FOXO Technologies Inc. (NYSEAM: FOXO), a leader in the field of
commercializing epigenetic biomarker technology, today reported
financial results for the second quarter ended June 30, 2023.
“I am very proud of our accomplishments during the second
quarter,” said Tyler Danielson, interim CEO and Chief Technology
Officer of FOXO. “In addition to streamlining our capital
structure, we continued to advance our growth initiatives through
product expansion and scientific discovery. Through our
partnerships with leading academic research and healthcare
institutions, we are exploring new insights in longevity science
and health, while at the same time developing new and exciting AI
driven consumer products to provide science-based evidence on how
to live healthier for longer.”
Recent Operational Developments
- On May 26, 2023, FOXO completed two tender offers that
streamlined our capital structure and removed impediments to
raising capital.
- In the Warrant Exchange Offer, 1,647,201 Assumed Warrants were
tendered and cancelled in exchange for the issuance by the company
of an aggregate of 7,955,948 shares of Class A Common Stock to
these former Assumed Warrant holders. Additionally, FOXO solicited
consents from a sufficient number of Assumed Warrants holders to
amend and restate the related securities purchase agreement to
permit certain issuances without triggering anti-dilution
adjustments in the Assumed Warrants.
- In the PIK Note Offer to Amend, all holders of the company’s
Senior PIK Notes consented to the amendment of these Notes to
permit certain issuances without requiring prepayment of the Notes.
In exchange, FOXO issued an aggregate of 4,321,875 shares of Class
A Common Stock on a pro rata basis to the Senior PIK Note
holders.
- In July and August of 2023, FOXO sold 5,625,000 shares of Class
A Common Stock and raised approximately $260,000 in net proceeds in
a private placement.
- On July 19, 2023, FOXO formally launched its Bioinformatics
Services, a consulting service to help researchers process,
analyze, and interpret epigenetic data sets, helping them
accelerate discoveries and advance their biological research. This
service was designed to accelerate breakthroughs in biology,
biotechnology, and healthcare, by increasing the speed and accuracy
with which researchers in academia, healthcare, and pharma can turn
their raw epigenetic data into health insights.
- On April 18, 2023, FOXO launched its direct-to-consumer
Longevity Report™ beta product to yield a more accurate and
user-friendly snapshot of an individual's current health status
compared to traditional genetic methods, such as whole genome
sequencing. We have since put sales of the Longevity Report on hold
until we complete more R&D and market research.
- Basic and diluted earnings per share increased to $(0.49) and
$(0.83) for the three and six months ended June 30, 2023,
respectively from $(3.84) and $(6.01) for the three and six months
ended June 30, 2022, respectively.
- Adjusted EBITDA increased to $(3,340) thousand and $(71,99)
thousand for the three and six months ended June 30, 2023,
respectively from $(8,821) thousand and $(4,470) thousand for the
three and six months ended June 30, 2022, respectively.
Conference Call and Webcast
FOXO will host a conference call and webcast today, August 10,
2023 at 3:15 p.m. Central Time to discuss second quarter 2023
results and recent business highlights.
The call can be accessed via webcast on the investors section of
the company’s website at www.foxotechnologies.com/investors or by
dialing (888) 770-7136 and referencing conference ID 4335886.
Participants are encouraged to call in 10 to 15 minutes prior to
the scheduled start time.
The webcast will be made available for replay on the Company’s
website beginning approximately two hours after the event.
About FOXO Technologies Inc. (“FOXO”)
FOXO is at the forefront of commercializing epigenetic biomarker
technology. Their mission is to utilize the power of epigenetics
and artificial intelligence to generate data-driven insights that
promote optimal health and longevity outcomes for individuals and
organizations alike. For more information about FOXO, visit
www.foxotechnologies.com.
Forward-Looking Statements
This press release contains certain forward-looking statements
for purposes of the “safe harbor” provisions under the United
States Private Securities Litigation Reform Act of 1995. Any
statements other than statements of historical fact contained
herein, including statements as to future results of operations and
financial position, planned products and services, business
strategy and plans, objectives of management for future operations
of FOXO, market size and growth opportunities, competitive position
and technological and market trends, are forward-looking
statements. Such forward-looking statements include, but are not
limited to, expectations, hopes, beliefs, intentions, plans,
prospects, financial results or strategies regarding FOXO and the
future held by the management team of FOXO, the future financial
condition and performance of FOXO and the products and markets and
expected future performance and market opportunities of FOXO. These
forward-looking statements generally are identified by the words
“anticipate,” “believe,” “could,” “expect,” “estimate,” “future,”
“intend,” “strategy,” “may,” “might,” “strategy,” “opportunity,”
“plan,” project,” “possible,” “potential,” “project,” “predict,”
“scales,” “representative of,” “valuation,” “should,” “will,”
“would,” “will be,” “will continue,” “will likely result,” and
similar expressions, but the absence of these words does not mean
that a statement is not forward-looking. Forward-looking statements
are predictions, projections and other statements about future
events that are based on current expectations and assumptions and,
as a result, are subject to risks and uncertainties. Many factors
could cause actual future events to differ materially from the
forward-looking statements in this press release, including but not
limited to: (i) the risk of changes in the competitive and highly
regulated industries in which FOXO operates, variations in
operating performance across competitors or changes in laws and
regulations affecting FOXO’s business, (ii) the ability to
implement FOXO’s business plans, forecasts, and other expectations,
(iii) the ability to continue as a going concern and obtain
financing, (iv) the ability to maintain its NYSE American listing,
(v) the risk that FOXO has a history of losses and may not achieve
or maintain profitability in the future, (vi) potential inability
of FOXO to establish or maintain relationships required to advance
its goals or to achieve its commercialization and development
plans, (vii) the enforceability of FOXO’s intellectual property,
including its patents and the potential infringement on the
intellectual property rights of others, and (viii) the risk of
downturns and a changing regulatory landscape in the highly
competitive biotechnology industry or in the markets or industries
in which FOXO operates, including the highly regulated insurance
industry. The foregoing list of factors is not exhaustive. Readers
should carefully consider the foregoing factors and the other risks
and uncertainties discussed in FOXO’s most recent reports on Forms
10-K and 10-Q, particularly the “Risk Factors” sections of those
reports, and in other documents FOXO has filed, or will file, with
the SEC. These filings identify and address other important risks
and uncertainties that could cause actual events and results to
differ materially from those contained in the forward-looking
statements. Forward-looking statements speak only as of the date
they are made. Readers are cautioned not to put undue reliance on
forward-looking statements, and FOXO assumes no obligation and do
not intend to update or revise these forward-looking statements,
whether as a result of new information, future events, or
otherwise.
Explanatory Notes on Use of Non-GAAP Measures
To supplement our financial information presented in accordance
with U.S. GAAP, management periodically uses certain “non-GAAP
financial measures,” as such term is defined under the rules of the
SEC, to clarify and enhance understanding of past performance and
prospects for the future. Generally, a non-GAAP financial measure
is a numerical measure of a company’s operating performance,
financial position or cash flows that excludes or includes amounts
that are included in or excluded from the most directly comparable
measure calculated and presented in accordance with U.S. GAAP. For
example, non-GAAP measures may exclude the impact of certain items
such as acquisitions, divestitures, gains, losses and impairments,
or items outside of management’s control. Management believes that
the following non-GAAP financial measure provides investors and
analysts useful insight into our financial position and operating
performance. Any non-GAAP measure provided should be viewed in
addition to, and not as an alternative to, the most directly
comparable measure determined in accordance with U.S. GAAP.
Further, the calculation of these non-GAAP financial measures may
differ from the calculation of similarly titled financial measures
presented by other companies and therefore may not be comparable
among companies.
We use Adjusted EBITDA to evaluate our operating performance.
Adjusted EBITDA does not represent and should not be considered an
alternative to net income as determined by U.S. GAAP, and our
calculations thereof may not be comparable to those reported by
other companies. We believe Adjusted EBITDA is an important measure
of operating performance and provides useful information to
investors because it highlights trends in our business that may not
otherwise be apparent when relying solely on U.S. GAAP measures and
because it eliminates items that have less bearing on our operating
performance. Adjusted EBITDA, as presented herein, is a
supplemental measure of our performance that is not required by, or
presented in accordance with, U.S. GAAP. We use non-GAAP financial
measures as supplements to our U.S. GAAP results in order to
provide a more complete understanding of the factors and trends
affecting our business. Adjusted EBITDA is a measure of operating
performance that is not defined by U.S. GAAP and should not be
considered a substitute for net (loss) income as determined in
accordance with U.S. GAAP.
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, such as impairment,
changes in fair value of convertible debentures, changes in fair
value of warrant liabilities, and expenses related to the forward
purchase agreement.
FOXO TECHNOLOGIES INC. AND
SUBSIDIARIES
CONSOLIDATED BALANCE
SHEETS
(Dollars in thousands, except per
share data)
June 30,
December 31,
2023
2022
(unaudited)
Assets
Current assets
Cash and cash equivalents
$
215
$
5,515
Supplies
1,302
1,313
Prepaid expenses
1,706
2,686
Prepaid consulting fees
-
2,676
Other current assets
105
114
Total current assets
3,328
12,304
Intangible assets
477
2,043
Reinsurance recoverables
-
18,573
Cloud computing arrangements
-
2,225
Other assets
242
263
Total assets
$
4,047
$
35,408
Liabilities and Stockholders'
Equity
Current liabilities
Accounts payable
$
4,021
$
3,466
Related party payable
500
500
Senior PIK Notes
3,861
1,409
Accrued severance
1,399
1,045
Accrued and other liabilities
377
493
Total current liabilities
10,158
6,913
Warrant liability
104
311
Senior PIK Notes
-
1,730
Policy reserves
-
18,573
Other liabilities
815
1,173
Total liabilities
11,077
28,700
Commitments and contingencies (Note
12)
Stockholders' (deficit) equity
Preferred stock, $0.0001 par value;
10,000,000 shares authorized, none issued or outstanding as of June
30, 2023 and December 31, 2022
-
-
Class A common stock, $0.0001 par value,
500,000,000 shares authorized, 46,480,892 and 29,669,830 issued,
and 46,480,892 and 27,529,069 outstanding as of June 30, 2023 and
December 31, 2022, respectively
5
3
Treasury stock, at cost, 0 and 2,140,761
as of June 30, 2023 and December 31, 2022, respectively
-
-
Additional paid-in capital
161,594
153,936
Accumulated deficit
(168,629
)
(147,231
)
Total stockholders' (deficit)
equity
(7,030
)
6,708
Total liabilities and stockholders'
(deficit) equity
$
4,047
$
35,408
FOXO TECHNOLOGIES INC. AND
SUBSIDIARIES
CONSOLIDATED STATEMENTS OF
OPERATIONS
(Dollars in thousands, except per share
data)
Three Months Ended June
30,
Six Months Ended June
30,
2023
2022
2023
2022
Total revenue
$
12
$
39
$
25
$
79
Operating expenses:
Research and development
333
1,001
642
1,602
Management contingent share plan
648
-
1,412
-
Impairment of intangible assets and cloud
computing arrangements
2,633
-
2,633
-
Selling, general and administrative
4,003
4,968
10,335
8,970
Total operating expenses
7,617
5,969
15,022
10,572
Loss from operations
(7,605
)
(5,930
)
(14,997
)
(10,493
)
Non-cash change in fair value of
convertible debentures
-
(17,051
)
-
(24,483
)
Change in fair value of warrant
liability
208
-
208
-
Loss from PIK Note Amendment and 2022
Debenture Release
(3,521
)
-
(3,521
)
-
Interest expense
(492
)
(504
)
(717
)
(826
)
Other income (expense)
117
(54
)
95
(104
)
Total non-operating expense
(3,688
)
(17,609
)
(3,935
)
(25,413
)
Loss before income taxes
(11,293
)
(23,539
)
(18,932
)
(35,906
)
Provision for income taxes
-
-
-
Net loss
$
(11,293
)
$
(23,539
)
$
(18,932
)
$
(35,906
)
Deemed dividend related to the Exchange
Offer
(2,466
)
-
(2,466
)
-
Net loss to common stockholders
$
(13,759
)
$
(23,539
)
$
(21,398
)
$
(35,906
)
Net loss per share of Class A common
stock, basic and diluted
$
(0.49
)
$
(3.84
)
$
(0.83
)
$
(6.01
)
FOXO TECHNOLOGIES INC. AND
SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’
EQUITY (DEFICIT)
(Dollars in thousands)
FOXO Technologies Operating Company FOXO Technologies
Inc. Series A Preferred Stock Common Stock (Class
A) Common Stock (Class B) Common Stock (Class A)
Treasury Stock Additional Paid-in-Capital
Accumulated Deficit Total Shares Amount
Shares Amount Shares Amount
Shares Amount Shares Three Months Ended
June 30, 2022 Balance, March 31, 2022
8,000,000
$
21,854
45,154
$
-
2,000,000
$
-
-
$
-
-
$
5,289
$
(64,343
)
$
(37,200
)
Net loss to common stockholders
-
-
-
-
-
-
-
-
-
-
(23,539
)
(23,539
)
Lease contributions
-
-
-
-
-
-
-
-
-
89
-
89
Stock based compensation
-
-
-
-
-
-
-
-
-
255
-
255
Warrant repurchase
-
-
-
-
-
-
-
-
-
(507
)
-
(507
)
Issuance of shares for consulting agreement
-
-
1,500,000
-
-
-
-
-
-
6,900
-
6,900
Balance, June 30, 2022
8,000,000
$
21,854
1,545,154
$
-
2,000,000
$
-
-
$
-
-
$
12,026
$
(87,882
)
$
(54,002
)
Six Months Ended June 30, 2022
Balance, December 31, 2021
8,000,000
$
21,854
30,208
$
-
2,000,000
$
-
-
$
-
-
$
4,902
$
(51,976
)
$
(25,220
)
Net loss to common stockholders
-
-
-
-
-
-
-
-
-
-
(35,906
)
(35,906
)
Lease contributions
-
-
-
-
-
-
-
-
-
225
-
225
Stock based compensation
-
-
-
-
-
-
-
-
-
506
-
506
Warrant repurchase
-
-
-
-
-
-
-
-
-
(507
)
-
(507
)
Issuance of shares for exercised stock options
-
-
14,946
-
-
-
-
-
-
-
-
-
Issuance of shares for consulting agreement
-
-
1,500,000
-
-
-
-
-
-
6,900
-
6,900
Balance, June 30, 2022
8,000,000
$
21,854
1,545,154
$
-
2,000,000
$
-
-
$
-
-
$
12,026
$
(87,882
)
$
(54,002
)
Three Months Ended June 30, 2023
Balance, March 31, 2023
-
$
-
-
$
-
-
-
29,558,830
$
3
(2,140,761
)
$
154,837
$
(154,870
)
$
(30
)
Net loss to common stockholders
-
-
-
-
-
-
-
-
-
-
(13,759
)
(13,759
)
Stock-based compensation
-
-
-
-
-
-
(250,000
)
-
-
772
-
772
2022 Debenture Release
-
-
-
-
-
-
7,035,000
1
-
2,180
-
2,181
PIK Note Amendment
-
-
-
-
-
-
4,321,875
-
-
1,339
-
1,339
Exchange Offer
-
-
-
-
-
-
7,955,948
1
-
2,466
-
2,467
Treasury stock
-
-
-
-
-
-
(2,140,761
)
-
2,140,761
-
-
-
Balance, June 30, 2023
-
$
-
-
$
-
-
$
-
46,480,892
$
5
-
$
161,594
$
(168,629
)
$
(7,030
)
Six Months Ended June 30, 2023
Balance, December 31, 2022
-
$
-
-
$
-
-
$
-
29,669,830
$
3
(2,140,761
)
153,936
(147,231
)
6,708
Net loss to common stockholders
-
-
-
-
-
-
-
-
-
-
(21,398
)
(21,398
)
Stock-based compensation
-
-
-
-
-
-
(361,000
)
-
-
1,673
-
1,673
2022 Debenture Release
-
-
-
-
-
-
7,035,000
1
-
2,180
-
2,181
PIK Note Amendment
-
-
-
-
-
-
4,321,875
-
-
1,339
-
1,339
Exchange Offer
-
-
-
-
-
-
7,955,948
1
-
2,466
-
2,467
Treasury stock
-
-
-
-
-
-
(2,140,761
)
-
2,140,761
-
-
-
Balance, June 30, 2023
-
$
-
-
$
-
-
$
-
46,480,892
$
5
-
$
161,594
$
(168,629
)
$
(7,030
)
FOXO TECHNOLOGIES INC. AND
SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars in thousands)
Six Months Ended June
30,
2023
2022
CASH FLOWS FROM OPERATING
ACTIVITIES:
Net loss
$
(18,932
)
$
(35,906
)
Adjustments to reconcile net loss to net
cash used in operating activities:
Depreciation and amortization
1,176
86
Loss from PIK Note Amendment and 2022
Debenture Release
3,521
Stock-based compensation
1,673
461
Amortization of consulting fees paid in
common stock
2,221
1,486
Impairment of intangible assets and cloud
computing arrangements
2,633
-
Change in fair value of convertible
debentures
-
24,483
Change in fair value of warrants
(208
)
-
PIK interest
275
-
Amortization of debt issuance costs
448
-
Contributions in the form of rent
payments
-
225
Recognition of prepaid offering costs upon
election of fair value option
-
107
Other
(1
)
-
Changes in operating assets and
liabilities:
Supplies
11
(903
)
Prepaid expenses and consulting fees
1,435
(1,632
)
Other current assets
9
-
Cloud computing arrangements
-
(1,298
)
Accounts payable
555
(1,646
)
Accrued and other liabilities
(116
)
350
Net cash used in operating
activities
(5,300
)
(14,187
)
CASH FLOWS FROM INVESTING
ACTIVITIES:
Purchase of property and equipment
-
(83
)
Development of internal use software
-
(1,177
)
Net cash used in investing
activities
-
(1,260
)
CASH FLOWS FROM FINANCING
ACTIVITIES:
Proceeds from issuance of convertible
debentures
-
28,000
Warrant repurchase
-
(507
)
Related party promissory note
-
(387
)
Deferred offering costs
-
(19
)
Net cash provided by financing
activities
-
27,087
Net change in cash and cash
equivalents
(5,300
)
11,640
Cash and cash equivalents at beginning of
period
5,515
6,856
Cash and cash equivalents at end of
period
$
215
$
18,496
NONCASH INVESTING AND FINANCING
ACTIVITIES:
2022 Debenture Release
$
2,181
$
-
PIK Note Amendment
$
1,339
$
-
Exchange Offer
$
2,466
$
-
FOXO TECHNOLOGIES INC. AND
SUBSIDIARIES
Reconciliation of net loss to adjusted
EBTIDA (unaudited)
(Dollars in thousands)
For the three months ended
June 30,
For the six months ended June
30,
2023
2022
2023
2022
Net loss
$
(11,293
)
$
(23,539
)
$
(18,932
)
$
(35,906
)
Add: Depreciation and amortization
247
55
1,176
86
Add: Interest expense
492
504
717
826
Add: Stock-based compensation (1)
1,268
1,459
3,894
1,690
Add: Change in fair value of warrant
liability
(208
)
-
(208
)
-
Add: Impairment of intangible assets and
cloud computing arrangements
2,633
-
2,633
-
Add: Loss from PIK Note Amendment and 2022
Debenture Release
3,521
-
3,521
-
Add: Non-cash change in fair value of
convertible debentures
-
17,051
-
24,483
Adjusted EBITDA
$
(3,340
)
$
(4,470
)
$
(7,199
)
$
(8,821
)
(1)
Includes expense recognized related to
the shares issued to the Consulting Agreement. See Note 6 to the
unaudited condensed consolidated financial statements.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230810310849/en/
Contacts / Investor Relations Matthew Hausch, Cody Slach
Gateway Group, Inc. (949) 574-3860 FOXO@gatewayir.com
FOXO Technologies (AMEX:FOXO)
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