Business Segments - FOXO Technologies Inc. operates in two reportable business segments: Healthcare and Labs and Life, with a focus on behavioral health services and epigenetic diagnostics [205]. - The company finalized the acquisition of Myrtle and RCHI in 2024, expecting these businesses to produce a small cash flow surplus through 2025 [261]. Acquisitions - The company completed the acquisition of Myrtle for $0.5 million, which included a $0.3 million non-interest bearing note payable and 102,363 shares of Class A Common Stock [211]. - The company acquired RCHI and its subsidiary SCCH, with a senior secured note issued for $22.0 million, maturing on September 10, 2026, and accruing interest at rates of 8% to 20% [216][217]. - Myrtle's alcohol and drug treatment facility began operations on August 14, 2023, offering services for up to 30 patients, and expanded to include a Nonresidential Office-Based Opiate Treatment Facility on November 1, 2023 [213][224]. - The company plans to expand Myrtle's business model by acquiring additional facilities and replicating the model in other rural areas [224]. Financial Performance - Net revenues for the three months ended March 31, 2025, were $3.2 million, a significant increase from $7,180 for the same period in 2024, with contributions of $0.5 million from Myrtle and $2.7 million from RCHI [234]. - Direct costs of revenues were $1.9 million for the three months ended March 31, 2025, with no direct costs reported for the same period in 2024, attributed to the acquisitions of Myrtle and RCHI [235]. - Research and development expenses decreased to $30,000 for the three months ended March 31, 2025, from $165,360 in the same period of 2024, reflecting the cessation of ongoing projects [236]. - Selling, general and administrative expenses rose to $2.8 million for the three months ended March 31, 2025, compared to $1.0 million in 2024, primarily due to expenses from the acquired companies [238]. - The net loss attributable to FOXO was $0.6 million for the three months ended March 31, 2025, an improvement from a loss of $1.5 million in 2024, mainly due to a gain from extinguishment of Senior PIK Notes [243]. - The company recorded a gain of $1.9 million from the extinguishment of $5.4 million of Senior PIK Notes during the three months ended March 31, 2025 [240]. - Total revenues for the healthcare segment were $3.2 million for the three months ended March 31, 2025, with a segment loss of $0.8 million [245]. - Labs and Life segment revenues increased by 18.23% to $8,489 for the three months ended March 31, 2025, compared to $7,180 in 2024 [248]. Cash Flow and Capital - As of March 31, 2025, the company had cash and cash equivalents of $16,907, a decrease of $51,361 from $68,268 as of December 31, 2024 [266]. - For the three months ended March 31, 2025, the company incurred a net loss of $1.1 million, an improvement from a net loss of $2.2 million for the same period in 2024 [250]. - The working capital deficit improved to $25.5 million as of March 31, 2025, compared to $29.8 million as of December 31, 2024, reflecting a change of $4.4 million [266]. - Total debt, net of discounts, decreased to $6.0 million as of March 31, 2025, down from $10.2 million as of December 31, 2024, a reduction of $4.2 million [266]. - Net cash used in operating activities for the three months ended March 31, 2025, was $1.3 million, compared to $0.4 million for the same period in 2024, indicating an increase in cash used by $0.9 million [268]. - The company raised $1.3 million from financing activities during the three months ended March 31, 2025, compared to $0.4 million in the same period of 2024 [270]. - The company expects to incur additional losses in future periods and requires additional capital to fund its operations [250]. Revenue Recognition and Accounting - Estimated contractual allowances and implicit price concessions of $17.5 million were recorded as reductions to revenues for the three months ended March 31, 2025 [283]. - After accounting for estimated contractual allowances and implicit price concessions, the healthcare segment recorded net revenues of $3.2 million for the three months ended March 31, 2025 [283]. - The healthcare segment's primary source of operating cash is the collection of outstanding receivables, which is critical to its operating performance [281]. - The performance obligations for inpatient services are generally satisfied over periods averaging approximately 7 to 28 days, while outpatient services are satisfied in less than one day [278]. - The healthcare segment's revenues are based on estimated amounts expected to be received from third-party payers and patients, influenced by Medicare and Medicaid rates [279]. - The company does not present "allowances for doubtful accounts" on its balance sheets; accounts receivable are reported at realizable value, net of estimated contractual allowances [282]. - The company assesses going concern uncertainty quarterly, considering cash and working capital to operate for at least one year from the issuance date of consolidated financial statements [286]. Future Plans and Developments - The company entered into a KR8 Agreement to develop a Direct-to-Consumer APP utilizing AI Machine Learning technology, effective January 12, 2024 [231]. - The company plans to adopt ASU 2023-09 effective January 1, 2025, which requires enhanced annual disclosures for specific categories in income tax disclosures [287].
FOXO Technologies (FOXO) - 2025 Q1 - Quarterly Report