NEW YORK--(BUSINESS WIRE)--Lemonade, Inc. (NYSE: LMND) (the “Company”) today announced an extension of the early lock-up expiration date pursuant to the terms of lock-up agreements with the underwriters (“lock-up agreements”) of its initial public offering (“IPO”) of common stock, par value $0.00001 per share, until one business day following the release of earnings for the third quarter of 2020.
In connection with the Company’s IPO, all of its executive officers, directors, and substantially all of the holders of the Company’s common stock, or securities exercisable for or convertible into the Company’s common stock outstanding immediately prior to the IPO (the “securities”), are parties to market standoff agreements with the Company or entered into lock-up agreements that restrict their ability to sell or transfer their securities, or otherwise engage in certain transactions related to their securities, for a period of up to 180 days after July 1, 2020 (the “lock-up period”).
Pursuant to the lock-up agreements, the lock-up period is scheduled to end with respect to 33% of the securities subject to each lock-up agreement on September 29, 2020, which falls within the Company’s quarterly blackout period. Therefore, in accordance with the lock-up agreements, the lock-up period with respect to 33% of the securities subject to each lock-up agreement will end one business day following the release of earnings for the third quarter, which date will be separately announced (the “early lock-up expiration extension date”). The Company will also release the same portion of securities restricted under the market standoff agreements on the early lock-up expiration extension date.
The Company estimates that, based on the number of shares of the Company's common stock, which as of September 29, 2020 are: (i) outstanding or (ii) subject to stock options that have vested, approximately 15,058,356 shares of the Company’s common stock may become eligible for sale in the public market at the open of trading on the early lock-up expiration extension date. This includes 9,899,362 shares held by affiliates which are subject to volume and other restrictions of Rule 144 of the Securities Act of 1933, as amended.
About Lemonade
Lemonade offers renters, homeowners, and pet health insurance in the United States, and contents and liability insurance in Germany and the Netherlands, through its full-stack insurance carriers. Powered by artificial intelligence and behavioral economics, Lemonade set out to replace brokers and bureaucracy with bots and machine learning, aiming for zero paperwork and instant everything. A Certified B-Corp, Lemonade gives unused premiums to nonprofits selected by its community, during its annual Giveback. Lemonade is currently available for most of the United States, Germany and the Netherlands, and continues to expand globally.
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Forward-Looking Statements
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements contained in this press release that do not relate to matters of historical fact should be considered forward-looking statements. These statements are neither promises nor guarantees, but involve known and unknown risks, uncertainties and other important factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements, including, but not limited to, the following: our history of losses and the fact that we may not achieve or maintain profitability in the future; our ability to retain and expand our customer base; the fact that the “Lemonade” brand may not become as widely known as incumbents’ brands or the brand may become tarnished; the denial of claims or our failure to accurately and timely pay claims; our ability to attain greater value from each user; the novelty of our business model and its unpredictable efficacy and susceptibility to unintended consequences; the possibility that we could be forced to modify or eliminate our Giveback, which could undermine our business model; the results of examinations by our primary state insurance regulator that could result in adverse examinations findings and necessitate remedial actions or give rise to regulatory orders requiring remedial, injunctive, or other corrective action; our limited operating history; our ability to manage our growth effectively; the impact of intense competition in the segments of the insurance industry in which we operate on our ability to attain or increase profitability; the unavailability of reinsurance at current levels and prices, which could limit our ability to write new business; our ability to renew reinsurance contracts on comparable duration and terms to those currently in effect; our exposure to counterparty risks as a result of reinsurance; the loss of personal customer information, damage to our reputation and brand, or harm to our business and operating results as a result of security incidents or real or perceived errors, failures or bugs in our systems, website or app; our actual or perceived failure to protect customer information and other data, respect customers’ privacy, or comply with data privacy and security laws and regulations; our ability to comply with extensive insurance industry regulations and the need to incur additional costs or devote additional resources to comply with changes to existing regulations; our exposure to additional regulatory requirements specific to other vertical markets that we enter or have entered, including auto, pet and life insurance, and the need to devote additional resources to comply with these regulations; and our inability to predict the lasting impacts of COVID-19 to our business in particular, and the global economy generally. These and other important factors are discussed under the caption “Risk Factors” in our Quarterly Report on Form 10-Q for the period ended June 30, 2020 and our other filings with the Securities and Exchange Commission could cause actual results to differ materially from those indicated by the forward-looking statements made in this press release. Any such forward-looking statements represent management’s beliefs as of the date of this press release. While we may elect to update such forward-looking statements at some point in the future, we disclaim any obligation to do so, even if subsequent events cause our views to change.
