FOXO Technologies Inc. (NYSEAM: FOXO) (“FOXO” or the “Company”),
a leader in commercializing epigenetic biomarkers of health and
aging, today reported financial results for the first quarter ended
March 31, 2023.
“The first quarter was a strong start to the year, and I am very
pleased by our continued execution in support of our strategic
goals,” said Tyler Danielson, interim CEO and Chief Technology
Officer of FOXO. “We recently announced the launch of our
direct-to-consumer FOXO Longevity Report™ beta, which represents
the next stage in FOXO’s evolution and expands on our successes in
the insurance market. We believe this significant milestone will
serve to improve the scale of our customer engagement platform
while expanding into additional use cases for our technology.
Additionally, we are taking proactive steps to simplify our capital
structure and raise additional financing to accelerate our growth
initiatives.”
About FOXO Technologies Inc.
FOXO is a biotechnology company dedicated to improving human
health and longevity through the development of cutting-edge
technology and product solutions for various industries, including
life insurance. FOXO’s epigenetic technology applies AI to DNA
methylation to identify molecular biomarkers of human health and
aging. FOXO is committed to leveraging the latest advancements in
science and technology to help people live better, longer lives.
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 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 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)
March 31,
December 31,
2023
2022
(unaudited)
Assets
Current assets
Cash and cash equivalents
$
2,155
$
5,515
Supplies
1,302
1,313
Prepaid expenses
2,117
2,686
Prepaid consulting fees
595
2,676
Other current assets
107
114
Total current assets
6,276
12,304
Intangible assets
1,863
2,043
Reinsurance recoverables
-
18,573
Cloud computing arrangements
1,483
2,225
Other assets
251
263
Total assets
$
9,873
$
35,408
Liabilities and Stockholders’
Equity
Current liabilities
Accounts payable
$
2,977
$
3,466
Related party payable
500
500
Senior PIK Notes
3,368
1,409
Accrued severance
1,212
1,045
Accrued and other liabilities
528
493
Total current liabilities
8,585
6,913
Warrant liability
311
311
Senior PIK Notes
-
1,730
Policy reserves
-
18,573
Other liabilities
1,007
1,173
Total liabilities
9,903
28,700
Commitments and contingencies (Note
13)
Stockholders’ equity (deficit)
Preferred stock, $0.0001 par value;
10,000,000 shares authorized, none issued or outstanding as of
March 31, 2023 and December 31, 2022
-
-
Class A common stock, $0.0001 par value,
500,000,000 shares authorized, 29,558,830 and 29,669,830 issued,
and 27,418,069 and 27,529,069 outstanding as of March 31, 2023 and
December 31, 2022, respectively
3
3
Treasury stock, at cost, 2,140,761 as of
March 31, 2023 and December 31, 2022
-
-
Additional paid-in capital
154,837
153,936
Accumulated deficit
(154,870
)
(147,231
)
Total stockholders’ equity
(deficit)
(30
)
6,708
Total liabilities and stockholders’
equity (deficit)
$
9,873
$
35,408
FOXO TECHNOLOGIES INC. AND
SUBSIDIARIES
CONSOLIDATED STATEMENTS OF
OPERATIONS
(Dollars in thousands, except per
share data)
Three Months Ended March
31,
2023
2022
Total revenue
$
13
$
40
Operating expenses:
Research and development
309
601
Management contingent share plan
764
-
Selling, general and administrative
6,332
4,002
Total operating expenses
7,405
4,603
Loss from operations
(7,392
)
(4,563
)
Non-cash change in fair value of
convertible debentures
-
(7,432
)
Interest expense
(225
)
(322
)
Other expense
(22
)
(50
)
Total non-operating expense
(247
)
(7,804
)
Loss before income taxes
(7,639
)
(12,367
)
Provision for income taxes
-
-
Net loss
$
(7,639
)
$
(12,367
)
Net loss per Class A common stock, basic
and diluted
$
(0.33
)
$
(2.12
)
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 Balance,
December 31, 2021
8,000,000
$
21,854
30,208
$
-
2,000,000
$
-
-
$
-
-
$
4,902
$
(51,976
)
$
(25,220
)
Net loss
-
-
-
-
-
-
-
-
-
-
(12,367
)
(12,367
)
Lease contributions
-
-
-
-
-
-
-
-
-
136
-
136
Stock based compensation
-
-
-
-
-
-
-
-
-
251
-
251
Issuance of shares for exercised stock options
-
-
14,946
-
-
-
-
-
-
-
-
-
Balance, March 31, 2022
8,000,000
$
21,854
45,154
$
-
2,000,000
$
-
-
$
-
-
$
5,289
$
(64,343
)
$
(37,200
)
Balance, December 31, 2022
-
$
-
-
$
-
-
$
-
29,669,830
$
3
(2,140,761
)
$
153,936
$
(147,231
)
$
6,708
Net loss
-
-
-
-
-
-
-
-
-
-
(7,639
)
(7,639
)
Stock based compensation
-
-
-
-
-
-
(111,000
)
-
-
901
-
901
Balance, March 31, 2023
-
$
-
-
$
-
-
$
-
29,558,830
$
3
(2,140,761
)
$
154,837
$
(154,870
)
$
(30
)
FOXO TECHNOLOGIES INC. AND
SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH
FLOWS
(Dollars in thousands)
Three Months Ended March
31,
2023
2022
CASH FLOWS FROM OPERATING
ACTIVITIES:
Net loss
$
(7,639
)
$
(12,367
)
Adjustments to reconcile net loss to net
cash used in operating activities:
Depreciation and amortization
929
31
Stock-based compensation
901
231
Amortization of consulting fees paid in
common stock
1,725
-
Change in fair value of convertible
debentures
-
7,432
PIK interest
135
-
Amortization of debt issuance costs
94
-
Contributions in the form of rent
payments
-
136
Recognition of prepaid offering costs upon
election of fair value option
-
107
Other
6
-
Changes in operating assets and
liabilities:
Supplies
11
57
Prepaid expenses and consulting fees
925
(132
)
Other current assets
7
-
Cloud computing arrangements
-
(621
)
Accounts payable
(489
)
(2,209
)
Accrued and other liabilities
35
149
Net cash used in operating
activities
(3,360
)
(7,186
)
CASH FLOWS FROM INVESTING
ACTIVITIES:
Purchase of property and equipment
-
(39
)
Development of internal use software
-
(519
)
Net cash used in investing
activities
-
(558
)
CASH FLOWS FROM FINANCING
ACTIVITIES:
Proceeds from issuance of convertible
debentures
-
22,500
Deferred offering costs
-
(19
)
Net cash provided by financing
activities
-
22,481
Net increase (decrease) in cash and
cash equivalents
(3,360
)
14,737
Cash and cash equivalents at beginning of
period
5,515
6,856
Cash and cash equivalents at end of
period
$
2,155
$
21,593
FOXO TECHNOLOGIES INC. AND
SUBSIDIARIES
Reconciliation of net loss to
adjusted EBTIDA (unaudited)
(Dollars in thousands)
For the three months ended
March 31,
2023
2022
Net loss
$
(7,639
)
$
(12,367
)
Add: Depreciation and amortization
929
31
Add: Interest expense
225
322
Add: Stock-based compensation (1)
2,626
231
Add: Non-cash change in fair value of
convertible debentures
-
7,432
Adjusted EBITDA
$
(3,859
)
$
(4,351
)
(1)
Includes expense recognized
related to the shares issued to the consulting agreement. See Note
6 of the unaudited consolidated financial statements.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230511005708/en/
Investor Relations Matthew Hausch, Cody Slach Gateway
Group, Inc. (949) 574-3860 FOXO@gatewayir.com
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