FOXO Technologies™ Announces Full Year 2022 Financial Results and Recent Business Highlights
FOXO Technologies Inc. (NYSEAM: FOXO) reported financial results for the full year 2022, emphasizing a strategic reassessment to optimize its life insurance offerings through epigenetic science. Interim CEO Tyler Danielson highlighted efforts to realign operations and reduce costs, increasing access to liquidity after selling a non-core regulated insurance entity for over $4.7 million. The company has initiated sales of the FOXO Longevity Report™ in partnership with life insurance products and established relationships with over 3,000 independent agents. A conference call scheduled for March 30, 2023, will discuss these results.
- Increased access to liquidity through the sale of a non-core asset for over $4.7 million.
- Established partnerships with five distribution partners reaching 3,000 independent agents.
- Initiated sales of the FOXO Longevity Report™ in life insurance.
- None.
“I am truly excited with the future we are building,” said
Recent Business Highlights and Operational Developments
-
FOXO completed its strategic review of business operations, streamlined its processes, enhanced its focus on product delivery, completed a cost reduction plan, and increased its access to liquidity. - FOXO Life has recruited and contracted five distribution partner relationships reaching over 3,000 independent insurance agents to sell “Life Insurance Designed to Keep You Alive.”
-
FOXO mutually agreed to terminate its common stock purchase agreement with an institutional investor onNovember 8, 2022 , and mutually agreed to terminate its forward share purchase agreement with another institutional investor onNovember 11, 2022 . Neither termination carried any cash consequences. -
FOXO has improved its cash position through the sale ofFOXO Life Insurance Company , a non-core asset, gaining access to that was previously held as statutory capital and surplus.$4,751,407
Conference Call and Webcast
The call can be accessed via webcast on the investors section of the Company’s website at www.foxotechnologies.com/investors or by dialing (888) 770-7136 and referencing conference ID 4335886. Participants are encouraged to call in 10 to 15 minutes prior to the scheduled start time.
The webcast will be made available for replay on the Company’s website beginning approximately two hours after the event.
About
Forward-Looking Statements
This press release contains certain forward-looking statements for purposes of the “safe harbor” provisions under the United States Private Securities Litigation Reform Act of 1995. Any statements other than statements of historical fact contained herein, including statements as to future results of operations and financial position, planned products and services, business strategy and plans, objectives of management for future operations of
Explanatory Notes on Use of Non-GAAP Measures
To supplement our financial information presented in accordance with
We use Adjusted EBITDA to evaluate our operating performance. Adjusted EBITDA does not represent and should not be considered an alternative to net income as determined by
We reconcile our non-GAAP financial measure to our net loss, which is its most directly comparable financial measure calculated and presented in accordance with
|
|||||||
CONSOLIDATED BALANCE SHEETS |
|||||||
(Dollars in thousands, except per share data) |
|||||||
|
|
|
|
||||
|
2022 |
|
|
2021 |
|
||
Assets |
|
|
|
|
|||
Current assets |
|
|
|
|
|
||
Cash and cash equivalents |
$ |
5,515 |
|
|
$ |
6,856 |
|
Supplies |
|
1,313 |
|
|
|
295 |
|
Prepaid expenses |
|
2,686 |
|
|
|
444 |
|
Prepaid consulting fees |
|
2,676 |
|
|
|
- |
|
Other current assets |
|
114 |
|
|
|
23 |
|
Total current assets |
|
12,304 |
|
|
|
7,618 |
|
|
|
|
|
|
|
||
Intangible assets |
|
2,043 |
|
|
|
191 |
|
Reinsurance recoverables |
|
18,573 |
|
|
|
19,463 |
|
Cloud computing arrangements |
|
2,225 |
|
|
|
2,745 |
|
Other assets |
|
263 |
|
|
|
287 |
|
Total assets |
$ |
35,408 |
|
|
$ |
30,304 |
|
|
|
|
|
|
|
||
Liabilities and Stockholders' Equity |
|
|
|
|
|
||
Current liabilities |
|
|
|
|
|
||
Accounts payable |
$ |
3,466 |
|
|
$ |
3,456 |
|
Related party payable |
|
500 |
|
|
|
- |
|
PIK Notes |
|
1,409 |
|
|
|
- |
|
Accrued severance |
|
1,045 |
|
|
|
- |
|
Accrued and other liabilities |
|
493 |
|
|
|
402 |
|
Related party convertible debentures |
|
- |
|
|
|
9,967 |
|
Convertible debentures |
|
- |
|
|
|
22,236 |
|
Total current liabilities |
|
6,913 |
|
|
|
36,061 |
|
Warrant liability |
|
311 |
|
|
|
- |
|
PIK Notes |
|
1,730 |
|
|
|
- |
|
Policy reserves |
|
18,573 |
|
|
|
19,463 |
|
Other liabilities |
|
1,173 |
|
|
|
- |
|
Total liabilities |
|
28,700 |
|
|
|
55,524 |
|
Commitments and contingencies (Note 13) |
|
|
|
|
|
||
Stockholders' equity (deficit) |
|
|
|
|
|
||
Preferred stock, |
|
- |
|
|
|
- |
|
Class A common stock, |
|
3 |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
Undesignated preferred stock, |
|
- |
|
|
|
- |
|
Non-redeemable preferred stock series A, |
|
- |
|
|
|
21,854 |
|
Common stock class A, |
|
- |
|
|
|
- |
|
Common stock class B, |
|
- |
|
|
|
- |
|
Additional paid-in capital |
|
153,936 |
|
|
|
4,902 |
|
Accumulated deficit |
|
(147,231 |
) |
|
|
(51,976 |
) |
Total stockholders' equity (deficit) |
|
6,708 |
|
|
|
(25,220 |
) |
Total Liabilities and Stockholders' Equity (Deficit) |
$ |
35,408 |
|
|
$ |
30,304 |
|
|
|||||||
CONSOLIDATED STATEMENTS OF OPERATIONS |
|||||||
(Dollars in thousands, except per share data) |
|||||||
|
Year Ended
|
||||||
|
2022 |
|
|
2021 |
|
||
Total revenue |
$ |
511 |
|
|
$ |
120 |
|
Cost of sales |
|
344 |
|
|
|
- |
|
Gross profit |
|
167 |
|
|
|
120 |
|
Operating expenses: |
|
|
|
|
|
||
Research and development |
|
3,047 |
|
|
|
4,879 |
|
Management contingent share plan |
|
10,091 |
|
|
|
- |
|
Selling, general and administrative |
|
27,196 |
|
|
|
10,272 |
|
Total operating expenses |
|
40,334 |
|
|
|
15,151 |
|
Loss from operations |
|
(40,167 |
) |
|
|
(15,031 |
) |
Non-cash change in fair value of convertible debentures |
|
(28,180 |
) |
|
|
(21,703 |
) |
Change in fair value of warrant liability |
|
2,076 |
|
|
|
- |
|
Forward purchase agreement expense |
|
(27,337 |
) |
|
|
- |
|
Interest expense |
|
(1,440 |
) |
|
|
(1,118 |
) |
Investment impairment |
|
- |
|
|
|
(400 |
) |
Other expense |
|
(207 |
) |
|
|
(236 |
) |
Total non-operating expense |
|
(55,088 |
) |
|
|
(23,457 |
) |
Loss before income taxes |
|
(95,255 |
) |
|
|
(38,488 |
) |
Provision for income taxes |
|
- |
|
|
|
- |
|
Net loss |
$ |
(95,255 |
) |
|
$ |
(38,488 |
) |
|
|
|
|
|
|
||
Net loss per Class A common stock, basic and diluted |
$ |
(8.40 |
) |
|
$ |
(6.61 |
) |
|
||||||||||||||||||||||||||||||||||||||||
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (DEFICIT) |
||||||||||||||||||||||||||||||||||||||||
(Dollars in thousands) |
||||||||||||||||||||||||||||||||||||||||
Stockholder Subscription Receivable | Series A Preferred Stock | Common Stock (Class A) | Common Stock (Class B) | Common Stock (Class A) | Treasury Stock | Accumulated Deficit | Total | |||||||||||||||||||||||||||||||||
Shares | Amount | Shares | Amount | Shares | Amount | Shares | Amount | Shares | ||||||||||||||||||||||||||||||||
Balance, |
$ | (3,750 |
) |
8,000,000 |
|
$ | 21,854 |
|
- |
|
$ | - |
2,000,000 |
|
$ | - |
- |
$ | - |
- |
|
$ | 4,104 |
|
$ | (13,488 |
) |
$ | 8,720 |
|
||||||||||
Net loss | - |
|
- |
|
- |
|
- |
|
- |
- |
|
- |
- |
- |
- |
|
- |
|
(38,488 |
) |
(38,488 |
) |
||||||||||||||||||
Lease contributions | - |
|
- |
|
- |
|
- |
|
- |
- |
|
- |
- |
- |
- |
|
547 |
|
- |
|
547 |
|
||||||||||||||||||
Equity-based compensation | - |
|
- |
|
- |
|
- |
|
- |
- |
|
- |
- |
- |
- |
|
238 |
|
- |
|
238 |
|
||||||||||||||||||
Subscriptions received | 3,750 |
|
- |
|
- |
|
- |
|
- |
- |
|
- |
- |
- |
- |
|
- |
|
- |
|
3,750 |
|
||||||||||||||||||
Warrants issued | - |
|
- |
|
- |
|
- |
|
- |
- |
|
- |
- |
- |
- |
|
13 |
|
- |
|
13 |
|
||||||||||||||||||
Issuance of shares for restricted stock | - |
|
- |
|
- |
|
30,000 |
|
- |
|
- |
- |
- |
- |
|
- |
|
- |
|
- |
|
|||||||||||||||||||
Issuance of shares for exercised stock options | - |
|
- |
|
- |
|
208 |
|
- |
- |
|
- |
- |
- |
- |
|
- |
|
- |
|
- |
|
||||||||||||||||||
Balance, |
$ | - |
|
8,000,000 |
|
$ | 21,854 |
|
30,208 |
|
$ | - |
2,000,000 |
|
$ | - |
- |
$ | - |
- |
|
$ | 4,902 |
|
$ | (51,976 |
) |
$ | (25,220 |
) |
||||||||||
Balance, |
$ | - |
|
8,000,000 |
|
$ | 21,854 |
|
30,208 |
|
$ | - |
2,000,000 |
|
$ | - |
- |
$ | - |
- |
|
$ | 4,902 |
|
$ | (51,976 |
) |
$ | (25,220 |
) |
||||||||||
Activity prior to the business combination: | ||||||||||||||||||||||||||||||||||||||||
Net loss | - |
|
- |
|
- |
|
- |
|
- |
- |
|
- |
- |
- |
- |
|
- |
|
(45,437 |
) |
(45,437 |
) |
||||||||||||||||||
Lease contributions | - |
|
- |
|
- |
|
- |
|
- |
- |
|
- |
- |
- |
- |
|
225 |
|
- |
|
225 |
|
||||||||||||||||||
Equity-based compensation | - |
|
- |
|
- |
|
- |
|
- |
- |
|
- |
- |
- |
- |
|
716 |
|
- |
|
716 |
|
||||||||||||||||||
Warrant repurchase | - |
|
- |
|
- |
|
- |
|
- |
- |
|
- |
- |
- |
- |
|
(507 |
) |
- |
|
(507 |
) |
||||||||||||||||||
Issuance of shares for exercised stock options | - |
|
- |
|
- |
|
14,946 |
|
- |
- |
|
- |
- |
- |
- |
|
- |
|
- |
|
- |
|
||||||||||||||||||
Issuance of shares for consulting agreement | - |
|
- |
|
- |
|
1,500,000 |
|
- |
- |
|
- |
- |
- |
- |
|
6,900 |
|
- |
|
6,900 |
|
||||||||||||||||||
Effects of the business combination: | - |
|
- |
|
||||||||||||||||||||||||||||||||||||
Conversion of Series A Preferred Stock | - |
|
(8,000,000 |
) |
(21,854 |
) |
8,000,000 |
|
- |
- |
|
- |
- |
- |
- |
|
21,854 |
|
- |
|
- |
|
||||||||||||||||||
Conversion of Bridge Loans | - |
|
- |
|
- |
|
15,172,729 |
|
- |
- |
|
- |
- |
- |
- |
|
88,975 |
|
- |
|
88,975 |
|
||||||||||||||||||
Conversion of Class B Common Stock | - |
|
- |
|
- |
|
2,000,000 |
|
- |
(2,000,000 |
) |
- |
- |
- |
- |
|
- |
|
- |
|
- |
|
||||||||||||||||||
Conversion of existing Class A Common Stock | - |
|
- |
|
(26,717,883 |
) |
- |
- |
|
- |
15,518,705 |
1 |
- |
|
- |
|
1 |
|
||||||||||||||||||||||
Reverse recapitalization | - |
|
- |
|
- |
|
- |
|
- |
- |
|
- |
8,143,649 |
1 |
- |
|
19,688 |
|
- |
|
19,689 |
|
||||||||||||||||||
Activity after the business combination: | - |
|
||||||||||||||||||||||||||||||||||||||
Net loss | - |
|
- |
|
- |
|
- |
|
- |
- |
|
- |
- |
- |
- |
|
- |
|
(49,818 |
) |
(49,818 |
) |
||||||||||||||||||
Equity-based compensation | - |
|
- |
|
- |
|
- |
|
- |
- |
|
- |
5,517,000 |
1 |
- |
|
10,363 |
|
- |
|
10,364 |
|
||||||||||||||||||
Cantor Commitment Fee | - |
|
- |
|
- |
|
- |
|
- |
- |
|
- |
190,476 |
- |
- |
|
1,600 |
|
- |
|
1,600 |
|
||||||||||||||||||
Vendor share issuance | 300,000 |
- |
- |
|
376 |
|
376 |
|
||||||||||||||||||||||||||||||||
Share repurchase and forward purchase agreement settlement | - |
|
- |
|
- |
|
- |
|
- |
- |
|
- |
- |
- |
(2,140,761 |
) |
(1,156 |
) |
- |
|
(1,156 |
) |
||||||||||||||||||
Balance, |
$ | - |
|
- |
|
$ | - |
|
- |
|
$ | - |
- |
|
$ | - |
29,669,830 |
$ | 3 |
(2,140,761 |
) |
$ | 153,936 |
|
$ | (147,231 |
) |
$ | 6,708 |
|
|
|||||||
CONSOLIDATED STATEMENTS OF CASH FLOWS |
|||||||
(Dollars in thousands) |
|||||||
|
|
Year Ended
|
|||||
|
2022 |
|
|
2021 |
|
||
CASH FLOWS FROM OPERATING ACTIVITIES: |
|
|
|
|
|
||
Net loss |
$ |
(95,255 |
) |
|
$ |
(38,488 |
) |
Adjustments to reconcile net loss to net cash used in operating activities: |
|
|
|
|
|
||
Depreciation and amortization |
|
1,487 |
|
|
|
98 |
|
Impairment charges |
|
1,370 |
|
|
|
400 |
|
Equity-based compensation |
|
11,035 |
|
|
|
131 |
|
Cantor commitment fee paid in common stock |
|
1,600 |
|
|
|
- |
|
Loss on settlement of the forward purchase agreement paid in common stock |
|
270 |
|
|
|
- |
|
Release of forward purchase agreement collateral upon cancellation |
|
26,773 |
|
|
|
- |
|
Vendor share issuance paid in common stock |
|
376 |
|
|
|
- |
|
Amortization of consulting fees paid in common stock |
|
4,679 |
|
|
|
- |
|
Change in fair value of convertible debentures |
|
28,180 |
|
|
|
21,703 |
|
Change in fair value of warrants |
|
(2,076 |
) |
|
|
- |
|
Conversion of accrued interest |
|
593 |
|
|
|
- |
|
PIK interest |
|
130 |
|
|
|
- |
|
Amortization of debt issuance costs |
|
91 |
|
|
|
- |
|
Contributions in the form of rent payments |
|
225 |
|
|
|
547 |
|
Amortization of right-of-use assets |
|
28 |
|
|
|
- |
|
Accretion of operating lease liabilities |
|
(28 |
) |
|
|
- |
|
Recognition of prepaid offering costs upon election of fair value option |
|
107 |
|
|
|
- |
|
Accretion of interest earned on investment in convertible promissory note |
|
- |
|
|
|
(32 |
) |
Other |
|
6 |
|
|
|
14 |
|
Changes in operating assets and liabilities: |
|
|
|
|
|
||
Supplies |
|
(1,018 |
) |
|
|
(295 |
) |
Prepaid expenses and consulting fees |
|
(2,832 |
) |
|
|
117 |
|
Other current assets |
|
(91 |
) |
|
|
(6 |
) |
Other assets |
|
(100 |
) |
|
|
- |
|
Cloud computing arrangements |
|
(1,773 |
) |
|
|
(2,488 |
) |
Reinsurance recoverables |
|
890 |
|
|
|
305 |
|
Accounts payable |
|
127 |
|
|
|
3,090 |
|
Accrued and other liabilities |
|
2,336 |
|
|
|
154 |
|
Policy reserves |
|
(890 |
) |
|
|
(305 |
) |
Net cash used in operating activities |
|
(23,760 |
) |
|
|
(15,055 |
) |
CASH FLOWS FROM INVESTING ACTIVITIES: |
|
|
|
|
|
||
Purchase of property and equipment |
|
(110 |
) |
|
|
(118 |
) |
Asset acquisition, net of cash acquired |
|
- |
|
|
|
(63 |
) |
Development of internal use software |
|
(1,760 |
) |
|
|
(124 |
) |
Acquisition of convertible promissory note |
|
- |
|
|
|
(50 |
) |
Net cash used in investing activities |
|
(1,870 |
) |
|
|
(355 |
) |
CASH FLOWS FROM FINANCING ACTIVITIES: |
|
|
|
|
|
||
Proceeds from issuance of related party convertible debentures |
|
- |
|
|
|
3,250 |
|
Proceeds from issuance of convertible debentures |
|
28,000 |
|
|
|
7,250 |
|
Warrant repurchase |
|
(507 |
) |
|
|
- |
|
Senior |
|
3,458 |
|
|
|
- |
|
Reverse recapitalization proceeds |
|
23,237 |
|
|
|
- |
|
Forward purchase agreement |
|
(30,561 |
) |
|
|
- |
|
Forward purchase agreement collateral release |
|
2,362 |
|
|
|
- |
|
Deferred offering costs |
|
(540 |
) |
|
|
(107 |
) |
Related party promissory note |
|
(1,160 |
) |
|
|
- |
|
Proceeds received from stockholder subscription receivable |
|
- |
|
|
|
3,750 |
|
Net cash provided by financing activities |
|
24,289 |
|
|
|
14,143 |
|
Net increase in cash and cash equivalents |
|
(1,341 |
) |
|
|
(1,267 |
) |
Cash and cash equivalents at beginning of period |
|
6,856 |
|
|
|
8,123 |
|
Cash and cash equivalents at end of period |
$ |
5,515 |
|
|
$ |
6,856 |
|
|
|
|
|
|
|
||
NONCASH INVESTING AND FINANCING ACTIVITIES: |
|
|
|
|
|
||
Conversion of phantom equity to stock options |
$ |
- |
|
|
$ |
54 |
|
Issuance of warrants |
$ |
- |
|
|
$ |
1 |
|
Conversion of debt |
$ |
88,382 |
|
|
$ |
- |
|
Conversion of preferred stock |
$ |
21,854 |
|
|
$ |
- |
|
Accrued internal use software |
$ |
239 |
|
|
$ |
- |
|
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: |
|
|
|
|
|
||
Cash paid for interest, net of amounts capitalized |
$ |
1,219 |
|
|
$ |
1,131 |
|
|
||||||||
Reconciliation of net loss to adjusted EBTIDA (unaudited) |
||||||||
(Dollars in thousands) |
||||||||
|
|
For the year ended
|
|
|||||
|
|
2022 |
|
|
2021 |
|
||
Net loss |
|
$ |
(95,255 |
) |
|
$ |
(38,488 |
) |
Add: Depreciation and amortization |
|
|
1,487 |
|
|
|
98 |
|
Add: Interest expense |
|
|
1,440 |
|
|
|
1,118 |
|
Add: Equity-based compensation |
|
|
17,689 |
|
|
|
131 |
|
Add: Non-cash change in fair value of convertible debentures |
|
|
28,180 |
|
|
|
21,703 |
|
Add: Change in fair value of warrant liability |
|
|
(2,076 |
) |
|
|
- |
|
Add: Impairment charges |
|
|
1,370 |
|
|
|
400 |
|
Add: Forward purchase agreement expense |
|
|
27,337 |
|
|
|
- |
|
Adjusted EBITDA |
|
$ |
(19,828 |
) |
|
$ |
(15,038 |
) |
View source version on businesswire.com: https://www.businesswire.com/news/home/20230330005639/en/
Contacts / Investor Relations
Gateway Investor Relations
(949) 574-3860
FOXO@gatewayir.com
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