RESOLUTIONS OF THE BOARD OF DIRECTORS OF LUMOS ANALYTICS INC.
Adopted by Unanimous Written Consent
This document contains two sets of resolutions adopted by the Board of Directors of Lumos Analytics Inc. on the dates indicated herein:
Part I: Resolutions adopted as of July 15, 2021 — Authorization to Explore an Initial Public Offering
Part II: Resolutions adopted as of November 5, 2021 — Authorization of IPO Filing, Engagement of Counsel and Underwriters, Pricing Committee Delegation, and Related Matters
PART I
RESOLUTIONS OF THE BOARD OF DIRECTORS
OF LUMOS ANALYTICS INC.
Adopted as of July 15, 2021
by Unanimous Written Consent in Lieu of a Meeting
RECITALS. WHEREAS, Lumos Analytics Inc. (the "Company" or "Lumos") is a corporation duly organized and existing under the laws of the State of Delaware, with its principal executive offices located at 450 Folsom Street, Suite 1200, San Francisco, California 94105, Delaware File Number 6281934, Employer Identification Number 82-3194567;
WHEREAS, the Board of Directors of the Company (the "Board") is acting by unanimous written consent in lieu of a meeting pursuant to Section 141(f) of the Delaware General Corporation Law (the "DGCL"), which permits any action required or permitted to be taken at any meeting of the Board of Directors to be taken without a meeting if all members of the Board consent thereto in writing or by electronic transmission;
WHEREAS, the Board is comprised of the following seven (7) duly elected and qualified directors as of the date hereof:
1. Priya Subramanian — Chair of the Board, Chief Executive Officer & Co-Founder;
2. Marcus Henley — Director, Chief Technology Officer & Co-Founder;
3. Diane Ochoa — Independent Director; Managing Partner, Ridgeline Capital Partners Fund II, L.P.;
4. Samuel Adebayo — Independent Director; former Chief Financial Officer of Verdant Software Corp.;
5. Catherine Mercer — Independent Director; Operating Partner, Arclight Equity Group Fund VII, L.P.;
6. Jonathan Tsai — Director; Managing Partner, Velthryn Venture Partners Fund IV, L.P.; and
7. Rebecca Stahl — Director; Partner, Arclight Equity Group Fund VII, L.P.;
WHEREAS, the Company operates a cloud-based, artificial-intelligence-driven analytics platform providing software-as-a-service ("SaaS") solutions to financial institutions, including real-time transaction monitoring, fraud detection, regulatory reporting, and predictive risk modeling, and the Company has established itself as a leading provider of such technology solutions across the financial services industry;
WHEREAS, the Company achieved total revenue of approximately $118.6 million for the fiscal year ended December 31, 2020, representing a strong growth trajectory, and as of the date hereof serves approximately 340 enterprise customers, with the Company's platform processing in excess of 2 billion transactions per month;
WHEREAS, the Company's authorized capital stock currently consists of 500,000,000 shares of Common Stock, par value $0.0001 per share, consisting of Class A Common Stock (one vote per share) and Class B Common Stock (ten votes per share), with Class B Common Stock held by the co-founders of the Company, Priya Subramanian and Marcus Henley, and the Company additionally has outstanding shares of Series A Preferred Stock, Series B Preferred Stock, Series C Preferred Stock, and Series D Preferred Stock, totaling 62,400,000 shares of Preferred Stock outstanding, with fully diluted shares outstanding of approximately 118,200,000;
WHEREAS, the Company's most recent preferred stock financing, the Series D Preferred Stock financing, closed on August 24, 2020 and was led by Velthryn Venture Partners Fund IV, L.P. at a price of $12.50 per share, implying a post-money valuation of approximately $1.478 billion;
WHEREAS, the Board has considered the Company's growth, financial position, competitive standing, and current and anticipated market conditions, and has evaluated the potential benefits and risks of accessing the public capital markets through an initial public offering ("IPO") of shares of the Company's common stock;
WHEREAS, the Board has reviewed and considered presentations from management of the Company regarding the merits, potential timing, structural considerations, and strategic rationale for a potential IPO, including the potential for enhanced access to capital, increased brand visibility, improved ability to attract and retain talent, and enhanced liquidity for existing stockholders; and
WHEREAS, having considered all of the foregoing, the Board has determined that it is in the best interests of the Company and its stockholders to authorize management to explore the feasibility, timing, and structure of a potential initial public offering of the Company's common stock.
NOW, THEREFORE, BE IT:
Resolution 1 — Authorization to Explore an Initial Public Offering
RESOLVED, that management of the Company, including the Chief Executive Officer, Priya Subramanian, and the Chief Financial Officer, David Lau, be, and each of them hereby is, authorized and directed, on behalf of the Company, to explore the feasibility, timing, and structure of a potential initial public offering of shares of the Company's Class A Common Stock, par value $0.0001 per share, on such terms and conditions as management, in consultation with legal counsel and financial advisors, shall deem appropriate and in the best interests of the Company and its stockholders; and be it further
RESOLVED, that in connection with such exploration, management is hereby authorized to engage in preliminary discussions with potential underwriters, financial advisors, legal counsel, independent auditors, and such other advisors and consultants as management may deem necessary or appropriate in furtherance of such exploration, including the evaluation of potential listing on the Nasdaq Global Select Market or another nationally recognized securities exchange; and be it further
RESOLVED, that management is hereby authorized to incur reasonable preliminary expenses in connection with such exploration, including fees and expenses associated with preliminary advisory discussions, due diligence activities, and the preparation of materials necessary for the evaluation of a potential IPO, in an aggregate amount not to exceed $500,000 without further Board approval.
Resolution 2 — Authorization to Conduct Organizational Meetings with Underwriters
RESOLVED, that management of the Company, including the Chief Executive Officer and the Chief Financial Officer, be, and each of them hereby is, authorized and directed to conduct organizational meetings and preliminary discussions with potential underwriters and book-running managers in connection with a potential initial public offering of the Company's Class A Common Stock, for the purpose of evaluating the proposed offering structure, anticipated timeline, preliminary valuation and pricing considerations, and syndicate composition, and to provide such potential underwriters with access to information regarding the Company's business, financial condition, and prospects as management may determine to be necessary or appropriate in connection therewith, subject to the execution of customary confidentiality and non-disclosure agreements.
Note: Subsequent to the adoption of these resolutions, the organizational meeting with potential underwriters, including Pinnacle Securities LLC and Whitfield & Company LLC, took place on September 22, 2021.
Resolution 3 — Authorization to Engage Preliminary Advisors
RESOLVED, that management of the Company be, and each of them hereby is, authorized to engage in preliminary discussions with, and to retain on customary terms and conditions, legal counsel, independent auditors, and such other professional advisors as may be necessary or appropriate to prepare for a potential initial public offering, including, without limitation, counsel specializing in securities law, capital markets transactions, and corporate governance matters; and be it further
RESOLVED, that in connection with the foregoing, the Board hereby acknowledges and affirms the Company's existing relationship with Meridian & Howe LLP (Gregory Simmons, Audit Partner), an independent registered public accounting firm located at 555 Mission Street, Suite 2500, San Francisco, California 94105, and authorizes management to engage Meridian & Howe LLP to undertake such audit, review, and advisory work as may be required in connection with the preparation for a potential initial public offering, including the preparation of audited financial statements in accordance with the rules and regulations of the Securities and Exchange Commission.
Resolution 4 — Reporting Obligation
RESOLVED, that management of the Company shall report to the Board at its next regularly scheduled meeting, or sooner if circumstances warrant, on the progress of the IPO exploration authorized hereby, including management's recommendations as to timing, structure, the selection of underwriters and advisors, and any other material developments relating thereto, and management shall keep the Board reasonably informed of all significant activities undertaken in furtherance of the foregoing resolutions.
Resolution 5 — General Authorization
RESOLVED, that the officers of the Company be, and each of them hereby is, authorized and empowered to take all such actions and to execute, deliver, and file all such documents, instruments, certificates, and agreements as may be necessary, advisable, or desirable to carry out the intent and purposes of each of the foregoing resolutions, with such changes, modifications, or amendments as the officer executing the same may approve, such approval to be conclusively evidenced by such execution; and be it further
RESOLVED, that any and all actions heretofore taken by any officer or director of the Company in connection with the matters contemplated by the foregoing resolutions are hereby ratified, confirmed, and approved in all respects as the acts and deeds of the Company.
SIGNATURE BLOCK — PART I
This Unanimous Written Consent of the Board of Directors of Lumos Analytics Inc. is effective as of July 15, 2021. By signing below, each of the undersigned directors consents and agrees to the adoption of each of the foregoing resolutions.
This consent may be executed in one or more counterparts, each of which shall be deemed an original and all of which together shall constitute one and the same instrument. Delivery of an executed counterpart of a signature page to this consent by facsimile or electronic transmission (including by portable document format (.pdf)) shall be effective as delivery of a manually executed counterpart.
________________________________________
Priya Subramanian Chair of the Board, Chief Executive Officer & Co-Founder
Date: July 15, 2021
________________________________________
Marcus Henley Director, Chief Technology Officer & Co-Founder
Date: July 15, 2021
________________________________________
Diane Ochoa Independent Director Managing Partner, Ridgeline Capital Partners Fund II, L.P.
Date: July 15, 2021
________________________________________
Samuel Adebayo Independent Director
Date: July 15, 2021
________________________________________
Catherine Mercer Independent Director Operating Partner, Arclight Equity Group Fund VII, L.P.
Date: July 15, 2021
________________________________________
Jonathan Tsai Director Managing Partner, Velthryn Venture Partners Fund IV, L.P.
Date: July 15, 2021
________________________________________
Rebecca Stahl Director Partner, Arclight Equity Group Fund VII, L.P.
Date: July 15, 2021
PART II
RESOLUTIONS OF THE BOARD OF DIRECTORS
OF LUMOS ANALYTICS INC.
Adopted as of November 5, 2021
by Unanimous Written Consent in Lieu of a Meeting
RECITALS. WHEREAS, Lumos Analytics Inc. (the "Company" or "Lumos") is a corporation duly organized and existing under the laws of the State of Delaware, with its principal executive offices located at 450 Folsom Street, Suite 1200, San Francisco, California 94105;
WHEREAS, the Board of Directors of the Company (the "Board") is acting by unanimous written consent in lieu of a meeting pursuant to Section 141(f) of the Delaware General Corporation Law (the "DGCL");
WHEREAS, the Board is comprised of the following seven (7) duly elected and qualified directors as of the date hereof:
1. Priya Subramanian — Chair of the Board, Chief Executive Officer & Co-Founder;
2. Marcus Henley — Director, Chief Technology Officer & Co-Founder;
3. Diane Ochoa — Independent Director; Managing Partner, Ridgeline Capital Partners Fund II, L.P.;
4. Samuel Adebayo — Independent Director; former Chief Financial Officer of Verdant Software Corp.;
5. Catherine Mercer — Independent Director; Operating Partner, Arclight Equity Group Fund VII, L.P.;
6. Jonathan Tsai — Director; Managing Partner, Velthryn Venture Partners Fund IV, L.P.; and
7. Rebecca Stahl — Director; Partner, Arclight Equity Group Fund VII, L.P.;
WHEREAS, on July 15, 2021, the Board adopted resolutions by unanimous written consent authorizing management of the Company to explore the feasibility, timing, and structure of a potential initial public offering of shares of the Company's Class A Common Stock, and to engage in preliminary discussions with potential underwriters, financial advisors, legal counsel, auditors, and other advisors in connection therewith (the "Prior Resolutions");
WHEREAS, pursuant to the Prior Resolutions, management of the Company has completed its evaluation and conducted an organizational meeting with potential underwriters on September 22, 2021, including:
• Pinnacle Securities LLC (Andrew Castellano, Managing Director, Coverage; Lisa Drummond, Managing Director, Equity Capital Markets), located at 399 Park Avenue, New York, New York 10022; and
• Whitfield & Company LLC (Derek Kaplan, Managing Director), located at 200 Vesey Street, 38th Floor, New York, New York 10281;
WHEREAS, following such organizational meeting and further discussions, management recommends that the Board authorize the Company to proceed with a proposed initial public offering of shares of the Company's Class A Common Stock, par value $0.0001 per share, on the Nasdaq Global Select Market under the proposed ticker symbol "LMSA";
WHEREAS, the proposed offering is expected to consist of approximately 12,941,176 primary shares of Class A Common Stock to be issued and sold by the Company (the "Primary Shares") at a preliminary price range of $16.00 to $18.00 per share, with a midpoint of $17.00 per share, targeting aggregate gross proceeds to the Company of approximately $220,000,000, plus up to 3,500,000 secondary shares of Class A Common Stock to be sold by certain selling stockholders (the "Secondary Shares");
WHEREAS, the Board has reviewed and considered the Company's recent financial performance, including anticipated total revenue for the fiscal year ending December 31, 2021 of approximately $187.4 million, representing approximately 58% year-over-year growth from fiscal year 2020 total revenue of $118.6 million, and annual recurring revenue ("ARR") as of December 31, 2021 expected to be approximately $206.8 million;
WHEREAS, the Board has considered the proposed dual-class common stock structure for the Company, consisting of Class A Common Stock (one vote per share) to be publicly offered in the IPO and Class B Common Stock (ten votes per share) to be held by the co-founders, Priya Subramanian and Marcus Henley, and the Board has evaluated the implications of such structure for corporate governance, voting control, and stockholder rights in the post-IPO period;
WHEREAS, the Board has considered that the net proceeds from the sale of Primary Shares in the Offering are expected to be used for general corporate purposes, including working capital, research and development investment, and potential strategic acquisitions;
WHEREAS, the Board has reviewed and considered presentations from management, including analyses prepared by the Chief Financial Officer and discussions with potential underwriters, regarding the proposed terms, structure, and timing of the Offering, and the Board has had the opportunity to ask questions and receive additional information as it has deemed necessary; and
WHEREAS, having considered all of the foregoing, the Board has determined that the IPO and each of the actions described in the resolutions set forth below are in the best interests of the Company and its stockholders.
NOW, THEREFORE, BE IT:
Resolution 1 — Authorization of the Initial Public Offering
RESOLVED, that the Board hereby authorizes and approves the Company proceeding with an initial public offering (the "IPO" or the "Offering") of shares of the Company's Class A Common Stock, par value $0.0001 per share (the "Class A Common Stock"), on the following terms:
(a) The Offering shall consist of (i) the issuance and sale by the Company of newly issued shares of Class A Common Stock (the "Primary Shares") and (ii) the sale of shares of Class A Common Stock by certain selling stockholders to be identified in the Registration Statement (as defined below) (the "Secondary Shares").
(b) The Offering shall target aggregate gross proceeds to the Company from the sale of Primary Shares of approximately $220,000,000 (Two Hundred Twenty Million Dollars), based on the sale of approximately 12,941,176 Primary Shares at the midpoint of the preliminary price range.
(c) The selling stockholders are anticipated to include (i) Velthryn Venture Partners Fund IV, L.P., offering up to 2,000,000 shares of Class A Common Stock, and (ii) Arclight Equity Group Fund VII, L.P., offering up to 1,500,000 shares of Class A Common Stock, for total Secondary Shares of up to 3,500,000 shares. The Company will not receive any proceeds from the sale of Secondary Shares by the selling stockholders.
(d) The Primary Shares and Secondary Shares shall be offered to the public at a public offering price within a preliminary range of $16.00 to $18.00 per share, subject to adjustment by the Pricing Committee (as defined and established in Resolution 6 below), taking into account market conditions, investor demand, and the recommendations of the underwriters.
(e) The underwriters shall be granted an overallotment option (the "Overallotment Option") covering up to 2,466,176 additional shares of Class A Common Stock, representing 15% of the total base shares of 16,441,176 (consisting of 12,941,176 Primary Shares and 3,500,000 Secondary Shares), exercisable for a period of 30 days following the date of the final prospectus, as is customary for offerings of this type.
(f) The shares of Class A Common Stock offered in the IPO shall be listed for trading on the Nasdaq Global Select Market under the proposed ticker symbol "LMSA."
Resolution 2 — Authorization of Registration Statement on Form S-1
RESOLVED, that the Company be, and it hereby is, authorized and directed to prepare, execute, and file with the Securities and Exchange Commission (the "SEC") a Registration Statement on Form S-1 (together with all exhibits, financial statements, and schedules thereto, the "Registration Statement") under the Securities Act of 1933, as amended (the "Securities Act"), and any and all amendments and supplements thereto, including pre-effective and post-effective amendments, in connection with the registration of shares of Class A Common Stock to be offered and sold in the Offering; and be it further
RESOLVED, that the Registration Statement shall initially be submitted to the SEC on a confidential basis as a Draft Registration Statement pursuant to Title I of the Jumpstart Our Business Startups Act of 2012 (the "JOBS Act"), and that the officers of the Company are authorized and directed to submit such confidential Draft Registration Statement and any revisions thereto with the SEC, and to cause the Registration Statement to be publicly filed with the SEC at such time as management and counsel to the Company shall determine to be appropriate, taking into account market conditions, the SEC review process, and the anticipated timeline for the Offering; and be it further
RESOLVED, that the officers of the Company, including Priya Subramanian, Chief Executive Officer, and David Lau, Chief Financial Officer, be, and each of them hereby is, authorized and directed to sign the Registration Statement and any amendments thereto on behalf of the Company, and to take all actions necessary to effect such filing, including the execution and filing of any amendments, supplements, exhibits, consents, and other documents required in connection therewith; and be it further
RESOLVED, that each director who is required to sign the Registration Statement pursuant to Section 6(a) of the Securities Act hereby constitutes and appoints each of Priya Subramanian and David Lau, acting singly, as his or her true and lawful attorney-in-fact and agent, with full power of substitution and resubstitution, to execute in the name and on behalf of such director the Registration Statement and any and all amendments thereto (including post-effective amendments), and to file the same, with all exhibits thereto and all other documents in connection therewith, with the SEC, granting unto each such attorney-in-fact and agent full power and authority to do and perform each and every act and thing requisite and necessary to be done in connection therewith, as fully to all intents and purposes as such director might or could do in person; and be it further
RESOLVED, that the Registration Statement shall include a prospectus containing such information as is required by the Securities Act and the rules and regulations of the SEC thereunder, including Regulation S-K and Regulation S-X, and such additional information as the officers of the Company and counsel to the Company shall deem appropriate and in the best interests of the Company.
Resolution 3 — Appointment of Issuer's Counsel
RESOLVED, that the Board hereby approves the appointment of Calderwood & Harkness LLP, with offices at 1 Market Street, Spear Tower, Suite 3600, San Francisco, California 94105 and 425 Lexington Avenue, 42nd Floor, New York, New York 10017, as counsel to the Company ("Issuer's Counsel") in connection with the IPO and all matters related thereto, including the preparation and filing of the Registration Statement, negotiation and execution of the Underwriting Agreement and ancillary transaction documents, preparation of the Amended and Restated Certificate of Incorporation and Amended and Restated Bylaws, and such other legal matters as may arise in connection with the Offering; and be it further
RESOLVED, that the engagement of Calderwood & Harkness LLP shall be on the terms and conditions set forth in an engagement letter to be executed between the Company and Calderwood & Harkness LLP (Calderwood & Harkness LLP Matter Number: 1008-00002), with total legal fees subject to a fee cap of $1,950,000 (One Million Nine Hundred Fifty Thousand Dollars), exclusive of disbursements and out-of-pocket expenses; and be it further
RESOLVED, that the Board acknowledges that the Calderwood & Harkness LLP engagement team shall be led by:
• Robert Adeyemi — Responsible Partner, Capital Markets Group;
• Jennifer Kwon — Billing Partner, Capital Markets Group;
• Audrey Zhou — Lead Associate;
• Brendan Walsh — Working Associate; and
• Sylvia Hartwell — Specialist Partner, Tax Group;
and be it further
RESOLVED, that the engagement letter with Calderwood & Harkness LLP shall be dated as of November 8, 2021, and the officers of the Company, including Naomi Feinberg, General Counsel and Corporate Secretary, be, and each of them hereby is, authorized and directed to negotiate, execute, and deliver the engagement letter on behalf of the Company on such terms and conditions as are consistent with the foregoing.
Resolution 4 — Engagement of Underwriters
RESOLVED, that the Board hereby approves the engagement of the following underwriters (collectively, the "Underwriters") for the Offering:
(a) Lead Book-Running Managing Underwriter: Pinnacle Securities LLC, a Delaware limited liability company and registered broker-dealer (member, Financial Industry Regulatory Authority), located at 399 Park Avenue, New York, New York 10022, with the coverage team led by Andrew Castellano, Managing Director (Coverage) and Lisa Drummond, Managing Director (Equity Capital Markets);
(b) Joint Book-Running Managing Underwriter: Whitfield & Company LLC, a Delaware limited liability company and registered broker-dealer, located at 200 Vesey Street, 38th Floor, New York, New York 10281, with the coverage team led by Derek Kaplan, Managing Director; and
(c) Co-Manager: Graystone Capital Markets Inc., a New York corporation and registered broker-dealer, located at 140 Broadway, 30th Floor, New York, New York 10005, with the coverage team led by Hannah Morales, Managing Director;
and be it further
RESOLVED, that the underwriting discount payable to the Underwriters shall be 6.5% of the public offering price per share of Class A Common Stock, resulting in an aggregate underwriting discount on Primary Shares of approximately $14,300,000 (Fourteen Million Three Hundred Thousand Dollars) based on midpoint pricing of $17.00 per share and gross proceeds to the Company from Primary Shares of approximately $220,000,000; and be it further
RESOLVED, that the officers of the Company, including Priya Subramanian (Chief Executive Officer) and David Lau (Chief Financial Officer), be, and each of them hereby is, authorized and directed to negotiate, execute, and deliver, on behalf of the Company, an underwriting agreement (the "Underwriting Agreement") with the Underwriters, with Pinnacle Securities LLC acting as representative of the several Underwriters, on terms and conditions customary for transactions of this type, including representations and warranties of the Company and the selling stockholders, conditions to closing, indemnification and contribution provisions, and such other terms as the officers of the Company, in consultation with Issuer's Counsel, shall determine to be necessary, advisable, or appropriate; and be it further
RESOLVED, that the Board acknowledges that Hargrove & Liddell LLP (Michael Sorrentino, Lead Partner), located at 601 Lexington Avenue, New York, New York 10022, will serve as counsel to the Underwriters in connection with the Offering.
Resolution 5 — Engagement of Other Advisors and Service Providers
RESOLVED, that the Board hereby ratifies, confirms, and approves the engagement of the following advisors and service providers in connection with the IPO, and authorizes management to negotiate and execute engagement letters, services agreements, and insurance applications with each of them on customary terms and conditions:
(a) Independent Auditor: Meridian & Howe LLP (Gregory Simmons, Audit Partner), located at 555 Mission Street, Suite 2500, San Francisco, California 94105, to serve as the Company's independent registered public accounting firm and to provide audited financial statements for the fiscal years ended December 31, 2019, December 31, 2020, and December 31, 2021, comfort letters to the Underwriters, and consent for incorporation of Meridian & Howe LLP's audit report by reference into the Registration Statement, at estimated fees of $680,000;
(b) Transfer Agent and Registrar: Broadleaf Transfer Services Inc., located at 250 Royall Street, Canton, Massachusetts 02021, to serve as transfer agent and registrar for the Class A Common Stock, at estimated setup fees of $25,000, plus ongoing per-transaction fees at customary rates;
(c) Financial Printer and EDGAR Filing Agent: Hennessy Consulting Group LLC (Martin Royce), located at 1166 Avenue of the Americas, 15th Floor, New York, New York 10036, to provide financial printing, typesetting, graphic design, and EDGAR filing services in connection with the Registration Statement, prospectus, and related documents, at estimated fees of $185,000; and
(d) Directors' and Officers' Liability Insurance: Terrace Hill Insurance Group Ltd. (through Terrace Hill Insurance Company of America; Julia Brennan, D&O Underwriter), located at 120 Broadway, Suite 2100, New York, New York 10271, to provide a directors' and officers' liability insurance policy with an aggregate limit of $30,000,000 (Thirty Million Dollars) and a six-year run-off ("tail") provision, at an estimated annual premium of approximately $2,400,000, such policy to be bound upon the closing of the IPO.
Resolution 6 — Delegation of Authority to Pricing Committee
RESOLVED, that the Board hereby establishes a committee of the Board to be known as the Pricing Committee (the "Pricing Committee"), consisting of the following three members:
1. Priya Subramanian — Chief Executive Officer & Co-Founder, Chair of the Board;
2. David Lau — Chief Financial Officer; and
3. Diane Ochoa — Independent Director; Managing Partner, Ridgeline Capital Partners Fund II, L.P.;
and be it further
RESOLVED, that the Pricing Committee be, and it hereby is, authorized and empowered, on behalf of the Board, to exercise the following authority in connection with the Offering:
(a) to determine the final public offering price per share of the Class A Common Stock, which may be within, at, above, or below the preliminary price range of $16.00 to $18.00 per share, taking into account market conditions, investor demand, the results of the road show, and the recommendations of the Underwriters;
(b) to determine the final number of Primary Shares to be issued and sold by the Company and the final number of Secondary Shares to be sold by selling stockholders in the Offering;
(c) to determine whether to exercise, or to authorize the Underwriters to exercise, the Overallotment Option, in whole or in part, and to approve the terms of any such exercise;
(d) to approve and authorize execution and delivery of the final Underwriting Agreement on behalf of the Company, reflecting the final pricing terms, share allocations, and such other terms as the Pricing Committee shall deem appropriate;
(e) to approve the final form of the prospectus and any prospectus supplements to be filed with the SEC in connection with the Offering; and
(f) to take all such other actions as may be necessary, advisable, or desirable in connection with the pricing, settlement, and closing of the Offering, including the authorization of any related filings with the SEC, Nasdaq, or any other regulatory body;
and be it further
RESOLVED, that any two (2) members of the Pricing Committee shall constitute a quorum for the transaction of business, and the affirmative vote of a majority of the members of the Pricing Committee present at a meeting at which a quorum is present shall constitute the act of the Pricing Committee. The Pricing Committee may act by telephone conference or other means of communication by which all persons participating in the meeting can hear each other, or by unanimous written consent, in each case in accordance with Section 141 of the DGCL.
Resolution 7 — Authorization of Dual-Class Stock Structure
RESOLVED, that the Board hereby approves and authorizes the dual-class common stock structure for the Company in connection with the IPO, consisting of the following:
(a) Class A Common Stock: One (1) vote per share. Shares of Class A Common Stock will be the shares offered to the public in the IPO and will be listed on the Nasdaq Global Select Market.
(b) Class B Common Stock: Ten (10) votes per share. Shares of Class B Common Stock will be held by the co-founders of the Company as follows:
• Priya Subramanian: 16,500,000 shares of Class B Common Stock
• Marcus Henley: 12,000,000 shares of Class B Common Stock
• Total Class B shares outstanding: 28,500,000 shares
• Total Class B votes: 285,000,000 votes
and be it further
RESOLVED, that the Board acknowledges and has considered that the dual-class common stock structure will result in the co-founders, Priya Subramanian and Marcus Henley, collectively holding approximately 73.5% of the total voting power of the Company's outstanding capital stock immediately following the completion of the IPO (assuming no exercise of the Overallotment Option), and that such concentration of voting power is intended to enable the co-founders to maintain long-term strategic direction over the Company's operations and corporate governance; and be it further
RESOLVED, that the dual-class common stock structure shall include the following sunset provisions: shares of Class B Common Stock shall automatically convert into shares of Class A Common Stock on a one-for-one basis upon the earliest to occur of:
(i) the seventh (7th) anniversary of the closing of the IPO;
(ii) any transfer of such shares of Class B Common Stock to a person or entity that is not a "Permitted Transferee" as defined in the Amended and Restated Certificate of Incorporation; or
(iii) the date on which the co-founders, collectively, cease to beneficially own shares of common stock representing at least ten percent (10%) of the total number of shares of common stock then outstanding;
and be it further
RESOLVED, that the dual-class common stock structure and the foregoing conversion provisions shall be reflected in the Amended and Restated Certificate of Incorporation to be adopted in connection with the IPO, and the officers of the Company and Issuer's Counsel are authorized to prepare and file such Amended and Restated Certificate of Incorporation with the Secretary of State of the State of Delaware at the appropriate time.
Resolution 8 — Authorization of Lock-Up Agreements
RESOLVED, that each director and executive officer of the Company, and each stockholder of the Company holding more than one percent (1%) of the outstanding shares of the Company's capital stock (on an as-converted basis), shall be required to execute a lock-up agreement in favor of Pinnacle Securities LLC, as representative of the Underwriters, providing for a lock-up period of one hundred eighty (180) days following the date of the final prospectus filed in connection with the Offering (the "Lock-Up Period"); and be it further
RESOLVED, that the lock-up agreements shall restrict the direct or indirect sale, offer to sell, contract to sell, transfer, pledge, hypothecation, grant of any option to purchase, or other disposition of, or hedging with respect to, any shares of common stock of the Company or any securities convertible into or exchangeable for shares of common stock during the Lock-Up Period, with customary carve-outs for (i) transfers for bona fide estate planning purposes, including transfers to trusts for the benefit of the transferor or members of the transferor's immediate family, (ii) charitable gifts and donations, (iii) transfers by operation of law, and (iv) the establishment of a trading plan pursuant to Rule 10b5-1 under the Securities Exchange Act of 1934, as amended, provided that no sales are made under such plan during the Lock-Up Period; and be it further
RESOLVED, that any early release from the lock-up restrictions prior to the expiration of the Lock-Up Period shall be at the sole discretion of Pinnacle Securities LLC, and the officers of the Company are authorized to cooperate with Pinnacle Securities LLC in the administration and enforcement of the lock-up agreements.
Resolution 9 — Authorization of Conversion of Preferred Stock
RESOLVED, that the Board hereby approves and authorizes the automatic conversion of all outstanding shares of the Company's Preferred Stock, consisting of:
• Series A Preferred Stock;
• Series B Preferred Stock;
• Series C Preferred Stock; and
• Series D Preferred Stock;
totaling 62,400,000 shares of Preferred Stock in the aggregate, into shares of Class A Common Stock upon the closing of the IPO, in accordance with the conversion provisions set forth in the Company's Certificate of Incorporation and the applicable certificates of designations governing each series of Preferred Stock, at the respective conversion ratios then in effect; and be it further
RESOLVED, that following such conversion, the Company's authorized capital stock shall consist solely of (i) Class A Common Stock and (ii) Class B Common Stock, as set forth in the Amended and Restated Certificate of Incorporation to be filed in connection with the IPO, and all references to Preferred Stock shall be eliminated from the Company's charter documents; and be it further
RESOLVED, that the officers of the Company are authorized and directed to take all actions necessary to effectuate such conversion, including the issuance of shares of Class A Common Stock upon conversion, the cancellation of Preferred Stock certificates (whether in book-entry or certificated form), the update of the Company's stock ledger and capitalization records, and the filing of any necessary certificates or notices with the Secretary of State of the State of Delaware.
Resolution 10 — Approval of Estimated Offering Expenses
RESOLVED, that the Board hereby acknowledges, approves, and authorizes the payment by the Company of estimated offering expenses (excluding the underwriting discount payable to the Underwriters) of approximately $4,800,000 (Four Million Eight Hundred Thousand Dollars) in connection with the IPO, which estimated expenses are summarized as follows:
Note: The SEC registration fee of $20,394 has been calculated at the rate of $92.70 per $1,000,000 of securities registered, applied to the estimated maximum aggregate offering price of $220,000,000 for the Primary Shares. The D&O insurance premium, while approved herein, is presented separately as it will be bound upon IPO closing and may be considered a post-IPO operating expense.
and be it further
RESOLVED, that excluding the D&O insurance premium, the estimated offering expenses of approximately $4,150,394, together with the aggregate underwriting discount of approximately $14,300,000, would result in estimated net proceeds to the Company (at midpoint pricing of $17.00 per share) of approximately $200,900,000 (Two Hundred Million Nine Hundred Thousand Dollars), and the Board hereby acknowledges and approves such estimated net proceeds allocation.
Resolution 11 — Authorization of Nasdaq Listing Application
RESOLVED, that the officers of the Company, including the Chief Executive Officer and the Chief Financial Officer, be, and each of them hereby is, authorized and directed to prepare and file a listing application with the Nasdaq Global Select Market for the listing and trading of the Company's Class A Common Stock under the proposed ticker symbol "LMSA," and to take all actions necessary or desirable to satisfy the initial and ongoing listing requirements of the Nasdaq Global Select Market, including the execution of a listing agreement and the payment of all applicable listing fees, and to respond to any comments or requests from Nasdaq in connection therewith.
Resolution 12 — Ratification of Prior Actions
RESOLVED, that all actions heretofore taken by the officers, directors, employees, and agents of the Company in connection with the exploration, preparation, and planning of the IPO, including without limitation:
(a) the organizational meeting with Pinnacle Securities LLC and Whitfield & Company LLC held on September 22, 2021;
(b) preliminary discussions with Calderwood & Harkness LLP regarding the engagement of such firm as Issuer's Counsel;
(c) discussions and negotiations with Pinnacle Securities LLC, Whitfield & Company LLC, and Graystone Capital Markets Inc. regarding the proposed structure, terms, and timeline of the Offering;
(d) discussions with Meridian & Howe LLP regarding the scope of audit work and the preparation of financial statements for inclusion in the Registration Statement;
(e) preliminary due diligence activities and the preparation of internal working materials in anticipation of the Offering; and
(f) all other actions taken in furtherance of the matters contemplated by the Prior Resolutions and these resolutions;
are hereby ratified, confirmed, and approved in all respects as the acts and deeds of the Company.
Resolution 13 — General Authorization
RESOLVED, that the officers of the Company, including Priya Subramanian (Chief Executive Officer), David Lau (Chief Financial Officer), Naomi Feinberg (General Counsel & Corporate Secretary), and Marcus Henley (Chief Technology Officer), be, and each of them hereby is, authorized and empowered, acting singly or together, to take all such further actions and to execute, deliver, and file all such further documents, instruments, agreements, certificates, notices, and filings, in the name and on behalf of the Company, with or under the seal of the Company (or without seal if no seal is required), as any such officer may deem necessary, advisable, or appropriate to carry out the intent and purposes of each of the foregoing resolutions, with such changes, modifications, amendments, or additions as the officer executing the same may approve, such approval to be conclusively evidenced by such execution and delivery; and be it further
RESOLVED, that any and all actions previously authorized by the Board in the Prior Resolutions adopted as of July 15, 2021, to the extent not inconsistent with the resolutions adopted herein, shall remain in full force and effect; and be it further
RESOLVED, that these resolutions shall remain in full force and effect until modified, amended, or revoked by subsequent action of the Board.
SIGNATURE BLOCK — PART II
This Unanimous Written Consent of the Board of Directors of Lumos Analytics Inc. is effective as of November 5, 2021. By signing below, each of the undersigned directors of the Company, constituting all members of the Board of Directors, consents and agrees to the adoption of each of the foregoing resolutions set forth in this Part II.