Lemonade Reports Material Agreement & Financial Obligation on Warrants

TL;DR

**Lemonade just reported a new financial obligation tied to warrants, watch for potential dilution.**

AI Summary

On January 8, 2024, Lemonade, Inc. entered into a material definitive agreement and created a direct financial obligation related to warrants to purchase common stock. This filing indicates that Lemonade has warrants outstanding, which could lead to dilution if exercised, impacting the value of existing shares. Investors should be aware of potential future share dilution if these warrants are exercised, which could affect the stock price.

Why It Matters

This filing signals potential future dilution for Lemonade shareholders if the warrants to purchase common stock are exercised, which could impact the stock's per-share value.

Risk Assessment

Risk Level: medium — The existence of warrants creates a medium risk of future share dilution, which could negatively impact the stock price for current shareholders.

Analyst Insight

A smart investor would monitor the exercise of Lemonade's warrants and assess the potential for dilution, considering its impact on future share price and earnings per share.

Key Numbers

• $0.00001 — par value per share (of Lemonade's Common Stock)

Key Players & Entities

• Lemonade, Inc. (company) — the registrant filing the 8-K
• New York Stock Exchange (company) — where Lemonade's Common Stock and Warrants are registered
• 001-39367 (dollar_amount) — Commission File Number
• 32-0469673 (dollar_amount) — I.R.S. Employer Identification No.
• $0.00001 (dollar_amount) — par value per share of Common Stock

Forward-Looking Statements

• Lemonade's stock (LMND) may experience downward pressure due to potential warrant exercises. (LMND) — medium confidence, target: Q2 2024

FAQ

Key Financial Figures

• $0.00001 — ange on which registered Common Stock, $0.00001 par value per share LMND New York Stock
• $150 million — nvestors will provide the Company up to $150 million from June 28, 2023 through December 31,
• $140 million — ors will also provide the Company up to $140 million from the Original Commitment End Date t

Filing Documents

• lmnd-20240108.htm (8-K) — 33KB
• 0001691421-24-000006.txt ( ) — 198KB
• lmnd-20240108.xsd (EX-101.SCH) — 2KB
• lmnd-20240108_def.xml (EX-101.DEF) — 16KB
• lmnd-20240108_lab.xml (EX-101.LAB) — 30KB
• lmnd-20240108_pre.xml (EX-101.PRE) — 16KB
• lmnd-20240108_htm.xml (XML) — 4KB

01

Item 1.01 Entry into a Material Definitive Agreement. On January 8, 2024, Lemonade, Inc. (the "Company") entered into an Amended and Restated Customer Investment Agreement (the "Agreement"), with GC Customer Value Arranger, LLC, as Arranger on behalf of the Investors (the "Investors"). Unless otherwise specified, capitalized terms used but not defined herein have the meanings given to them in the Agreement. Under the Agreement, the Investors will provide the Company up to $150 million from June 28, 2023 through December 31, 2024 (the "Original Commitment End Date"), as previously agreed pursuant to the terms of that certain Customer Investment Agreement with the Investors dated June 28, 2023, and the Investors will also provide the Company up to $140 million from the Original Commitment End Date through December 31, 2025, in each case for the Company's sales and marketing ("Growth") efforts. Under the Agreement, subject to certain terms and conditions specified therein, at the start of each Growth Period, the Investors will provide an Investment Amount equal to up to 80% of the Company's Growth Spend with respect to a particular Reference Cohort. During each Growth Period, the Company will pay to the Investors an amount equal to the Investor Sharing Percentage of Reference Income generated during the Growth Period corresponding to such Disbursement Date for each Reference Cohort for every Growth Period until the Investors receive an amount sufficient to attain an effective Internal Rate of Return of 16% across all cash remittances associated with specific transactions, at which point all future Reference Income is retained by Company. The Agreement contains standard customary representations, warranties and covenants by the parties, and will continue in effect unless terminated by any party pursuant to its terms. The foregoing description of the Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the A

03

Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant. The disclosure set forth above under Item 1.01 of this Current Report on Form 8-K is incorporated by reference into this Item 2.03.

SIGNATURES

SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. LEMONADE, INC. Date: January 11, 2024 By: /s/ Tim Bixby Tim Bixby Chief Financial Officer

View Full Filing

View this 8-K filing on SEC EDGAR