[Part I](index=6&type=section&id=Part%20I) [Business Overview](index=6&type=section&id=Item%201.%20Business) FOXO commercializes epigenetic biomarker technology for health and longevity, focusing on AI-based Bioinformatics Services and strategic alternatives - FOXO is dedicated to research and development in epigenetic biomarkers to provide data-driven insights for optimal health and longevity[13](index=13&type=chunk) - The company has paused sales of its 'Underwriting Report' and 'Longevity Report™' to focus on increasing cash resources and further R&D[15](index=15&type=chunk) - FOXO is exploring strategic alternatives, including consumer-facing AI technology applications, business combinations (e.g., KR8 AI Inc.), asset sales, and restructurings to maximize stockholder value[17](index=17&type=chunk) - The business is managed under two segments: FOXO Labs (R&D, epigenetic biomarker technology, Bioinformatics Services) and FOXO Life (paused life insurance sales)[20](index=20&type=chunk)[21](index=21&type=chunk) - Key milestones include launching Bioinformatics Services in **June 2023** and receiving USPTO allowances for two patents related to machine learning models for epigenetic biomarkers in **April and September 2023**[24](index=24&type=chunk)[30](index=30&type=chunk)[31](index=31&type=chunk) - Current strategy focuses on Bioinformatics Services and R&D in health and wellness testing powered by machine learning and AI, leveraging extensive epigenetic datasets from clinical trials[25](index=25&type=chunk)[26](index=26&type=chunk) - The company relies on a limited number of critical third-party suppliers for epigenetic testing materials (saliva kits, arrays) and lab processing services[42](index=42&type=chunk) - A **1-for-10 reverse stock split** was implemented on **November 6, 2023**, to regain compliance with NYSE American listing standards[48](index=48&type=chunk)[49](index=49&type=chunk) [Risk Factors](index=12&type=section&id=Item%201A.%20Risk%20Factors) The company faces numerous significant risks that could materially and adversely affect its business, financial condition, and stock price - The company is exploring strategic alternatives, including mergers and acquisitions, with no assurance of successful identification or completion, or that any alternative will yield additional stockholder value or sufficient operating capital[55](index=55&type=chunk)[61](index=61&type=chunk) - FOXO has a history of losses, accumulating deficits of **$177,060,000** as of **December 31, 2023**, and may not achieve or maintain profitability in the future[55](index=55&type=chunk)[67](index=67&type=chunk) - The company does not have adequate cash resources to fund operations beyond **Q3 2024** and requires additional capital, which may not be available on acceptable terms, raising substantial doubt about its ability to continue as a going concern[55](index=55&type=chunk)[68](index=68&type=chunk)[74](index=74&type=chunk) - Reliance on a limited number of critical third-party suppliers for epigenetic testing services (saliva kits, microarrays, lab processing) poses a risk of supply interruptions or cost increases[57](index=57&type=chunk)[134](index=134&type=chunk) - The company's 'dry lab' data analysis services are not currently subject to CLIA or FDA regulation for general health and wellness, but future regulatory changes or differing interpretations could materially impact the business[57](index=57&type=chunk)[140](index=140&type=chunk)[144](index=144&type=chunk) - Protecting patent-pending methods of identifying epigenetic biomarkers and intellectual property in general is crucial, as inadequate protection could diminish brand value and allow competitors to mimic services[57](index=57&type=chunk)[161](index=161&type=chunk)[162](index=162&type=chunk) - The public market for FOXO's securities is volatile, and future share issuances (for financing or services) could result in dilution for existing stockholders[59](index=59&type=chunk)[187](index=187&type=chunk)[188](index=188&type=chunk) [Unresolved Staff Comments](index=36&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) There are no unresolved staff comments to report - No unresolved staff comments[195](index=195&type=chunk) [Cybersecurity](index=36&type=section&id=Item%201C.%20Cybersecurity) FOXO emphasizes robust cybersecurity measures, guided by GDPR principles, to protect highly personal customer data - FOXO's cybersecurity strategy is built on tightly controlled access management, layered defenses, continuous monitoring, vulnerability testing, rapid response, and internal/supply chain risk management[198](index=198&type=chunk)[200](index=200&type=chunk) - The company uses GDPR as a guidepost for data protection practices and is completing control compliance development for its initial SOC 2 Type II audit[197](index=197&type=chunk)[200](index=200&type=chunk) - The primary cybersecurity risk identified is the storage of customer questions and emails, with a potential breach negatively affecting public trust, customer retention, and revenue[205](index=205&type=chunk) - The board of directors does not have specific processes or a subcommittee for monitoring cybersecurity; management, with over **20 years** of technology experience, handles monitoring and communicates with the board[207](index=207&type=chunk)[208](index=208&type=chunk) [Properties](index=38&type=section&id=Item%202.%20Properties) FOXO Technologies Inc. does not own any real property and operates from a leased office space in Minneapolis, MN, on a month-to-month basis - The company does not own any real property[209](index=209&type=chunk) - FOXO leases its principal executive offices on a month-to-month basis at **729 N. Washington Ave., Suite 600, Minneapolis, MN 55401**[209](index=209&type=chunk) [Legal Proceedings](index=38&type=section&id=Item%203.%20Legal%20Proceedings) FOXO is involved in a significant legal proceeding with Smithline Family Trust II, which filed a complaint alleging breach of contract, unjust enrichment, and fraud - Smithline Family Trust II filed a complaint against FOXO and its former CEO, Jon Sabes, alleging breach of contract, unjust enrichment, and fraud, claiming damages exceeding **$6,206,768**[210](index=210&type=chunk) - A settlement agreement was reached on **November 7, 2023**, requiring FOXO to pay Smithline **$2,300,000** in cash by the **12-month** anniversary of the agreement's effective date (Settlement Deadline)[213](index=213&type=chunk)[214](index=214&type=chunk) - FOXO agreed to pay Smithline a minimum of **25%** of gross proceeds from any equity or equity-linked financing towards the cash settlement payment[214](index=214&type=chunk) - The company is currently in default of the Settlement Agreement due to failure to pay **$300,000** by **December 31, 2023**, and is negotiating a resolution with Smithline[87](index=87&type=chunk)[224](index=224&type=chunk) - An Exchange Agreement was entered into on **May 28, 2024**, where Smithline exchanged its Assumed Warrant for the right to receive up to **8,370,000 shares** of Class A Common Stock, subject to beneficial ownership limitations[86](index=86&type=chunk)[223](index=223&type=chunk) [Mine Safety Disclosures](index=40&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to FOXO Technologies Inc - Mine Safety Disclosures are not applicable[225](index=225&type=chunk) [Part II](index=41&type=section&id=Part%20II) [Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=41&type=section&id=Item%205.%20Market%20for%20Registrant's%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) FOXO's Class A Common Stock is listed on NYSE American under 'FOXO', while its Public Warrants trade on the OTC Pink Marketplace under 'FOXOW' - Class A Common Stock (FOXO) is listed on NYSE American, and Public Warrants (FOXOW) are quoted on the OTC Pink Marketplace[228](index=228&type=chunk) Security Prices as of June 3, 2024 | Security | Closing Price | | :--------------------------------- | :------------ | | Class A Common Stock | $0.3540 | | Public Warrants | $0.0043 | - As of **June 3, 2024**, there were **60** active holders of record for Class A Common Stock, one for Public Warrants, nine for private warrants, and one for Smithline Assumed Warrants[230](index=230&type=chunk) - The company has never declared or paid cash dividends and does not anticipate doing so, intending to retain all earnings to finance growth and operations[231](index=231&type=chunk) [Item 6. [Reserved]](index=41&type=section&id=Item%206.%20%5BReserved%5D) This item is reserved and contains no information [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=41&type=section&id=Item%207.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section analyzes FOXO's financial condition, results of operations, liquidity, and capital resources for **2023** and **2022**, highlighting revenue decrease, net loss improvement, and going concern doubts [Formation](index=42&type=section&id=Formation) FOXO Technologies Inc. was formed in **2019** and underwent a reverse recapitalization in **September 2022**, acquiring Legacy FOXO as the accounting acquirer - FOXO was formed as a limited liability company on **November 11, 2019**, and converted to a C Corporation in **November 2020**[234](index=234&type=chunk) - The company consummated a Business Combination on **September 15, 2022**, where Legacy FOXO survived as a wholly-owned subsidiary, and the company's name changed from Delwinds Insurance Acquisition Corp. to FOXO Technologies Inc[235](index=235&type=chunk) [Overview](index=42&type=section&id=Overview) FOXO commercializes epigenetic biomarker technology for health and longevity, providing data-driven insights, and has paused 'Underwriting Report' and 'Longevity Report™' sales to re-strategize and focus on Bioinformatics Services - FOXO commercializes epigenetic biomarker technology for health and longevity, aiming to provide data-driven insights based on unique biological measures[236](index=236&type=chunk) - The company has strategically extended its expertise in epigenetic data processing and analysis to outside parties through Bioinformatics Services to accelerate new discoveries and generate revenue[237](index=237&type=chunk) - Sales of 'Underwriting Report' and 'Longevity Report™' have been paused to conserve cash and redevelop/re-strategize these offerings[238](index=238&type=chunk) - On **October 2, 2023**, FOXO paused sales of new life insurance products and moved existing producers out of the MGA Model to focus resources on FOXO Labs[239](index=239&type=chunk) [Exploration of Strategic Alternatives and Restructuring](index=43&type=section&id=Exploration%20of%20Strategic%20Alternatives%20and%20Restructuring) FOXO is actively exploring strategic alternatives to maximize stockholder value, including potential business combinations with AI technology companies, developing consumer-facing AI healthcare tools, pausing life insurance sales, reducing headcount, and identifying non-core assets for sale - FOXO is exploring strategic alternatives focused on consumer-facing AI technology applications and solutions, and maximizing stockholder value[240](index=240&type=chunk) - Strategic options include evaluating KR8 AI Inc. as a suitable acquisition candidate, developing a consumer-facing AI platform leveraging epigenetics, pausing new life insurance sales, reducing headcount and expenses, and identifying non-core business assets for sale[240](index=240&type=chunk) [Segments](index=43&type=section&id=Segments) The company's business is classified into two reportable segments: FOXO Labs, focusing on R&D and Bioinformatics Services, and FOXO Life, which has paused new life insurance product sales - FOXO manages its business in two reportable segments: FOXO Labs and FOXO Life[242](index=242&type=chunk) - FOXO Labs performs R&D, commercializes epigenetic biomarker technology, and anticipates revenue from Bioinformatics Services and other commercialization opportunities, including a potential AI platform[243](index=243&type=chunk) - FOXO Labs recognizes revenue from epigenetic testing services and royalties from Illumina, Inc. for the Infinium Mouse Methylation Array[244](index=244&type=chunk) - Bioinformatics Services, now a primary offering, provides data processing, quality checking, and analysis using FOXO's cloud-based bioinformatics pipeline[245](index=245&type=chunk) [Comparability of Financial Results](index=44&type=section&id=Comparability%20of%20Financial%20Results) The Business Combination on **September 15, 2022**, was accounted for as a reverse recapitalization, with Legacy FOXO as the accounting acquirer, meaning prior financial statements reflect Legacy FOXO's historical costs - The Business Combination was accounted for as a reverse recapitalization, with Legacy FOXO determined to be the accounting acquirer[248](index=248&type=chunk) - The net assets of the Company were stated at historical cost, with no goodwill or other separately identifiable intangible assets recorded[248](index=248&type=chunk) - Prior to the Closing, various transactions occurred, including the exchange of Legacy FOXO Series A preferred stock for Class A Common Stock and the conversion of Bridge Debentures into Class A Common Stock[250](index=250&type=chunk) [Recent Developments](index=44&type=section&id=Recent%20Developments) Recent developments include **$2.633 million** in asset impairment charges, a reduction in headcount to **4** employees, the pausing of Longevity Report sales, the launch of Bioinformatics Services, and private placements to raise capital - Recognized **$1,425,000** impairment loss in **April 2023** for the digital insurance platform[251](index=251&type=chunk) - Recognized impairment charges of **$630,000** for the underwriting API and **$578,000** for the longevity API in **June 2023**, as positive cash flows were no longer forecasted[252](index=252&type=chunk) - Reduced employee headcount from **22 to 4** in **2023** through layoffs to reduce operating expenses and refocus on Bioinformatics Services[254](index=254&type=chunk) - Sales of the Longevity Report are on hold pending recomputation of data models with updated arrays and additional content development[255](index=255&type=chunk) - Formally launched Bioinformatics Services in **July 2023**, offering advanced data solutions for epigenetic data processing and analysis[256](index=256&type=chunk) - Completed two rounds of private placements in **2023**, raising aggregate gross proceeds of **$450,000** and **$293,500** respectively[258](index=258&type=chunk)[260](index=260&type=chunk) - A down round provision in Assumed Warrants was triggered in **2023**, resulting in **2,007,848** outstanding warrants with an exercise price of **$0.80 per share** and a deemed dividend of **$912,000**[261](index=261&type=chunk) - Completed an Exchange Offer in **May 2023**, issuing **795,618 shares** of Class A Common Stock to warrant holders, resulting in a deemed dividend of **$2,466,000**[266](index=266&type=chunk)[291](index=291&type=chunk) - Public Warrants were delisted from NYSE American on **May 16, 2023**, due to low trading price and began trading on the OTC Pink Marketplace[275](index=275&type=chunk)[276](index=276&type=chunk) [Non-GAAP Financial Measures](index=48&type=section&id=Non-GAAP%20Financial%20Measures) FOXO uses Adjusted EBITDA as a non-GAAP financial measure to provide additional insight into its operating performance, excluding various non-cash and non-recurring items for better period-to-period comparisons - Adjusted EBITDA is used as a non-GAAP financial measure to evaluate operating performance, excluding interest, tax, depreciation, amortization, non-cash changes in fair value of convertible debentures and warrants, stock-based compensation, write-offs, and impairment[278](index=278&type=chunk)[299](index=299&type=chunk) [Results of Operations](index=49&type=section&id=Results%20of%20Operations) For the year ended **December 31, 2023**, FOXO experienced a significant reduction in net loss and total revenue compared to **2022**, driven by decreased expenses and the absence of large non-cash expenses from the prior year Consolidated Results of Operations (Years Ended December 31, 2023 and 2022) | (Dollars in thousands) | 2023 | 2022 | Change in $ | Change in % | | :------------------------------------------------- | :--- | :--- | :---------- | :---------- | | Total revenue | $145 | $511 | $(366) | (72)% | | Cost of sales | 132 | 344 | (212) | (62)% | | Gross profit | 13 | 167 | (154) | (92)% | | Operating expenses: | | | | | | Research and development | 901 | 3,047| (2,146) | (70)% | | Management contingent share plan | (732)| 10,091| (10,823) | (107)% | | Impairments of intangible assets and cloud computing arrangements | 2,633| 1,370| 1,263 | 92% | | Selling, general and administrative | 19,399| 25,826| (6,427) | (25)% | | Total operating expenses | 22,201| 40,334| (18,133) | (45)% | | Loss from operations | (22,188)| (40,167)| 17,979 | 45% | | Non-cash change in fair value of convertible debentures | - | (28,180)| 28,180 | N/A% | | Change in fair value of warrant liability | 303 | 2,076| (1,773) | (85)% | | Loss from PIK Note Amendment and 2022 Debenture Release | (3,521)| - | (3,521) | N/A% | | Forward purchase agreement expense | - | (27,337)| 27,337 | N/A % | | Other non-operating expenses, net | (1,045)| (1,647)| 602 | 37% | | Total non-operating expenses | (4,263)| (55,088)| 50,825 | 92% | | Net loss | $(26,451)| $(95,255)| $68,804 | 72% | | Deemed dividends | (3,378)| - | (3,378) | NA% | | Net loss to common stockholders | $(29,829)| $(95,255)| $65,426 | 70% | - Total revenue decreased by **$366,000 (72%)** in **2023**, primarily due to a **$301,000** decrease in Epigenetic biomarker services and a **$56,000** reduction in royalty rates from Illumina, Inc[280](index=280&type=chunk) - Research and development expenses decreased by **$2,146,000 (70%)** in **2023**, largely due to the completion of a clinical trial agreement and lower employee-related and professional services costs[281](index=281&type=chunk) - Selling, general and administrative expenses decreased by **$6,427,000 (25%)** in **2023**, driven by headcount reductions, lower consulting costs, and the absence of a Cantor Commitment Fee, partially offset by public company costs and a **$1,313,000** write-off of supplies[285](index=285&type=chunk) - Net loss decreased by **$68,804,000 (72%)** in **2023**, mainly due to a decrease in loss from operations and the absence of significant non-cash changes in fair value of convertible debentures and forward purchase agreement expenses incurred in **2022**[291](index=291&type=chunk) [Analysis of Segment Results](index=51&type=section&id=Analysis%20of%20Segment%20Results%3A) Segment analysis for **2023** shows revenue declines in both FOXO Labs and FOXO Life, with FOXO Labs' revenue decreasing by **74%** and FOXO Life's by **32%**, though both segments improved their losses due to cost reductions Segment Revenues and Losses (Years Ended December 31, 2023 and 2022) | (Dollars in thousands) | Revenues 2023 | Revenues 2022 | Losses 2023 | Losses 2022 | | :--------------------- | :------------ | :------------ | :---------- | :---------- | | FOXO Labs | $126 | $483 | $(2,149) | $(2,769) | | FOXO Life | $19 | $28 | $(1,645) | $(3,735) | | Total | $145 | $511 | $(3,794) | $(6,504) | - FOXO Labs' total revenues decreased by **$357,000 (74%)** in **2023**, primarily from a **$301,000** decrease in Epigenetic biomarker services and a **$56,000** decrease in royalty revenues[293](index=293&type=chunk) - FOXO Labs' segment losses decreased by **$620,000 (29%)** in **2023**, driven by reduced clinical trial expenses, lower employee-related costs, and professional services, partially offset by the revenue decrease and a **$1,313,000** write-off of supplies[294](index=294&type=chunk) - FOXO Life's total revenues decreased by **$9,000 (32%)** in **2023** due to reduced life insurance commissions as the company ceased placing new policies[295](index=295&type=chunk) - FOXO Life's segment losses decreased by **$2,090,000 (56%)** in **2023**, mainly due to lower employee-related expenses and professional services, partially offset by a **$251,000** loss on the sale of FOXO Life Insurance Company[296](index=296&type=chunk) [Other Operating Data](index=52&type=section&id=Other%20Operating%20Data%3A) The company's Adjusted EBITDA, a non-GAAP measure, improved from a loss of **$19.828 million** in **2022** to a loss of **$13.752 million** in **2023**, reflecting reduced operating expenses and the absence of certain non-cash charges Adjusted EBITDA Reconciliation (Dollars in thousands) | (Dollars in thousands) | 2023 | 2022 | | :------------------------------------------------- | :--- | :--- | | Net loss | $(26,451)| $(95,255)| | Add: Depreciation and amortization | 1,279| 1,487| | Add: Interest expense | 1,064| 1,440| | Add: Equity-based compensation | 2,586| 17,689| | Add: Non-cash change in fair value of convertible debentures | - | 28,180| | Add: Change in fair value of warrant liability | 303 | (2,076)| | Add: Impairment charges | 2,633| 1,370| | Add: Write off of supplies | 1,313| - | | Add: Loss from PIK Note Amendment and 2022 Debenture Release | 3,521| - | | Add: Forward purchase agreement expense | - | 27,337| | Adjusted EBITDA | $(13,752)| $(19,828)| - Adjusted EBITDA improved from a loss of **$19,828,000** in **2022** to a loss of **$13,752,000** in **2023**[300](index=300&type=chunk) [Liquidity and Capital Resources (dollars in thousands)](index=52&type=section&id=Liquidity%20and%20Capital%20Resources%20%28dollars%20in%20thousands%29) FOXO faces significant liquidity challenges with cash at **$38,000** by **December 31, 2023**, and an accumulated deficit of **$177,060,000**, raising substantial doubt about its going concern ability beyond **Q3 2024** without additional financing Cash and Cash Equivalents and Accumulated Deficit | Metric | December 31, 2023 | December 31, 2022 | | :------------------------ | :------------------ | :------------------ | | Cash and cash equivalents | $38 | $5,515 | | Accumulated deficit | $177,060 | $147,231 | - The company has incurred net losses since inception, with **$29,829,000** in **2023** and **$95,255,000** in **2022**[301](index=301&type=chunk) - Current capital is insufficient to meet operating requirements beyond the **third quarter of 2024**, necessitating additional financing or strategic transactions[69](index=69&type=chunk)[324](index=324&type=chunk) - The sale of FOXO Life Insurance Company on **February 3, 2023**, provided **$4,751,000** to fund operations[303](index=303&type=chunk) - In **2023**, the company completed private placements raising **$1,176,000** in net proceeds[310](index=310&type=chunk)[311](index=311&type=chunk) - In **Q1 2024**, FOXO entered into a Second Strata Purchase Agreement for up to **$5,000,000** in Class A Common Stock and a **$750,000** promissory note with ClearThink, and issued a **$110,000** convertible promissory note to LGH Investments[313](index=313&type=chunk)[314](index=314&type=chunk)[315](index=315&type=chunk) - The company received NYSE American non-compliance notices for failing to timely file its **10-K** and for having a stockholders' deficit and recurring losses, with a compliance deadline of **December 12, 2024**[318](index=318&type=chunk)[323](index=323&type=chunk) Cash Flow Data (Years Ended December 31, 2023 and 2022) | Years Ended December 31, | 2023 | 2022 | | :----------------------- | :--- | :--- | | Operating Activities | $(6,645)| $(23,760)| | Investing Activities | $- | $(1,870)| | Financing Activities | $1,168| $24,289| - Net cash used in operating activities decreased by **$17,115,000 (72%)** in **2023**, partly due to reduced net loss and access to **$4,751,000** from the FOXO Life Insurance Company sale[327](index=327&type=chunk) Contractual Obligations as of December 31, 2023 (Dollars in thousands) | | Less than 1 year | 1 - 3 years | 3 - 5 years | More than 5 years | Total | | :------------------------ | :--------------- | :---------- | :---------- | :---------------- | :---- | | License agreements | $20 | $40 | $40 | $- | $100 | | Senior PIK Notes | $4,203 | $- | $- | $- | $4,203| | Supplier and other commitments | $54 | $- | $- | $- | $54 | | Total | $4,277 | $40 | $40 | $- | $4,357| [Critical Accounting Policies](index=56&type=section&id=Critical%20Accounting%20Policies) The company's critical accounting policies involve significant management judgment and estimates, particularly for equity-based compensation, fair value of convertible debentures, and the ongoing assessment of its ability to continue as a going concern - Critical accounting policies include equity-based compensation, fair value of convertible debentures, and going concern assessment, all requiring subjective judgments and estimates[335](index=335&type=chunk) - Equity-based compensation is measured at fair value using a Black-Scholes valuation model, with assumptions for expected term, volatility, risk-free interest rate, and dividend yield[336](index=336&type=chunk)[337](index=337&type=chunk)[338](index=338&type=chunk) - The fair value option was elected for convertible debentures, initially valued using a Monte Carlo simulation and later a probability-weighted expected return model, with changes recognized in the consolidated statements of operations[339](index=339&type=chunk)[341](index=341&type=chunk)[342](index=342&type=chunk) - The going concern assessment involves evaluating cash and working capital for a **one-year** look-forward period, considering various scenarios and the ability to curtail expenditures[344](index=344&type=chunk) [Recent Accounting Pronouncements](index=59&type=section&id=Recent%20Accounting%20Pronouncements) In **December 2023**, the FASB issued ASU 2023-09, 'Improvements to Income Tax Disclosures,' which will be adopted retrospectively on **January 1, 2025**, with no anticipated material effect on disclosures - ASU 2023-09, 'Improvements to Income Tax Disclosures,' issued in **December 2023**, requires enhanced annual disclosures for specific categories in rate reconciliation and disaggregated income taxes[345](index=345&type=chunk) - The company plans to adopt ASU 2023-09 effective **January 1, 2025**, applying a retrospective approach, and does not believe it will have a material effect on its disclosures[345](index=345&type=chunk) [Factors That May Adversely Affect our Results of Operations](index=59&type=section&id=Factors%20That%20May%20Adversely%20Affect%20our%20Results%20of%20Operations) The company's results of operations are susceptible to adverse impacts from various external factors beyond its control, including general economic conditions, financial market downturns, inflation, interest rate increases, supply chain disruptions, and geopolitical instability - Results of operations may be adversely affected by general economic conditions, financial market downturns, inflation, interest rate increases, supply chain disruptions, and geopolitical instability[346](index=346&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=59&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) As a smaller reporting company, FOXO Technologies Inc. is not required to provide quantitative and qualitative disclosures about market risk - As a smaller reporting company, FOXO is not required to provide quantitative and qualitative disclosures about market risk[347](index=347&type=chunk) [Financial Statements and Supplementary Data](index=59&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) This section refers to the consolidated financial statements and supplementary data, including the report of independent registered public accounting firms, which are incorporated by reference and set forth on pages **F-1 through F-47** of this Annual Report - Consolidated financial statements and report of independent registered public accounting firm are incorporated by reference and located on pages **F-1 through F-47**[348](index=348&type=chunk) [Changes in and Disagreements with Accountants on Accounting and Financial Disclosure](index=59&type=section&id=Item%209.%20Changes%20in%20and%20Disagreements%20with%20Accountants%20on%20Accounting%20and%20Financial%20Disclosure) There are no changes in or disagreements with accountants on accounting and financial disclosure to report - No changes in or disagreements with accountants on accounting and financial disclosure[349](index=349&type=chunk) [Controls and Procedures](index=59&type=section&id=Item%209A.%20Controls%20and%20Procedures) As of **December 31, 2023**, management concluded that FOXO's disclosure controls and procedures, as well as its internal control over financial reporting, were not effective, with material weaknesses identified in entity-level controls, accounting personnel resources, and segregation of duties - Management concluded that disclosure controls and procedures were not effective as of **December 31, 2023**[351](index=351&type=chunk) - Management concluded that internal control over financial reporting was not effective as of **December 31, 2023**[354](index=354&type=chunk) - Material weaknesses were identified in (i) entity-level controls, (ii) accounting personnel resources with necessary expertise, and (iii) segregation of duties[357](index=357&type=chunk) - Remediation actions include engaging third-party consultants, assessing and recruiting finance/accounting personnel, centralizing key processes for segregation of duties, and developing further training[357](index=357&type=chunk) - No change in internal control over financial reporting materially affected or is reasonably likely to materially affect internal control over financial reporting during the most recently completed fiscal quarter[359](index=359&type=chunk) [Other Information](index=61&type=section&id=Item%209B.%20Other%20Information) There is no other information to report under this item - No other information to report[360](index=360&type=chunk) [Disclosure Regarding Foreign Jurisdictions that Prevent Inspections](index=61&type=section&id=Item%209C.%20Disclosure%20Regarding%20Foreign%20Jurisdictions%20that%20Prevent%20Inspections) This item is not applicable to FOXO Technologies Inc - Disclosure regarding foreign jurisdictions that prevent inspections is not applicable[361](index=361&type=chunk) [Part III](index=62&type=section&id=Part%20III) [Directors, Executive Officers and Corporate Governance](index=62&type=section&id=Item%2010.%20Directors%2C%20Executive%20Officers%20and%20Corporate%20Governance) This section outlines FOXO's Board of Directors and executive officers, including their independence and committee assignments, with Mark White as Interim CEO and Martin Ward as Interim CFO, both also holding positions at KR8 AI Current Directors and Executive Officers | Name | Age | Position | | :-------------------- | :-- | :------------------------------------- | | Mark White | 63 | Interim Chief Executive Officer and Director | | Martin Ward | 66 | Interim Chief Financial Officer | | Bret Barnes | 42 | Chairman and Director | | Francis Colt deWolf III | 56 | Director | - Mark White and Martin Ward were appointed Interim CEO and Interim CFO, respectively, in **September 2023**, and also serve as executive officers for KR8 AI Inc[366](index=366&type=chunk)[367](index=367&type=chunk) - Bret Barnes and Francis Colt deWolf III are independent directors, and the Board consists of a majority of independent directors[375](index=375&type=chunk) - The company has standing Audit, Compensation, and Nominating and Corporate Governance Committees, each operating under a written charter[376](index=376&type=chunk) - The Audit Committee consists of Bret Barnes and Francis Colt deWolf III, with Mr. deWolf III qualifying as an audit committee financial expert[378](index=378&type=chunk)[379](index=379&type=chunk) - The Board actively oversees risk management, including cybersecurity risks, receiving regular reports from management[389](index=389&type=chunk)[390](index=390&type=chunk) - The company's Charter limits director liability and requires indemnification and expense advancement to the fullest extent permitted by Delaware law[391](index=391&type=chunk) [Executive Compensation](index=67&type=section&id=Item%2011.%20Executive%20Compensation) This section details the compensation of FOXO's named executive officers for **2023** and **2022**, including salaries, stock awards, and other compensation, highlighting the **$1** annual base salary for current Interim CEO Mark White and Interim CFO Martin Ward Summary Compensation Table (Dollars in thousands) | Name and Principal Position | Year | Salary ($) | Stock Awards ($) | Total ($) | | :-------------------------- | :--- | :--------- | :--------------- | :-------- | | Mark White | 2023 | — | 257,500 | 257,500 | | Current Interim CEO | 2022 | — | — | — | | Martin Ward | 2023 | — | 257,500 | 257,500 | | Current Interim CFO | 2022 | — | — | — | | Tyler Danielson | 2023 | 141,923 | — | 210,833 | | Former Interim CEO | 2022 | 205,000 | 5,935,600 | 6,140,622 | | Brian Chen, PhD | 2023 | 163,385 | — | 238,333 | | Former CSO | 2022 | 236,000 | 5,935,600 | 6,171,622 | | Robert Potashnick | 2023 | 141,923 | — | 181,833 | | Former CFO | 2022 | 205,000 | 3,983,100 | 4,188,122 | - The **2020 Equity Incentive Plan** was terminated after the approval of the **2022 Plan**, with no further awards granted under it[406](index=406&type=chunk) - The **2022 Equity Incentive Plan** authorizes the grant of stock options, SARs, restricted shares, RSUs, and other equity-based awards, with **651,862 shares** of Class A Common Stock available for issuance[418](index=418&type=chunk)[419](index=419&type=chunk) - The Management Contingent Share Plan made **920,000 shares** eligible for restricted share awards, initially subject to time-based and performance-based vesting, with performance-based vesting no longer required after the sale of FOXO Life Insurance Company[444](index=444&type=chunk)[451](index=451&type=chunk) - Mark White and Martin Ward, current Interim CEO and CFO, respectively, each receive an annual base salary of **$1** and were granted **250,000 fully vested shares** of Class A Common Stock on **October 3, 2023**[473](index=473&type=chunk)[476](index=476&type=chunk)[477](index=477&type=chunk)[479](index=479&type=chunk) - Former executives Tyler Danielson, Brian Chen, and Robert Potashnick resigned in **September 2023**[462](index=462&type=chunk)[469](index=469&type=chunk)[472](index=472&type=chunk) [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](index=79&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Stockholder%20Matters) This section provides a snapshot of the beneficial ownership of FOXO's Class A Common Stock as of **June 3, 2024**, showing Interim CEO Mark White and Interim CFO Martin Ward each beneficially own **12.19%** Beneficial Ownership of Class A Common Stock as of June 3, 2024 | Name and Address of Beneficial Owner | Number of Shares of Common Stock | % of Class | | :----------------------------------- | :------------------------------- | :--------- | | Mark White | 1,300,000 | 12.19% | | Martin Ward | 1,300,000 | 12.19% | | Bret Barnes | 11,865 | * | | Francis Colt deWolf III | 0 | - | | All current directors and executive officers as a group (four individuals) | 1,311,865 | 12.30% | - Mark White and Martin Ward's beneficial ownership includes **1,300,000 shares** of Class A Common Stock held by KR8 AI, an entity they control[485](index=485&type=chunk)[487](index=487&type=chunk) - Applicable percentage of ownership is based on **10,667,258 shares** of Class A Common Stock outstanding as of **June 3, 2024**[484](index=484&type=chunk) [Certain Relationships and Related Transactions, Director Independence](index=79&type=section&id=Item%2013.%20Certain%20Relationships%20and%20Related%20Transactions%2C%20Director%20Independence) This section details various related party transactions, including a provisional exclusive license agreement with KR8 AI (controlled by current executives) for AI software development, which was later formalized into a Master Software and Services Agreement - FOXO entered into a Letter Agreement with KR8 AI (controlled by Interim CEO Mark White and Interim CFO Martin Ward) for a provisional exclusive license to use KR8's AI Eco System and iOS/Android app for consumer health, wellness, and longevity apps in North America[487](index=487&type=chunk)[493](index=493&type=chunk) - The Letter Agreement stipulated an initial license and development fee of **$2,500,000 ($1,500,000 cash, $1,000,000 stock)** and a **15%** royalty on product subscriber revenues[488](index=488&type=chunk)[489](index=489&type=chunk) - Effective **January 12, 2024**, a definitive KR8 AI Master License and Services Agreement was signed, granting a perpetual license for AI machine learning epigenetic APP development in the U.S., Canada, and Mexico, with an initial fee of **$2,500,000**, a **$50,000** monthly maintenance fee, and a **15%** royalty on Subscriber Revenues[494](index=494&type=chunk)[495](index=495&type=chunk) - On **January 19, 2024**, FOXO issued **1,300,000 shares** of Class A Common Stock to KR8 AI under the License Agreement[499](index=499&type=chunk) - The company obtained two demand promissory notes from former director Andrew J. Poole in **September and October 2023**, totaling **$247,233 (no interest)** and **$42,500 (13.25% interest)**, respectively[500](index=500&type=chunk)[501](index=501&type=chunk) - The Board reviews and approves related person transactions exceeding **$120,000** where any related person has a direct or indirect material interest[514](index=514&type=chunk)[515](index=515&type=chunk) [Principal Accountant Fees and Services](index=84&type=section&id=Item%2014.%20Principal%20Accountant%20Fees%20and%20Services) FOXO experienced multiple changes in its independent registered public accounting firm, with KPMG LLP serving until **June 2023**, followed by EisnerAmper LLP until **January 2024**, and then Kreit & Chiu CPA LLP for the fiscal year ended **December 31, 2023** - KPMG LLP served as the independent registered public accounting firm until **June 12, 2023**[519](index=519&type=chunk) - EisnerAmper LLP was appointed effective **June 12, 2023**, and served until **January 3, 2024**[520](index=520&type=chunk) - Kreit & Chiu CPA LLP was engaged on **December 29, 2023**, to serve as the independent registered public accounting firm for the year ended **December 31, 2023**[520](index=520&type=chunk) Audit and Audit-Related Fees (Fiscal Years Ended December 31, 2023 and 2022) | For the Fiscal Year Ended | 2023 | 2022 | | :------------------------ | :-------- | :---------- | | Audit Fees | $373,236 | $516,187 | | Audit-Related Fees | $110,675 | $704,219 | | Total | $483,911 | $1,220,406 | - The audit committee is responsible for pre-approving all auditing and permissible non-audit services[522](index=522&type=chunk) [Part IV](index=85&type=section&id=Part%20IV) [Exhibits and Financial Statement Schedules](index=85&type=section&id=Item%2015.%20Exhibits%20and%20Financial%20Statement%20Schedules) This section lists the consolidated financial statements, financial statement schedules, and exhibits filed as part of the Annual Report on Form **10-K** - Consolidated Financial Statements and Report of Independent Registered Public Accounting Firm are set forth on pages **F-1 through F-47**[526](index=526&type=chunk) - Financial statement schedules are omitted if not required, not applicable, or if the information is shown in the consolidated financial statements or notes[527](index=527&type=chunk) - Required exhibits are incorporated by reference or filed with this Annual Report[528](index=528&type=chunk) [Form 10-K Summary](index=90&type=section&id=Item%2016.%20Form%2010-K%20Summary) This item is not applicable to FOXO Technologies Inc - Form **10-K** Summary is not applicable[537](index=537&type=chunk) [Signatures](index=91&type=section&id=Signatures) The Annual Report on Form **10-K** was duly signed on **June 6, 2024**, by Mark White as Interim Chief Executive Officer and Martin Ward as Interim Chief Financial Officer, along with other directors - The Annual Report was signed on **June 6, 2024**[539](index=539&type=chunk) - Signatories include Mark White (Interim Chief Executive Officer and Director) and Martin Ward (Interim Chief Financial Officer), and directors Francis Colt deWolf III and Bret Barnes[540](index=540&type=chunk)[541](index=541&type=chunk) [INDEX TO CONSOLIDATED FINANCIAL STATEMENTS](index=92&type=section&id=INDEX%20TO%20CONSOLIDATED%20FINANCIAL%20STATEMENTS) [Report of Independent Registered Public Accounting Firm (KPMG LLP)](index=93&type=section&id=Report%20of%20Independent%20Registered%20Public%20Accounting%20Firm%20%28KPMG%20LLP%29) KPMG LLP audited FOXO's consolidated financial statements for **2022**, issuing a fair opinion but highlighting substantial doubt about the company's ability to continue as a going concern due to negative cash flows and operating losses - KPMG LLP audited the consolidated financial statements for the year ended **December 31, 2022**, and expressed a fair opinion[545](index=545&type=chunk) - The report included an explanatory paragraph regarding substantial doubt about the company's ability to continue as a going concern due to continued negative cash flows and losses from operations[546](index=546&type=chunk) [Report of Independent Registered Public Accounting Firm (Kreit & Chiu CPA LLP)](index=94&type=section&id=Report%20of%20Independent%20Registered%20Public%20Accounting%20Firm%20%28Kreit%20%26%20Chiu%20CPA%20LLP%29) Kreit & Chiu CPA LLP audited FOXO's consolidated financial statements for **2023**, issuing a fair opinion but emphasizing substantial doubt about the company's ability to continue as a going concern due to negative working capital and recurring losses - Kreit & Chiu CPA LLP audited the consolidated financial statements for the year ended **December 31, 2023**, and expressed a fair opinion[552](index=552&type=chunk) - The report included an explanatory paragraph on going concern, citing a negative working capital and shareholders' deficiency of **$14,103,000** and **$14,100,000**, respectively, as of **December 31, 2023**, and recurring net losses of **$26,451,000 (2023)** and **$95,255,000 (2022)**[553](index=553&type=chunk) [Consolidated Balance Sheets](index=95&type=section&id=Consolidated%20Balance%20Sheets) The consolidated balance sheets present FOXO's financial position as of **December 31, 2023**, and **2022**, showing a significant decrease in total assets and cash, a rise in current liabilities, and a shift to a substantial stockholders' deficit Consolidated Balance Sheet Summary (Dollars in thousands) | Metric | December 31, 2023 | December 31, 2022 | | :-------------------------- | :---------------- | :---------------- | | Total current assets | $233 | $12,304 | | Total assets | $725 | $35,408 | | Total current liabilities | $14,336 | $6,913 | | Total liabilities | $14,825 | $28,700 | | Total stockholders' (deficit) equity | $(14,100) | $6,708 | - Cash and cash equivalents decreased significantly from **$5,515,000** in **2022** to **$38,000** in **2023**[558](index=558&type=chunk) - The company's stockholders' equity shifted from a positive **$6,708,000** in **2022** to a deficit of **$14,100,000** in **2023**[558](index=558&type=chunk) - Intangible assets, net, decreased from **$2,043,000** in **2022** to **$378,000** in **2023**, largely due to impairment charges[558](index=558&type=chunk) [Consolidated Statements of Operations](index=96&type=section&id=Consolidated%20Statements%20of%20Operations) The consolidated statements of operations show a substantial reduction in net loss for FOXO, from **$95,255,000** in **2022** to **$26,451,000** in **2023**, primarily driven by decreased operating expenses and the absence of large non-cash charges, despite a **72%** decline in total revenue Consolidated Statements of Operations Summary (Dollars in thousands) | Metric | Year Ended December 31, 2023 | Year Ended December 31, 2022 | | :----------------------------------------------- | :--------------------------- | :--------------------------- | | Total revenue | $145 | $511 | | Gross profit | $13 | $167 | | Total operating expenses | $22,201 | $40,334 | | Loss from operations | $(22,188) | $(40,167) | | Non-cash change in fair value of convertible debentures | $- | $(28,180) | | Forward purchase agreement expense | $- | $(27,337) | | Net loss | $(26,451) | $(95,255) | | Net loss to common stockholders | $(29,829) | $(95,255) | - Net loss decreased by **$68,804,000 (72%)** from **$95,255,000** in **2022** to **$26,451,000** in **2023**[559](index=559&type=chunk) - Total revenue decreased by **$366,000 (72%)** from **$511,000** in **2022** to **$145,000** in **2023**[559](index=559&type=chunk) - Operating expenses decreased by **$18,133,000 (45%)** from **$40,334,000** in **2022** to **$22,201,000** in **2023**[559](index=559&type=chunk) [Consolidated Statements of Stockholders' (Deficit) Equity](index=97&type=section&id=Consolidated%20Statements%20of%20Stockholders'%20%28Deficit%29%20Equity) The consolidated statements of stockholders' (deficit) equity reflect the impact of the reverse recapitalization in **2022** and subsequent financial activities, leading to a significant accumulated deficit and negative total stockholders' equity by year-end **2023** - The balance of total stockholders' (deficit) equity shifted from **$6,708,000** at **December 31, 2022**, to **$(14,100,000)** at **December 31, 2023**[561](index=561&type=chunk) - Net loss to common stockholders for **2023** was **$(29,829,000)**, contributing to an accumulated deficit of **$(177,060,000)**[561](index=561&type=chunk) - Deemed dividends related to the Exchange Offer and trigger of down round provisions of Assumed Warrants totaled **$(3,378,000)** in **2023**[561](index=561&type=chunk) - Private placements in **2023** resulted in an increase in additional paid-in capital of **$862,000**[561](index=561&type=chunk) [Consolidated Statements of Cash Flows](index=99&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) The consolidated statements of cash flows show a significant reduction in net cash used in operating activities, from **$23,760,000** in **2022** to **$6,645,000** in **2023**, primarily due to a lower net loss and proceeds from the sale of FOXO Life Insurance Company Consolidated Statements of Cash Flows Summary (Dollars in thousands) | Cash Flow Activity | Year Ended December 31, 2023 | Year Ended December 31, 2022 | | :------------------------- | :--------------------------- | :--------------------------- | | Operating Activities | $(6,645) | $(23,760) | | Investing Activities | $- | $(1,870) | | Financing Activities | $1,168 | $24,289 | | Net change in cash and cash equivalents | $(5,477) | $(1,341) | | Cash and cash equivalents at end of period | $38 | $5,515 | - Net cash used in operating activities decreased by **$17,115,000 (72%)** in **2023**, driven by a reduction in net loss and **$4,751,000** from the sale of FOXO Life Insurance Company[327](index=327&type=chunk)[562](index=562&type=chunk) - Net cash provided by financing activities decreased from **$24,289,000** in **2022** to **$1,168,000** in **2023**, reflecting lower proceeds from private placements and the absence of large reverse recapitalization proceeds[329](index=329&type=chunk)[562](index=562&type=chunk) - Cash and cash equivalents at the end of **2023** were **$38,000**, a significant decrease from **$5,515,000** at the end of **2022**[562](index=562&type=chunk) [Notes to Consolidated Financial Statements](index=101&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) The Notes to Consolidated Financial Statements provide detailed disclosures on FOXO's business, significant accounting policies, financial instruments, debt, equity, and related party transactions, highlighting ongoing going concern issues and strategic shifts [Note 1 DESCRIPTION OF BUSINESS](index=101&type=section&id=Note%201%20DESCRIPTION%20OF%20BUSINESS) FOXO Technologies Inc. commercializes epigenetic biomarker technology, applying AI and machine learning for health, wellness, and aging insights, with business divided into FOXO Labs and FOXO Life, following a significant Business Combination in **September 2022** and the sale of FOXO Life Insurance Company in **February 2023** - FOXO commercializes epigenetic biomarker technology, applying AI and machine learning to discover biomarkers for human health, wellness, and aging[564](index=564&type=chunk) - The company's business is managed in two reportable segments: FOXO Labs and FOXO Life[565](index=565&type=chunk) - A Business Combination was consummated on **September 15, 2022**, where Delwinds Insurance Acquisition Corp. changed its name to FOXO Technologies Inc., and Legacy FOXO became a wholly-owned subsidiary[567](index=567&type=chunk) - FOXO Life Insurance Company was sold on **February 3, 2023**[568](index=568&type=chunk) [Note 2 GOING CONCERN AND MANAGEMENT'S PLAN](index=102&type=section&id=Note%202%20GOING%20CONCERN%20AND%20MANAGEMENT'S%20PLAN) FOXO's history of losses, negative working capital, and insufficient cash (**$38,000** as of **December 31, 2023**) raise substantial doubt about its ability to continue as a going concern beyond **Q3 2024**, necessitating additional financing and revenue generation - The company incurred net losses to common stockholders of **$29,829,000 (2023)** and **$95,255,000 (2022)**, with an accumulated deficit of **$14,100,000** and a working capital deficit of **$14,103,000** as of **December 31, 2023**[572](index=572&type=chunk) - Cash and cash equivalents were **$38,000** as of **December 31, 2023**, and the company's ability to continue as a going concern is dependent on generating revenue and raising additional capital[572](index=572&type=chunk)[573](index=573&type=chunk) - FOXO received official notices of noncompliance from NYSE American for failing to timely file its **10-K** for **2023** and for being below compliance with stockholders' equity requirements, with a compliance plan accepted until **December 12, 2024**[575](index=575&type=chunk)[579](index=579&type=chunk) - The company is in default of its Senior PIK Notes due to missed payments starting **November 1, 2023**, and is negotiating with holders for a resolution[581](index=581&type=chunk) - Substantial doubt exists about the company's ability to continue as a going concern for the **one-year** period following the issuance of the financial statements[582](index=582&type=chunk) [Note 3 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES](index=104&type=section&id=Note%203%20SUMMARY%20OF%20SIGNIFICANT%20ACCOUNTING%20POLICIES) This note details FOXO's significant accounting policies, including the reverse recapitalization accounting for the Business Combination, its status as an emerging growth company, the **1-for-10** reverse stock split, and policies for cash, write-offs, impairment, fair value measurements, debt, revenue recognition, equity-based compensation, R&D costs, income taxes, net loss per share, and asset acquisitions - The Business Combination was accounted for as a reverse recapitalization, with Delwinds treated as the 'acquired' company and Legacy FOXO as the accounting acquirer[584](index=584&type=chunk) - FOXO is an 'emerging growth company' and has elected not to opt out of the extended transition period for complying with new or revised financial accounting standards[587](index=587&type=chunk) - A **1-for-10 reverse stock split** was effected on **November 6, 2023**, to regain compliance with NYSE American listing standards[589](index=589&type=chunk)[590](index=590&type=chunk) - The company recognized a **$1,313,000** write-off of supplies (Epic+ arrays, mouse arrays, saliva test kits) in **2023** due to project completion and expired warranties[595](index=595&type=chunk) - Revenue recognition follows a **five-step** approach, with revenues primarily from epigenetic biomarker services and royalties, and historically from life insurance commissions[603](index=603&type=chunk)[604](index=604&type=chunk) - FOXO Labs' revenues decreased by **$357,000** in **2023**, driven by a **$301,000** decrease in Epigenetic biomarker services and a **$56,000** decrease in royalty revenues[604](index=604&type=chunk) - As of **October 19, 2023**, FOXO Life business activity was terminated due to sustained losses, and FOXO Life Insurance Company was sold on **February 3, 2023**[608](index=608&type=chunk)[612](index=612&type=chunk) [Note 4 INTANGIBLE ASSETS, NET AND CLOUD COMPUTING ARRANGEMENTS, NET](index=111&type=section&id=Note%204%20INTANGIBLE%20ASSETS%2C%20NET%20AND%20CLOUD%20COMPUTING%20ARRANGEMENTS%2C%20NET) FOXO's intangible assets and cloud computing arrangements are subject to annual impairment reviews, with **$2,633,000** in impairment losses recognized in **2023** for the digital insurance platform, underwriting API, and longevity API due to revised cash flow forecasts and discontinued sales expectations Intangible Assets, Net (Dollars in thousands) | Asset | 2023 | 2022 | | :------------------------ | :--- | :--- | | Methylation pipeline | $592 | $592 | | Underwriting API | $840 | $840 | | Longevity API | $717 | $717 | | Less accumulated amortization and impairment | $(1,771)| $(106)| | Intangible assets, net | $378 | $2,043| Cloud Computing Arrangements, Net (Dollars in thousands) | Asset | 2023 | 2022 | | :------------------------ | :--- | :--- | | Digital insurance platform| $2,966| $2,966| | Less accumulated amortization and impairment | $(2,966)| $(741)| | Cloud computing arrangements, net | $- | $2,225| - Amortization expense for intangible assets and cloud computing arrangements was **$1,257,000** in **2023** and **$1,283,000** in **2022**[622](index=622&type=chunk) - Recognized a **$1,425,000** impairment loss in **April 2023** for the digital insurance platform[623](index=623&type=chunk) - Recognized impairment losses of **$630,000** for the underwriting API and **$578,000** for the longevity API in **June 2023**, totaling **$2,633,000** in **2023**[624](index=624&type=chunk)[625](index=625&type=chunk) [Note 5 DEBT](index=112&type=section&id=Note%205%20DEBT) This note details FOXO's debt instruments, including the **15%** Senior PIK Notes, which matured on **April 1, 2024**, and are currently in default due to missed payments, and the historical **2021** and **2022** Bridge Debentures, which were converted into equity - FOXO issued **15%** Senior PIK Notes in **September 2022** for an aggregate principal of **$3,458,000**, maturing on **April 1, 2024**[627](index=627&type=chunk) - The company is in default of the Senior PIK Notes due to failure to make monthly payments commencing **November 1, 2023**, leading to an increased interest rate of **22% per annum**[628](index=628&type=chunk)[634](index=634&type=chunk) - The PIK Note Amendment, consummated in **May 2023**, was accounted for as an extinguishment, resulting in a **$1,596,000** expense, including **$1,339,000** for the issuance of Class A Common Stock to holders[633](index=633&type=chunk) - As of **December 31, 2023**, the **$4,203,000** balance of the Senior PIK Notes is recorded as current liabilities[636](index=636&type=chunk) - The **2021 Bridge Debentures ($11,812,000 aggregate principal)** and **2022 Bridge Debentures ($30,800,000 aggregate principal)** were converted into FOXO Class A Common Stock and subsequently exchanged for the Company's Class A Common Stock as part of the Business Combination[637](index=637&type=chunk)[641](index=641&type=chunk)[644](index=644&type=chunk) [Note 6 RELATED PARTY TRANSACTIONS](index=115&type=section&id=Note%206%20RELATED%20PARTY%20TRANSACTIONS) This note details FOXO's related party transactions, including historical office subleases, convertible debentures, and a promissory note with Delwinds, as well as recent demand promissory notes from former director Andrew J. Poole and **$595,000** owed to KR8 AI Inc. (controlled by current executives) for management, license, and maintenance fees - The company subleased office space from an investor, with payments treated as additional capital contributions[646](index=646&type=chunk) - FOXO obtained a **$247,000** demand promissory note (no interest) and a **$43,000** demand promissory note (**13.25% interest**) from former director Andrew J. Poole in **September and October 2023**, respectively[650](index=650&type=chunk)[651](index=651&type=chunk) - As of **December 31, 2023**, FOXO owed KR8 AI Inc. **$595,000** for management, license, and maintenance fees, with KR8 AI Inc. being equity-owned by FOXO's Interim CEO and Interim CFO[653](index=653&type=chunk) - A consulting agreement with a related party, which expired in **April 2023**, resulted in **$2,676,000** of expenses recognized in **2023**[654](index=654&type=chunk) - Key executive and board changes in **2023** include the resignations of Tyler Danielson (former Interim CEO), Robert Potashnick (former CFO), and Andrew Poole (director), and the appointments of Mark White (Interim CEO) and Martin Ward (Interim CFO)[656](index=656&type=chunk)[657](index=657&type=chunk)[658](index=658&type=chunk) [Note 7 STOCKHOLDERS' (DEFICIT) EQUITY](index=117&type=section&id=Note%207%20STOCKHOLDERS'%20%28Deficit%29%20Equity) This note details FOXO's stockholders' equity, including authorized shares, **2023** private placements, Finder's Fee and Shares for Services Agreements, and the impact of the Assumed Warrants' down round provision and Exchange Offer, all contributing to the company's current stockholders' deficit - As of **December 31, 2023**, FOXO had **10,000,000** authorized preferred shares (none issued) and **500,000,000** authorized Class A Common Stock shares, with **7,646,032** shares issued and outstanding[659](index=659&type=chunk)[660](index=660&type=chunk)[661](index=661&type=chunk) - In **2023**, the company completed two rounds of private placements, raising aggregate gross proceeds of **$450,000** and **$293,500**, respectively, through Stock Purchase Agreements[662](index=662&type=chunk)[663](index=663&type=chunk) - The Strata Purchase Agreement with ClearThink Capital Partners, LLC allows FOXO to sell up to **$2,000,000** of Class A Common Stock, and in **2023**, ClearThink purchased **200,000** restricted shares for **$200,000** and an additional **979,000 shares** for **$246,000**[664](index=664&type=chunk)[668](index=668&type=chunk) - A Finder's Fee Agreement with J.H. Darbie & Co., Inc. involved cash fees and the issuance of **25,672 five-year warrants** in **2023**[670](index=670&type=chunk)[673](index=673&type=chunk) - Shares for Services Agreements with Mitchell Silberberg & Knupp LLP (MSK) and Joseph Gunnar & Co., LLC (JGUN) resulted in the issuance of **292,866** and **276,875 shares** of Class A Common Stock, respectively, in satisfaction of outstanding amounts[675](index=675&type=chunk)[676](index=676&type=chunk) - The down round provision of Assumed Warrants was triggered in **2023**, increasing outstanding warrants to **2,007,848** with an exercise price of **$0.80 per share**, resulting in a **$912,000** deemed dividend[689](index=689&type=chunk) - The Exchange Offer in **May 2023** resulted in the issuance of **795,618 shares** of Class A Common Stock to Assumed Warrant holders, leading to a **$2,466,000** deemed dividend[691](index=691&type=chunk)[693](index=693&type=chunk) - The ELOC Agreement with Cantor Investor, which allowed FOXO to sell up to **$40,000,000** in Class A Common Stock, was mutually terminated in **November 2022** due to low market capitalization[679](index=679&type=chunk)[680](index=680&type=chunk) [Note 8 EQUITY-BASED COMPENSATION](index=122&type=section&id=Note%208%20EQUITY-BASED%20COMPENSATION) This note details FOXO's equity-based compensation plans, including the Management Contingent Share Plan (with **920,000 shares**), the terminated **2020 Stock Incentive Plan**, and the active **2022 Plan**, under which **609,770 restricted shares** were granted in **2023**, with **$1,113,000** in total equity-based compensation expense (excluding Management Contingent Share Plan) - The Management Contingent Share Plan, approved in **September 2022**, made **920,000 shares** of Class A Common Stock available for restricted share awards, subject to time-based vesting conditions[698](index=698&type=chunk)[699](index=699&type=chunk)[701](index=701&type=chunk) - Performance-based vesting for the Management Contingent Share Plan was no longer required after the sale of FOXO Life Insurance Company on **February 3, 2023**[702](index=702&type=chunk) - For the year ended **December 31, 2023**, **419,132 shares** under the Management Contingent Share Plan were forfeited, resulting in a net reduction of **$732,000** in compen

PART I - FINANCIAL INFORMATION [Item 1. Financial Statements](index=6&type=section&id=Item%201.%20Financial%20Statements) This section presents the company's unaudited condensed consolidated financial statements for the period ended September 30, 2023 [Unaudited Condensed Consolidated Balance Sheets](index=6&type=section&id=Unaudited%20Condensed%20Consolidated%20Balance%20Sheets) The balance sheets show a significant decline in assets and a shift to a stockholder deficit by September 30, 2023 Condensed Consolidated Balance Sheets (Dollars in thousands) | Metric | Sep 30, 2023 | Dec 31, 2022 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $42 | $5,515 | | Total current assets | $2,585 | $12,304 | | Total assets | $3,131 | $35,408 | | **Liabilities and Stockholders' (Deficit) Equity** | | | | Total current liabilities | $13,516 | $6,913 | | Total liabilities | $14,234 | $28,700 | | Total stockholders' (deficit) equity | $(11,103) | $6,708 | - The Company's cash and cash equivalents significantly decreased from **$5,515 thousand** at December 31, 2022, to **$42 thousand** at September 30, 2023, indicating a substantial reduction in liquidity[14](index=14&type=chunk) - Total stockholders' (deficit) equity shifted from a positive **$6,708 thousand** at December 31, 2022, to a deficit of **$(11,103) thousand** at September 30, 2023, reflecting accumulated losses and other equity changes[14](index=14&type=chunk) [Unaudited Condensed Consolidated Statements of Operations](index=7&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Operations) The statements of operations reveal a decrease in revenue but a significant improvement in net loss Condensed Consolidated Statements of Operations (Dollars in thousands) | Metric | Three Months Ended Sep 30, 2023 | Three Months Ended Sep 30, 2022 | Nine Months Ended Sep 30, 2023 | Nine Months Ended Sep 30, 2022 | | :--- | :--- | :--- | :--- | :--- | | Total revenue | $10 | $14 | $35 | $93 | | Gross profit | $(60) | $14 | $(35) | $93 | | Loss from operations | $(3,507) | $(8,813) | $(18,504) | $(19,306) | | Net loss | $(3,660) | $(41,026) | $(22,592) | $(76,932) | | Net loss per share (basic and diluted) | $(0.75) | $(67.04) | $(7.48) | $(128.65) | - Total revenue decreased by **28.6%** for the three months ended September 30, 2023, and by **62.4%** for the nine months ended September 30, 2023, compared to the respective prior periods[15](index=15&type=chunk) - Net loss significantly improved, decreasing by **91.1%** to **$(3,660) thousand** for the three months ended September 30, 2023, and by **70.6%** to **$(22,592) thousand** for the nine months ended September 30, 2023, primarily due to reduced non-operating expenses related to fair value changes of convertible debentures and derivatives[15](index=15&type=chunk)[196](index=196&type=chunk)[209](index=209&type=chunk) [Unaudited Condensed Consolidated Statements of Changes in Stockholders' Equity (Deficit)](index=8&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Changes%20in%20Stockholders'%20(Deficit)%20Equity) The statements reflect an increasing accumulated deficit alongside growth in paid-in capital and outstanding shares - The accumulated deficit increased from **$(147,231) thousand** at December 31, 2022, to **$(172,289) thousand** at September 30, 2023, reflecting ongoing net losses[17](index=17&type=chunk) - Additional paid-in capital increased from **$153,936 thousand** to **$161,180 thousand** during the nine months ended September 30, 2023, driven by private placements, the 2022 Debenture Release, PIK Note Amendment, and Exchange Offer[17](index=17&type=chunk) - The number of Class A common stock shares outstanding increased from **2,966,967** at December 31, 2022, to **5,916,852** at September 30, 2023, due to various equity issuances including private placements and conversions[17](index=17&type=chunk) [Unaudited Condensed Consolidated Statements of Cash Flows](index=10&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Cash flow statements show reduced cash usage in operations but a significant drop in financing activities Condensed Consolidated Statements of Cash Flows (Dollars in thousands) | Cash Flow Activity | Nine Months Ended Sep 30, 2023 | Nine Months Ended Sep 30, 2022 | | :--- | :--- | :--- | | Net cash used in operating activities | $(6,165) | $(19,232) | | Net cash used in investing activities | $0 | $(1,730) | | Net cash provided by financing activities | $692 | $24,560 | | Net change in cash and cash equivalents | $(5,473) | $3,598 | | Cash and cash equivalents at end of period | $42 | $10,454 | - Net cash used in operating activities decreased by **68%** to **$(6,165) thousand** for the nine months ended September 30, 2023, compared to **$(19,232) thousand** in the prior year, primarily due to a lower net loss and less cash used for working capital[18](index=18&type=chunk)[243](index=243&type=chunk) - Net cash provided by financing activities significantly decreased from **$24,560 thousand** in 2022 to **$692 thousand** in 2023, mainly due to non-recurring debt financing in the prior period[18](index=18&type=chunk)[245](index=245&type=chunk) [Notes to Unaudited Condensed Consolidated Financial Statements](index=12&type=section&id=Notes%20to%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) The notes provide detailed explanations of accounting policies and significant corporate events [Note 1 Description of Business](index=12&type=section&id=Note%201%20DESCRIPTION%20OF%20BUSINESS) The company commercializes epigenetic biomarker technology using AI for health, wellness, and aging insights - FOXO Technologies Inc. (formerly Delwinds Insurance Acquisition Corp.) is a leader in commercializing epigenetic biomarker technology, applying AI/machine learning to discover biomarkers for human health, wellness, and aging[20](index=20&type=chunk) - The Company entered into a Letter Agreement with KR8 AI Inc. on October 29, 2023, to develop a Direct-to-Consumer app (iOS and Android) combining AI Machine Learning with Foxo's epigenetic biomarker technology for a subscription consumer engagement platform in North America[20](index=20&type=chunk) - The Business Combination closed on September 15, 2022, with FOXO Technologies Operating Company becoming a wholly-owned subsidiary of FOXO Technologies Inc., conducting all core business operations[23](index=23&type=chunk)[24](index=24&type=chunk) [Note 2 Going Concern Uncertainty and Management's Plan](index=12&type=section&id=Note%202%20GOING%20CONCERN%20UNCERTAINTY%20AND%20MANAGEMENT'S%20PLAN) The company faces substantial doubt about its ability to continue as a going concern due to recurring losses and low cash reserves - The Company has a history of losses, with a net loss of **$3,660 thousand** and **$22,592 thousand** for the three and nine months ended September 30, 2023, respectively, and an accumulated deficit of **$172,289 thousand** as of September 30, 2023[25](index=25&type=chunk) - As of September 30, 2023, the Company had only **$42 thousand** in cash and cash equivalents, and cash used in operating activities for the nine months ended September 30, 2023, was **$6,165 thousand**, raising substantial doubt about its ability to continue as a going concern[25](index=25&type=chunk) - The Company failed to make PIK Note payments due November 1, 2023, constituting an event of default, which increased the interest rate from **15% to 22%** per annum and allows holders to accelerate the Maturity Date at **130%** of the outstanding principal balance[30](index=30&type=chunk)[31](index=31&type=chunk) - The Company received a NYSE American notice of noncompliance on June 12, 2023, due to a stockholders' deficit and sustained losses, requiring a compliance plan by December 12, 2024[28](index=28&type=chunk) [Note 3 Summary of Significant Accounting Policies](index=14&type=section&id=Note%203%20SUMMARY%20OF%20SIGNIFICANT%20ACCOUNTING%20POLICIES) The financial statements are prepared under U.S. GAAP for interim reporting, with the company classified as an emerging growth company - The unaudited condensed consolidated financial statements are prepared in accordance with U.S. GAAP for interim financial information and SEC rules, with certain disclosures condensed or omitted[33](index=33&type=chunk) - The Company is an 'emerging growth company' and takes advantage of certain exemptions from reporting requirements[35](index=35&type=chunk) [Note 4 Intangible Assets and Cloud Computing Arrangements](index=14&type=section&id=Note%204%20INTANGIBLE%20ASSETS%20AND%20CLOUD%20COMPUTING%20ARRANGEMENTS) The company recognized significant impairment losses on its intangible assets and cloud computing arrangements in 2023 Intangible Assets (Dollars in thousands) | Asset | Sep 30, 2023 | Dec 31, 2022 | | :--- | :--- | :--- | | Methylation pipeline | $592 | $592 | | Underwriting API | $840 | $840 | | Longevity API | $717 | $717 | | Less: accumulated amortization and impairment | $(1,721) | $(106) | | **Intangible assets, net** | **$428** | **$2,043** | Cloud Computing Arrangements (Dollars in thousands) | Asset | Sep 30, 2023 | Dec 31, 2022 | | :--- | :--- | :--- | | Digital insurance platform | $2,966 | $2,966 | | Less: accumulated amortization and impairment | $(2,966) | $(741) | | **Cloud computing arrangements, net** | **$0** | **$2,225** | - The Company recognized a **$1,425 thousand** impairment loss in April 2023 for the digital insurance platform, as its usage and cash flows no longer supported the asset[39](index=39&type=chunk) - In June 2023, the underwriting API and longevity API were fully impaired, resulting in charges of **$630 thousand** and **$578 thousand**, respectively, due to no longer forecasting positive cash flows[40](index=40&type=chunk) [Note 5 Debt](index=16&type=section&id=Note%205%20DEBT) The company details its Senior PIK Notes, a subsequent amendment accounted for as an extinguishment, and a recent default - The Company issued 15% Senior Promissory Notes (Senior PIK Notes) totaling **$3,458 thousand** in September 2022, with net proceeds of **$2,918 thousand**[41](index=41&type=chunk) - On May 26, 2023, the Company consummated the PIK Note Offer to Amend, issuing **432,188 shares** of Class A Common Stock to holders in exchange for consent to amendments allowing future equity/debt issuances without prepaying the PIK Notes[44](index=44&type=chunk)[46](index=46&type=chunk) - The PIK Note Amendment was accounted for as an extinguishment, resulting in a **$1,596 thousand** expense[47](index=47&type=chunk) - The Company defaulted on PIK Note payments due November 1, 2023, increasing the interest rate from **15% to 22%** per annum and allowing holders to accelerate the debt at **130%** of the outstanding principal balance[49](index=49&type=chunk)[50](index=50&type=chunk) [Note 6 Related Party Transactions](index=18&type=section&id=Note%206%20RELATED%20PARTY%20TRANSACTIONS) This note describes transactions with related parties, including loans, consulting agreements, and key management changes - As of September 30, 2023, **$500 thousand** was remaining due to the Sponsor from a loan to finance Business Combination transaction costs[55](index=55&type=chunk) - On September 19, 2023, the Company obtained a **$247 thousand** interest-free demand promissory note from former director Andrew J. Poole to pay for directors' and officers' insurance[56](index=56&type=chunk) - Expenses related to a consulting agreement with a related party decreased significantly, with **$0** recognized for the three months ended September 30, 2023, compared to **$2,081 thousand** in the prior year, as the agreement expired in April 2023[57](index=57&type=chunk) - Key management changes occurred in September 2023, with Tyler Danielson resigning as Interim CEO, Robert Potashnick resigning as CFO, and Mark White appointed Interim CEO and Director, and Martin Ward appointed Interim CFO[59](index=59&type=chunk)[60](index=60&type=chunk) [Note 7 Stockholders' (Deficit) Equity](index=20&type=section&id=Note%207%20STOCKHOLDERS'%20(DEFICIT)%20EQUITY) This note details the company's equity structure, warrants, and significant equity transactions during the period - The Company's Amended and Restated Company Charter authorizes **500,000,000 shares** of Class A Common Stock and **10,000,000 shares** of preferred stock; no preferred stock was issued or outstanding as of September 30, 2023[61](index=61&type=chunk)[62](index=62&type=chunk) - Public Warrants (**1,006,250**) and Private Placement Warrants (**31,623**) entitle holders to purchase Class A Common Stock at **$115.00 per share**, exercisable 30 days after Business Combination completion[63](index=63&type=chunk)[64](index=64&type=chunk) - Assumed Warrants (**190,619**) from the Business Combination allow purchase of Class A Common Stock at **$62.10 per share** and include a down round provision[68](index=68&type=chunk) - The Exchange Offer, consummated on May 26, 2023, resulted in the issuance of **795,618 shares** of Class A Common Stock for 164,751 tendered Assumed Warrants, recorded as a **$2,466 thousand** deemed dividend[69](index=69&type=chunk)[71](index=71&type=chunk) - The 2022 Bridge Debenture Release in June 2023 involved issuing **703,500 shares** of Class A Common Stock to former holders in exchange for a general release, recognizing an expense of **$2,181 thousand**[72](index=72&type=chunk)[74](index=74&type=chunk) - The 2023 Private Placement, completed in two tranches in July and August 2023, raised aggregate gross proceeds of **$743.5 thousand** from the sale of **929,376 shares** of Class A Common Stock[75](index=75&type=chunk)[76](index=76&type=chunk) [Note 8 Net Loss Per Share](index=22&type=section&id=Note%208%20NET%20LOSS%20PER%20SHARE) Net loss per share improved significantly year-over-year, with potential dilutive securities excluded from the calculation - Net loss per share of Class A common stock (basic and diluted) was **$(0.75)** for the three months ended September 30, 2023, a significant improvement from **$(67.04)** in the prior year[82](index=82&type=chunk) - For the nine months ended September 30, 2023, net loss per share was **$(7.48)**, compared to **$(128.65)** in the prior year[82](index=82&type=chunk) - The computation of diluted net loss per share excluded **1,278,835** Class A common stock equivalents as of September 30, 2023 (including public, private, and assumed warrants, and assumed options), because their inclusion would be anti-dilutive due to the Company's loss position[80](index=80&type=chunk)[83](index=83&type=chunk) [Note 9 Fair Value Measurements](index=24&type=section&id=Note%209%20FAIR%20VALUE%20MEASUREMENTS) The fair value of the company's warrant liability decreased significantly during the period Fair Value Measurements of Warrant Liability (Dollars in thousands) | Metric | Sep 30, 2023 Fair Value | Level 1 | Level 2 | Level 3 | | :--- | :--- | :--- | :--- | :--- | | Warrant liability | $67 | $65 | $2 | $0 | | Metric | Dec 31, 2022 Fair Value | Level 1 | Level 2 | Level 3 | | :--- | :--- | :--- | :--- | :--- | | Warrant liability | $311 | $302 | $9 | $0 | - The warrant liability decreased from **$311 thousand** at December 31, 2022, to **$67 thousand** at September 30, 2023[85](index=85&type=chunk) - Public Warrants are classified as **Level 1** due to observable market quotes, while Private Placement Warrants are classified as **Level 2** with an insignificant adjustment for marketability restrictions[86](index=86&type=chunk) [Note 10 FOXO Life Insurance Company](index=25&type=section&id=Note%2010%20FOXO%20LIFE%20INSURANCE%20COMPANY) The company completed the sale of its life insurance subsidiary, gaining access to previously restricted capital - On February 3, 2023, the Company completed the sale of FOXO Life Insurance Company to Security National Life Insurance Company[88](index=88&type=chunk) - The transaction resulted in the Company gaining access to **$4,751 thousand** that was previously held as statutory capital and surplus, after accounting for the merger consideration and buyer's third-party expenses[88](index=88&type=chunk)[151](index=151&type=chunk) - A total loss of **$251 thousand** was recognized within selling, general and administrative expense related to the sale[88](index=88&type=chunk) [Note 11 Business Segment](index=25&type=section&id=Note%2011%20BUSINESS%20SEGMENT) The company operates two segments, FOXO Labs and FOXO Life, with the latter's business activities being discontinued - The Company manages two reportable business segments: FOXO Labs and FOXO Life[89](index=89&type=chunk) - FOXO Labs focuses on commercializing proprietary epigenetic biomarker technology for underwriting risk classification and generates revenue from epigenetic biomarker services and royalties[89](index=89&type=chunk)[90](index=90&type=chunk) - FOXO Life aimed to combine life insurance with a molecular health and wellness platform but discontinued this business activity as of October 19, 2023, due to sustained losses[89](index=89&type=chunk)[147](index=147&type=chunk) Segment Revenue and Earnings (Dollars in thousands) | Segment | Three Months Ended Sep 30, 2023 Revenue | Three Months Ended Sep 30, 2022 Revenue | Three Months Ended Sep 30, 2023 Earnings | Three Months Ended Sep 30, 2022 Earnings | | :--- | :--- | :--- | :--- | :--- | | FOXO Labs | $6 | $7 | $(269) | $(500) | | FOXO Life | $4 | $7 | $(139) | $(1,158) | | **Total** | **$10** | **$14** | **$(408)** | **$(1,658)** | | Segment | Nine Months Ended Sep 30, 2023 Revenue | Nine Months Ended Sep 30, 2022 Revenue | Nine Months Ended Sep 30, 2023 Earnings | Nine Months Ended Sep 30, 2022 Earnings | | :--- | :--- | :--- | :--- | :--- | | FOXO Labs | $20 | $71 | $(873) | $(1,952) | | FOXO Life | $15 | $22 | $(1,029) | $(3,070) | | **Total** | **$35** | **$93** | **$(1,902)** | **$(5,022)** | [Note 12 Commitments and Contingencies](index=27&type=section&id=Note%2012%20COMMITMENTS%20AND%20CONTINGENCIES) This note outlines license agreements, legal settlements, and severance accruals - The Company has license agreements with The Regents of University of California for DNA Methylation Based Predictor of Mortality and GrimAge/PhenoAge technology, requiring maintenance fees and royalties on sales[95](index=95&type=chunk)[96](index=96&type=chunk) - A legal proceeding with Smithline Family Trust II was settled on November 7, 2023, with the Company agreeing to pay **$2,300 thousand** in cash by November 7, 2024, with payments from equity financings[103](index=103&type=chunk)[104](index=104&type=chunk) - As of September 30, 2023, the Company accrued **$1,528 thousand** for former CEO severance, pending review of termination cause. If terminated with cause, **$9,130 thousand** of previously recognized stock-based compensation expense would be reversed[106](index=106&type=chunk)[107](index=107&type=chunk)[108](index=108&type=chunk) - The Company has an accrual of **$2,300 thousand** related to the settlement of legal proceedings as of September 30, 2023[110](index=110&type=chunk) [Note 13 Subsequent Events](index=30&type=section&id=Note%2013%20SUBSEQUENT%20EVENTS) The company details significant events after the reporting period, including financing, stock splits, and new agreements - On October 2, 2023, the Company obtained a **$43 thousand** loan from Andrew J. Poole, a former director, for legal fees, accruing interest at **13.25%** per annum[113](index=113&type=chunk) - On October 13, 2023, the Company entered into a Strata Purchase Agreement with ClearThink Capital Partners, LLC, to sell up to **$2,000 thousand** of Class A common stock, with a purchase price at **85%** of the lowest daily VWAP during a valuation period[114](index=114&type=chunk) - Concurrently, a Securities Purchase Agreement (SPA) with ClearThink involved the sale of **200,000** restricted shares of Common Stock for **$200 thousand** in two closings in October 2023[117](index=117&type=chunk) - On October 31, 2023, NYSE American halted trading in the Common Stock due to low selling price, leading to a **1-for-10 reverse stock split** implemented on November 6, 2023, to regain compliance[122](index=122&type=chunk)[123](index=123&type=chunk)[124](index=124&type=chunk) - On October 3, 2023, Mark White (Interim CEO) and Martin Ward (Interim CFO) were each granted **250,000 shares** of Class A common stock, fully earned and not subject to vesting[132](index=132&type=chunk) - Effective January 12, 2024, the Company entered into a Master Software and Services Agreement with KR8 AI Inc. (whose equity owners include the Interim CEO and CFO) for a perpetual license to develop an AI machine learning epigenetic app in the U.S., Canada, and Mexico, involving an initial **$2,500 thousand** fee, **$50 thousand** monthly maintenance, and **15%** royalty on subscriber revenues[133](index=133&type=chunk)[134](index=134&type=chunk) - On January 19, 2023, the Company issued **1,300,000 shares** of Common Stock to KR8 AI Inc. under the Master Software and Services Agreement[137](index=137&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=34&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses financial conditions, operational results, strategic shifts, and ongoing liquidity challenges [Overview](index=34&type=section&id=Overview) The company is focused on commercializing health and longevity science through its epigenetic biomarker technology - FOXO is focused on commercializing health and longevity science through epigenetic biomarker technology, leveraging AI and machine learning for new discoveries[139](index=139&type=chunk) - The Company offers Bioinformatics Services to other researchers and partners, providing data processing, quality checking, and analysis using its cloud-based bioinformatics pipeline[139](index=139&type=chunk)[144](index=144&type=chunk) - Historically, core product offerings included the 'Underwriting Report' (paused) and 'Longevity Report™' (paused for redevelopment), both leveraging epigenetic insights for life insurance[140](index=140&type=chunk) [Segments](index=34&type=section&id=Segments) The company operates through its FOXO Labs segment after discontinuing the FOXO Life insurance business - FOXO Labs performs R&D and commercializes epigenetic biomarker technology, generating revenue from epigenetic testing services and royalties[142](index=142&type=chunk)[143](index=143&type=chunk) - FOXO Life aimed to combine life insurance with a healthy longevity platform but decided to sell certain assets and terminate this business activity as of October 19, 2023, due to sustained losses[145](index=145&type=chunk)[147](index=147&type=chunk) - The sale of FOXO Life Insurance Company on February 3, 2023, provided access to **$4,751 thousand** previously held as statutory capital and surplus[150](index=150&type=chunk)[151](index=151&type=chunk) [Comparability of Financial Results](index=36&type=section&id=Comparability%20of%20Financial%20Results) The 2022 Business Combination was accounted for as a reverse recapitalization, impacting financial comparability - The Business Combination on September 15, 2022, was accounted for as a reverse recapitalization, with FOXO Technologies Operating Company (Legacy FOXO) as the accounting acquirer[153](index=153&type=chunk) - Upon closing, all outstanding Legacy FOXO Class A and Class B common stock were converted into **1,551,874 shares** of the Company's Class A Common Stock[155](index=155&type=chunk) [Recent Developments](index=36&type=section&id=Recent%20Developments) The company has recently undertaken asset impairments, significant layoffs, and various capital-raising efforts - The Company recognized **$2,633 thousand** in impairment losses during the nine months ended September 30, 2023, for its digital insurance platform, underwriting API, and longevity API, as these assets no longer supported positive cash flows[156](index=156&type=chunk)[157](index=157&type=chunk) - Employee headcount was reduced from **22 to 4** by October 2023 through layoffs, aiming to reduce operating expenses and focus on Bioinformatics Services[158](index=158&type=chunk) - The Longevity Report is currently on hold due to the need to recompute data models with an updated array and develop additional content based on market research[159](index=159&type=chunk)[160](index=160&type=chunk) - The Company launched Bioinformatics Services on July 19, 2023, as a primary offering, providing advanced data solutions for epigenetic data processing and analysis to clients in academia, healthcare, government, and pharmaceutical research[161](index=161&type=chunk) - The 2023 Private Placement, completed in two rounds, generated aggregate gross proceeds of **$743.5 thousand** from the sale of **929,376 shares** of Class A Common Stock[163](index=163&type=chunk)[165](index=165&type=chunk) - The Exchange Offer and PIK Note Offer to Amend, consummated on May 26, 2023, facilitated amendments to existing agreements to permit future equity/debt issuances without triggering anti-dilution adjustments or requiring PIK Note prepayment, issuing **795,618** and **432,188** shares of Class A Common Stock, respectively[167](index=167&type=chunk)[171](index=171&type=chunk)[176](index=176&type=chunk) - The Company received a NYSE American notice of noncompliance on June 12, 2023, due to a stockholders' deficit and losses, and submitted a compliance plan by July 12, 2023, with an 18-month cure period[184](index=184&type=chunk)[185](index=185&type=chunk) [Non-GAAP Financial Measures](index=42&type=section&id=Non-GAAP%20Financial%20Measures) Management utilizes Adjusted EBITDA to evaluate the company's operating performance - Management uses Adjusted EBITDA as a non-GAAP financial measure to evaluate operating performance, excluding interest, tax, depreciation, amortization, non-cash fair value changes, stock-based compensation, and impairment[187](index=187&type=chunk) [Results of Operations](index=42&type=section&id=Results%20of%20Operations) The company experienced lower revenue but a significantly reduced net loss due to decreased operating and non-operating expenses Key Financial Results (Dollars in thousands) | Metric | 3 Months Ended Sep 30, 2023 | 3 Months Ended Sep 30, 2022 | Change ($) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Total revenue | $10 | $14 | $(4) | (29)% | | Gross profit | $(60) | $14 | $(74) | (529)% | | Research and development | $283 | $558 | $(275) | (49)% | | Management contingent share plan | $(1,553) | $0 | $(1,553) | N/A% | | Selling, general and administrative | $4,717 | $8,269 | $(3,552) | (43)% | | Loss from operations | $(3,507) | $(8,813) | $5,306 | 60% | | Non-operating expense | $(153) | $(32,213) | $32,060 | (100)% | | Net loss | $(3,660) | $(41,026) | $37,366 | (91)% | | Metric | 9 Months Ended Sep 30, 2023 | 9 Months Ended Sep 30, 2022 | Change ($) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Total revenue | $35 | $93 | $(58) | (62)% | | Gross profit | $(35) | $93 | $(128) | (138)% | | Research and development | $925 | $2,160 | $(1,235) | (57)% | | Management contingent share plan | $(141) | $0 | $(141) | N/A% | | Impairment | $2,633 | $0 | $2,633 | N/A% | | Selling, general and administrative | $15,052 | $17,239 | $(2,187) | (13)% | | Loss from operations | $(18,504) | $(19,306) | $802 | (4)% | | Non-operating expense | $(4,088) | $(57,626) | $53,538 | (93)% | | Net loss | $(22,592) | $(76,932) | $54,340 | (71)% | - Total revenue decreased by **29%** for the three months and **62%** for the nine months ended September 30, 2023, primarily due to lower life insurance commissions and reduced royalty revenue from Illumina, Inc[190](index=190&type=chunk)[198](index=198&type=chunk)[200](index=200&type=chunk)[203](index=203&type=chunk)[211](index=211&type=chunk)[213](index=213&type=chunk) - Net loss significantly decreased by **91%** for the three months and **71%** for the nine months ended September 30, 2023, mainly driven by reduced non-operating expenses related to fair value changes of convertible debentures and derivatives[194](index=194&type=chunk)[196](index=196&type=chunk)[208](index=208&type=chunk)[209](index=209&type=chunk) - Research and development expenses decreased by **49%** for the three months and **57%** for the nine months ended September 30, 2023, due to lower employee-related expenses, professional services, and the discontinuation of certain R&D projects[191](index=191&type=chunk)[199](index=199&type=chunk)[204](index=204&type=chunk)[212](index=212&type=chunk) - Selling, general and administrative expenses decreased by **43%** for the three months and **13%** for the nine months ended September 30, 2023, primarily due to the completion of a consulting agreement and lower employee-related expenses, partially offset by public company costs and intangible asset amortization[193](index=193&type=chunk)[201](index=201&type=chunk)[207](index=207&type=chunk)[214](index=214&type=chunk) [Other Operating Data](index=47&type=section&id=Other%20Operating%20Data) Adjusted EBITDA improved year-over-year, reflecting better operational performance after excluding non-cash and infrequent items Adjusted EBITDA Reconciliation (Dollars in thousands) | Metric | 3 Months Ended Sep 30, 2023 | 3 Months Ended Sep 30, 2022 | 9 Months Ended Sep 30, 2023 | 9 Months Ended Sep 30, 2022 | | :--- | :--- | :--- | :--- | :--- | | Net loss | $(3,660) | $(41,026) | $(22,592) | $(76,932) | | Add: Depreciation and amortization | $75 | $74 | $1,251 | $159 | | Add: Interest expense | $148 | $424 | $865 | $1,250 | | Add: Stock-based compensation | $(1,312) | $3,866 | $2,582 | $5,556 | | Add: Change in fair value of warrant liability | $(36) | $(1,349) | $(244) | $(1,349) | | Add: Change in fair value of forward purchase put derivative | $0 | $1,284 | $0 | $1,284 | | Add: Change in fair value of forward purchase collateral derivative | $0 | $27,378 | $0 | $27,378 | | Add: Impairment of intangible assets and cloud computing arrangements | $0 | $0 | $2,633 | $0 | | Add: Loss from PIK Note Amendment and 2022 Debenture Release | $0 | $0 | $3,521 | $0 | | Add: Non-cash change in fair value of convertible debentures | $0 | $3,697 | $0 | $28,180 | | **Adjusted EBITDA** | **$(4,785)** | **$(5,652)** | **$(11,984)** | **$(14,474)** | - Adjusted EBITDA improved from **$(5,652) thousand** to **$(4,785) thousand** for the three months ended September 30, 2023, and from **$(14,474) thousand** to **$(11,984) thousand** for the nine months ended September 30, 2023, reflecting better operational performance after excluding non-cash and infrequent items[218](index=218&type=chunk) [Liquidity and Capital Resources](index=47&type=section&id=Liquidity%20and%20Capital%20Resources) The company faces significant liquidity challenges with minimal cash reserves and requires additional financing to continue operations - The Company had cash and cash equivalents of **$42 thousand** as of September 30, 2023, a significant decrease from **$5,515 thousand** at December 31, 2022[219](index=219&type=chunk) - The Company has incurred net losses since inception, with an accumulated deficit of **$172,289 thousand** as of September 30, 2023, and expects to incur additional losses, indicating insufficient capital to fund operations for the next 12 months[219](index=219&type=chunk)[237](index=237&type=chunk) - The sale of FOXO Life Insurance Company in Q1 2023 provided access to **$4,751 thousand** in cash, which was used to fund operations[221](index=221&type=chunk) - The 2023 Private Placement provided net proceeds of **$260 thousand** and **$217 thousand** from two tranches, totaling **$477 thousand**[228](index=228&type=chunk) - The Company entered into a Strata Purchase Agreement in October 2023 to sell up to **$2,000 thousand** of Class A common stock to ClearThink Capital Partners, LLC, and a concurrent SPA for **$200 thousand** in restricted shares[229](index=229&type=chunk)[232](index=232&type=chunk) - The Company expects to fund operations through January 2024 based on current plans and cash position, but requires additional financing beyond that point[238](index=238&type=chunk) Contractual Obligations as of September 30, 2023 (Dollars in thousands) | Obligation | Less than 1 Year | 1 - 3 years | 3 - 5 years | More than 5 years | Total | | :--- | :--- | :--- | :--- | :--- | :--- | | License agreements | $20 | $40 | $40 | $0 | $100 | | Senior PIK Notes | $4,006 | $0 | $0 | $0 | $4,006 | | Supplier and other commitments | $14 | $0 | $0 | $0 | $14 | | **Total** | **$4,080** | **$40** | **$40** | **$0** | **$4,160** | [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=54&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) As a smaller reporting company, detailed market risk disclosures are not required - The Company is a smaller reporting company and is not required to provide quantitative and qualitative disclosures about market risk[259](index=259&type=chunk) [Item 4. Controls and Procedures](index=54&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective as of the end of the reporting period - The Company's Certifying Officers concluded that disclosure controls and procedures were effective as of September 30, 2023[261](index=261&type=chunk) - There were no material changes in the Company's internal control over financial reporting during the quarter ended September 30, 2023[262](index=262&type=chunk) - The Company acknowledges that disclosure controls and procedures provide only reasonable, not absolute, assurance and may not prevent all errors or fraud due to inherent limitations and resource constraints[263](index=263&type=chunk) PART II - OTHER INFORMATION [Item 1. Legal Proceedings](index=55&type=section&id=Item%201.%20Legal%20Proceedings) The company details the settlement of a legal dispute with Smithline Family Trust II - On November 7, 2023, the Company entered into a Settlement Agreement with Smithline Family Trust II to resolve all disputes, including claims for breach of contract, unjust enrichment, and fraud[265](index=265&type=chunk) - The Company agreed to pay Smithline **$2,300,000** in cash by November 7, 2024, with a minimum of **25%** of gross proceeds from any equity or equity-linked financing (excluding convertible debt until conversion) to be applied towards the payment[266](index=266&type=chunk) - The Company also agreed to use commercially reasonable efforts to pay **$300,000** in cash to Smithline by December 31, 2023[267](index=267&type=chunk) - The settlement includes restrictions on filing resale registration statements without Smithline's consent until **$300,000** is paid, and a provision for issuing additional shares to Smithline under certain future registration events[268](index=268&type=chunk)[269](index=269&type=chunk) [Item 1A. Risk Factors](index=56&type=section&id=Item%201A.%20Risk%20Factors) The company outlines significant risks including historical losses, capital needs, and potential delisting [Risks Related to Our Business and Industry](index=56&type=section&id=Risks%20Related%20to%20Our%20Business%20and%20Industry) The company faces risks from its history of losses, inadequate cash resources, and restrictive debt covenants - The Company has a history of losses, accumulating deficits of **$172,289 thousand** as of September 30, 2023, and may not achieve or maintain profitability in the future, requiring significant capital investments for growth[271](index=271&type=chunk) - The Company lacks adequate cash resources to fund operations through December 31, 2024, and requires additional capital, which may not be available on acceptable terms, potentially forcing delays, reductions, or cessation of commercialization efforts[272](index=272&type=chunk)[276](index=276&type=chunk)[277](index=277&type=chunk) - Covenants in outstanding indebtedness, particularly the Senior PIK Notes, restrict the Company's ability to incur new debt or equity financing without consent, limiting financial flexibility[279](index=279&type=chunk) - The Company is negotiating with PIK note holders to restructure notes due to default on November 1, 2023, which increased the interest rate from **15% to 22%** and allows acceleration of debt at **130%** of the principal balance[280](index=280&type=chunk) [Risks Related to Our Epigenetic Testing Services](index=61&type=section&id=Risks%20Related%20to%20Our%20Epigenetic%20Testing%20Services) The company's research may not yield commercially viable results, impacting future revenue generation - The Company's research projects for epigenetic biomarkers may not yield positive or immediately commercializable results, potentially impacting the acceptance of products and services and the ability to generate revenue[288](index=288&type=chunk)[289](index=289&type=chunk)[290](index=290&type=chunk) [Risks Related to Owning Our Securities](index=61&type=section&id=Risks%20Related%20to%20Owning%20Our%20Securities) Security ownership risks include potential delisting, unlikely warrant exercise, and challenges in maintaining internal controls - The Company is at risk of delisting from NYSE American due to non-compliance with listing standards, specifically having a stockholders' deficit and sustained losses, which could adversely affect trading, liquidity, and market price of Class A Common Stock[291](index=291&type=chunk)[292](index=292&type=chunk)[293](index=293&type=chunk) - The exercise price of Public and Private Warrants (**$115.00**) and Assumed Warrants (**$62.10**) is significantly higher than the Class A Common Stock closing price of **$0.276** as of January 18, 2024, making it unlikely for warrant holders to cash exercise, potentially resulting in no cash proceeds to the Company[282](index=282&type=chunk) - The Company may reduce the exercise price of warrants without holder consent, which would decrease potential cash proceeds, and anti-dilution provisions in Assumed Warrants could be triggered by future financings, further diluting equity[281](index=281&type=chunk)[282](index=282&type=chunk) - Failure to maintain effective internal control over financial reporting and disclosure controls could adversely affect financial reporting accuracy and timing, potentially leading to restatements, litigation, and negative investor confidence[283](index=283&type=chunk)[285](index=285&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=62&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company details a 2023 Private Placement conducted under an exemption from securities registration - The Company sold **562,500 shares** of Class A Common Stock in a 2023 Private Placement to three accredited investors for aggregate gross proceeds of **$450 thousand**[297](index=297&type=chunk) - These shares were issued under the exemption from securities registration afforded by Section 4(a)(2) of the Securities Act and Rule 506(b) of Regulation D[298](index=298&type=chunk) - Sales commissions of **$24 thousand** were paid to J.H. Darbie & Co., Inc. for this placement[299](index=299&type=chunk) [Item 5. Other Information](index=62&type=section&id=Item%205.%20Other%20Information) This section reports the resignation of a director from the company's board - Murdoc Khaleghi resigned from the Company's Board of Directors on August 9, 2023, for personal reasons[301](index=301&type=chunk) - His resignation was not related to any disagreement with the Company's operations, policies, or practices[301](index=301&type=chunk) [Item 6. Exhibits](index=63&type=section&id=Item%206.%20Exhibits) This section lists the certifications and interactive data files filed with the report - The report includes certifications from the Principal Executive Officer and Principal Financial and Accounting Officer pursuant to Section 302 and 18 U.S.C. Section 1350[304](index=304&type=chunk) - Various Inline XBRL documents (Instance, Schema, Calculation, Definition, Label, Presentation Linkbase, and Cover Page Interactive Data File) are filed as exhibits[304](index=304&type=chunk)

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2023 ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from __________ to __________ Commission File Number: 001-39783 FOXO TECHNOLOGIES INC. or (Exact name of registrant as specified in its charter) | Delaware | 85-105026 ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2023 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from __________ to __________ Commission File Number: 001-39783 FOXO TECHNOLOGIES INC. (Exact name of registrant as specified in its charter) Delaware 85-1050265 ( ...

Financial Performance and Capital Requirements - The company has accumulated deficits of $147,231,000 and $51,976,000 as of December 31, 2022 and December 31, 2021, respectively, with net losses of $95,255,000 and $38,488,000 for the years ended December 31, 2022 and 2021[95]. - The company expects to require significant capital to commercialize its product and service offerings and grow its business, which may not be available on acceptable terms[100]. - The company has a history of losses and may not achieve or maintain profitability in the future, with expectations of increasing net losses in the near term due to ongoing investments[95]. - The company has significant operating costs expected to be incurred in the next twelve months, raising concerns about its ability to continue as a going concern[98]. - The company’s outstanding indebtedness includes restrictive covenants that could limit financial flexibility and impact its financial condition[120]. - The company acknowledges that changes in general economic conditions, such as interest rates, could adversely impact its operating results and capital raising ability[130]. Operational Risks and Management Changes - Recent management changes, including the departure of the CEO and COO, could disrupt operations and impair the ability to attract and retain key personnel[104]. - The company is transitioning from a research and development focus to supporting both R&D and commercial activities, facing risks and uncertainties typical of development-stage companies[118]. - The company may experience difficulties in maintaining relationships with key distributors, which could adversely affect its ability to sell products and generate revenue[179]. Market Competition and Product Development - The company intends to provide consumer engagement through its health and wellness platform, but faces increasing competition in the personal health and wellness testing market[92]. - The company faces substantial competition from larger, established companies in the life insurance industry, which may impair its ability to commercialize its products and services[159]. - The company may not be able to develop epigenetic biomarkers that attract and retain life insurance carriers as customers, which is critical for its success[92]. - The company has developed ancillary products and services, such as the "MethylSuite" software, but these are not expected to generate significant revenue[173]. - The company anticipates competition based on product efficacy, accuracy, availability, and price, which will impact its competitive position[161]. Regulatory and Compliance Challenges - The company may be subject to laws and regulations relating to laboratory testing, which could materially adversely impact its ability to offer products or services[92]. - The company faces significant regulatory compliance obligations under GDPR and UK GDPR, which could impose fines of up to 4% of global annual turnover or €20 million for serious violations[140]. - The company is subject to various data privacy laws, including the California Consumer Privacy Act (CCPA), which imposes fines of up to $7,500 per violation, potentially increasing compliance costs[186]. - Noncompliance with the General Data Protection Regulation (GDPR) could result in fines of up to €20 million or 4% of global annual revenues, impacting the company's financial condition[187]. - The company’s underwriting technology and services may be subject to FDA regulations, which could adversely affect operations if premarket review or approval is required[170]. Intellectual Property and Legal Risks - The company relies on proprietary technology and intellectual property for its business success, with a focus on protecting trade secrets related to machine learning models[194]. - The uncertainty surrounding patent and trademark prosecution in biotechnology could affect the company's ability to secure and enforce intellectual property rights[196]. - The company may face claims regarding the inventorship or ownership of its patents, which could lead to costly litigation and loss of valuable intellectual property rights[206]. - The company anticipates increased litigation related to intellectual property as the industry expands, which could divert resources and management attention[209]. - The company’s proprietary information is at risk of misappropriation, which could materially impact its competitive advantages[213]. Customer Engagement and Data Security - Security incidents or errors in systems could lead to loss of customer information and damage to the company's reputation, impacting business operations[127]. - The company is at risk of reputational harm if it fails to address customer concerns regarding privacy and security, which could affect customer retention and acquisition[131]. - The company may face reputational damage and financial harm due to potential security breaches or unauthorized disclosures of customer data[184]. Stock Performance and Market Conditions - The Class A Common Stock has traded as low as $0.23 per share since the Business Combination, indicating significant volatility in the market[219]. - The company is subject to continued listing standards of the NYSE American, which includes maintaining a minimum stock price of $0.20 per share[220]. - The company’s stock price may be adversely affected by negative perceptions from securities analysts or investors during intellectual property litigation[214].

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2022 Securities registered pursuant to Section 12(b) of the Act: | Title of Each Class: | Trading Symbol(s) | Name of Each Exchange on Which Registered: | | --- | --- | --- | | Class A Common Stock, par value $0.0001 | FOXO | NYSE American | | Warrant, each whole warrant exercisable ...

Financial Position - As of June 30, 2022, the company had $147,023 in cash outside of the Trust Account and $638,228 as of December 31, 2021[122]. - As of June 30, 2022, the company had $37,665 in interest income available from its investments in the Trust Account to cover tax obligations[137]. - The company withdrew $147,436 from the Trust Account to pay tax obligations during the periods ended June 30, 2022[137]. - The company has not entered into any off-balance sheet financing arrangements or established special purpose entities[143]. - As of June 30, 2022, the company had no capital lease obligations or operating lease obligations[147]. Initial Public Offering - The company generated gross proceeds of $201,250,000 from its Initial Public Offering by selling 20,125,000 Units at a price of $10.00 per Unit[135]. - The company incurred offering costs of $11,494,785 related to the Initial Public Offering, including an underwriting fee of $4,025,000[136]. - The underwriters of the Initial Public Offering received a cash underwriting fee of 2% of gross proceeds, totaling $4,025,000, with deferred underwriting commissions of $7,043,750[148]. Business Combination - The FOXO Transaction Agreement was amended to reduce the number of shares to be issued as Merger Consideration from 10,000,000 to 9,200,000 shares[127]. - The company has the right to sell up to $40 million in shares of its Class A common stock to Cantor after the Closing of the FOXO Business Combination[125]. - The FOXO Note allows the company to draw down up to $1,159,995.69 to be deposited into the Trust Account for each Public Share not redeemed[141]. - The company extended the date to consummate its initial Business Combination from June 15, 2022, to September 15, 2022[126]. - The company does not anticipate needing to raise additional funds to meet operational expenditures prior to its initial Business Combination[142]. Financial Performance - For the three months ended June 30, 2022, the company reported a net loss of $132,253, which included a change in fair value of warrant liability of $943,298[133]. - Basic loss per common share is calculated by dividing net income applicable to common stockholders by the weighted average number of common shares outstanding[154]. - The company’s outstanding Public Warrants and Placement Warrants are recorded as liabilities and measured at fair value[155]. Management and Operations - The company pays its Sponsor $10,000 per month for administrative services, which will cease upon completion of the initial Business Combination or liquidation[146]. - Various factors, including economic downturns and geopolitical instability, may adversely affect the company's results of operations and ability to complete an initial Business Combination[157]. - Management does not believe that any recently issued accounting pronouncements will materially affect the financial statements[156].

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2022 ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from __________ to __________ Commission File Number: 001-39783 DELWINDS INSURANCE ACQUISITION CORP. (Exact name of registrant as specified in its charter) | Delaware | N/A | | ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K (Mark One) ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2021 ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number: 001-39783 DELWINDS INSURANCE ACQUISITION CORP. (Exact name of registrant as specified in its charter) Delaware N/A (State or other jurisdic ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2021 ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from __________ to __________ Commission File Number: 001-39783 DELWINDS INSURANCE ACQUISITION CORP. (Exact name of registrant as specified in its charter) | Delaware | | N/ ...