FOXO TECHNOLOGIES INC.

Previous wording

The first agreement, as supplemented (the “Myrtle Agreement”), provided for RHI to exchange all of its equity interest in Myrtle for $0.5 million, payable in a combination of shares of the Company’s Class A Common Stock and a note payable. The closing occurred effective on June 14, 2024. The Company recorded a non-interest bearing note payable due on demand to RHI in the amount of $0.3 million and it paid the remaining purchase price of $0.2 million by issuing 1,023,629 shares of its Class A Common Stock to RHI on July 17, 2024. In addition to the $0.3 million promissory note issued to RHI for a portion of the purchase price of Myrtle, Myrtle issued a promissory note payable to RHI dated June 13, 2024, in the original principal amount of $1.6 million, which represented the amount owed to RHI by Myrtle at the time of the sale of Myrtle to the Company.

Current wording

The first agreement, as supplemented (the “Myrtle Agreement”), provided for RHI to exchange all of its equity interest in Myrtle for $0.5 million, payable in a combination of shares of the Company’s Class A Common Stock and a note payable. The closing occurred effective on June 14, 2024. The Company recorded a non-interest bearing note payable due on demand to RHI in the amount of $0.3 million and it paid the remaining purchase price of $0.2 million by issuing 51,439 shares of its Class A Common Stock to RHI on July 17, 2024. In addition to the $0.3 million promissory note issued to RHI for a portion of the purchase price of Myrtle, Myrtle issued a promissory note payable to RHI dated June 13, 2024, in the original principal amount of $1.6 million, which represented the amount owed to RHI by Myrtle at the time of the sale of Myrtle to the Company.

Previous wording

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 wording

Myrtle was formed in the second quarter of 2022 to pursue opportunities in the behavioral health sector, including substance use disorder treatment, initially in rural markets. Services are provided on either an inpatient, residential basis or an outpatient basis.

Previous wording

The second agreement with RHI, also dated June 10, 2024, (the “RCHI Agreement”) provided for the RJO to exchange all of the outstanding shares of its subsidiary RCHI, including RCHI’s wholly-owned subsidiary Scott County Community Hospital, Inc. (“SCCH”), for 20,000 shares of the Company’s to be authorized Series A Cumulative Convertible Redeemable Preferred Stock (the “Series A Preferred Stock”). Closing of the RCHI Agreement was subject to a number of conditions. On September 10, 2024, the parties to the RCHI Agreement entered into an Amended and Restated Securities Exchange Agreement (the “Amendment”) which revised the consideration payable to RHI from shares of Series A Preferred Stock to $100. In addition, RCHI issued to the RHI a senior secured note in the principal amount of $22.0 million the “RCHI Note”). The RCHI Note matured on September 10, 2026 and accrued interest on any outstanding principal amount at the rate of 8% per annum for the first six months, increasing to 12% per annum thereafter. After maturity, interest accrued at a rate of 20% per annum. The RCHI Note required principal repayments equal to 10% of the free cash flow (net cash from operations less capital expenditures) from RCHI and SCCH.

Current wording

The second agreement with RHI, also dated June 10, 2024, (the “RCHI Agreement”) provided for the RHI to exchange all of the outstanding shares of its subsidiary RCHI, including SCCH, for 20,000 shares of the Company’s to be authorized Series A Preferred Stock. On September 10, 2024, the parties to the RCHI Agreement entered into an Amended and Restated Securities Exchange Agreement (the “Amendment”) which revised the consideration payable to RHI from shares of Series A Preferred Stock to $100. In addition, RCHI issued to the RHI a senior secured note in the principal amount of $22.0 million the “RCHI Note”) (subject to adjustment). The RCHI Note had a maturity date of September 10, 2026 and accrued interest on any outstanding principal amount at the rate of 8% per annum for the first six months, increasing to 12% per annum thereafter. After maturity, interest accrued at a rate of 20% per annum. The RCHI Note required principal repayments equal to 10% of the free cash flow (net cash from operations less capital expenditures) from RCHI and SCCH.

Previous wording

The RCHI Note was guaranteed by the Company and SCCH, pursuant to the terms of a Guaranty Agreement (the “Guaranty”). The RCHI Note was also secured by the assets of RCHI and Scott County pursuant to a Security and Pledge Agreement (the “RCHI Pledge Agreement”) and by the “Collateral” owned by the Company as provided in the Security and Pledge Agreement with FOXO (the “FOXO Pledge Agreement”). The Amendment also provided that RHI may at any time request that the Company seek approval of its shareholders of the issuance of its Class A Common Stock upon conversion in full of the shares of the Company’s Series A Preferred Stock issuable upon exchange of the RCHI Note. At any time after receipt of such approval, RHI had the option to exchange, in whole or in part, the RCHI Note for shares of the Company’s Series A Preferred Stock. Upon any such exchange, RHI would receive the equivalent of $1.00 stated value of the Company’s Series A Preferred Stock for each $1.00 of the aggregate of principal and accrued and unpaid interest, liquidated damages and/or redemption proceeds (or any other amounts owing under the RCHI Note) being exchanged. On December 5, 2024, the Company and RCHI entered into an Exchange Agreement (the “Exchange Agreement”) with RHI. Pursuant to the Exchange Agreement, $21.0 million of the principal balance of the RCHI Note was exchanged for 21,000 shares of the Company’s Series A Preferred Stock with a stated value of $21.0 million. Upon the closing of the Exchange Agreement, RCHI executed a senior secured promissory note payable to RHI (the “New RCHI Note”) in the principal amount of $1.0 million, with similar terms to the RCHI Note.

Current wording

The RCHI Note was guaranteed by the Company and SCCH, pursuant to the terms of a Guaranty Agreement (the “Guaranty”). The RCHI Note was also secured by the assets of RCHI and Scott County pursuant to a Security and Pledge Agreement (the “RCHI Pledge Agreement”) and by the “Collateral” owned by the Company as provided in the Security and Pledge Agreement with FOXO (the “FOXO Pledge Agreement”). The Amendment also provided that RHI may at any time request that the Company seek approval of its shareholders of the issuance of its Class A Common Stock upon conversion in full of the shares of the Company’s Series A Preferred Stock issuable upon exchange of the RCHI Note. At any time after receipt of such approval, RHI had the option to exchange, in whole or in part, the RCHI Note for shares of the Company’s Series A Preferred Stock. Upon any such exchange, RHI would receive the equivalent of $1.00 stated value of the Company’s Series A Preferred Stock for each $1.00 of the aggregate of principal and accrued and unpaid interest, liquidated damages and/or redemption proceeds (or any other amounts owing under the RCHI Note) being exchanged. On December 5, 2024, the Company and RCHI entered into an Exchange Agreement (the “Exchange Agreement”) with RHI. Pursuant to the Exchange Agreement, $21.0 million of the principal balance of the RCHI Note was exchanged for 21,000 shares of the Company’s Series A Preferred Stock with a stated value of $21.0 million. Upon the closing of the Exchange Agreement, RCHI executed a senior secured promissory note payable to RHI (the “New RCHI Note”) in the principal amount of $1.0 million, with similar terms to the RCHI Note. At December 31, 2025, the New RCHI Note is in default and the Company is in discussions with RHI about extending the maturity date of the note.

Previous wording

Termination of Employment, Settlement and Mutual Release Agreement

Current wording

Amended Service Agreement and Termination of Employment, Settlement and Mutual Release Agreement

Previous wording

On July 25, 2024, we entered into an amended Services Agreement with Mark White (the “Services Agreement”).

Current wording

On July 25, 2024, we entered into an amended Services Agreement with Mark White, our former interim chief executive officer, (the “Services Agreement”).

Previous wording

On December 6, 2024, we entered into the Termination Agreement with Kr8 ai Inc., a Nevada corporation controlled my Messrs. White and Ward (“KR8”), pursuant to which 3,000 shares of our Series D Preferred Stock (as defined below) (the “KR8 Shares”) were issued to KR8 as full and final satisfaction of approximately $3.0 million owed to KR8 and the Master Software and Services Agreement with KR8 dated January 12, 2024, as amended (the “MSSA”), was terminated (the “KR8 Termination Agreement”). The Series D Preferred Stock have no voting rights and conversion to common stock by KR8 is subject to relevant approvals from NYSE and shareholders. The Termination Agreement closed on December 6, 2024. Effective December 6, 2024, the Company and KR8 entered into Amendment No. 1 to the KR8 Termination Agreement, which clarifies that the KR8 Termination Agreement did not terminate the MSSA but terminated the financial obligations of the Company under the MSSA.

Current wording

On December 6, 2024, we entered into the Termination Agreement with KR8, pursuant to which 3,000 shares (the “KR8 Shares”) of our Series D Cumulative Convertible Redeemable Preferred Stock (“Series D Preferred Stock”) were issued to KR8 as full and final satisfaction of approximately $3.0 million owed to KR8 and the Master Software and Services Agreement with KR8 dated January 12, 2024, as amended (the “MSSA”), was terminated (the “KR8 Termination Agreement”). The Series D Preferred Stock have no voting rights and conversion to common stock by KR8 is subject to relevant approvals from NYSE and shareholders. The Termination Agreement closed on December 6, 2024. Effective December 6, 2024, the Company and KR8 entered into Amendment No. 1 to the KR8 Termination Agreement, which clarifies that the KR8 Termination Agreement did not terminate the MSSA but terminated the financial obligations of the Company under the MSSA.

Previous wording

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 BSF’s 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 complements the existing residential rehabilitation and detoxification services offered at Myrtle. On April 11, 2023, Myrtle sold shares of its common stock equivalent to a 1.961% ownership stake in the subsidiary for de minimis value to an unaffiliated individual licensed as a physician in Tennessee. The shares have certain transfer restrictions, including the right of the subsidiary to transfer the shares to another physician licensed in Tennessee for de minimis value. The shares were sold to the individual for Tennessee healthcare regulatory reasons

Current wording

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 BSF’s 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 OBOT. The OBOT is located adjacent to Myrtle’s alcohol and drug treatment facility in Oneida, Tennessee and complements the existing residential rehabilitation and detoxification services offered at Myrtle. On April 11, 2023, Myrtle sold shares of its common stock equivalent to a 1.961% ownership stake in the subsidiary for de minimis value to an unaffiliated individual licensed as a physician in Tennessee. The shares have certain transfer restrictions, including the right of the subsidiary to transfer the shares to another physician licensed in Tennessee for de minimis value. The shares were sold to the individual for Tennessee healthcare regulatory reasons

Previous wording

We plan to grow this division by acquisition and investment in new operations in targeted areas.

Current wording

We plan to grow this division by expansion of services at its BSF campus and acquisitions in targeted areas.

Previous wording

In response to changing conditions and feedback from the market, including growing demand for direct-to-consumer wellness testing and epigenetic data analysis tools, we are shifting our strategic focus away from selling life insurance products through our MGA Model and concentrating efforts on: (1) our Bioinformatics Services offering, a suite of bioinformatic tools to help researchers process, analyze, and interpret epigenetic data (see “Bioinformatics Services” below for more information); and (2) research and development in the fields of health and wellness testing powered by machine learning and artificial intelligence (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). To further these goals, we intend to leverage the extensive epigenetic data we have generated in our clinical trials and the expertise of our team and continue building strategic alliances with new partners in academia, business, healthcare and government. We also intend to frequently evaluate and develop commercialization opportunities for our product and service offerings and our research findings.

Current wording

We believe there is growing demand for direct-to-consumer wellness testing and epigenetic data analysis tools and are concentrating efforts on: (1) our Bioinformatics Services offering, a suite of bioinformatic tools to help researchers process, analyze, and interpret epigenetic data; and (2) research and development in the fields of health and wellness testing powered by machine learning and artificial intelligence (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). To further these goals, we intend to leverage the extensive epigenetic data we have generated in our clinical trials and the expertise of our team and continue building strategic alliances with new partners in academia, business, healthcare and government. We also intend to frequently evaluate and develop commercialization opportunities for our product and service offerings and our research findings.

Previous wording

Healthcare generates revenues from hospital and ancillary services as well as substance abuse treatments, including inpatient and outpatient services. 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. Life primarily had residual commission revenues from its legacy insurance agency business.

Current wording

Healthcare generates revenues from hospital and ancillary services as well as substance abuse treatments, including inpatient and outpatient services. Life Science Services generates revenues from sales of biological materials, such as blood and urine to the pharmaceutical and biotechnology research sectors. Labs currently recognizes revenues from collecting a royalty from Illumina, Inc. related to the sales of the Infinium Mouse Methylation Array.

Previous wording

***Direct Costs of Revenues.***Direct costs of revenues were $2.5 million for the year ended December 31, 2024, compared to $0.1 million of direct costs of revenues for the year ended December 31, 2023. The increase resulted from the direct costs of Myrtle and RCHI, which were acquired on June 14, 2024 and September 10, 2024, respectively.

Current wording

***Direct Costs of Revenues.***Direct costs of revenues were $8.3 million for the year ended December 31, 2025, compared to $2.5 million of direct costs of revenues for the year ended December 31, 2024. Myrtle’s direct costs of revenues were $1.2 million, RCHI’s were $7.0 million and Vector’s were $0.1 million for the year ended December 31, 2025. Myrtle was acquired on June 14, 2024, RCHI was acquired on September 10, 2024 and Vector was acquired on September 19, 2025. Myrtle’s and RCHI’s direct costs for the year ended December 31, 2024 were $0.4 million and $2.1 million respectively.

Previous wording

***Research and Development.***Research and development expenses were $0.3 million or the year ended December 31, 2024, compared to $0.9 million for the year ended December 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.

Current wording

***Research and Development.***Research and development expenses were $0.2 million or the year ended December 31, 2025, compared to $0.3 million for the year ended December 31, 2024. The decrease was due to research and development projects that were paused or that are no longer ongoing.

Previous wording

***Management Contingent Share Plan.***During the years ended December 31, 2024 and 2023, forfeitures of 12,334 and 419,132 unvested shares previously granted under the Management Contingent Share Plan resulted in a reduction of compensation expense under the plan of $0.1 million and $0.7 million, respectively.

Current wording

***Management Contingent Share Plan.***During the years ended December 31, 2025 and 2024, forfeitures of 168 and 620 unvested shares, respectively, that were previously granted under the Management Contingent Share Plan resulted in a net decrease of compensation expense under the plan of ($0.2) million and ($0.1) million, respectively.

Previous wording

Impairments of Intangible Assets and Cloud Computing Arrangements. During the year ended December 31, 2024 and 2023, total impairment losses were $1.8 million and $2.6 million, respectively. The impairment loss recorded for 2024 were $1.7 million for the Epigenetic APP and $0.2 for the methylation pipeline asset and for 2023 were $0.6 million for an underwriting API intangible asset, $0.6 million for a longevity API intangible asset and $1.4 million for cloud computing arrangements, that is, a digital insurance platform. In December of 2024, the Company determined that the projected cash flows could no longer support the Epigenetic APP and the methylation pipeline asset. In June of 2023, management no longer forecasted positive cash flows from the longevity report, underwriting report or digital insurance platform. For the longevity report, the Company sold the associated product at cost. For the underwriting report, the Company no longer expected sales during the amortization period. For the digital insurance platform, the manner in which the asset was used, and the corresponding cash flows no longer supported the asset.

Current wording

Impairments of Intangible Assets. During the years ended December 31, 2025 and 2024, total impairment losses were $0 million and $1.8 million, respectively. The impairment loss recorded for 2024 consisted of $1.7 million for the Epigenetic APP and $0.2 for the methylation pipeline asset. In December 2024, the Company determined that the projected cash flows could no longer support the Epigenetic APP and the methylation pipeline asset.

Previous wording

***Change in Fair Value of Warrant Liability.***The fair value of the warrant liability decreased by $32,425 for the year ended December 31, 2024, compared to an increase in fair value of $0.3 million for the year ended December 31, 2023. The change was attributable to a reduction in the quoted price of the Public Warrants at December 31 2024 versus 2023, The warrants are listed on the OTC Pink Marketplace.

Current wording

***Change in Fair Value of Warrant Liability.***The fair value of the warrant liability decreased by $41,246 and increased by $32,425 for the years ended December 31, 2025 and 2024, respectively. The changes in the fair values were due primarily to the changes in the quoted prices of the Public Warrants on the OTC Pink Marketplace.

Previous wording

***Loss from Extinguishments of Debt.***We exchanged $2.2 million of notes payable and $1.1 million of accounts payable for $3.7 million of stated value of our preferred stock resulting in a loss from extinguishments of debt of $0.4 million during the year ended December 31, 2024

Current wording

***Gain (Loss) from Extinguishment of Debt.***During the year ended December 31, 2025, we exchanged $5.4 million of Senior PIK Notes, which included $1.9 million of accrued interest, for $3.5 million of stated value of our Series B Cumulative Convertible Redeemable Preferred Stock (“Series B Preferred Stock”) resulting in a gain of $1.9 million. The loss from extinguishment of debt for the year ended December 31, 2024 of $0.4 million, resulted from the exchange of $2.2 million of notes payable and $1.1 million of accounts payable for $3.7 million of stated value of our preferred stock.

Previous wording

***Non-Operating (Expenses) Income, Net.***Non-operating expenses, net were $0.3 million for the year ended December 31, 2024, compared to non-operating income, net of $18,832 for the year ended December 31, 2023. The non-operating expenses, net in 2024 were attributable to $0.3 million of penalties and interest for nonpayment of payroll taxes, a $0.1 million loss on legal settlement, partially offset by cafeteria income of $0.1 million.

Current wording

***Other Non-Operating Expenses, Net.***Other non-operating expenses, net were $0.9 million for the year ended December 31, 2025, compared to other non-operating expenses, net of $0.3 million for the year ended December 31, 2024. The non-operating expenses, net in 2025 resulted primarily from $0.8 million of penalties and interest for nonpayment of payroll taxes, an $0.1 million of additional purchase price consideration for RCHI, partially offset by hospital cafeteria income of $0.2 million, among other items. The non-operating expenses, net in 2024 were attributable to $0.3 million of penalties and interest for nonpayment of payroll taxes, a $0.1 million loss on legal settlement, partially offset by cafeteria income of $0.1 million.

Previous wording

***Net Loss Attributable to FOXO.***Net loss attributable to FOXO was $12.4 million for the year ended December 31, 2024 compared to a loss of $26.5 million for the year ended December 31, 2023. The improvement was primarily related to a decrease in the loss from operations of $14.4 million for the year ended December 31, 2024 compared to the year ended December 31, 2023. Also, contributing to the improvement in 2024 compared to 2023 was the $3.5 million loss from PIK Note Amendment and debenture release in 2023. Partially offsetting the improvement in 2024 was an increase in interest expense of $2.8 million in the year ended December 31, 2024 compared to 2023. Additionally, we recorded $1.1 million of deemed dividends from the trigger of the down round provisions and the extension of the Assumed Warrants and the issuance of preferred stock in the year ended December 31, 2024 compared to deemed dividends of $3.4 million related to the Exchange Offer and the trigger of the down round provisions of the Assumed Warrants during the year ended December 31, 2023. The deemed dividends resulted in net loss to common stockholders of $13.5 million and $29.8 million for the years ended December 31, 2024 and 2023, respectively.

Current wording

***Net Loss Attributable to FOXO.***Net loss attributable to FOXO was $12.4 million for the year ended December 31, 2025 compared to a net loss attributable to FOXO of $12.4 million for the year ended December 31, 2024. The loss from operations was $10.3 million and $7.8 million for the years ended December 31, 2025 and 2024, respectively, or an increase of $2.5 million due primarily to the $7.0 million goodwill impairment in 2025 compared to an intangible asset impairment of $1.8 million in 2024. Excluding these asset impairments, the loss from operations decreased by $2.7 million for the year ended December 31, 2025 compared to 2024, which we attribute primarily to the $3.5 million of THIP net revenues recorded in the year ended December 31, 2025. Partially offsetting the net loss attributable to FOXO in the year ended December 31, 2025 was the $1.9 million gain from extinguishment of Senior PIK Notes in the 2025 period, compared to a loss from extinguishments of debt of $0.4 million in the 2024 period, a decrease of interest expense of $0.5 million and the gain from the change in fair value of warrants of $41,246 in 2025 period, partially offset by an increase in other non-operating expenses, net of $0.5 million in the year ended December 31, 2025 compared to 2024. We recorded deemed dividends in the year ended December 31, 2025 of $21.7 million resulting primarily from decreases in the floor conversion prices of our convertible preferred stock from floors ranging from $0.01 to $0.995 per share to $0.0001 per share. Deemed dividends in the year ended December 31, 2025 also resulted from the issuances of preferred stock, the conversion of and anti-dilution provisions of our Series C Cumulative Convertible Redeemable Preferred Stock (“Series C Preferred Stock”) and the triggers of the down-round provisions of the Assumed Warrants compared to deemed dividends of $1.1 million related to the triggers of the down-round provisions and extension of the Assumed Warrants during year ended December 31, 2024. The deemed dividends resulted in a net loss to common stockholders of $34.1 million and $13.5 million for the years ended December 31, 2025 and 2024, respectively.

Previous wording

***Net revenues.***Net revenues were $4.0 million for the year ended December 31, 2024 and represent the net revenue of Myrtle of $0.6 million and the net revenue of RCHI of $3.4 million. Myrtle was acquired on June 14, 2024 and of RCHI was acquired on September 10, 2024. Our healthcare segment began with the acquisition of Myrtle.

Current wording

***Net Revenues.***Net revenues were $16.1 million for the year ended December 31, 2025 and include Myrtle’s net revenues of $2.2 million and RCHI’s net revenues of $13.9 million. Net revenues for the year ended December 31, 2024 of $4.0 million represent $0.6 million net revenues of Myrtle and $3.4 million net revenues of RCHI. Myrtle was acquired on June 14, 2024 and RCHI was acquired on September 10, 2024. Our healthcare segment began with the acquisition of Myrtle. The net revenues of RCHI for the year ended December 31 2025 included $3.5 million of net revenues from the THIP.

Previous wording

***Segment Loss.***Segment Loss was $1.7 million for the year ended December 31, 2024 and represents the losses of Myrtle and RCHI.

Current wording

Segment Loss. Segment loss was $0.1 million for the year ended December 31, 2025 and represents the loss from Vector.

Previous wording

We had cash and cash equivalents of $68,268 and $38,116 as of December 31, 2024 and December 31, 2023, respectively. We have incurred net losses since our inception. For the years ended December 31, 2024 and 2023, we incurred net losses to common stockholders of $13.5 million and $29.8 million, respectively. As of December 31, 2024, we had a working capital deficit of $29.8 million. We expect to incur additional losses in future periods. Our current revenue is not adequate to fund our operations in the next twelve months and requires us to fund our business through other avenues until the time we achieve adequate scale. Securing additional capital is necessary to execute our business strategy.

Current wording

We had cash and cash equivalents of $207,453 and $68,268 as of December 31, 2025 and 2024, respectively. We have incurred net losses since our inception. For the years ended December 31, 2025 and 2024, we incurred net losses attributable to FOXO of $12.4 million and $12.4 million, respectively. As of December 31, 2025, we had a working capital deficit of $25.5 million. Cash used in operations was $3.9 million and $2.8 million in the years ended December 31, 2025 and 2024, respectively. We expect to incur additional losses in future periods. Our current revenue and operating cash flow is not adequate to fund our operations for the next twelve months and requires us to fund our business through other sources until the time we achieve adequate scale. Securing additional capital is necessary to execute our business strategy.

Previous wording

During the fourth quarter of 2023, we entered into the Strata Purchase Agreement with ClearThink, as supplemented by that certain Supplement to Strata Purchase Agreement, dated as of October 13, 2023, by and between us and ClearThink. During the fourth quarter of 2023, we completed two tranches of private placements under the terms of the Strata Purchase Agreement with ClearThink that provided gross proceeds of $0.2 million and $0.3 million. After deducting finder’s fees and other offering expenses, the net proceeds from the private placements were $0.2 million and $0.2 million. On August 13, 2024, we entered into Amendment No. 1 to the Strata Purchase Agreement pursuant to which the commitment amount was increased from $2.0 million to $5.0 million.

Current wording

During the fourth quarter of 2023, we entered into the Strata Purchase Agreement with ClearThink, as supplemented by that certain Supplement to Strata Purchase Agreement, dated as of October 13, 2023, by and between us and ClearThink. On August 13, 2024, we entered into Amendment No. 1 to the Strata Purchase Agreement pursuant to which the commitment amount was increased from $2.0 million to $5.0 million. On May 15, 2025, we amended and restated the Strata Purchase Agreement to extend the maturity date to June 30, 2026 and improve and simplify the Purchase Price to define the price per share of Common Stock purchased shall equal 90% of the average of the two (2) lowest daily VWAP during the Valuation Period. To utilize this Agreement and access funding from the equity line of credit described, the Company was required to obtain an effective registration statement, which was obtained on February 11, 2026. Despite having an effective registration statement, we have not been able to access the operating capital available under the Strata Purchase Agreement because current market conditions, including the low trading price and limited trading volume of our Class A Common Stock, have prevented us from satisfying the contractual conditions required for puts under the agreement.

Previous wording

As of December 31, 2024, we had outstanding Senior PIK Notes Payable in the amount of $5.3 million. The Senior PIK Notes Payable were issued during 2022. During the year ended December 31, 2024, we issued to third parties 17 promissory notes with principal balances totaling $5.0 million and we received net cash proceeds from the issuances totaling $4.1 million. During the year ended December 31, 2024, we exchanged $2.2 million of the promissory notes issued in 2024 for 2,464 shares of our Series A Preferred Stock with a stated value of $1,000 per share. In addition, during the year ended December 31, 2024, $0.6 million of the principal balances of three of the promissory notes issued during 2024 and $61,745 of associated accrued interest were converted into 2.1 million shares of our Class A Common Stock pursuant to the conversion terms of such notes. At December 31, 2024, $2.1 million of the outstanding principal balance of six promissory notes were convertible into 2.9 million shares of our Class A Common Stock per the terms of the securities purchase agreement entered into in connection with the notes. Two other promissory notes outstanding at December 31, 2024, were convertible but only in the event of an event of default as that term is defined in the applicable agreements. In addition, at December 31, 2024, as part of the RCHI acquisition, we assumed a note a payable with Western Healthcare, LLC (the “Western Note Payable”) in the principal amount of $0.6 million As of December 31, 2024, the total principal balance of third-party promissory notes payable as presented on the consolidated balance sheet is $7.3 million, which is net of $0.7 million of debt discounts.

Current wording

During the year ended December 31, 2024, we issued to third parties 17 promissory notes with principal balances totaling $5.0 million and one-time interest expense totaling $0.1 million and we received net cash proceeds from the issuances totaling $4.1 million. During the year ended December 31, 2024, we exchanged $2.2 million of the promissory notes issued in 2024 for 2,464 shares of our Series A Preferred Stock with a stated value of $1,000 per share. In addition, during the year ended December 31, 2024, $0.6 million of the principal balances of three of the promissory notes issued during 2024 and $61,745 of associated accrued interest were converted into 104,564 shares of our Class A Common Stock pursuant to the conversion terms of such notes.

Previous wording

In February 2025, the Western Note Payable was sold to a new holder and it was amended and restated. Per the terms of the amendment and restatement, the principal balance of the note, which includes previously accrued interest expense, is $1.1 million, the maturity date is February 26, 2026 and the note is convertible into shares of the Company’s Class A Common Stock at a conversion price equal to 90% of the average VWAP for the five trading days prior to conversion.

Current wording

During the year ended December 31, 2025, we entered into 13 third party promissory notes with principal balances totaling $3.1 million and one-time interest expense totaling $0.2 million and we received net cash of $1.7 million. In addition, in February 2025, the Western Note Payable (the “Western Note”), which we assumed when we acquired SCCH, was sold to a new third party holder, Western Healthcare LLC, and it was amended and restated. Per the terms of the amendment and restatement, the principal balance of the note, which included previously accrued interest expense, totaled $1.1 million, the maturity date was February 26, 2026 and the note was convertible into shares of the Company’s Class A Common Stock at a conversion price equal to 90% of the average VWAP for the five trading days prior to conversion. During the year ended December 31, 2025, the third party paid Western approximately 50% of the debt owed, and we issued 0.3 million shares of our Class A Common Stock upon conversions of $0.5 million principal balance of the Western Note. The Western Note is currently in default as the third party failed to make further payments to Western Healthcare LLC and it is probable that no further conversions of the principal balance into shares of our Class A common stock will take place. In addition to the conversion of the Western Note discussed above, during the year ended December 31, 2025, $2.4 million of principal balance of the third-party notes issued in 2025 and 2024, and including accrued interest, were converted and/or exchanged into 535.6 million shares of our Class A Common Stock.

Previous wording

Each of these notes is more fully discussed in the footnotes to the consolidated financial statements presented elsewhere in this Annual Report.

Current wording

As of December 31, 2025, the total principal balance of third-party promissory notes payable was $2.2 million, which was net of $0.1 million of debt discounts. In addition, $0.2 million of accrued interest was owed on these notes. Each of these notes is more fully discussed in the footnotes to the consolidated financial statements presented elsewhere in this Annual Report.

Previous wording

***Interest Expense.***Interest expense was $3.9 million for the year ended December 31, 2024 compared to $1.1 million for the year ended December 31, 2023. The increase was attributable to the increase in notes payable during 2024. We issued 17 third party promissory notes and two interest-bearing related party promissory notes during 2024.

Current wording

Related Party Promissory Notes and Loans Payable

Previous wording

On September 10, 2024, we issued a note payable due on September 10, 2026 to RHI in the principal amount of $22.0 million for the purchase of RCHI. During December, 2024, we exchanged $21.0 million of the promissory note owed to RHI for 21,000 shares of our Series A Preferred Stock with a stated value of $1,000 per share and we issued to RHI a new promissory note in the principal amount of $1.0 million due on June 5, 2025.

Current wording

On September 10, 2024, we issued a note payable that had a maturity date of September 10, 2026 to RHI in the principal amount of $22.0 million for the purchase of RCHI. During December, 2024, we exchanged $21.0 million of the promissory note owed to RHI for 21,000 shares of our Series A Preferred Stock with a stated value of $1,000 per share and we issued to RHI a new promissory note in the principal amount of $1.0 million due on June 5, 2025. At December 31, 2025, the note is in default and the Company is in discussions with RHI about extending the maturity date of the note which extension we expect to receive. During the year ended December 31, 2025, we issued an additional note payable to RHI in the principal amount of $6.0 million for additional purchase price consideration for the purchase of RCHI, of which $5.0 million was exchanged for 5,000 shares of our Series A Preferred Stock with a stated value of $1,000 per share on August 18, 2025 leaving an additional note due to RHI at December 31, 2025 of $1.0 million. During the fourth quarter of 2025, we issued a $0.1 million loan to RHI for an additional purchase price consideration for the purchase of RCHI.

Previous wording

In addition, we have outstanding a note payable to RHI in the amount of $0.3 million for the purchase of Myrtle, a note payable to RHI for the amount owed by Myrtle to RHI on the date that we acquired Myrtle, which balance has been reduced to $0.6 million as of December 31, 2024, and we have outstanding at December 31, 2024, three additional promissory notes payable to related parties totaling $0.8 million.

Current wording

In addition, to the two notes discussed in the paragraph above, we have outstanding at December 31, 2025: (i) a note payable to RHI in the amount of $264,565 for the purchase of Myrtle; (ii) a note payable to RHI in the original amount of $1.6 million, which was the amount owed by Myrtle to RHI on the date that we acquired Myrtle, which balance was $1.4 million as of December 31, 2025; (iii) a note payable to RHI in the amount of $0.3 million for working capital purposes; and (iv) we have outstanding at December 31, 2025, three additional promissory notes payable to related parties totaling $0.8 million. The total amount of notes and loans payable owed to RHI and its subsidiaries from the Company and its subsidiaries at December 31, 2025 was $4.1 million.

Previous wording

In addition to the issuances of Series A Preferred Stock for the exchange of third party and RHI notes payable as discussed above, during the year ended December 31, 2024, we issued 120 shares of our Series C Preferred Stock with a stated value of $1,000 per share for net cash proceeds of $0.1 million and we issued 4,311.7 shares of our Series D Preferred Stock with a stated value of $1,000 per share for $4.2 million of accounts payable and accrued expenses. During December 2024, 924 shares of our Series A Preferred Stock were converted into 3.6 million shares of our Class A Common Stock.

Current wording

In addition to the issuances of shares of Series A Preferred Stock for the exchange of third party and RHI notes payable as discussed above, during the year ended December 31, 2024, we issued 120 shares of our Series C Preferred Stock with a stated value of $1,000 per share for net cash proceeds of $0.1 million and we issued 4,311.7 shares of our Series D Preferred Stock with a stated value of $1,000 per share for $4.2 million of accounts payable and accrued expenses. During December 2024, 924 shares of our Series A Preferred Stock were converted into 179,563 shares of our Class A Common Stock.

Previous wording

Our primary uses of cash are to fund our operations as we continue to grow our business, as well as to service our debt. We finalized the acquisition of Myrtle on June 14, 2024 and the acquisition of RCHI on September 10, 2024. We are expecting the Myrtle and RCHI businesses to produce a small cash flow surplus through 2025. Capital expenditures have historically not been material to our consolidated operations, and we do not anticipate making material capital expenditures in 2025 unless we secure additional capital to expand the current operations. We expect that our liquidity requirements will continue to consist of working capital, including payments of outstanding debt and accrued liabilities and general corporate expenses associated with the growth of our business. Based on the size of our current operations, we do not have sufficient capital to fund our corporate overhead for at least 12 months from the date hereof. We expect to address our liquidity needs through the pursuit of additional funding through a combination of equity or debt financing and additional strategic acquisitions that we expect will contribute positive cash flow to enable us to fund our operations. Completing such acquisitions requires significant additional capital that has not yet been secured.

Current wording

Our primary uses of cash are to fund our operations as we continue to grow our business, as well as to service our debt. We closed the acquisition of Myrtle on June 14, 2024, the acquisition of RCHI on September 10, 2024 and the acquisition of Vector on September 19, 2025. Capital expenditures have historically not been material to our consolidated operations, and we do not anticipate making material capital expenditures over the next 12 months unless we secure additional capital to expand the current operations. We expect that our liquidity requirements will continue to consist of working capital, including payments of outstanding debt and accrued liabilities and general corporate expenses associated with the growth of our business. Based on the size of our current operations, we do not have sufficient capital to fund our corporate overhead for at least 12 months from the date hereof. We expect to address our liquidity needs through the pursuit of additional funding through a combination of equity or debt financing and additional strategic acquisitions that we expect will contribute to positive cash flow to enable us to fund our operations. Completing such acquisitions requires significant additional capital that has not yet been secured.

Previous wording

We have taken various actions to bolster our cash position, including raising funds through the private placements and the issuances of promissory notes, and conserving cash by issuing shares of our Preferred Stock and shares of our Class A Common Stock under exchange agreements, license agreements, legal settlements, consulting agreements, finder’s fees related to equity and debt financing and consulting agreements, among other transactions, as an alternative to paying in cash.

Current wording

We have taken various actions to bolster our cash position, including raising funds through the private placements and the issuances of promissory notes and other loans, and conserving cash by issuing shares of our preferred stock and shares of our Class A Common Stock under exchange agreements, license agreements, legal settlements, consulting agreements, finder’s fees related to equity and debt financing and consulting agreements, among other transactions, as an alternative to paying in cash.

Previous wording

Based on our current operating plan, our cash position as of December 31, 2024, and after taking into account the actions described above, we do not expect to be able to fund our operations through 2025 without the need for additional financing or other increases 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 December 31, 2025, and after taking into account the actions described above, we do not expect to be able to fund our operations through the twelve months ended December 31, 2026 without the need for additional financing or other increases in our cash and cash equivalents balances to enable us to fund our future operations.

Previous wording

Net cash provided by financing activities for the year ended December 31, 2024 was $2.9 million compared to $1.2 million for the year ended December 31, 2023. Net cash provided by financing activities for the year ended December 31, 2024, included $4.1 million from the issuances of third party notes payable and $0.1 million from the issuance of preferred stock, partially offset by $1.0 million paid on related party notes payable, $0.3 million of payments on other loans, among other items. Net cash provided by financing activities for the year ended December 31, 2023, included $1.2 million from private placements and $0.3 million from related parties’ promissory notes/payables, partially offset by $0.3 million of deferred offering costs.

Current wording

Net cash provided by financing activities for year ended December 31, 2025 was $4.7 million compared to $2.9 million for the year ended December 31, 2024. Net cash provided by financing activities for the year ended December 31, 2025, included $3.1 million from the issuances of preferred stock, $1.7 million from the issuances of third party notes payable, $3.8 million from related party notes payable, and $0.3 million from other loans, partially offset by $2.1 million of payments of related party notes payable, $0.5 million of payments on other loans and $1.7 million of payments of third party notes payable. Net cash provided by financing activities for the year ended December 31, 2024, included $4.1 million from the issuances of third-party notes payable and $0.1 million from the issuance of preferred stock, partially offset by $1.0 million paid on related party notes payable, $0.3 million of payments on other loans, among other items.

Previous wording

During the year ended December 31, 2024, estimated contractual allowances and implicit price concessions of $18.6 million have been recorded as reductions to revenues and accounts receivable balances to enable the Company to record its revenues and accounts receivable at the estimated amounts it expects to collect. As required by Topic 606, after estimated contractual allowances and implicit price concessions to the health care segment’s revenues for the year ended December 31, 2024, the Company recorded healthcare net revenues of $4.1 million. Myrtle and SCCH were acquired on June 14, 2024 and September 10, 2024, respectively, thus no revenues were recorded related to the healthcare segment in the year ended December 31, 2023.

Current wording

During the years ended December 31, 2025 and 2024, estimated contractual allowances and implicit price concessions of $70.0 million and $18.6 million, respectively, have been recorded as reductions to revenues and accounts receivable balances to enable the Company to record its revenues and accounts receivable at the estimated amounts it expects to collect. As required by Topic 606, after estimated contractual allowances and implicit price concessions to the health care segment’s revenues for the years ended December 31, 2025 and 2024, the Company recorded healthcare net revenues of $16.1 million and $4.0 million, respectively. Myrtle and SCCH were acquired on June 14, 2024 and September 10, 2024, respectively.

Previous wording

In 2022, we offered equity-based compensation to employees and nonemployees in the form of stock options and restricted stock. We measure and recognize all equity-based payments to employees, service providers and board members at fair value. The cost of services received from employees and non-employees in exchange for awards of equity instruments is recognized in the consolidated statements of operations based on the estimated fair value of those awards on the grant date or reporting date, if required to be remeasured, and amortized on a straight-line basis over the requisite service period. We recognize forfeitures as incurred. We utilize a Black-Scholes valuation model to estimate the fair value of stock options and this model requires the input of assumptions, including the exercise price, volatility, expected term, discount rate, and the fair value of the underlying membership or stock on the date of grant. These inputs are provided at the grant date for an equity classified award and each measurement date for a liability classified award. Equity-based compensation awards are considered granted (i) when there is a mutual understanding of key terms, (ii) we are contingently obligated to issue the options, and (iii) the option holder begins to benefit or be adversely impacted by changes in our stock price. This primarily occurs at the time the stock option agreements are executed. The fair value of each stock option is estimated using a Black-Scholes valuation model while considering the respective rights of each type of stockholder. We did not grant stock options during the years ended December 31, 2024 and 2023, however, we had significant forfeitures during those years.

Current wording

In 2022, we offered equity-based compensation to employees and nonemployees in the form of stock options and restricted stock. We measure and recognize all equity-based payments to employees, service providers and board members at fair value. The cost of services received from employees and non-employees in exchange for awards of equity instruments is recognized in the consolidated statements of operations based on the estimated fair value of those awards on the grant date or reporting date, if required to be remeasured, and amortized on a straight-line basis over the requisite service period. We recognize forfeitures as incurred. We utilize a Black-Scholes valuation model to estimate the fair value of stock options and this model requires the input of assumptions, including the exercise price, volatility, expected term, discount rate, and the fair value of the underlying membership or stock on the date of grant. These inputs are provided at the grant date for an equity classified award and each measurement date for a liability classified award. Equity-based compensation awards are considered granted (i) when there is a mutual understanding of key terms, (ii) we are contingently obligated to issue the options, and (iii) the option holder begins to benefit or be adversely impacted by changes in our stock price. This primarily occurs at the time the stock option agreements are executed. The fair value of each stock option is estimated using a Black-Scholes valuation model while considering the respective rights of each type of stockholder. We did not grant stock options during the years ended December 31, 2025 and 2024, however, we had forfeitures during those years.

Previous wording

In December 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-09,Improvements to Income Tax Disclosures, which requires enhanced annual disclosures for specific categories in the rate reconciliation and income taxes paid disaggregated by federal, state and foreign taxes. ASU 2023-09 is effective for public business entities for annual periods beginning on January 1, 2025. We plan to adopt ASU 2023-09 effective January 1, 2025 applying a retrospective approach to all prior periods presented in the financial statements. We do not believe the adoption of this new standard will have a material effect on our disclosures.

Current wording

In December 2023, the Financial Accounting Standards Board (“FASB”) issued ASU 2023-09,Improvements to Income Tax Disclosures, which requires enhanced annual disclosures for specific categories in the rate reconciliation and income taxes paid disaggregated by federal, state and foreign taxes. ASU 2023-09 was effective for public business entities for annual periods beginning on January 1, 2025. The Company adopted ASU 2023-09 effective January 1, 2025 using a retrospective approach to all prior periods presented in these annual financial statements. Income taxes, including the enhanced annual disclosures required by ASU 2023-09, as applicable, are presented in Note 16.

Previous wording

Our results of operations may be adversely affected by various factors that could cause economic uncertainty and volatility in the financial markets, many of which are beyond our control. Our business could be impacted by, among other things, downturns in the financial markets or in economic conditions, Medicare and Medicaid cost reimbursement, increases in oil prices, inflation, increases in interest rates, supply chain disruptions, declines in consumer confidence and spending, a resurgence of the COVID-19 pandemic and/or the emergence of new variants or new pandemics, cyber security risks and geopolitical instability. We cannot at this time fully predict the likelihood of one or more of the above events, their duration or magnitude or the extent to which they may negatively impact our business.

Current wording

Our results of operations may be adversely affected by various factors that could cause economic uncertainty and volatility in the financial markets, many of which are beyond our control. This risk is amplified by our current need to secure additional capital which efforts have been hindered by our inability to get approval from FINRA to complete that Corporate Action approval to execute a reverse split of our common shares on a timely basis. Our business could be impacted by, among other things, downturns in the financial markets or in economic conditions, Medicare and Medicaid cost reimbursement, increases in oil prices, inflation, increases in interest rates, supply chain disruptions, declines in consumer confidence and spending, a resurgence of the COVID-19 pandemic and/or the emergence of new variants or new pandemics, cyber security risks and geopolitical instability. We cannot at this time fully predict the likelihood of one or more of the above events, their duration or magnitude or the extent to which they may negatively impact our business.