in connection with new hires and promotions for employees other than Key Company Employees in the ordinary course of business;

 

  

adopt a plan of, or otherwise enter into or effect a, complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization of Hippo or its subsidiaries (other than the Mergers);

 

  

waive, release, settle, compromise or otherwise resolve any inquiry, investigation, claim, action, litigation or other legal proceedings, except in the ordinary course of business (including with respect to ordinary course claims under, and within the applicable policy limits of, insurance contracts or reinsurance contracts of Hippo) or where such waivers, releases, settlements or compromises involve only the payment of monetary damages in an amount less than $250,000 in the aggregate;

 

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sell, assign, transfer, convey, license, encumber or divest (or agree to do any of the preceding) any intellectual property that is material to Hippo and its subsidiaries (other than non-exclusive licenses granted in the ordinary course of business), or dispose of, abandon or permit to lapse any rights to any material Hippo registered intellectual property except for the expiration of any such Hippo registered intellectual property in accordance with the applicable statutory term;

 

  

make or commit to make capital expenditures other than in an amount not in excess of the amount disclosed in the Hippo Disclosure Letter, in the aggregate;

 

  

enter into, modify, amend, renew or extend any collective bargaining agreement (other than as required by applicable law), or recognize or certify any labor organization, or group of employees of Hippo or its subsidiaries as the bargaining representative for any employees of Hippo or its subsidiaries;

 

  

terminate without replacement or fail to use reasonable efforts to maintain any license that is material to the conduct of the business of Hippo and its subsidiaries, taken as a whole;

 

  

waive the restrictive covenant obligations of any current or former employee of Hippo or any of Hippo’s subsidiaries;

 

  

voluntarily terminate without replacement or amend in a manner materially detrimental to the Company or any of its Subsidiaries, taken as a whole, any insurance policy insuring the business of the Company or any of the Company’s subsidiaries;

 

  

terminate or commute, nor materially modify, amend or waive compliance with any material provision of any reinsurance contracts or any material insurance contracts of Hippo, other than in the ordinary course of business;

 

  

make any material changes in the methods, policies, practices or principles of Hippo or any of its subsidiaries in effect on the date of the Merger Agreement with respect to reserving, hedging, underwriting, pricing, investing, risk management, reinsurance, marketing or claims administration or adopt any new reserving, hedging, underwriting, pricing, investing, risk management, reinsurance, marketing or claims administration methods, policies, practices or principles, except in each case in the ordinary course of business or to the extent required by applicable law, applicable SAP or GAAP;

 

  

reduce or strengthen any reserves, provisions for losses and other liability amounts in respect of the insurance contracts and reinsurance contracts of Hippo, except (i) to the extent required by applicable law or GAAP or (ii) other than in the ordinary course of business, including as a result of loss or expense payments to other parties in accordance with the terms of such insurance contracts and reinsurance contracts; or

 

  

enter into any agreement to take any of the above actions prohibited under the Merger Agreement.

Conduct of Business of RTPZ

During the Interim Period, RTPZ has agreed that it will, and will cause Merger Sub to, except as otherwise explicitly contemplated by the Merger Agreement (including as contemplated by the PIPE Investment), in connection with the Domestication, as required by law (including COVID-19 Measures) or as consented to by Hippo in writing (which consent will not be unreasonably conditioned, withheld, delayed or denied), use commercially reasonable efforts to (x) operate the business of RTPZ in the ordinary course and (y) preserve intact RTPZ’s present business organization, retain RTPZ’s current officers, and preserve RTPZ’s relationships with its shareholders and other business relationships.

During the Interim Period, RTPZ has also agreed not to, and to cause Merger Sub not to, except as otherwise contemplated by the Merger Agreement (including as contemplated by the PIPE Investment or in connection with the Domestication) or the Ancillary Agreements (as defined below), as consented to by Hippo in

 

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writing (which consent will not be unreasonably conditioned, withheld, delayed or denied) or as required by applicable law (including COVID-19 Measures):

 

  

seek any approval from RTPZ’s shareholders to change, modify or amend the Trust Agreement or the governing documents of RTPZ or Merger Sub, except as otherwise contemplated by the Transaction Proposals or the RTPZ Warrant Amendment Proposal;

 

  

except as contemplated by the Transaction Proposals or the RTPZ Warrant Amendment Proposal, (i) make or declare any dividend or distribution to the shareholders of RTPZ or make any other distributions in respect of any of RTPZ’s or Merger Sub’s capital stock, share capital or equity interests, (ii) split, combine, reclassify or otherwise amend any terms of any shares or series of RTPZ’s or Merger Sub’s capital stock or equity interests or (iii) purchase, repurchase, redeem or otherwise acquire any issued and outstanding share capital, outstanding shares of capital stock, share capital or membership interests, warrants or other equity interests of RTPZ or Merger Sub other than a redemption of shares of RTPZ Class A ordinary shares effected in connection with the Mergers;

 

  

(i) make or change any material election in respect of material taxes, (ii) amend, modify or otherwise change any filed material tax return, (iii) adopt or request permission of any taxing authority to change any accounting method in respect of material taxes, (iv) enter into any closing agreement in respect of material taxes or enter into any tax sharing or similar agreement, (v) settle any claim or assessment in respect of material taxes, (vi) surrender or allow to expire any right to claim a refund of material taxes, or (vii) consent to any extension or waiver of the limitation period applicable to any claim or assessment in respect of material taxes;

 

  

take any action, or knowingly fail to take any action (excluding, for the avoidance of doubt, increasing the aggregate merger consideration to be received by the equityholders of Hippo pursuant to the Merger Agreement), where such action or failure to act could reasonably be expected to prevent either the Mergers from qualifying as a “reorganization” within the meaning of Section 368(a) of the Code and the Treasury Regulations;

 

  

other than as expressly required by the Sponsor Support Agreement, enter into, renew or amend in any material respect, any transaction or contract with an affiliate of RTPZ or Merger Sub (including, for the avoidance of doubt, (i) the Sponsor and (ii) any person in which the Sponsor has a direct or indirect legal, contractual or beneficial ownership interest of 5% or greater);

 

  

other than the Sponsor working capital loans, incur or assume any indebtedness or guarantee any indebtedness of another person, issue or sell any debt securities or warrants or other rights to acquire any debt securities of RTPZ or any of RTPZ’s subsidiaries or guaranty any debt securities of another person, other than any indebtedness for borrowed money or guarantee (i) incurred in the ordinary course of business and in an aggregate amount not to exceed $100,000 or (ii) incurred between RTPZ and Merger Sub;

 

  

incur, guarantee or otherwise become liable for (whether directly, contingently or otherwise) any indebtedness or otherwise knowingly and purposefully incur, guarantee or otherwise become liable for (whether directly, contingently or otherwise) any other material liabilities, debts or obligations, other than fees and expenses incurred in support of the transactions contemplated by this Agreement and the Ancillary Agreements or in support of the ordinary course operations of RTPZ (which includes any indebtedness in respect of any Sponsor working capital loan incurred in the ordinary course of business);

 

  

other than with respect to the PIPE Investment or the Sponsor working capital loans or as expressly contemplated by the Merger Agreement, (i) issue any securities of RTPZ or securities exercisable for or convertible into securities of RTPZ, other than the issuance of the Aggregate Merger Consideration, (ii) grant any options, warrants or other equity-based awards with respect to securities of RTPZ not outstanding on the date of the Merger Agreement or (iii) amend, modify or waive any of the material

 

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terms or rights set forth in any RTPZ warrant or the RTPZ Warrant Agreement, including any amendment, modification or reduction of the warrant price set forth therein; or

 

  

enter into any agreement to do any of the above actions prohibited under the Merger Agreement.

Covenants of RTPZ

Pursuant to the Merger Agreement, RTPZ has agreed, among other things, to:

 

  

prior to the Closing Date, obtain approval for and adopt the Incentive Award Plan, the Restricted Stock Unit Agreement, the Option Award Agreement and the ESPP, in each case, with such changes that may be agreed in writing by RTPZ and Hippo;

 

  

within two business days following the expiration of the sixty-day period after RTPZ has filed current Form 10 information with the SEC, file an effective registration statement on Form S-8 (or other applicable form, including Form S-3) with respect to Hippo Holdings’ common stock issuable under the Incentive Award Plan and/or the ESPP and use reasonable best efforts to maintain the effectiveness of such registration statement(s) (and the current status of the prospectus or prospectuses contained therein) for so long as awards granted thereunder remain outstanding;

 

  

take certain actions so that the Trust Amount will released from the trust account and so that the trust account will terminate thereafter, in each case, pursuant to the terms and subject to the terms and conditions of the Trust Agreement;

 

  

during the Interim Period, ensure RTPZ remains listed as a public company on the NYSE;

 

  

during the Interim Period, not, and cause its subsidiaries not to, and instruct its and their representatives not to, initiate any negotiations or enter into any agreements for certain alternative transactions and to terminate any such negotiations ongoing as of the date of the Merger Agreement;

 

  

subject to the terms of RTPZ’s governing documents, take all such action within its power as may be necessary or appropriate such that immediately following the effective time of the Merger:

 

  

the board of directors of Hippo Holdings shall consist of (i) an individual designated by RTPZ, subject to Hippo’s reasonable approval, as a director pursuant to the Sponsor Agreement, (ii) individuals to be designated by Hippo as directors, as listed in the section titled “Management of Hippo Holdings Following the Business Combination,” subject to requirements of the NYSE, and (iii) Michael Thompson as a non-voting board observer, subject to the terms of the Sponsor Agreement;

 

  

the board of directors of Hippo Holdings shall have a majority of “independent” directors for the purposes of NYSE listing rules, each of whom shall serve in such capacity in accordance with the terms of the governing documents of Hippo Holdings following the Effective Time; and

 

  

the initial officers of RTPZ will be as set forth in Hippo’s disclosure letter (and are listed under “Executive Officers” in the section titled “Management of Hippo Holdings Following the Business Combination”), who will serve in such capacity in accordance with the terms of the governing documents of Hippo Holdings following the Effective Time;

 

  

subject to approval of RTPZ’s shareholders, cause the Domestication to become effective prior to the Effective Time (see “Domestication Proposal”);

 

  

after the Effective Time, indemnify and hold harmless each present and former director and officer of Hippo and RTPZ and each of their respective subsidiaries against any costs, expenses, damages or liabilities incurred in connection with any legal proceeding, to the fullest extent that would have been permitted under applicable law and the applicable governing documents to indemnify such person;

 

  

maintain, and cause its subsidiaries to maintain for a period of not less than six years from the Effective Time (i) provisions in their respective governing documents and those of its subsidiaries concerning the

 

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indemnification and exoneration of its subsidiaries and their subsidiaries’ former and current officers, directors and employees and agents, no less favorable than as contemplated by the applicable governing documents of Hippo immediately prior to the Effective Time and (ii) a directors’ and officers’ liability insurance policy covering those persons who are currently covered by RTPZ’s, Hippo’s or their respective subsidiaries’ directors’ and officers’ liability insurance policies on terms no less favorable than the terms of such current insurance coverage, except that in no event will RTPZ be required to pay an annual premium for such insurance in excess of 300% of the aggregate annual premium payable by RTPZ or Hippo, as applicable, for such insurance policy for the year ended December 31, 2020;

 

  

on the Closing Date, enter into customary indemnification agreements reasonably satisfactory to each of Hippo and RTPZ with the post-Closing directors and officers of Hippo Holdings, which indemnification agreements will continue to be effective following the Closing;

 

  

from the date of the Merger Agreement through the Effective Time, keep current and timely file all reports required to be filed or furnished with the SEC and otherwise comply in all material respects with its reporting obligations under applicable law;

 

  

(i) as promptly as practicable after this registration statement is declared effective under the Securities Act, (A) cause the proxy statement/prospectus to be disseminated to RTPZ shareholders in compliance with applicable law, (B) solely with respect to the Transaction Proposals and the RTPZ Warrant Amendment Proposal, duly give notice of and convene and hold a meeting of its shareholders in accordance with RTPZ’s governing documents and Section 710 of the NYSE Listing Rules for a date no later than thirty (30) business days following the date this registration statement is declared effective, and (C) solicit proxies from the holders of RTPZ public shares to vote in favor of each of the Transaction Proposals and from the holders of RTPZ public warrants to vote in favor of the RTPZ Warrant Amendment Proposal, and (ii) provide its public shareholders with the opportunity to elect to effect a redemption;

 

  

recommend to its public shareholders and public warrantholders, as applicable, through its board of directors, the approval of the Transaction Proposals and the RTPZ Warrant Amendment Proposal and not withdraw, amend, qualify or modify such recommendations;

 

  

except as otherwise approved in writing by Hippo (which approval shall not be unreasonably withheld, conditioned or delayed) or as would not increase conditionality or impose any new obligation on Hippo or RTPZ, reduce the Committed PIPE Investment Amount or the subscription amount under any PIPE Subscription Agreement or reduce or impair the rights of RTPZ under any PIPE Subscription Agreement, not permit any amendment or modification to be made to, any waiver (in whole or in part) of, or provide consent to modify (including consent to terminate), any provision or remedy under, or any replacements of, any of the PIPE Subscription Agreements, in each case, other than any assignment or transfer contemplated therein or expressly permitted thereby (without any further amendment, modification or waiver to such assignment or transfer provision) and so long as the initial party to such Subscription Agreement remains bound by its obligations with respect thereto in the event that the transferee or assignee, as applicable, does not comply with its obligations to consummate the purchase of shares of Hippo Holdings common stock contemplated thereby;

 

  

use its reasonable best efforts to take, or to cause to be taken, all actions required, necessary or that it deems to be proper or advisable to consummate the transactions contemplated by the PIPE Subscription Agreements on the terms described therein, including using its reasonable best efforts to enforce its rights under the PIPE Subscription Agreements to cause the PIPE Investors to pay to (or as directed by) RTPZ the applicable purchase price under each PIPE Investor’s applicable Subscription Agreement in accordance with its terms; and

 

  

prior to the Closing Date, promptly notify and keep Hippo reasonably informed of the status of any litigation brought or, to RTPZ’s knowledge, threatened in writing against RTPZ or its board of

 

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directors by any of RTPZ’s stockholders in connection with the Merger Agreement, any Ancillary Agreement or the transactions contemplated therein, and provide Hippo with the opportunity to participate in the defense of such litigation, give due consideration to Hippo’s advice with respect thereto and not settle any such litigation without the prior written consent of Hippo (such consent not to be unreasonably withheld, conditioned or delayed).

Covenants of Hippo

Pursuant to the Merger Agreement, Hippo has agreed, among other things, to:

 

  

use its reasonable best efforts to obtain the requisite stockholder approval necessary to adopt the Merger Agreement and the transactions contemplated thereby, including the Mergers (the “Hippo Stockholder Approval”), either by (i) written consent of the holders of shares of Hippo capital stock sufficient to obtain the Hippo Stockholder Approval promptly (and in any event within three (3) business days) following the time at which this registration statement shall have been declared effective under the Securities Act and delivered or otherwise made available to stockholders, and prepare and deliver a notice of action by written consent and appraisal rights as required by Sections 228(e) and 262 of the DGCL and such other documents required by law to such stockholders that did not deliver such written consent or (ii) in the event Hippo is unable to obtain such written consent, by calling and holding a meeting of the stockholders of Hippo for the purpose of voting solely upon the adoption of the Merger Agreement and the transactions contemplated thereby, including the Mergers, as soon as reasonably practicable after this registration statement is declared effective under the Securities Act;

 

  

recommend to its stockholders, through its board of directors, the adoption of the Merger Agreement and the transactions contemplated thereby, and not withdraw, amend, qualify or modify such recommendation;

 

  

subject to confidentiality obligations (whether contractual, imposed by applicable law or otherwise) that may be applicable to information furnished to Hippo or any of its subsidiaries by third parties and except for any information that is subject to attorney-client privilege, and to the extent permitted by applicable law (including COVID-19 Measures), afford RTPZ and its accountants, counsel and other representatives reasonable access during the Interim Period to their properties, books, contracts, commitments, tax returns, records and appropriate officers and employees and furnish such representatives with all financial and operating data and other information concerning the affairs of Hippo and its subsidiaries that are in the possession of Hippo or its subsidiaries as such representatives may reasonably request, subject to certain exceptions;

 

  

provide to RTPZ and, if applicable, its accountants, counsel or other representatives, (i) such information and such other materials and resources relating to any legal proceeding initiated, pending or threatened during the Interim Period, or to the compliance and risk management operations and activities of Hippo and its subsidiaries during the Interim Period, in each case, as RTPZ or such representative may reasonably request, (ii) prompt written notice of any material status updates in connection with any such legal proceedings or otherwise relating to any compliance and risk management matters or decisions of Hippo or its subsidiaries, and (iii) copies of any communications sent or received by Hippo or its subsidiaries in connection with such legal proceedings, matters and decisions;

 

  

deliver to RTPZ, as soon as reasonably practicable following the date of the Merger Agreement, (i) audited financial statements (together with the auditor’s reports thereon) of Hippo and its subsidiaries as of and for the year ended December 31, 2020 and (ii) if the Closing has not occurred prior to May 17, 2021, unaudited financial statements of Hippo and its subsidiaries as of and for the three-month period ended March 31, 2021;

 

  

use reasonable best efforts to deliver to RTPZ, as soon as reasonably practicable following the date of the Merger Agreement, any additional financial or other information reasonably requested by RTPZ to

 

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prepare pro forma financial statements required under federal securities laws to be included in RTPZ’s filings with the SEC (including, if applicable, this registration statement);

 

  

use reasonable best efforts to cause its independent auditors to provide any necessary consents to the inclusion of the financial statements in RTPZ’s filings with the SEC in accordance with the applicable requirements of federal securities laws;

 

  

at or prior to Closing, Hippo will terminate or settle, or cause to be terminated or settled without further liability to RTPZ, Hippo or any of its subsidiaries, all Affiliate Agreements (as defined in the Merger Agreement) set forth in the applicable section of the Hippo Disclosure Letter and provide RTPZ with evidence of such termination or settlement reasonably satisfactory to RTPZ; and

 

  

during the Interim Period, not, and to use reasonable best efforts to cause its representatives to not, (i) initiate any negotiations with any person with respect to certain alternative transactions, (ii) enter into an agreement with respect to any such alternative transactions or proposed transactions, (iii) grant any waiver, amendment or release under any confidentiality agreement or the anti-takeover laws of any state, or (iv) otherwise knowingly facilitate any inquiries, proposals, discussions, or negotiations or any effort or attempt by any person to make a proposal with respect to any such alternative transaction.

Joint Covenants of RTPZ and Hippo

In addition, each of RTPZ and Hippo has agreed, among other things, to take certain actions set forth below:

 

  

Each of RTPZ and Hippo will (and, to the extent required, will cause its affiliates to) comply promptly, but in no event later than ten business days after the date of the Merger Agreement, with the notification and reporting requirements of the HSR Act;

 

  

Each of RTPZ and Hippo will substantially comply with any information or document requests with respect to antitrust matters as contemplated by the Merger Agreement;

 

  

Each of RTPZ and Hippo will (and, to the extent required, will cause its affiliates to) (i) request early termination of any waiting period or periods under the HSR Act (to the extent early termination is made available by the relevant antitrust authorities) and exercise its reasonable best efforts to (a) obtain termination or expiration of the waiting period or periods under the HSR Act and (b) prevent the entry, in any legal proceeding brought by an antitrust authority or any other person, of any governmental order which would prohibit, make unlawful or delay the consummation of the transactions contemplated by the Merger Agreement and (ii) take certain other actions to cooperate to avoid any governmental order from an antitrust authority that would delay, enjoin, prevent, restrain or otherwise prohibit the consummation of the Merger, including sharing relevant information with the other parties thereto for such purposes (subject to, as applicable, a requirement to obtain Hippo’s prior written consent with respect to certain such actions identified above as contemplated by the Merger Agreement);

 

  

RTPZ and Hippo will jointly prepare and RTPZ will file with the SEC the proxy statement/registration statement in connection with the registration under the Securities Act of (i) the shares of Hippo Holdings common stock and warrants comprising such to be issued in connection with the Domestication and (ii) the shares of Hippo Holdings common stock that constitute the Aggregate Merger Consideration to be received by the Hippo stockholders;

 

  

Each of RTPZ and Hippo will use its reasonable best efforts to cause the proxy statement/registration statement to comply with the rules and regulations promulgated by the SEC, to have the Registration Statement (as defined below) declared effective under the Securities Act as promptly as practicable after such filing, to keep the Registration Statement effective as long as is necessary to consummate the transactions contemplated by the Merger Agreement, to provide such information as may be reasonably necessary, advisable or requested in connection with the proxy statement/registration statement, any current report on Form 8-K or any other statement, filing, notice or application in connection with the

 

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transactions contemplated by the Merger Agreement and otherwise ensure that the information contained in the proxy statement/registration statement contains no untrue statement of material fact or material omission;

 

  

Each of RTPZ and Hippo will reasonably cooperate and jointly prepare a registration statement on Form S-1 (the “Resale Registration Statement”) registering the shares to be received by the PIPE Investors, the Sponsor and certain of its affiliates and certain Hippo stockholders in order to enable Hippo Holdings to file the Resale Registration Statement as soon as reasonably practicable following the Closing, and in any event within thirty (30) days of the Closing, and to reasonably cooperate and furnish such information as may be reasonably requested in connection with the foregoing;

 

  

Each of RTPZ and Hippo will, and will cause their respective subsidiaries to use reasonable best efforts to obtain all material consents and approvals of third parties that any of RTPZ, Hippo, or their respective affiliates are required to obtain in order to consummate the Mergers and take such other action as soon as practicable as may be reasonably necessary in order to consummate the transactions contemplated by the Merger Agreement;

 

  

Each of Hippo and RTPZ will each, and will each cause their respective subsidiaries and its and their representatives to, prior to the Closing, reasonably cooperate in a timely manner in connection with any financing arrangement the parties mutually agree to seek in connection with the transactions contemplated by the Merger Agreement;

 

  

RTPZ will use its reasonable best efforts to, and will instruct its financial advisors to, keep Hippo and its financial advisors reasonably informed with respect to the PIPE Investment and the rotation of the shares of Hippo Holdings common stock during the period commencing on the date of announcement of the Merger Agreement or the transactions contemplated thereby until the Closing Date; and

 

  

Each of Hippo and RTPZ will, prior to the Closing, take all such steps as may be required (to the extent permitted under applicable law) to cause any acquisitions or dispositions of shares of Hippo capital stock, Hippo Holdings common stock (including, in each case, securities deliverable upon exercise, vesting or settlement of any derivative securities) resulting from the transactions contemplated by the Merger Agreement, including the Redemption (as defined below), by each individual who is or may become subject to the reporting requirements of Section 16(a) of the Exchange Act in connection with the transactions contemplated thereby to be exempt under Rule 16B-3 promulgated under the Exchange Act.

Redemption

Immediately following, and subject to, the Effective Time, Hippo Holdings will redeem an aggregate of 10,000,000 shares of Hippo Holdings common stock from certain stockholders of Hippo set forth on the Hippo Disclosure Letter (or such other persons as mutually agreed by RTPZ and Hippo), including certain directors and executive officers of Hippo as more fully described in “Interests of Hippo’s Directors and Executive Officers in the Business Combination”, at a purchase price of $10.00 per share, payable in immediately available funds (the “Hippo Holdings Redemption”).

Closing Conditions

The consummation of the Mergers is conditioned upon the satisfaction or waiver by the applicable parties to the Merger Agreement of the conditions set forth below. Therefore, unless these conditions are waived by the applicable parties to the Merger Agreement, the Mergers may not be consummated. There can be no assurance that the parties to the Merger Agreement would waive any such provisions of the Merger Agreement.

Minimum Cash Condition

The Merger Agreement provides that the obligations of Hippo to consummate the Mergers are conditioned on, among other things, that as of the Closing, the Trust Amount plus the PIPE Investment Amount, in the

 

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aggregate, is at least equal to $450 million (the “Minimum Cash Condition”). The Minimum Cash Condition is for the sole benefit of Hippo.

Conditions to the Obligations of Each Party

The obligations of each party to the Merger Agreement to consummate, or cause to be consummated, the Mergers are subject to the satisfaction of the following conditions, any one or more of which may be waived in writing by all of such parties:

 

  

the approval of the Transaction Proposals by RTPZ’s shareholders will have been obtained (the “RTPZ Shareholder Approval”);

 

  

the Hippo Stockholder Approval will have been obtained;

 

  

the Domestication will have been completed as contemplated by the Merger Agreement and a time- stamped copy of the certificate issued by the Delaware Secretary of State in relation thereto will have been delivered to Hippo (for additional information, see “Domestication Proposal”);

 

  

the registration statement of which this proxy statement/prospectus forms a part (the “Registration Statement”) will have become effective under the Securities Act and no stop order suspending the effectiveness of the Registration Statement will have been issued and no proceedings for that purpose will have been initiated or threatened by the SEC and not withdrawn;

 

  

the waiting period or periods under the HSR Act and the governmental authorizations set forth in the applicable section of the Hippo Disclosure Letter (pertaining to applicable insurance regulatory approvals and/or exemptions) will have been obtained, expired or terminated;

 

  

there will not be in force any order, judgment, injunction, decree, writ, stipulation, determination or award (entered by or with any federal, state, provincial, municipal, local or foreign government, governmental authority, regulatory or administrative agency, governmental commission, department, board, bureau, agency or instrumentality, court or tribunal (a “Governmental Order”), in each case, to the extent such governmental authority has jurisdiction over the parties to the Merger Agreement and the transactions contemplated thereby) enjoining or prohibiting the consummation of the Mergers or any law that makes the consummation of the Mergers illegal or otherwise prohibited;

 

  

RTPZ will have at least $5,000,001 of net tangible assets (as determined in accordance with Rule 3a51-1(g)(1) of the Exchange Act); and

 

  

the shares of Hippo Holdings common stock to be issued in connection with the Mergers will have been approved for listing on NYSE.

Conditions to the Obligations of RTPZ and Merger Sub

The obligations of RTPZ and Merger Sub to consummate, or cause to be consummated, the Mergers are subject to the satisfaction of the following additional conditions, any one or more of which may be waived in writing by RTPZ and Merger Sub:

 

  

certain of the representations and warranties of Hippo pertaining to the capitalization of Hippo will be true and correct in all but de minimis respects as of the Closing Date, except with respect to such representations and warranties that are made as of an earlier date, which representations and warranties will be true and correct in all but de minimis respects at and as of such date, except for changes after the date of the Merger Agreement which are contemplated or expressly permitted by the Merger Agreement or the Ancillary Agreements;

 

  

each of Hippo Fundamental Representations (other than those portions of the capitalization representations referenced above) will be true and correct in all material respects, in each case as of the Closing Date, except with respect to such representations and warranties that are made as of an earlier

 

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date, which representations and warranties will be true and correct in all material respects at and as of such date, except for changes after the date of the Merger Agreement which are contemplated or expressly permitted by the Merger Agreement or the Ancillary Agreements;

 

  

each of the remaining representations and warranties of Hippo contained in the Merger Agreement (disregarding any qualifications and exceptions contained therein relating to materiality, material adverse effect or any similar qualification or exception) will be true and correct as of the Closing Date, except with respect to such representations and warranties that are made as of an earlier date, which representations and warranties will be true and correct at and as of such date, except for, in each case, inaccuracies or omissions that would not, individually or in the aggregate, reasonably be expected to have a Company Material Adverse Effect;

 

  

each of the covenants of Hippo to be performed as of or prior to the Closing will have been performed in all material respects; and

 

  

there will not have occurred a Company Material Adverse Effect after the date of the Merger Agreement that is continuing.

Conditions to the Obligations of Hippo

The obligation of Hippo to consummate, or cause to be consummated, the Mergers is subject to the satisfaction of the following conditions any one or more of which may be waived in writing by Hippo:

 

  

each of the representations and warranties of RTPZ regarding its capitalization, as provided for in the Merger Agreement, will be true and correct in all but de minimis respects as of the Closing Date, except with respect to such representations and warranties that are made as of an earlier date, which representations and warranties will be true and correct in all but de minimis respects at and as of such date, except for changes after the date of the Merger Agreement which are contemplated or expressly permitted by the Merger Agreement;

 

  

each of the other representations and warranties of RTPZ contained in the Merger Agreement (disregarding any qualifications and exceptions contained therein relating to materiality, material adverse effect or any similar qualification or exception) will be true and correct in all material respects, in each case as of the Closing Date, except with respect to such representations and warranties that are made as of an earlier date, which representations and warranties will be true and correct in all material respects at and as of such date, except for changes after the date of Merger Agreement which are contemplated or expressly permitted by Merger Agreement or the Ancillary Agreements;

 

  

each of the covenants of RTPZ to be performed as of or prior to the Closing will have been performed in all material respects;

 

  

all of the directors of RTPZ (other than those persons identified as the initial directors of Hippo Holdings Inc. after the Effective Time) will have resigned or otherwise been removed effective as of or prior to the Effective Time; and

 

  

the Minimum Cash Condition. For more information, see “— Minimum Cash Condition” above.

Termination; Effectiveness

The Merger Agreement may be terminated and the Mergers abandoned at any time prior to the Closing:

 

  

by mutual written consent of Hippo and RTPZ;

 

  

by Hippo or RTPZ if any Governmental Order has become final and nonappealable which has the effect of making consummation of the Mergers illegal or otherwise preventing or prohibiting the Mergers or if there is adopted any law that permanently makes the Mergers illegal or otherwise prohibited;

 

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by Hippo or RTPZ if the RTPZ Shareholder Approval will not have been obtained by reason of the failure to obtain the required vote at a meeting of RTPZ’s shareholders duly convened therefor or at any adjournment thereof;

 

  

by Hippo if there has been a modification in recommendation of the board of directors of RTPZ with respect to any of the Transaction Proposals;

 

  

by written notice to Hippo from RTPZ in the event of certain uncured breaches on the part of Hippo or if the Closing has not occurred on or before September 29, 2021, the date that is 210 days after the date of the Merger Agreement, provided that such date will be automatically extended for a period of 60 days if on or before such date certain conditions to Closing have not been satisfied or waived by Hippo and RTPZ (the “Agreement End Date”), unless RTPZ is in material breach of the Merger Agreement; and

 

  

by written notice to RTPZ from Hippo in the event of certain uncured breaches on the part of RTPZ or Merger Sub or if the Closing has not occurred on or before the Agreement End Date, unless Hippo is in material breach of the Merger Agreement.

In the event of the termination of the Merger Agreement, the Merger Agreement will become void and have no effect, without any liability on the part of any party thereto or its respective affiliates, officers, directors or stockholders, other than liability of Hippo, RTPZ or Merger Sub, as the case may be, for fraud or any willful and material breach of the Merger Agreement occurring prior to such termination, other than with respect to certain exceptions contemplated by the Merger Agreement (including the terms of the Confidentiality Agreement) that will survive any termination of the Merger Agreement.

Waiver; Amendments

No provision of the Merger Agreement may be waived unless such waiver is in writing and signed by the party or parties against whom such waiver is effective. Any party to the Merger Agreement may, at any time prior to the Closing, by action taken by its board of directors, board of managers, managing member or other officers or persons thereunto duly authorized, (a) extend the time for the performance of the obligations or acts of the other parties hereto, (b) waive any inaccuracies in the representations and warranties (of another party hereto) that are contained in the Merger Agreement or (c) waive compliance by the other parties hereto with any of the agreements or conditions contained in the Merger Agreement, but such extension or waiver will be valid only if in writing signed by the party granting such extension or waiver.

The Merger Agreement may be amended or modified in whole or in part, only by a duly authorized agreement in writing that is executed in the same manner as the Merger Agreement and which makes reference to the Merger Agreement.

Fees and Expenses

If the Closing does not occur, Hippo will be responsible for Hippo’s transaction expenses incurred in connection with the Merger Agreement and the transactions contemplated hereby, including all fees of its legal counsel, financial advisers and accountants, and RTPZ will be responsible for RTPZ’s transaction expenses (including the expenses of both parties for filing fees incurred and fees and expenses incurred in connection with preparing and filing the Registration Statement and obtaining approval of the NYSE). If the Closing occurs, Hippo Holdings Inc. will, upon the consummation of the Mergers and release of proceeds from the trust account, pay or cause to be paid all accrued and unpaid transaction expenses of Hippo and pay or cause to be paid all accrued transaction expenses of RTPZ. RTPZ and Hippo will exchange written statements listing all accrued and unpaid transaction expenses not less than two business days prior to the Closing Date.

 

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Related Agreements

This section describes certain additional agreements entered into or to be entered into pursuant to the Merger Agreement, but does not purport to describe all of the terms thereof. The following summary is qualified in its entirety by reference to the complete text of each of the agreements. The full text of the Sponsor Support Agreement, the Hippo Support Agreement, the Registration Rights Agreement, the PIPE Subscription Agreements, the Sponsor Agreement, and the Lock-up Agreements (the “Related Agreements”), or forms thereof, are filed as annexes to this proxy statement/prospectus or as exhibits to the registration statement of which this proxy statement/prospectus forms a part, and the following descriptions are qualified in their entirety by the full text of such annexes and exhibits. Shareholders and other interested parties are urged to read such Related Agreements in their entirety prior to voting on the proposals presented at the extraordinary general meeting.

Sponsor Support Agreement

In connection with the execution of the Merger Agreement, RTPZ, each officer and director of RTPZ, the Sponsor, and Hippo entered into the Sponsor Support Agreement, dated as of March 3, 2021, a copy of which is attached to this proxy statement/prospectus as Annex F. Pursuant to the Sponsor Support Agreement, the Sponsor and each director and officer of RTPZ agreed to, among other things, vote to adopt and approve the Merger Agreement and all other documents and transactions contemplated thereby, in each case, subject to the terms and conditions of the Sponsor Support Agreement. As of the record date for the extraordinary general meeting the Sponsor and RTPZ’s independent directors collectively own 20.0% of the issued and outstanding ordinary shares.

The Sponsor Support Agreement will terminate in its entirety, and be of no further force or effect, upon the earliest to occur of (i) the termination of the Merger Agreement in accordance with its terms, (ii) the liquidation of RTPZ and (iii) the Effective Time. Upon such termination of the Sponsor Support Agreement, all obligations of the parties under the Sponsor Support Agreement will terminate, without any liability or other obligation on the part of any party thereto to any person in respect thereof or the transactions contemplated hereby, and no party thereto will have any claim against another (and no person will have any rights against such party), whether under contract, tort or otherwise, with respect to the subject matter thereof; provided, however, that the termination of the Sponsor Support Agreement will not relieve any party thereto from liability arising in respect of any breach of the Sponsor Support Agreement prior to such termination.

Hippo Support Agreement

In connection with the execution of the Merger Agreement, RTPZ, Hippo, each officer and director of Hippo, and certain stockholders of Hippo set forth on Schedule I thereto (the “Hippo Support Stockholders”) entered into the Hippo Support Agreement, a copy of which is attached to this proxy statement/prospectus as Annex G. Pursuant to Hippo Support Agreement, the Hippo Support Stockholders agreed to, among other things, vote to adopt and approve, upon the effectiveness of the Registration Statement, the Merger Agreement and all other documents and transactions contemplated thereby, in each case, subject to the terms and conditions of Hippo Support Agreement.

Pursuant to the Hippo Support Agreement, the Hippo Support Stockholders also agreed to, among other things, (i) approve and adopt the Amended and Restated Charter of Hippo (the “Amended and Restated Company Charter”), (ii) authorize and approve the Mergers as an RTPZ Transaction (as defined in the Amended and Restated Company Charter), (iii) exercise the drag-along rights pursuant to and in accordance with that certain Amended and Restated Voting Agreement, dated as of July 8, 2020, by and among Hippo and the Stockholders (as defined therein), (iv) deliver a duly executed copy of the Registration Rights Agreement at the Closing, (v) deliver a duly executed lock-up agreement and (vi) terminate all Affiliate Agreements (as defined in the Merger Agreement) to which such Hippo Support Stockholders are party.

The Hippo Support Agreement will terminate in its entirety, and be of no further force or effect, upon the earliest to occur of (i) the termination of the Merger Agreement in accordance with its terms, (ii) the Effective

 

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Time and (b) as to each Hippo Support Stockholder, the written agreement of RTPZ, Hippo and such Hippo Support Stockholder. Upon such termination of the Hippo Support Agreement, all obligations of the parties under the Hippo Support Agreement will terminate, without any liability or other obligation on the part of any party thereto to any person in respect thereof or the transactions contemplated hereby, and no party thereto will have any claim against another (and no person will have any rights against such party), whether under contract, tort or otherwise, with respect to the subject matter thereof; provided, however, that the termination of the Hippo Support Agreement will not relieve any party thereto from liability arising in respect of any breach of the Hippo Support Agreement prior to such termination.

Registration Rights Agreement

The Merger Agreement contemplates that, at the Closing, Hippo Holdings, the Sponsor and the other holders of RTPZ Class B ordinary shares, certain former stockholders of Hippo, including certain of Hippo’s directors and officers, and Reinvent Capital Fund, will enter into the Registration Rights Agreement, a copy of which is attached to this proxy statement/prospectus as Annex J, pursuant to which Hippo Holdings will agree to register for resale, pursuant to Rule 415 under the Securities Act, certain shares of Hippo Holdings common stock and other equity securities of Hippo Holdings that are held by the parties thereto from time to time. Pursuant to the Registration Rights Agreement, Hippo Holdings will agree to file a shelf registration statement registering the resale of the Hippo Holdings common stock (including the Hippo Holdings warrants and shares of Hippo Holdings common stock issued or issuable upon the exercise of any other equity security) held by a party immediately following the Closing (including any securities distributable pursuant to the Merger Agreement and any shares of Hippo Holdings common stock purchased in the PIPE Investment) within 30 days of the Closing. Up to twice in any 12-month period, the Sponsor, Reinvent Capital Fund and the former stockholders of Hippo may each request to sell all or any portion of their Registrable Securities in an underwritten offering so long as the total offering price is reasonably expected to exceed $100 million. Hippo Holdings will also agree to provide customary “piggyback” registration rights, subject to certain requirements and customary conditions. The Registration Rights Agreement will also provide that Hippo Holdings will pay certain expenses relating to such registrations and indemnify the stockholders against certain liabilities.

PIPE Subscription Agreements

In connection with the execution of the Merger Agreement, RTPZ entered into Subscription Agreements with the PIPE Investors, pursuant to which the PIPE Investors agreed to purchase, in the aggregate, 55,000,000 shares of Hippo Holdings common stock at $10.00 per share for an aggregate commitment amount of $550,000,000. The obligation of the parties to consummate the purchase and sale of the shares covered by the Subscription Agreement is conditioned upon (i) there not being in force any injunction or order enjoining or prohibiting the issuance and sale of the shares covered by the Subscription Agreement, (ii) there not being any amendment or modification of the terms of the Merger Agreement in a manner that is materially adverse to the PIPE Investor (in its capacity as such) and (iii) the prior or substantially concurrent consummation of the transactions contemplated by the Merger Agreement. The closings under the Subscription Agreements will occur substantially concurrently with the Closing.

The Subscription Agreements provide that, solely with respect to subscriptions by third-party investors, RTPZ is required to file with the SEC, within 30 days after the consummation of the transactions contemplated by the Merger Agreement, a shelf registration statement covering the resale of the shares of Hippo Holdings common stock to be issued to any such third-party investor and to use its commercially reasonable efforts to have such registration statement declared effective as soon as practicable after the filing thereof but no later than the earlier of (i) the 90th day following the filing date thereof if the SEC notifies RTPZ that it will “review” such registration statement and (ii) the 10th business day after the date RTPZ is notified (orally or in writing, whichever is earlier) by the SEC that such registration statement will not be “reviewed” or will not be subject to further review.

 

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Additionally, pursuant to the Subscription Agreements, the PIPE Investors agreed to waive any claims that they may have at the Closing (as defined in the Subscription Agreements) or in the future as a result of, or arising out of, the Subscription Agreements against RTPZ, including with respect to the trust account. The Subscription Agreements will terminate, and be of no further force and effect, upon the earlier to occur of (i) such date and time as the Merger Agreement is terminated in accordance with its terms, (ii) upon the mutual written agreement of RTPZ and the applicable PIPE Investor, (iii) if the conditions set forth therein are not satisfied or are not capable of being satisfied prior to the Closing (as defined in the Subscription Agreements) and, as a result thereof, the transactions contemplated therein will not be or are not consummated at the Closing, and (iv) the Agreement Outside Date (as defined in the Merger Agreement), if the Closing has not occurred by such date.

Sponsor Agreement

On March 3, 2021, the Sponsor entered into the Sponsor Agreement with RTPZ and Hippo, a copy of which is attached to this proxy statement/prospectus as Annex I, pursuant to which the parties thereto agreed to, among other things, (i) certain vesting terms with respect to the Sponsor Shares, (ii) the Sponsor lock-up described under the “Lock-up Agreements” section below, (iii) in addition to the existing exercise provisions in the Warrant Agreement, the mandatory exercise of the private placement warrants if (a) Hippo Holdings elects to redeem the public warrants, (b) the last reported sales price of Hippo Holdings common stock for any 20 trading days within a period of 30 consecutive trading days exceeds $25.00 per share and (c) there is an effective registration statement covering the issuance of shares of Hippo Holdings common stock issuable upon exercise of the private placement warrants, and a current prospectus relating thereto, available at the time of such exercise; and (iv) certain rights of Sponsor with respect to board representation of Hippo Holdings following the Closing, in each case, on the terms and subject to the conditions set forth in the Sponsor Agreement.

Pursuant to the terms of the Sponsor Agreement, the Sponsor Shares will vest in tranches of 25% (i) automatically at Closing, (ii) when the VWAP (as defined in the Sponsor Agreement) of Hippo Holdings common stock is greater than $12.50 for any twenty (20) Trading Days within a period of thirty (30) consecutive Trading Days (as defined in the Sponsor Agreement), (iii) when the VWAP of Hippo Holdings common stock is greater than $15.00 for any twenty (20) Trading Days within a period of thirty (30) consecutive Trading Days, and (iv) when the VWAP of Hippo Holdings common stock is greater than $20.00 for any twenty (20) Trading Days within a period of thirty (30) consecutive Trading Days, respectively. Any Sponsor Shares that have not vested as of the tenth anniversary of the Closing will automatically vest on such date.

Lock-up Agreements

The Merger Agreement contemplates that, at the Closing, Hippo Holdings and the Company Directors and Officers (as defined in the Merger Agreement) will enter into the Company D&O Lock-Up Agreement, and Hippo Holdings and the Major Company Equityholders (as defined in the Merger Agreement) will enter into the Major Company Equityholders Lock-Up Agreement.

The Company D&O Lock-Up Agreement contains certain restrictions on transfer with respect to the D&O Lock-up Shares. Such restrictions begin at the Closing and end in tranches of 25% of the D&O Lock-up Shares at each of (i) the date that is six months after the Closing, (ii) the one-year anniversary of the Closing, (iii) the date that is 18 months after the Closing, and (iv) the two-year anniversary of the Closing. If, after Closing, Hippo Holdings completes a transaction that results in a change of control, the D&O Lock-up Shares are released from restriction immediately prior to such change of control.

Pursuant to the Sponsor Agreement, the shares of Hippo Holdings common stock (other than shares purchased in the public market or in the PIPE Investment) held by Sponsor are subject to the same restrictions and releases as the D&O Lock-up Shares.

The Major Company Equityholders Lock-Up Agreement contains certain restrictions on transfer with respect to the Major Company Equityholders Lock-up Shares. Such restrictions begin at the Closing and end in

 

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tranches of 50% of the Major Company Equityholders Lock-up Shares at each of (i) the date that is six months after the Closing and (ii) the one-year anniversary of the Closing. If, after Closing, Hippo Holdings completes a transaction that results in a change of control, the Major Company Equityholders Lock-up Shares are released from restriction immediately prior to such change of control.

Background of the Business Combination

The terms of the Business Combination are the result of negotiations between the representatives of RTPZ and Hippo. The following is a brief description of the background of these negotiations and the resulting Business Combination.

RTPZ is a blank check company incorporated on October 2, 2020, as a Cayman Islands exempted company and formed for the purpose of effecting a merger, share exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more businesses.

The Business Combination was the result of an extensive search for a potential transaction using the network and investing and operating experience of our management team, including our Board of Directors. RTPZ’s intention was to focus on partnering with a technology business to innovate and achieve entrepreneurship at scale by leveraging the Board of Director’s expertise as founders of technology companies and their experience building companies as advisors and board members. The following is a brief description of the background of these negotiations, the Business Combination and related transactions.

Prior to the RTPZ initial public offering, neither RTPZ nor anyone on its behalf engaged in any substantive discussions, directly or indirectly, with any business combination target with respect to an initial business combination with RTPZ.

On November 23, 2020, RTPZ consummated its initial public offering of 23,000,000 Units, including the issuance of 3,000,000 Units as a result of the underwriter’s exercise of its over-allotment option. Each Unit consisted of one Ordinary Share, and one-fifth of one redeemable warrant of RTPZ. Each whole warrant entitled the holder thereof to purchase one Ordinary Share for $11.50 per share, subject to adjustment. The Units were sold at a price of $10.00 per Unit, generating gross proceeds to the Company of $230,000,000. Morgan Stanley & Co. LLC (“Morgan Stanley”) served as the lead underwriter on the initial public offering and received a fee of $12.65 million, of which approximately $8.1 million was deferred and is payable only upon completion by RTPZ of an initial business combination. Accordingly, Morgan Stanley will receive the deferred portion of the initial public offering underwriting fee upon consummation of the Mergers.

Substantially concurrently with the closing of the initial public offering, RTPZ completed the private sale of 4,400,000 Private Placement Warrants at a purchase price of $1.50 per Private Placement Warrant, to the Sponsor, generating gross proceeds to the Company of $6,600,000. The Private Placement Warrants were identical to the warrants sold as part of the Units in the initial public offering except that, so long as they were held by the Sponsor or its permitted transferees: (i) they would not be redeemable by RTPZ (except in certain redemption scenarios when the price per Ordinary Share equals or exceeds $10.00 (as adjusted)); (ii) they (including the Ordinary Shares issuable upon exercise of the warrants) may not, subject to certain limited exceptions, be transferred, assigned or sold by the Sponsor until 30 days after the completion of RTPZ’s initial business combination; (iii) they may be exercised by the holders on a cashless basis; and (iv) they (including the Ordinary Shares issuable upon exercise of the warrants) are entitled to registration rights. Prior to the RTPZ initial public offering, the Sponsor paid an aggregate of $25,000 to cover certain expenses in exchange for the issuance of 5,750,000 Class B ordinary shares, par value of $0.0001 per share, or approximately $0.004 per share (“Founder Shares”). In October 2020, the Sponsor transferred 30,000 Founder Shares to each of Byron Auguste, Julie Hanna, Lee Linden and Linda Rottenberg, the independent director nominees.

After the RTPZ initial public offering, RTPZ’s officers and directors commenced an active search for prospective businesses or assets to acquire in its initial business combination. From the date of the RTPZ initial

 

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public offering through the signing of the Exclusivity Agreement on February 4, 2021, members of RTPZ’s Board of Directors and management contacted, and were contacted by, a number of individuals with respect to business combination opportunities in various industries, including financial technology, gaming, social networking, enterprise software, consumer internet or products, artificial intelligence, and healthcare, among others.

RTPZ considered businesses that it believed had attractive long-term growth potential, were well-positioned within their industry and would benefit from the substantial intellectual capital, operational experience, and network of RTPZ’s management team. In the process that led to identifying Hippo as an attractive investment opportunity, RTPZ’s management team evaluated over 150 potential business combination targets, made contact with representatives of dozens such potential combination targets to discuss the potential for a business combination transaction, entered into non-disclosure agreements with 17 such potential business combination targets, and submitted a non-binding indication of interest to one potential business combination target other than Hippo (“Company A”).

On December 8, 2020, RTPZ signed a non-disclosure agreement with Company A, a company operating in the payments space, and from this time through early January 2021, representatives of RTPZ engaged with members of the management of Company A relating to a potential business combination with RTPZ. During this time, representatives of RTPZ reviewed Company A’s financials, revenue projections and business plan, and discussed various business diligence topics with Company A’s management. However, after completing due diligence and engaging in detailed discussions between the management teams, RTPZ and Company A were unable to agree upon mutually agreeable terms regarding a potential business combination transaction between the parties, and RTPZ and Company A mutually agreed to discontinue business combination discussions.

On December 9, 2020, RTPZ retained Sullivan & Cromwell LLP (“Sullivan & Cromwell”) to act as outside counsel to RTPZ in connection with a potential business combination.

From September 2020 through December 2020, representatives of Hippo approached and interviewed several investment banks to discuss the possibility of pursuing a business combination with a special purpose acquisition company (“SPAC”) counterparty.

During December 2020, representatives of Hippo, including Mr. Wand and Mr. Ellis, had discussions with representatives of five SPACs other than RTPZ regarding the potential for a business combination transaction and entered into non-disclosure agreements with four of such SPACs. With the exception of SPAC A, described below, none of such discussions progressed beyond preliminary phases or resulted in the submission of a letter of intent or other binding or non-binding proposal.

On December 14, 2020, a venture capital firm introduced Mr. Wand to Mr. Thompson and Mr. Hoffman. Shortly following this introduction, Mr. Wand and Mr. Ellis and representatives of RTPZ, including Mr. Thompson, held an initial discussion regarding the business and operating history of Hippo and whether Mr. Wand and Mr. Ellis and Hippo would be interested in learning more about a potential business combination transaction with RTPZ. Following this discussion, the parties agreed that further discussions regarding a potential business combination transaction would be mutually beneficial.

On December 23, 2020, Mr. Wand, Mr. Ellis and representatives of RTPZ, including Mr. Thompson and Mr. Pincus, discussed matters relating to a potential business combination transaction involving Hippo and RTPZ. Also on this date, RTPZ sent a draft confidentiality agreement to Hippo.

On December 24, 2020, RTPZ and Hippo executed a confidentiality agreement, on customary terms restricting RTPZ’s use and disclosure of information with respect to Hippo for a specified term, with such information required to be returned or destroyed upon termination thereof and without otherwise restricting Hippo’s activities through a standstill, non-solicitation or any similar provision.

 

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On December 26, 2020, RTPZ and its advisors received access to a virtual data room containing certain due diligence materials, including financial information. RTPZ’s management team and its advisors reviewed these materials and engaged in due diligence, including due diligence meetings and telephone calls between the parties to discuss various topics.

In early January 2021, representatives of Hippo, including Mr. Wand and Mr. Ellis, and RTPZ, including Mr. Hoffman and Mr. Cohen, continued initial discussions between Hippo and RTPZ regarding a potential business combination.

Also in early January 2021, Hippo engaged Goldman Sachs & Co. LLC (“Goldman Sachs”) and Morgan Stanley to serve as Hippo’s financial advisors in connection with identifying and evaluating potential business combination transactions with a SPAC counterparty (which engagements were subsequently formalized pursuant to engagement letters entered into on February 12, 2021 and February 7, 2021, respectively).

On January 5, 2021, Mr. Ellis, Mr. Wand and representatives of RTPZ, including Mr. Thompson, Mr. Hoffman and Mr. Pincus, attended a conference call to discuss financial due diligence matters and the documents and materials provided by Hippo to RTPZ in the virtual data room.

On January 8, 2021, Mr. Ellis, Mr. Wand and representatives of RTPZ, including Mr. Thompson, attended a conference call to discuss diligence questions related to the financial model for Hippo prepared by Hippo management, including with respect to Hippo’s historical and projected financial statements and its strategic priorities with respect to the proceeds received in the potential business combination.

On January 11, 2021, Mr. Ellis, Mr. Wand and representatives of RTPZ, including, Mr. Thompson held a follow-up diligence call to further discuss the financial model for Hippo prepared by Hippo management, including the treatment and effect of the financial model on the Units issued by RTPZ in connection with the initial public offering.

From January 15, 2021 through January 22, 2021, representatives of RTPZ, including Mr. Thompson, and representatives of Hippo, including Mr. Wand and Mr. Ellis, had various discussions regarding a potential business combination, including discussions regarding Hippo’s financial condition and operations as well as the financial terms of a potential business combination between RTPZ and Hippo, including Hippo’s valuation in connection therewith.

On January 21, 2021, representatives of RTPZ and Hippo held two follow-up diligence calls to further discuss the documents and materials provided by Hippo to RTPZ in the virtual data room.

On January 22, 2021, representatives of RTPZ and Morgan Stanley (in its capacity as financial advisor to Hippo) attended a conference call to discuss the terms of a potential business combination transaction between RTPZ and Hippo, including valuation and valuation methodology.

On January 27, 2021, Mr. Wand, Mr. Thompson and Mr. Pincus attended a conference call to discuss the financial terms of a potential business combination, including the valuation of Hippo, the governance of the combined company and the treatment of the Private Placement Warrants and Founder Shares in any potential transaction.

On January 28, 2021, representatives of RTPZ provided Hippo with an initial draft of a non-binding letter of intent setting forth a summary of the material terms of a potential business combination between RTPZ and Hippo (the “Letter of Intent”). The initial Letter of Intent ascribed a pre-transaction enterprise value of $5.0 billion to Hippo and also contemplated, among other things, (i) a PIPE financing of between $270 and $370 million; (ii) vesting terms with respect to 75% of the Founder Shares beneficially owned by the Sponsor pursuant to which equal tranches of such shares would vest only in the event that the trading price of Hippo

 

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Holdings’ common stock following the Closing exceeded price thresholds of $12.50, $15.00 and $17.50, in each case, for any 20 Trading Days (as defined in the Sponsor Agreement) within a period of 30 consecutive Trading Days; and (iii) that all of the Founder Shares, together with all shares of Hippo Holdings’ common stock held by key management members and significant investors of Hippo, would be subject to a lockup commencing as of the Closing and expiring with respect to 25% of such shares on each of the date that is six months after the Closing, the one-year anniversary of the Closing, the date that is 18 months after the Closing, and the two-year anniversary of the Closing. The initial Letter of Intent did not include a minimum level of cash that would need to be retained by RTPZ as of the Closing as a condition to Hippo’s obligations to consummate the transaction.

Also on January 28, 2021, a representative of a publicly traded blank check special purpose acquisition company that had raised over $250 million in cash in its initial public offering (“SPAC A”) submitted to Hippo a non-binding letter of intent with respect to a potential business combination between Hippo and SPAC A. The letter of intent contemplated the acquisition of 100% of the outstanding equity interests of Hippo in exchange for shares of common stock of SPAC A and $150 million in cash at an enterprise valuation of Hippo of $5.75 billion, subject to a purchase price adjustment in respect of Hippo’s unrestricted cash in excess of working capital and regulatory requirements, less Hippo’s indebtedness, with a potential holdback for a post-closing purchase price adjustment based on working capital, net assets or a similar metric. The letter of intent also contemplated, among other things, a PIPE financing of $450 million conditioned upon the consummation of the acquisition, that the acquisition would be conditioned upon SPAC A retaining a minimum of $500 million in cash at the closing of the acquisition and such PIPE financing, a lockup of nine months applicable to all shares of SPAC A’s common stock received by Hippo stockholders in the potential business combination, and that a portion of the shares of SPAC A’s common stock held by the sponsor of SPAC A (“SPAC A Sponsor”) would be subject to certain vesting terms and would only vest in the event that the trading price of SPAC A’s common stock exceeded certain price thresholds, all of which such thresholds were lower than the price thresholds set forth in the initial Letter of Intent from RTPZ. The letter of intent did not contemplate any lockup of the shares of SPAC A’s common stock held by SPAC A’s sponsor (other than the price-based vesting thresholds).

Later on January 28, 2021, the Hippo board of directors held a meeting by video conference that was also attended by representatives of Hippo senior management and Latham & Watkins LLP (“Latham”), Hippo’s legal counsel. At the meeting, representatives of Latham reviewed the fiduciary duties of the Hippo board of directors in the context of considering strategic alternatives. Representatives of Hippo management then presented an update on the business combination process, including a summary of the non-binding letters of intent received by Hippo and an analysis of the key terms thereunder. Hippo management expressed their view that a business combination with RTPZ was more favorable than a business combination with SPAC A based on, among other things, (i) the long-term focus of RTPZ and its sponsor, as evidenced in part by RTPZ’s proposal that Founder Shares would be subject to a long-term lockup, with the final release of such shares occurring upon the two-year anniversary of the Closing, (ii) the greater likelihood of a successful PIPE financing, a successful closing of the transaction and a successful transition of Hippo to the public markets based on, among other things, the high quality of RTPZ’s then-current investor base and RTPZ’s ability to help attract high quality investors with a long-term focus, (iii) a lower expected dilution to the ownership of Hippo’s existing stockholders resulting from a business combination with RTPZ as compared to SPAC A based on, among other things, the higher percentage of the outstanding capital stock of SPAC A represented by the shares of SPAC A’s Class B common stock held by SPAC A Sponsor as compared to the percentage of the outstanding capital stock of RTPZ represented by Sponsor’s Founder Shares (i.e., SPAC A Sponsor’s higher relative “promote”) and that SPAC A’s outstanding units consisted of one share of Class A common stock and one-third of one warrant to acquire one share of SPAC A common stock (as compared to RTPZ’s units which consist of one RTPZ Class A ordinary share and one-fifth of one warrant to acquire one RTPZ Class A ordinary share), (iv) the higher price thresholds of the vesting terms contemplated by the initial Letter of Intent from RTPZ as compared to SPAC A’s letter of intent and (v) the expected value to the combined company resulting from the operational expertise, credibility and reputation of RTPZ and its directors and officers, particularly with respect to consumer-focused businesses. Following discussion, the Hippo board of directors directed management and Hippo’s advisors to continue to negotiate terms with RTPZ. The Hippo board of directors did not direct management or Hippo’s advisors to pursue further discussions with SPAC A.

 

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On January 29, 2021, representatives of Latham delivered a revised draft of the Letter of Intent to representatives of Sullivan & Cromwell. The revised Letter of Intent contemplated, among other things, (i) an equity valuation of Hippo of $5.522 billion, reflecting a pre-transaction valuation of $5 billion in total enterprise value and an estimated $522 million of cash and cash equivalents on Hippo’s balance sheet as of December 31, 2020, (ii) a PIPE financing of $450 to $500 million, (iii) the payment of between $100 million and $150 million in cash in the Secondary Transaction to participants selected by Hippo, (iv) vesting terms with respect to 100% of the Founder Shares beneficially owned by the Sponsor pursuant to which equal tranches of such shares would vest only in the event that the trading price of Hippo Holdings’ common stock following the Closing exceeded price thresholds of $12.50, $15.00, $17.50 and $20.00, in each case, for any 20 Trading Days within a period of 30 consecutive Trading Days, (v) the forfeiture at Closing of Founder Shares and Private Placement Warrants held by Sponsor on a pro rata basis in proportion to the percentage of RTPZ’s trust account that is used to satisfy public stockholder redemption obligations in connection with the Closing, (vi) a six-month lock-up applicable to Hippo Holdings’ common stock held by the Company Directors and Officers and the Major Company Equityholders, (vii) the mandatory exercise of the converted warrants to acquire an equal number of shares of RTPZ Common Stock (“Domesticated RTPZ Warrants”) held by the Sponsor if the last reported sales price of the RTPZ Common Stock for any 20 Trading Days within a period of 30 consecutive Trading Days exceeds $18.00 per share and (viii) a Minimum Cash Condition of at least $450 to $500 million (after giving effect to RTPZ’s redemption obligations and the payment of any unpaid transaction fees and expenses owed by RTPZ).

From January 29, 2021 until the execution of the non-binding Letter of Intent on February 4, 2021, representatives of RTPZ held various calls and exchanged e-mails and revised drafts of the Letter of Intent with Hippo and representatives from their respective advisors to negotiate the Letter of Intent. The focus of these negotiations centered on, among other things, the duration of the lock-up applicable to shares of Hippo Holdings common stock held by the Sponsor, the Company Directors and Officers and the Major Company Equityholders, the potential forfeiture and vesting of RTPZ’s Founder Shares, the conditions to Hippo’s and RTPZ’s respective obligations to consummate a potential business combination (and specifically, the Minimum Cash Condition), the size of and participants in the Secondary Transaction and the mechanics and effect of the Warrant Amendment. The parties also discussed the PIPE Transaction, including the size and investor appetite for the investment as well as the timing and scope of investor outreach and marketing.

On February 4, 2021, the RTPZ Board of Directors held a meeting by video conference that was attended by representatives of Sullivan & Cromwell to discuss negotiations with Hippo regarding a proposed initial business combination. The discussion included a presentation of the key terms of a non-binding Letter of Intent and Exclusivity Agreement as well as a presentation on how the Hippo business compared to other companies in the insurance technology industry. The independent directors of the board then convened in private to discuss the proposed transaction with representatives of Sullivan & Cromwell, with the discussion focusing on the process going forward and timing of the proposed transaction. At the conclusion of this meeting, the RTPZ Board of Directors authorized the management of RTPZ to continue to negotiate the Letter of Intent and Exclusivity Agreement with Hippo, and to enter in to such agreements to the extent each remained substantially consistent with the terms and conditions reviewed and considered by the RTPZ Board of Directors.

On February 4, 2021, RTPZ and Hippo finalized the Letter of Intent, which set forth a summary of the material terms of a potential business combination between RTPZ and Hippo that would be based on an equity valuation of Hippo of $5.522 billion, reflecting a pre-transaction valuation of $5 billion in total enterprise value and an estimated $522 million of cash and cash equivalents on Hippo’s balance sheet as of December 31, 2020. The Letter of Intent also contemplated, among other things, (i) vesting terms with respect to 75% of the Founder Shares beneficially owned by the Sponsor pursuant to which equal tranches of such shares would vest only in the event that the trading price of Hippo Holdings’ common stock following the Closing exceeded price thresholds of $12.50, $15.00 and $20.00, in each case, for any 20 Trading Days (as defined in the Sponsor Agreement) within a period of 30 consecutive Trading Days; (ii) a lock-up of all Founder Shares, together with all shares of Hippo Holdings’ common stock held by the directors and key officers of Hippo, commencing as of the Closing and expiring with respect to 25% of such shares on each of the date that is six months after the Closing, the

 

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one-year anniversary of the Closing, the date that is 18 months after the Closing, and the two-year anniversary of the Closing; (iii) a lock-up of all shares of Hippo Holdings’ common stock held by significant investors of Hippo, commencing as of the Closing and expiring with respect to 50% of such shares on each of the date that is six months after the Closing and the one-year anniversary of the Closing; (iv) the mandatory exercise of the Domesticated RTPZ Warrants held by the Sponsor if the last reported sales price of the RTPZ Common Stock for any 20 Trading Days within a period of 30 consecutive Trading Days exceeds $25.00 per share; (v) a PIPE financing of between $450 and $500 million; (vi) the payment of between $75 million and $100 million in cash in the Secondary Transaction to participants selected by Hippo in consultation with RTPZ; (vii) a Minimum Cash Condition of at least $450 million (after giving effect to RTPZ’s redemption obligations and the payment of any unpaid transaction fees and expenses owed by RTPZ); and (viii) certain rights of the Sponsor with respect to its right to nominate a director and non-voting observer of the board of the combined company at the Closing (subject to Hippo’s reasonable approval). The Letter of Intent also provided that Hippo’s financial advisors, Morgan Stanley and Goldman Sachs, would serve as co-placement agents on the PIPE Transaction. RTPZ and Hippo also executed the 30-day Exclusivity Agreement on February 4, 2021, pursuant to which RTPZ and Hippo agreed not to pursue potential transactions with other parties for a 30-day period.

Following execution of the Letter of Intent and the Exclusivity Agreement, the parties and their respective legal counsel prepared and then negotiated the Merger Agreement and related ancillary agreements, which continued until the Merger Agreement was executed. The parties also began planning for discussions with potential investors in the PIPE Transaction.

On February 5, 2021, representatives of RTPZ, including Mr. Thompson and Mr. Hoffman, and various representatives of Hippo, including Mr. Wand and Mr. Ellis, held multiple discussions relating to the due diligence items and potential investors in the PIPE Transaction. Following these discussions and continuing until the Merger Agreement was executed, members of the management teams of both Hippo and RTPZ continued to have discussions by phone and video conference regarding the potential business combination of Hippo and RTPZ.

On February 5, 2021, published news articles reported Hippo was in discussions regarding a potential business combination. RTPZ was not mentioned in the news articles. Following the publication of this news article, representatives of RTPZ, including Mr. Thompson, and Joele Frank attended a conference call to discuss the news article and the potential implications for the proposed business combination.

Between February 6, 2021, and February 8, 2021, representatives of RTPZ, including Mr. Thompson and Mr. Cohen, and Hippo, including Mr. Wand and Mr. Ellis, discussed the PIPE Transaction investor marketing materials and related management presentation for potential PIPE investors.

On February 6, 2021, various representatives of RTPZ, including Mr. Thompson, were introduced to representatives of Goldman Sachs, who along with Morgan Stanley, would serve as placement agents for the PIPE.

Between February 9, 2021 and the recording of the management presentation for the PIPE Transaction on February 14, 2021, Mr. Wand and representatives of RTPZ, including Mr. Thompson, held calls with various representatives from Morgan Stanley and Goldman Sachs to discuss the PIPE Transaction, including potential investors, allocations, and marketing.

On February 11, 2021, Sullivan & Cromwell delivered an initial draft of the Merger Agreement to Latham.

Between February 11, 2021, and March 2, 2021, representatives of RTPZ, including Mr. Thompson, and representatives of Hippo, including Mr. Wand and Mr. Ellis, had numerous communications regarding various aspects of the business combination, including the PIPE Transaction, Hippo Holdings post-closing governance and management structure, the Secondary Transaction and Hippo’s growth plans and strategy.

 

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On February 12, 2021, representatives of RTPZ, including Mr. Thompson and Mr. Cohen, and representatives of Joele Frank, Wilkinson Brimmer Katcher (“Joele Frank”) discussed the communications and public relations strategy with respect to the potential business combination.

On February 12, 202, RTPZ engaged Barclays Capital Inc. (“Barclays”) to serve as financial advisor to RTPZ in connection with evaluating the proposed business combination transaction with Hippo (which engagement was subsequently formalized pursuant to an engagement letter entered into on February 17, 2021). Barclays was not engaged to, and did not deliver, any reports, opinions or appraisals relating to the business combination to the RTPZ Board of Directors or executive management of RTPZ.

On February 14, 2021, representatives from Hippo recorded the management presentation so that it could be circulated to prospective PIPE investors.

On February 15, 2021, Sullivan & Cromwell, on behalf of RTPZ, submitted a supplemental due diligence request list to Latham.

On February 16, 2021, RTPZ entered into an engagement letter with each of Goldman Sachs and Morgan Stanley pursuant to which they would act as placement agents in connection with the PIPE Transaction. On February 16, 2021, RTPZ also entered into letter agreements with Goldman Sachs and Morgan Stanley amending the engagement letters to specify that the placement fee charged by Goldman Sachs and Morgan Stanley in the PIPE transaction would be $0.

On February 16 and February 17, 2021, Sullivan & Cromwell delivered initial drafts of ancillary documents, including the subscription agreement, registration rights agreement and sponsor support agreement, to Latham.

Also on February 16, 2021, a virtual data room containing certain diligence information regarding Hippo was opened to prospective investors in the PIPE Transaction.

On February 18, 2021, the RTPZ Board of Directors held a telephonic meeting that was also attended by representatives of Sullivan & Cromwell, Joele Frank and KPMG LLP (“KPMG”). Representatives of Morgan Stanley involved in the PIPE process joined the meeting to provide the Board of Directors with an update on the PIPE Transaction, including on wall crossing and next steps and timeline for the PIPE Transaction. Representatives of Morgan Stanley left the board meeting after their presentation. In addition, KPMG discussed ongoing tax and accounting diligence work, and Sullivan & Cromwell provided an update on ongoing legal due diligence work as well as the preparation of legal documents in connection with the proposed transaction. Sullivan & Cromwell also provided an overview of relevant regulatory approval processes.

On February 19, 2021, representatives of Sullivan & Cromwell, and Latham held a telephonic conference to discuss various issues with the Merger Agreement, transaction process and documentation.

From February 19, 2021 through February 26, 2021, Sullivan & Cromwell and Latham continued to negotiate and exchange several drafts of the Merger Agreement. A draft of the Merger Agreement was provided to potential investors in the PIPE Transaction on February 26, 2021.

On February 23, 2021, Latham delivered initial drafts of related ancillary documents, including the certificate of incorporation of Hippo Holdings, bylaws of Hippo Holdings, and written consent of the stockholders of Hippo, to Sullivan & Cromwell.

On February 25, 2021, the Hippo board of directors held a meeting by video conference that was also attended by representatives of Latham and the rewards solutions practice of Aon plc (Radford), Hippo’s compensation consultant. Mr. Ellis provided the Board with an update of the current status of the potential business combination transaction with RTPZ, including the PIPE, the merger agreement and the SEC process.

 

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The Hippo board of directors asked questions, and a discussion ensued. Mr. Freese provided the Hippo board of directors with an overview of the current material terms of the transaction. Mr. Freese then led a discussion with the Hippo board of directors regarding the fiduciary duties of board members in connection with the potential transaction. Following discussion, the Hippo board of directors authorized management to continue to negotiate the transaction, with final terms to be approved by the board.

On February 26, 2021, Mr. Wand and Mr. Pincus attended teleconference to continue to discuss the potential business combination, including the size and allocation of the PIPE Transaction. Also on this date, representatives of Hippo and Mr. Hoffman attended a conference call to discuss the communications and public relations strategy with respect to the potential business combination.

From February 26, 2021 until March 3, 2021, RTPZ and representatives of Goldman Sachs and Morgan Stanley and Sullivan & Cromwell negotiated the terms of the subscription agreements with prospective investors in the PIPE Transaction.

On March 2, 2021, given the level of interest with respect to the PIPE Transaction, the parties agreed to increase the size of the PIPE Transaction from $450-500 million (as contemplated by the Letter of Intent) to $550 million.

On March 3, 2021, Hippo, RTPZ and their respective legal counsel finalized the draft of the Merger Agreement, Ancillary Agreements and other documents related thereto.

On March 3, 2021, the RTPZ Board of Directors held a meeting by video conference that was also attended by representatives of Sullivan & Cromwell, Joele Frank, KPMG, Barclays, and the Maples Group. Representatives of Morgan Stanley involved in the PIPE Transaction joined the meeting to provide the members of the Board of Directors with an overview of the PIPE Transaction, including the investor outreach and demand and allocations assigned to investors. Representatives of Morgan Stanley left the board meeting after their presentation. Joele Frank explained the strategy and objectives for the announcement of the proposed transaction. In addition, KPMG provided a summary of the diligence it undertook, and Sullivan & Cromwell provided an update on ongoing legal due diligence work, preparation of legal documents in connection with the proposed transaction and the regulatory process. Members of the Board of Directors discussed the merits of the transaction, potential risks, the PIPE financing, the transaction timeline, and other ongoing work streams. Barclays provided the Board of Directors with an update on the state of the insurance technology sector, and discussed long-term trends in the insurance industry and the effect of recent events, including the Texas winter storms in February 2021. In addition, representatives from the Maples Group provided an overview of the duties of directors of Cayman Islands companies. The independent directors of the board then convened in private to further discuss the proposed transaction with representatives of Sullivan & Cromwell where they asked questions about the proposed transaction. The independent directors of the Board unanimously adopted a set of resolutions approving the proposed transaction, and the full Board of Directors, including the independent directors, unanimously adopted a set of resolutions approving the proposed transaction.

Also on March 3, 2021, the Hippo board of directors held a meeting by video conference that was also attended by representatives of Latham to discuss the proposed transaction, including a detailed discussion of the forms of the transaction documents. The Hippo board of directors reviewed the proposed terms of the transaction agreements that had been negotiated with RTPZ and its representatives. Following presentations by Latham to the Hippo board of directors and additional discussion on related matters concerning the proposed transaction, the Hippo board of directors unanimously approved the transaction documents, subject to final negotiations and modifications, and determined to recommend the approval of the transaction documents to its stockholders. In the evening of March 3, 2021, the parties entered into the Merger Agreement and the relevant Ancillary Agreements, and RTPZ entered into the Subscriptions Agreements for the PIPE Transaction. RTPZ and Hippo subsequently issued a press release announcing the Business Combination before the opening of trading on March 4, 2021.

 

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RTPZ’s Reasons for the Merger; Recommendation of RTPZ’s Board of Directors

The Board of Directors of RTPZ has unanimously approved the Business Combination and declared it advisable for RTPZ to enter into the Merger Agreement and the other documents contemplated, and recommended the approval of the Merger Agreement by RTPZ’s stockholders. RTPZ’s Board of Directors considered a range of factors, including, but not limited to, the factors discussed below. In light of the large number and wide variety of factors considered in connection with its evaluation of the Business Combination, RTPZ’s Board of Directors did not consider it practicable to, and did not attempt to, quantify or otherwise assign relative weights to the specific factors that it considered in reaching its determination and supporting its decision. RTPZ’s Board of Directors viewed its decision as being based on all of the information available and the factors presented to and considered by it. In addition, individual directors may have given different weights to different factors.

This explanation of RTPZ’s reasons for the Business Combination and all other information presented in this section is forward-looking in nature, and, therefore should be read in light of the factors discussed under “Forward-Looking Statements.”

Before reaching its decision, RTPZ’s Board of Directors reviewed the results of management’s due diligence, which included:

 

  

research on industry trends, projected growth and other industry factors;

 

  

extensive meetings and calls with Hippo’s management team and representatives regarding operations, major customers, financial prospects and potential expansion opportunities, among other customary due diligence matters;

 

  

consultation with RTPZ’s legal, accounting and financial advisors;

 

  

review of Hippo’s material business contracts and certain other legal, intellectual property and commercial diligence;

 

  

financial, accounting and tax diligence;

 

  

research on comparable public companies;

 

  

background checks on key executives of Hippo; and

 

  

review of Hippo’s financial projections and creation of an independent financial model in conjunction with the management of Hippo, which was generally consistent with the financial model prepared by Hippo and provided an overview of potential upside and downside scenarios.

The officers and directors of RTPZ have substantial experience in evaluating the operating and financial merits of companies from a wide range of industries and concluded that their experience and background, together with the experience and sector expertise of RTPZ’s advisors, enabled them to make the necessary analyses and determinations regarding the Business Combination. In addition, RTPZ’s officers and directors and RTPZ’s advisors have substantial experience with mergers and acquisitions. Although RTPZ’s Board of Directors did not seek a third-party valuation, the RTPZ Board of Directors relied on the following sources, among others: (i) due diligence on Hippo’s operations, (ii) RTPZ management’s collective experience in constructing and evaluating financial models/projections and conducting valuations of businesses, (iii) reports from RTPZ’s various advisors, including its financial advisor, Barclays and (iv) Radford market data evaluating market compensation practices, including with respect to equity incentive plans and employee stock purchase plans, for corporations in anticipation of an initial public offering.

 

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RTPZ’s Board of Directors considered a number of factors pertaining to the Business Combination as generally supporting its decision to enter into the Merger Agreement and the transactions contemplated thereby, including, but not limited to, the following material factors:

 

  

Large and Expanding Growth Industry. The potential opportunity in the homeowners insurance market, with the potential for continued growth in annual premiums, in the backdrop of a fragmented existing competitive environment;

 

  

Attractive Business Model. The geographic diversification and footprint of Hippo’s businesses and operations and vertical integration efforts to become a “full-stack” provider of home insurance services and products contributing to an attractive asset-light business model with best-in-class unit economics;

 

  

Validated Partnership Distribution Channels. The success of Hippo’s existing third-party distribution arrangements and the potential for Hippo to further develop these and new distribution channels, supported by multi-year reinsurance commitments;

 

  

Strengthened Business Through Scale and Increased Liquidity. A belief that Hippo’s business will strengthen with scale and the increased liquidity available to the combined company as a result of the Business Combination;

 

  

Hippo’s Focus on Digitizing Home Insurance. Hippo’s efforts to digitize the home insurance process using data and analytics to provide accurate and competitive pricing, including the ability to leverage investments in innovation and technology to improve customer offerings and services;

 

  

Hippo’s Emphasis on the Customer Experience. The ability of Hippo to leverage augmented intelligence and machine learning to prefill customer applications and accurately assess and price risk at the point of purchase, enabling accurate quotes in under a minute and purchase in just five minutes on average;

 

  

Strong Ability to Attract Customers. Hippo’s historically demonstrated strong ability to acquire customers;

 

  

Hippo’s Acquisition of Spinnaker. Hippo’s acquisition of Spinnaker and the potential benefits of owning an insurance carrier;

 

  

Experienced and Proven Management Team. The expertise and experience of Hippo’s senior management team;

 

  

RTPZ Strength of Experience. The expertise and experience of the members of RTPZ’s Board of Directors in the creation of successful corporations across multiple technology categories, and the ability to leverage this expertise and experience to partner with Hippo to drive long-term value for stockholders;

 

  

Philosophical Alignment. Hippo’s and RTPZ’s shared belief in a purpose-driven and thoughtful approach to the potential combination and the resulting company, structured to maximize the growth potential of Hippo’s businesses compared to the projections of Hippo on a stand-alone basis;

 

  

Financial Condition. Hippo’s historical financial results, outlook and expansion opportunities, and financial plan. In considering those factors, RTPZ’s Board of Directors reviewed Hippo’s historical growth and its current prospects for growth if Hippo achieves its business plan, and various historical and current balance sheet items of Hippo;

 

  

Public Company Readiness. The belief in the readiness of Hippo to operate in the scrutiny of public markets, with strong management, corporate governance and reporting policies in place, supported by the ongoing partnership with RTPZ;

 

  

Investment Interest in the PIPE Transaction. The significant oversubscription of the PIPE Investment and the fact that certain existing stockholders of Hippo are investing in the PIPE Transaction;

 

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Continued Ownership by Sellers. The fact that Hippo’s existing equityholders would be receiving a significant amount of the combined company’s common stock as its consideration under the terms of the Merger Agreement;

 

  

Alternatives. The determination that the proposed Business Combination represents the most attractive opportunity for RTPZ’s management to accelerate its business plan based upon the process utilized to evaluate and assess other potential acquisition targets, and the determination that such process has not presented a better alternative;

 

  

Results of Due Diligence. The review by the Board of Directors and discussions with RTPZ’s management and third-party advisors concerning the due diligence examination of the operations, financial condition and prospects of Hippo;

 

  

Negotiated Transaction. The determination that the financial and other terms of the Merger Agreement are reasonable and were the product of arm’s-length negotiations between RTPZ and Hippo;

 

  

Terms of the Merger Agreement. The review by the Board of Directors with its financial advisors of the financial terms of the Merger Agreement and its review with its legal advisors of the other terms of the Merger Agreement, including the representations, covenants and termination provisions; and

 

  

Role of Independent Directors. The fact that Byron Auguste, Julie Hanna, Lee Linden, and Linda Rottenberg, RTPZ’s independent directors, met separately to evaluate the proposed terms of the Business Combination, including the Merger Agreement and the related agreements, as well as all arrangements with RTPZ management and the Sponsor relating to the Mergers, waived actual and potential RTPZ management conflicts, and unanimously approved, separately and with the full Board of Directors, the Merger Agreement and the related agreement and the transactions contemplated thereby, including the Business Combination.

RTPZ’s Board of Directors also considered various uncertainties and risks and other potentially negative factors concerning the Business Combination, including, but not limited to, the following, which are not weighted or in any order of significance:

 

  

Macroeconomic Risks. Macroeconomic uncertainty, including the potential impact of the COVID-19 pandemic and the Texas winter storms in February 2021, and the direct and indirect effects those events could have on the combined company’s financial condition and operations;

 

  

Business Plan and Projections May Not Be Achieved. The risk that Hippo may not be able to execute on the business plan, and realize the financial performance as set forth in the financial projections, in each case as presented to the management of RTPZ;

 

  

Limited Operating History and Historical Net Losses. The fact that Hippo has a relatively limited operating history, and has incurred net losses on an annual basis since its incorporation in 2015;

 

  

Redemption Risk. The potential a significant number of RTPZ stockholders could elect to redeem their public shares for cash prior to the consummation of the Business Combination, which may impair or inhibit the ability of RTPZ to consummate the Business Combination;

 

  

Stockholder Votes. The risk that RTPZ’s stockholders or Hippo’s stockholders may not vote to approve the Business Combination;

 

  

Closing Conditions. The fact that the completion of the Business Combination is conditioned on the satisfaction of certain closing conditions that are not within RTPZ’s control;

 

  

Regulatory Approvals. The fact that regulatory and other approvals or exemptions are required in connection with the Mergers, and the risk that such regulatory approvals or exemptions will not be received in a timely manner or may impose unacceptable conditions;

 

  

Litigation. The potential for legal claims challenging the Business Combination;

 

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Public Company and Listing Risks. The challenges associated with preparing Hippo, a private entity, for the applicable disclosure and listing requirements to which the combined company will be subject as a publicly traded company on the NYSE;

 

  

Benefits May Not Be Achieved. The risk that the potential benefits of the Business Combination may not be fully achieved or may not be achieved;

 

  

Diversion of Hippo’s Resources. The diversion of Hippo’s focus and resources from other strategic opportunities and operational matters while working to consummate and implement the Business Combination;

 

  

Liquidation of RTPZ. The risks and costs to RTPZ if the Business Combination is not completed, including the risk of diverting management focus and resources from other business combination opportunities, which could result in RTPZ being unable to effect a business combination by November 23, 2022 (or February 23, 2023 if RTPZ has executed a letter of intent, agreement in principle or definitive agreement for an initial business combination by November 23, 2022 but has not completed the initial business combination by then);

 

  

Growth Initiatives May Not Be Achieved. The risk that Hippo’s growth initiatives may not be fully achieved or may not be achieved within the expected time frame;

 

  

No Third-Party Valuation. RTPZ’s decision not to obtain a third-party valuation or fairness opinion in connection with the Business Combination;

 

  

Insider Participation in the Secondary Transaction. The fact that certain existing stockholders of Hippo, including members of Hippo’s senior management team, are participating in the Secondary Transaction;

 

  

RTPZ Stockholders Receiving a Minority Position in Hippo. The risks associated with the minority position in Hippo that RTPZ stockholders will hold following consummation of the Business Combination; and

 

  

Costs. Anticipated costs related to the Business Combination.

In addition to considering the factors described above, RTPZ’s Board of Directors also considered other factors, including, without limitation:

 

  

Interests of Certain Persons. The fact that some officers and directors of RTPZ may have interests in the Business Combination (see “— Interests of RTPZ’s Directors and Officers in the Business Combination”).

 

  

Role of Morgan Stanley and Goldman Sachs. The fact that Morgan Stanley was serving as Hippo’s financial advisor and would receive both the approximately $8.1 million deferred underwriting fee owed to Morgan Stanley as lead underwriter in RTPZ’s initial public offering upon completion of the Business Combination and any fees Hippo agreed to pay Morgan Stanley as financial advisor to Hippo in connection with the Business Combination; the fact that Goldman Sachs is receiving a fee from Hippo as a financial advisor to Hippo in connection with the Business Combination; and that Morgan Stanley and Goldman Sachs were also serving as co-placement agents for the PIPE (although not receiving a separate fee for that work).

 

  

Other Risk Factors. Various other risk factors associated with the business of Hippo or the Business Combination, as described in the section entitled “Risk Factors” appearing elsewhere in this proxy statement/prospectus.

The foregoing discussion of the information and factors considered by the RTPZ Board of Directors is not intended to be exhaustive, but includes the material factors considered by the board. In reaching its decision to approve the Merger Agreement, the merger, and the other transactions contemplated by the Merger Agreement,

 

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the RTPZ board of directors did not quantify or assign any relative weights to the factors considered, and individual directors may have given different weights to different factors. The RTPZ board of directors considered all these factors as a whole, including discussions with, and questioning of, RTPZ’s management and RTPZ’s independent financial and legal advisors, and overall considered that the factors supported its determination.

RTPZ’s board of directors concluded that the potential benefits that it expects RTPZ and its stockholders to achieve as a result of the Business Combination outweigh the potentially negative and other factors associated with the Business Combination. Accordingly, RTPZ’s board of directors unanimously determined that the Business Combination and the transactions contemplated by the Merger Agreement are advisable and in the best interests of RTPZ and its stockholders.

Unaudited Projected Financial Information

Hippo provided RTPZ with its internally prepared forecasts for each of the years in the five year period ending December 31, 2025. Hippo does not, as a matter of general practice, publicly disclose long-term forecasts or internal projections of its future performance, revenue, financial condition or other results. However, in connection with the proposed Business Combination, management of Hippo prepared the unaudited financial projections set forth below to present key elements of the forecasts provided to RTPZ. The Hippo forecasts were prepared solely for internal use and not with a view toward public disclosure, the published guidelines of the SEC regarding projections or the guidelines established by the American Institute of Certified Public Accountants for preparation and presentation of prospective financial information. In the view of Hippo’s management, the financial projections were prepared on a reasonable basis reflecting management’s currently available estimates and judgments.

The inclusion of unaudited financial projections in this proxy statement/prospectus should not be regarded as an indication that RTPZ, our board of directors, or their respective affiliates, advisors or other representatives considered, or now considers, such financial projections necessarily to be predictive of actual future results or to support or fail to support your decision whether to vote for or against the proposals presented in this proxy statement/prospectus. The financial projections are not fact and should not be relied upon as being necessarily indicative of future results, and readers of this proxy statement/prospectus, including investors or holders, are cautioned not to place undue reliance on this information. You are cautioned not to place undue reliance on the projections in making a decision regarding the transaction, as the projections may be materially different than actual results. We will not refer back to the financial projections in our future periodic reports filed under the Exchange Act.

The financial projections reflect numerous estimates and assumptions with respect to general business, economic, regulatory, market and financial conditions and other future events, as well as matters specific to Hippo’s business, all of which are difficult to predict and many of which are beyond Hippo’s and RTPZ’s control. The financial projections are forward looking statements that are inherently subject to significant uncertainties and contingencies, many of which are beyond Hippo’s control. The various risks and uncertainties include those set forth in the “Risk Factors,” “Hippo’s Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Cautionary Note Regarding Forward-Looking Statements” sections of this proxy statement/prospectus, respectively. As a result, there can be no assurance that the projected results will be realized or that actual results will not be significantly higher or lower than projected. Since the financial projections cover multiple years, such information by its nature becomes less reliable with each successive year. These financial projections are subjective in many respects and thus are susceptible to multiple interpretations and periodic revisions based on actual experience and business developments.

Furthermore, the financial projections do not take into account any circumstances or events occurring after the date they were prepared. None of Hippo’s independent registered accounting firm, RTPZ’s independent registered accounting firm or any other independent accountants, have compiled, examined or performed any procedures with respect to the financial projections included below, nor have they expressed any opinion or any

 

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other form of assurance on such information or their achievability, and they assume no responsibility for, and disclaim any association with, the financial projections. Nonetheless, a summary of the financial projections is provided in this proxy statement/prospectus because they were made available to RTPZ and our board of directors in connection with their review of the proposed transaction.

The key elements of the projections provided by management of Hippo to RTPZ are summarized in the table below (unaudited):

 

($ in Millions )

  2021F  2022F  2023F  2024F  2025F 

Total Generated Premium(1)

  $544  $796  $1,145  $1,628  $2,279 

Total Earned Premium(2)

  $473  $666  $967  $1,382  $1,947 

Revenue

  $87  $151  $282  $488  $789 

Adjusted Gross Profit(3)

  $40  $106  $202  $340  $546 

Operating Expenses

  $187  $241  $310  $380  $488 

Operating Income

  ($146 ($135 ($108 ($40 $58 

 

(1)

In the projections provided by management of Hippo to RTPZ, “Total Generated Premium” was referred to as “Total Written Premium.”

(2)

Total Earned Premium represents the Total Generated Premium as if it were earned pro rata over the terms of the policies, which is typically one year.

(3)

Determined based on total revenue, less loss and loss adjustment expense, insurance related expenses, and net investment income, plus (i) channel distribution costs, (ii) overhead associated with Hippo’s underwriting operations including employee-related expense and professional fees, and (iii) depreciation, amortization, stock-based compensation and other expenses. Note that sales commission expense for policies placed on third party carriers has not been deducted to arrive at adjusted gross profit. These expenses are included in sales and marketing expenses.

Total Generated Premium is based on a variety of operational assumptions, including number of active states, number of policies sold, average premium per policy, premium retention rate, new product introduction and new business partnerships. Other key assumptions impacting the forecast include reinsurance related assumptions, service and fee income, projected Loss and Loss Adjustment Expenses, insurance related expenses, sales and marketing expenses, technology and development expenses, general and administrative expenses, and others.

EXCEPT TO THE EXTENT REQUIRED BY APPLICABLE FEDERAL SECURITIES LAWS, BY INCLUDING IN THIS PROXY STATEMENT/PROSPECTUS A SUMMARY OF THE FINANCIAL PROJECTIONS FOR HIPPO, RTPZ UNDERTAKES NO OBLIGATIONS AND EXPRESSLY DISCLAIMS ANY RESPONSIBILITY TO UPDATE OR REVISE, OR PUBLICLY DISCLOSE ANY UPDATE OR REVISION TO, THESE FINANCIAL PROJECTIONS TO REFLECT CIRCUMSTANCES OR EVENTS, INCLUDING UNANTICIPATED EVENTS, THAT MAY HAVE OCCURRED OR THAT MAY OCCUR AFTER THE PREPARATION OF THESE FINANCIAL PROJECTIONS, EVEN IN THE EVENT THAT ANY OR ALL OF THE ASSUMPTIONS UNDERLYING THE FINANCIAL PROJECTIONS ARE SHOWN TO BE IN ERROR OR CHANGE.

Satisfaction of 80% Test

It is a requirement under the Cayman Constitutional Documents and the NYSE listing requirements that any business acquired in an initial business combination have a fair market value equal to at least 80% of the balance of the funds in the trust account (net of amounts disbursed to management for working capital purposes, if permitted, and excluding the amount of any deferred underwriting discount held in trust) at the time of the execution of a definitive agreement for an initial business combination. Based on the pre-money valuation of $5.522 billion for Hippo compared to the $230 million in the trust account, the RTPZ board of directors determined that this requirement was met. The board determined that the consideration being paid in the

 

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Business Combination, which amount was negotiated at arms-length, were fair to and in the best interests of RTPZ and its shareholders and appropriately reflected Hippo’s value. In reaching this determination, the board concluded that it was appropriate to base such valuation in part on qualitative factors such as management strength and depth, competitive positioning, customer relationships, and technical skills, as well as quantitative factors such as its potential for future growth in revenue and profits. RTPZ’s board of directors believes that the financial skills and background of its members qualify it to conclude that the acquisition of Hippo met this requirement.

Interests of RTPZ’s Directors and Officers in the Business Combination

When you consider the recommendation of RTPZ’s board of directors in favor of approval of the proposals in this proxy statement/prospectus, you should keep in mind that the Sponsor and RTPZ’s directors and executive officers have interests in such proposal that are different from, or in addition to, those of RTPZ shareholders and warrant holders generally. These interests include, among other things, the interests listed below:

 

  

Prior to RTPZ’s initial public offering, the Sponsor purchased the “Founder Shares, and, in October 2020, the Sponsor transferred 30,000 Founder Shares to each of Byron Auguste, Julie Hanna, Lee Linden, and Linda Rottenberg, RTPZ’s independent directors. If RTPZ does not consummate a business combination by the Liquidation Date, it would cease all operations except for the purpose of winding up, redeeming all of the outstanding public shares for cash and, subject to the approval of its remaining shareholders and its board of directors, dissolving and liquidating, subject in each case to its obligations under the Cayman Islands Companies Act to provide for claims of creditors and the requirements of other applicable law. In such event, the 5,750,000 Founder Shares owned by the Sponsor and RTPZ’s independent directors would be worthless because following the redemption of the public shares, RTPZ would likely have few, if any, net assets and because the Sponsor and RTPZ’s directors and officers have agreed to waive their respective rights to liquidating distributions from the trust account in respect of the 5,750,000 Founder Shares held by it if RTPZ fails to complete a business combination within the required period. Additionally, in such event, the 4,400,000 private placement warrants purchased by the Sponsor simultaneously with the consummation of RTPZ’s initial public offering for an aggregate purchase price of $6,600,000, will also expire worthless. Certain of RTPZ’s directors, Reid Hoffman and Mark Pincus, also have an economic interest in such private placement warrants and in the 5,750,000 Founder Shares owned by the Sponsor. The 5,750,000 shares of Hippo Holdings common stock into which the 5,750,000 Founder Shares held by the Sponsor and RTPZ’s independent directors will automatically convert in connection with the Mergers (as a direct result of the Domestication), if unrestricted, fully vested and freely tradable, would have had an aggregate market value of $57.098 million based upon the closing price of $9.93 per share on the NYSE on June 30, 2021, the most recent practicable date prior to the date of this proxy statement/ prospectus. However, given that such shares of Hippo Holdings common stock will be subject to certain restrictions, including those described above, RTPZ believes such shares have less value. The 120,000 shares of Hippo Holdings common stock into which the 120,000 Founder Shares held by RTPZ’s independent directors will automatically convert in connection with the Mergers (as a direct result of the Domestication), if unrestricted and freely tradable, would have had an aggregate market value of $1.192 million based upon the closing price of $9.93 per share on the NYSE on June 30, 2021, the most recent practicable date prior to the date of this proxy statement/ prospectus. The 4,400,000 Hippo Holdings warrants into which the 4,400,000 private placement warrants held by the Sponsor will automatically convert in connection with the Mergers (as a direct result of the Domestication), if unrestricted and freely tradable, would have had an aggregate market value of $7.964 million based upon the closing price of $1.81 per warrant on the NYSE on June 30, 2021, the most recent practicable date prior to the date of this proxy statement/prospectus.

 

  

Pursuant to the Sponsor Agreement, the Sponsor has the right to select, subject to Hippo Holdings’ reasonable consent, a director of Hippo Holdings for a two-year term. In addition, Michael Thompson, RTPZ’s Chief Executive Officer and Chief Financial Officer, will serve as a board observer.

 

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The Sponsor (including its representatives and affiliates) and RTPZ’s directors and officers, are, or may in the future become, affiliated with entities that are engaged in a similar business to RTPZ. For example, certain officers and directors of RTPZ, who may be considered an affiliate of the Sponsor, have also recently incorporated Reinvent Technology Partners (“RTP”) and Reinvent Technology Partners Y (“RTPY”), each of which is a blank check company incorporated as a Cayman Islands exempted company for the purpose of effecting their respective initial business combinations. Mr. Hoffman and Mr. Pincus are Co-Lead Directors, Mr. Thompson is Chief Executive Officer, Chief Financial Officer and Director and David Cohen is Secretary of RTP and RTPY. The Sponsor and RTPZ’s directors and officers are not prohibited from sponsoring, or otherwise becoming involved with, any other blank check companies prior to RTPZ completing its initial business combination. Moreover, certain of RTPZ’s directors and officers have time and attention requirements for investment funds of which affiliates of the Sponsor are the investment managers. RTPZ’s directors and officers also may become aware of business opportunities which may be appropriate for presentation to RTPZ, and the other entities to which they owe certain fiduciary or contractual duties, including RTP and RTPY. Accordingly, they may have had conflicts of interest in determining to which entity a particular business opportunity should be presented. These conflicts may not be resolved in RTPZ’s favor and such potential business opportunities may be presented to other entities prior to their presentation to RTPZ, subject to applicable fiduciary duties under Cayman Islands Companies Act. RTPZ’s Cayman Constitutional Documents provide that RTPZ renounces its interest in any corporate opportunity offered to any director or officer of RTPZ.

 

  

RTPZ’s existing directors and officers will be eligible for continued indemnification and continued coverage under RTPZ’s directors’ and officers’ liability insurance after the Mergers and pursuant to the Merger Agreement.

 

  

Reinvent Capital Fund, an affiliate of RTPZ, subscribed for $10,000,000 of the PIPE Investment, for which it will receive 1,000,000 shares of Hippo Holdings common stock. Each of Mr. Hoffman, Mr. Pincus, Mr. Thompson and Mr. Cohen has an economic interest in Reinvent Capital Fund. The 1,000,000 shares of Hippo Holdings common stock which Reinvent Capital Fund has subscribed for in the PIPE Investment, if unrestricted and freely tradable, would have had an aggregate market value of $9.93 million based upon the closing price of $9.93 per share on the NYSE on June 30, 2021, the most recent practicable date prior to the date of this proxy statement/prospectus. See “Certain Relationships and Related Person Transactions  RTPZ  Subscription Agreements”.

 

  

In the event that RTPZ fails to consummate a business combination within the prescribed time frame (pursuant to the Cayman Constitutional Documents), or upon the exercise of a redemption right in connection with the Business Combination, RTPZ will be required to provide for payment of claims of creditors that were not waived that may be brought against RTPZ within the ten years following such redemption. In order to protect the amounts held in RTPZ’s trust account, the Sponsor has agreed that it will be liable to RTPZ if and to the extent any claims by a third party (other than RTPZ’s independent auditors) for services rendered or products sold to RTPZ, or a prospective target business with which RTPZ has discussed entering into a transaction agreement, reduce the amount of funds in the trust account to below (i) $10.00 per public share or (ii) such lesser amount per public share held in the trust account as of the date of the liquidation of the trust account, due to reductions in value of the trust assets, in each case, net of the amount of interest which may be withdrawn to pay taxes, except as to any claims by a third party who executed a waiver of any and all rights to seek access to the trust account and except as to any claims under the indemnity of the underwriters of RTPZ’s initial public offering against certain liabilities, including liabilities under the Securities Act.

 

  

RTPZ’s officers and directors, and their affiliates are entitled to reimbursement of out-of-pocket expenses incurred by them in connection with certain activities on RTPZ’s behalf, such as identifying and investigating possible business targets and business combinations. However, if RTPZ fails to consummate a business combination by the Liquidation Date, they will not have any claim against the trust account for reimbursement. RTPZ’s officers and directors, and their affiliates, expect to incur (or

 

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guaranty) approximately $8.6 million of transaction expenses (excluding the deferred underwriting commissions being held in the trust account). Accordingly, RTPZ may not be able to reimburse these expenses if the Business Combination or another business combination, is not completed by such date.

 

  

Pursuant to the Registration Rights Agreement, the Sponsor, RTPZ’s independent directors and Reinvent Capital Fund will have customary registration rights, including demand and piggy-back rights, subject to cooperation and cut-back provisions with respect to the shares of Hippo Holdings common stock and warrants held by such parties following the consummation of the Business Combination.

The Sponsor has agreed to vote in favor of the Business Combination, regardless of how our public shareholders vote. Unlike some other blank check companies in which the initial shareholders agree to vote their shares in accordance with the majority of the votes cast by the public shareholders in connection with an initial business combination, the Sponsor and each director of RTPZ have agreed to, among other things, vote in favor of the Merger Agreement and the transactions contemplated thereby, in each case, subject to the terms and conditions contemplated by the Sponsor Support Agreement. As of the date of this proxy statement/prospectus, the Sponsor (including RTPZ’s independent directors) owns 20.0% of the issued and outstanding ordinary shares.

At any time at or prior to the Business Combination, during a period when they are not then aware of any material nonpublic information regarding us or RTPZ’s securities, the Sponsor, Hippo or their directors, officers, advisors or respective affiliates may purchase public shares from institutional and other investors who vote, or indicate an intention to vote, against any of the Condition Precedent Proposals, or execute agreements to purchase such shares from such investors in the future, or they may enter into transactions with such investors and others to provide them with incentives to acquire public shares or vote their public shares in favor of the Condition Precedent Proposals. Such a purchase may include a contractual acknowledgement that such shareholder, although still the record holder of RTPZ’s shares, is no longer the beneficial owner thereof and therefore agrees not to exercise its redemption rights. In the event that the Sponsor, Hippo or their directors, officers, advisors or respective affiliates purchase shares in privately negotiated transactions from public shareholders who have already elected to exercise their redemption rights, such selling shareholder would be required to revoke their prior elections to redeem their shares. The purpose of such share purchases and other transactions would be to increase the likelihood of (1) satisfaction of the requirement that holders of a majority of the ordinary shares, represented in person or by proxy and entitled to vote at the extraordinary general meeting, vote in favor of the BCA Proposal, the Incentive Award Plan Proposal, the ESPP Proposal and the Adjournment Proposal, (2) satisfaction of the requirement that holders of at least two-thirds of the ordinary shares, represented in person or by proxy and entitled to vote at the extraordinary general meeting, vote in favor of the Domestication Proposal and the Organizational Documents Proposals, (3) satisfaction of the Minimum Cash Condition, (4) otherwise limiting the number of public shares electing to redeem and (5) RTPZ’s net tangible assets (as determined in accordance with Rule 3a51(g)(1) of the Exchange Act) being at least $5,000,001.

Entering into any such arrangements may have a depressive effect on the ordinary shares (e.g., by giving an investor or holder the ability to effectively purchase shares at a price lower than market, such investor or holder may therefore become more likely to sell the shares he or she owns, either at or prior to the Business Combination). If such transactions are effected, the consequence could be to cause the Business Combination to be consummated in circumstances where such consummation could not o