FOXO TECHNOLOGIES INC
For the period ended Jun 30, 2024. Filed Aug 19, 2024.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2024 · Filed Aug 19, 2024
FOXO$0.13+19.2%Stored close · as of Jul 8, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-03-31; filed 2024-06-28.
0001213900-24-057245
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-06-30; filed 2024-08-19.
0001493152-24-032961
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 108 previous paragraphs and 118 current paragraphs.
59 unchanged; 26 reworded; 29 added; 20 removed; 3 previous and 4 current paragraphs rearranged.
Tables are not compared: 15 previous and 19 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (29)
Current report
Myrtle was formed in the second quarter of 2022 to pursue opportunities in the behavioral health sector, including substance abuse treatment. initially in rural markets. Services are provided on either an inpatient, residential basis or an outpatient basis.
Current report
On August 10, 2023, Myrtle was granted a license by the Department of Mental Health and Substance Abuse Services of Tennessee to operate an alcohol and drug treatment facility in Oneida, Tennessee. The facility, which is located at RHI’s Big South Fork Medical Center campus, commenced operations and began accepting patients on August 14, 2023. The facility offers alcohol and drug residential detoxification and residential rehabilitation treatment services for up to 30 patients. On November 1, 2023, Myrtle began accepting patients at its Nonresidential Office-Based Opiate Treatment Facility (“OBOT”). The OBOT is located adjacent to Myrtle’s alcohol and drug treatment facility in Oneida, Tennessee and supplements the existing residential rehabilitation and detoxification services offered at Myrtle.
Current report
The Company acquired Myrtle as a synergistic opportunity to expand its operations into the healthcare sector and as a compliment to its epigenetic biomarkers of human health, wellness and aging.
Current report
We manage and classify our business into two reportable business segments: (i) Healthcare; and (ii) Labs and Life. Previously, Labs and Life were treated as separate segments, however, with the acquisition of Myrtle, our operational focus shifted such that it was appropriate to combine our Labs and Life segments and to operate Myrtle under our newly formed Healthcare segment.
Current report
***Net Revenues.***Total revenues were $28 for the three months ended June 30, 2024, compared to $12 for the three months ended June 30, 2023. Myrtle, acquired on June 14, 2024, contributed $20 of the increase, partially offset by the decreases in FOXO Labs and FOXO Life revenues of $4.
Current report
***Direct Costs of Revenues.***Direct costs of revenues were $31 for the three months ended June 30, 2024, compared to no direct costs of revenues for the three months ended June 30, 2023. The increase resulted from the acquisition of Myrtle on June 14, 2024.
Current report
***Impairment of Intangible Assets and Cloud Computing Arrangements.***During the three months ended June 30, 2023, we determined that the cash flows would no longer support the digital insurance platform, underwriting API, and longevity API and recognized impairment losses of $1,425, $630, and $578, respectively or $2,633 in total.
Current report
Healthcare
Current report
***Net revenues.***Net revenues were $20 or the three months ended June 30, 2024 and represent the net revenue of Myrtle, which was acquired on June 14, 2024. Our healthcare segment began with the acquisition of Myrtle.
Current report
***Segment Losses.***Segment losses were $67 for the three months ended June 2024 and represent the losses of Myrtle, which was acquired on June 14, 2024.
Current report
Life and Labs
Current report
Six Months Ended June 30, 2024 and 2023
Current report
***Net revenues.***Net revenues were $35 for the six months ended June 30, 2024, compared to $25 for the six months ended June 30, 2023. Myrtle, acquired on June 14,2024, contributed $20 of the increase, partially offset by decreases in FOXO Labs and FOXO Life revenues of $10.
Current report
***Direct Costs of Revenues.***Direct costs of revenues were $31 for the six months ended June 30, 2024, compared to no direct costs of revenues for the six months ended June 30, 2023. The increase resulted from the acquisition of Myrtle on June 14, 2024.
Current report
***Impairment of Intangible Assets and Cloud Computing Arrangements.***During the six months ended June 30, 2023, we determined that the cash flows would no longer support the digital insurance platform, underwriting API, and longevity API and recognized impairment losses of $1,425, $630, and $578, respectively or $2,633 in total.
Current report
Non-operating Expense. Non-operating expense was $900 for the six months ended June 30, 2024, compared to $3,935 for the six months ended June 30, 2023. The decrease is primarily related to the loss from PIK Note Amendment and 2022 Debenture Release $3,521 during the six months ended June 30, 2023.
Current report
***Net Loss.***was $3,668 for the six months ended June 30, 2024, an improvement of $15,264 or 81% compared to net loss of $18,932 for the six months ended June 30, 2023. The decrease in net loss was primarily related to the decrease in the loss from operations of $12,229, and the decrease in other non-operating expenses of $3,035. Additionally, a deemed dividend of $966 related to the trigger of the down round provisions and the extension of the Smithline Assumed Warrants was recognized in the six months ended June 30, 2024 compared to a deemed dividend of $2,466 related to the Exchange Offer during the six months ended June 30, 2023. The deemed dividends resulted in net loss to common stockholders of $4,633 and $21,398 for the six months ended June 30, 2024 and 2023, respectively.
Current report
Analysis of Segment Results:
Current report
Healthcare
Current report
***Net revenues.***Net revenues were $20 or the six months ended June 30, 2024 and represent the net revenue of Myrtle, which was acquired on June 14, 2024. Our healthcare segment began with the acquisition of Myrtle.
Current report
***Segment Losses.***Segment losses were $67 for the six months ended June 30, 2024 and represent the losses of Myrtle, which was acquired on June 14, 2024.
Current report
Labs and Life
Current report
***Net revenues.***Net revenues were $15 for the six months ended June 30, 2024 compared to $25 for the six months ended June 30, 2023. The decrease was due to lower royalty revenue and reduced life insurance commissions earned as we ceased placing policies from our legacy agency business.
Current report
On April 30, 2024, we entered into a Securities Purchase Agreement with IG pursuant to which we issued IG a promissory note in the principal amount of $150 and we agreed to issue 100,000 shares of our Class A Common Stock as inducement shares to IG. We received cash of $100 from the issuance of the promissory note. We are in negotiations to extend the maturity date.
Current report
Pursuant to the acquisition of Myrtle, a note payable to RHI due on December 31, 2024 in the amount of $1,611 was transferred to us and we issued a non-interest bearing note payable due on demand to RHI in the amount of $265 for a portion of the purchase price of Myrtle.
Current report
On June 14, 2024, we issued the Senior Note Payable in the principal amount of $840 to the Purchaser and we received cash of $750. On July 17, 2024, we issued to the Purchaser 1,108,755 shares of our common stock per the terms of the agreement.
Current report
Sox Months Ended June 30, 2024 and 2023
Current report
On April 17, 2024, the Company received an official notice of noncompliance from the New York Stock Exchange (“NYSE”) stating that it was not in compliance with NYSE American continued listing standards due to the failure to timely file its Annual Report on Form 10-K for the year ended December 31, 2023 (the “Delinquent Report”) by the filing due date of April 16, 2024 (the “Filing Delinquency”). With the filing of the Delinquent Report and the Quarterly Report on Form 10-Q for the quarter ended March 31, 2024, the Filing Delinquency was cured.
Current report
On July 10, 2024, the Company received an official notice of noncompliance from NYSE stating that the Company is not in compliance with Section 1003(a)(ii) of the Company Guide since it reported stockholders’ deficit of ($14.9) million as of March 31, 2024, and losses from continuing operations and/or net losses in its three most recent fiscal years ended December 31, 2023. The Company is now subject to the procedures and requirements set forth in Section 1009 of the Company Guide.
Removed paragraphs (20)
Previous report
We have managed and classified our business into two reportable business segments, FOXO Labs and FOXO Life. While we have decided to pause sales of new life insurance products, we still intend to continue to classify our business into the two reportable business segments.
Previous report
FOXO Labs
Previous report
FOXO Labs performs research and development and is commercializing proprietary epigenetic biomarker technology. Our research demonstrates that epigenetic biomarkers, collected from saliva or blood, provide meaningful measures of health and lifestyle factors. FOXO Labs anticipates recognizing revenue related to sales of its Bioinformatics Services and from the commercialization of research and development activities, which may include its Underwriting Report, Longevity Report, or as a result of other commercialization opportunities including a potential AI platform for the delivery of health and well-being data-driven insights to individuals, healthcare professionals and third-party service providers as discussed above.
Previous report
FOXO Life
Previous report
FOXO Life sought to redefine the relationship between consumers and insurers by combining life insurance with healthy longevity. The distribution of insurance products that may be paired with our FOXO’s Longevity Report strived to provide life insurance consumers with valuable information and insights about their individual health and wellness.
Previous report
***Revenues.***Total revenues were $7 for the three months ended March 31, 2024, compared to $13 for the three months ended March 31, 2023. FOXO Labs revenues decreased by $3 and FOXO Life revenues decreased by $3. The decreases were due to less royalty revenue for FOXO Labs and less life insurance commissions earned for FOXO life.
Previous report
FOXO Labs
Previous report
***Revenue.***Total revenue was $4 and $7 for the three months ended March 31, 2024 and 2023, respectively. The decrease in revenue was primarily driven by lower royalty revenue.
Previous report
FOXO Life
Previous report
We reconcile our non-GAAP financial measure to our net loss, which is its most directly comparable financial measure calculated and presented in accordance with U.S. GAAP. Our management uses Adjusted EBITDA as a financial measure to evaluate the profitability and efficiency of our business model. Adjusted EBITDA is not presented in accordance with U.S. GAAP. Adjusted EBITDA includes adjustments for provision for income taxes, as applicable, interest income and expense, depreciation and amortization, stock-based compensation, and certain other infrequent and/or unpredictable non-cash charges or benefits.
Previous report
Each Closing is subject to additional conditions as disclosed in the SPA.
Previous report
On June 14, 2024 (the “Initial Closing Date”), pursuant to the SPA, we issued a Note in the principal amount of $840 to the Purchaser. The Note matures on June 14, 2025 and the principal amount of the Note is the subscription amount multiplied by 1.12 which represents 12% original issuance discount. The Note does not accrue any interest exempt for in the event of an Event of Default (as defined in the Note) upon which it will accrue interest at 18% per annum.
Previous report
The Note provides the Purchaser with rights upon a Fundamental Transaction (as defined in the Note) such as assumption rights of the Successor Entity (as defined in the Note). The Note also provides the Purchaser an exchange right upon the issuance of preferred stock (except in connection with the Acquisition) and mandatory redemption rights. There is also an optional prepayment of the Note provided to us of 100% of the Note amount. The Note is guaranteed by RHI.
Previous report
As of the Initial Closing Date, we have yet to issue the Shares to the Purchaser due to the fact that their issuance is conditioned upon approval from NYSE American and, although in process, we have yet to receive approval.
Previous report
On April 17, 2024, the Company received the Filing Delinquency. During the Initial Cure Period, NYSE will monitor the Company and the status of the Delinquent Report and any subsequent delayed filings, including through contact with the Company, until the Filing Delinquency is cured. If the Company fails to cure the Filing Delinquency within the Initial Cure Period, NYSE may, in NYSE’s sole discretion, allow the Company’s securities to be traded for the Additional Cure Period depending on its specific circumstances. If NYSE determines that an Additional Cure Period is not appropriate, suspension and delisting procedures will commence in accordance with the procedures set out in Section 1010 of the NYSE American Company Guide. If NYSE determines that an Additional Cure Period of up to six months is appropriate and the Company fails to file its Delinquent Report and any subsequent delayed filings by the end of that period, suspension and delisting procedures will generally commence. An issuer is not eligible to follow the procedures outlined in Section 1009 with respect to these criteria.
Previous report
Notwithstanding the foregoing, however, NYSE may in its sole discretion decide (i) not to afford the Company any Initial Cure Period or Additional Cure Period, as the case may be, at all or (ii) at any time during the Initial Cure Period or Additional Cure Period, to truncate the Initial Cure Period or Additional Cure Period, as the case may be, and immediately commence suspension and delisting procedures if the Company is subject to delisting pursuant to any other provision of the Company Guide, including if NYSE believes, in NYSE’s sole discretion, that continued listing and trading of an issuer’s securities on NYSE is inadvisable or unwarranted in accordance with Sections 1001-1006 hereof.
Previous report
While the Company has not received an official notice of noncompliance regarding the delinquency of this report, with the filing of the Delinquent Report, and this filing, the Company intends to regain compliance with the NYSE American continued listing standards. There can be no assurance that the Company will ultimately regain compliance with all applicable NYSE American listing standards.
Previous report
As a result, receipt of the Delinquency Notification was NYSE’s official notice of noncompliance with Section 1003(f)(iv) of the Company Guide. The Company is now subject to the procedures and requirements set forth in Section 1009 of the Company Guide. In connection with its non-compliance with Section 1003(f)(iv) of the Company Guide, the Company was required to submit a written response by June 18, 2024 advising of actions it has taken or will take to pay its past-due fees in full to NYSE within 60 calendar days of receipt of the Delinquency Notification (subject to acceptance of the compliance plan by NYSE).
Previous report
The Company submitted a written response to NYSE on June 18, 2024. If the written response is deemed unacceptable by NYSE, NYSE will commence delisting proceedings. Furthermore, if NYSE accepts the actions proposed by the Company in its written response and the Company does not make progress towards full payment of all past-due fees consistent with the proposed actions as accepted by NYSE, NYSE staff will initiate delisting proceedings as appropriate. The Company may appeal a staff delisting determination in accordance with Section 1010 and Part 12 of the Company Guide.
Previous report
The Company has paid $65,000 towards the delinquent balance and still owes $146,000. The Company intends to regain compliance with the NYSE American continued listing standards. There can be no assurance that the Company will ultimately regain compliance with all applicable NYSE American listing standards.
Reworded paragraphs (26)
Previous wording
The Myrtle Agreement provided for RHI to exchange all of its equity interest in Myrtle for $500, payable in shares of our Class A Common Stock. The number of shares of our Class A Common Stock issuable to RHI will be determined by dividing $500 by the volume weighted average price of our Class A Common Stock on the day prior to closing. The purchase price payable for the equity interest in Myrtle will be subject to certain past-closing adjustments as provided in the Myrtle Agreement.
Current wording
The first agreement, as supplemented, (the “Myrtle Agreement”), provided for RHI to exchange all of its equity interest in Myrtle for $500, payable in a combination of shares of our Class A Common Stock and a note payable. The closing occurred on June 14, 2024. The purchase price payable for the equity interest in Myrtle will be subject to certain post-closing adjustments, as provided in the Myrtle Agreement.
Previous wording
In the RCHI Agreement, we agreed to issue the Preferred Stock to RHI in exchange for all of the outstanding shares of RCHI. RCHI owns all of the outstanding shares of Scott County Community Hospital, Inc. (operating as Big South Fork Medical Center), RHI’s critical access care hospital in Oneida, Tennessee. Each share of our Preferred Stock will have a stated value of $1,000. The number of shares of our Preferred Stock issuable to RHI upon the closing of the RCHI Agreement is subject to adjustment as provided in the RCHI Agreement.
Current wording
In the second agreement, the RCHI Agreement, we agreed to issue the Preferred Stock to RHI in exchange for all of the outstanding shares of RCHI. RCHI owns all of the outstanding shares of Scott County Community Hospital, Inc. (operating as Big South Fork Medical Center), RHI’s critical access care hospital in Oneida, Tennessee. Each share of our Preferred Stock will have a stated value of $1,000. The number of shares of our Preferred Stock issuable to RHI upon the closing of the RCHI Agreement is subject to adjustment as provided in the RCHI Agreement.
Previous wording
Also see Note 12 for other recent developments.
Current wording
Also see Note 17 of the accompanying unaudited condensed financial statements for other recent developments.
Previous wording
FOXO Labs had operated its Bioinformatics Services as an ancillary offering, with revenue recognized as epigenetic biomarker services in our historical financial statements, but now looks to it as a primary offering. Bioinformatics Services provide a data processing, quality checking, and data analysis service using FOXO’s cloud-based bioinformatics pipeline, referred to as our epigenetics, longevity, or methylation pipeline in our historical financial statements. FOXO Labs accepts raw data from third party labs and converts that data into usable values for customers.
Current wording
Labs currently recognizes revenue from providing epigenetic testing services and collecting a royalty from Illumina, Inc. related to the sales of the Infinium Mouse Methylation Array. Labs conducts research and development, and such costs are recorded within research and development expenses on the unaudited condensed consolidated statements of operations. Labs had operated its Bioinformatics Services as an ancillary offering, with revenue recognized as epigenetic biomarker services in our historical financial statements, but now looks to it as a primary offering. Bioinformatics Services provide a data processing, quality checking, and data analysis service using FOXO’s cloud-based bioinformatics pipeline, referred to as our epigenetics, longevity, or methylation pipeline in our historical financial statements. Labs accepts raw data from third party labs and converts that data into usable values for customers. Life primarily had residual commission revenues from its legacy insurance agency business. Life also began receiving insurance commissions from the distribution and sale of life insurance policies based on the size and type of policies sold to customers. Life costs are recorded within selling, general and administrative expenses on the consolidated statements of operations.
Previous wording
***Research and Development.***Research and development expenses were $165 for the three months ended March 31, 2024, compared to $309 for the three months ended March 31, 2023. The decrease was driven by lower employee-related expenses and professional services as well as research and development projects that are no longer ongoing, which also contributed to the period over period decrease in research and development expenses.
Current wording
***Research and Development.***Research and development expenses were $104 for the three months ended June 30, 2024, compared to $333 for the three months ended June 30, 2023. The decrease was driven by lower employee-related expenses and professional services as well as research and development projects that are no longer ongoing, which also contributed to the period over period decrease in research and development expenses.
Previous wording
***Management Contingent Share Plan.***Management Contingent Share Plan expenses were $33 for the three months ended March 31, 2024 compared to expense of $764 for the three months ended March 31, 2023. The decrease was due to more shares vesting under the plan during the 2023 period.
Current wording
***Management Contingent Share Plan.***Management Contingent Share Plan expenses were $8 for the three months ended June 30, 2024 compared to expense of $648 for the three months ended June 30, 2023. The decrease was due to more shares vesting under the plan during the 2023 period.
Previous wording
***Selling, General and Administrative.***Selling, general and administrative expenses were $988 for the three months ended March 31, 2024 compared to $6,332 for the three months ended March 31, 2023. The decrease of $5,344, or 82%, was driven by the completion of a consulting agreement as we recognized $1,700 less compensation costs associated with the amortization of consulting agreements in the current period compared to the prior period. Also contributing to the decrease were lower: employee related expenses due to head count reductions, legal fees, amortization of intangible assets and professional fees, among other items.
Current wording
***Selling, General and Administrative.***Selling, general and administrative expenses were $1,474 for the three months ended June 30, 2024 compared to $4,003 for the three months ended June 30, 2023. The decrease of $2,529, or 63%, was driven by the completion of a consulting agreement as we recognized $519 less compensation costs associated with the amortization of consulting agreements in the current period compared to the prior period. Also contributing to the decrease were lower: employee related expenses due to headcount reductions, legal fees, amortization of intangible assets and professional fees, among other items. Partially offsetting the decrease in selling, general and administrative expenses were expenses of $37 associated with Myrtle, which was acquired on June 14, 2024.
Previous wording
Non-operating expense. Non-operating expense was $325 for the three months ended March 31, 2024, compared to $247 for the three months ended March 31, 2023. The increase primarily related to additional interest expense in the three months ended March 31, 2024 compared to the 2023 period.
Current wording
Non-operating Expense. Non-operating expense was $575 for the three months ended June 30, 2024, compared to $3,688 for the three months ended June 30, 2023. The decrease is primarily related to the loss from PIK Note Amendment and 2022 Debenture Release of $3,521 during the three months ended June 30, 2023.
Previous wording
***Net Loss.***Net loss was $1,504 for the three months ended March 31, 2024, an improvement of $6,135 or 80% compared to net loss of $7,639 for the three months ended March 31, 2023. The decrease in net loss was primarily related to the decrease in the operating loss of $6,213, partially offset by an increase in other non-operating expenses of $78. Additionally, a deemed dividend of $656 related to the trigger of the down round provisions and the extension of the Smithline Assumed Warrants was recognized in the three months ended March 31, 2024 resulting in a net loss to common stockholders of $2,160 for the current period.
Current wording
***Net Loss.***Net loss was $2,164 for the three months ended June 30, 2024, an improvement of $9,129 or 81% compared to net loss of $11,293 for the three months ended June 30, 2023. The decrease in net loss was primarily related to the decrease in the loss from operations of $6,016, and the decrease in other non-operating expenses of $3,113. Additionally, a deemed dividend of $310 related to the trigger of the down round provisions of the Smithline Assumed Warrants was recognized in the three months ended June 30, 2024 compared to a deemed dividend of $2,466 related to the Exchange Offer during the three months ended June 30, 2023. The deemed dividends resulted in net loss to common stockholders of $2,473 and $13,759 for the three months ended June 30, 2024 and 2023, respectively.
Previous wording
***Revenue.***Total revenue was $3 for the three months ended March 31, 2024 compared to $6 for the three months ended March 31, 2023. The decrease was due to reduced life insurance commissions earned as we ceased placing policies from our legacy agency business.
Current wording
***Net revenues.***Net revenues were $8 for the three months ended June 30, 2024 compared to $12 for the three months ended June 30, 2023. The decrease was due to lower royalty revenue and reduced life insurance commissions earned as we ceased placing policies from our legacy agency business.
Previous wording
***Segment Losses.***Segment losses decreased from $290 for the three months ended March 31, 2023 to $154 for the three months ended March 31, 2024. The decrease in the losses of $136 was primarily as a result of employee related expenses.
Current wording
***Segment Losses.***Segment losses decreased from $557 for the three months ended June 30, 2023 to $503 for the three months ended June 30, 2024. The decrease was driven by lower employee-related expenses, partially offset by minimum royalties due under the KR8 Agreement.
Previous wording
***Segment Losses.***Segment losses decrease from $647 for the three months ended March 31, 2023 to $5 for the three months ended March 31, 2024. The decrease was driven by lower employee-related expenses and a $251 loss on the sale of FOXO Life Insurance Company in the three months ended March 31, 2023.
Current wording
***Segment Losses.***Segment losses decreased from $1,494 for the six months ended June 30, 2023 to $870 for the six months ended June 30, 2024. The decrease was driven by lower employee-related expenses and a $251 loss on the sale of FOXO Life Insurance Company in the six months ended June 30, 2023, partially offset by minimum royalties due under the KR8 Agreement.
Previous wording
We had cash and cash equivalents of $3 and $38 as of March 31, 2024 and December 31, 2023, respectively. We have incurred net losses since our inception. For the three months ended March 31, 2024 and the year ended December 31, 2023, we incurred net losses available to common stockholders of $2,160 and $29,829, respectively. At March 31, 2024, had a working capital deficit and an accumulated deficit of $16,810 and $14,937, respectively. While cash of $1,716 was provided by operating activities for the three months ended March 31, 2024, our operations used cash of $6,645 for the year ended December 31, 2023. We have generated limited revenue to date and expect to incur losses from our existing business in future periods.
Current wording
We had cash and cash equivalents of $33 and $38 as of June 30, 2024 and December 31, 2023, respectively. We have incurred net losses since our inception. For the six months ended June 30, 2024 and 2023, we incurred net losses available to common stockholders of $4,633 and $21,398, respectively. At June 30, 2024, had a working capital deficit and a total stockholders’ deficit of $20,817 and $16,167, respectively. While cash of $551 was provided by operating activities for the six months ended June 30, 2024, our operations used cash of $5,300 for the six months ended June 30, 2023. We have generated limited revenue to date and expect to incur losses from our existing business in future periods.
Previous wording
On January3, 2024, we issued to ClearThink a promissory note in the principal amount of $75, less an original issue discount of $25, and on January 30, 2024, we issued to ClearThink a promissory note in the principal amount of up to $750, less an original issue discount of $250. We receive net proceeds totaling $371 during the three months ended March 31, 2024 and $1,220 during the three months ended June 30, 2024 from the issuances of the notes payable.
Current wording
On January3, 2024, we issued to ClearThink a promissory note in the principal amount of $75, less an original issue discount of $25, on January 30, 2024, we issued to ClearThink a promissory note in the principal amount of up to $750, less an original issue discount of $250 and on May 15, 2024, we issued ClearThink a promissory note in the principal amount of $300, less an original issue discount of $100. We receive net proceeds totaling $658 during the six months ended June 30, 2024 from the issuances of the notes payable. We are in negotiations to extend the maturity date of the May 15, 2024 promissory note.
Previous wording
On April 28, 2024, we entered into a Securities Purchase Agreement with LGH pursuant to which we issued to LGH a convertible promissory note in the principal amount of $110 and 200,000 shares of our Class A Common Stock as inducement shares to LGH.
Current wording
On April 28, 2024, we entered into a Securities Purchase Agreement with LGH pursuant to which we issued to LGH a convertible promissory note in the principal amount of $110 and 200,000 shares of our Class A Common Stock as inducement shares to LGH. We received cash of $100 from the issuance of the convertible promissory note.
Previous wording
On June 12, 2024, we entered into a Securities Purchase Agreement (the “SPA”) with an institutional investor (the “Purchaser”) pursuant to which we agreed to issue to the Purchaser and subsequent purchasers who will also be parties to the SPA (the Purchaser, together with the purchasers, the “Purchasers”) Senior Notes in the aggregate principal amount of up to $2,800 (each a “Note” or, together, the “Notes”).
Current wording
On June 12, 2024, we entered into a Securities Purchase Agreement (the “SPA”) with an institutional investor (the “Purchaser”) pursuant to which we agreed to issue to the Purchaser and subsequent purchasers who will also be parties to the SPA (the Purchaser, together with the purchasers, the “Purchasers”) Senior Notes Payable in the aggregate principal amount of up to $2,800.
Previous wording
Based on our current operating plan, our cash position as of March 31, 2024, and after taking into account the actions described above, we expect to be able to fund our operations through the end of 2024. Even if our current operating plan is successful, we expect to need additional financing or other increase in our cash and cash equivalents balance to enable us to fund our future operations.
Current wording
Based on our current operating plan, our cash position as of June 30, 2024, and after taking into account the actions described above, we expect to be able to fund our operations through December 31, 2024. Even if our current operating plan is successful, we expect to need additional financing or other increase in our cash and cash equivalents balance to enable us to fund our future operations.
Previous wording
The following table summarizes our cash flow data for the three months ended March 31, 2024 and 2023 (dollars in thousands):
Current wording
The following table summarizes our cash flow data for the six months ended June 30, 2024 and 2023 (dollars in thousands):
Previous wording
Net cash provided by operating activities in the three months ended March 31, 2024 was $1,716 compared to cash of $3,360 used in operating activities in the three months ended March 31, 2023, an improvement of $5,076 or 151%. The improvement was primarily the result of the $6,033 reduction in the net loss in the three months ended March 31, 2024 compared to the prior period.
Current wording
Net cash provided by operating activities in the six months ended June 30, 2024 was $551 compared to cash of $5,300 used in operating activities in the six months ended June 30, 2023, an improvement of $5,851. The improvement was primarily the result of the $15,264 reduction in the net loss, including noncontrolling interest, in the six months ended June 30, 2024 compared to the prior period. The improvement in the six months ended June 30, 2024 was partially offset by certain noncash items in the 2023 period, including: (i) the loss from PIK Note Amendment and 2022 Debenture Release of $3,521, (ii) increased stock-based compensation of $1,486, (iii) an increase in amortization of consulting fees paid in common stock of $2,120 and (iv) impairment of assets of $2,633, among other items.
Previous wording
Investing activity in the three months ended March 31, 2024 of $2,122 was to acquire an epigenetic software APP under the KR8 Agreement. No cash was used or provided by investing activities in the three months ended March 31, 2023.
Current wording
Investing activity in the six months ended June 30, 2024 used cash of $2,381. Cash of $2,221 was used to acquire an epigenetic software APP under the KR8 Agreement and the cash of $259, net of cash acquired, was used to purchase of Myrtle. No cash was used or provided by investing activities in the three months ended June 30, 2023.
Previous wording
Net cash of $371 was provided by financing activities in the three months ended March 31, 2024 from the issuances of promissory notes to ClearThink. No cash was used or provided by financing activities in the three months ended March 31, 2023.
Current wording
Net cash of $1,825 was provided by financing activities in the six months ended June 30, 2024 from the issuances of promissory notes, including a $265 promissory note issued to RHI for the purchase of Myrtle. No cash was used or provided by financing activities in the six months ended June 30, 2023.
Previous wording
Our contractual obligations as of March 31, 2024 include:
Current wording
Our contractual obligations as of June 30, 2024 include (in thousands):
Previous wording
Our history of losses requires management to critically assess our ability to continue operating as a going concern. For the three months ended March 31, 2024, and the year ended December 31, 2023, we incurred net losses to common stockholders of $2,160 and $29,829, respectively. As of March 31, 2024, we had a working capital deficit and an accumulated deficit of $16,810 and $14,937, respectively. While cash of $1,716 was provided by operating activities for the three months ended March 31, 2024, cash of $6,645 was used in operating activities for the three months ended December 31, 2023. As of March 31, 2024, we had $3 of available cash and cash equivalents.
Current wording
Our history of losses requires management to critically assess our ability to continue operating as a going concern. For the six months ended June 30, 2024 and 2023, we incurred net losses to common stockholders of $4,633 and $21,398, respectively. As of June 30, 2024, we had a working capital deficit and a total stockholders’ deficit of $20,817 and $16,167, respectively. While cash of $551 was provided by operating activities for the six months ended June 30, 2024, cash of $5,300 was used in operating activities for the six months ended June 30, 2023. As of June 30, 2024, we had $33 of available cash and cash equivalents.
Previous wording
On June 10, 2024, the Company received an official notice of noncompliance from NYSE stating that the Company is not in compliance with NYSE American continued listing standards (the “Delinquency Notification”) due to an outstanding balance of listing fees over 180 days old and NYSE provided the Company until June 7, 2024 to provide payment before the Company would become subject to the noncompliance procedures (the “Delinquency”). The Company failed to pay the fee by June 7, 2024.
Current wording
On June 10, 2024, the Company received an official notice of noncompliance from NYSE stating that the Company is not in compliance with NYSE American continued listing standards due to an outstanding balance of listing fees over 180 days old and NYSE provided the Company until June 7, 2024 to provide payment before the Company would become subject to the noncompliance procedures. The Company failed to pay the fee by June 7, 2024, which was extended to August 9, 2024. On August 7, 2024, the Company received a letter from NYSE stating that the Company is back in compliance with the NYSE American continued listed standards pertaining to timely payment of listing fees set forth in Section 1003(f)(iv) of the NYSE American Company Guide. The letter acknowledged that the Company has paid its outstanding balance of fees.
Previous wording
On June 12, 2023, the Company received the “NYSE American Notice from NYSE Regulation stating that the Company is below compliance with Section 1003(a)(i) in the NYSE American Company Guide since the Company reported stockholders’ deficit of $30 at March 31, 2023, and losses from continuing operations and/or net losses in its two most recent fiscal years ended December 31, 2022. As required by the NYSE American Notice, on July 12, 2023, the Company the Plan to NYSE advising of actions it has taken or will take to regain compliance with the NYSE American continued listing standards by December 12, 2024, and if NYSE accepts the Plan, the Company will have until December 12, 2024 to comply with the Plan. Should the Plan not be accepted, or the Company be unable to comply with the Plan, then it may make it more difficult for the Company to raise capital and the Company will be delisted in the event it is unable to cure the noncompliance by December 12, 2024.
Current wording
On June 12, 2023, the Company received an official notice of noncompliance from NYSE Regulation stating that the Company is below compliance with Section 1003(a)(i) in the NYSE American Company Guide since the Company reported stockholders’ deficit of $30 at March 31, 2023, and losses from continuing operations and/or net losses in its two most recent fiscal years ended December 31, 2022. As required by the notice, on July 12, 2023, the Company submitted a compliance plan (the “Plan”) to NYSE advising of actions it has taken or will take to regain compliance with the NYSE American continued listing standards by December 12, 2024, and if NYSE accepts the Plan, the Company will have until December 12, 2024 to comply with the Plan. Should the Plan not be accepted, or the Company be unable to comply with the Plan, then it may make it more difficult for the Company to raise capital and the Company will be delisted in the event it is unable to cure the noncompliance by December 12, 2024.
Previous wording
However, we can provide no assurance that these actions will be successful or that additional sources of financing will be available to us on favorable terms, if at all. As such, until additional equity or debt capital is secured and we begin generating sufficient revenue, there is substantial doubt about the Company’s ability to continue as a going concern for the one-year period following the issuance of the accompanying unaudited condensed consolidated financial statements. Assuming we are successful in closing the stock exchange agreements entered into on June 10, 2024, which are more fully discussed in Note 12 to the accompanying unaudited condensed consolidated financial statements, we believe we will be able to fund our operations until the end of the fourth quarter of 2024. In any event, if we are unable to fund our operations we will be required to evaluate further alternatives, which could include further curtailing or suspending operations, selling the Company, dissolving and liquidating its assets or seeking protection under the bankruptcy laws. A determination to take any of these actions could occur at a time that is earlier than when we would otherwise exhaust our cash resources.
Current wording
However, we can provide no assurance that these actions will be successful or that additional sources of financing will be available to us on favorable terms, if at all. As such, until additional equity or debt capital is secured and we begin generating sufficient revenue, there is substantial doubt about the Company’s ability to continue as a going concern for the one-year period following the issuance of the accompanying unaudited condensed consolidated financial statements. Assuming we are successful in closing the stock exchange agreement with RHI entered into on June 10, 2024, which is more fully discussed in Note 5 to the accompanying unaudited condensed consolidated financial statements, we believe we will be able to fund our operations until the end of December 31, 2024. In any event, if we are unable to fund our operations we will be required to evaluate further alternatives, which could include further curtailing or suspending operations, selling the Company, dissolving and liquidating its assets or seeking protection under the bankruptcy laws. A determination to take any of these actions could occur at a time that is earlier than when we would otherwise exhaust our cash resources.
Rearranged current paragraphs (4)
Current report — wording carried from elsewhere
***Research and Development.***Research and development expenses were $269 for the six months ended June 30, 2024, compared to $642 for the six months ended June 30, 2023. The decrease was driven by lower employee-related expenses and professional services as well as research and development projects that are no longer ongoing, which also contributed to the period over period decrease in research and development expenses.
Current report — wording carried from elsewhere
***Management Contingent Share Plan.***Management Contingent Share Plan expenses were $41 for the six months ended June 30, 2024 compared to expense of $1,412 for the six months ended June 30, 2023. The decrease was due to more shares vesting under the plan during the 2023 period.
Current report — wording carried from elsewhere
***Selling, General and Administrative.***Selling, general and administrative expenses were $2,462 for the six months ended June 30, 2024 compared to $10,335 for the six months ended June 30, 2023. The decrease of $7,873, or 76%, was driven by the completion of a consulting agreement as we recognized $2,575 less compensation costs associated with the amortization of consulting agreements in the current period compared to the prior period. Also contributing to the decrease were lower: employee related expenses due to headcount reductions, legal fees, amortization of intangible assets and professional fees, among other items. Partially offsetting the decrease in selling, general and administrative expenses were expenses of $37 associated with Myrtle, which was acquired on June 14, 2024.
Current report — wording carried from elsewhere
The following is an analysis of our results by reportable segment for the six months ended June 30, 2024 compared to the three and six months ended June 30, 2023. The primary earnings/loss measure used for assessing reportable segment performance is earnings/loss before interest, income taxes, depreciation, amortization, and stock-based compensation. Segment income/loss by reportable segment also excludes corporate and other costs, including management, IT, and overhead costs. For further information regarding our reportable business segments, please refer to our unaudited condensed consolidated financial statements and related notes included elsewhere in this report.
Rearranged previous paragraphs (3)
Previous report — wording carried elsewhere
FOXO Labs currently recognizes revenue from providing epigenetic testing services and collecting a royalty from Illumina, Inc. related to the sales of the Infinium Mouse Methylation Array. FOXO Labs conducts research and development, and such costs are recorded within research and development expenses on the unaudited condensed consolidated statements of operations.
Previous report — wording carried elsewhere
FOXO Life primarily had residual commission revenues from its legacy insurance agency business. FOXO Life also began receiving insurance commissions from the distribution and sale of life insurance policies based on the size and type of policies sold to customers. FOXO Life costs are recorded within selling, general and administrative expenses on the consolidated statements of operations.
Previous report — wording carried elsewhere
Three Months Ended March 31, 2024 and 2023