FOXO Technologies (US:FOXO)2025-11-10 21:02Business Segments - FOXO Technologies Inc. operates in three reportable business segments: Healthcare, Life Science Services, and Labs, with a focus on healthcare services and technology [231]. - The Healthcare segment includes the acquisition of Myrtle on June 14, 2024, and RCHI with its subsidiary SCCH on September 10, 2024, enhancing the company's service offerings [232]. - The Labs segment is commercializing epigenetic biomarker technology, utilizing AI and machine learning to discover biomarkers related to health and aging [235]. - Myrtle and RCHI acquisitions are aimed at expanding operations into the healthcare sector, complementing the company's epigenetic biomarker initiatives [246]. - FOXO Labs is focusing on commercializing epigenetic data analysis tools and bioinformatics services to address market demand for wellness testing [257][259]. Financial Performance - Net revenues for the three months ended September 30, 2025, were $3.5 million, a 196.55% increase from $1.2 million in the same period of 2024, with contributions from Myrtle ($0.4 million), RCHI ($1.9 million), and Vector ($31,630) [267][268]. - Net revenues increased to $11.9 million for the nine months ended September 30, 2025, up 869.50% from $1.2 million in the same period of 2024 [278]. - Healthcare net revenues for the nine months ended September 30, 2025 were $11.9 million, up from $1.2 million in 2024, reflecting growth in the healthcare segment [339]. - Net loss attributable to FOXO for the three months ended September 30, 2025, was $1.9 million, a decrease of 3.61% from $1.9 million in 2024 [267]. - Net loss attributable to FOXO improved to $3.0 million for the nine months ended September 30, 2025, a decrease of 46.30% from a loss of $5.6 million in 2024 [287]. Expenses and Costs - Direct costs of revenues increased to $2.1 million for the three months ended September 30, 2025, compared to $0.5 million in 2024, with RCHI contributing $1.8 million and Myrtle $0.3 million [269]. - Selling, general and administrative expenses were $2.5 million for the three months ended September 30, 2025, a 42.76% increase from $1.7 million in 2024, primarily due to expenses from Myrtle and RCHI [272]. - Research and development expenses rose to $77,096 for the three months ended September 30, 2025, up from $43,806 in 2024, driven by projects related to epigenetic biomarker technology [270]. - Selling, general and administrative expenses increased by 87.24% to $7.9 million for the nine months ended September 30, 2025, compared to $4.2 million in 2024 [282]. - Interest expense rose to $2.8 million for the nine months ended September 30, 2025, an increase of 57.39% from $1.8 million in the same period of 2024 [285]. Acquisitions and Investments - On September 9, 2025, FOXO entered into a Stock Purchase Agreement to acquire Vector for $500,000 in cash and additional equity valued at $1.5 million, contingent on revenue performance [247]. - The company completed acquisitions of Myrtle, RCHI, and Vector in 2024 and 2025, which are expected to enhance cash flow and operational capacity [317]. - The company plans to expand Myrtle's business model by acquiring additional operating facilities and replicating the model in other rural hospital properties [255]. - Vector BioSource is pursuing acquisitions to enhance its FDA-approved collection and processing capabilities in the biospecimen sourcing sector [256]. Cash Flow and Liquidity - Cash and cash equivalents as of September 30, 2025, were $628,557, compared to $68,268 as of December 31, 2024 [303]. - The company incurred net losses of $14.3 million and $6.7 million for the nine months ended September 30, 2025, and 2024, respectively [303]. - As of September 30, 2025, the company had a working capital deficit of $24.5 million [303]. - Net cash used in operating activities for the nine months ended September 30, 2025 was $(3,761,087), compared to $(994,578) for the same period in 2024, an increase of $2,766,509 in cash used [323][324]. - Net cash provided by financing activities was $4,958,241 for the nine months ended September 30, 2025, compared to $977,242 in 2024, reflecting increased capital raising efforts [326]. Regulatory and Accounting Matters - The FASB issued ASU 2023-09, effective January 1, 2025, requiring enhanced annual disclosures for income tax categories, which the company plans to adopt [343]. - The FASB issued ASU 2024-04, effective after December 15, 2025, clarifying accounting for induced conversions of convertible debt instruments, with the company yet to determine its impact [345]. - The FASB issued ASU 2025-07, effective after December 15, 2027, addressing accounting for internal-use software, with the company yet to assess its impact [346]. Going Concern and Future Outlook - The company assessed going concern uncertainty quarterly, indicating substantial doubt about its ability to continue as a going concern until additional equity or debt capital is secured [342]. - The company anticipates needing additional financing to fund operations through September 30, 2026, indicating ongoing liquidity challenges [319]. - The company's results of operations may be adversely affected by economic uncertainty, financial market volatility, and factors such as inflation and supply chain disruptions [347]. - The company is classified as a smaller reporting company and is not required to provide certain market risk disclosures [348].