Root, Inc. filed a Form 8-K with the SEC on September 1, 2026, disclosing that on August 31, 2026, the company and Carvana Group, LLC entered into a Warrant Cancellation and Exchange Agreement and amended several related commercial and investment agreements.

Key Highlights

  • Warrant cancellation: Carvana surrendered all outstanding long-term warrants originally issued on October 1, 2021, which the company then cancelled.
  • New Warrant issued: Root issued Carvana a new Common Stock Purchase Warrant covering up to 1,525,560 shares of Class A Common Stock if fully exercised for cash.
  • Five tranches: The New Warrant consists of five independently exercisable tranches of 305,112 shares each, subject to conditions tied to defined milestones in insurance sales through the Integrated Platform.
  • Commercial Agreement amended: The Second Amendment to the Commercial Agreement modified the term, notice of non-renewal provision, the definition of "Company Warrants," and certain commercial terms including exclusivity obligations.
  • Exemption from registration: The New Warrant was issued pursuant to the exemption under Section 4(a)(2) of the Securities Act of 1933, with Carvana representing it is an "accredited investor."
  • Additional amendments: The Investment Agreement and Registration Rights Agreement, both originally dated August 11, 2021, were also amended on August 31, 2026, to reflect the warrant restructuring.

Root Inc. and Carvana Restructure Warrant Arrangement and Commercial Terms

According to the filing, Root, Inc. (NASDAQ:ROOT) and Carvana Group, LLC entered into a Warrant Cancellation and Exchange Agreement on August 31, 2026. Under this agreement, Carvana surrendered all five remaining tranches of long-term warrants that had been issued on October 1, 2021, under the original Investment Agreement dated August 11, 2021. The company simultaneously issued a replacement Common Stock Purchase Warrant to Carvana. The three short-term warrant tranches originally issued in 2021 had already "expired in accordance with their terms," according to the filing.

The New Warrant, as described in the filing, allows Carvana the opportunity to purchase up to 1,525,560 shares of Class A Common Stock if all five tranches are fully exercised for cash. Each of the five tranches covers 305,112 shares and is independently exercisable. The filing notes that each tranche is subject to "Conditions to Exercise," including "certain conditions dependent on the achievement of defined milestones tied to insurance sales through the Integrated Platform" - the integrated automobile insurance solution the two companies developed for Carvana's online car buying platform.

Alongside the warrant restructuring, the filing disclosed that a subsidiary of Root and Carvana entered into a Second Amendment to the Commercial Agreement, modifying the term, the non-renewal notice provision, the definition of "Company Warrants," and certain commercial terms including exclusivity obligations. Root and Carvana also entered into a Second Amendment to the Investment Agreement and a First Amendment to the Registration Rights Agreement, each to reflect the warrant restructuring. The filing was signed by Megan Binkley, Chief Financial Officer of Root, Inc.

What Was Disclosed

Root, Inc. disclosed the cancellation of all outstanding long-term warrants held by Carvana Group, LLC, the issuance of a new five-tranche warrant covering up to 1,525,560 shares of Class A Common Stock, and amendments to its Commercial Agreement, Investment Agreement, and Registration Rights Agreement with Carvana, all effective August 31, 2026.