S-4/A 1 nt10014322x2_s4a.htm S-4/A

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As filed with the Securities and Exchange Commission on September 11, 2020.
Registration No. 333-248568
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
AMENDMENT NO. 1
TO
FORM S-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
TELADOC HEALTH, INC.
(Exact name of registrant as specified in its charter)
Delaware
7389
04-3705970
(State or other jurisdiction of
incorporation or organization)
(Primary Standard Industrial
Classification Code Number)
(I.R.S. Employer
Identification No.)
2 Manhattanville Road, Suite 203
Purchase, New York 10577
(203) 653-2002
(Address, including zip code, and telephone number, including area code, of registrant’s principal executive offices)
Adam Vandervoort
Chief Legal Officer
Teladoc Health, Inc.
2 Manhattanville Road, Suite 203
Purchase, New York 10577
(203) 653-2002
(Name, address, including zip code, and telephone number, including area code, of agent for service)
With a copy to
Scott A. Barshay
Laura C. Turano
Paul, Weiss, Rifkind, Wharton & Garrison LLP
1285 Avenue of the Americas
New York, NY 10019-6064
(212) 373-3000
Erica Palsis
General Counsel
Livongo Health, Inc.
150 West Evelyn Avenue, Suite 150
Mountain View, California 94041
(866) 435-5643
Mike Ringler
Sonia Nijjar
Skadden, Arps, Slate, Meagher and Flom LLP
525 University Avenue
Palo Alto, California 94301
(650) 470-4500
Approximate date of commencement of proposed sale of the securities to the public: As soon as practicable after this registration statement is declared effective.
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 of 1933, as amended (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, a 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. (Check one):
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-1(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 U.S. Securities and Exchange Commission, acting pursuant to said section 8(a), may determine

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The information in this joint proxy statement/prospectus is not complete and may be changed. A registration statement relating to the securities described in this joint proxy statement/prospectus has been filed with the Securities and Exchange Commission. These securities may not be issued until the registration statement filed with the Securities and Exchange Commission is effective. This joint proxy statement/prospectus does not constitute an offer to sell or the solicitation of offers to buy these securities in any jurisdiction where the offer or sale is not permitted.
PRELIMINARY, SUBJECT TO COMPLETION, DATED SEPTEMBER 11, 2020


MERGER PROPOSAL-YOUR VOTE IS VERY IMPORTANT
On August 5, 2020, Teladoc Health, Inc., which is referred to as Teladoc, and Livongo Health, Inc., which is referred to as Livongo, entered into an Agreement and Plan of Merger, as it may be amended from time to time, which is referred to as the merger agreement, pursuant to which they agreed to combine their respective businesses. The combined company will be a leader in virtual health, with scale and scope across critical, chronic and complex care, on a global basis. Pursuant to the terms of the merger agreement, Tempranillo Merger Sub, Inc., a wholly-owned subsidiary of Teladoc and a party to the merger agreement, will merge with and into Livongo, which transaction is referred to as the merger, with Livongo surviving as a wholly-owned subsidiary of Teladoc. Following the merger, Teladoc, Livongo and their respective subsidiaries will operate as a combined company, which is referred to as the combined company, under the name Teladoc.
Upon successful completion of the merger, each issued and outstanding share of Livongo common stock will be converted automatically into the right to receive (i) 0.5920 of a share of Teladoc common stock, which number is referred to as the exchange ratio, and (ii) $4.24 in cash, without interest. The exchange ratio is fixed and will not be adjusted for changes in the market price of either Teladoc common stock or Livongo common stock between the dates of signing of the merger agreement and completion of the merger. Teladoc stockholders will continue to own their existing Teladoc shares. In addition, prior to the effective time of the merger, Livongo will declare a special cash dividend equal to $7.09 per share of Livongo common stock to stockholders of Livongo as of a record date immediately prior to the closing of the merger. As of the date of this joint proxy statement/prospectus, based on the estimated number of shares of Teladoc common stock and Livongo common stock that will be outstanding immediately prior to the completion of the merger, we estimate that Teladoc stockholders will own approximately 58% and Livongo stockholders will own approximately 42% of the issued and outstanding shares of the combined company immediately following the completion of the merger. The common stock of Teladoc is traded on the NYSE under the symbol “TDOC” and the common stock of Livongo is traded on Nasdaq under the symbol “LVGO.” The common stock of the combined company will be listed on the NYSE under the symbol “TDOC.” We encourage you to obtain updated quotes for the Teladoc common stock and the Livongo common stock.
Teladoc and Livongo will each hold special meetings of their respective stockholders in connection with the proposed merger, which are referred to as the Teladoc stockholder meeting and the Livongo stockholder meeting, respectively.
At the Teladoc stockholder meeting, Teladoc stockholders will be asked to consider and vote on (1) the proposal to approve the issuance of shares of Teladoc common stock to Livongo stockholders pursuant to the merger agreement, which is referred to as the Teladoc share issuance proposal, (2) the proposal to adopt an amendment to Teladoc’s certificate of incorporation, which is referred to as the Teladoc charter amendment proposal, and (3) the proposal to adjourn the Teladoc stockholder meeting to solicit additional proxies if there are not sufficient votes to approve the Teladoc share issuance proposal or the Teladoc charter amendment proposal or to ensure that any supplement or amendment to the accompanying joint proxy statement/prospectus is timely provided to Teladoc stockholders. The Teladoc board of directors unanimously recommends that Teladoc stockholders vote “FOR” each of the proposals to be considered at the Teladoc stockholder meeting.
At the Livongo stockholder meeting, Livongo stockholders will be asked to consider and vote on (1) the proposal to adopt the merger agreement, which is referred to as the Livongo merger agreement proposal, (2) the proposal to approve, on a non-binding advisory basis, specific compensatory arrangements between Livongo and its named executive officers relating to the merger and (3) the proposal to adjourn the Livongo stockholder meeting to solicit additional proxies if there are not sufficient votes to approve the Livongo merger agreement proposal or to ensure that any supplement or amendment to the accompanying joint proxy statement/prospectus is timely provided to Livongo stockholders. The Livongo board of directors unanimously recommends that Livongo stockholders vote “FOR” each of the proposals to be considered at the Livongo stockholder meeting.
We cannot complete the merger unless the Livongo stockholders approve the Livongo merger agreement proposal and the Teladoc stockholders approve both the Teladoc share issuance proposal and the Teladoc charter amendment proposal. Your vote on these matters is very important, regardless of the number of shares you own. Whether or not you plan to attend your respective stockholder meeting, please promptly mark, sign and date the accompanying proxy and return it in the enclosed postage-paid envelope or authorize the individuals named on your proxy card to vote your shares by calling the toll-free telephone number or by using the Internet as described in the instructions included with your proxy card.
The accompanying joint proxy statement/prospectus provides you with important information about the stockholder meetings, the merger, and each of the proposals. We encourage you to read the entire document carefully, in particular the “Risk Factors” section beginning on page 46 for a discussion of risks relevant to the merger.
We look forward to the successful completion of the merger.
Sincerely,
Jason Gorevic
Chief Executive Officer
Teladoc Health, Inc.
Zane Burke
Chief Executive Officer
Livongo Health, Inc.
Neither the U.S. Securities and Exchange Commission nor any state securities commission has approved or disapproved of the merger or the Teladoc common stock to be issued in the merger or determined if this joint proxy statement/prospectus is accurate or complete. Any representation to the contrary is a criminal offense.
This joint proxy statement/prospectus is dated [•], 2020 and is first being mailed to Teladoc and Livongo stockholders on or about [•], 2020.

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Teladoc Health, Inc.
2 Manhattanville Road, Suite 203
Purchase, New York 10577
(203) 635-2002
NOTICE OF SPECIAL MEETING OF STOCKHOLDERS
TO BE HELD ON OCTOBER 29, 2020
To the Stockholders of Teladoc Health, Inc.:
Notice is hereby given that Teladoc Health, Inc., which is referred to as Teladoc, will hold a special meeting of its stockholders, which is referred to as the Teladoc stockholder meeting. The Teladoc stockholder meeting will be held on October 29, 2020, beginning at 11:00 a.m., Eastern Time, and will be a completely virtual meeting of stockholders. You will be able to attend the Teladoc stockholder meeting, vote and submit your questions during the meeting via live webcast by visiting www.virtualshareholdermeeting.com/TDOC2020SM.
The purpose of the Teladoc stockholder meeting is for the stockholders to consider and vote upon the following proposals:
1.
to approve the issuance of shares of Teladoc common stock to the stockholders of Livongo Health, Inc., which is referred to as Livongo, pursuant to the Agreement and Plan of Merger, dated as of August 5, 2020 (as it may be amended from time to time), which is referred to as the merger agreement, by and among Teladoc, Livongo and Tempranillo Merger Sub, Inc., a wholly-owned subsidiary of Teladoc, which proposal is referred to as the Teladoc share issuance proposal;
2.
to adopt an amendment to the certificate of incorporation of Teladoc, which amendment is referred to as the charter amendment and which proposal is referred to as the Teladoc charter amendment proposal; and
3.
to approve the adjournment of the Teladoc stockholder meeting to solicit additional proxies if there are not sufficient votes at the time of the Teladoc stockholder meeting to approve the Teladoc share issuance proposal and the Teladoc charter amendment proposal or to ensure that any supplement or amendment to the accompanying joint proxy statement/prospectus is timely provided to Teladoc stockholders, which is referred to as the Teladoc adjournment proposal.
Teladoc will transact no other business at the Teladoc stockholder meeting except such business as may properly be brought before the Teladoc stockholder meeting or any adjournment or postponement thereof. The accompanying joint proxy statement/prospectus, including the merger agreement attached thereto as Annex A, contains further information with respect to these matters.
Only holders of record of Teladoc common stock at the close of business on September 8, 2020 are entitled to notice of and to vote at the Teladoc stockholder meeting and any adjournments or postponements thereof.
The Teladoc board of directors has unanimously approved and declared advisable the merger agreement and the transactions contemplated by the merger agreement on the terms and subject to the conditions set forth in the merger agreement. The Teladoc board of directors unanimously recommends that Teladoc stockholders vote “FOR” the Teladoc share issuance proposal, “FOR” the Teladoc charter amendment proposal and “FOR” the Teladoc adjournment proposal.
Your vote is very important, regardless of the number of shares of Teladoc common stock you own. We cannot complete the transactions contemplated by the merger agreement without the approval of the Teladoc share issuance proposal and the Teladoc charter amendment proposal. Assuming a quorum is present, the approval of the Teladoc share issuance proposal requires the affirmative vote of a majority of votes cast on the proposal, and the approval of the Teladoc charter amendment proposal requires the affirmative vote of a majority of the outstanding shares of Teladoc common stock entitled to vote on such proposal.

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Whether or not you plan to attend the Teladoc stockholder meeting, we urge you to please promptly mark, sign and date the accompanying proxy and return it in the enclosed postage-paid envelope or authorize the individuals named on the proxy card to vote your shares by calling the toll-free telephone number or by using the Internet as described in the instructions included with the proxy card. If your shares are held in the name of a bank, broker or other nominee, please follow the instructions on the voting instruction card furnished by such bank, broker or other nominee.
If you have any questions about the merger, please contact Teladoc at (203) 635-2002 or write to Teladoc Health, Inc., Attention: Investor Relations, 2 Manhattanville Road, Suite 203, Purchase, New York 10577.
If you have any questions about how to vote or direct a vote in respect of your shares of Teladoc common stock, you may contact our proxy solicitor, MacKenzie Partners, Inc., at (800) 322-2885 or via email at proxy@mackenziepartners.com.
 
By Order of the Board of Directors,
 
 
 
 
 
Adam C. Vandervoort
 
Chief Legal Officer and Secretary
Purchase, New York
Dated: [•], 2020
Your vote is important. Teladoc stockholders are requested to complete, date, sign and return the enclosed proxy in the envelope provided, which requires no postage if mailed in the United States, or to submit their votes electronically through the Internet or by telephone.

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Livongo Health, Inc.
150 West Evelyn Avenue
Suite 150
Mountain View, California 94041
(866) 435-5643
NOTICE OF SPECIAL MEETING OF STOCKHOLDERS
TO BE HELD ON OCTOBER 29, 2020
To the Stockholders of Livongo Health, Inc.:
Notice is hereby given that Livongo Health, Inc., which is referred to as Livongo, will hold a virtual, audio-only special meeting of its stockholders, which is referred to as the Livongo stockholder meeting, at www.virtualshareholdermeeting.com/LVGO2020SM, on October 29, 2020, beginning at 11:00 a.m., Eastern Time, for the purpose of considering and voting on the following proposals:
1.
to adopt the Agreement and Plan of Merger, dated as of August 5, 2020 (as it may be amended from time to time), which is referred to as the merger agreement, by and among Teladoc Health, Inc., referred to as Teladoc, Livongo and Tempranillo Merger Sub, Inc., a wholly-owned subsidiary of Teladoc, which proposal is referred to as the Livongo merger agreement proposal;
2.
to approve, on an advisory (non-binding) basis, the executive officer compensation that will or may be paid to Livongo’s named executive officers that is based on or otherwise relates to the transactions contemplated by the merger agreement, which is referred to as the Livongo compensation proposal; and
3.
to approve the adjournment of the Livongo stockholder meeting to solicit additional proxies if there are not sufficient votes at the time of the Livongo stockholder meeting to approve the Livongo merger agreement proposal or to ensure that any supplement or amendment to the accompanying joint proxy statement/prospectus is timely provided to Livongo stockholders, which is referred to as the Livongo adjournment proposal.
Livongo will transact no other business at the Livongo stockholder meeting except such business as may properly be brought before the Livongo stockholder meeting or any adjournment or postponement thereof. The accompanying joint proxy statement/prospectus, including the merger agreement attached thereto as Annex A, contains further information with respect to these matters.
Only holders of record of Livongo common stock at the close of business on September 8, 2020 are entitled to notice of and to vote at the Livongo stockholder meeting and any adjournments or postponements thereof.
The Livongo board of directors has unanimously approved and declared advisable the merger agreement and the transactions contemplated by the merger agreement on the terms and subject to the conditions set forth in the merger agreement. The Livongo board of directors unanimously recommends that Livongo stockholders vote “FOR” the Livongo merger agreement proposal, “FOR” the Livongo compensation proposal and “FOR” the Livongo adjournment proposal.
Your vote is very important, regardless of the number of shares of Livongo common stock you own. We cannot complete the transactions contemplated by the merger agreement without approval of the Livongo merger agreement proposal. Assuming a quorum is present, the approval of the Livongo merger agreement proposal requires the affirmative vote of a majority of the outstanding shares of Livongo common stock entitled to vote on the Livongo merger agreement proposal.
Whether or not you plan to attend the Livongo stockholder meeting virtually, we urge you to please promptly mark, sign and date the accompanying proxy and return it in the enclosed postage-paid envelope or authorize the individuals named on the proxy card to vote your shares by calling the toll-free telephone number or by using the Internet as described in the instructions included with the proxy card. If your shares are held in the name of a bank, broker or other nominee, please follow the instructions on the voting instruction card furnished by such bank, broker or other nominee.

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If you have any questions about the merger, please contact Livongo at (312) 588-7048 or write to Livongo Health, Inc., Attention: Investor Relations, 444 N. Michigan Ave., Suite 3400, Chicago, Illinois 60611.
If you have any questions about how to vote or direct a vote in respect of your shares of Livongo common stock, you may contact our proxy solicitor, D.F. King, toll-free at (800)-628-8510 or banks and brokers may call (212) 269-5550 or via email at lvgo@dfking.com.
 
By Order of the Board of Directors,
 
 
 
 
 
Erica Palsis
 
General Counsel and Secretary
Mountain View, California
Dated: [•], 2020
Your vote is important. Livongo stockholders are requested to complete, date, sign and return the enclosed proxy in the envelope provided, which requires no postage if mailed in the United States, or to submit their votes electronically through the Internet or by telephone.

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REFERENCES TO ADDITIONAL INFORMATION
This joint proxy statement/prospectus incorporates important business and financial information about Teladoc and Livongo from other documents that Teladoc and Livongo have filed with the U.S. Securities and Exchange Commission, which is referred to as the SEC, and that are contained in or incorporated by reference into this joint proxy statement/prospectus. For a listing of documents incorporated by reference into this joint proxy statement/prospectus, please see the section entitled “Where You Can Find More Information” beginning on page 218. This information is available for you free of charge to review through the SEC’s website at www.sec.gov.
Any person may request a copy of this joint proxy statement/prospectus and any of the documents incorporated by reference into this joint proxy statement/prospectus or other information concerning Teladoc or Livongo, without charge, by written or telephonic request directed to the appropriate company or its proxy solicitor at the following contacts:
For Teladoc stockholders:
For Livongo stockholders:
 
 
Teladoc Health, Inc.
2 Manhattanville Road, Suite 203
Purchase, New York 10577
(203) 635-2002
Attention: Investor Relations
Livongo Health, Inc.
444 N. Michigan Avenue, Suite 3400
Chicago, Illinois 60611
(312) 588-7048
Attention: Investor Relations
 
 
MacKenzie Partners, Inc.
1407 Broadway, 27th Floor
New York, New York 10018
Toll-Free: (800) 322-2885
Call Collect: (212) 929-5500
D.F. King & Co., Inc.
48 Wall Street
New York, New York 10005
Toll-Free: (800) 628-8510
Banks and Brokers: (212) 269-5550
In order for you to receive timely delivery of the documents in advance of the special meeting of Teladoc stockholders to be held on October 29, 2020, which is referred to as the Teladoc stockholder meeting, or the special meeting of Livongo stockholders to be held on October 29, 2020, which is referred to as the Livongo stockholder meeting, as applicable, you must request the information no later than October 22, 2020.
The contents of the websites of the SEC, Teladoc, Livongo or any other entity are not being incorporated into this joint proxy statement/prospectus. The information about how you can obtain certain documents that are incorporated by reference into this joint proxy statement/prospectus at these websites is being provided only for your convenience.

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ABOUT THIS JOINT PROXY STATEMENT/PROSPECTUS
This document, which forms part of a registration statement on Form S-4 filed with the SEC by Teladoc (File No. 333-248568), constitutes a prospectus of Teladoc under Section 5 of the Securities Act of 1933, as amended, which is referred to as the Securities Act, with respect to the shares of common stock of Teladoc to be issued to Livongo stockholders pursuant to the Agreement and Plan of Merger, dated as of August 5, 2020, by and among Teladoc, Livongo and Merger Sub, as it may be amended from time to time, which is referred to as the merger agreement. This document also constitutes a joint proxy statement of Teladoc and Livongo under Section 14(a) of the Securities Exchange Act of 1934, as amended, which is referred to as the Exchange Act. It also constitutes a notice of meeting with respect to the Livongo stockholder meeting and a notice of meeting with respect to the Teladoc stockholder meeting.
Teladoc has supplied all information contained or incorporated by reference into this joint proxy statement/prospectus relating to Teladoc, and Livongo has supplied all such information relating to Livongo. Teladoc and Livongo have both contributed to the information related to the merger contained in this joint proxy statement/prospectus.
You should rely only on the information contained in or incorporated by reference into this joint proxy statement/prospectus. Teladoc and Livongo have not authorized anyone to provide you with information that is different from that contained in or incorporated by reference into this joint proxy statement/prospectus. This joint proxy statement/prospectus is dated [•], 2020, and you should not assume that the information contained in this joint proxy statement/prospectus is accurate as of any date other than such date unless otherwise specifically provided herein.
Further, you should not assume that the information incorporated by reference into this joint proxy statement/prospectus is accurate as of any date other than the date of the incorporated document. Neither the mailing of this joint proxy statement/prospectus to Teladoc stockholders or Livongo stockholders nor the issuance by Teladoc of shares of its common stock pursuant to the merger agreement will create any implication to the contrary.
This joint proxy statement/prospectus does not constitute an offer to sell, or a solicitation of an offer to buy, any securities, or the solicitation of a proxy, in any jurisdiction to or from any person to whom it is unlawful to make any such offer or solicitation in such jurisdiction.
All references in this joint proxy statement/prospectus to “Teladoc” refer to Teladoc Health, Inc., a Delaware corporation; all references to “Merger Sub” refer to Tempranillo Merger Sub, Inc., a Delaware corporation and wholly-owned subsidiary of Teladoc formed for the purpose of effecting the merger as described in this joint proxy statement/prospectus. All references in this joint proxy statement/prospectus to “Livongo” refer to Livongo Health, Inc., a Delaware corporation. All references in this joint proxy statement/prospectus to “combined company” refer to Teladoc immediately following completion of the merger and the other transactions contemplated by the merger agreement. All references in this joint proxy statement/prospectus to “Teladoc common stock” refer to the common stock of Teladoc, par value $0.001 per share, and all references in this joint proxy statement/prospectus to “Livongo common stock” refer to the common stock of Livongo, par value $0.001 per share.

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ANNEX A – AGREEMENT AND PLAN OF MERGER
ANNEX B – VOTING AGREEMENT
ANNEX C – OPINION OF LAZARD FRÈRES & CO. LLC
ANNEX D – OPINION OF MORGAN STANLEY & CO. LLC
ANNEX E – CHARTER AMENDMENT
ANNEX F – SECTION 262 OF THE DELAWARE GENERAL CORPORATION LAW
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QUESTIONS AND ANSWERS
The following are some questions that you, as a stockholder of Teladoc or a stockholder of Livongo, may have regarding the merger and the other matters being considered at the special meetings of each company’s stockholders and brief answers to those questions. You are urged to carefully read this joint proxy statement/prospectus and the other documents referred to in this joint proxy statement/prospectus in their entirety because this section may not provide all the information that is important to you regarding these matters. Additional important information is contained in the annexes to, and the documents incorporated by reference into, this joint proxy statement/prospectus. You may obtain the information incorporated by reference in this joint proxy statement/prospectus, without charge, by following the instructions under the section entitled “Where You Can Find More Information” beginning on page 218.
Q:
Why am I receiving this joint proxy statement/prospectus?
A:
You are receiving this joint proxy statement/prospectus because Teladoc and Livongo have agreed to combine their companies structured through a merger of Merger Sub with and into Livongo, with Livongo surviving the merger as a wholly-owned subsidiary of Teladoc. The merger agreement governs the terms of the business combination and merger of Livongo and Merger Sub, which is referred to as the merger, and is attached to this joint proxy statement/prospectus as Annex A.
In order to complete the merger, among other things:
Livongo stockholders must adopt the merger agreement in accordance with Delaware General Corporation Law, referred to as the DGCL, which proposal is referred to as the Livongo merger agreement proposal;
Teladoc stockholders must approve the issuance of shares of Teladoc common stock to Livongo stockholders pursuant to the merger agreement, which issuance is referred to as the share issuance and which proposal is referred to as the Teladoc share issuance proposal; and
Teladoc stockholders must adopt the proposed amendment to Teladoc’s certificate of incorporation, which amendment is referred to as the charter amendment and which proposal is referred to as the Teladoc charter amendment proposal.
Teladoc is holding a special meeting of its stockholders, which is referred to as the Teladoc stockholder meeting, to obtain approval of the Teladoc share issuance proposal and the Teladoc charter amendment proposal. Teladoc stockholders will also be asked to approve the proposal to adjourn the Teladoc stockholder meeting to solicit additional proxies if there are not sufficient votes at the time of the Teladoc stockholder meeting to approve the Teladoc share issuance proposal and the Teladoc charter amendment proposal or to ensure that any supplement or amendment to this joint proxy statement/prospectus is timely provided to Teladoc stockholders, which is referred to as the Teladoc adjournment proposal.
Livongo is holding a special meeting of its stockholders, which is referred to as the Livongo stockholder meeting, to obtain approval of the Livongo merger agreement proposal. Livongo stockholders will also be asked to approve, on an advisory (non-binding) basis, the merger-related executive officer compensation payments that will or may be paid by Livongo to its named executive officers that is based on or otherwise relates to the merger, which is referred to as the Livongo compensation proposal, and to approve the proposal to adjourn the Livongo stockholder meeting to solicit additional proxies if there are not sufficient votes at the time of the Livongo stockholder meeting to approve the Livongo merger agreement proposal or to ensure that any supplement or amendment to this joint proxy statement/prospectus is timely provided to Livongo stockholders, which is referred to as the Livongo adjournment proposal.
Your vote is very important.
Q:
When and where will each of the stockholder meetings take place?
A:
The Teladoc stockholder meeting will be held virtually at www.virtualshareholdermeeting.com/TDOC2020SM, on October 29, 2020, at 11:00 a.m., Eastern Time. Online access will begin at 10:45 a.m., Eastern Time, and Teladoc encourages its stockholders to access the meeting prior to the start time. You will be able to vote your shares electronically by Internet and submit questions online during the Teladoc stockholder meeting by logging in to the website listed above using the 16-digit control number included in your proxy card.
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The Livongo stockholder meeting will be held will be held virtually via live audio-only webcast at 11:00 a.m., Eastern Time, on October 29, 2020, at www.virtualshareholdermeeting.com/LVGO2020SM. Online check-in will begin at 10:45 a.m., Eastern Time, and you should allow ample time for the check-in procedures. You will be able to vote your shares electronically by Internet and submit questions online during the Livongo stockholder meeting by logging in to the website listed above using the 16-digit control number included in your proxy card.
Even if you plan to attend your respective company’s stockholder meeting, Teladoc and Livongo recommend that you vote your shares in advance as described below so that your vote will be counted if you later decide not to or become unable to attend the applicable stockholder meeting. Shares held in “street name” may be voted in person by you only if you obtain a signed legal proxy from your bank, broker or other nominee giving you the right to vote the shares at the applicable stockholder meeting.
Q:
What matters will be considered at each of the stockholder meetings?
A:
At the Teladoc stockholder meeting, the stockholders of Teladoc will be asked to consider and vote on the following proposals:
Teladoc Proposal 1: The Teladoc share issuance proposal. Approval of the issuance of shares of Teladoc common stock to Livongo stockholders pursuant to the merger agreement;
Teladoc Proposal 2: The Teladoc charter amendment proposal. Adoption of an amendment to Teladoc’s certificate of incorporation; and
Teladoc Proposal 3: The Teladoc adjournment proposal. Approval of the adjournment of the Teladoc stockholder meeting to solicit additional proxies if there are not sufficient votes at the time of the Teladoc stockholder meeting to approve the Teladoc share issuance proposal and the Teladoc charter amendment proposal or to ensure that any supplement or amendment to this joint proxy statement/prospectus is timely provided to the Teladoc stockholders.
At the Livongo stockholder meeting, stockholders of Livongo will be asked to consider and vote on the following proposals:
Livongo Proposal 1: The Livongo merger agreement proposal. Adoption of the merger agreement;
Livongo Proposal 2: The Livongo compensation proposal. Approval of, on an advisory (non-binding) basis, the merger-related named executive officer compensation payments that will or may be paid by Livongo to its named executive officers that is based on or otherwise relates to the merger; and
Livongo Proposal 3: The Livongo adjournment proposal. Approval of the adjournment of the Livongo stockholder meeting to solicit additional proxies if there are not sufficient votes at the time of the Livongo stockholder meeting to approve the Livongo merger agreement proposal or to ensure that any supplement or amendment to this joint proxy statement/prospectus is timely provided to the Livongo stockholders.
The approval of the Livongo merger agreement proposal, the approval of the Teladoc share issuance proposal and the approval of the Teladoc charter amendment proposal are conditions to the obligations of Livongo and Teladoc to complete the merger. None of the approvals of the Livongo compensation proposal, the Teladoc adjournment proposal or the Livongo adjournment proposal are conditions to the obligations of Livongo or Teladoc to complete the merger.
Q:
Does my vote matter?
A:
Yes, your vote is very important. The merger cannot be completed unless the merger agreement is adopted by Livongo stockholders, the share issuance is approved by Teladoc stockholders and the charter amendment is adopted by Teladoc stockholders.
For Teladoc stockholders, if you do not return or submit your proxy or vote at the Teladoc stockholder meeting as provided in this joint proxy statement/prospectus, the effect will be the same as a vote “AGAINST” the Teladoc charter amendment proposal. The Teladoc board of directors unanimously recommends that you vote “FOR” the Teladoc share issuance proposal, “FOR” the Teladoc charter amendment proposal and “FOR” the Teladoc adjournment proposal.
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For Livongo stockholders, if you do not return or submit your proxy or vote at the Livongo stockholder meeting as provided in this joint proxy statement/prospectus, the effect will be the same as a vote “AGAINST” the Livongo merger agreement proposal. The Livongo board of directors unanimously recommends that you vote “FOR” the Livongo merger agreement proposal, “FOR” the Livongo compensation proposal and “FOR” the Livongo adjournment proposal.
Q:
What will I receive if the merger is completed?
A:
If the merger is completed, each share of Livongo common stock outstanding at the effective time of the merger will be converted automatically into the right to receive (i) 0.5920 shares of Teladoc common stock, which amount is referred to as the stock consideration and (ii) $4.24 in cash, without interest, which amount is referred to as the cash consideration, and together with the stock consideration, the merger consideration. Each Livongo stockholder will receive cash for any fractional shares of Teladoc common stock that such stockholder would otherwise receive in the merger. Any cash amounts to be received by a Livongo stockholder in respect of fractional shares will be aggregated and rounded to the nearest whole cent. As referred to in this joint proxy statement/prospectus, the effective time means the date and time when the certificate of merger has been duly filed with the Office of the Secretary of State of the State of Delaware, which is referred to as the Delaware Secretary, or at such later date and time as may be agreed by Teladoc and Livongo in writing and specified in the certificate of merger.
If the merger is completed, Teladoc stockholders will not receive any merger consideration, and their shares of Teladoc common stock will constitute shares of the combined company.
Because Teladoc will issue a fixed number of shares of Teladoc common stock in exchange for each share of Livongo common stock, the value of the merger consideration that Livongo stockholders will receive in the merger will depend on the market price of shares of Teladoc common stock at the time the merger is completed. The market price of shares of Teladoc common stock when Livongo stockholders receive those shares after the merger is completed could be greater than, less than or the same as the market price of shares of Teladoc common stock on the date of this joint proxy statement/prospectus or at the time of the stockholder meetings. Accordingly, you should obtain current stock price quotations for Teladoc common stock and Livongo common stock before deciding how to vote with respect to the approval of the share issuance and the adoption of the charter amendment in the case of Teladoc stockholders or the adoption of the merger agreement in the case of Livongo stockholders. Teladoc’s common stock is traded on the New York Stock Exchange, which is referred to as the NYSE, under the symbol “TDOC.” Livongo’s common stock is traded on the Nasdaq Global Select Market, which is referred to as Nasdaq, under the symbol “LVGO.”
For more information regarding the merger consideration to be provided to Livongo stockholders if the merger is completed, see the section entitled “The Merger AgreementMerger Consideration” beginning on page 131.
Additionally, prior to the effective time and in connection with the closing of the merger, Livongo will declare and, immediately prior to the effective time, pay a cash dividend per share equal to $7.09 to holders of record of the issued and outstanding shares of Livongo common stock as of a record date immediately prior to the effective time, which dividend is referred to as the special dividend.
For more information regarding the special dividend, see the section entitled “The Merger AgreementSpecial Dividend” beginning on page 131.
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Q:
Will Livongo equity awards be affected by the merger?
A:
At the effective time, as set forth in the merger agreement:
Each Livongo stock option, whether vested or unvested, that is outstanding as of immediately prior to the effective time, will be converted into an option to purchase a number of shares of Teladoc common stock equal to the product of (i) the number of shares of Livongo common stock subject to such Livongo stock option immediately prior to the effective time and (ii) the equity award adjustment ratio (as defined below) (rounded down to the nearest whole share of Teladoc common stock on an award-by-award basis), with an exercise price equal to the quotient of (x) the exercise price of such Livongo stock option and (y) the equity award adjustment ratio (rounded up to the nearest whole cent), in each case, subject to the same terms and conditions as were applicable to such Livongo stock option immediately prior to the effective time (including applicable vesting conditions).
Each outstanding award of restricted Livongo common stock will be converted into an award of a number of shares of restricted Teladoc common stock equal to the product of (i) the number of shares of Livongo common stock subject to such award of Livongo restricted stock immediately prior to the effective time and (ii) the equity award adjustment ratio (rounded down to the nearest whole share of Teladoc common stock on an award-by-award basis), subject to the same terms and conditions as were applicable to such award of Livongo restricted stock immediately prior to the effective time (including applicable vesting conditions).
Each outstanding restricted stock unit award in respect of Livongo common stock will be converted into a number of restricted stock units with respect to a number of shares of Teladoc common stock equal to the product of (i) the number of shares of Livongo common stock subject to such Livongo restricted stock unit award immediately prior to the effective time and (ii) the equity award adjustment ratio (rounded down to the nearest whole share of Teladoc common stock on an award-by-award basis), subject to the same terms and conditions as were applicable to such Livongo restricted stock unit award immediately prior to the effective time (including applicable vesting conditions).
Each outstanding award of Livongo restricted stock units that is subject to performance vesting conditions, which is referred to as a Livongo PSU, will be converted, on the basis of full achievement of all applicable performance goals, into a number of restricted stock units with respect to a number of shares of Teladoc common stock equal to the product of (i) the number of shares of Livongo common stock subject to such Livongo PSU award immediately prior to the effective time and (ii) the equity award adjustment ratio (rounded down to the nearest whole share of Teladoc common stock on an award-by-award basis), subject to the same terms and conditions as were applicable to such Livongo PSU immediately prior to the effective time; provided that any such converted Livongo PSU will continue to be subject to any time-based vesting terms applicable to the Livongo PSU prior to such conversion, but subject only to the continued service of the holder through each applicable vesting date and will not be subject to any performance goals or metrics following the effective time.
For purposes of converting the Livongo equity award conversion described above, the “equity award adjustment ratio” means the quotient determined by dividing (i) the volume weighted average closing price of Livongo common stock on the four trading days ending on the trading day immediately prior to the trading day on which the Livongo common stock trades ex-dividend with respect to the special dividend, or if the Livongo common stock never trades ex-dividend, on the last complete trading day prior to the effective time by (ii) the volume weighted average closing price of Teladoc common stock on the four trading days beginning on the trading day prior to the effective time.
Each equity award described above is referred to herein as a Livongo equity award.
Q:
What will happen to the Livongo Employee Stock Purchase Plan?
A:
For any offering period in effect under Livongo’s 2019 Employee Stock Purchase Plan, which is referred to herein as the Livongo ESPP, prior to the closing, Livongo will cause the exercise date to be no later than five business days before the effective time, and each Livongo ESPP participant’s accumulated contributions will be used to purchase shares of Livongo common stock on such date. Livongo ESPP participants may not
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change their payroll deductions from those in effect on August 5, 2020, other than to discontinue their participation in the Livongo ESPP in accordance with the terms and conditions of the Livongo ESPP. The Livongo ESPP will be terminated as of immediately prior to the closing date.
Q:
How does the board of directors of Teladoc recommend that I vote at the Teladoc stockholder meeting?
A:
The Teladoc board of directors unanimously recommends that you vote “FOR” the Teladoc share issuance proposal, “FOR” the Teladoc charter amendment proposal and “FOR” the Teladoc adjournment proposal.
In considering the recommendations of the Teladoc board of directors, Teladoc stockholders should be aware that Teladoc directors and executive officers have interests in the merger that are different from, or in addition to, their interests as Teladoc stockholders. For a more complete description of these interests, see the information provided in the section entitled “Interests of Teladoc’s Directors and Executive Officers in the Merger” beginning on page 171.
Q:
How does the board of directors of Livongo recommend that I vote at the Livongo stockholder meeting?
A:
The Livongo board of directors unanimously recommends that you vote “FOR” the Livongo merger agreement proposal, “FOR” the Livongo compensation proposal and “FOR” the Livongo adjournment proposal.
In considering the recommendations of the Livongo board of directors, Livongo stockholders should be aware that Livongo directors will directly benefit from the merger. In addition, Livongo directors and executive officers have interests in the merger that are different from, or in addition to, their interests as Livongo stockholders. For a more complete description of these interests, see the information provided in the section entitled “Interests of Livongo’s Directors and Executive Officers in the Merger” beginning on page 172.
Q:
Who is entitled to vote at the Teladoc stockholder meeting?
A:
The record date for the Teladoc stockholder meeting is September 8, 2020. All holders of shares of Teladoc common stock who held shares at the close of business on the record date are entitled to receive notice of, and to vote at, the Teladoc stockholder meeting. Each holder of Teladoc common stock is entitled to cast one vote on each matter properly brought before the Teladoc stockholder meeting for each share of Teladoc common stock that such holder owned of record as of the record date. Virtual attendance at the stockholder meeting is not required to vote. See below and the section entitled “The Teladoc Stockholder Meeting—Methods of Voting” beginning on page 61 for instructions on how to vote your shares without attending the Teladoc stockholder meeting. In addition, the stockholder list will be available for inspection during the Livongo stockholder meeting at www.virtualshareholdermeeting.com/TDOC2020SM.
Q:
Who is entitled to vote at the Livongo stockholder meeting?
A:
The record date for the Livongo stockholder meeting is September 8, 2020. All holders of shares of Livongo common stock who held shares at the close of business on the record date are entitled to receive notice of, and to vote at, the Livongo stockholder meeting. Each holder of Livongo common stock is entitled to cast one vote on each matter properly brought before the Livongo stockholder meeting for each share of Livongo common stock that such holder owned of record as of the record date. See below and the section entitled “The Livongo Stockholder MeetingMethods of Voting” beginning on page 70 for instructions on how to vote your shares without attending the Livongo stockholder meeting. In addition, the stockholder list will be available for inspection during the Livongo stockholder meeting at www.virtualshareholdermeeting.com/LVGO2020SM.
Q:
What is a proxy?
A:
A proxy is a stockholder’s legal designation of another person, which is referred to as a proxy, to vote shares of such stockholder’s common stock at a stockholder meeting. The document used to designate a proxy to vote your shares of Teladoc common stock or Livongo common stock, as applicable, is referred to as a proxy card.
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Q:
How many votes do I have for the Teladoc stockholder meeting?
A:
Each Teladoc stockholder is entitled to one vote for each share of Teladoc common stock held of record as of the close of business on the record date for the Teladoc stockholder meeting. As of the close of business on the record date, there were 82,957,800 outstanding shares of Teladoc common stock.
Q:
How many votes do I have for the Livongo stockholder meeting?
A:
Each Livongo stockholder is entitled to one vote for each share of Livongo common stock held of record as of the close of business on the record date for the Livongo stockholder meeting. As of the close of business on the record date, there were 101,585,377 outstanding shares of Livongo common stock.
Q:
What constitutes a quorum for the Teladoc stockholder meeting?
A:
The holders of a majority of the shares of Teladoc common stock entitled to vote at the meeting must be represented at the Teladoc stockholder meeting in person or by proxy in order to constitute a quorum. Virtual attendance at the Teladoc stockholder meeting will constitute presence in person for the purpose of determining the presence of a quorum for the transaction of business at the Teladoc stockholder meeting. Abstentions and broker non-votes are considered present for purposes of establishing a quorum.
Q:
What constitutes a quorum for the Livongo stockholder meeting?
A:
The holders of a majority in voting power of the outstanding shares of capital stock of Livongo must be represented at the Livongo stockholder meeting in person or by proxy in order to constitute a quorum. Livongo stockholders who virtually attend the Livongo stockholder meeting via live audio-only webcast at www.virtualshareholdermeeting.com/LVGO2020SM will be considered present “in person” for purposes of establishing a quorum and for all other purposes. Abstentions and broker non-votes are considered present for purposes of establishing a quorum.
Q:
What will happen to Teladoc and Livongo as a result of the merger?
A:
The merger is structured as a “reverse triangular merger,” in which Merger Sub, a wholly-owned subsidiary of Teladoc, will merge with and into Livongo, with Livongo surviving the merger as a wholly-owned subsidiary of Teladoc. Upon completion of the merger, Livongo will no longer be a public company and its shares will be delisted from Nasdaq, deregistered under the Exchange Act and cease to be publicly traded.
Q:
Where will the common stock of the combined company that I receive in the merger be publicly traded?
A:
The shares of common stock of the combined company to be issued in the merger will be listed for trading on the NYSE under the ticker symbol “TDOC.”
Q:
What happens if the merger is not completed?
A:
If the merger agreement is not adopted by Livongo stockholders, if the share issuance is not approved by Teladoc stockholders, if the charter amendment is not adopted by Teladoc stockholders or if the merger is not completed for any other reason, Livongo stockholders will not receive any merger consideration for their shares of Livongo common stock in connection with the merger. Instead, Livongo will remain an independent public company and its common stock will continue to be listed and traded on Nasdaq, and Teladoc will not complete the share issuance or the charter amendment. If the merger agreement is terminated under specified circumstances, Livongo may be required to pay Teladoc a termination fee of $562,810,000. If the merger agreement is terminated under other specified circumstances, Teladoc may be required to pay Livongo a termination fee of $712,330,000. See the section entitled “The Merger AgreementTermination Fees” beginning on page 154 for a more detailed discussion of the termination fees.
Q:
What is a “broker non-vote”?
A:
Under NYSE and Nasdaq rules, banks, brokers and other nominees may use their discretion to vote “uninstructed” shares (i.e., shares of record held by banks, brokers or other nominees, but with respect to
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which the beneficial owner of such shares has not provided instructions on how to vote on a particular proposal) with respect to matters that are considered to be “routine,” but not with respect to “non-routine” matters. All of the proposals currently scheduled for consideration at the Teladoc stockholder meeting and the Livongo stockholder meeting are “non-routine” matters.
A “broker non-vote” occurs on an item when (i) a bank, broker or other nominee has discretionary authority to vote on one or more proposals to be voted on at a meeting of stockholders, but is not permitted to vote on other proposals without instructions from the beneficial owner of the shares and (ii) the beneficial owner fails to provide the bank, broker or other nominee with such instructions. Because none of the proposals currently scheduled to be voted on at either the Teladoc stockholder meeting or the Livongo stockholder meeting are routine matters for which brokers may have discretionary authority to vote, Teladoc and Livongo do not expect there to be any broker non-votes at the Teladoc stockholder meeting or the Livongo stockholder meeting, respectively.
Q:
What stockholder vote is required for the approval of each proposal at the Teladoc stockholder meeting? What will happen if I fail to vote or abstain from voting on each proposal at the Teladoc stockholder meeting?
A:
Teladoc Proposal 1: Teladoc share issuance proposal. Assuming a quorum is present, the approval of the share issuance by the stockholders of Teladoc requires the affirmative vote of a majority of votes cast on the proposal. A Teladoc stockholder’s abstention from voting will have the same effect as a vote “AGAINST” the Teladoc share issuance proposal, while a broker non-vote or the failure of a Teladoc stockholder to vote (including the failure of a Teladoc stockholder who holds shares in “street name” through a bank, broker or other nominee to give voting instructions to that bank, broker or other nominee) will have no effect on the Teladoc share issuance proposal.
Teladoc Proposal 2: Teladoc charter amendment proposal. Assuming a quorum is present, the adoption of the charter amendment by stockholders of Teladoc requires the affirmative vote of a majority of the outstanding shares of Teladoc common stock entitled to vote on such proposal. Accordingly, a Teladoc stockholder’s abstention from voting, a broker non-vote or the failure of a Teladoc stockholder to vote (including the failure of a Teladoc stockholder who holds shares in “street name” through a bank, broker or other nominee to give voting instructions to that bank, broker or other nominee) will have the same effect as a vote “AGAINST” the Teladoc charter amendment proposal.
Teladoc Proposal 3: Teladoc adjournment proposal. The Teladoc stockholder meeting may be adjourned to solicit additional proxies if there are not sufficient votes at the time of the Teladoc stockholder meeting to approve the Teladoc share issuance proposal and the Teladoc charter amendment proposal or to ensure that any supplement or amendment to this joint proxy statement/prospectus is timely provided to the Teladoc stockholders. The affirmative vote of the holders of a majority in voting power of the votes cast affirmatively or negatively (excluding abstentions) at the Teladoc stockholder meeting is required to adjourn the Teladoc stockholder meeting. A Teladoc stockholder’s abstention from voting, a broker non-vote or the failure of a Teladoc stockholder to vote (including the failure of a Teladoc stockholder who holds shares in “street name” through a bank, broker or other nominee to give voting instructions to that bank, broker or other nominee) will have no effect on the Teladoc adjournment proposal.
Q:
What stockholder vote is required for the approval of each proposal at the Livongo stockholder meeting? What will happen if I fail to vote or abstain from voting on each proposal at the Livongo stockholder meeting?
A:
Livongo Proposal 1: Livongo merger agreement proposal. Assuming a quorum is present, the adoption of the merger agreement by the stockholders of Livongo requires the affirmative vote of a majority of the outstanding shares of Livongo common stock entitled to vote thereon. Accordingly, a Livongo stockholder’s abstention from voting, a broker non-vote or the failure of a Livongo stockholder to vote (including the failure of a Livongo stockholder who holds shares in “street name” through a bank, broker or other nominee to give voting instructions to that bank, broker or other nominee) will have the same effect as a vote “AGAINST” the proposal.
Livongo Proposal 2: Livongo compensation proposal. Assuming a quorum is present, approval of the Livongo compensation proposal requires the affirmative vote of a majority in voting power of the shares of
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Livongo common stock represented at the Livongo stockholder meeting. Accordingly, a Livongo stockholder’s abstention from voting will have the same effect as a vote “AGAINST” the proposal, while a broker non-vote or the failure of a Livongo stockholder to vote (including the failure of a Livongo stockholder who holds shares in “street name” through a bank, broker or other nominee to give voting instructions to that bank, broker or other nominee) will have no effect on the Livongo compensation proposal.
Livongo Proposal 3: Livongo adjournment proposal. The Livongo stockholder meeting may be adjourned to solicit additional proxies if there are not sufficient votes at the time of the Livongo stockholder meeting to approve the Livongo merger agreement proposal or to ensure that any supplement or amendment to this joint proxy statement/prospectus is timely provided to the Livongo stockholders. Whether or not there is a quorum, approval of the Livongo adjournment proposal requires the affirmative vote of a majority in voting power of the shares of Livongo common stock represented at the Livongo stockholder meeting. Accordingly, a Livongo stockholder’s abstention from voting will have the same effect as a vote “AGAINST” the proposal, while a broker non-vote or the failure of a Livongo stockholder to vote (including the failure of a Livongo stockholder who holds shares in “street name” through a bank, broker or other nominee to give voting instructions to that bank, broker or other nominee) will have no effect on the Livongo adjournment proposal. The chairperson of the Livongo stockholder meeting may also adjourn the meeting if no quorum is present.
Q:
Why am I being asked to consider and vote on a proposal to approve, by non-binding, advisory vote, merger-related compensation arrangements for the Livongo named executive officers (i.e., the Livongo compensation proposal)?
A:
Under SEC rules, Livongo is required to seek a non-binding, advisory vote with respect to the compensation that may be paid or become payable to Livongo’s named executive officers that is based on or otherwise relates to the merger, or “golden parachute” compensation.
Q:
What happens if Livongo stockholders do not approve, by non-binding, advisory vote, merger-related compensation arrangements for Livongo’s named executive officers (i.e., the Livongo compensation proposal)?
A:
The votes on the proposal to approve the merger-related compensation arrangements for Livongo’s named executive officers are separate and apart from the votes to approve the other proposals being presented at the Teladoc meeting and the Livongo stockholder meeting. Because the votes on the proposal to approve the merger-related executive compensation are advisory in nature only, they will not be binding upon Teladoc, Livongo or the surviving company in the merger. Accordingly, the merger-related compensation may be paid to Livongo’s named executive officers to the extent payable in accordance with the terms of their compensation agreements and arrangements even if Livongo’s stockholders do not approve the proposal to approve the merger-related executive compensation.
Q:
What if I hold shares in both Teladoc and Livongo?
A:
If you are both a Teladoc stockholder and a Livongo stockholder, you will receive two separate packages of proxy materials. A vote cast as a Teladoc stockholder will not count as a vote cast as a Livongo stockholder, and a vote cast as a Livongo stockholder will not count as a vote cast as a Teladoc stockholder. Therefore, please submit separate proxies for your shares of Teladoc common stock and your shares of Livongo common stock.
Q:
How do I vote?
A:
Record Holders. Shares held directly in your name as the stockholder of record of Teladoc or Livongo may be voted in one of the following ways:
Telephone: use the toll-free number shown on your proxy card;
Internet: visit the website shown on your proxy card to vote via the Internet; or
Mail: complete, sign, date and return the enclosed proxy card in the enclosed postage-paid envelope.
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If you are a stockholder of record of Teladoc or Livongo, you may also attend the Teladoc stockholder meeting or the Livongo stockholder meeting, as applicable, live online and cast your vote virtually at www.virtualshareholdermeeting.com/TDOC2020SM or www.virtualshareholdermeeting.com/LVGO2020SM, as applicable. You will need your 16-digit control number that is shown on your proxy card. If you decide to attend the Teladoc stockholder meeting or the Livongo meeting virtually and vote at the meeting, your vote will revoke any proxy previously submitted.
Shares in “street name.” If your shares are held in “street name” through a broker, bank or other nominee, that institution will send you separate instructions describing the procedure for voting your shares. Shares held beneficially in “street name” may be voted by you at the meeting only if you obtain a legal proxy from the broker, bank, trustee or nominee that holds your shares giving you the right to vote the shares.
If your shares of Teladoc common stock or Livongo common stock are held in “street name” and you intend to vote at the Teladoc stockholder meeting or the Livongo stockholder meeting, as applicable, you may attend such meeting live online and cast your vote virtually at www.virtualshareholdermeeting.com/TDOC2020SM or www.virtualshareholdermeeting.com/LVGO2020SM, as applicable. Your vote at the stockholder meeting will revoke any proxy previously submitted on your behalf by your broker, bank or other nominee.
Even if you plan to attend the Teladoc stockholder meeting or the Livongo stockholder meeting, as applicable, Teladoc and Livongo recommend that you vote your shares in advance as described below so that your vote will be counted if you later decide not to or become unable to attend the respective stockholder meeting.
Additional information on attending the stockholder meetings can be found under the section entitled “The Teladoc Stockholder Meeting” beginning on page 59 and under the section entitled “The Livongo Stockholder Meeting” beginning on page 68.
Q:
How do I ask questions at my respective stockholder meeting?
A:
The Teladoc stockholder meeting allows stockholders to submit questions during the Teladoc stockholder meeting in the question box provided at www.virtualshareholdermeeting.com/TDOC2020SM. Teladoc will respond to as many inquiries at the Teladoc stockholder meeting as time allows.
The Livongo stockholder meeting allows stockholders to submit questions during the Livongo stockholder meeting in the question box provided at www.virtualshareholdermeeting.com/LVGO2020SM. Livongo will respond to as many inquiries at the Livongo stockholder meeting as time allows.
Q:
What if during the check-in time or during the respective stockholder meeting I have technical difficulties or trouble accessing the virtual meeting website?
A:
Teladoc and Livongo will each have technicians ready to assist you with any technical difficulties you may have accessing the virtual meeting website. If you encounter any difficulties accessing the virtual meeting website during the check-in or meeting time, please call the technical support number that will be posted on the virtual meeting website log-in page at www.virtualshareholdermeeting.com/TDOC2020SM for the Teladoc stockholder meeting and www.virtualshareholdermeeting.com/LVGO2020SM for the Livongo stockholder meeting.
Q:
How can I vote my shares without attending my respective stockholder meeting?
A:
Whether you hold your shares directly as the stockholder of record of Teladoc or Livongo or beneficially in “street name,” you may direct your vote by proxy without attending the Teladoc stockholder meeting or the Livongo stockholder meeting, as applicable. You can vote by proxy over the Internet, or by telephone or by mail by following the instructions provided in the enclosed proxy card. Please note that if you hold shares beneficially in “street name,” you should follow the voting instructions provided by your bank, broker or other nominee.
Additional information on voting procedures can be found under the section entitled “The Teladoc Stockholder Meeting” beginning on page 59 and under the section entitled “The Livongo Stockholder Meeting” beginning on page 68.
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Q:
What is the difference between holding shares as a stockholder of record and as a beneficial owner of shares held in “street name?”
A:
If your shares of common stock in Teladoc are registered directly in your name with American Stock Transfer & Trust Company, LLC, which is referred to as American Stock, the transfer agent of Teladoc, you are considered the stockholder of record with respect to those shares. As the stockholder of record, you have the right to vote, or to grant a proxy for your vote directly to Teladoc, as applicable, or to a third party to vote, at the Teladoc stockholder meeting.
If your shares of common stock in Livongo are registered directly in your name with Broadridge Financial Solutions, Inc., which is referred to as Broadridge, the transfer agent of Livongo, you are considered the stockholder of record with respect to those shares. As the stockholder of record, you have the right to vote, or to grant a proxy for your vote directly to Livongo, as applicable, or to a third party to vote, at the respective stockholder meeting.
If your shares of common stock in Teladoc or Livongo are held by a bank, broker or other nominee, you are considered the beneficial owner of shares held in “street name,” and your bank, broker or other nominee is considered the stockholder of record with respect to those shares. Your bank, broker or other nominee will send you, as the beneficial owner, a package describing the procedure for voting your shares. You should follow the instructions provided by them to vote your shares. You are invited to attend the Teladoc stockholder meeting or the Livongo stockholder meeting, as applicable, however, you may not vote these shares through the Internet during the respective stockholder meetings at www.virtualshareholdermeeting.com/TDOC2020SM or www.virtualshareholdermeeting.com/LVGO2020SM, as applicable, unless you obtain a signed legal proxy, executed in your favor, from your bank, broker or other nominee that holds your shares, giving you the right to vote the shares at the applicable stockholder meeting.
Q:
If my shares of Teladoc common stock or Livongo common stock are held in “street name” by my bank, broker or other nominee, will my bank, broker or other nominee automatically vote those shares for me?
A:
No. Your bank, broker or other nominee will only be permitted to vote your shares of Teladoc common stock or Livongo common stock, as applicable, if you instruct your bank, broker or other nominee how to vote. You should follow the procedures provided by your bank, broker or other nominee regarding the voting of your shares. Under the rules of the NYSE and Nasdaq, banks, brokers and other nominees who hold shares of Teladoc common stock or Livongo common stock in “street name” for their customers have authority to vote on “routine” proposals when they have not received instructions from beneficial owners. However, banks, brokers and other nominees are prohibited from exercising their voting discretion with respect to non-routine matters, which includes all the proposals currently scheduled to be considered and voted on at each of the Teladoc and Livongo stockholder meetings. As a result, absent specific instructions from the beneficial owner of such shares, banks, brokers and other nominees are not empowered to vote such shares.
For Teladoc stockholders, the effect of not instructing your bank, broker or other nominee how you wish to vote your shares will be the same as a vote “AGAINST” the Teladoc charter amendment proposal, but will not be counted as “FOR” or “AGAINST” and, assuming a quorum is present at the Teladoc stockholder meeting, will have no effect on, the Teladoc share issuance proposal or the Teladoc adjournment proposal.
For Livongo stockholders, the effect of not instructing your bank, broker or other nominee how you wish to vote your shares will be the same as a vote “AGAINST” the Livongo merger agreement proposal, but will not be counted as “FOR” or “AGAINST” and, assuming a quorum is present at the Livongo stockholder meeting, will have no effect on, the Livongo compensation proposal and will not be counted as “FOR” or “AGAINST” and will have no effect on the Livongo adjournment proposal.
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Q:
What should I do if I receive more than one set of voting materials for the same stockholder meeting?
A:
If you hold shares of Teladoc common stock or Livongo common stock in “street name” and also directly in your name as a stockholder of record or otherwise or if you hold shares of Teladoc common stock or Livongo common stock in more than one brokerage account, you may receive more than one set of voting materials relating to the same stockholder meeting.
Record Holders. For shares held directly, please complete, sign, date and return each proxy card (or cast your vote by telephone or Internet as provided on each proxy card) or otherwise follow the voting instructions provided in this joint proxy statement/prospectus in order to ensure that all of your shares of Teladoc common stock or Livongo common stock are voted.
Shares in “street name. For shares held in “street name” through a bank, broker or other nominee, you should follow the procedures provided by your bank, broker or other nominee to vote your shares.
Q:
If a stockholder gives a proxy, how are the shares of Teladoc or Livongo common stock voted?
A:
Regardless of the method you choose to vote, the individuals named on the enclosed proxy card will vote your shares of Teladoc common stock or Livongo common stock, as applicable, in the way that you indicate. When completing the Internet or telephone processes or the proxy card, you may specify whether your shares of Teladoc common stock or Livongo common stock, as applicable, should be voted for or against, or abstain from voting on, all, some or none of the specific items of business to come before the respective stockholder meeting.
Q:
How will my shares of Teladoc common stock be voted if I return a blank proxy?
A:
If you sign, date and return your proxy and do not indicate how you want your shares of Teladoc common stock to be voted, then your shares of Teladoc common stock will be voted “FOR” the Teladoc share issuance proposal, “FOR” the Teladoc charter amendment proposal and “FOR” the Teladoc adjournment proposal.
Q:
How will my shares of Livongo common stock be voted if I return a blank proxy?
A:
If you sign, date and return your proxy and do not indicate how you want your shares of Livongo common stock to be voted, then your shares of Livongo common stock will be voted “FOR” the Livongo merger agreement proposal, “FOR” the Livongo compensation proposal and “FOR” the Livongo adjournment proposal.
Q:
Can I change my vote after I have submitted my proxy?
A:
Any stockholder giving a proxy has the right to revoke it before the proxy is voted at the applicable stockholder meeting by any of the following:
subsequently submitting a new proxy (including by submitting a proxy via the Internet or telephone) that is received by the deadline specified on the accompanying proxy card;
giving written notice of your revocation to the Teladoc corporate secretary or Livongo secretary, as applicable; or
you can virtually attend the applicable stockholder meeting and vote through the Internet by visiting www.virtualshareholdermeeting.com/TDOC2020SM, and www.virtualshareholdermeeting.com/LVGO2020SM, for Teladoc and Livongo respectively. To attend the meeting and vote, you will need the 16-digit control number included in your proxy card, and if you hold in “street name” you will need a signed legal proxy from your bank, broker or other nominee giving you the right to vote the shares at the applicable stockholder meeting. Simply attending the meeting will not, by itself, revoke your proxy.
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Execution or revocation of a proxy will not in any way affect your right to attend the applicable stockholder meeting and vote. Written notices of revocation and other communications with respect to the revocation of proxies should be addressed:
if you are a Teladoc stockholder, to:
if you are a Livongo stockholder, to:
 
 
Teladoc Health, Inc.
Attention: Corporate Secretary
2 Manhattanville Road, Suite 203
Purchase, New York 10577
Livongo Health, Inc.
Attention: General Counsel and Secretary
444 N. Michigan Ave., Suite 3400
Chicago, Illinois 60611
Q:
If I hold my shares in “street name,” can I change my voting instructions after I have submitted voting instructions to my bank, broker or other nominee?
A:
If your shares are held in the name of a bank, broker or other nominee and you previously provided voting instructions to your bank, broker or other nominee, you should follow the instructions provided by your bank, broker or other nominee to revoke or change your voting instructions.
Q:
Where can I find the voting results of the stockholder meetings?
A:
The preliminary voting results for each stockholder meeting will be announced at that stockholder meeting. In addition, within four business days following certification of the final voting results, each of Teladoc and Livongo intends to file the final voting results of its respective stockholder meeting with the SEC on a Current Report on Form 8-K.
Q:
If I do not favor the merger, what are my rights?
A:
Under Delaware law, Livongo stockholders who neither vote in favor of the adoption of the merger agreement nor consent thereto in writing, who continuously hold their shares of Livongo common stock through the effective date of the merger and who otherwise comply with the procedures set forth in Section 262 of the DGCL, will be entitled to appraisal rights in connection with the merger, and if the merger is completed, subject to the provisions of Section 262 of the DGCL, obtain payment in cash of the fair value of their shares of Livongo common stock as determined by the Delaware Court of Chancery, together with interest, if any, to be paid on the amount determined to be the fair value, instead of receiving the merger consideration for their shares. Under Section 262 of the DGCL, assuming Livongo common stock remains listed on a national securities exchange immediately prior to the effective time of the merger, the Delaware Court of Chancery will dismiss any appraisal proceedings as to all holders of such shares who have perfected their appraisal rights unless (i) the total number of such shares entitled to appraisal exceeds 1% of the outstanding shares of Livongo common stock, or (ii) the value of the consideration provided in the merger for such total number of shares entitled to appraisal exceeds $1 million. To exercise appraisal rights, Livongo stockholders must comply with the procedures prescribed by Section 262 of the DGCL. These procedures are summarized under the section entitled “Appraisal Rights” beginning on page 204. In addition, a copy of the full text of Section 262 of the DGCL is included as Annex F to this joint proxy statement/prospectus. Failure to comply with these provisions may result in a loss of the right of appraisal.
Additionally, if they are not in favor of the merger, Teladoc stockholders may vote against the Teladoc share issuance proposal or the Teladoc charter amendment proposal, and Livongo stockholders may vote against the Livongo merger agreement proposal. Information about how Teladoc stockholders may vote on the proposals being considered in connection with the merger can be found under the section entitled “The Teladoc Stockholder Meeting” beginning on page 59. Information about how Livongo stockholders may vote on the proposals being considered in connection with the merger can be found under the section entitled “The Livongo Stockholder Meeting” beginning on page 68.
Q:
Are there any risks that I should consider in deciding whether to vote for the approval of the Livongo merger agreement proposal, the approval of the Teladoc share issuance proposal or the approval of the Teladoc charter amendment proposal?
A:
Yes. You should read and carefully consider the risk factors set forth in the section entitled “Risk Factors” beginning on page 46. You also should read and carefully consider the risk factors of Teladoc and Livongo contained in the documents that are incorporated by reference into this joint proxy statement/prospectus.
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Q:
What happens if I sell my shares of Teladoc common stock or Livongo common stock before the respective stockholder meeting?
A:
The record date for Teladoc stockholders entitled to vote at the Teladoc stockholder meeting is earlier than the date of the Teladoc stockholder meeting, and the record date for Livongo stockholders entitled to vote at the Livongo stockholder meeting is earlier than the date of the Livongo stockholder meeting. If you transfer your shares of Teladoc common stock or Livongo common stock after the respective record date but before the applicable stockholder meeting, you will, unless special arrangements are made, retain your right to vote at the applicable stockholder meeting.
Q:
Who will solicit and pay the cost of soliciting proxies?
A:
Teladoc has engaged MacKenzie Partners, Inc., which is referred to as MacKenzie, to assist in the solicitation of proxies for the Teladoc stockholder meeting. Teladoc estimates that it will pay MacKenzie a fee of approximately $75,000 plus costs and expenses. Teladoc has agreed to indemnify MacKenzie against various liabilities and expenses that relate to or arise out of its solicitation of proxies (subject to certain exceptions). Livongo has engaged D.F. King & Co., Inc., which is referred to as D.F. King, to assist in the solicitation of proxies for the Livongo stockholder meeting. Livongo estimates that it will pay D.F. King a fee of approximately $20,000, plus reimbursement for certain fees and expenses. Livongo has agreed to indemnify D.F. King against various liabilities and expenses that relate to or arise out of its solicitation of proxies (subject to certain exceptions). Teladoc and Livongo also may be required to reimburse banks, brokers and other custodians, nominees and fiduciaries or their respective agents for their expenses in forwarding proxy materials to beneficial owners of Teladoc common stock and Livongo common stock, respectively. Teladoc’s directors, officers and employees and Livongo’s directors, officers and employees also may solicit proxies by telephone, by electronic means or in person. They will not be paid any additional amounts for soliciting proxies.
Q:
What are the United States federal income tax consequences of the merger and special dividend to Livongo stockholders?
A:
The Merger. For U.S. federal income tax purposes, the merger is intended to be treated as a “reorganization” within the meaning of Section 368(a) of the Internal Revenue Code of 1986, as amended, which is referred to as the Code. As described further in the section entitled “The Merger Agreement—Conditions to the Completion of the Merger” beginning on page 151, it is a condition to Livongo’s obligation to complete the merger that Livongo receive an opinion from Skadden, Arps, Slate, Meagher & Flom LLP, which is referred to as Skadden (or if Skadden is unable to, or prior to the closing of the merger does not, deliver such an opinion, an opinion of Paul, Weiss, Rifkind, Wharton & Garrison LLP, which is referred to as Paul Weiss), dated as of the closing date, substantially to the effect that, on the basis of facts, representations and assumptions set forth in such opinion, the merger will qualify as a “reorganization” within the meaning of Section 368(a) of the Code. Whether such an opinion can be given will depend on, among other factors, the fair market value of Teladoc common stock as of the closing date. Moreover, if such opinion is delivered, there can be no assurance that the Internal Revenue Service, which is referred to as the IRS, or a court will agree with the conclusions expressed therein. In the event that neither Skadden nor Paul Weiss can deliver an opinion that the merger will qualify as a “reorganization” within the meaning of Section 368(a) of the Code, Livongo and Teladoc will each cooperate and use good faith efforts to consider and negotiate such amendments to the merger agreement as may be reasonably required in order for Skadden or Paul Weiss, as applicable, to deliver such an opinion (though neither party will be required to agree to any such amendment which, in the good faith judgment of such party, would subject it to any material economic, legal, regulatory, reputational or other cost or detriment).
Assuming that the merger qualifies as a “reorganization” within the meaning of Section 368(a) of the Code, if you are a U.S. holder (as defined in the section entitled “U.S. Federal Income Tax Considerations” beginning on page 182) of Livongo common stock and you exchange all of your Livongo common stock in exchange for Teladoc common stock and the cash consideration in the merger, you will not recognize any gain or loss with respect to your Livongo common stock, except to the extent of the cash consideration you receive (including the special dividend to the extent it is not treated as a distribution within the meaning of Section 301 of the Code, as described below) and cash in lieu of a fractional share of Teladoc common stock. If you are a non-U.S. holder (as defined in the section entitled “U.S. Federal Income Tax
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Considerationsbeginning on page 182) of Livongo common stock, the merger will generally not result in tax to you under U.S. federal income tax laws unless you have certain connections to the United States. Because individual circumstances may differ, it is recommended that you consult your own tax advisor to determine the particular tax effects of the merger to you.
The Special Dividend. For U.S. federal income tax purposes, the special dividend is intended to be treated, and will be reported by Livongo, as a distribution by Livongo within the meaning of Section 301 of the Code and not as consideration paid for Livongo common stock in the merger. Assuming this intended treatment is respected, the special dividend will be treated as a dividend for U.S. federal income tax purposes to the extent paid out of current or accumulated earnings and profits of Livongo. To the extent that the amount of the dividend exceeds Livongo’s current and accumulated earnings and profits, the excess will first be treated as a tax-free return of capital, causing a reduction in the holder’s adjusted basis in its Livongo common stock. If such basis is reduced to zero, any remaining portion of the special dividend will be taxed as capital gain. It is possible that the IRS would disagree with the characterization of the special dividend as a distribution by Livongo and instead seek to characterize the special dividend as merger consideration paid by Teladoc in exchange for a portion of Livongo common stock in the merger. If this characterization were to be sustained, a holder of Livongo common stock would recognize gain on the special dividend as though it were cash consideration received in the merger, as described above.
You should read the section entitled “U.S. Federal Income Tax Considerations” beginning on page 182 for a more complete discussion of the U.S. federal income tax considerations related to the merger and special dividend.
Q:
When is the merger expected to be completed?
A:
Subject to the satisfaction or waiver of the closing conditions described under the section entitled “The Merger AgreementConditions to the Completion of the Merger” beginning on page 151, including the approval of the share issuance and adoption of the charter amendment by Teladoc stockholders at the Teladoc stockholder meeting and the adoption of the merger agreement by Livongo stockholders at the Livongo stockholder meeting, the merger is expected to close in the fourth quarter of 2020. However, neither Teladoc nor Livongo can predict the actual date on which the merger will be completed, or if the merger will be completed at all, because completion is subject to conditions and factors outside the control of both companies. Teladoc and Livongo hope to complete the merger as soon as reasonably practicable. See also the section entitled “The MergerReasonable Best Efforts and Regulatory Approvals” beginning on page 125.
Q:
What are the conditions to completion of the merger?
A:
In addition to the approval of the share issuance and the adoption of the charter amendment by Teladoc stockholders and the adoption of the merger agreement by Livongo stockholders, as described above, completion of the merger is subject to the satisfaction of a number of other conditions, including, but not limited to, (i) the absence of any U.S. court order or law prohibiting the consummation of the merger, (ii) the early termination or expiration of any applicable waiting period or periods under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, which is referred to as the HSR Act, (iii) the shares of Teladoc common stock to be issued in the merger having been approved for listing on the NYSE, (iv) the effectiveness of the registration statement on Form S-4 registering the Teladoc common stock issuable in the merger and the absence of any stop order or proceedings with respect thereto, (v) compliance by Teladoc and Livongo in all material respects with their respective obligations under the merger agreement, (vi) the accuracy of representations and warranties made by Teladoc and Merger Sub and by Livongo, respectively (subject to certain materiality qualifiers) and (vii) the absence of a material adverse effect on the other party. Additionally, the obligation of Livongo to consummate the merger is subject to its receipt of an opinion stating that the merger will qualify as a “reorganization” within the meaning of Section 368(a) of the Code. For a more complete summary of the conditions that must be satisfied or waived prior to completion of the merger, see the section entitled “The Merger AgreementConditions to the Completion of the Merger” beginning on page 151.
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Q:
What respective equity stakes will Teladoc stockholders and Livongo stockholders hold in the combined company immediately following the merger?
A:
As of the date of this joint proxy statement/prospectus, based on the estimated number of shares of common stock of Teladoc and Livongo that will be outstanding immediately prior to the completion of the merger and the exchange ratio of 0.5920, Teladoc and Livongo estimate that holders of shares of Teladoc common stock as of immediately prior to the completion of the merger will hold, in the aggregate, approximately 58% of the issued and outstanding shares of common stock of the combined company immediately following the completion of the merger, and holders of shares of Livongo common stock as of immediately prior to the completion of the merger will hold, in the aggregate, approximately 42% of the issued and outstanding shares of common stock of the combined company immediately following the completion of the merger. The exact equity stake of Teladoc stockholders and Livongo stockholders in the combined company immediately following the merger will depend on the number of shares of Teladoc common stock and Livongo common stock issued and outstanding immediately prior to the merger.
Q:
What should I do now?
A:
You should read this joint proxy statement/prospectus carefully and in its entirety, including the annexes, and return your completed, signed and dated proxy card(s) by mail in the enclosed postage-paid envelope or submit your voting instructions by telephone or over the Internet as soon as possible so that your shares will be voted in accordance with your instructions.
Please do not submit your Livongo stock certificates at this time. If the merger is completed, you will receive instructions for surrendering your Livongo stock certificates in exchange for shares of Teladoc common stock from the exchange agent. More information may be found in the sections entitled “The MergerExchange of Shares” beginning on page 128 and “The Merger AgreementExchange of Shares” beginning on page 132.
Q:
Whom do I contact if I have questions about the Teladoc stockholder meeting, the Livongo stockholder meeting or the merger?
A:
If you have questions about the Teladoc stockholder meeting, the Livongo stockholder meeting or the merger, or desire additional copies of this joint proxy statement/prospectus or additional proxies, you may contact:
if you are a Teladoc stockholder:
if you are a Livongo stockholder:
 
 
MacKenzie Partners, Inc.
1407 Broadway, 27th Floor
New York, New York 10018
Email: NBL@mackenziepartners.com
Call Collect: (212) 929-5500
Toll-Free: (800) 322-2885
D.F. King & Co., Inc.
48 Wall Street
New York, New York 10005
Email: lvgo@dfking.com
Telephone Toll Free: (800) 628-8510
Banks and Brokers: (212) 269-5550
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SUMMARY
For your convenience, provided below is a brief summary of certain information contained in this joint proxy statement/prospectus. This summary highlights selected information from this joint proxy statement/prospectus and does not contain all of the information that may be important to you as a Teladoc stockholder or a Livongo stockholder. To understand the merger fully and for a more complete description of the terms of the merger, you should read carefully this entire joint proxy statement/prospectus, its annexes and the other documents to which you are referred. Items in this summary include a page reference directing you to a more complete description of those items. You may obtain the information incorporated by reference into this joint proxy statement/prospectus without charge by following the instructions under the section entitled “Where You Can Find More Information” beginning on page 218.
The Parties to the Merger (Page 58)
Teladoc Health, Inc.
Teladoc Health, Inc. is a leading provider of comprehensive virtual healthcare services. Teladoc provides virtual access to high-quality care and expertise, with a portfolio of services and solutions covering more than 450 medical subspecialties from non-urgent, episodic needs like flu and upper respiratory infections, to chronic, complicated medical conditions like cancer and congestive heart failure. Teladoc deliver services on a business-to-business basis to thousands of clients in more than 175 countries around the world. Teladoc’s principal executive offices are located at 2 Manhattanville Road, Suite 203, Purchase, New York 10577 and its telephone number is (203) 653-2002.
Livongo Health, Inc.
Livongo empowers people with chronic conditions to live better and healthier lives. Livongo has created a unified platform that provides smart, cellular-connected devices, supplies, informed coaching, data science-enabled insights and facilitates access to medications across multiple chronic conditions to help its members lead better lives. Livongo currently offers Livongo for Diabetes, Livongo for Hypertension, Livongo for Prediabetes and Weight Management, and Livongo for Behavioral Health by myStrength. Livongo has created consumer-first experiences with high member satisfaction, measurable, sustainable health outcomes, and more cost-effective care for its members and its clients. Livongo’s principal executive offices are located at 150 West Evelyn Avenue, Suite 150, Mountain View, California 94041 and its telephone number is (866) 435-5643.
Tempranillo Merger Sub, Inc.
Tempranillo Merger Sub, Inc., a Delaware corporation and a wholly-owned subsidiary of Teladoc, was formed solely for the purpose of facilitating the merger. Merger Sub has not carried on any activities or operations to date, except for those activities incidental to its formation and undertaken in connection with the merger and the other transactions contemplated by the merger agreement. By operation of the merger, Merger Sub will be merged with and into Livongo, with Livongo surviving the merger as a wholly-owned subsidiary of Teladoc. Merger Sub’s principal executive offices are located at c/o Teladoc Health, Inc., 2 Manhattanville Road, Suite 203, Purchase, New York 10577 and its telephone number is (203) 653-2002.
The Merger and the Merger Agreement (Page 78 and 130)
The terms and conditions of the merger are contained in the merger agreement, a copy of which is attached as Annex A to this joint proxy statement/prospectus. You are encouraged to read the merger agreement carefully and in its entirety, as it is the primary legal document that governs the merger.
Pursuant to the merger agreement, Merger Sub will merge with and into Livongo. At the effective time, the separate existence of Merger Sub will cease, and Livongo will be the surviving corporation and a wholly-owned subsidiary of the combined company. Following the merger, Livongo common stock will be delisted from Nasdaq, deregistered under the Exchange Act and will cease to be publicly traded.
Merger Consideration (Page 78)
In the merger, each share of Livongo common stock (other than excluded shares, as defined in the section entitled “The Merger—Merger Consideration” beginning on page 78 and dissenting shares, as defined in the section entitled “The Merger Agreement—Dissenting Shares” beginning on page 133) will be converted
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automatically into the right to receive (i) 0.5920 of a share of Teladoc common stock, which ratio is referred to as the exchange ratio, and (ii) $4.24 in cash, without interest. The exchange ratio is fixed, which means that it will not change between now and the date of completion of the merger, regardless of whether the market price of either Teladoc or Livongo common stock changes. No fractional shares of Teladoc common stock will be issued upon the conversion of shares of Livongo common stock pursuant to the merger agreement. Each Livongo stockholder that otherwise would have been entitled to receive a fraction of a share of Teladoc common stock will be entitled to receive cash in lieu of a fractional share.
Teladoc stockholders will continue to own their existing shares, which will not be affected by the merger and which will constitute shares of the combined company following completion of the merger.
For more information on the exchange ratio or the merger consideration, see the section entitled “The Merger—Merger Consideration” beginning on page 78 and “The Merger Agreement—Merger Consideration” beginning on page 131.
Special Dividend (Page 131)
Prior to the effective time of the merger, Livongo will pay a cash dividend per share of Livongo common stock equal to $7.09, which amount is referred to as the special dividend per share amount and which dividend is referred to as the special dividend, to holders of record of the issued and outstanding shares of Livongo common stock as of a record date immediately prior to the effective time of the merger. Livongo will provide the transfer agent for the Livongo common stock all of the cash necessary to pay the special dividend pursuant to the terms of the merger agreement, which cash will not form part of the exchange fund, as defined in the section entitled “The Merger Agreement—Exchange of Shares” beginning on page 132.
Treatment of Livongo Equity Awards (Page 131)
Livongo Stock Options
At the effective time, each Livongo stock option, whether vested or unvested, that is outstanding as of immediately prior to the effective time, will be converted into an option to purchase a number of shares of Teladoc common stock equal to the product of (i) the number of shares of Livongo common stock subject to such Livongo stock option immediately prior to the effective time and (ii) the equity award adjustment ratio (rounded down to the nearest whole share of Teladoc common stock on an award-by-award basis), with an exercise price equal to the quotient of (x) the exercise price of such Livongo stock option and (y) the equity award adjustment ratio (rounded up to the nearest whole cent), in each case, subject to the same terms and conditions as were applicable to such Livongo stock option immediately prior to the effective time (including applicable vesting conditions).
Livongo Restricted Stock
At the effective time, each outstanding award of restricted Livongo common stock will be converted into an award of a number of shares of restricted Teladoc common stock equal to the product of (i) the number of shares of Livongo common stock subject to such award of Livongo restricted stock immediately prior to the effective time and (ii) the equity award adjustment ratio (rounded down to the nearest whole share of Teladoc common stock on an award-by-award basis), subject to the same terms and conditions as were applicable to such award of Livongo restricted stock immediately prior to the effective time (including applicable vesting conditions).
Livongo Restricted Stock Units
At the effective time, each outstanding restricted stock unit award in respect of Livongo common stock will be converted into a number of restricted stock units with respect to a number of shares of Teladoc common stock equal to the product of (i) the number of shares of Livongo common stock subject to such Livongo restricted stock unit award immediately prior to the effective time and (ii) the equity award adjustment ratio (rounded down to the nearest whole share of Teladoc common stock on an award-by-award basis), subject to the same terms and conditions as were applicable to such Livongo restricted stock unit award immediately prior to the effective time (including applicable vesting conditions).
Livongo PSUs
At the effective time, each Livongo PSU will be converted, on the basis of full achievement of all applicable performance goals, into a number of restricted stock units with respect to a number of shares of
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Teladoc common stock equal to the product of (i) the number of shares of Livongo common stock subject to such Livongo PSU award immediately prior to the effective time and (ii) the equity award adjustment ratio (rounded down to the nearest whole share of Teladoc common stock on an award-by-award basis), subject to the same terms and conditions as were applicable to such Livongo PSU immediately prior to the effective time; provided that any such converted Livongo PSU will continue to be subject to any time-based vesting terms applicable to the Livongo PSU prior to such conversion, but subject only to the continued service of the holder through each applicable vesting date and will not be subject to any performance goals or metrics following the effective time.
Livongo ESPP
For any offering period in effect under the Livongo ESPP, prior to the closing, Livongo will cause the exercise date to be no later than five business days before the effective time, and each Livongo ESPP participant’s accumulated contributions will be used to purchase shares of Livongo common stock on such date. Livongo ESPP participants may not change their payroll deductions from those in effect on August 5, 2020, other than to discontinue their participation in the Livongo ESPP in accordance with the terms and conditions of the Livongo ESPP. The Livongo ESPP will be terminated as of immediately prior to the closing date.
Teladoc’s Reasons for the Merger (Page 89)
Teladoc’s board of directors unanimously recommends that Teladoc stockholders vote “FOR” the Teladoc share issuance proposal (Teladoc Proposal 1) and “FOR” the Teladoc charter amendment proposal (Teladoc Proposal 2).
In reaching its decision to approve and declare advisable the merger agreement and the transactions contemplated thereby, including the charter amendment as attached to this joint proxy statement/prospectus, and the merger on the terms and subject to the conditions set forth in the merger agreement and to recommend that the holders of shares of Teladoc common stock adopt the charter amendment and approve the share issuance on the terms and subject to the conditions set forth in the merger agreement, the Teladoc board of directors consulted with Teladoc’s senior management and its outside legal and financial advisors, and considered a number of factors it believed supported its decision to enter into the merger agreement, including, without limitation, those listed in the section entitled “The Merger—Recommendation of the Teladoc Board of Directors; Teladoc’s Reasons for the Merger” beginning on page 89.
Livongo’s Reasons for the Merger (Page 94)
Livongo’s board of directors unanimously recommends that Livongo stockholders vote “FOR” the Livongo merger agreement proposal (Livongo Proposal 1).
The Livongo board of directors unanimously approved and declared advisable the merger agreement, the merger and the other transactions contemplated by the merger agreement and determined that the merger agreement, the merger and the other transactions contemplated by the merger agreement are fair to, and in the best interests of, Livongo and its stockholders. In reaching its decision to approve and declare advisable the merger agreement, the merger and the other transactions contemplated thereby and to recommend the adoption of the merger agreement to Livongo stockholders, the Livongo board of directors consulted with Livongo’s senior management, as well as outside legal and financial advisors, and considered a number of factors it believed supported its decision to enter into the merger agreement, including without limitation those listed in the section entitled “The Merger—Recommendation of the Livongo Board of Directors; Livongo’s Reasons for the Merger” beginning on page 94.
Opinion of Teladoc’s Financial Advisor (Page 97 and Annex C)
Teladoc retained Lazard Frères & Co. LLC, which is referred to as Lazard, to act as a financial advisor to the Teladoc board of directors in connection with the transactions contemplated by the merger agreement. In connection with this engagement, the Teladoc board of directors requested that Lazard evaluate the fairness, from a financial point of view, to Teladoc of the merger consideration to be paid by Teladoc in the transactions contemplated by the merger agreement.
On August 4, 2020, Lazard rendered to the Teladoc board of directors its oral opinion, which was subsequently confirmed by delivery of its written opinion, dated August 5, 2020, to the effect that, as of the date
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of the opinion and based upon and subject to the assumptions made, procedures followed, matters considered and qualifications and limitations on the review undertaken described in such opinion, the merger consideration to be paid by Teladoc in the transaction was fair, from a financial point of view, to Teladoc.
The full text of Lazard’s written opinion, dated August 5, 2020, which sets forth, among other things, the assumptions made, procedures followed, matters considered and qualifications and limitations on the review undertaken, is included as Annex C to this joint proxy statement/prospectus and is incorporated by reference herein in its entirety. The summary of Lazard's opinion included in the section entitled “The Merger—Opinion of Teladoc’s Financial Advisor” is qualified in its entirety by reference to the full text of the opinion. You are encouraged to read Lazard’s opinion and that section carefully and in their entirety. Lazard’s opinion was for the benefit of the Teladoc board of directors (in its capacity as such) and Lazard’s opinion was rendered to the Teladoc board of directors in connection with the Teladoc board of director’s evaluation of the transactions contemplated by the merger agreement. Lazard’s opinion did not address the relative merits of the transactions contemplated by the merger agreement as compared to any other transaction or business strategy in which Teladoc might engage or the merits of the underlying decision by Teladoc to engage in the transaction. Lazard’s opinion was not intended to and does not constitute a recommendation to any stockholder as to how such stockholder should vote or act with respect to the transactions contemplated by the merger agreement or any matter relating thereto.
For a summary of Lazard’s opinion and the methodology that Lazard used to render its opinion, see the section titled “The Merger—Opinion of Teladoc’s Financial Advisor” beginning on page 97.
Opinion of Livongo’s Financial Advisor (Page 106 and Annex D)
Livongo retained Morgan Stanley & Co. LLC, which is referred to as Morgan Stanley, as its financial advisor in connection with the merger. Morgan Stanley rendered an oral opinion to the Livongo board of directors on August 5, 2020, subsequently confirmed by delivery of a written opinion dated as of such date, to the effect that as of such date and based upon and subject to the various assumptions made, procedures followed, matters considered and qualifications and limitations on the scope of review undertaken by Morgan Stanley as set forth in its written opinion, the merger consideration and the per share amount of the special dividend, which is referred to as the special dividend per share amount, taken together (and not separately), to be received by the holders of shares of Livongo common stock pursuant to the merger agreement (other than the Excluded Shares (as defined in Morgan Stanley’s written opinion)) is fair from a financial point of view to such holders. The full text of Morgan Stanley’s written opinion, dated August 5, 2020, is attached as Annex D to this joint proxy statement/prospectus and is incorporated by reference in this joint proxy statement/prospectus in its entirety.
The description of Morgan Stanley’s opinion is qualified in its entirety by reference to the full text of Morgan Stanley’s opinion. Morgan Stanley’s opinion was directed to the Livongo board of directors, in its capacity as such, and addressed only the fairness from a financial point of view of the merger consideration and the special dividend per share amount, taken together (and not separately), to be received by the holders of shares of Livongo common stock pursuant to the merger agreement (other than the Excluded Shares (as defined in Morgan Stanley’s written opinion)) as of the date of such opinion. It did not address any other aspects or implications of the merger or in any manner address the prices at which the Teladoc common stock would trade following consummation of the merger or at any time and was not intended to and did not express any opinion or recommendation as to how the stockholders of Teladoc or Livongo should vote at the stockholders’ meetings to be held in connection with the merger.
For a description of the opinion that the Livongo board of directors received from Morgan Stanley, see “The Merger—Opinion of Livongo’s Financial Advisor” beginning on page 106 of this joint proxy statement/prospectus.
Proxy Solicitation Costs (Page 63 and 72)
Teladoc and Livongo are soliciting proxies to provide an opportunity to all Teladoc stockholders and Livongo stockholders to vote on agenda items at the respective stockholder meetings, whether or not they are able to attend their respective stockholder meetings or an adjournment or postponement thereof. Teladoc’s and Livongo’s directors, officers and other employees may solicit proxies in person, by telephone, electronically, by mail or other means, but they will not be specifically compensated for doing this. Teladoc and Livongo also may be required to reimburse banks, brokers and other persons for expenses they incur in forwarding proxy materials
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to obtain voting instructions from beneficial stockholders. Teladoc has also hired MacKenzie to assist in the solicitation of proxies, and Livongo has hired D.F. King to assist in the solicitation of proxies. The total cost of solicitation of proxies will be borne by Teladoc and Livongo. For a description of the costs and expenses to Teladoc and Livongo of soliciting proxies, see “The Teladoc Stockholder Meeting—Proxy Solicitation Costs” beginning on page 63 and “The Livongo Stockholder Meeting—Proxy Solicitation Costs” beginning on page 72.
The Teladoc Stockholder Meeting (Page 59)
The Teladoc stockholder meeting will be held on October 29, 2020 at 11:00 a.m., Eastern Time, virtually at www.virtualshareholdermeeting.com/TDOC2020SM. The Teladoc stockholder meeting will be held online only and you will not be able to attend in person. Online check-in will begin at 10:45 a.m., Eastern Time and you should allow ample time for the check-in procedures. You will be able to vote your shares electronically by Internet and submit questions online during the Teladoc stockholder meeting by logging in to the website listed above using the 16-digit control number included in your proxy card.
The purposes of the Teladoc stockholder meeting are as follows:
Teladoc Proposal 1: Approval of the Issuance of Shares of Teladoc Common Stock to Livongo Stockholders pursuant to the Merger Agreement. To consider and vote on the Teladoc share issuance proposal;
Teladoc Proposal 2: Adoption of an Amendment to Teladoc’s Certificate of Incorporation. To consider and vote on the Teladoc charter amendment proposal; and
Teladoc Proposal 3: Adjournments of the Livongo Stockholder Meeting. To consider and vote on the Teladoc adjournment proposal.
Completion of the merger is conditioned on the approval of the share issuance and adoption of the charter amendment by Teladoc’s stockholders.
Only holders of record of issued and outstanding shares of Teladoc common stock as of the close of business on September 8, 2020, the record date for the Teladoc stockholder meeting, are entitled to notice of, and to vote at, the Teladoc stockholder meeting or any adjournment or postponement of the Teladoc stockholder meeting. Teladoc stockholders may cast one vote for each share of Teladoc common stock that Teladoc stockholders owned as of that record date.
Assuming a quorum is present at the Teladoc stockholder meeting, the Teladoc share issuance proposal requires the affirmative vote of a majority of votes cast on the proposal. An abstention will have the same effect as a vote “AGAINST” the Teladoc share issuance proposal, while a broker non-vote or other failure to vote will have no effect on the outcome of the Teladoc share issuance proposal.
Assuming a quorum is present at the Teladoc stockholder meeting, the Teladoc charter amendment proposal requires the affirmative vote of a majority of the outstanding shares of Teladoc common stock entitled to vote on such proposal. A failure to vote, a broker non-vote or an abstention will have the same effect as a vote “AGAINST” the Teladoc charter amendment proposal.
Approval of the Teladoc adjournment proposal requires the affirmative vote of the holders of a majority in voting power of the votes cast affirmatively or negatively (excluding abstentions) at the Teladoc stockholder meeting. A stockholder’s abstention from voting, a broker non-vote or other failure to vote (including a failure to instruct your bank, broker or other nominee to vote) will have no effect on the outcome of the proposal.
The Livongo Stockholder Meeting (Page 68)
Due to the public health concerns regarding the coronavirus (COVID-19) outbreak, the Livongo stockholder meeting will be held virtually via live audio-only webcast at 11:00 a.m., Eastern Time, on October 29, 2020 at www.virtualshareholdermeeting.com/LVGO2020SM. The Livongo stockholder meeting will be held online only and you will not be able to attend in person. Online check-in will begin at 10:45 a.m., Eastern Time, and you should allow ample time for the check-in procedures. You will be able to vote your shares electronically by Internet and submit questions online during the Livongo stockholder meeting by logging in to the website listed above using the 16-digit control number included in your proxy card.
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The purposes of the Livongo stockholder meeting are as follows:
Livongo Proposal 1: Adoption of the Merger Agreement. To consider and vote on the Livongo merger agreement proposal;
Livongo Proposal 2: Approval, on an Advisory (Non-Binding) Basis, of Certain Compensatory Arrangements with Livongo’s Named Executive Officers. To consider and vote on the Livongo compensation proposal; and
Livongo Proposal 3: Adjournments of the Livongo Stockholder Meeting. To consider and vote on the Livongo adjournment proposal.
Completion of the merger is conditioned on adoption of the merger agreement by Livongo’s stockholders. Approval of the advisory proposal concerning the merger-related compensation arrangements for Livongo’s named executive officers is not a condition to the obligation of either Livongo or Teladoc to complete the merger.
Only holders of record of issued and outstanding shares of Livongo common stock as of the close of business on September 8, 2020, the record date for the Livongo stockholder meeting, are entitled to notice of, and to vote at, the Livongo stockholder meeting or any adjournment or postponement of the Livongo stockholder meeting. Livongo stockholders may cast one vote for each share of Livongo common stock that Livongo stockholders owned as of that record date.
Assuming a quorum is present at the Livongo stockholder meeting, the Livongo merger agreement proposal requires the affirmative vote of a majority of the outstanding shares of Livongo common stock entitled to vote thereon. Shares of Livongo common stock not present, and shares present and not voted, whether by broker non-vote, abstention or otherwise, will have the same effect as votes cast “AGAINST” the proposal to approve the merger agreement.
Assuming a quorum is present at the Livongo stockholder meeting, approval of the Livongo compensation proposal requires the affirmative vote of a majority in voting power of the shares of Livongo common stock represented at the Livongo stockholder meeting. Accordingly, an abstention will have the same effect as a vote “AGAINST” the Livongo compensation proposal, while a broker non-vote or other failure to vote will have no effect on the outcome of the Livongo compensation proposal.
Whether or not there is a quorum, the approval of the Livongo adjournment proposal requires the affirmative vote of a majority in voting power of the shares of Livongo common stock represented at the Livongo stockholder meeting. Accordingly, an abstention will have the same effect as a vote “AGAINST” the Livongo adjournment proposal, while a broker non-vote or other failure to vote will have no effect on the outcome of the Livongo adjournment proposal.
Interests of Teladoc’s Directors and Executive Officers in the Merger (Page 171)
In considering the recommendation of the Teladoc board of directors to vote for the Teladoc share issuance proposal and the Teladoc charter amendment proposal, Teladoc stockholders should be aware that Teladoc’s directors and executive officers may have interests in the merger that are different from, or in addition to, the interests of Teladoc stockholders generally and that may create potential conflicts of interest. These interests include, following closing of the merger, that certain of Teladoc’s directors and executive officers will continue to serve as directors or executive officers, as applicable, of the combined company. The members of the Teladoc board of directors were aware of and considered these interests, among other matters, when evaluating the merger agreement and the merger and when ultimately approving the merger agreement and the merger. These interests are described in more detail in the section entitled “Interests of Teladoc’s Directors and Executive Officers in the Merger” beginning on page 171.
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Interests of Livongo’s Directors and Executive Officers in the Merger (Page 172)
In considering the Livongo board of directors’ recommendation to vote for the proposal to approve the merger agreement, Livongo stockholders should be aware that the directors and executive officers of Livongo have interests in the merger that are different from, or in addition to, the interests of Livongo stockholders generally. These interests include, among others:
Livongo’s directors and executive officers have Livongo equity awards, including stock options, restricted stock awards, and restricted stock units, that are being assumed by Teladoc (such awards are referred to herein as the assumed Livongo equity awards). There has been an agreement following discussion between the parties, which is referred to as the supplemental agreement (as described in the section entitled “Interests of Livongo’s Directors and Executive Officers in the Merger” beginning on page 172), that all unvested assumed Livongo equity awards that are held by Glen Tullman, Zane Burke, Jennifer Schneider, and Lee Shapiro, will become fully vested and exercisable immediately following the effective time, solely as a result of the closing of the merger and regardless of whether such individuals’ employment with Livongo terminates. Moreover, under the terms of the executive severance plan that may be adopted by Livongo pursuant to the merger agreement, which is referred to as the executive severance plan (as described in the section entitled “Interests of Livongo’s Directors and Executive Officers in the Merger” beginning on page 172) assumed Livongo equity awards will also be subject to full or partial accelerated vesting in the event the executive officer’s employment is terminated by Livongo without cause or by the executive officer for good reason (as defined in the executive severance plan), in either case within one year following the effective time, if the supplemental agreement does not apply to the executive officer. Moreover, all Livongo equity awards that are held by non-employee directors will accelerate if such director’s service does not continue with the combined company.
Pursuant to their employment agreements, Livongo’s executive officers are eligible to receive cash severance payments, and in Mr. Tullman’s case, continued health and dental benefits, upon a qualifying termination of employment with Livongo, such as a termination of employment by Livongo without cause or by the executive officer for good reason (as defined in the applicable executive officer’s employment agreement). Under Mr. Tullman’s employment agreement, such severance increases if it is in connection with a sale of the company (as defined in his employment agreement), but the other executive officers are eligible for their severance amounts regardless of whether their termination of employment is in connection with the merger.
Livongo’s directors and executive officers are entitled to continued indemnification and insurance coverage under the merger agreement.
The Livongo board of directors was aware of these interests and considered them, among other matters, in evaluating and negotiating the merger agreement and approving the merger, and in recommending the adoption of the merger agreement by Livongo stockholders. For more information, see the section entitled “Interests of Livongo’s Directors and Executive Officers in the Merger” beginning on page 172. The interests are described in more detail below, and certain of them are quantified in the narrative and in the section entitled, “Interests of Livongo’s Directors and Executive Officers in the Merger—Quantification of Payments and Benefits to Livongo’s Named Executive Officers—Golden Parachute Compensation” beginning on page 177.
Governance of the Combined Company (Page 127 and Annex E)
Certificate of Incorporation
Subject to adoption of the charter amendment by Teladoc stockholders, at the effective time, the certificate of incorporation of Teladoc, as in effect immediately prior to the effective time, will be amended as provided in the merger agreement, and as so amended will be the certificate of incorporation of the combined company, until thereafter amended as provided therein or by applicable law.
Board of Directors
Under the merger agreement, Teladoc and Livongo have agreed to take all necessary action such that, for the two-year period commencing at the effective time, until successors are duly elected or appointed and qualified in accordance with applicable law, or until their earlier death, resignation or removal in accordance with
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the organizational documents of the combined company, the board of directors of the combined company will be comprised of 13 directors, consisting of (i) eight current directors of Teladoc selected by the Teladoc board of directors prior to the effective time, as follows: Jason Gorevic, current chief executive officer of Teladoc; David B. Snow, current non-executive chairman of the Teladoc board of directors; William H. Frist, M.D.; Catherine Jacobson; Thomas G. McKinley; Kenneth H. Paulus; David L. Shedlarz; and Mark D. Smith, M.D.; and (ii) five current directors of Livongo selected by the Livongo Board of directors prior to the effective time, as follows: Chris Bischoff; Karen L. Daniel; Sandra Fenwick; Hemant Taneja; and Glen Tullman.
Certain Beneficial Owners of Teladoc Common Stock (Page 211)
At the close of business on September 8, 2020, directors and executive officers of Teladoc beneficially owned and were entitled to vote approximately 826,084 shares of Teladoc common stock, collectively representing 0.99% of the shares of Teladoc common stock outstanding on September 8, 2020. Although none of them has entered into any agreement obligating them to do so, Teladoc currently expects that all of its directors and executive officers will vote their shares “FOR” the Teladoc share issuance proposal, “FOR” the Teladoc charter amendment proposal and “FOR” the Teladoc adjournment proposal. For more information regarding the security ownership of Teladoc directors and executive officers, see the information provided in the section entitled “Certain Beneficial Owners of Teladoc Common Stock—Security Ownership of Teladoc Directors and Executive Officers” beginning on page 211.
Certain Beneficial Owners of Livongo Common Stock (Page 213)
At the close of business on September 8, 2020, directors and executive officers of Livongo beneficially owned and were entitled to vote 24,953,412 shares of Livongo common stock, collectively representing approximately 24.56% of the shares of Livongo common stock outstanding on September 8, 2020. As discussed in the section entitled “Voting Agreement” beginning on page 179, Glen Tullman and Lee Shapiro have entered into a voting agreement in connection with the transactions contemplated by the merger agreement. Although no other Livongo directors or officers have entered into any agreement obligating them to vote in a certain way, Livongo currently expects that all of its directors and executive officers will vote their shares “FOR” the Livongo merger agreement proposal, “FOR” the Livongo compensation proposal, and “FOR” the Livongo adjournment proposal. For more information regarding the security ownership of Livongo directors and executive officers, see the information provided in the section entitled “Certain Beneficial Owners of Livongo Common Stock—Security Ownership of Livongo Directors and Executive Officers” beginning on page 213.
Reasonable Best Efforts and Regulatory Approvals (Page 145)
Teladoc and Livongo have agreed to each use, and cause their respective subsidiaries to use, their respective reasonable best efforts to take, or cause to be taken, all actions and to do, or cause to be done, and to assist and cooperate with the other parties in doing all things necessary, proper or advisable under applicable law to (i) obtain all necessary actions, waivers, registrations, permits, authorizations, orders, consents and approvals from governmental entities, the expiry or early termination of any applicable waiting periods, and make all necessary registrations and filings and take all steps as may be reasonably necessary to obtain an approval or waiver from, or to avoid an action or proceeding by, any governmental entities and (ii) deliver required notices or any necessary additional instruments to, and obtain required consents, waivers or any additional instruments necessary form, third parties, in each case, in order to consummate the transactions contemplated by the merger agreement as promptly as practicable (and in any event prior to 11:59 p.m., Eastern Time, on May 5, 2021).
Teladoc and Livongo are required under the merger agreement to accept or agree to certain conditions (as described in the section entitled “The Merger AgreementReasonable Best Efforts and Regulatory Approvals” beginning on page 145), including potential asset sales, divestitures, dispositions, licenses or other dispositions in order to obtain such regulatory approvals.
The completion of the merger is subject to the receipt of antitrust clearance in the United States. Under the HSR Act and the rules promulgated thereunder, the merger may not be completed until notification and report forms have been filed with the U.S. Federal Trade Commission, which is referred to as the FTC, and the Antitrust Division of the U.S. Department of Justice, which is referred to as the DOJ, and the applicable waiting period (or any extensions thereof) has expired or been terminated. Teladoc and Livongo each filed a notification and report form under the HSR Act, which is referred to as a HSR notification, with the FTC and the DOJ on
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August 19, 2020. The waiting period under the HSR Act with respect to the filed notification currently is scheduled to expire at 11:59 p.m., Eastern Time, on September 18, 2020, unless extended or terminated earlier. Teladoc and Livongo continue to expect the merger to close in the fourth quarter of 2020.
Ownership of the Combined Company after the Merger (Page 126)
As of the date of this joint proxy statement/prospectus, based on the estimated number of shares of common stock of Teladoc and Livongo that will be outstanding immediately prior to the completion of the merger and the exchange ratio of 0.5920, Teladoc and Livongo estimate that holders of shares of Teladoc common stock as of immediately prior to the completion of the merger will hold, in the aggregate, approximately 58% of the issued and outstanding shares of common stock of the combined company immediately following the completion of the merger, and holders of shares of Livongo common stock as of immediately prior to the completion of the merger will hold, in the aggregate, approximately 42% of the issued and outstanding shares of common stock of the combined company immediately following the completion of the merger.
Appraisal Rights (Page 204)
Pursuant to Section 262 of the DGCL, Livongo stockholders who do not vote in favor of adoption of the merger agreement, who continuously hold their shares of Livongo common stock through the effective date of the merger and who otherwise comply with the applicable requirements of Section 262 of the DGCL have the right to seek appraisal of the fair value of their shares of Livongo common stock, as determined by the Delaware Court of Chancery, together with interest, if any, on the amount determined to be the fair value, if the merger is completed. The “fair value” of shares of Livongo common stock as determined by the Delaware Court of Chancery could be greater than, the same as, or less than the value of the merger consideration that Livongo stockholders would otherwise be entitled to receive under the terms of the merger agreement.
The right to seek appraisal will be lost if a Livongo stockholder votes “FOR” adoption of the merger agreement. However, abstaining or voting against adoption of the merger agreement is not in itself sufficient to perfect appraisal rights because additional actions must also be taken to perfect such rights.
Livongo stockholders who wish to exercise the right to seek an appraisal of their shares must so advise Livongo by delivering a written demand for appraisal prior to the taking of the vote on the merger agreement at the Livongo stockholder meeting, and must otherwise follow the procedures prescribed by Section 262 of the DGCL. A person having a beneficial interest in shares of Livongo common stock held of record in the name of another person, such as a nominee or intermediary, must act promptly to cause the record holder to follow the steps required by Section 262 of the DGCL and in a timely manner to perfect appraisal rights. In view of the complexity of Section 262 of the DGCL, Livongo stockholders that may wish to pursue appraisal rights are urged to consult their legal and financial advisors. In addition, assuming the shares of Livongo common stock remain listed on a national securities exchange immediately prior to the effective time, under Section 262 of the DGCL, the Delaware Court of Chancery will dismiss any appraisal proceedings as to all holders of Livongo common stock who have perfected their appraisal rights unless (i) the total number of such shares entitled to appraisal exceeds 1% of the outstanding shares of Livongo common stock, or (ii) the value of the merger consideration provided in the merger agreement for the total number of shares of Livongo common stock entitled to appraisal exceeds $1 million. See the section entitled “Appraisal Rights” beginning on page 204.
Holders of shares of Teladoc common stock will not be entitled to rights of appraisal in connection with the merger.
Conditions to the Completion of the Merger (Page 151)
Each party’s obligation to effect the merger is subject to the satisfaction at closing or waiver at or prior to closing of each of the following conditions:
receipt of the required Livongo vote and the required Teladoc vote (each as defined in the section entitled “The Merger Agreement—No Solicitation of Acquisition Proposals; No Change of Recommendation” beginning on page 140);
absence of any order, injunction, judgment or other action issued by a governmental entity in the U.S. having competent jurisdiction over Teladoc, Livongo or Merger Sub, or any applicable law enacted in the U.S. that is in effect, in either case that makes consummation of the merger illegal or otherwise prohibited;
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the expiration or termination of the waiting period (and any extension thereof, including any agreement with any governmental entity by a party not to effect the merger prior to a certain date) applicable to the merger under the HSR Act;
the shares of Teladoc common stock to be issued to Livongo stockholders in accordance with the merger agreement having been approved for listing on the NYSE, subject only to official notice of issuance;
the effectiveness of the registration statement of which this joint proxy statement/prospectus forms a part and the absence of a stop order or proceedings seeking a stop order;
the accuracy of the representations and warranties of the other party to the extent required under the merger agreement;
in the case of Teladoc, Livongo’s and in the case of Livongo, Teladoc’s and Merger Sub’s compliance with, in all material respects, each of the covenants, obligations and agreements it is required to comply with or perform at or prior to the effective time;
since the date of the merger agreement there must not have occurred and be continuing any (i) state of facts, circumstance, condition, event, change, development, occurrence, result, effect, action or omission that has had or would reasonably be expected to have, individually in the aggregate, a material adverse effect with respect to the other party or (ii) material adverse effect with respect to the other party; and
the receipt by such party of a certificate of an officer of the other party certifying that the conditions in the three immediately preceding bullets have been satisfied.
In addition, the obligations of Livongo to effect the merger are subject to the receipt of an opinion of Skadden (or if Skadden is unable to or prior to the closing does not deliver such opinion, an opinion of Paul Weiss), in form and substance reasonably satisfactory to Livongo, dated as of the closing date, substantially to the effect that, on the basis of facts, representations and assumptions set forth in such opinion, the merger will qualify as a “reorganization” within the meaning of Section 368(a) of the Code.
For a more complete summary of the conditions that must be satisfied or waived prior to completion of the merger, see the section entitled “The Merger Agreement—Conditions to the Completion of the Merger” beginning on page 151.
No Solicitation of Acquisition Proposals; No Change of Recommendation (Page 140)
No Solicitation of Acquisition Proposals
Each of Teladoc and Livongo have agreed not to, and to cause its subsidiaries and its and its subsidiaries’ respective directors, officers and employees not to, and not to authorize or permit its representatives (as defined in the section entitled “Merger Agreement—No Solicitation of Acquisition Proposals; No Change of Recommendation” beginning on page 140) to, and to direct and use its reasonable best efforts to cause each of its subsidiaries and its representatives not to, directly or indirectly:
initiate, solicit, propose, induce or knowingly encourage or facilitate the making of any acquisition proposal (as defined in the section entitled “Merger Agreement—No Solicitation of Acquisition Proposals; No Change of Recommendation” beginning on page 140) or any inquiries or the making of any proposal that would reasonably be expected to lead to an acquisition proposal;
other than informing third parties of the existence of the provisions described in this section, enter into, engage in, continue or otherwise participate in negotiations or discussions with, or furnish any non-public information (or access thereto) concerning itself or any of its subsidiaries to, any third party in connection with, or for the purpose of knowingly encouraging or facilitating, or otherwise cooperate in any way with any third party (or any representative thereof) with respect to, an acquisition proposal;
recommend or enter into any contract, letter of intent, acquisition agreement, agreement in principle, memorandum of understanding, option agreement, joint venture agreement, partnership agreement or other agreement with respect to any acquisition proposal, other than with respect to an acceptable confidentiality agreement (as defined in the section entitled “Merger Agreement—No Solicitation of Acquisition Proposals; No Change of Recommendation” beginning on page 140); or
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approve, authorize, agree or publicly announce an intention to do any of the foregoing.
Notwithstanding anything in the merger agreement to the contrary, in the case of Teladoc, prior to the time the required Teladoc vote is obtained or, in the case of Livongo, prior to the time the required Livongo vote is obtained, in response to an unsolicited, bona fide written acquisition proposal received after the date of the merger agreement that did not result from a breach of the obligations described in this section, Teladoc or Livongo, as applicable, may:
furnish any information with respect to itself and its subsidiaries to the third party making such acquisition proposal (and its representatives and financing sources); provided that (i) prior to furnishing any such information, such party receives from such third party an executed acceptable confidentiality agreement and (ii) any such non-public information so furnished has been previously provided or made available to the other party or is concurrently provided or made available to the other party; or
participate or engage in negotiations or discussions with, and only with, the third party making such acquisition proposal and its representatives regarding such acquisition proposal;
in each case only if, prior to doing so, the Teladoc board of directors or Livongo board of directors, as applicable, determines in good faith after consultation on a confidential basis with its outside legal counsel and a financial advisor of national reputation that such acquisition proposal constitutes, or would reasonably be expected to lead to, a superior proposal (as defined in the section entitled “Merger Agreement—No Solicitation of Acquisition Proposals; No Change of Recommendation” beginning on page 140).
Existing Discussions and Standstill Provisions
Following the execution and delivery of the merger agreement, each of Teladoc and Livongo and their respective subsidiaries are required to, and to direct their respective representatives to:
immediately cease and cause to be terminated, and not authorize or knowingly permit any representative to continue, any solicitation and any and all existing activities, discussions or negotiations with any person conducted prior to the execution and delivery of the merger agreement with respect to any acquisition proposal or any inquiry or request for information that could reasonably be expected to lead to, or result in, an acquisition proposal;
promptly, and in any event by August 6, 2020, request that each person and its representatives (other than Teladoc or Livongo, as applicable, and its representatives) that has, prior to August 5, 2020, executed a confidentiality agreement or otherwise received non-public information about Teladoc or Livongo, as applicable, from, or on behalf of, Teladoc or Livongo, as applicable, in each case, in connection with such person’s consideration of an alternative transaction (as defined in the section entitled “Merger Agreement—No Solicitation of Acquisition Proposals; No Change of Recommendation” beginning on page 140), to promptly return or destroy all non-public information furnished to such person by or on behalf of Teladoc or Livongo, as applicable, or any of its subsidiaries prior to the date of the merger agreement; and
immediately terminate access by any third party to any physical or electronic data room relating to any potential alternative transaction.
Additionally, each of Teladoc and Livongo has agreed not to modify, amend or terminate, or waive, release or assign, any provisions of, any confidentiality or standstill agreement (or any similar agreement) to which it or any of its subsidiaries is a party relating to any acquisition proposal and to enforce the provisions of any such agreement, except that each of Teladoc and Livongo is permitted on a confidential non-public basis to release or waive any explicit or implicit standstill obligations solely to the extent necessary to permit the relevant party thereto to submit an acquisition proposal to the Teladoc board of directors or the Livongo board of directors, as applicable, on a confidential non-public basis and solely to the extent such board of directors determines in good faith that the failure to do so would be inconsistent with the fiduciary duties of such board of directors under applicable law. Each of Teladoc and Livongo are required to provide written notice to the other party of the waiver or release of any standstill by such party within 24 hours of such waiver or release, including disclosure of the identities of the parties thereto and circumstances relating thereto.
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No Change of Recommendation
Teladoc and Livongo have agreed that, except as otherwise set forth in the merger agreement, neither the Teladoc board of directors nor the Livongo board of directors will:
withhold or withdraw (or modify, amend or qualify in a manner adverse to Livongo or to Teladoc or Merger Sub, as applicable), or propose publicly to withhold or withdraw (or modify, amend or qualify in a manner adverse to Livongo or to Teladoc or Merger Sub, as applicable), the Teladoc recommendation or the Livongo recommendation (each as defined in the section entitled “Merger Agreement—Representations and Warranties” beginning on page 135), as applicable (or the recommendation or declaration of advisability by any such committee of the merger agreement or the merger);
approve, recommend or declare advisable, or propose publicly to approve, recommend or declare advisable, any acquisition proposal;
fail to include the Teladoc recommendation or the Livongo recommendation, as applicable, in this joint proxy statement/prospectus when disseminated to Teladoc stockholders or Livongo stockholders, as applicable;
resolve or agree to take any of the actions described in the preceding three bullets (any action described in this bullet or the preceding three bullets being referred to as a change of recommendation); or
approve, recommend, declare advisable or cause or permit Teladoc or Livongo, as applicable, to enter into any alternative acquisition agreement (as defined in the section entitled “Merger Agreement—No Solicitation of Acquisition Proposals; No Change of Recommendation” beginning on page 140).
Nothing contained in the merger agreement will prohibit Teladoc or Livongo or their respective board of directors, directly or indirectly, through their respective representatives, from (i) taking and disclosing to the stockholders of Teladoc or Livongo, as applicable, any position contemplated by Rule 14d-9, Rule 14e-2(a) or Item 1012(a) of Regulation M-A promulgated under the Exchange Act or (ii) making any disclosure to the stockholders of Teladoc or Livongo, as applicable, that the Teladoc board of directors or the Livongo board of directors, as applicable, has determined in its good faith judgment (after consultation with its outside counsel) is required by applicable law, except that neither party may effect a change of recommendation other than in accordance with the procedures described in the sections entitled “Merger Agreement—Change of Recommendation for an Intervening Event” and “Merger Agreement—Change of Recommendation for a Superior Proposal.”
Change of Recommendation for an Intervening Event
Notwithstanding anything in the merger agreement to the contrary, prior to the time, in the case of Livongo, the required Livongo vote is obtained or, in the case of Teladoc, the required Teladoc vote is obtained, the Livongo board of directors or the Teladoc board of directors, as applicable, may effect a change of recommendation in response to an intervening event (as defined in the section entitled “Merger Agreement—No Solicitation of Acquisition Proposals; No Change of Recommendation” beginning on page 140) if such board of directors determines in good faith, after consultation with its outside legal counsel and a financial advisor of national reputation, that the failure to do so would be inconsistent with such board of directors’ fiduciary duties under applicable law, only if all of the following conditions are met:
Livongo or Teladoc, as applicable, has first provided to the other party an intervening event notice (as defined in the section entitled “Merger Agreement—No Solicitation of Acquisition Proposals; No Change of Recommendation” beginning on page 140) at least five business days in advance;
during such five business day period (or any mutually agreed extension or continuation thereof), Livongo and its representatives or Teladoc and its representatives, as applicable, must negotiate in good faith with the other party and its officers, directors, and representatives regarding any changes to the terms of the merger agreement and any other proposals made by such other party so that a failure to effect a change of recommendation in response to such intervening event would no longer be inconsistent with the fiduciary duties of the Livongo board of directors or the Teladoc board of directors, as applicable, under applicable law;
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the other party does not make, within such five business day period (or any extension or continuation thereof) after the receipt of such intervening event notice, a proposal that would, in the good faith judgment of the Livongo board of directors or the Teladoc board of directors, as applicable (after consultation with its outside legal counsel and a financial advisor of national reputation), cause the failure to effect a change of recommendation in response to such intervening event to no longer be inconsistent with the fiduciary duties of such board of directors under applicable law; and
following such five business day period, the Livongo board of directors or the Teladoc board of directors, as applicable, has determined in good faith (after consultation with its outside legal counsel and a financial advisor of national reputation) that the failure to effect a change of recommendation in response to such intervening event continues to be inconsistent with the fiduciary duties of such board of directors under applicable law.
Any material change in any event, occurrence or facts relating to such intervening event will require a new intervening event notice with a new notice period, and references to “five business day period” in the preceding bullets will be deemed to be references to a period ending on the earlier of (i) the day that is three business days after such material change and (ii) the day that is ten days prior to the Livongo stockholder meeting or the Teladoc stockholder meeting, as applicable.
Change of Recommendation for a Superior Proposal
Notwithstanding anything in the merger agreement to the contrary, prior to the time, in the case of Livongo, the required Livongo vote is obtained or, in the case of Teladoc, the required Teladoc vote is obtained, the Livongo board of directors or the Teladoc board of directors, as applicable, may effect a change of recommendation if, in response to a bona fide unsolicited written acquisition proposal made by a third party after the date of the merger agreement which does not arise from a breach of such party’s non-solicitation obligations described in this section and has not been withdrawn, the Livongo board of directors or the Teladoc board of directors, as applicable, determines in good faith (after consultation with its outside legal counsel and a financial advisor of national reputation) that (i) such acquisition proposal constitutes a superior proposal and (ii) the failure to make a change of recommendation would be inconsistent with such board of directors’ fiduciary duties under applicable law, only if, in either such case, all of the following conditions are met:
Livongo or Teladoc, as applicable, has first provided to the other party a superior proposal notice (as defined in the section entitled “Merger Agreement—No Solicitation of Acquisition Proposals; No Change of Recommendation” beginning on page 140) at least five business days in advance, along with a complete copy of any written request, proposal or offer, including any proposed alternative acquisition agreement (and all schedules, appendices, exhibits and other attachments relating thereto), and any other documents containing the material terms of such superior proposal;
during such five business day period (or any extension or continuation thereof), prior to its effecting the change of recommendation, Livongo and its representatives or Teladoc and its representatives, as applicable, must negotiate in good faith with the other party and its officers, directors, and representatives regarding changes to the terms of the merger agreement and any other proposals made by such other party intended by such other party to cause such acquisition proposal to no longer constitute a superior proposal;
the other party does not make, within such five business day period (or any mutually agreed extension or continuation thereof) after the receipt of such superior proposal notice, a proposal that would, in the good faith judgment of the Livongo board of directors or the Teladoc board of directors, as applicable (after consultation with its outside legal counsel and a financial advisor of national reputation), cause the offer previously constituting a superior proposal to no longer constitute a superior proposal; and
following such five business day period, the Livongo board of directors or the Teladoc board of directors, as applicable, has determined in good faith (after consultation with its outside legal counsel and a financial advisor of national reputation) that, in light of such superior proposal and taking into account any revised terms proposed by the other party, (i) such acquisition proposal continues to constitute a superior proposal and (ii) the failure to make a change of recommendation would continue to be inconsistent with the fiduciary duties of such board of directors under applicable law.
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Any amendment or modification of such superior proposal will require a new superior proposal notice with a new notice period, and references to “five business day period” in the preceding bullets will be deemed to be references to “three business day period.”
Notice Regarding Acquisition Proposals
Each of Teladoc and Livongo must promptly (and, in any event, within 24 hours) advise the other party orally and in writing of any acquisition proposal or any request for information or inquiry that contemplates or that would reasonably be expected to lead to an acquisition proposal and the terms and conditions of such acquisition proposal, request or inquiry (including any subsequent amendment or other modification to such terms and conditions) and the identity of the person making any such acquisition proposal, request or inquiry. Commencing upon the provision of any notice referred to in the preceding sentence, Teladoc or Livongo, as applicable, or its outside counsel, must keep the other party (or its outside counsel) reasonably informed on a reasonably current basis regarding the status and terms of discussions and negotiations relating to any such acquisition proposal, request or inquiry, and as promptly as practicable (and in any event within 24 hours), provide the other party (or its outside legal counsel) with unredacted copies of all writings or media (whether or not electronic) containing any terms or conditions of any proposals or proposed transaction agreements (including any drafts thereof and all schedules and exhibits thereto) relating to any acquisition proposal.
Termination of the Merger Agreement (Page 152)
Termination by Mutual Consent
The merger agreement may be terminated and the merger and the other transactions contemplated by the merger agreement may be abandoned at any time prior to the effective time by mutual written consent of Teladoc and Livongo.
Termination by Either Teladoc or Livongo
Either Teladoc or Livongo may terminate the merger agreement at any time prior to the effective time if:
the merger has not been completed by 11:59 p.m., Eastern Time, on May 5, 2021, although such right to terminate will not be available to any party whose material breach of any provision in the merger agreement has been a principal cause of, or resulted in, the failure of the merger agreement to be consummated by such time;
any final, non-appealable order has been issued by any governmental entity in the U.S. having competent jurisdiction over Teladoc, Livongo or Merger Sub, or any applicable law enacted in the U.S. is in effect, in each case that makes the consummation of the merger illegal or otherwise prohibited;
the required Livongo vote has not been obtained at the Livongo stockholder meeting (or at any adjournment or postponement thereof); or
the required Teladoc vote has not been obtained at the Teladoc stockholder meeting (or at any adjournment or postponement thereof).
Termination by Teladoc
In addition, Teladoc may terminate the merger agreement and the merger may be abandoned at any time prior to the effective time, if:
prior to the time the required Livongo vote is obtained:
Livongo has delivered an intervening event notice (which has not been withdrawn) or a superior proposal notice (which has not been withdrawn) or a change of recommendation has occurred;
following the public disclosure or announcement of an acquisition proposal with respect to Livongo, the Livongo board of directors fail to reaffirm publicly the Livongo recommendation within three business days after receipt of a written request from Teladoc to do so;
a tender or exchange offer relating to securities of Livongo has been commenced by a third party and Livongo has not announced, within ten business days after the commencement of such tender or exchange offer, a statement disclosing that the Livongo board of directors recommends rejection of such tender or exchange offer; or
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there has been a willful and material breach of Livongo’s non-solicitation covenant described in the section entitled “Merger Agreement—No Solicitation of Acquisition Proposals; No Change of Recommendation” beginning on page 140 or the covenant to convene a stockholder meeting for purposes of obtaining the required Livongo vote described in the section entitled “Merger Agreement—Stockholder Meetings” beginning on page 145;
Livongo has breached or failed to perform any of its representations, warranties, covenants or other agreements contained in the merger agreement such that a condition to Teladoc’s obligation to consummate the merger would fail to be satisfied, and such breach or failure is incapable of being cured by May 5, 2021 or, if capable of being cured by such date, has not been cured within 30 days after written notice is given by Teladoc to Livongo of such breach or failure to perform; provided, however, that Teladoc may not terminate the merger agreement as described in this bullet if, at the time such termination would otherwise take effect in accordance with the foregoing, Teladoc or Merger Sub is in material breach of any provision of the merger agreement (it being understood and agreed that if Teladoc remedies any such breach, then it may terminate the merger agreement as described in this bullet when such breach has been so remedied); or
prior to the time the required Teladoc vote is obtained:
the Teladoc board of directors determines that an acquisition proposal with respect to Teladoc that did not result from a breach of Teladoc’s non-solicitation covenant described in the section entitled “Merger Agreement—No Solicitation of Acquisition Proposals; No Change of Recommendation” beginning on page 140 constitutes a superior proposal;
Teladoc has complied with non-solicitation obligations described in the section entitled “Merger Agreement—No Solicitation of Acquisition Proposals; No Change of Recommendation” beginning on page 140;
substantially concurrently with such Teladoc change of recommendation termination, Teladoc enters into a definitive agreement to consummate such superior proposal;
prior to or concurrently with (and as a condition to) any such Teladoc change of recommendation termination, Teladoc pays to Livongo a termination fee of $712,330,000; and
Teladoc has complied with the procedural requirements described in the section entitled “Merger Agreement—No Solicitation of Acquisition Proposals; No Change of Recommendation—Change of Recommendation for a Superior Proposal” beginning on page 140 with respect to such superior proposal.
Termination by Livongo
In addition, Livongo may terminate the merger agreement and the merger may be abandoned at any time prior to the effective time, if:
prior to the time the required Teladoc vote is obtained:
Teladoc has delivered an intervening event notice (which has not been withdrawn) or a superior proposal notice (which has not been withdrawn) or a change of recommendation has occurred;
following the public disclosure or announcement of an acquisition proposal with respect to Teladoc, the Teladoc board of directors fail to reaffirm publicly the Teladoc recommendation within three business days after receipt of a written request from Livongo to do so;
a tender or exchange offer relating to securities of Teladoc has been commenced by a third party and Teladoc has not announced, within ten business days after the commencement of such tender or exchange offer, a statement disclosing that the Teladoc board of directors recommends rejection of such tender or exchange offer; or
there has been a willful and material breach of Teladoc’s non-solicitation covenant described in the section entitled “Merger Agreement—No Solicitation of Acquisition Proposals; No Change of Recommendation” beginning on page 140 or the covenant to convene a stockholder meeting for purposes of obtaining the required Teladoc vote described in the section entitled “Merger Agreement—Stockholder Meetings” beginning on page 145;
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Teladoc has breached or failed to perform any of its representations, warranties, covenants or other agreements contained in the merger agreement such that a condition to Livongo’s obligation to consummate the merger would fail to be satisfied, and such breach or failure is incapable of being cured by May 5, 2021 or, if capable of being cured by such date, has not been cured within 30 days after written notice is given by Livongo to Teladoc of such breach or failure to perform; provided, however, that Livongo may not terminate the merger agreement as described in this bullet if, at the time such termination would otherwise take effect in accordance with the foregoing, Livongo is in material breach of any provision of the merger agreement (it being understood and agreed that if Livongo remedies any such breach, then it may terminate the merger agreement as described in this bullet when such breach has been so remedied); or
prior to the time the required Livongo vote is obtained:
the Livongo board of directors determines that an acquisition proposal with respect to Livongo that did not result from a breach of Livongo’s non-solicitation covenant described in the section entitled “Merger Agreement—No Solicitation of Acquisition Proposals; No Change of Recommendation” beginning on page 140 constitutes a superior proposal;
Livongo has complied with non-solicitation obligations described in the section entitled “Merger Agreement—No Solicitation of Acquisition Proposals; No Change of Recommendation” beginning on page 140;
substantially concurrently with such Livongo change of recommendation termination, Livongo enters into a definitive agreement to consummate such superior proposal;
prior to or concurrently with (and as a condition to) any such Livongo change of recommendation termination, Livongo pays to Teladoc a termination fee of $562,810,000; and
Livongo has complied with the procedural requirements described in the section entitled “Merger Agreement—No Solicitation of Acquisition Proposals; No Change of Recommendation—Change of Recommendation for a Superior Proposal” beginning on page 144 with respect to such superior proposal.
Termination Fees (Page 154)
Livongo will be required to pay to Teladoc a termination fee of $562,810,000 if the merger agreement is terminated (with each following termination right as defined in the section entitled “The Merger Agreement—Termination of the Merger Agreement” beginning on page 152):
by Teladoc as a Livongo non-solicitation breach termination;
by either Teladoc or Livongo as a Livongo no vote termination if, at the time of such termination, Teladoc had the right to terminate as a Livongo non-solicitation breach termination;
by either Teladoc or Livongo as a Livongo no vote termination, and (i) at or prior to the Livongo stockholder meeting an acquisition proposal with respect to Livongo has been made (whether or not conditional and whether or not withdrawn) to the Livongo board of directors or has become publicly known, and (ii) within 12 months after the date of such termination, (a) Livongo enters into an alternative acquisition agreement providing for an alternative transaction (defined for purposes of this bullet with all references to “15%” in the definition of alternative transaction (as defined in the section entitled “Merger Agreement—No Solicitation of Acquisition Proposals; No Change of Recommendation” beginning on page 140) being replaced with “50%”) with respect to Livongo or (b) an alternative transaction with respect to Livongo is consummated;
by either Teladoc or Livongo as an outside date termination or by Teladoc as a Livongo material breach termination, and (i) at any time on or after the date of the merger agreement and prior to such termination an acquisition proposal with respect to Livongo has been made (whether or not conditional and whether or not withdrawn) and (ii) within 12 months after the date of such termination, (a) Livongo enters into an alternative acquisition agreement providing for an alternative transaction (defined for purposes of this bullet with all references to “15%” in the definition of alternative transaction being replaced with “50%”) with respect to Livongo or (b) an alternative transaction with respect to Livongo is consummated; or
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by Livongo as a Livongo change of recommendation termination.
Teladoc will be required to pay to Livongo a termination fee of $712,330,000 if the merger agreement is terminated (with each following termination right as defined in the section entitled “The Merger Agreement—Termination of the Merger Agreement” beginning on page 152):
by Livongo as a Teladoc non-solicitation breach termination;
by either Teladoc or Livongo as a Teladoc no vote termination if, at the time of such termination, Livongo had the right to terminate as a Teladoc non-solicitation breach termination;
by either Teladoc or Livongo as a Teladoc no vote termination, and (i) at or prior to the Teladoc stockholder meeting an acquisition proposal with respect to Teladoc has been made (whether or not conditional and whether or not withdrawn) to the Teladoc board of directors or has become publicly known, and (ii) within 12 months after the date of such termination, (a) Teladoc enters into an alternative acquisition agreement providing for an alternative transaction (defined for purposes of this bullet with all references to “15%” in the definition of alternative transaction (as defined in the section entitled “Merger Agreement—No Solicitation of Acquisition Proposals; No Change of Recommendation” beginning on page 140) being replaced with “50%”) with respect to Teladoc or (b) an alternative transaction with respect to Teladoc is consummated;
by either Teladoc or Livongo as an outside date termination or by Livongo as a Teladoc material breach termination, and (i) at any time on or after the date of the merger agreement and prior to such termination an acquisition proposal with respect to Teladoc has been made (whether or not conditional and whether or not withdrawn) and (ii) within 12 months after the date of such termination, (a) Teladoc enters into an alternative acquisition agreement providing for an alternative transaction (defined for purposes of this bullet with all references to “15%” in the definition of alternative transaction being replaced with “50%”) with respect to Teladoc or (b) an alternative transaction with respect to Teladoc is consummated; or
by Teladoc as a Teladoc change of recommendation termination.
Voting Agreement (Page 179)
Concurrently with the execution of the merger agreement, General Catalyst Group VI, L.P., General Catalyst Group VIII, L.P., General Catalyst Group VIII Supplemental, L.P., GC Venture LH Manager, LLC, Kinnevik Internet Lux S.a.r.l., 7Wire Ventures Fund, L.P., 7Wire Ventures LLC – Series EosHealth, 7Wire Ventures LLC – Series Livongo C, 7Wire Ventures LLC – Series Livongo D, 7Wire Ventures LLC – Series Livongo E, Glen Tullman, Lee Shapiro, which are referred to as the specified Livongo stockholders, Teladoc and Merger Sub entered into the voting agreement with respect to all shares of Livongo common stock owned of record or beneficially by that specified Livongo stockholder as of August 5, 2020, which is referred to, together with any additional shares or other voting securities of Livongo of which that specified Livongo stockholder acquires beneficial ownership after August 5, 2020, including by purchase, as a result of a stock dividend, stock split, recapitalization, combination, consolidation, reclassification, exchange or change of such shares, or other similar transaction, or upon exercise or conversion of any securities, as that specified Livongo stockholder’s covered shares.
As of September 8, 2020, the record date for the Livongo stockholder meeting, the specified Livongo stockholders, in aggregate, were the beneficial owners of 36,519,004 shares of Livongo common stock, or approximately 35.95% of the voting power of Livongo common stock.
Subject to the terms and conditions set forth in the voting agreement, from August 5, 2020 until the termination of the voting agreement, each of the specified Livongo stockholders agreed to vote their respective covered shares:
in favor of (i) the adoption of the merger agreement and (ii) the approval of any proposal to adjourn the Livongo stockholder meeting to a later date, if there are not sufficient affirmative votes (in person or by proxy) to obtain the required Livongo vote on the date on which such meeting is held; and
against any acquisition proposal with respect to Livongo.
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Subject to the terms and conditions set forth in the voting agreement, from August 5, 2020 until the termination of the voting agreement, each of the specified Livongo stockholders agreed to appear at each meeting of the stockholders of Livongo, or adjournment or postponement thereof, to vote on any matter contemplated by the voting agreement and to cause their respective covered shares to be counted as present thereat for purposes of calculating a quorum.
You should read the section entitled “The Voting Agreement” beginning on page 179 for a more complete discussion of the voting agreement.
Accounting Treatment of the Merger (Page 127)
Teladoc and Livongo each prepare their respective financial statements in accordance with accounting principles generally accepted in the United States, which are referred to as GAAP. The merger will be accounted for using the acquisition method of accounting, and Teladoc will be treated as the accounting acquirer.
U.S. Federal Income Tax Considerations (Page 182)
The Merger
For U.S. federal income tax purposes, the merger is intended to be treated as a “reorganization” within the meaning of Section 368(a) of the Code. Generally, for U.S. federal income tax purposes, if the merger qualifies as a “reorganization” within the meaning of Section 368(a) of the Code, if you are a U.S. holder (as defined in the section entitled “U.S. Federal Income Tax Considerations” beginning on page 182) of Livongo common stock and you exchange all of your Livongo common stock in exchange for Teladoc common stock and the cash consideration in the merger, you will not recognize any gain or loss with respect to your Livongo common stock, except to the extent of the cash consideration you receive (including the special dividend to the extent it is not treated as a distribution within the meaning of Section 301 of the Code, as described below) and cash in lieu of a fractional share of Teladoc common stock. If you are a non-U.S. holder (as defined in the section entitled “U.S. Federal Income Tax Considerations” beginning on page 182) of Livongo common stock, the merger will generally not result in tax to you under U.S. federal income tax laws unless you have certain connections to the United States. Because individual circumstances may differ, it is recommended that you consult your own tax advisor to determine the particular tax effects of the merger to you.
It is a condition to Livongo’s obligation to complete the merger that Livongo receive an opinion from Skadden (or if Skadden is unable to, or prior to the closing of the merger does not, deliver such an opinion, Paul Weiss), dated as of the closing date, substantially to the effect that, on the basis of facts, representations and assumptions set forth in such opinion, the merger will qualify as a “reorganization” within the meaning of Section 368(a) of the Code. Whether such an opinion can be given will depend on, among other factors, the fair market value of Teladoc common stock as of the closing date. Moreover, if such opinion is delivered, there can be no assurance that the IRS or a court will agree with the conclusions expressed therein.
In the event that neither Skadden nor Paul Weiss can deliver an opinion that the merger will qualify as a “reorganization” within the meaning of Section 368(a) of the Code, Livongo and Teladoc will each cooperate and use good faith efforts to consider and negotiate such amendments to the merger agreement as may be reasonably required in order for Skadden or Paul Weiss, as applicable, to deliver such an opinion (though neither party will be required to agree to any such amendment which, in the good faith judgment of such party, would subject it to any material economic, legal, regulatory, reputational or other cost or detriment).
The Special Dividend
Under the terms of the merger agreement, holders of record of Livongo common stock as of a record date immediately prior to the effective time will be paid the special dividend, a one-time special cash dividend of $7.09 per share. The special dividend is intended to be treated, and will be reported by Livongo, as a distribution by Livongo within the meaning of Section 301 of the Code and not as consideration paid for Livongo common stock in the merger. Assuming this intended treatment is respected, the special dividend will be treated as a dividend for U.S. federal income tax purposes to the extent paid out of current or accumulated earnings and profits of Livongo. To the extent that the amount of the dividend exceeds Livongo’s current and accumulated earnings and profits, the excess will first be treated as a tax-free return of capital, causing a reduction in the holder’s adjusted basis in its Livongo common stock. If such basis is reduced to zero, any remaining portion of the special dividend will be taxed as capital gain.
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It is possible that the IRS would disagree with the characterization of the special dividend as a distribution by Livongo and instead seek to characterize the special dividend as merger consideration paid by Teladoc in exchange for a portion of Livongo common stock in the merger. If this characterization were to be sustained, a holder of Livongo common stock would recognize gain on the special dividend as though it were cash consideration received in the merger, as described above.
You should read the section entitled “U.S. Federal Income Tax Considerations” beginning on page 182 for a more complete discussion of the U.S. federal income tax considerations related to the merger and special dividend.
Comparison of Stockholders’ Rights (Page 187)
Upon completion of the merger, Livongo stockholders receiving shares of Teladoc common stock will become stockholders of the combined company, and their rights will be governed by Delaware law and the governing corporate documents of the combined company in effect at the effective time. Livongo stockholders will have different rights once they become stockholders of the combined company due to differences between the governing corporate documents of Livongo and the proposed governing corporate documents of the combined company. These differences are described in more detail under the section entitled “Comparison of Stockholders’ Rights” beginning on page 187.
Listing of Teladoc Common Stock; Delisting and Deregistration of Livongo Common Stock (Page 128)
If the merger is completed, the shares of Teladoc common stock to be issued in the merger will be listed for trading on the NYSE. In addition, if the merger is completed, Livongo common stock will be delisted from Nasdaq and deregistered under the Exchange Act.
Risk Factors (Page 46)
In evaluating the merger agreement, the merger or the issuance of shares of Teladoc common stock in the merger, you should carefully read this joint proxy statement/prospectus and give special consideration to the factors discussed in the section entitled “Risk Factors” beginning on page 46.
Litigation Related to the Merger (Page 128)
On September 10, 2020, a purported class action complaint was filed against Livongo, the members of its board of directors, Teladoc and Merger Sub in the United States District Court for the District of Delaware under the caption Kent v. Livongo Health, Inc., et al., Case No. 1:20-cv-01213 (D. Del.). The complaint alleges that the registration statement filed in connection with the proposed merger between Livongo and Teladoc omitted material information in violation of Sections 14(a) and 20(a) of the Securities Exchange Act of 1934, rendering the registration statement false and misleading. The complaint seeks an order (1) preliminarily and permanently enjoining defendants from proceeding with the proposed transaction; (2) rescinding the proposed transaction, to the extent it closes; (3) directing defendants to disseminate a registration statement that does not contain any untrue statements of material fact and that states all material facts required to make the statements contained therein not misleading; (4) declaring that defendants violated Sections 14(a) and/or 20(a); (5) awarding costs, including attorneys' fees and expenses; and (6) awarding such other relief as the court deems proper.
Specifically, the complaint alleges that the registration statement omits material information regarding Livongo's and Teladoc's financial projections and Morgan Stanley's analyses. The complaint also alleges that the registration statement fails to disclose the circumstances under which the “fee of up to approximately $11 million” is payable to Morgan Stanley, whether defendants intend to pay such fee to Morgan Stanley, the timing and nature of the past services Morgan Stanley provided to Livongo and its affiliates and whether Morgan Stanley has provided past services to Teledoc or its affiliates, and if so, the timing and nature of such services and Morgan Stanley's compensation. It is possible additional lawsuits may be filed between the date of this joint proxy statement/prospectus and consummation of the merger.
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SELECTED HISTORICAL CONSOLIDATED FINANCIAL DATA OF TELADOC
The following tables present selected historical consolidated financial data for Teladoc as of and for each of the years in the five-year period ended December 31, 2019 and as of and for the six months ended June 30, 2020 and June 30, 2019. The selected historical consolidated financial data for the fiscal years ended December 31, 2019, 2018 and 2017 and as of December 31, 2019 and December 31, 2018 were derived from Teladoc’s audited consolidated financial statements included in its Annual Report on Form 10-K for the fiscal year ended December 31, 2019, which is incorporated herein by reference. The selected historical consolidated financial data for the fiscal years ended December 31, 2016 and 2015 and the balance sheet data as of December 31, 2017, 2016 and 2015 have been derived from Teladoc’s consolidated financial statements not incorporated by reference into this prospectus. The selected historical consolidated financial data for the six months ended June 30, 2020 and 2019 and the balance sheet data as of June 30, 2020 were derived from Teladoc’s unaudited consolidated financial statements included in Teladoc’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2020, which is incorporated herein by reference. Teladoc’s unaudited consolidated financial statements for the six months ended June 30, 2020 and 2019 and as of June 30, 2020 and 2019 include, in Teladoc’s opinion, all adjustments consisting of normal and recurring adjustments considered necessary for a fair presentation of the results for these periods.
Teladoc acquired Médecin Direct on April, 30, 2019, Advance Medical, Inc. on May 31, 2018, Best Doctors Holdings, Inc. on July 14, 2017, HY Holdings, Inc. d/b/a HealthiestYou Corporation on July 1, 2016, Stat Health Services Inc. on June 17, 2015 and Compile, Inc. d/b/a BetterHelp on January 23, 2015. The results of the acquisitions were integrated within Teladoc’s existing business on the respective acquisition dates.
The selected historical consolidated financial data is not necessarily indicative of future results of Teladoc and should be read together with the other information contained in the section entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the consolidated financial statements and related notes in Teladoc’s Annual Report on Form 10-K for the fiscal year ended December 31, 2019 and Quarterly Report on Form 10-Q for the quarter ended June 30, 2020, each of which is incorporated herein by reference.
See the section entitled “Where You Can Find More Information” beginning on page 218.
 
Six Months Ended
June 30,
Year Ended December 31,
 
2020
2019
2019
2018
2017
2016
2015
 
(in thousands, except share and per share data)
Consolidated Statements of Operations Data:
 
 
 
 
 
 
 
Revenue
$421,829
$258,849
$553,307
$417,907
$233,279
$123,157
$77,384
Expenses:
 
 
 
 
 
 
 
Cost of revenue (exclusive of depreciation and amortization shown separately below)
163,162
86,311
184,465
128,735
61,623
31,971
21,041
Operating expenses:
 
 
 
 
 
 
 
Advertising and marketing
80,093
53,020
109,697
85,109
57,663
34,720
20,236
Sales
36,627
32,044
64,915
59,154
37,984
26,243
17,976
Technology and development
42,286
32,652
64,644
54,373
34,459
21,815
14,210
Legal and regulatory
3,454
3,605
6,762
3,981
4,872
7,275
11,311
Acquisition and integration related costs
5,291
2,148
6,620
10,391
13,196
6,959
551
Gain on sale
(5,500)
General and administrative
99,503
74,531
157,694
116,916
79,781
48,568
42,981
Depreciation and amortization
19,603
19,448
38,952
35,602
19,095
8,270
4,863
Total expenses
450,019
303,759
633,749
488,761
308,673
185,821
133,169
Loss from operations
(28,190)
(44,910)
(80,442)
(70,854)
(75,394)
(62,664)
(55,785)
Amortization of warrants and loss on extinguishment of debt
7,751
14,122
8,454
Interest expense, net
22,454
13,732
29,013
26,112
17,491
2,588
2,199
Net loss before taxes
(58,395)
(58,642)
(109,455)
(96,966)
(107,007)
(73,706)
(57,984)
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Six Months Ended
June 30,
Year Ended December 31,
 
2020
2019
2019
2018
2017
2016
2015
 
(in thousands, except share and per share data)
Income tax (benefit) provision
(3,110)
832
(10,591)
118
(225)
510
36
Net loss
$(55,285)
$(59,474)
$(98,864)
$(97,084)
$(106,782)
$(74,216)
$(58,020)
Net loss per share, basic and diluted
$(0.74)
$(0.83)
$(1.38)
$(1.47)
$(1.93)
$(1.75)
$(2.91)
Weighted-average shares used to compute basic and diluted net loss per share
74,919,194
71,322,586
71,844,535
65,844,908
55,427,460
42,330,908
19,917,348
 
June 30,
December 31,
 
2020
2019
2019
2018
2017
2016
2015
 
(in thousands)
Consolidated Balance Sheet Data:
 
 
 
 
 
 
 
Cash, cash equivalents and short-term investments
$1,311,775
$472,604
$517,064
$478,534
$122,306
$65,808
$137,348
Working capital
1,279,562
462,188
497,821
470,297
115,909
61,644
133,592
Total assets
2,418,828
1,565,344
1,602,827
1,528,876
824,391
303,670
229,737
Stockholders’ equity
1,294,929
1,002,640
1,014,025
1,013,119
558,903
230,870
178,564
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SELECTED HISTORICAL CONSOLIDATED FINANCIAL DATA OF LIVONGO
The following tables present selected historical consolidated financial data for Livongo as of and for the years ended December 31, 2019, 2018 and 2017 and as of and for the six months ended June 30, 2020 and 2019. The selected historical consolidated financial data for each of the years ended December 31, 2019, 2018 and 2017 and as of December 31, 2019 and 2018 were derived from Livongo’s audited consolidated financial statements included in Livongo’s Annual Report on Form 10-K for the year ended December 31, 2019, incorporated herein by reference. The selected historical consolidated financial data as of June 30, 2020 and for the six months ended June 30, 2020 and June 30, 2019 were derived from Livongo’s unaudited condensed consolidated financial statements included in Livongo’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2020, incorporated herein by reference. Livongo’s unaudited condensed consolidated financial statements as of June 30, 2020 and 2019 and for the six months ended June 30, 2020 and 2019 include, in Livongo’s opinion, all adjustments consisting of normal and recurring adjustments considered necessary for a fair statement of the results for these periods.
The selected historical consolidated financial data set forth below is not necessarily indicative of future results of Livongo and should be read together with the other information contained in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the consolidated financial statements and related notes included in Livongo’s Annual Report on Form 10-K for the year ended December 31, 2019 and Quarterly Report on Form 10-Q for the quarter ended June 30, 2020, each of which is incorporated herein by reference. Livongo’s results of operations, cash flows and financial condition may be affected significantly, in some periods, by business acquisitions, the more significant of which are described in the documents incorporated herein by reference.
See the section entitled “Where You Can Find More Information” beginning on page 218.
 
June 30,
December 31,
 
2020(1)
2019(2)(3)
2019(2)(3)(4)
2018(5)
2017
 
(in thousands)
Assets
 
 
 
 
 
Current assets:
 
 
 
 
 
Cash and cash equivalents
$685,953
$38,165
$241,738
$108,928
$61,243
Short-term investments
150,000
150,000
Accounts receivable, net of allowance for doubtful accounts
59,237
35,086
40,875
16,623
7,517
Inventories
17,616
13,835
28,983
8,934
2,915
Deferred costs and other, current
27,137
13,730
16,051
6,022
2,841
Restricted cash, current
50
Prepaid expenses and other current assets
11,318
6,250
9,860
4,935
1,293
Total current assets
951,261
107,066
487,507
145,442
75,859
Property and equipment, net
16,209
7,564
10,354
5,837
2,059
Right-of-use assets, net
16,253
Restricted cash, noncurrent
1,270
858
1,270
179
230
Goodwill
35,801
35,794
35,801
15,709
2,486
Intangible assets, net
15,081
17,861
16,469
5,154
166
Deferred costs and other, noncurrent
12,843
7,166
5,700
2,447
1,153
Other noncurrent assets
569
6,413
3,460
5,485
92
Total assets
$1,049,287
$182,722
$560,561
$180,253
$82,045
37

TABLE OF CONTENTS

 
June 30,
December 31,
 
2020(1)
2019(2)(3)
2019(2)(3)(4)
2018(5)
2017
 
(in thousands)
Liabilities, Redeemable Convertible Preferred Stock and Stockholders’ Deficit
 
 
 
 
 
Current liabilities:
 
 
 
 
 
Accounts payable
$6,401
$8,975
$8,362
$6,377
$3,253
Accrued expenses and other current liabilities
35,684
23,290
27,801
16,152
6,094
Deferred acquisition related payments
2,000
Deferred revenue, current
5,420
3,467
3,945
1,614
987
Advance payments from partner, current
354
1,343
1,767
293
200
Lease obligations, current
Total current liabilities
47,859
37,075
41,875
24,436
12,534
Deferred revenue, noncurrent
1,561
637
654
437
257
Advance payments from partner, noncurrent
9,142
7,754
7,754
6,432
3,569
Lease obligations, noncurrent
15,758
Long-Term Convertible Senior Notes
396,446
Other noncurrent liabilities
397
3,173
2,914
3,825
76
Total liabilities
471,163
48,639
53,197
35,130
16,436
Commitments and contingencies
 
 
 
 
 
Redeemable convertible preferred stock, par value of $0.001 per share
237,012
236,929
132,017
Stockholders’ deficit:
 
 
 
 
 
Common stock, par value of $0.001 per share
100
21
95
18
17
Additional paid-in capital
749,349
33,326
671,467
21,789
13,806
Accumulated deficit
(171,325)
(136,276)
(164,198)
(113,613)
(80,231)
Total stockholders’ deficit
578,124
(102,929)
507,364
(91,806)
(66,408)
 
 
 
 
 
 
Total Liabilities, Redeemable Convertible Preferred Stock and Stockholders’ Deficit
$1,049,287
$182,722
$560,561
$180,253
$82,045
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TABLE OF CONTENTS

 
Six Months Ended June 30,
Year Ended December 31,
 
2020(1)
2019(2)(3)
2019(2)(3)
2018(5)
2017
 
(in thousands, except per share data)
Revenue
$160,745
$72,982
$170,198
$68,431
$30,850
Cost of revenue
39,572
21,827
46,158
20,269
8,312
Gross profit
121,173
51,155
124,040
48,162
22,538
Operating expenses:
 
 
 
 
 
Research and development
29,806
19,285
49,842
24,861
12,028
Sales and marketing
60,535
32,476
78,060
36,433
16,502
General and administrative
37,874
27,816
55,676
23,063
11,050
Change in fair value of contingent consideration
86
956
843
(1,200)
Total operating expenses
128,301
80,533
184,421
83,157
39,580
Loss from operations
(7,128)
(29,378)
(60,381)
(34,995)
(17,042)
Interest income
2,476
641
3,797
1,709
305
Interest expense
(2,320)
(26)
(55)
(166)
Other (expense) income, net
(62)
6
(29)
(13)
(16)
Loss before provision for income taxes
(7,034)
(28,731)
(56,639)
(33,354)
(16,919)
Provision for (benefit from) income taxes
93
(1,383)
(1,369)
28
(61)
Net loss
$(7,127)
$(27,348)
$(55,270)
$(33,382)
$(16,858)
Accretion of redeemable convertible preferred stock
(83)
(96)
(162)
(143)
Net loss attributable to common stockholders
$(7,127)
$(27,431)
$(55,366)
$(33,544)
$(17,001)
Net loss per share attributable to common stockholders
$(0.07)
$(1.48)
$(1.09)
$(2.02)
$(1.18)
Weighted average shares
96,719
18,564
50,930
16,573
14,442
(1)
On June 4, 2020, Livongo issued $550.0 million aggregate principal amount of 0.875% Convertible Senior Notes due 2025 in a private placement to qualified institutional buyers pursuant to Rule 144A under the Securities Act.
(2)
For fiscal year 2019, Livongo adopted Accounting Standards Codification (ASC) No. 606, a new accounting standard related to revenue recognition, using the modified retrospective method to those contracts that were not completed as of the adoption date.
(3)
In February 2019, Livongo acquired myStrength, Inc. for a total purchase consideration of $33.5 million and recognized a tax benefit of $1.4 million.
(4)
In July 2019, Livongo completed its initial public offering in which 14,590,050 shares of common stock were issued and sold at an offering price of $28.00 per share, including 1,903,050 shares of common stock pursuant to the exercise in full of the underwriters’ option to purchase additional shares. Livongo received net proceeds of $377.5 million, after deducting underwriting discounts and commission of $28.6 million and offering costs of $2.4 million. Immediately prior to the closing of Livongo’s initial public offering, all 58,615,488 shares of Livongo’s then-outstanding redeemable convertible preferred shares automatically converted into 58,615,488 shares of common stock and Livongo reclassified $237.0 million from temporary equity to additional paid-in capital and into common stock par value on its consolidated balance sheet.
(5)
In April 2018, Livongo acquired Retrofit Inc. for a total purchase consideration of $18.6 million.
39

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SELECTED UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION
The following tables show a summary of the unaudited pro forma condensed combined financial information about the financial condition and results of operations of the combined company, after giving effect to the merger, which were prepared using the acquisition method of accounting with Teladoc as the accounting acquirer of Livongo. See the section entitled “The Merger—Accounting Treatment” beginning on page 127 for a description of the expected accounting treatment of the merger. The unaudited pro forma condensed combined balance sheet information as of June 30, 2020 is based on the individual historical consolidated balance sheets of Teladoc and Livongo, and has been prepared to reflect the merger as if it had occurred on June 30, 2020. The unaudited pro forma condensed combined statements of operations for the six months ended June 30, 2020 and the year ended December 31, 2019 combine the historical results of operations of Teladoc and Livongo and have been prepared to reflect the merger as if it had occurred on January 1, 2019.
The following selected unaudited pro forma condensed combined financial information has been prepared for illustrative purposes only and is not necessarily indicative of what the combined company’s operating results or financial position would actually have been had the merger been completed as of the dates indicated. In addition, the selected unaudited pro forma condensed combined financial information includes adjustments which are preliminary and may be revised. The selected unaudited pro forma condensed combined financial information does not purport to project the future financial position or operating results of the combined company. Future results may vary significantly from the results reflected because of various factors, including those discussed in the section entitled “Risk Factors” beginning on page 46. The following selected unaudited pro forma condensed combined financial information has been developed from and should be read in conjunction with the section entitled “Unaudited Pro Forma Condensed Combined Financial Information” and the notes related thereto beginning on page 157 and with the historical consolidated financial statements of Teladoc and Livongo and related notes that have been filed with the SEC, certain of which are incorporated by reference into this joint proxy statement/prospectus. See the section entitled “Where You Can Find More Information” beginning on page 218.
 
Six Months Ended
June 30, 2020
Year Ended
December 31, 2019
 
(in thousands, except per share data)
Pro forma condensed combined statement of operations data:
 
 
Revenues
$582,574
$723,505
Loss from operations
$(217,479)
$(1,050,458)
Net loss
$(197,264)
$(819,289)
Net loss per share - basic and diluted
$(1.47)
$(6.27)
 
 
 
 
June 30, 2020
 
 
(in thousands)
 
Pro forma condensed combined balance sheet data:
 
 
Total assets
$16,689,939
 
Total liabilities
$1,830,247
 
Total equity
$14,859,692
 
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TABLE OF CONTENTS

COMPARATIVE HISTORICAL AND UNAUDITED PRO FORMA PER SHARE DATA
The following selected unaudited pro forma per share information for the year ended December 31, 2019 and the six months ended June 30, 2020 reflects the merger as if it had occurred on January 1, 2019. The book value per share amounts in the table below reflect the merger as if it had occurred on June 30, 2020. The information in the table is based on, and should be read together with, the historical financial information that Teladoc and Livongo have presented in their respective filings with the SEC and with the unaudited pro forma condensed combined financial information contained in the section entitled “Unaudited Pro Forma Condensed Combined Financial Information” and the notes related thereto beginning on page 157. See also the section entitled “Where You Can Find More Information” beginning on page 218.
The unaudited pro forma combined per share data is presented for illustrative purposes only and is not necessarily indicative of actual or future financial condition or results of operations that would have been realized if the merger had been completed as of the dates indicated or will be realized upon the completion of the merger. The summary pro forma information is preliminary, based on initial estimates of the fair value of assets acquired (including intangible assets) and liabilities assumed, and is subject to change as more information regarding the fair values is obtained, which changes could be materially different than the initial estimates. The Livongo equivalent pro forma data are calculated by multiplying the pro forma combined per share data by the exchange ratio in the merger agreement.
Neither Teladoc nor Livongo have declared or paid dividends during the periods presented. Following the completion of the merger, the declaration of dividends will be at the discretion of the combined company’s board of directors and will be determined after consideration of various factors, including earnings, cash requirements, the financial condition of the combined company, government regulations and other factors deemed relevant by the combined company’s board of directors.
 
Historical
Teladoc
Historical
Livongo
Teladoc Pro
Forma Combined
Livongo
Equivalent Pro
Forma(3)
Net loss per share – basic
 
 
 
 
Year ended December 31, 2019
$(1.38)
$(1.09)
$(6.27)
$(3.71)
Six months ended June 30, 2020
$(0.74)
$(0.07)
$(1.47)
$(0.87)
 
 
 
 
 
Net loss per share – diluted