團結起來各州

證券交易委員會

華盛頓，特區。20549

表格10-Q

(馬克一)

☒ 根據1934年證券交易法第13或15(d)節的季度報告

截至季度結束九月三十日， 2024

☐ 根據1934年證券交易法第13或15(d)節的轉型報告書

過渡期從__________到__________

委員會文件編號：001-39783

FOXO TECHNOLOGIES INC.

（公司章程中指定的準確公司名稱）

特拉華州		85-1050265
（住所的州或其他司法轄區文件號碼）		（國稅局僱主 (主要執行人員之地址)

729 北華盛頓大道。, 600室 562-9447（更改前名稱或地址，如果自上次報告以來發生更改。）, 明尼蘇達州		55401
(主要執行人員之地址)		(郵政編碼)

(612) 562-9447

根據交易所法規（17 CFR 240.14a-12）第14a-12規定的招股材料

根據法案第12(b)節註冊的證券:

每一類別的名稱：		交易符號		在哪個交易所上市的名稱：
A類普通股，每股面值 $0.0001		根據財務報表基本審計準則對未經審計的連續財務報表進行審計時，本公司於2023年12月31日確定了與俱樂部成立憑證有關的錯誤。		紐約證交所美國

請勾選標記以指示註冊者是否（1）在過去12個月內（或註冊者需要提交這些報告的更短時間內）已提交證券交易所法案第13或15（d）節要求提交的所有報告，及　（2）是否已被提交要求過去90天的提交要求所制約。是 ☒ No ☐

請在勾選框內勾選，以指示註冊人在過去的12個月內(或註冊人需要提交這些文件的時間更短)是否已經電子提交了每一份互動數據文件，該提交是根據證券法規定第405條規則和本章第232.405條規則規定。是 ☒ No ☐

請使用複選標記指示註冊者是大型加速文件提交者、加速文件提交者、非加速文件提交者、較小的報告公司還是新興成長企業。請參閱規則120億.2中「大型加速文件提交者」、「加速文件提交者」、「較小報告公司」和「新興成長企業」的定義。

大型加速文件提交人	☐	加速文件提交人	☐
非加速文件提交人	☒	小型報告公司	☒
新興成長公司	☒

如果是新興成長公司，請勾選，如果註冊人已選擇不使用根據交易所法案第13(a)條提供的任何新的或修改的財務會計準則的延長過渡期，請勾選。 ☐

請勾選適用的圓圈，表示註冊登記者是否是空殼公司(根據交易所法案第12b-2條的定義)。是 ☐ 否☒

截至2024年11月15日，已有 17,476,574每股面值爲0.0001 每股（「A類普通股」）註冊人已發行和流通。

FOXO TECHNOLOGIES INC.

表格第10-Q 季度報告，截至2024年9月30日

第I部分-財務信息：
項目 1.	基本報表	1
	2024年9月30日和2023年12月31日未經審計的簡明合併資產負債表	1
	2024年9月30日和2023年三個月及九個月結束的未經審計簡明綜合損益表	2
	截至2024年和2023年9月30日的九個月內各季度的未經審計的合併股東（虧損）權益變動基本報表	3
	2024年9月30日和2023年未經審計的簡明合併現金流量表	5
	簡明聯合財務報表附註(未經審計)	6
項目 2.	分銷計劃	36
項目 3.	有關市場風險的定量和定性披露	49
項目 4.	控制和程序	49

第二部分其他信息：		50
項目 1.	法律訴訟	50
Interest expense, net	風險因素	50
項目5。	其他信息	58
項目 6.	展示資料	58
簽名		59

關於前瞻性聲明和其他信息的特別說明
包含在本報告中

本季度10-Q表格的季度報告，或本報告，以及參考文件中包含的前瞻性陳述是指1933年修訂後的《證券法》第27A條和1934年修訂後的《交易所法》第21E條中規定的內容，其中包括但不限於關於財務和業績指標的估計和預測，市場機遇和市場份額的預測，產品和服務對客戶的商業吸引力，營銷和擴張戰略的潛在成功，實現業務組合的潛在利益（如本報告中定義的，涉及股東價值和本報告中確定的業務的其他方面），以及我們不時向證券交易委員會提交的其他報告。本報告中關於我們業務、財務結果、財務狀況和運營的陳述，如果不是歷史事實的陳述，可能被視爲前瞻性陳述。這些前瞻性陳述代表我們對未來事件的意圖、計劃、期望、假設和信仰，並受到風險、不確定性和其他因素的影響。

除非有明確限制，諸如「相信」、「預期」、「期望」、「打算」、「計劃」、「預測」或類似表達的詞語旨在識別前瞻性陳述。我們無義務基於任何原因公開更新前瞻性陳述，除非法律要求，即使在新信息可用或將來發生其他事件時也是如此。由於各種因素的影響，我們的實際結果可能會與這些前瞻性陳述所表達或暗示的結果有實質性差異，其中包括我公司於2023年12月31日結束的財年提交給美國證券交易委員會（「SEC」）的年度報告第I部分第1A項「風險因素」中描述的風險因素以及本報告中第II部分第1A項「風險因素」中描述的風險因素。

除非另有明確說明或上下文另有要求，本年報中的「FOXO」、「公司」、「我們」、「我們」或「我們的」指代的是在特拉華州註冊的FOXO科技公司及其子公司（如適用）。

第I部分 - 財務信息

項目1.基本報表

FOXO 科技公司及其附屬公司

簡明合併資產負債表

(以千元為單位，除每股數據外)

	九月三十日，			12月31日,
	2024			2023
	(未經審計)
資產
流動資產合計
現金及現金等價物	$	34		$	38
應收賬款，淨額		2,001			-
物資		210			-
預付費用		502			86
其他流動資產		162			109
流動資產總額		2,909			233
不動產及設備，淨額		387			14
使用權租賃資產		4,110			-
無形資產，扣除累計攤銷		2,105			378
商譽		33,160			-
其他資產		-			100
總資產	$	42,671		$	725

負債及股東權益不足
流動負債
應付賬款	$	8,204		$	4,556
應計費用		12,557			3,986
相關方應付票據		1,762			790
應付款項		7,803			4,203
相關方應付款項及應計款項		3,682			801
租賃權債務		339			-
流動負債總額		34,347			14,336
認股權證負債		7			8
關係方應付票據		22,000			-
租賃負債，非流動資產		3,771			-
其他負債		100			481
總負債		60,225			14,825
承諾和或可能的事項（見註16）		-
股東赤字
優先股，面額$0.01，授權股數為5,000,000股，發行且流通股數為截至2024年6月30日和2023年12月31日之184,668,188股和181,364,180股。0.0001 面值； 10,000,000 授權股份數，無截至2024年9月30日及2023年12月31日已發行或流通的股份		-			-
A類普通股，$0.0001 面值， 500,000,000 授權股份數， 13,621,554 和 7,646,032 截至2024年9月30日和2023年12月31日，分別發行和流通的股份數。		1			1
資本公積額額外增資		166,218			162,959
累積虧損		(183,727	)		(177,060	)
FOXO公司的股東赤字總額		(17,508	)		(14,100	)
非控制權益		(46	)		-
股東權益的赤字為		(17,554	)		(14,100	)
總負債及股東權益赤字	$	42,671		$	725

查看附註以查看未經審計簡明綜合財務報表

Foxo Technologies INc. 及其子公司

綜合損益表

(以千元為單位，除每股數據外)

(未經審計)


	截至三個月九月三十日，						九個月結束九月三十日，
	2024			2023			2024			2023
淨收入	$	1,196		$	10		$	1,231		$	35
營運費用：
直接成本收入		541			70			572			70
研發		43			283			312			925
管理與附帶分享計劃費用（沒收）		(116	)		(1,553	)		(75	)		(141	)
無形資產及雲計算服務商安排的減值		-			-			-			2,633
銷售、一般及行政費用		1,733			4,717			4,195			15,052
營業費用總額		2,201			3,447			5,004			18,469
營運虧損		(1,005	)		(3,507	)		(3,773	)		(18,504	)
認股權負債公平價值變動		(7	)		36			1			244
因PIK票據修訂及2022年債券解除而造成的損失		-			-			-			(3,521	)
利息支出		(957	)		(148	)		(1,800	)		(865	)
其他收入（費用）		16			(41	)		(49	)		54
總非營業費用		(948	)		(153	)		(1,848	)		(4,088	)
稅前損失		(1,953	)		(3,660	)		(5,621	)		(22,592	)
所得稅準備		-			-			-			-
淨虧損		(1,953	)		(3,660	)		(5,621	)		(22,592	)
非控制權益		7			-			8			-
歸屬於FOXO的淨損失	$	(1,946	)	$	(3,660	)	$	(5,613	)	$	(22,592	)
與交易所要約及已假定warrants的下調條款的延長和觸發相關的視為分紅派息		(88	)		(912	)		(1,054	)		(3,378	)
淨損失對普通股股東	$	(2,034	)	$	(4,572	)	$	(6,667	)	$	(25,970	)

每股A類普通股的淨損失，基本及攤薄	$	(0.15	)	$	(0.94	)	$	(0.62	)	$	(7.75	)
A類普通股的加權平均股份數，基本及攤薄（以千為單位）		13,156			4,878			10,813			3,350

查看附註以查看未經審計簡明綜合財務報表

FOXO科技公司及其子公司

簡明合併股東（虧損）權益聲明

(千元美元)

(未經審計)

	股份			金額		股票			在資本中			赤字						利息
	Class A Common								追加						總計 FOXO					總計
	股票					庫藏			已支付-			累積的			股東的			非控制權益		股東的
	股份			金額		股票			在資本中			赤字						利息

2022年12月31日的結存		2,966,987		$	-		(214,077	)	$	153,939		$	(147,231	)	$	6,708		$	-	$	6,708
普通股股東的淨損失		-			-		-			-			(7,639	)		(7,639	)		-		(7,639	)
基於股票的補償		(11,100	)		-		-			901			-			901			-		901
2023年3月31日結餘		2,955,887			-		(214,077	)		154,840			(154,870	)		(30	)		-		(30	)
普通股股東的淨損失		-			-		-			-			(13,759	)		(13,759	)		-		(13,759	)
基於股票的補償		(25,000	)		-		-			773			-			773			-		773
2022 債券發行		703,500			-		-			2,181			-			2,181			-		2,181
PIk 債券修訂		432,187			-		-			1,339			-			1,339			-		1,339
交換提議		795,595			-		-			2,466			-			2,466			-		2,466
庫藏股		(214,076	)		-		214,077			-			-			-			-		-
2023年6月30日結餘		4,648,093		$	-		-		$	161,599		$	(168,629	)	$	(7,030	)	$	-	$	(7,030	)
對普通股股東的淨損失		-			-		-			-			(4,572	)		(4,572	)		-		(4,572	)
基於股票的補償		(329,032	)		-		-			(1,447	)		-			(1,447	)		-		(1,447	)
扣除發行成本後的私募配售		929,376			1		-			443			-			444			-		444
向Joseph Gunner發行普通股		276,875			-		-			221			-			221			-		221
向MSK發行普通股		292,867			-		-			234			-			234			-		234
因認購權證的下調條款而產生的認定股息		-			-		-			912			-			912			-		912
向員工發行普通股		98,670			-		-			135			-			135			-		135
2023年9月30日的餘額		5,916,849		$	1		-		$	162,097		$	(173,201	)	$	(11,103	)	$	-	$	(11,103	)

	Class A Common							追加						Total FOXO						總計
	股票					庫藏		已付款			累積的			股東的			非控制權益			股東的
	股份			金額		股票		資本號			赤字			赤字			利息			赤字

2023年12月31日結餘		7,646,032		$	1		-	$	162,959		$	(177,060	)	$	(14,100	)	$	-		$	(14,100	)
淨損失對普通股股東		-			-		-		-			(2,160	)		(2,160	)		-			(2,160	)
基於股票的薪酬		(667	)		-		-		103			-			103			-			103
根據KR8協議發行的股份		1,300,000			-		-		378			-			378			-			378
根據企業發展和諮詢協議發行的股份		450,000			-		-		153			-			153			-			153
根據股票換取服務協議發行予MSk的股份		511,027			-		-		-			-			-			-			-
發行予員工的股份		53,202			-		-		16			-			16			-			16
發行予尋找人員費用的認股權證		-			-		-		17			-			17			-			17
由於觸發下輪條款及推遲假定認股權證而產生的被視為分紅派息		-			-		-		656			-			656			-			656
2024年3月31日結存		9,959,594			1		-		164,282			(179,220	)		(14,937	)		-			(14,937	)
淨損失對普通股股東		-			-		-		-			(2,473	)		(2,473	)		-			(2,473	)
非控制權益		-			-		-		-			-			-			(1	)		(1	)
基於股票的薪酬		(1,667	)		-		-		68			-			68			-			68
根據應付票據條款發行的股份		-			-		-		28			-			28			-			28
根據應付票據條款發行給LGH的股份		200,000			-		-		57			-			57			-			57
用於法律和解的發行股份		1,119,893			-		-		286			-			286			-			286
為尋找人費用發行的認股權證		-			-		-		43			-			43			-			43
為Myrtle收購而可發行的股份		-			-		-		235			-			235			-			235
根據應付優先票據條款向機構投資者發行的股份		-			-		-		255			-			255			-			255
非控制權益		-			-		-		-			-			-			(38	)		(38	)
因假定認股權觸發的認股股息		-			-		-		310			-			310			-			310
2024年6月30日資產負債表		11,277,820		$	1		-	$	165,564		$	(181,693	)	$	(16,128	)	$	(39	)	$	(16,167	)
平衡		11,277,820		$	1		-	$	165,564		$	(181,693	)	$	(16,128	)	$	(39	)	$	(16,167	)
淨損失對普通股股東		-			-		-		-			(2,034	)		(2,034	)		-			(2,034	)
非控制權益		-			-		-		-			-			-			(7	)		(7	)
基於股票的薪酬		(10,000	)		-		-		(93	)		-			(93	)		-			(93	)
股份可用於擴展應付票據		-			-		-		24			-			24			-			24
股份可用於企業發展和顧問服務		-			-				393						393						393
股份可用於財務和戰略顧問服務的中介人		-			-		-		165			-			165			-			165
股份發行以作法律和解		221,350			-		-		29			-			29			-			29
憑證可發行以作找頭費		-			-		-		2			-			2			-			2
發行股份以作Myrtle併購		1,023,629			-		-		-			-			-			-			-
發行股份以作Myrtle併購，股份		1,023,629			-		-		-			-			-			-			-
發行股份予機構投資者，按照資產負債表上的高階票據條款		1,108,755			-		-		-			-			-			-			-
發行股份予機構投資者，按照資產負債表上的高階票據條款，股份				1,108,755
發行股份予找頭人，取代找頭費和憑證		-							47			-			47			-			47
非控制權益		-			-		-		-			-			-			-			-
由於擬發出的認購權證下調條款觸發，視為分紅派息		-			-		-		88			-			88			-			88
截至2024年9月30日的餘額		13,621,554		$	1		-	$	166,218		$	(183,727	)	$	(17,508	)	$	(46	)	$	(17,554	)
平衡		13,621,554		$	1		-	$	166,218		$	(183,727	)	$	(17,508	)	$	(46	)	$	(17,554	)

查看附註以查看未經審計簡明綜合財務報表

FOXO科技公司及其子公司

綜合現金流量表

(千元美元)

(未經審計)

	2024			2023
	九個月結束九月三十日，
	2024			2023
營業活動之現金流量：
淨虧損	$	(5,621	)	$	(22,592	)
調整項目以協調淨損失與經營活動提供的現金（使用現金）：
折舊及攤銷		796			1,251
因PIK票據修訂及2022年債券解除而造成的損失		-			3,521
基於股票的薪酬		94			361
支付顧問費用以普通股支付之攤提		502			2,221
無形資產及雲計算服務商安排的減值		-			2,633
投資損失		100			-
認股權証變動公允價值之變動		(1	)		(244	)
PIk 利息		768			419
債務折扣和發行成本之攤提		696			448
其他		-			100
營運資產和負債的變化：
應收賬款		687			-
物資		(8	)		182
預付費用和諮詢/顧問費		(87	)		1,835
租賃資產權利的變動		(1,417	)		-
其他流動資產		4			3
再保險資產追回		-			18,573
應付賬款，包括相關方應付款		1,507			1,806
應計利益及其他負債		(432	)		1,891
保單儲備		-			(18,573	)
租賃負債權利變動		1,417			-
經營活動所用的淨現金		(995	)		(6,165	)
投資活動產生的現金流量:
從購買Myrtle和RCHI獲得的現金		14			-
投資活動產生的淨現金流量		14			-
融資活動產生的現金流量:
支付給RHI的票據應付款項		(904	)		-
普通股私募款項收益		-			744
來自應收票據的現金收入		1,981			247
應收賬款銷售協議支付款項		(100	)		-
待發行成本		-			(299	)
籌資活動提供的淨現金		977			692
現金及現金等價物淨變動		(4	)		(5,473	)
期初現金及現金等價物餘額		38			5,515
期末現金及現金等價物	$	34		$	42

查看附註以查看未經審計簡明綜合財務報表

Foxo 科技公司及其子公司

附註至未經審核之簡明合併基本財務報表

(以千元為單位，除每股數據外)

注意 1 業務描述

FOXO科技股份公司（「FOXO」或「公司」），前身為Delwinds保險收購公司（「Delwinds」），一家德拉瓦州公司，原於2020年4月成立，是一家以公開交易為目的的特殊公司，旨在進行合併、股本交易、資產收購、重組或類似業務組合，涉及一個或多個業務。FOXO正在商業化表觀遺傳標記技術，以支持開創性的科學研究和破壞性的下一代業務倡議。公司應用自動機器學習和人工智能（「AI」）技術來發現人類健康、健康與老化的表觀遺傳標記，並於2024年6月14日生效收購Myrtle Recovery Centers, Inc.（「Myrtle」），一家田納西州公司，以及於2024年9月10日生效收購Rennova社區健康, Inc.（「RCHI」），一家佛羅里達州公司，及其全資附屬公司Scott County社區醫院, Inc.（「SCCH」），一家田納西州公司，公司提供行為健康服務，包括物質濫用治療，並在田納西州Oneida經營一家臨界訪問指定醫院。Myrtle和RCHI的收購在附註5中有更詳細討論。

區域

公司將其業務分為兩個可報告的業務部門：（i）醫療；和（ii）實驗室和生命。之前，實驗室和生命被視為獨立的部門，然而，隨著2024年6月收購Myrtle，公司的營運重心轉移，因此適當地決定在2024年第二季度將其實驗室和生命部門合併，並在公司新成立的醫療業務部門下運作Myrtle、RCHI和SCCH。SCCH以Big South Fork Medical Center（“BSF”）經營醫療業務。

商業合併

2022年2月24日，Delwinds與FOXO Technologies Inc.達成確定性的併購協議和計劃，日期為2022年2月24日，並於2022年4月26日、7月6日和8月12日進行修訂（「併購協議」），現以FOXO Technologies Operating Company為名（簡稱為「FOXO Technologies Operating Company」），連同Delwinds的全資子公司DWIN Merger Sub Inc.（「併購子公司」），以及DIAC Sponsor LLC（「贊助人」）簽署併購交易協議中所述交易（統稱為「交易」或「業務合併」）的結束後代表Delwinds股東的代表進行收盤（「收盤」）。

該業務合併於2022年9月14日經Delwinds的股東批准，並於2022年9月15日（“交割日”）完成，合併子公司合併至FOXO Technologies Operating Company，FOXO Technologies Operating Company作為公司的全資子公司存續於該次合併（“合併公司”），並且FOXO Technologies Operating Company的安防持有者將成為合併公司的安防持有者。交割後，Delwinds的名稱立即更改為FOXO Technologies Inc.

根據交易完成後，FOXO成為一家控股公司，其全資子公司FOXO Technologies Operating Company負責所有核心業務。FOXO Technologies Operating Company持有其兩家全資子公司，分別為FOXO Labs Inc.和FOXO Life, LLC。FOXO Labs擁有一家全資子公司Scientific Testing Partners, LLC，而FOXO Life Insurance Company則是FOXO Life, LLC的全資子公司。於2023年2月3日，公司出售了FOXO Life Insurance Company，詳情請參見附註14。於2024年6月14日和2024年9月10日，FOXO分別收購了Myrtle和RCHI，詳情請參見附註5。

注意 2 持續經營不確定性和管理計劃

根據會計準則 Codification（“ASC”）基本報表， 基本報表的呈現——持續經營（205-40 小規範）（“ASC 205-40”）公司有責任評估條件和/或事件是否對其未來一年內到期的財務義務提出重大懷疑。根據 ASC 205-40 的要求，該評估最初不應考慮在基本報表發布日尚未全面實施的計劃可能產生的緩解效果。管理層已根據 ASC 205-40 的要求評估了公司繼續作為持續經營的能力。

公司的歷史虧損情況需要管理層對其作爲持續經營實體的能力進行審慎評估。截至2024年9月30日和2023年9月30日，公司向普通股股東產生了淨虧損，金額分別爲$6,667 and $25,970。截至2024年9月30日，公司的營運資本虧空和總股東欠款分別爲$31,439 and $17,554，現金餘額爲$995 and $6,165 用於截至2024年9月30日和2023年9月30日九個月的營業活動。截至2024年9月30日，公司現金及現金等價物的可用金額爲$34 。

公司的持續經營能力取決於產生營業收入、籌集額外的股本或債務資本、減少虧損並改善未來的現金流。公司將繼續進行資本募集活動，並已經在籌集資本以支持其運營方面表現出成功，包括私募和債務融資。

2023年第一季度，公司完成了出售FOXO人壽保險公司的交易，以獲得FOXO人壽保險公司保留的現金作爲法定資本和剩餘資金，我們用這些資金資助了2023年的部分營運。2024年6月14日和2024年9月10日，公司分別完成了對Myrtle和RCHI的收購，這在第5條註解中有更詳細的討論。此外，爲了資助我們的業務，我們繼續（i）尋求其他途徑爲公司注資，（ii）尋找其他戰略性營運公司，以及（iii）將我們的產品商業化以產生營業收入。

請參見第10頁，了解截至2024年9月30日的九個月內所發行的應付本票的信息。

符合紐交所美國繼續上市要求

在 2024年4月17日，公司收到了來自紐約證券交易所（「紐交所」）的正式不合規通知，說明由於未能及時提交截至2023年12月31日的年度報告（表格10-k）（「未提交報告」），公司未能遵守紐交所美國持續上市標準，提交截止日期爲2024年4月16日（「提交逾期」）。隨着未提交報告和截至2024年3月31日的季度報告（表格10-Q）的提交，提交逾期問題已經得到解決。

2024年6月10日，公司收到了紐交所的一份正式通知，指出公司由於逾期180天以上的上市費用餘額未支付，未符合紐交所美國繼續上市標準。紐交所要求公司在2024年6月7日之前提供支付，否則公司將受到違規程序的制裁。公司未能在2024年6月7日支付費用，後來期限延長至2024年8月9日。2024年8月7日，公司收到了紐交所的一封信，指出公司已符合紐交所美國繼續上市標準，涉及到《紐交所美國公司指南》第1003(f)(iv)條對上市費用的及時支付規定。該信函確認公司已支付了其未付費用的餘額。

2024年7月10日，公司收到紐交所的正式違規通知，稱公司未符合公司指南第1003(a)(ii)條款，因報告股東赤字$16,167 截至2024年6月30日，以及截至2023年12月31日的三個最近財政年度的持續經營和/或淨虧損。公司現在需遵守公司指南第1009條款中規定的程序和要求。

2023年6月12日，公司收到了紐交所監管部門的一份官方不合規通知，指出公司未達到紐交所美國公司指南第1003(a)(i)條的合規標準，因爲公司報告的股東赤字金額爲$30 ，截至2023年3月31日，並在其截至2022年12月31日的最近兩個財政年度中持續經營虧損和/或淨虧損。根據該通知，公司於2023年7月12日提交了一份合規計劃（「計劃」）給紐交所，說明了公司已經採取或將採取的措施，以於2024年12月12日前恢復符合紐交所美國繼續上市標準，並且如果紐交所接受該計劃，公司將有至2024年12月12日的時間執行該計劃。如果計劃不被接受，紐交所將尋求進一步澄清糾正措施。如果公司無法遵守該計劃，那麼公司可能更難籌集資金，且若無法於2024年12月12日前解決不合規問題，公司將被除牌。

高級 PIk筆記

在 2022年9月20日，公司向某些投資者發行了 15%高級本票（「高級PiK本票」），總本金金額爲$3,457，每份的到期日爲 2024年4月1日（「到期日」）。根據高級PiK本票的條款，自2023年11月1日起，以及在每個一個月的週年紀念日，公司需要支付高級PiK本票的持有人等額款項，直至其未償還本金餘額在到期日全額支付，或者，如果在此之前，按照其條款提前償還或加速償還高級PiK本票。公司未能在2023年11月1日及每個一個月的週年紀念日按時付款，這構成了高級PiK本票下的違約事件。高級PiK本票及違約事件在附註10中有更詳細的討論。2024年10月18日，公司與高級PiK本票簽訂了修正案第1號（「PiK本票修正案第1號」）。在附註10和17中進一步討論的PiK本票修正案第1號下，高級PiK本票將在獲得股東批准後自動交換爲公司累積可轉換可贖回優先股，指定爲b系列優先股（「b系列優先股」）。

公司不能保證這些行動會成功，或者會有額外的融資來源以優惠條款獲得，如果有的話。因此，在額外的股權或債務資本獲得之前，以及公司開始產生足夠的營業收入和運營現金流之前，關於公司繼續作爲持續經營體的能力在發佈這些未經審計的簡單合併基本報表後的這一年內存在重大疑慮。由於公司於2024年9月10日收購RCHI，公司相信它將能夠資助其運營直到2025年第二季度。在任何情況下，如果公司無法資助其運營，將被迫評估進一步的替代方案，這可能包括進一步縮減或暫停其運營、出售公司、解散和清算其資產或尋求破產法下的保護。在採取任何這些行動的決定可能會在公司原本將耗盡其現金資源之前的某個時間發生。

未經審計的簡化合並基本報表不包括如果公司無法持續經營而可能需要的任何調整。

注意 3 重要會計政策摘要

報告基礎

隨附的未經審計的簡明合併基本報表是根據美國通用會計準則（「U.S. GAAP」）針對臨時財務信息及表格10-Q的說明和SEC第10條規章編制的。根據SEC對臨時財務報告的規則和規定，某些通常包含在根據U.S. GAAP編制的基本報表中的信息或腳註披露已被簡明或省略，因此隨附的未經審計的簡明合併基本報表不包括爲完整呈現財務狀況、運營結果或現金流所需的所有信息和腳註。應將未經審計的簡明合併基本報表與截至2023年12月31日的經過審計的合併基本報表及其附註一起閱讀。2023年12月31日的合併資產負債表數據來源於截至該日期的經過審計的合併基本報表，但不包括U.S. GAAP所要求的所有披露。在管理層看來，隨附的未經審計的簡明合併基本報表包括所有正常或經常性性質的調整，這些調整對於公正呈現所列期間的財務狀況、運營結果和現金流是必要的。截至2024年9月30日的九個月的運營結果不一定表明截至2024年12月31日的財務結果。

未經審計的簡明綜合財務報表包括公司及其全資和控股子公司的帳戶。所有公司間餘額和交易在合併中被消除。

公司是根據1933年證券法第2(a)條修訂的「新興成長公司」，因此可以利用某些免除適用於其他非新興成長公司的公共公司的各種報告要求的豁免。

根據美國通用會計準則編制的未經審計的簡明綜合財務報表要求管理層進行估計和假設，這些估計和假設會影響資產和負債的報告金額以及揭示的或有資產和負債。有關公司編制基礎和使用估計的更多信息，請參閱截至2023年12月31日的審計綜合財務報表。該報告中描述的政策和估計用於編制公司的季度未經審計的簡明綜合財務報表。

綜合虧損

在截至2024年和2023年9月30日的三個月和九個月期間，綜合損失等於未經審計的簡明合併運營報表中呈現的淨損失金額。

再分類

根據第11條的說明，KR8協議下無形資產的購買之前在現金流量表的投資活動中反映爲現金的使用，相應的應計負債在現金流量表的經營活動部分中反映。這些金額已重新分類至第17條呈現的補充現金流量信息中。下表展示了所列期間重分類的影響：

重新分類的時間表

	如先前所述			調整後			調整後
	截至六個月結束
	2024年6月30日

	如先前所述			調整後			調整後
經營活動產生的淨現金流量	$	551		$	(2,122	)	$	(1,571	)
投資活動中使用的淨現金		(2,381	)		2,122			(259	)
現金淨變動	$	(1,830	)	$	-		$	(1,830	)

購買無形資產的非現金關聯方應付款	$	-		$	2,122		$	2,122

	如先前所述			調整後			調整後
	截至三個月
	2024年3月31日

	如先前所述			調整後			調整後
經營活動產生的淨現金流量	$	1,716		$	(2,122	)	$	(406	)
投資活動中使用的淨現金		(2,122	)		2,122			-
現金淨變動	$	(406	)	$	-		$	(406	)

購買無形資產的非現金相關方應付款項	$	-		$	2,122		$	2,122

此外，2023年基本報表中的某些項目已被重新歸類，以便進行比較。

反向股票拆分

2023年10月31日，公司修訂了其修訂後的第二修正章程，以實施 1比10的股票逆向拆分，使得公司的每十股A類普通股合併爲一份已發行和流通的一股A類普通股，並且每股面值不變（「反向股票拆分」）。0.0001

公司於2023年11月6日下午4:01（東部時間）執行了反向股票拆分，拆分了其已發行的A級普通股，這一方案之前已得到股東的批准，股東會議於2023年5月26日召開，以重新符合紐交所公司指南第1003(f)(v)條的規定。

交易於2023年11月7日重新開始，那時公司的A類普通股以反向拆股後的基礎開始交易。所有在這些未經審計的簡明基本報表中包含的股票信息均已反映爲反向拆股發生在所呈現的最早期間。

營業收入確認政策

公司根據ASC的規定確認營業收入，包括隨後發佈的更新。根據會計準則，營業收入以估計的合同津貼和估計的隱含價格讓與物爲淨額呈現。

公司在截至2024年9月30日的三個月和九個月期間，從其實驗室和生命科學部門記錄了少量收入。目前，其醫療保健部門包括自2024年6月14日收購Myrtle以來的運營，以及自2024年9月10日收購RCHI以來的運營。

邁特爾的收入與與患者的合同相關，其履行的績效義務是向患者提供行爲醫療保健服務。收入在提供醫療保健服務的義務滿足期間錄入。邁特爾對住院服務的履行義務通常在大約7到28天的時間內滿足，具體取決於服務線，收入根據發生的費用來確認。與患者的合同關係在大多數情況下還涉及第三方支付方，並且所提供服務的交易價格取決於與第三方支付方提供的條款或協商的條款。與第三方支付方的支付安排通常指定低於其標準收費的金額。提供給患者的服務通常按照每日確定的費率支付。

RCHI的收入與BSF患者的合同相關，其履行義務是向患者提供醫療保健服務。收入在履行醫療保健服務義務的期間記錄。其對住院服務的履行義務通常在平均約三天的時間內履行完畢，收入根據發生的費用確認。其對門診服務（包括急診室相關服務）的履行義務通常在不到一天的時間內履行完畢。與患者之間的合同關係，在大多數情況下也涉及第三方支付者（醫療保險、醫療補助、託管衛生計劃和商業保險公司），所提供服務的交易價格取決於（醫療保險和醫療補助）提供的條款或與（託管衛生計劃和商業保險公司）協商的條款。與爲相關患者提供服務的第三方支付者的支付安排通常規定支付金額低於我們的標準收費金額。由於BSF被指定爲重要醫療援助醫院，醫療保險通常按照與醫院成本相關的費率支付住院和門診服務。爲具有醫療補助覆蓋的患者提供的服務通常按照每次出院、每項識別的服務或每位被保障成員的事先確定費率支付。與商業保險承辦人、託管衛生和優選提供者組織的協議通常規定按照每項診斷、每日費率或折扣費用服務費率支付。

管理層不斷審查合同估算流程，以考慮由於合同重新談判和續簽而導致的託管醫療合同條款的頻繁變化。根據收入確認會計指引，收入以預計的合同扣款和預計的隱性降價的淨額表示。醫療保健部門的淨收入基於其預計從第三方付款者和患者那裏應收的金額，部分基於上述討論的醫保和 Medicaid 費率，針對每個 Myrtle 和 BSF。醫療保健部門還記錄與無保險帳戶相關的預計隱性降價，以按其預計收集的金額記錄自付收入。

應收賬款的收集是醫療保健部門的主要運營現金來源，對其運營績效至關重要。主要的收款風險與患者帳戶相關，這些帳戶的主要保險公司已按適用協議支付了相應金額，但患者的責任金額（自付額和共付款）仍未付款。隱含的價格讓步主要與直接來自患者的應付款項相關。當所有合理的內部和外部催收努力都已進行後，帳戶才會被註銷。隱含的價格讓步的估計基於管理層對歷史註銷和預期淨收款、業務和經濟條件及其他催收因子的評估。

合同津貼和可疑帳戶政策

根據ASC，“ 包括隨後發佈的更新，公司在資產負債表上不列示「壞賬準備」，而是將應收賬款按可實現價值報告，淨值爲估計的合同準備金和估計的隱含價格折讓（也稱爲壞賬），這些金額是在相關營業收入確認的期間內估計和記錄的。歷史的催收和付款人報銷經驗是與合同準備金和壞賬相關的估計過程的一個重要部分。被認爲無法收回的應收賬款在所有催收努力已停止或該帳戶以低於最初預計可收回金額的價格結算後，計入壞賬準備。之前註銷的應收賬款的回收作爲壞賬準備的抵免記錄。壞賬準備的修正作爲對營業收入的調整記錄。

截至2024年9月30日的三個月和九個月，預計合同津貼和隱性價格讓步總額爲$4,047 and $4,137，分別被記錄爲收入和應收賬款的減少，以便公司能夠按照其預計收回的金額記錄其收入和應收賬款。根據第606號專題的要求，在2024年9月30日結束的三個月和九個月內，根據衛生保健部門的預計合同津貼和隱性價格讓步，公司記錄了$的醫療保健淨收入1,188 and $1,208，分別爲$。Myrtle和SCCH分別於2024年6月14日和2024年9月10日收購，因此2023年9月30日結束的三個月和九個月內未記錄與醫療保健部門相關的收入。公司將繼續審查合同津貼和隱性價格讓步的條款。請參閱註釋6。

最近發佈的會計準則

2023-09號ASU的修訂增強了與所得稅相關的主要信息，特別是有效稅率的調和和所得稅信息。該指南要求披露特定類別的有效稅率調和，並提供重大和適當的調和項目信息。此外，修訂的指南要求根據5%或超過總所得稅（扣除收到的退款）的標準對所得稅支付（扣除收到的退款）進行分離，也要求在所得稅支付中分離每個特定司法管轄區。此修訂指南於2024年12月15日後開始實施。指南可根據前瞻性或回溯性進行應用。目前，公司正在評估這種修訂指南對彙總財務報表的附註可能產生的影響。所得稅披露改進, 這需要增強對特定類別的年度披露用於稅率調節和按聯邦、州和外國稅收分類的所得稅。ASU 2023-09 對公共業務實體在2025年1月1日開始的年度期間生效。公司計劃於2025年1月1日生效採用ASU 2023-09，對所有在基本報表中列示的先前期間應用追溯法。公司不認爲採納這一新標準會對其披露產生重大影響。

其他未來生效日期的FASB公告要麼不適用，要麼不會對公司的財務狀況、經營業績或現金流產生實質影響。

注意 4 每股淨虧損

公司在計算基本每股淨虧損時排除了影響 3,334和 69,668作爲觸發此類股份歸屬條件未在相應期間內滿足的經理人權益股的塵除的基本淨虧損每股計算，以公司前CEO根據董事會決定股份是否根據此計劃應予以放棄，根據網絡虧損每股計入的管理層權益股權計劃發行的股份，有關信息請參見附註16。

公司在計算截至2024年和2023年9月30日三個月和九個月的攤薄每股淨損失時，排除了未行使的普通股認股權證和股票期權的影響，因爲如果包括在內將導致淨損失每股增值，而該時期公司處於虧損狀態。公司的認股權證和股票期權在第13注中有更詳細的討論。

下面的表格列出了截至2024年和2023年9月30日的三個月和九個月期間，按加權平均股份數計算的每股普通股股東可用基本和稀釋淨虧損。


	截至三個月 9月30日,						截至九個月 9月30日,
	2024			2023			2024			2023
淨虧損 - 基本和稀釋	$	(1,946	)	$	(3,660	)	$	(5,613	)	$	(22,592	)
與交易所要約以及假設warrants的下調條款相關的視爲股息		(88	)		(912	)		(1,054	)		(3,378	)
淨虧損歸普通股東 - 基本和稀釋	$	(2,034	)	$	(4,572	)	$	(6,667	)	$	(25,970	)
普通股A類的基本和稀釋加權平均股數（以千計）		13,156			4,878			10,813			3,350
可供A類普通股的基本和稀釋每股淨虧損	$	(0.15	)	$	(0.94	)	$	(0.62	)	$	(7.75	)

截至2024年9月30日和2023年9月30日，公司未發行的A級普通股等價物已被排除在可供普通股股東每股稀釋淨虧損計算之外，因爲其影響將是抗稀釋的（實際股份）:

	9月30日, 2024		9月30日, 2023
公開和私有warrants		1,037,873		1,037,873
認定的認股權證		4,726,514		2,007,848
股票期權		108,410		215,094
總非稀釋性股份		5,872,797		3,260,815

除了上述列出的A類普通股等價物，公司已簽訂協議，涉及諮詢和顧問服務、中介費、補償性服務、法律和和解協議以及期票和期票延期，根據這些協議，公司同意發行其普通股。這些未解決的股份發行問題詳見第10、13和16 注，須經紐交所或股東批准，因此，這些股份未納入截至2024年9月30日結束的三個和九個月內的加權平均未流通股份。

注意 5 收購和股票交易所協議

2024年6月10日，公司與rennova health簽訂了兩份股票交易協議，分別與美國特拉華州的一家公司（「RHI」）簽訂。

Myrtle在首個股票交易所協議下被收購

首個協議，經過補充（以下簡稱「美特爾協議」），規定RHI將其在美特爾的所有股權置換爲$500，以公司A級普通股和應付款項的組合形式支付。交割於2024年6月14日生效。公司記錄了一筆無利息的應付款項，金額爲$265 ，並於2024年7月17日向RHI支付了剩餘購買價格$235 單元份額，每個單位包括一股普通股和一份可購買一股普通股的權證。 1,023,629 的A級普通股。向RHI發行的公司A級普通股的數量是通過將$235 除以交割前一天公司普通股的成交量加權平均價格來確定的，該價格爲$0.23 。

Myrtle在2022年第二季度成立，旨在開拓行爲健康板塊的機會，包括藥物濫用治療，在農村市場首次提供服務。服務可提供住院、住宿或門診方式。

在2023年8月10日，Myrtle獲得了田納西州心理健康和藥物濫用服務部的許可證，允許其在田納西州Oneida運營一家酒精和藥物治療設施。該設施位於BSF的校園，已於2023年8月14日開始運營並接受患者。該設施爲最多30名患者提供酒精和藥物的住院排毒及康復治療服務。2023年11月1日，Myrtle開始在其非居民辦公室基礎阿片類藥物治療設施（「OBOT」）接受患者。OBOT位於田納西州Oneida，緊鄰Myrtle的酒精和藥物治療設施，與Myrtle提供的現有住院康復和排毒服務相輔相成。

Myrtle 已獲得田納西州精神健康與藥物濫用服務部頒發的兩個許可證，生效日期爲2024年8月1日，有效期爲12個月。第一個許可證授權提供酒精和藥物住院排毒治療服務，以及酒精和藥物住院康復治療服務。第二個許可證授權提供非住院 treatment的辦公室類鴉片治療服務。

在2023年4月11日，Myrtle出售了其普通股，等於一個 1.961%的所有權股份，出售給了在田納西州獲得許可的無關聯個體，價值微不足道。該股票有一定的轉讓限制，包括子公司有權以微不足道的價值將股票轉讓給另一位在田納西州獲得許可的醫生。這些股份是出於田納西州醫療監管的原因出售給該個人的。

根據經修訂和重訂的第二份股票交易協議，收購RCHI及其子公司SCCH

開啓 2024年6月10日，公司與RCHI和RHI簽訂了證券交易協議（「RCHI SEA」）。9月10日， 2024年，公司與RCHI和RHI簽訂了經修訂和重述的證券交易協議（「RCHI SEA修正案」）根據該法，對RCHI SEA進行了修訂，更改了RHI收取的對價，以換取所有股權來自 RCHI 的 20,000 本金爲美元的本金將公司A系列優先股的股份轉換爲優先票據22,000 （視情況而定調整）（「2024年9月10日票據」），由RCHI及其子公司SCCH的所有資產擔保 RHI、RCHI 和 SCCH 於 2024 年 9 月 10 日簽訂的、彼此之間以及彼此之間簽訂的《擔保和質押協議》（「附屬證券」）協議”），公司和SCCH根據日期爲2024年9月10日的擔保協議爲2024年9月10日的票據提供擔保 2024年9月10日（「擔保協議」），且公司提供了「抵押品」的擔保權益，定義見2024年9月10日與RHI簽訂的擔保和質押協議（「擔保協議」）。九月 2024 年 10 月 10 日 Note 在 Note 10 中進行了更全面的討論。

正如在注1中討論的那樣，RCHI的全資子公司SCCH以業務名稱BSF進行業務。BSF是位於田納西州奧奈達市的一家重要醫院，包括一座52,000平方英尺的醫院大樓和一座6,300平方英尺的專業大樓，佔地約4.3英畝。BSF有25張住院牀位和一個24/7急診科，提供輔助服務，包括實驗室、放射科、呼吸科和藥房服務。該醫院於2017年8月8日開始運營，並於2021年12月成爲農村臨時通道醫院指定，追溯至2021年6月30日。

FOXO 收購了Myrtle和RCHI，作爲擴展其在盈健醫療板塊運營的協同機會，並作爲其表觀遺傳生物標誌物在人類健康、健康和衰老方面的補充。

董事會成員的任命

關於收購RCHI，於2024年9月10日，RHI董事會成員兼首席執行官暨臨時首席財務官Seamus Lagan先生，以及RHI董事會成員Trevor Langley先生，被任命爲公司的董事會。

Myrtle和RHI以及SCCH和RHI之間的租賃協議

Myrtle 與RHI的子公司簽訂了一份租賃協議，根據該協議，Myrtle同意從2024年6月14日起在BSF的校園內租賃設施。租期爲一年，並且有五個年度期權可以再續租一年，初始月租金額爲$35 ，每年的租金漲幅爲 3%和消費價格指數中的較大者。

2024年6月1日，SCCH與RHI子公司簽訂了一份「三重淨」租賃協議，在該協議下，SCCH同意租賃BSF醫院設施。該租賃期限爲一年，有五個年度續租選項，每年起初的月租金基礎金額爲$65 和按照較高者爲準的消費者價格指數所確定的年度租金增加額 3和消費者價格指數。

這些租賃被視爲使用權資產和負債，具體內容詳見第12注。

根據Myrtle協議和RCHI海域修正案，支付給RHI的購買對價被分配到所收購的淨有形和無形資產以及假定的負債。公司根據美國通用會計準則將這些收購視爲業務合併。根據ASC主題805的收購方法會計， 「業務合併，」 （「ASC 805」），所收購的資產和假定的負債在收購日期以各自的公允價值進行記錄，並與公司的資產合併。

公司將進行評估研究，以判斷所收穫資產的公允價值。所收穫資產的預估公允價值，扣除承擔的負債後，約爲$500 爲Myrtle 爲$22,000 爲RCHI 超出購買價格與所收穫有形資產和承擔負債的總體公允價值之間的差額，目前估計爲$(1,869)爲Myrtle 爲$(8,791) 爲RCHI，其差額作爲商譽，如下表所示。此外，在覈算期間或直至評估研究完成期間，用於購買價格分配的暫定金額將在不超過自收購日起一年的期間內進行調整。因此，在評估研究完成後，下面所示的商譽金額可能會增加或減少。初步購買價格分配部分基於與RHI進行的討論。

以下表格顯示了對Myrtle和RCHI購買價格的初步分配，以及其各自收購日期上獲得的可識別資產和承擔的負債：

	Myrtle			RCHI
總購買價格	$	500		$	22,000

以估計公允價值取得的有形和無形資產以及承擔的負債：
現金	$	6		$	8
應收賬款，淨額		284			2,354
用品		-			202
預付費用		-			128
物業和設備，淨值		221			176
租賃權益資產		1,463			2,693
應付賬款		(708	)		(3,081	)
應計費用		(99	)		(7,953	)
租賃權責要義		(1,463	)		(2,693	)
應付票據		(1,611	)		(624	)
非控股權益		38			-

資產獲取，扣除假定負債後	$	(1,869	)	$	(8,791	)
商譽	$	2,369		$	30,791

收購Myrtle相關的總成本約爲$505。其中包括支付給RHI的$500 考慮和法律費用約爲$5，這些費用於2024年6月列支。收購RCHI相關的總成本約爲$22,005。其中包括支付給RHI的$22,000 考慮和法律費用約爲$5，這些費用截至2024年9月30日列支。

以下展示了公司、Myrtle和RCHI的未經審計的預估合併運營結果，假設Myrtle和RCHI的收購是在2023年1月1日發生的。

未經審計的合併業績安排


	三個月結束						九個月結束
	9月30日,						9月30日,
	2024			2023			2024			2023

淨收入	$	3,041		$	3,510		$	9,706		$	14,735
FOXO歸屬於淨損失		(2,785	)		(3,401	)		(7,483	)		(17,767	)
視同股息		(88	)		(912	)		(1,054	)		(3,378	)
普通股股東的淨損失	$	(2,873	)	$	(4,313	)	$	(8,537	)	$	(21,145	)

每股淨虧損：
普通股股東的基本和攤薄淨虧損	$	(0.22	)	$	(0.73	)	$	(0.74	)	$	(4.83	)
期間內普通股權重平均股數（以千爲單位）：
基本和攤薄		13,334			5,902			11,553			4,374

未經審計的業績預估結果僅供參考。未經審計的業績預估結果並不打算呈現如果在2023年1月1日前完成對Myrtle和RCHI的收購，實際可達成的結果，也不用於任何未來日期或期間的潛在運營結果的預測。

注意 6 帳戶應收款項，淨額

截至2024年9月30日和2023年12月31日的應收賬款如下：

應收賬款清單

	9月30日, 2024			2023年12月31日, 2023
應收賬款，毛額	$	12,900		$	-
減：
折扣準備金		(9,354	)		-
壞賬準備		(1,119	)		-
銷售協議下的應收賬款		(426	)		-
應收賬款，淨額	$	2,001		$	-

應收賬款銷售協議

截至 2024年9月30日，SCCH拖欠的總額爲$426 在四份應收賬款銷售協議下的應收賬款中，包括 $91 在一份違約的銷售協議條款下所拖欠的款項。

注意 7 固定資產淨額

截至2024年9月30日和2023年12月31日，固定資產淨值如下：

財產和設備的日程安排

	9月30日, 2024			2023年12月31日, 2023

租賃改良	$	180		$	-
傢俱和固定裝置		133			-
計算機設備		78			37
軟件		6			-
醫療設備		37			-
固定資產總額		434			37
減少已計提折舊額		(47	)		(23	)
物業和設備，淨值	$	387		$	14

財產和設備按直線法在其各自的使用年限內折舊。租賃改進按租賃期限折舊，其餘設備和軟件的折舊年限從一到十年不等。財產和設備的折舊費用爲 $17 and $5 ，截至2024年9月30日和2023年的三個月分別爲$24 and $23 截至2024年和2023年9月30日的九個月。

注意 8 無形資產和商譽

截至2024年9月30日和2023年12月31日的無形資產如下：

無形資產清單

	九月 30日， 2024			12月31日， 2023
甲基化流程	$	592		$	592
表觀遺傳APP		2,500			-
減：累計攤銷		(987	)		(214	)
無形資產-淨額	$	2,105		$	378

公司的無形資產攤銷以直線法記錄在銷售、一般和行政費用中，持續三年。公司確認了無形資產的攤銷費用爲$257 and $70 在截至2024年9月30日和2023年9月30日的三個月中，分別爲$773 and $1,228 在截至2024年9月30日和2023年9月30日的九個月中，分別爲$2,633 在截至2023年9月30日的九個月中，公司記錄了$的減損損失，針對其數字保險平台及其承銷API和長壽API，詳情請見於其2023年12月31日年度報告中附帶的財務報表第4號說明。

該公司的表觀遺傳APP無形資產是根據許可協議從KR8獲得的，相關內容在附註11中有更詳細的討論。

商譽

商譽爲$33,160 and $0 截至2024年9月30日和2023年12月31日，商譽分別爲$。2024年9月30日的商譽源於對Myrtle和RCHI的收購，這在第5條中有更詳細的討論。

注意 9 應計費用

2024年9月30日和2023年12月31日，應計費用包括以下內容：

應計費用表

	9月30日,		2023年12月31日,
	2024		2023
應計工資及相關負債	$	4,598	$	-
應計解聘費		2,072		1,696
應計利息		621		-
累積的法律費用和和解金		1,945		2,260
醫療保險成本報告和解準備金		2,097		-
其他應計費用		1,224		30
應計費用	$	12,557	$	3,986

應計的工資和相關負債中包括大約$4,065 用於截至2024年9月30日應計的逾期工資稅及相關罰金和利息。

注意 10 債務

2024年9月30日和2023年12月31日，債務包括以下內容：

債務安排表

	9月30日, 2024			2023年12月31日, 2023

應付賬款 - 第三方	$	7,803		$	4,203
應付款項 - 關聯方		23,762			790
總債務		31,565			4,993
減：短期借款		(9,565	)		(4,993	)
減：流動部分的總負債	$	22,000		$	-

應付賬款 - 第三方

截至2024年9月30日和2023年12月31日，向第三方應付票據包括以下內容：

應付第三方票據安排

	9月30日, 2024			2023年12月31日, 2023

本金金額爲$的Senior PIK筆記3,458，包括利息$1,514 and $745	$	4,971		$	4,203
西方應付票據		624			-
ClearThink筆記的總本金金額爲$1,076，減去未攤銷折扣$106		970			-
LGH應付款項的本金金額爲$110，減去未攤銷折扣$36		74			-
IG應付款項的本金金額爲$175		175			-
Senior Notes應付款項的總本金金額爲$1,120，減去未攤銷折扣$266		854			-
1800 Diagonal Note應付款項的本金金額爲$169，減去未攤銷折扣$34		135			-
總第三方應付款項		7,803			4,203
第三方應付票據的當前部分較少		(7,803	)		(4,203	)
第三方應付票據總額，減去當前部分	$	-		$	-

15% 高級PIk票據

在 2022年9月20日，公司與合格投資者簽署了單獨的證券購買協議，根據該協議，公司發行了總本金金額爲$的高級PIK票據3,458，2022年12月28日完成交易後，公司扣除了與發行相關的貸款人交易費用和剩餘未償還的2021年11月票據本金及應計利息的全額付款，收到的淨收益爲18,052,461美元。根據下文，了解有關2021年11月票據的其他披露。2,918, 在扣除費用和支出$後540.

Senior PIk Notes的利息以每年％的利率計息，通過發行額外的Senior PIk Notes（「PIk Interest」）以實物支付，按季度拖欠付款。 15Senior PIk Notes在到期日（「到期日」）到期。從2023年11月1日起，公司必須支付Senior PIk Notes持有人，並在每個月的紀念日支付等額的款項，直到到期日全額償還未償還的本金餘額。如果在第一年內償還了Senior PIk Notes，公司則必須支付持有人未償還的本金餘額，不包括由於PIK利息增加而計算出的任何增加金額，乘以。Senior PIk Notes的支付已逾期，如下面更全面討論。 2024年4月1日 Senior PIk Notes的利息以每年％的利率計息，通過發行額外的Senior PIk Notes（「PIk Interest」）以實物支付，按季度拖欠付款。 1.15Senior PIk Notes的支付已逾期，如下面更全面討論。

公司已同意在未得到多數高級PIk票據持有者的同意下，不獲得額外的股權或債務融資，除非融資用於償還高級PIk票據的應付金額，但某些豁免發行除外。公司在高級PIk票據全部償還之前不得承擔其他債務，除非是某些豁免債務；然而，高級PIk票據是無擔保的。

PIK 備註修正

2023年5月26日，公司完成了兩項發行人收購要約：（i）交換要約（如附註13所述），和（ii）提議修改的要約 15截至2023年4月27日啓動的「高級可轉換票據和同意徵集」的PIk票據提議修改，公司向所有高級PIk票據持有人提供公司A類普通股股票，每$的原始本金金額（定義見高級PIk票據）的高級PIk票據持有人 0.125 公司的A類普通股的股票，每$的原始本金金額交換一份高級PIk票據1.00 以換取高級PIk票據持有人同意修改於2022年9月20日簽訂的高級可轉換票據購買協議，公司與每位高級PIk票據購買人簽訂的協議

依照對於PiK票據的修正要約，公司徵求了優先PiK票據持有人批准修改PiK票據購買協議允許公司發行以下A類普通股和普通股等價物（定義見PiK票據）購買協議），無需預付優先PiK票據：（i）發行公司A類普通股與PiK發行票據的修正要約有關，（ii）發行與公司A類普通股相關的股票通過交易所要約（定義見附註13），（iii）發行公司的A類普通股或普通股與2022年過橋債券發行（定義見附註13）相關的等價物（定義見PiK票據購買協議）， (iv) 發行公司A類普通股或普通股等價物（定義見PiK票據購買協議）（a）私募公司股權、股票掛鉤證券或債務證券中的協議），其總收益爲公司不大於 $5 百萬（「私募配售」）和/或（b）公司股權的註冊發行，導致公司總收益不超過美元的股票掛鉤證券或債務證券20 百萬 (「公共融資」); 前提是 (A) 私募的收益爲公司帶來的總收益至少爲美元2 百萬被使用了公司將預付截至預付款之日不少於未償本金餘額（定義見優先PiK票據）的25％在此類私募配售結束時按比例計算，以及（B）公共融資產生的總收益向公司支付至少 $10 公司使用百萬美元來預付截至預付款之日的所有未償本金餘額在此類公共融資結束後，以及（v）發行公司的A類普通股或普通股等價物（定義見PiK票據購買協議），即私募額外對價（統稱爲「PIK」）備註修正案”）。

公司已經獲得所有高級PIK票據持有人的同意，以及包括股東批准在內的所有必要批准，並按比例向高級PIK票據持有人發行了。 432,188 其A類普通股給予PIK票據修正案作爲對價。

公司將PIk票據修正案視爲一種消滅，因爲支付給高級PIk票據持有人的考慮金額爲$1,339 以公司的A類普通股形式支付的$使得PIk票據修正案後的現金流變化超過了 10%. 由於高級PIk票據的短期特性，公司確定債務的重新收購價格等於修正案時的本金金額。1,596 公司確認與PIk票據修正案相關的費用爲$256 $的未攤銷債務發行成本和$1,339 用於發行公司A類普通股。公司將繼續支付PIk利息，直到到期或償還。

根據高級PIK票據的條款，自2023年11月1日起，以及每個月的週年紀念日，公司需要向PIK票據的持有人支付相等的金額，直到其未償還的本金餘額在到期日全額支付完畢，或者如果提前，根據其條款加速或提前支付高級PIK票據。公司未能在2023年11月1日及之後的每個月週年紀念日付款，這構成了高級PIK票據的違約事件。 15因此，由於違約事件，高級PIK票據的利率從 22% 年（每年複利，按照360天計算）增加到 130% 的未償還本金餘額。此外，高級PIK票據的持有人可以採取其他救濟措施，加速到期日並宣佈所有債務在

如前所述，優先支付票據目前處於違約狀態，公司沒有財務能力糾正此違約。爲了解決優先支付票據的違約並將公司的優先支付票據債務轉爲股權，以提高股東權益並符合紐交所的持續上市要求，公司要求優先支付票據持有者考慮對其票據進行某些修訂。 50.01截至2024年10月18日，公司獲得了超過 %優先支付票據持有人的批准，該持有人根據優先支付票據中的總原始本金金額（如定義）同意簽署優先支付票據修正案第1號，在該修正案下，優先支付票據將被交換爲公司的B系列優先股。優先支付票據修正案第1號的詳細信息在註釋18中進行了更全面的討論。

截至2024年9月30日和2023年12月31日，公司已記錄$4,971 and $4,203 高級PIk票據的餘額分別作爲流動負債，基於每月分期付款計劃。截至2024年9月30日的三個月和九個月，公司確認了$264 and $768，分別與高級PIk票據的合同利息費用。截止2023年9月30日的三個月和九個月，公司確認了$140 and $275，分別與高級PIk票據的合同利息費用；以及$354 and $448分別與高級PIk票據的債務發行成本的攤銷相關。債務發行成本的攤銷包括$256 在PIk票據修訂時的未攤銷債務發行成本爲$。截至2023年6月30日，針對高級PIk票據的債務發行成本已全部攤銷。

西方應付票據

應付給西方醫療有限責任公司的 promissory note（「西方應付票據」），由 SCCH 在收購 RCHI 時所欠。收購情況詳見附註 5。截止到 2024 年 9 月 30 日，所欠本金餘額爲 $624。該票據的利率爲 18% 每年，包含本金和利息的付款不得晚於 2022 年 8 月 30 日到期。RCHI 尚未按票據要求支付所有的月供，目前已逾期。根據西方應付票據的條款，RHI 是共同借款人。

注意事項應付給ClearThink Capital Partners, LLC

在2024年9月30日結束的九個月內，公司向ClearThink Capital Partners, LLC（「ClearThink」）發行了四張本票。75。該期票的利率爲25 原始發行折扣，到期日爲 2025年1月3日。在2024年1月30日，公司向ClearThink發行了最高金額爲的本票。750。該期票的利率爲250 。 2025年1月30日2024年5月15日，公司發行ClearThink一張票據，面額爲$300。該期票的利率爲100 原始發行折讓，到期日爲 2024年8月14日2024年8月16日，該票據延期至2024年9月30日。根據2024年8月16日的延期協議，公司同意向ClearThink發行 100,000 價值$的A類普通股股票，以增加票據的本金金額$16，並採用年利率50 22%回到投資的原日期。（2024年10月11日，2024年5月15日的債券已經延期至2024年11月30日，在附註18中有更詳細的討論。）2024年8月16日，公司向ClearThink發行了一份本金金額爲$的期票。40 到期日爲 2024年11月16日。該期票的利率爲13 原始發行折扣。

The January 3, 2024, January 30, 2024, May 15, 2024 and August 16, 2024 notes are referred to collectively as the “ClearThink Notes.” The January 3, 2024, January 30, 2024 and August 16, 2024 notes have interest rates of 12% per annum (22 – 24% after the occurrence of an Event of Default, as defined in the ClearThink Notes). The May 15, 2024 note originally did not bear interest but as amended has an interest rate of 22% as discussed above. 10% of all future purchase notices from the Strata Purchase Agreement with ClearThink, which is more fully discussed in Note 13, must be directed toward repayment of the ClearThink Notes until they are paid in full. The May 15, 2024 promissory note is convertible into shares of common stock, but only in the event of a default. The Events of Default for the ClearThink Notes include: failure to pay amounts owed under the ClearThink Notes, uncured breach of covenants, breach of representations and warranties, bankruptcy, delisting of the Company’s Class A Common Stock from exchange or OTC Markets, failure to comply with reporting under the Exchange Act, cessation of operations, restatement of financial statements or cross-default of any other agreement with ClearThink, among others.

Funding of the ClearThink Notes occurred on various dates during the period January 4, 2024 through August 16, 2024. During the nine months ended September 30, 2024, the Company received net cash proceeds of $656. During the three and nine months ended September 30, 2024, the Company recorded interest expense of $246 and $460, respectively, on the ClearThink Notes, including amortization of debt discounts of $192 and $379, respectively. The Company incurred finder’s fees due in cash and common stock warrants pursuant to a Finder’s Fee Agreement, which is more fully discussed below. The Company recorded the fair value of the warrants issuable to the finder in connection with the ClearThink Notes of $48 as debt discounts and additional paid-in-capital and it recorded the cash Finder’s Fees of $29 as additional debt discounts on the ClearThink Notes. The balance of the ClearThink Notes at September 30, 2024 was $970 and was net of unamortized discounts of $106.

Securities Purchase Agreement Dated April 28, 2024 With LGH Investments

2024年4月28日，公司與LGH投資有限責任公司（「LGH」）簽訂了一份證券購買協議，根據該協議，公司向LGH發行了一份可轉換的、非計息的金額爲$的期票，並獲得了現金$的收益（「LGH應付票據」），並向LGH發行了股份作爲誘因股份。該票據可轉換爲公司的A類普通股，基於每股$的轉換價格，受到%的受益所有權限制。（截至2024年10月29日，轉換價格已降低，具體討論請參閱註釋18。）110 及收到現金$的收益，和發行100 股份作爲誘因股份給LGH。 200,000 股，這是基於每股$的轉換價格，受益所有權限制爲 366,666 %。（截至2024年10月29日，轉換價格已降低，具體討論請參閱註釋18。）0.30 4.99 %（或$10原發行折扣和一次性的10%利息費用爲11美元，公司已計入。公司在2024年4月按照票據條款發行給LGH的誘因股票的價值爲 200,000，被記爲額外的債務折讓。57，被記爲額外的債務折讓和額外的資本金，並記錄了根據尋找協議應發的權證的公允價值爲7，作爲額外的債務折讓記錄在LGH應付票據上。公司分別在2024年9月30日結束的三個月和九個月內記錄了7 的利息費用，包括債務折讓的攤銷。截至2024年9月30日，LGH應付票據的餘額爲27 and $56 。74 並且淨額扣除折扣爲$36.

2024年4月30日與IG Holdings, Inc.簽訂的證券購買協議。

開啓 2024 年 4 月 30 日，公司與亞利桑那州的一家公司 IG Holdings, Inc. 簽訂了證券購買協議（「IG」），根據該協議，公司向IG發行了本金爲美元的期票150 並收到了$的現金收益100 （「IG應付票據」），公司同意發行 100,000 其A類普通股的股票作爲IG的激勵股。IG應付票據的發行價格爲美元50 原始發行折扣。發生以下事件時，IG應付票據可轉換爲公司A類普通股默認，如協議中所定義。應計利息的利率爲 22% 除其他罰款外，每年在發生違約事件時支付。IG應付票據，最初於三個月後到期根據修正案的條款，截止日期已於2024年8月16日延長至2024年9月30日。另外，在修正案的條款，公司同意向IG發佈 50,000 其價值爲美元的A類普通股股票8，將票據的本金增加美元25 並適用的年利率爲 22% 回到最初的投資日期。的價值 100,000 根據票據原始條款可向IG發行的激勵股票，以及 50,000 根據修正案條款可發行的公司A類普通股股份，將到期日延長至 2024 年 9 月 30 日，原價 $28 和 $8，分別被記作額外債務折扣。（這些股票由公司發行，自2024年10月27日起生效。）在此外，公司記錄了根據發現者費用協議向發現者發行的認股權證的公允價值 $7 作爲債務折扣和額外的實收資本，它記錄了應付給美元開戶的現金7 作爲IG應付票據的額外折扣。公司記錄的利息支出，包括債務的攤銷折扣，美元80 和 $141，分別在截至2024年9月30日的三個月和九個月中。截至2024年9月30日的IG應付票據餘額是 $175。自2024年9月30日起，所有折扣均已全部攤銷。正如註釋18中更全面地討論的那樣，IG Note的全部餘額應付賬款在2024年11月1日至2024年11月15日期間轉換爲公司A類普通股。

尋找者費用協議

根據2023年10月9日簽署的推薦費協議，公司有義務向推薦人支付相當於 3至7%的公司從ClearThink票據、LGH應付票據和IG應付票據中收到的總收入，並向推薦人發行 5-年期的認股權證，以購買公司A類普通股，數量相當於 7%的認股權證覆蓋，基於公司從推薦人引入的第三方投資者那裏收到的總收入，行使價格爲 110%的總收入（如推薦費協議中定義）或公司A類普通股在資金到位日的公開市場收盤價，以較低者爲準，受反稀釋價格保護和參與註冊權的限制。由於發行了ClearThink票據、LGH應付票據和IG應付票據，公司有義務作爲推薦費發行認股權證。有關認股權證的更多詳細信息請參閱第13條。推薦費協議於2024年8月22日修訂，具體內容請參閱第13條。

證券 2024年6月12日與機構投資者簽訂的購買協議

2024年6月12日，公司與機構投資者（「買方」）簽署了《證券購買協議》（「SPA」），根據協議同意向買方以及隨後也成爲SPA當事方的後續購買者（買方與購買者合稱「購買者」）發行總面額高達$的優先票據。2,800 （每張爲「應付的優先票據」或者，合計爲「應付的優先票據」）。

SPA的結束（每個爲「結束」，或者一起爲「結束」）如下：

	●	如下更詳細討論，在初步結束日期（如下定義），購買方購買了$的本金金額840 普通債務票據應付的發行公司額外發行給購買方的股份總計爲 1,108,755 公司發行給購買方的A類普通股份爲該公司截至初步結束日期已發行普通股份的 9.99%。公司於2024年7月17日發行了該 1,108,755 公司在2024年7月17日發行了該股份。

	●	在向美國證券交易委員會提交與公司股東批准公司收購RHI的RCHI普通股以及所有相關交易的初步代理聲明或信息聲明後（「收購」），購買方購買了總計爲$的280 在下文中更詳細討論的資產支付款的本金金額

	●	在收購完成時，買方同意購買高達美元的累計金額1,120按照協議的條件，買方或買方尚未購買這些額外的票據

	●	在公司向SEC提交與買方（以及任何關聯公司）持有的公司A類普通股全部股份有關的註冊聲明後，買方將購買高達美元的累計金額560 按照協議的條件，買方或買方尚未購買這些票據，因爲資金條件尚未完全滿足

Each Closing is subject to additional conditions as disclosed in the SPA.

On June 14, 2024 (the “Initial Closing Date”), pursuant to the SPA, the Company issued a Senior Note Payable in the principal amount of $840 to the Purchaser and it received cash proceeds of $750. The Senior Note Payable matures on June 14, 2025. The principal amount of the Senior Note Payable is the subscription amount multiplied by 1.12 which represents a 12% (or $90) original issuance discount. The Senior Note Payable does not accrue any interest except for in the event of an Event of Default (as defined in the Note) upon which it will accrue interest at 18% per annum. The Company recorded the $90 original issue discount and the value of the 1,108,755 shares of its Class A Common Stock issuable in connection with the Senior Note Payable of $255 as debt discounts. The Company recorded interest expense resulting from the amortization of the debt discounts of $88 and $104 during the three and nine months ended September 30, 2024. The balance of the Senior Note Payable at September 30, 2024 was $599, which was net of debt discounts of $241.

根據上述討論的SPA條款，2024年8月1日，公司發行了一張面額爲$的高級票據應付。280給買方，並收到現金收入$。250該高級票據應付將於到期。 7月31日，2025年美國國債到期。. 高級票據應付的面額爲認購額度乘以1.12，代表了 12%（或$30）的原始發行折扣。除非發生違約事件（如在票據中定義），否則該高級票據應付不產生任何利息，屆時將產生利息爲 18% 年利率。公司記錄了由於攤銷債務折扣而產生的利息費用 $5 在截至2024年9月30日的三個月和九個月期間。2024年9月30日，優先票據應付餘額爲 $255，減去債務折扣 $25.

高級應付票據賦予購買者在根本交易（如高級應付票據中定義）時的權利，例如接替實體的假設權利（如高級應付票據中定義）。高級應付票據還爲購買者提供了在發行優先股時的交易所權利，包括A系列優先股（收購時除外）和強制贖回權。公司還提供了高級應付票據的可選提前還款。 100%的高級應付票據金額。$840 高級應付票據由RHI擔保。

1800 對角融資有限責任公司應付票據

2024年7月22日，公司向1800 Diagonal Lending LLC（以下簡稱「1800 Diagonal Note」）發行了一張本金爲$的期票。169，其中包括一次性利息金額$；18 (12$151）；公司收到了$的現金。該票以$的原始發行折扣發行，並在到期時到期；125。該期票的利率爲20 。 2025年5月22日的到期。該票按利率計息。 22根據票據中定義的違約事件，在違約事件中，該1800對角線票據可轉換爲普通股，並且應在五個月內償還。第一筆月付款應於2025年1月22日到期，金額爲85美元，接下來的四筆月付款分別爲每筆21美元。該1800對角線票據可以在發行之日起的前180天內以優惠折扣率97%的未償餘額預付。公司記錄的利息費用是由於債務折讓的攤銷，金額爲$10 截至2024年9月30日，在截至2024年9月30日的三個月和九個月內，該1800對角線票據的餘額爲$135，淨債務折讓額爲$34.

應付賬款 - 關聯方

截至2024年9月30日和2023年12月31日，應付票據與相關方情況如下：

應付關聯方債券安排表

	9月30日, 2024			2023年12月31日, 2023

波爾備忘錄，日期爲2023年9月19日	$	247		$	247
額外的波爾備忘錄		43			43
贊助商貸款		500			500
向RHI支付的有關收購Myrtle的應付款項		265			-
向RHI支付的有關原始本金金額爲$收購Myrtle的應付款項1,611		707			-
2024年9月10日致RHI有關RCHI收購的備忘錄		22,000			-
相關方應付款總額		23,762			790
減：相關方應付款的流動部分		(1,762	)		(790	)
相關方應付款總額，減去流動部分後淨額	$	22,000		$	-

普爾備註

在2023年9月19日，公司獲得了$247 來自公司前董事安德魯·J·普爾（「貸款」）的貸款，用於支付董事和高管的保險，直至2023年11月。公司向普爾先生簽發了一張$的需求本票，證明該貸款（「普爾本票」）。普爾本票不計利息。普爾本票可按要求償還，若無任何要求，普爾本票將在簽發之日起一年到期。普爾本票可以提前償還，部分或全部均可，且無任何罰款。247 普爾本票可以在任何時候提前償還，無論是部分還是全部，且不收取罰款。

附加 Poole 注意事項

2023年10月2日，公司獲得了一筆$貸款。43 貸款來自普爾先生（「額外貸款」），用於支付Mitchell Silberberg & Knupp LLP律師事務所（「MSK」）的法律費用，直至2023年10月。公司向普爾先生簽發了一張$要求的本票，用於證明額外貸款（「額外普爾票據」）。43 額外普爾票據應以每年百分之一的利息率拖欠利息。 13.25額外普爾票據應在要求日期屆滿後一年內到期，如果沒有任何要求，可以隨時全額或部分提前償還，無需支付罰款。

贊助商貸款

爲了籌集與業務合併相關的交易成本，贊助商或贊助商的關聯公司向Delwinds提供了用於流動資金的所有基金類型貸款。

備註支付給RHI用於購買Myrtle

根據在註釋5中詳細討論的對Myrtle的收購，公司向RHI發行了一份無息的應付票據，金額爲$265該票據在索取時到期。

Note Payable to RHI In Connection with Myrtle Acquisition

Note payable to RHI dated June 13, 2024, in the original principal amount of $1,611 owed by Myrtle to RHI at the time of the acquisition of Myrtle. The acquisition is more fully discussed in Note 5. The note is non-interest bearing, except if not paid by the maturity date of December 31, 2024, in which case the note will bear interest at 18% per annum. The note may be increased for any subsequent borrowings made by Myrtle from RHI. During the three months ended September 30, 2024, the Company has repaid $904 leaving a principal balance of $707 on September 30, 2024.

September 10, 2024 Note to RHI In Connection with the RCHI Acquisition

In connection with the acquisition of RCHI, which is more fully discussed in Note 5, RCHI issued the September 10, 2024 Note. The September 10, 2024 Note matures on September 10, 2026 and accrues interest on any outstanding principal amount at an interest rate of 8% per annum for the first six months increasing to 12% per annum after six months until maturity. After maturity, the default interest rate will be 20% per annum until the September 10, 2024 Note is paid in full. The September 10, 2024 Note requires principal repayments equal to 10% of the free cash flow (net cash from operations less capital expenditures) from RCHI. Payments will be one month in arrears. The September 10, 2024 Note is required to be reduced by payment of 25% of any net proceeds from equity capital raised by the Company. The September 10, 2024 Note is secured by the assets of RCHI and SCCH and guaranteed by the Company and SCCH under the Guaranty Agreement and Security Agreement, respectively.

Note 11 RELATED PARTY TRANSACTIONS

In addition to the transactions discussed in Notes 5, 10, 12, 16 and 18, the Company had the following related party activity during the three and nine months ended September 30, 2024 and 2023:

Consulting Agreement

In April 2022, the Company executed a consulting agreement (the “Consulting Agreement”) with an individual (the “Consultant”) considered to be a related party of the Company as a result of his investment in 2021 Bridge Debentures. The Consulting Agreement, which expired in April 2023, had a minimum term of twelve months, over which the Consultant was to provide services that included, but were not limited to, advisory services relating to the implementation and completion of the Business Combination. The Company determined that all compensation costs related to the Consulting Agreement, including both cash and equity fee paid in 2022, represented remuneration for services to be rendered evenly over the contract term. Thus, all such costs were initially recorded at fair value as prepaid consulting fees in the consolidated balance sheet and were being recognized as selling, general and administrative expenses in the unaudited condensed consolidated statement of operations on a straight-line basis over the term of the contract. For the three and nine months ended September 30, 2023, $0 and $2,676 of expense was recognized related to the Consulting Agreement, respectively.

Management, License and Maintenance Fees Under the KR8 Agreement

On October 29, 2023, the Company entered into a Letter Agreement with KR8 to develop a Direct-to-Consumer APP (iOS and Android) combining its AI Machine Learning technology to provide a commercial application of FOXO’s epigenetic biomarker technology as a subscription consumer engagement platform. Effective January 12, 2024, the Letter Agreement was replaced with the Master Software and Services Agreement between the Licensor and the Company (the “KR8 Agreement”). The Company’s Interim CEO, Mark White, and Interim CFO, Martin Ward, each are equity owners of the Licensor. Under the KR8 Agreement, the Licensor granted to the Company a limited, non-sublicensable, non-transferable perpetual license to use the “Licensor Products,” which are listed in Exhibit A to the KR8 Agreement, to develop, launch and maintain license applications based upon the Company’s epigenetic biomarker technology and software to develop an AI machine learning Epigenetic APP to enhance health, wellness and longevity. The territory of the KR8 Agreement is solely within the U.S., Canada and Mexico.

Under the KR8 Agreement, the Company agreed to pay to the Licensor an initial license and development fee of $2,500, a monthly maintenance fee of $50 and an ongoing royalty equal to 15% of “Subscriber Revenues,” as defined in the KR8 Agreement, in accordance with the terms and subject to the minimums set forth in the schedules of the KR8 Agreement. The Company agreed to reimburse the Licensor for all reasonable travel and out-of-pocket expenses incurred in connection with the performance of the services under the KR8 Agreement, in addition to payment of any applicable hourly rates. If the Company fails to timely pay the “Minimum Royalty,” as defined in the KR8 Agreement, due with respect to any calendar year, the License will become non-exclusive. (Payments of certain of these amounts in cash are restricted by the terms of a legal settlement agreement, which is more fully discussed in Note 16 under the heading, “Smithline Family Trust II vs. FOXO Technologies Inc. and Jon Sabes.”)

The initial term of the KR8 Agreement commenced on the effective date of the KR8 Agreement. Unless terminated earlier in accordance with the terms, the KR8 Agreement will be perpetual. Either party may terminate the KR8 Agreement, effective on written notice to the other party, if the other party materially breaches the KR8 Agreement, and such breach remains uncured 30 days after the non-breaching party provides the breaching party with written notice of such breach, in which event, the non-breaching party will then deliver a second written notice to the breaching party terminating the KR8 Agreement, in which event the KR8 Agreement, and the licenses granted under the KR8 Agreement, will terminate on the date specified in such second notice. Either party may terminate the KR8 Agreement, effective immediately upon written notice to the other party, if the other party: (i) is unable to pay, or fails to pay, its debts as they become due; (ii) becomes insolvent, files or has filed against it, a petition for voluntary or involuntary bankruptcy or otherwise becomes subject, voluntarily or involuntarily, to any proceeding under any domestic or foreign bankruptcy or insolvency law; (iii) makes or seeks to make a general assignment for the benefit of its creditors; or (iv) applies for or has appointed a receiver, trustee, custodian, or similar agent appointed by order of any court of competent jurisdiction to take charge of or sell any material portion of its property or business.

The Company may terminate the Agreement at any time upon 90 days’ notice to the Licensor provided that, as a condition to such termination, the Company immediately ceases using any Licensor Products. The Licensor may terminate the KR8 Agreement at any time upon 30 days’ notice to the Company if the Company fails to pay any portion of the “Initial License Fee,” as defined in the KR8 Agreement.

During the nine months ended September 30, 2024, under the terms of the KR8 Agreement, the Company issued 1,300,000 shares of its Class A Common Stock to the Licensor valued at $378 and it accrued $2,122 for the initial license and development fee. During the three and nine months ended September 30, 2024, the Company, recorded $150 and $450, respectively, for maintenance fees under the KR8 Agreement and $100 and $300, respectively, of minimum royalties. As of September 30, 2024, the Company accrued a total of $3,039 for the initial license and development fees, minimum royalties, maintenance fees, management fees and reimbursable expenses. The amounts owed to the KR8 are reflected as related parties payables and promissory notes on the September 30, 2024 and December 31, 2023 unaudited condensed consolidated balance sheets. Subsequent to September 30, 2024, the Company issued 237,037 shares of its Class A Common Stock to KR8 as partial payment of the $2,122 accrued initial license and development fee as more fully discussed in Note 18.

Management Agreement Between Myrtle and RCHI

On June 1, 2024, Myrtle and RCHI entered into a management agreement wherein RCHI agreed to provide management and consulting services to Myrtle for a management fee of $15 per month.

Services Agreement With Interim CEO

On July 25, 2024, the Company entered into a new Services Agreement with Mr. White that superseded the interim employment agreement (the “Services Agreement”). The initial term of the Services Agreement is until July 31, 2026. Pursuant to the Services Agreement, Mr. White is entitled to monthly fees of $30, which may be converted into equity at the option of both Mr. White and the Company. Mr. White is entitled to full and prompt reimbursement of all expenses incurred in connection with his service as an officer of the Company and a monthly reimbursement for the cost of leasing and insuring a vehicle with a fair market value not in excess of $80. No later than 30 days after the date of the Services Agreement, Mr. White was to be issued 2,000 shares of the Company’s Series A Preferred Stock. Issuance of the 2,000 shares of the Company’s Series A Preferred to Mr. White has been delayed as the issuance requires shareholder approval. The Series A Preferred Stock is more fully discussed in Note 18.

The Company may terminate the Services Agreement at any time without Cause (as defined in the Services Agreement), provided that the Company give written notice of termination at 60 days before the date of such termination. In which case, Mr. White is be entitled to receive the following:

(i) payment of 24 months’ of monthly fees which, may be taken in cash or common stock of FOXO at Mr. White’s sole option; and (ii) reimbursement for any outstanding reasonable business expenses incurred by Mr. White in performing his duties.

The Company may terminate the Services Agreement at any time for Cause, provided that the Company gives written notice of termination to Mr. White. If the Services Agreement is terminated for Cause, Mr. White is entitled to:

(i) accrued and unpaid monthly fees through the date of such termination; and (ii) reimbursement for any outstanding reasonable business expenses incurred by Mr. White in performing his duties.

The Services Agreement will terminate upon a Change of Control (as defined in the Services Agreement). If the Services Agreement is terminated upon Change of Control, Mr. White will be entitled to:

(i) payment of 24 months of monthly fees which, may be taken in cash or common stock of the Company at Mr. White’s sole option; and (ii) reimbursement for any outstanding reasonable business expenses incurred by Mr. White in performing his duties.

For purposes of the Services Agreement, a termination for “Change of Control” means: (i) A change in control of the Company of a nature that would be required to be reported in response to Item 6(e) of Schedule 14A of Regulation 14A as in effect on the date of this Agreement pursuant to the Exchange Act; provided that, without limitation, such a change in control will be deemed to have occurred at such time as any Acquiring Person hereafter becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of 30% or more of the combined voting power of Voting Securities; or (ii) during any period of 12 consecutive calendar months, individuals who at the beginning of such period constitute the Board of Directors cease for any reason to constitute at least a majority thereof unless the election, or the nomination for election, by the Company’s stockholders of each new director was approved by a vote of at least a majority of the directors then in office who were directors at the beginning of the period; or (iii) there will be consummated (1) any acquisition by the Company of stock or assets of another entity actively engaged in business, in connection with which the Company issues Voting Securities or any security, instrument or agreement exercisable for or convertible into Voting Securities, representing in the aggregate more than 100% of the Voting Securities outstanding prior to the entry into an agreement to consummate such acquisition, notwithstanding that the exercise or conversion of such security, instrument or agreement is subject to a vote of the shareholders of the Company, (2) any consolidation or merger of the Company in which the Company is not the continuing or surviving corporation or pursuant to which Voting Securities would be converted into cash, securities, or other property, other than a merger of the Company in which the holders of Voting Securities immediately prior to the merger have the same proportionate ownership of common stock of the surviving corporation immediately after the merger, or (3) any sale, lease, exchange, or other transfer (in one transaction or a series of related transactions) of all, or substantially all, of the assets of the Company; or (iv) approval by the stockholders of the Company of any plan or proposal for the liquidation or dissolution of the Company.

For purposes of the Services Agreement, “Acquiring Person” means any person or related person or related persons which constitute a “group” for purposes of Section 13(d) and Rule 13d-5 under the Exchange Act, as such Section and Rule are in effect as of the date of this Agreement; provided, however, that the term Acquiring Person shall not include (i) the Company or any of its subsidiaries, (ii) any employee benefit plan of the Company or any of its subsidiaries, (iii) any entity holding voting capital stock of the Company for or pursuant to the terms of any such employee benefit plan, or (iv) any person or group solely because such person or group has voting power with respect to capital stock of the Company arising from a revocable proxy or consent given in response to a public proxy or consent solicitation made pursuant to the Exchange Act.

For purposes of the Services Agreement, “Voting Securities” means the Company’s issued and outstanding securities ordinarily having the right to vote at elections for director.

Upon the termination of the Services Agreement, upon the payment of all obligations owing to Mr. White by the Company, unless the Company will otherwise request, Mr. White shall resign from all positions within the Company.

As of September 30, 2024, the Company has accrued $90 for services provided by Mr. White.

Other Related Party Liabilities

Other related party amounts owed at September 30, 2024 included $205 to Mr. Poole for reimbursement of legal expenses that he paid on the Company’s behalf and $348 owed to a subsidiary of RHI for rent under leases that are more fully discussed in Note 5. The leases are also discussed in Note 12.

Note 12 RIGHT-OF-USE LEASE ASSETS AND LIABILITIES

As discussed in Note 5, the Company leases facilities for its Myrtle and RCHI operations under operating leases with a subsidiary of RHI. For operating leases with terms greater than 12 months, including annual options that are expected to be renewed, the Company records the related right-of-use assets and right-of-use liabilities at the present value of lease payments over the terms.

The Company uses an estimated borrowing interest rate at lease commencement as its interest rate, as its operating leases do not provide a readily determinable implicit interest rate.

The following table presents the Company’s lease-related assets and liabilities at September 30, 2024 and December 31, 2023:

	Balance Sheet Classification	September 30, 2024			December 31, 2023

Assets:

Operating leases	Right-of-use operating lease assets	$	4,110		$	-

Liabilities:
Current:
Operating leases	Right-of-use operating lease liabilities	$	339		$	-
Noncurrent:
Operating leases	Right-of-use operating lease liabilities		3,771			-

Total right-of-use lease liabilities		$	4,110		$	-

Weighted average remaining term of operating leases, including option periods expected to renew			5.5 years			n/a

Interest rate			22.0	%		n/a

The following table presents certain information related to lease expense for the right-of-use operating leases for the three and nine months ended September 30, 2024 and 2023:

	2024		2023		2024		2023
	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2024		2023		2024		2023

Right-of-use operating leases amortization (1)	$	41	$	-	$	46	$	-
Right-of-use operating leases interest expense ⁽²⁾	$	113		-	$	128		-

⁽¹⁾	Expense is included in selling, general and administrative expenses in the unaudited condensed consolidated statement of operations.

⁽²⁾	Expense is included in interest expense in the unaudited condensed consolidated statements of operations.

The following table presents supplemental cash flow information for the nine months ended September 30, 2024 and 2023:

Nine Months Ended

September 30, 2024

Nine Months Ended

September 30, 2023

Operating cash flows for right-of-use operating leases

Aggregate future minimum lease payments under right-of-use operating leases are as follows:

	Right-of-Use Operating Leases
Twelve months ending:
October 1, 2024 to September 30, 2025	$	1,212
October 1, 2025 to September 30, 2026		1,248
October 1, 2026 to September 30, 2027		1,285
October 1, 2027 to September 30, 2028		1,324
October 1, 2028 to September 30, 2029		1,363
Thereafter		945
Total		7,377

Less interest		(3,267	)
Present value of minimum lease payments		4,110

Less current portion of right-of-use lease liabilities		(339	)
Right-of-use lease liabilities, net of current portion	$	3,771

Note 13 STOCKHOLDERS’ (DEFICIT) EQUITY

The Company’s authorized shares of all capital stock, par value $0.0001 per share, of 510,000,000 shares, consisting of (i) 10,000,000 shares of preferred stock and (ii) 500,000,000 shares of Class A Common Stock.

Preferred Stock

The Amended and Restated Certificate of Incorporation authorizes the Company to issue 10,000,000 shares of preferred stock with such designations, voting and other rights and preferences as may be determined from time to time by the Company’s board of directors. As of September 30, 2024 and December 31, 2023, there were no shares of preferred stock issued or outstanding. See Notes 5, 10, 11 and 18 for a discussion of the Company’s Series A Preferred Stock that may be issued in connection with its acquisition of RCHI on September 10, 2024, the Senior Notes Payable and the Services Agreement, and Notes 1, 10 and 18 for discussions of the Company’s Series B Preferred Stock that it may issue in connection with the PIK Notes Amendment No. 1.

Class A Common Stock

As of September 30, 2024 and December 31, 2023, there were 13,621,554 and 7,646,032 shares of the Company’s Class A Common Stock issued and outstanding, respectively.

Common Stock Issued to KR8 under KR8 Agreement

On January 19, 2024, the Company issued 1,300,000 shares of its Class A Common Stock pursuant to the KR8 Agreement, which is more fully discussed in Note 11. See also Note 18 for shares issued to KR8 pursuant to the KR8 Agreement subsequent to September 30, 2024.

October 13, 2023 Strata Purchase Agreement

On October 13, 2023, the Company entered into a Strata Purchase Agreement (the “Strata Purchase Agreement”) with ClearThink, as supplemented by that certain Supplement to Strata Purchase Agreement, dated as of October 13, 2023, by and between the Company and ClearThink. Pursuant to the Strata Purchase Agreement, after the satisfaction of certain commencement conditions, including, without limitation, the effectiveness of the Registration Statement, ClearThink has agreed to purchase from the Company, from time to time upon delivery by the Company to ClearThink of request notices, and subject to the other terms and conditions set forth in the Strata Purchase Agreement, up to an aggregate of $2,000 of the Company’s Class A Common Stock. On August 13, 2024, the Company entered into Amendment No. 1 to the Strata Purchase Agreement pursuant to which the commitment amount was increased from $2,000 to $5,000.

During the fourth quarter of 2023, we completed two tranches of private placements under the terms of the Strata Purchase Agreement with ClearThink that provided gross proceeds of $200 and $256. After deducting finder’s fees and other offering expenses, the net proceeds from the private placements were of $186 and $246. No shares of the Company’s Class A Common Stock were issued under the terms of the Strata Purchase Agreement during the nine months ended September 30, 2024.

February 1, 2024 Second Strata Purchase Agreement

On February 1, 2024, the Company entered into a Second Strata Purchase Agreement (the “Second Strata Purchase Agreement”) with ClearThink. No shares of the Company’s common stock were issued under the Second Strata Purchase Agreement and on August 8, 2024, the Company and ClearThink entered into a termination agreement and all outstanding obligations were terminated.

Common Stock Issued to MSK Under Shares for Services Agreement

On September 19, 2023, the Company entered into a Shares for Services Agreement with MSK pursuant to which the Company issued to MSK in September 2023 292,866 shares of Company’s Class A Common Stock valued at $234 and rights (the “Rights”) to receive 511,027 shares of the Company’s Class A Common Stock valued at $409 in satisfaction of outstanding amounts payable to MSK in an aggregate amount equal to $643 for legal services rendered. During the nine months ended September 30, 2024, the Company issued to MSK 511,027 shares of its Class A Common Stock in full satisfaction of the Rights.

Common Stock Issued to Tysadco Partners under Corporate Development Advisory Agreement

On March 5, 2024, the Company issued 450,000 shares of its Class A Common Stock to Tysadco Partners under the Corporate Development Advisory Agreement dated effective February 26, 2024. Under the agreement, Tysadco Partners will provide strategic, financing, capital structure and other guidance and expertise to the Company’s management.

Common Stock Issued to LGH

In April 2024, the Company issued 200,000 shares of its Class A Common Stock to LGH in connection with the LGH Note Payable as more fully discussed in Note 10.

Common Stock Issuable to IG

In April 2024, the Company issued the IG Note Payable, which is more fully discussed in Note 10, under which 50,000 shares of its Class A Common Stock are issuable and on August 16, 2024, the Company agreed to issue an additional 50,000 shares of its Class A Common Stock in connection with the extension of the maturity date of the IG Note Payable. These shares were issued effective October 27, 2024.

Common Stock Issued to Smithline

During the nine months ended September 30, 2024, the Company issued 1,341,243 shares of its Class A Common Stock, including 221,350 shares issued in the three months ended September 30, 2024, in connection with a legal settlement, which is more fully discussed in Note 16 under the heading, “Smithline Family Trust II vs. FOXO Technologies Inc. and Jon Sabes.”)

Common Stock Issued to RHI

On July 17, 2024, the Company issued 1,023,629 shares of its Class A Common Stock to RHI for the acquisition of Myrtle, which is more fully discussed in Note 5.

Common Stock Issued for Senior Note Payable

On July 17, 2024, the Company issued 1,108,755 shares of its Class A Common Stock to the Purchaser in connection with the issuance of its Senior Note Payable as more fully discussed in Note 10.

Corporate Development Advisory Agreement Commencing July 17, 2024

On July 25, 2024, the board of directors of the Company approved FOXO entering into the Corporate Development Advisory Agreement with C L Talent Inc. (“C. L. Talent”), (the “Talent Agreement”). Pursuant to the Talent Agreement, commencing July 17, 2024, C. L. Talent will reasonably be available during regular business hours to advise, counsel and inform designated officers and employees of FOXO about the health, wellness and social media businesses in which the Company is engaged, competitors, business opportunities, talent engagement and other aspects of or concerning FOXO’s business about which C. L. Talent has knowledge or expertise. In addition, it will assist FOXO with targeting key talent with whom FOXO has an existing relationship to further enhance market reach. The term of the Talent Agreement is 12 months. As compensation for services to be provided under the Talent Agreement, FOXO will issue to C. L. Talent 1,500,000 shares of the Company’s Class A Common Stock pending approval from the NYSE.

Financial Adviser

On July 25, 2024, FOXO entered into the advisory agreement with J.H. Darbie & Co., Inc. (“J.H. Darbie”) pursuant to which J.H. Darbie was engaged as nonexclusive financial adviser. The term of the agreement is six months. As compensation for the services to be performed under the agreement, the Company is obligated to issue to J.H. Darbie 625,000 shares of its Class A Common Stock.

Private Placement Engagement

On July 25, 2024, FOXO engaged J.H. Darbie, on an exclusive basis, to provide services in connection with private placements (the “Engagement”). The term of the Engagement is 120 days, subject to early termination provisions in the Engagement. Under the Engagement, J.H. Darbie has a right of first refusal for all financing, cash, common stock or convertible securities, debt or equity, for six months after the termination of the Engagement. As compensation for the services to be performed under the Engagement, the Company will pay a nonrefundable fee of $30 in shares of its Class A Common Stock, priced at the closing price of the stock on the date of the Engagement with a maximum fee of 2% to J.H. Darbie. The shares will be issued within three days or upon approval by NYSE if such approval is required.

As additional compensation for the services to be rendered by J.H. Darbie under the Engagement, FOXO will (i) pay a cash fee to J.H. Darbie equal to 3% of the principal amount of the securities to be exchanged and 5% of gross proceeds raised from the sale of the securities to customers of J.H. Darbie; and (ii) issue to J.H. Darbie warrants to purchase a number of shares of the Company’s Class A Common Stock equal to the cash fee. The warrants will have piggyback rights and be priced at 110% of the closing price on the dates of closings of the sales of securities.

Finder’s Fee Agreement

On October 9, 2023, the Company entered into the Finder’s Agreement, by and between the Company and the finder. Pursuant to the Finder’s Agreement the Company agreed to pay the Finder a cash fee equal to 4% of the gross proceeds received by the Company from the equity transactions contemplated by the Second Strata Purchase Agreement. The Company also agreed to issue to the finder a 5-year warrant to purchase shares of the Company’s Class A Common Stock equal to 1% warrant coverage based on the amount raised from the equity transactions with an exercise price per share equal to 110% of the transaction (as defined in the Finder Agreement) or the public market closing price of the Company’s Common Stock on the date of the transaction, whichever is lower, subject to anti-dilutive price protection and participating registration rights. In addition, under the Finder Agreement, the Company was obligated to pay the finder a 3% to 7% cash fees and 7% warrant coverage based on the gross cash proceeds from the issuances of the ClearThink Notes, the LGH Note Payable and the IG Notes Payable as more fully discussed in Note 10.

Finder’s Warrants and Amendment to Finder’s Agreement

Pursuant to the terms of the Finder’s Agreement, discussed above, and in connection with a private placement of the Company’s Class A Common Stock under the Strata Purchase Agreement during the three months ended December 31, 2023, which is discussed above, the Company issued or was obligated to issue to the Finder 25,672 warrants to acquire shares of the Company’s common stock under the terms of the Finder’s Agreement. The warrants had a five-year term and were exercisable into shares of the Company’s Class A Common Stock at a weighted average exercise price of $1.324 per share. In addition, in connection with the issuances in the nine months ended September 30, 2024 of the ClearThink Notes, the LGH Note Payable and IG Note Payable, which are more fully discussed in Note 10, the Company was obligated to issue 191,179 additional warrants to purchase shares of the Company’s common stock under the terms of the Finder’s Agreement. The additional warrants had a five-year term and were exercisable into shares of the Company’s Class A Common Stock at a weighted average exercise price of $0.324 per share.

On August 22, 2024, the Company entered into an amendment to the Finder Agreement (the “Amended Finder’s Agreement”) in which the Company agreed to issue to the Finder 446,724 shares of its Class A Common Stock for the termination of all of the Finder’s common stock warrants and outstanding cash fees. During the three and nine months ended September 30, 2024, the Company recorded other income of $6, which represented the difference of the value of the Class A Common Stock issuable under the Amended Finder’s Agreement of $80, the $53 of cash finder’s fees that were no longer payable and the value of the common stock warrants that were terminated of $33. The common stock warrants were valued using the Black Scholes valuation model with the following assumptions: risk free rate of 3.72%, volatility of 234.23%, term of 4.5 years and expected dividend yield of $0. Also, pursuant to the Amended Finder’s Agreement, the Finder will no longer receive a cash fee for any equity/convertible debt financing except for an equity line of credit in which case the cash fee will be 4%. Compensation for an equity/convertible debt financing will be made in the form of common stock equal to 14% of the gross proceeds of an equity/convertible debt financing and 10% of a non-dilutive debt financing.

Common Stock Issuable to ClearThink

On May 15, 2024, the Company issued ClearThink a promissory note as more fully discussed in Note 10. On August 16, 2024, the note was extended until September 30, 2024. Under the terms of the extension, the Company agreed to issue to ClearThink 100,000 shares of its Class A Common Stock. These shares remain issuable as of September 30, 2024.

Warrants

Public Warrants and Private Placement Warrants

As of September 30, 2024 and 2023, the Company had outstanding 1,006,250 Public Warrants and 31,623 Private Placement Warrants each with an exercise price of $115.00 per share and each expiring five years after the completion of the Business Combination or earlier upon redemption or liquidation. The Public Warrants and Private Placement Warrants are more fully described in Note 7 to the Company’s consolidated financial statements included in its Annual Report on Form 10-K for the year ended December 31, 2023.

Assumed Warrants

At Closing of the Business Combination, the Company assumed common stock warrants that were exchanged for common stock warrants to purchase 190,619 shares of the Company’s Class A Common Stock at an exercise price of $62.10 per share, subject to adjustment (the “Assumed Warrants”). After the Exchange Offer discussed below, 25,868 Assumed Warrants remained outstanding. The Assumed Warrants include down round provisions that should the Company issue common stock or common stock equivalents, excluding certain exempt issuances, for consideration of less than the then exercise price per share then the exercise price shall be lowered to the new consideration amount on a per share basis with a simultaneous and corresponding increase to the number of warrants. During the year ended December 31, 2023, a triggering event occurred as a result of the issuance of the Rights under the terms of the Shares for Services Agreement dated September 19, 2023. Therefore, as of December 31, 2023, 2,007,848 Assumed Warrants were outstanding with an exercise price of $0.80 per share.

On February 23, 2024, 598,877 Assumed Warrants expired by their terms and on February 24, 2024, an Assumed Warrant exercisable into 1,408,971 shares of the Company’s Common Stock was extended until February 23, 2025 in connection a legal settlement as more fully discussed in Note 16 under the heading, “Smithline Family Trust II vs. FOXO Technologies Inc. and Jon Sabes.”), (the “Smithline Assumed Warrant”). On February 24, 2024, the Company issued: (i) its Class A Common Stock to Tysadco Partners, as more fully discussed above; (ii) on June 14, 2024, the Company purchased Myrtle, which is more fully discussed in Note 5, pursuant to which the Company is obligated to provide piggy-back registration rights for the shares of its Class A Common Stock that it issued to RHI in connection with the acquisition; and (iii) on July 25, 2024, the Company agreed to issue shares of its Class A Common Stock to J.H. Darbie under the terms of an advisory agreement. These transactions triggered the down round provisions of the Smithline Assumed Warrant. Therefore, as of September 30, 2024, the Smithline Assumed Warrant was exercisable into 4,726,514 shares of the Company’s Common Stock with an exercise price of $0.216 per share. The incremental value of the modifications to the Smithline Assumed Warrant as a result of the triggers of the down round provisions and the extension of the expiration date resulted in deemed dividends of $88 and $1,054 for the three and nine months ended September 30, 2024, respectively. The incremental value was measured using the Black Scholes valuation model with the following assumptions: risk free rates ranging from 4.74% to 5.19%, volatility ranging from 111.99% to 158.57%, terms of .6 to 1 year and expected dividend yield of $0. Partially offsetting the increase in the number of outstanding Smithline Assumed Warrants on September 30, 2024, was the exchange of 312,500 Smithline Assumed Warrants under the terms of an Exchange Agreement dated May 28, 2024, between the Company and Smithline Family Trust II (“Smithline”) as more fully discussed in Note 16.

Exchange Offer

On May 26, 2023, the Company consummated its tender offer commenced on April 27, 2023, to all holders of the then outstanding 190,619 Assumed Warrants to receive 48.3 shares of the Company’s Class A Common Stock in exchange for each Assumed Warrant tendered (the “Exchange Offer”). As part of the Exchange Offer, the Company also solicited consents from holders of the Assumed Warrants to amend and restate in its entirety the Securities Purchase Agreement, dated as of January 25, 2021 (the “Original Securities Agreement”), to include certain issuances of the Company’s Class A Common Stock as exempt issuances that do not trigger the down round provisions of the Assumed Warrants. Pursuant to the Exchange Offer, an aggregate of 164,751 Assumed Warrants were tendered and an aggregate of 795,618 shares of the Company’s Common Stock were issued. After the Exchange Offer, 25,868 Assumed Warrants remained outstanding as noted above. At the same time 432,188 shares of Class A Common Stock were issued as part of the PIK Note Amendment as discussed in Note 10.

Bridge Debenture Release

The Company entered into two separate general release agreements in June of 2023 (the “General Release Agreements” and such transaction, the “2022 Bridge Debenture Release”). The General Release Agreements are with former registered holders (the “Investors”) of 10% Original Issue Discount Convertible Debentures issued in 2022 by Legacy FOXO (the “2022 Bridge Debentures”).

Pursuant to their respective General Release Agreement, each Investor released, waived and discharged the Company from any and all claims that such Investor had, have or may have against the Company from the beginning of time through the effective date of their respective General Release Agreement (the “Release”). As consideration for the Release and each Investor’s other obligations, covenants, agreements, representations and warranties set forth in their respective General Release Agreement, the Company issued to each Investor 0.067 shares of Class A Common Stock for every $1.00 of Subscription Amount (as defined in the securities purchase agreements governing the 2022 Bridge Debentures) of 2022 Bridge Debentures purchased by such Investor. Pursuant to the General Release Agreements, the Company issued an aggregate of 703,500 shares of Class A Common Stock.

The Company issued shares to the Investors in exchange for the release and recognized expense of $2,181 based on the shares issued and corresponding fair value of common stock at the time of issuance.

Treasury Stock

On April 14, 2023, the Company cancelled the 214,077 shares of treasury stock that it held.

Note 14 FOXO LIFE INSURANCE COMPANY

On February 3, 2023, the Company consummated the sale of FOXO Life Insurance Company to Security National Life Insurance Company (the “Buyer”). At closing, all of the FOXO Life Insurance Company’s shares were cancelled and retired and ceased to exist in exchange for the assignment to the Company of FOXO Life Insurance Company’s statutory capital and surplus amount of $5,002, as of the closing date, minus $200 (the “Merger Consideration”). Pursuant to the transaction, at the closing, the Company paid the Buyer’s third-party out-of-pocket costs and expenses of $51 resulting in a total loss of $251 that was recognized in the nine months ended September 30, 2023 within selling, general and administrative expense on the unaudited condensed consolidated statements of operations and in the FOXO Life segment. After the Merger Consideration and Buyer’s third party expenses, the transaction resulted in the Company gaining access to $4,751 that was previously held as statutory capital and surplus pursuant to the Arkansas Insurance Code. The Company used the funds to fund a portion of its operations during 2023.

Note 15 BUSINESS SEGMENTS

During the three and nine months ended September 30, 2024 and 2023, the Company managed and classified its business into two reportable business segments: (i) Healthcare and (ii) Labs and Life

	●	Healthcare - The Company’s healthcare segment began with the acquisition of Myrtle on June 14, 2024 and includes RCHI, which was acquired on September 10, 2024. Each of these businesses is more fully discussed in Note 5. Myrtle offers behavioral health services, primarily substance abuse treatments and services that are provided on either an inpatient, residential basis or an outpatient basis. RCHI’s hospital, BSF, has 25 inpatient beds, and a 24/7 emergency department and provides ancillary services, including laboratory, radiology, respiratory and pharmacy services. BSF is designated as a Critical Access Hospital (rural) hospital.

	●	Labs and Life - The Company’s Labs and Life segment is commercializing proprietary epigenetic biomarker technology to be used for underwriting risk classification in the global life insurance industry. The Company’s innovative biomarker technology enables the adoption of new saliva-based health and wellness biomarker solutions for underwriting and risk assessment. The Company’s research demonstrates that epigenetic biomarkers, collected from saliva, provide measures of individual health and wellness for the factors used in life insurance underwriting traditionally obtained through blood and urine specimens. On February 3, 2023, the Company sold FOXO Life Insurance Company as more fully discussed in Note 14.

The primary income measure used for assessing segment performance and making operating decisions is income (losses) before interest, income taxes, and depreciation and amortization not associated with a specific segment. The segment measure of profitability also excludes corporate and other costs, including management, IT, overhead costs and certain other non-cash charges or benefits, such as impairment and any non-cash changes in fair value.

With the acquisition of Myrtle on June 14, 2024, the Chief Operating Decision Maker (“CODM”) has begun to consider segment assets when making decisions and allocating resources. Assets by segment as of September 30, 2024 and December 31, 2023 were as follows:

SCHEDULE OF BUSINESS SEGMENT

	September 30, 2024		December 31, 2023

Healthcare	$	39,954	$	-
Labs and Life		2,226		408
Corporate and other		491		317
Total assets	$	42,671	$	725

Summarized below is information about the Company’s operations for the three months ended September 30, 2024 and 2023 by business segment:

	Revenues				Losses
	2024		2023		2024			2023
Healthcare	$	1,188	$	-	$	(47	)	$	-
Labs and Life		8		10		(382	)		(408	)
		1,196		10		(429	)		(408	)
Corporate and other (a)		-		-		(560	)		(3,104	)
Interest expense		-		-		(957	)		(148	)
Total	$	1,196	$	10	$	(1,946	)	$	(3,660	)

(a)

For the three months ended September 30, 2024, Corporate and other includes stock-based compensation, including amortization of consulting fees paid in stock, of $308. For the three months ended September 30, 2023, Corporate and other includes stock-based compensation, including consulting agreement expense, of $1,312.

Summarized below is information about the Company’s operations for the nine months ended September 30, 2024 and 2023 by business segment:

	Revenues				Losses
	2024		2023		2024			2023
Healthcare	$	1,208	$	-	$	(114	)	$	-
Labs and Life		23		35		(1,252	)		(1,902	)
		1,231				(1,366	)		(1,494	)
Impairments of intangible assets		-		-		-			(2,633	)
2022 Debenture Release and PIK Note Amendment		-		-		-			(3,521	)
Corporate and other (a)		-		-		(2,447	)		(13,671	)
Interest expense		-		-		(1,800	)		(865	)
Total	$	1,231	$	35	$	(5,613	)	$	(22,592	)

(a)

For the nine months ended September 30, 2024, Corporate and other includes stock-based compensation, including amortization of consulting fees paid in stock, of $397 and depreciation and amortization expense of $156. For the nine months ended September 30, 2023, Corporate and other includes stock-based compensation, including consulting agreement expense, of $2,582, depreciation and amortization expense of $1,230 and change in warrant liability of $(244)

Note 16 COMMITMENTS AND CONTINGENCIES

The Company is a party to various vendor and license agreements and sponsored research arrangements in the normal course of business that create commitments and contractual obligations.

As more fully discussed in Note 11, effective January 12, 2024, the Company entered into the KR8 Agreement. The Company’s Interim CEO and Interim CFO each are equity owners of KR8. See Note 18 for agreements entered into subsequent to September 30, 2024.

Legal Proceedings

The Company accrues for costs associated with certain contingencies, including, but not limited to, settlement of legal proceedings, regulatory compliance matters and self-insurance exposures when such costs are probable and reasonably estimable. In addition, the Company records legal fees in defense of asserted litigation and regulatory matters as such legal fees are incurred. To the extent it is probable that the Company is able to recover losses and legal fees related to contingencies, it records such recoveries concurrently with the accrual of the related loss or legal fees. Significant management judgment is required to estimate the amounts of such contingent liabilities. In the Company’s determination of the probability and ability to estimate contingent liabilities, it considers the following: litigation exposure based on currently available information, consultations with external legal counsel and other pertinent facts and circumstances regarding the contingency. Liabilities established to provide for contingencies are adjusted as further information develops, circumstances change, or contingencies are resolved; and such changes are recorded in the condensed consolidated statements of operations during the period of the change and appropriately reflected in the condensed consolidated balance sheets. At September 30, 2024 and December 31, 2023, the Company had $1,974 and $2,260 accrued for settlement of legal proceedings, respectively.

Smithline Family Trust II vs. FOXO Technologies Inc. and Jon Sabes

On November 18, 2022, Smithline filed a complaint against the Company and Jon Sabes, the Company’s former Chief Executive Officer and a former member of the Company’s board of directors, in the Supreme Court of the State of New York, County of New York, Index 0654430/2022. The complaint asserted claims for breach of contract, unjust enrichment and fraud, alleging that (i) the Company breached its obligations to Smithline pursuant to that certain Securities Purchase Agreement, dated January 25, 2021, between Legacy FOXO and Smithline, the 2021 Bridge Debentures, due February 23, 2022, and Assumed Warrant to purchase shares of FOXO common stock until February 23, 2024 (collectively, including any amendment or other document entered into in connection therewith, the “Financing Documents”), (ii) the Company and Mr. Sabes were unjustly enriched as a result of their alleged actions and omissions in connection with the Financing Documents, and (iii) the Company and Mr. Sabes made materially false statements or omitted material information in connection with the Financing Documents. The complaint claims damages in excess of a minimum of $6,207 on each of the three causes of action, plus attorneys’ fees and costs.

On December 23, 2022, the Company removed this action from the Supreme Court of the State of New York, County of New York to the United States District Court for the Southern District of New York, Case 1:22-cv-10858-VEC.

On November 7, 2023, Smithline and the Company and its subsidiaries entered into the Settlement Agreement, pursuant to which the parties agreed to resolve and settle all disputes and potential claims which exist or may exist among them, including without limitation those claims asserted in the Action, as more specifically set forth in, and subject to the terms and conditions of, the Settlement Agreement. Upon the execution of the Settlement Agreement, the parties agreed to jointly dismiss the action without prejudice.

Pursuant to the Settlement Agreement, the Company agreed to pay Smithline the “Cash Settlement Payment,” payable in full no later than the date that is the 12-month anniversary of the effective date of the Settlement Agreement (such date, the “Settlement Deadline” and, such period, the “Settlement Period”). During the Settlement Period, the Company agreed to pay Smithline out of any Equity Financing a minimum of 25% of the gross proceeds of each Equity Financing within two business days of the Company’s receipt of the proceeds from such Equity Financing, and which payment to Smithline would be applied toward the Cash Settlement Payment. Notwithstanding the foregoing, in the event that the Company has received proceeds from the Strata Purchase Agreement prior to the effective date of the Settlement Agreement, Smithline will be entitled to a minimum of 25% of the gross proceeds thereof, payment of which to Smithline would be applied toward the Cash Settlement Payment.

In addition, the Company agreed to use commercially reasonable efforts to pay $300 in cash to Smithline by December 31, 2023 toward the Cash Settlement Payment. In the event that the Company has not paid in full the Cash Settlement Payment prior to the Settlement Deadline, Smithline will be entitled to retain all proceeds received pursuant to the Settlement Agreement, the Mutual Release (as defined below) will be returned to their respective parties, and Smithline may pursue any claims against, among others, the Company.

In addition, the parties agreed that prior to Smithline receiving $300 in cash from the Company toward the Cash Settlement Payment, the Company may not file any resale registration statements and any amendments or supplements thereto without Smithline’s written consent, except for those that cover the resale of shares of the Company’s Class A Common Stock currently issued or issuable under the Strata Purchase Agreement dated October 13, 2023.

In addition, the parties agreed that after Smithline has received $300 in cash from the Company, in the event the Company registers for resale shares of its Class A Common Stock, which are not issued or issuable as of the effective date of the Settlement Agreement, for a selling stockholder other than under the Strata Purchase Agreement, during the Settlement Period, then the Company will be required to issue Smithline Settlement Shares at the closing price of the Class A Common Stock immediately prior to their issuance, subject to the authorization of NYSE American if the Class A Common Stock is then traded on such exchange, which Settlement Shares will be included for resale in such registration statement, provided, however, that the amount of Settlement Shares, if any, when aggregated with other Settlement Shares, if any, will be reduced to ensure that such aggregate amount will not exceed 19.9% of the outstanding shares of the Company’s Class A Common Stock as of the date of issuance (subject to adjustment for reverse and forward stock splits, stock dividends, stock combinations, and other similar transactions that occur after the date of the Settlement Agreement). Any net proceeds (after taking into account all brokerage, transfer agent, legal and other expenses incurred in connection with the sale of the Settlement Shares, if any) received by Smithline on the sale of the Settlement Shares, if any, will be credited against the Cash Settlement Payment.

Pursuant to the Settlement Agreement, the Company agreed to use its best efforts to obtain an amendment to its Senior PIK Notes such that their maturity date and amortization dates are extended to December 31, 2024. Whether such amendment is obtained or not, the Company agreed to not make any payments in cash or stock on such Senior PIK Notes or permit such Senior PIK Notes to convert into stock prior to the satisfaction in full of the Cash Settlement Payment.

Simultaneous with the execution of the Settlement Agreement, Smithline and Puritan Partners LLC and the Company entered into a mutual release (the “Mutual Release”), which will be held in escrow pending notification from counsel for Smithline that 90 calendar days have elapsed since Smithline has received the Cash Settlement Payment in full. The Mutual Release includes the release of, in addition to the Company, Jon Sabes, Bespoke Growth Partners, Inc. and Mark Peikin, subject to their satisfaction of the conditions of the Mutual Release, including delivery of an executed release to counsel for Smithline releasing the Claiming Parties (as defined in the Mutual Release). Pursuant to the Mutual Release, in the event that the Company files for bankruptcy and the Claiming Parties are not permitted to retain the Cash Settlement Payment or the net proceeds received on the sale of Settlement Shares, if any, the Mutual Release will be null and void and void ab initio. Further, in the event that Jon Sabes, Bespoke Growth Partners, Inc., or Mark Peikin commences a lawsuit or arbitration or otherwise asserts a claim or cause of action against any of the Responding Parties (as defined in the Mutual Release) or any of the Claiming Parties, or takes any action against or otherwise hinders in any manner the Company’s ability to repay the Claiming Parties the Cash Settlement Payment or deliver and register the Settlement Shares, if any, the release of such person or entity will be null and void and void ab initio.

Pursuant to the Settlement Agreement, without the prior written consent of Smithline, the Company may not (x) pay KR8, including its affiliates, in cash more than the sum of (A) (i) $100 a month for the first three months after the effective date of the Settlement Agreement and (ii) more than $50 a month for months 4 to 12 after the effective date of the Settlement Agreement and (B) a royalty for 15% of product subscriber revenues received by the Company, or (y) make any payment in cash or stock to Jon Sabes until the Cash Settlement Payment is paid in full.

Pursuant to the Settlement Agreement, the parties agreed that Smithline may retain the Smithline Assumed Warrant issued to Smithline pursuant to the Agreement and Plan of Merger, dated February 24, 2022, as amended on April 26, 2022, July 6, 2022 and August 12, 2022, by and among the Company, DWIN Merger Sub Inc., DIAC Sponsor LLC, and Legacy FOXO; provided, however, that the Smithline Assumed Warrant will be automatically cancelled immediately upon Smithline’s receipt of the Cash Settlement Payment in full. Further, due to the fact that the Company did not pay the Cash Settlement Payment in full prior to the warrant’s expiration on February 23, 2024, the Smithline Assumed Warrant was automatically extended for a year until February 23, 2025, subject to cancellation upon Smithline’s receipt of the Cash Settlement Payment. From the effective date of the Settlement Agreement until the Settlement Deadline, Smithline may not exercise any of its rights under the Smithline Assumed Warrant so long as the Company continues to comply with the Settlement Agreement. In the event the Company or any of its subsidiaries is subject to a Bankruptcy Event (as defined in the Debenture) then immediately prior to the occurrence of such Bankruptcy Event, the Smithline Assumed Warrant will be converted into an unsecured debt obligation of the Company and its subsidiaries in the amount of $3,500 less the cash proceeds paid by the Company to Smithline under the Settlement Agreement or the Net Proceeds received by Smithline on the sale of any Settlement Shares, if any, in satisfaction of the Cash Settlement Payment.

Exchange Agreement with Smithline Dated May 28, 2024

On May 28, 2024, the Company, entered into an Exchange Agreement with Smithline pursuant to which Smithline exchanged the Smithline Assumed Warrant to purchase up to 312,500 shares, as adjusted, of the Company’s Common Stock terminating on February 23, 2025, for the right to receive up to 8,370,000 shares of the Company’s Class A Common Stock (the “Rights Shares”), subject to a 4.99% beneficial ownership limitation and issued without any restrictive legends. The total number of Rights Shares that may be issued under the Exchange Agreement, will be limited to 19.99% of the Company’s outstanding shares of Class A Common Stock, unless stockholder approval is obtained to issue more than 19.99%. Upon the execution of the Exchange Agreement and receipt of all of the Rights Shares, the Smithline Assumed Warrant, and all associated rights thereunder will be terminated. As of September 30, 2024, the Company has recorded the value of 1,341,243 of the Rights Shares that it has issued to Smithline pursuant to the terms of the Exchange Agreement of $315 as a reduction in the liability owed to Smithline under the Settlement Agreement. Subsequent issuances of the Rights Shares will continue to result in a reduction of the amount owed.

The Company is currently in default of the Settlement Agreement and is currently in negotiations with Smithline on a resolution.

Former CEO Severance

As of September 30, 2024, the board of directors has yet to complete its review into whether the former CEO was terminated with or without cause. Accordingly, the Company has yet to make a determination on its obligations under the former CEO’s employment agreement. The Company has accrued for his severance and has recognized expenses related to his equity-based compensation per the terms of his contract while the matter remains under review.

Should the review conclude that the former CEO was terminated without cause then the former CEO will receive thirty-six months of severance based on his base salary, his options granted immediately vest, and his Management Contingent Share Plan related to performance-based conditions that have been met become fully vested. As of September 30, 2024 and December 31, 2023, $1,575 of severance and related expense was recorded within accrued expenses on the unaudited condensed consolidated balance sheets. The corresponding expense was recognized within selling, general and administrative expense during the year ended December 31, 2022. In addition, during the year ended December 31, 2022, the Company recognized $8,695 of expense related to the Management Contingent Share Plan.

Should the review conclude the former CEO was terminated with cause then no severance or continued benefits are due and the Company will account for the forfeiture of his Management Contingent Share Plan and reverse the accrual and corresponding expense related to his severance.

Additionally, the Company cancelled the Management Contingent Share Plan related to performance-based conditions that have not been met.

Disputed Severance Policy

A severance policy was drafted in early 2023 with an effective date of January 9, 2023. The policy applied to all exempt level vice presidents and above employees across various departments. It provided for a six-month salary pay out if the employee, while in good standing, was involuntarily separated from the Company. However, neither the Company’s board of directors nor its remuneration committee approved the policy. If the policy were valid, five former employees would have met the guidelines to receive the severance aggregating approximately $462 in severance payments.

Three former employees have sent letters, through their attorneys, requesting the payment of the severance. The Company has responded to the letters stating that the policy was not valid and that all of the Company’s obligations related to their separation from the Company have been paid and/or fully satisfied.

SEC Investigation

On March 3, 2023, the Company received a document request from the SEC indicating that the SEC was conducting an investigation regarding the Company and sought documents concerning (1) Jon Sabes’ termination as CEO, (2) Jon Sabes’ resignation from the Company’s board of directors, and (3) Steven Sabes’ termination as COO, and is voluntarily responding to the SEC’s request. According to the SEC’s request, its investigation does not mean that the SEC has concluded that anyone violated the law or that the SEC has a negative opinion of the Company or any person, event, or security.

On July 9, 2024, the Company received a letter from the SEC that it has concluded the investigation and, based on the information it had as of that date, it does not intend to recommend an enforcement action against the Company.

Illumina Inc. Order

On July 10, 2024, the Company was informed by counsel to Illumina Inc that a summary judgment had been granted to Illumina Inc in the amount of $822. The Company is in discussion with Illumina’s counsel to settle the amount.

Senior PIK Notes Claim

On October 9, 2024, the Company was made aware of a Complaint made by two of the holders of the Company’s Senior PIK Notes claiming $650 and $325, respectively. Although the Company received consent by 50.01% of the holders of the Senior PIK Notes to a conversion amendment, which is more fully discussed in Note 18, the Company is in the process of seeking counsel in this matter.

The Company is also party to various other legal proceedings, claims, and regulatory, tax or government inquiries and investigations that arise in the ordinary course of business, and the Company may in the future be subject to additional legal proceedings and disputes.

Note 17 SUPPLEMENTAL DISCLOSRE OF CASH FLOW INFORMATION

The supplemental cash flow information for the nine months ended September 30, 2024 and 2023 is as follows:

	2024		2023
	Nine Months Ended September 30,
	2024		2023
Non-cash investing and financing activities:
2022 Debenture Release	$	-	$	2,181
PIK Note Amendment	$	-	$	1,339
Deemed dividends from Exchange Offer	$	-	$	2,466
Purchase of intangible asset under KR8 Agreement	$	2,122	$	-
Related party payable to KR8 for purchase of intangible asset under KR8 Agreement	$	2,122	$	-
Class A Common Stock issued to KR8 for purchase of intangible asset under KR8 Agreement	$	378	$	-
Purchase of Myrtle, net of cash acquired	$	494	$	-
Purchase of RCHI, net of cash acquired	$	21,992	$	-
Deemed dividends from trigger of down round provisions and extension of Assumed Warrants	$	1,054	$	912
Class A Common Stock issued/issuable in connection with debt financings	$	364	$	-
Warrants issuable for finder’s fees	$	62		-
Common stock issuable for finder’s warrants and cash fees	$	47	$	-
Class A Common Stock issued for Myrtle acquisition	$	235	$	-
Promissory note issued to RHI for Myrtle acquisition	$	265	$	-
Promissory note issued to RHI for RCHI acquisition	$	22,000		-

Note 18 SUBSEQUENT EVENTS

The Company evaluated subsequent events and transactions that occurred after the balance sheet date up to the date that the unaudited condensed consolidated financial statements were issued in this 10-Q. Other than as described below, the Company did not identify any subsequent events that would have required adjustment or disclosure in the accompanying unaudited condensed consolidated financial statements.

Amendment No. 1 to the Senior PIK Notes

On September 20, 2022, the Company issued the Senior PIK Notes, which are more fully discussed in Note 10. Section 22 of the Senior PIK Notes states that no provision of the Senior PIK Notes can be waived, modified, supplemented or amended except in a written instrument signed - in the case of an amendment - by the Company and 50.01% of the holders of the Senior PIK Notes based on the Aggregate Original Principal Amount.

As noted in Note 10, the Senior PIK Notes are currently in default and the Company has not had the financial ability to correct this default. To resolve the default of the Senior PIK Notes and transition the Senior PIK Note debt to equity in the Company to improve shareholder equity and comply with NYSE continued listing requirements the Company asked the Senior PIK Note holders to consider certain amendments to their Notes. On October 18, 2024, the Company received the approval of over 50.01% of the holders of the Senior PIK Notes based on the Aggregate Original Principal Amount (as defined in the Senior PIK Notes) to enter into the PIK Notes Amendment No. 1. Pursuant to the PIK Notes Amendment No. 1, the Senior PIK Notes will be automatically exchanged into shares of the Company’s Series B Preferred Stock effective as of 5:00 pm Eastern time on the second business day after the date on which the Company’s stockholders approve the conversion of the Series B Preferred Stock into shares of Class A Common Stock in accordance with the continued listing rules of the New York Stock Exchange American. The Senior PIK Notes (not including accrued and unpaid Interest (as defined in the Senior PIK Notes) which will be waived as part of the automatic exchange) will automatically exchange into a number of shares of Series B Preferred Stock equal to the Original Principal Amount (as defined in the Senior PIK Notes) divided by the Stated Value ($1,000) of Series B Preferred Stock (the “Automatic Exchange”). Upon the Automatic Exchange, all Senior PIK Notes (including all accrued and unpaid Interest) (which total value was $4,971 at September 30, 2024) shall be exchanged to equity, cancelled and satisfied in full. No shares of Series B Preferred Stock will be convertible into Class A Common Stock prior to the one-year anniversary of the date of issuance. Each share of Series B Preferred Stock will have one vote.

Extension of ClearThink May 15, 2024 Promissory Note

Under the term of an amendment dated October 11, 2024, the maturity date of the ClearThink promissory note issued on May 15, 2024, which is more fully discussed in Note 10, was extended until November 30, 2024. Under the terms of the amendment, the Company is required to issue to ClearThink 200,000 shares of its Class A Common Stock. All other terms, including the 22% per annum interest rate remain in effect.

Class A Common Stock Issued Under KR8 Agreement

Under the terms of the KR8 Agreement, effective on October 9, 2024, the Company issued 237,037 shares of its Class A Common Stock to the Licensor valued at $42. The KR8 Agreement is more fully discussed in Note 11.

Series A Preferred Stock Designation

On October 16, 2024, the Company’s board of directors approved the designation of 35,000 shares of Series A Preferred Stock. Each share of Series A Preferred Stock shall have a par value of $0.0001 per share and a stated value equal to $1 (one thousand dollars) per share. Terms of the Series A Preferred Stock include: (i) dividends at 5% per annum, (ii) voting rights, which include voting as one class with the common stockholders, and (iii) conversion into shares of the Company’s Class A Common Stock at the higher of $0.01 per share or 90% of the average VWAP for the five trading days prior to the date of the conversion notice, among other terms. The Certificate of Designations for the Series A Preferred Stock was filed with the Secretary of the State of Delaware on October 18, 2024.

Amended and Restated Bylaws

On October 21, 2024, the Company’s board of directors, approved the Amended and Restated Bylaws of the Company (the “Amended Bylaws”). The Amended Bylaws, which revise the quorum requirements for a meeting of the Company’s shareholders from a majority to one-third, amend Section 2.4 to read as follows:

Section 2.4. Quorum. Except as otherwise provided by applicable law, the Corporation’s Certificate of Incorporation, as the same may be amended or restated from time to time (the “Certificate of Incorporation”) or these By Laws, the presence, in person or by proxy, at a stockholders meeting of the holders of shares of outstanding capital stock of the Corporation representing one-third (33.33%) of the voting power of all outstanding shares of capital stock of the Corporation entitled to vote at such meeting shall constitute a quorum for the transaction of business at such meeting, except that when specified business is to be voted on by a class or series of stock voting as a class, the holders of shares representing a majority of the voting power of the outstanding shares of such class or series shall constitute a quorum of such class or series for the transaction of such business. If a quorum shall not be present or represented by proxy at any meeting of the stockholders of the Corporation, the chairman of the meeting may adjourn the meeting from time to time in the manner provided in Section 2.6 until a quorum shall attend. The stockholders present at a duly convened meeting may continue to transact business until adjournment, notwithstanding the withdrawal of enough stockholders to leave less than a quorum. Shares of its own stock belonging to the Corporation or to another corporation, if a majority of the voting power of the shares entitled to vote in the election of directors of such other corporation is held, directly or indirectly, by the Corporation, shall neither be entitled to vote nor be counted for quorum purposes; provided, however, that the foregoing shall not limit the right of the Corporation or any such other corporation to vote shares held by it in a fiduciary capacity.

October 29, 2024 Amendment to the LGH Note Payable

On October 29, 2024, the Company entered into Amendment No. 1 to the LGH Note Payable wherein the conversion price under the terms of the note was reduced from $0.30 per share of the Company’s Class A Common Stock to $0.10 per share. The LGH Note Payable is more fully discussed in Note 10.

Conversion of IG Note Payable into the Company’s Class A Common Stock

During the period November 1, 2024 to November 15, 2024, the full principal balance and associated accrued interest of the IG Note Payable of $195 was converted into 415,000 shares of the Company’s Class A Common Stock. The IG Note Payable is more fully discussed in Note 10.

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

References to the “Company,” “FOXO,” “us,” “our” or “we” refer to FOXO Technologies Inc. and its consolidated subsidiaries. The following discussion and analysis summarizes the significant factors affecting the consolidated operating results, financial condition, liquidity, capital resources and cash flows of our Company as of and for the periods presented below. You should read the following discussion of our financial condition and results of operations in conjunction with the unaudited condensed consolidated financial statements and the related notes included elsewhere in this Form 10-Q and with our audited consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2023, as filed with the SEC. In addition to our historical consolidated financial information, the following discussion contains forward-looking statements that reflect our plans, estimates, and beliefs. Our actual results could differ materially from those discussed in the forward-looking statements. Factors that could cause or contribute to these differences include those discussed below. We undertake no obligation to update publicly any forward-looking statements for any reason, except as required by law, even as new information becomes available or events occur in the future. Dollar amounts are in thousands, except per share amounts or unless otherwise noted.

Overview

FOXO is focused on commercializing scientific discoveries in health and longevity. A pivotal moment in the field of longevity science came with the discovery that epigenetics could be used to develop measures of health, including biological aging, according to an article published in the scientific journal, Nature, in 2014. In recent years, we and other scientists have extended these findings to assess tobacco, alcohol, blood cell composition, and other health measures based on discovered epigenetic biomarkers. To that end, FOXO is dedicated to research and development in order to provide data-driven insights based on the numerous health measures that can be determined through this unique dimension of biology and used to foster optimal health and longevity for both individuals and organizations. We believe there is value in what these biomarkers will be able to provide to the world. Current testing options can be inaccurate, and piecemeal, and often require obtaining a blood sample. Epigenetic biomarkers may pave the path for a fully comprehensive, at-home, low-cost test that could, with other existing testing, offer a much easier, more detailed sense of one’s health.

At the same time, we believe there exists a significant bottleneck in scientific research and product development using epigenetic data. Due to the complexity of the data, many scientists are unaware of how to properly process such data or take full advantage of the available tools. With our experience in bringing to market new tools (both software and hardware) and know-how (our Bioinformatics Services and analytic consulting), we believe we are well-positioned to help reduce barriers in advancing epigenetic research and the development of epigenetic-based products. Thus, we have chosen strategically to extend our expertise in epigenetic data processing and analysis to outside parties in an effort to further accelerate new discoveries. This work not only allows us to generate revenue, but also continue our work in developing improved ways in processing and analyzing this important data.

Historically, we have had two core product offerings related to the commercialization of epigenetic science: the “Underwriting Report,” and the “Longevity Report™.” The Underwriting Report, which has been under development and is currently paused until we increase our cash resources in order to continue additional research and development, is intended to allow us to leverage a single assay testing process to generate a panel of impairment scores that could be applied by life insurance underwriters to more efficiently assess clients during the underwriting process and provide a more personalized risk assessment. The Longevity Report, sales of which have also been paused as we redevelop and re-strategize around this product, was designed as a customer-facing consumer engagement product that provides actionable insights based on one’s biological age and other epigenetic measures of health and wellness.

Historically, we were operationalizing a sales and distribution platform focused on recruiting independent life insurance agents to sell life insurance with longevity-promoting products such as our Longevity Report. We previously marketed and sold life insurance products underwritten and issued by third-party carriers through distribution relationships (the “MGA Model”). The MGA Model allowed us to appoint sales agents and producers to sell insurance products for specific carriers and earn commissions on subsequent policy sales. On October 2, 2023, we decided to pause sales of new life insurance products and move existing producers out of the MGA Model hierarchy to further conserve cash resources and focus resources on FOXO Labs.

Management, License and Maintenance Fees Under the KR8 Agreement

On October 29, 2023, we entered into a Letter Agreement with KR8 to develop a Direct-to-Consumer APP (iOS and Android) combining its artificial intelligence (“AI”) Machine Learning technology to provide a commercial application of our epigenetic biomarker technology as a subscription consumer engagement platform. Effective January 12, 2024, the Letter Agreement was replaced by the KR8 Agreement. Our Interim CEO and Interim CFO each are equity owners of the Licensor. Under the KR8 Agreement, the Licensor granted to us a limited, non-sublicensable, non-transferable perpetual license to use the Licensor’s products to develop, launch and maintain license applications based upon our epigenetic biomarker technology and software to develop an AI machine learning epigenetic APP to enhance health, wellness and longevity. The territory of the agreement is solely within the U.S., Canada and Mexico.

Recent Developments

Stock Exchange Agreements Dated June 10, 2024

On June 10, 2024, we entered into two stock exchange agreements, each with RHI.

The first agreement, as supplemented, (the “Myrtle Agreement”), provided for RHI to exchange all of its equity interest in Myrtle for $500, payable in a combination of shares of our Class A Common Stock and a note payable. The closing occurred on June 14, 2024.

Myrtle was formed in the second quarter of 2022 to pursue opportunities in the behavioral health sector, including substance abuse treatment. initially in rural markets. Services are provided on either an inpatient, residential basis or an outpatient basis.

On August 10, 2023, Myrtle was granted a license by the Department of Mental Health and Substance Abuse Services of Tennessee to operate an alcohol and drug treatment facility in Oneida, Tennessee. The facility, which is located at BSF’s campus, commenced operations and began accepting patients on August 14, 2023. The facility offers alcohol and drug residential detoxification and residential rehabilitation treatment services for up to 30 inpatients. On November 1, 2023, Myrtle began accepting patients at its Nonresidential Office-Based Opiate Treatment Facility (“OBOT”). The OBOT is located adjacent to Myrtle’s alcohol and drug treatment facility in Oneida, Tennessee and complements the existing residential rehabilitation and detoxification services offered at Myrtle.

Myrtle has been granted two licenses from the Tennessee Department of Mental Health and Substance Abuse Services, effective August 1, 2024, for 12 months. The first license authorizes the provision of services for alcohol and drug residential detoxification treatment, as well as alcohol and drug residential rehabilitation treatment. The second license authorizes the provision of services for non-residential office-based opiate treatment. Myrtle has also entered into in-network contracts with a number of commercial payers in the second and third quarters 2024.

Acquisition of RCHI and Its Subsidiary SCCH Under the Second Stock Exchange Agreement with RHI, as Amended and Restated

On June 10, 2024, the Company entered into the Second Stock Exchange Agreement (the “RCHI SEA”) with RCHI and RHI. On September 10, 2024, the Company entered into the Amended and Restated Stock Exchange Agreement with RCHI and RHI (the “RCHI SEA Amendment”) pursuant to which the RCHI SEA was amended to change the consideration to be received by RHI in exchange for all of the equity interests of RCHI from 20,000 shares of Series A Preferred Stock of the Company to a senior note in the principal amount of $22,000 (subject to adjustments) (the “September 10, 2024 Note”).

RCHI’s wholly-owed subsidiary, SCCH, is doing business as BSF. BSF is a critical access care hospital located in Oneida, Tennessee consisting of a 52,000-square foot hospital building and 6,300-square foot professional building on approximately 4.3 acres. BSF has 25 inpatient beds, and 24/7 emergency department and provides ancillary services, including laboratory, radiology, respiratory and pharmacy services. The hospital became operational on August 8, 2017 and it became designated as a Critical Access Hospital (rural) hospital in December 2021, retroactive to June 30, 2021.

FOXO acquired Myrtle and RCHI as synergistic opportunities to expand its operations into the healthcare sector and as a complement to its epigenetic biomarkers of human health, wellness and aging.

Also see Note 18 of the accompanying unaudited condensed financial statements for other recent developments.

Segments

We manage and classify our business into two reportable business segments: (i) Healthcare; and (ii) Labs and Life. Previously, Labs and Life were treated as separate segments, however, with the acquisition of Myrtle, our operational focus shifted such that it was appropriate to combine our Labs and Life segments and to operate Myrtle and RCHI under our newly formed Healthcare segment.

	●	Healthcare - The Company’s healthcare segment began with the acquisition of Myrtle on June 14, 2024 and expanded with the acquisition of RCHI on September 10, 2024, as more fully discussed in Note 5 to the accompanying unaudited condensed financial statements. Myrtle offers substance abuse treatments and services that are provided on either an inpatient, residential basis or an outpatient basis. Presently, it offers alcohol and drug residential detoxification and residential rehabilitation treatment services for up to 30 inpatients. RCHI’s hospital, BSF, has 25 inpatient beds, and a 24/7 emergency department and provides ancillary services, including laboratory, radiology, respiratory and pharmacy services. BSF is designated as a Critical Access Hospital (rural) hospital.

	●	Labs and Life- Our Labs and Life segment is commercializing proprietary epigenetic biomarker technology to be used for underwriting risk classification in the global life insurance industry. Our research demonstrates that epigenetic biomarkers, collected from saliva or blood, provide meaningful measures of health and lifestyle factors. Labs and Life anticipates recognizing revenue related to sales of its Bioinformatics Services and from the commercialization of research and development activities, which may include its Underwriting Report, Longevity Report, or as a result of other commercialization opportunities including a potential AI platform for the delivery of health and well-being data-driven insights to individuals, healthcare professionals and third-party service providers. Life sought to redefine the relationship between consumers and insurers by combining life insurance with healthy longevity. The distribution of insurance products that may be paired with our FOXO’s Longevity Report strived to provide life insurance consumers with valuable information and insights about their individual health and wellness.

Healthcare generates revenues from hospital and auxiliary services as well as substance abuse treatments, including inpatient and outpatient services. Labs currently recognizes revenue from providing epigenetic testing services and collecting a royalty from Illumina, Inc. related to the sales of the Infinium Mouse Methylation Array. Life primarily had residual commission revenues from its legacy insurance agency business.

Labs conducts research and development, and such costs are recorded within research and development expenses on the unaudited condensed consolidated statements of operations. Labs had operated its Bioinformatics Services as an ancillary offering, with revenue recognized as epigenetic biomarker services in our historical financial statements, but now looks to it as a primary offering. Bioinformatics Services provide a data processing, quality checking, and data analysis service using FOXO’s cloud-based bioinformatics pipeline, referred to as our epigenetics, longevity, or methylation pipeline in our historical financial statements. Labs accepts raw data from third party labs and converts that data into usable values for customers

FOXO Life Insurance Company

Due to market conditions, our capitalization following the Business Combination did not materialize in the way the Company anticipated, and we did not possess the funding that we believed would be required to satisfy state regulations and regulatory bodies to issue new life insurance policies through FOXO Life Insurance Company. As such, we decided to not move forward with the launch of FOXO Life Insurance Company. Accordingly, on February 3, 2023, we consummated the sale of FOXO Life Insurance Company to Security National pursuant to the Security National Merger Agreement. As a result of the merger, we were no longer required to hold cash and cash equivalents required to be held as statutory capital and surplus, as required under the Arkansas Insurance Code (the “Arkansas Code”).

At the closing, all of FOXO Life Insurance’s shares were cancelled and retired and ceased to exist in exchange of an amount equal to FOXO Life Insurance’s statutory capital and surplus amount of $5,002 as of the closing date, minus $200 (the “Merger Consideration”).

After the Merger Consideration and Security National’s third-party expenses, the transaction resulted in the Company gaining access to $4,751 that was previously held as statutory capital and surplus pursuant to the Arkansas Code.

Results of Operations

Three Months Ended September 30, 2024 and 2023

(Dollars in thousands)		2024			2023			Change in $		Change in %
Net revenues	$	1,196		$	10		$	1,186		NM
Operating expenses:
Direct costs of revenues		541			70			471		673	%
Research and development		43			283			(240	)	-85	%
Management contingent share plan		(116	)		(1,553	)		1,437		-93	%
Selling, general and administrative		1,733			4,717			(2,984	)	-63	%
Total operating expenses		2,201			3,517			(1,316	)	-37	%
Loss from operations		(1,005	)		(3,507	)		2,502		-71	%
Non-operating expenses		(948	)		(153	)		(795	)	520	%
Net loss, including noncontrolling interest		(1,953	)		(3,660	)		1,707		-47	%
Net loss attributable to noncontrolling interest		7			-			7		NM
Net loss attributable to FOXO		(1,946	)		(3,660	)		1,714		-47	%
Deemed dividends		(88	)		(912	)		824		-90	%
Net loss to common stockholders	$	(2,034	)	$	(4,572	)	$	2,538		-56	%

NM = Not meaningful

Net Revenues. Total revenues were $1,196 for the three months ended September 30, 2024, compared to $10 for the three months ended September 30, 2023, an increase of $1,186. Myrtle, acquired on June 14, 2024, and RCHI, acquired on September 10, 2024, contributed $1,188 of the increase, partially offset by the decrease in Labs and Life revenues of $2.

Direct Costs of Revenues. Direct costs of revenues were $541 for the three months ended September 30, 2024, compared to $70 of direct costs of revenues for the three months ended September 30, 2023. The increase resulted from the direct costs of Myrtle and RCHI, which were acquired on June 14, 2024 and September 10, 2024, respectively.

Research and Development. Research and development expenses were $43 for the three months ended September 30, 2024, compared to $283 for the three months ended September 30, 2023. The decrease was driven by lower employee-related expenses and professional services as well as research and development projects that are no longer ongoing, which also contributed to the period over period decrease in research and development expenses.

Management Contingent Share Plan. Forfeitures under the Management Contingent Share Plan resulted in a net reduction of expense of $116 for the three months September 30, 2024 compared to a net reduction of expense of $1,553 for the three months ended September 30, 2023. The change is driven by more forfeitures of these awards in the 2023 period as a result of more employee layoffs and departures in 2023.

Selling, General and Administrative. Selling, general and administrative expenses were $1,733 for the three months ended September 30, 2024 compared to $4,717 for the three months ended September 30, 2023. We attribute the decrease of $2,984, or 63%, to lower: employee related expenses due to headcount reductions, legal fees and insurance expense, among other items. Partially offsetting the decrease in selling, general and administrative expenses were expenses of $326 associated with Myrtle, which was acquired on June 14, 2024 and $303 associated with RCHI, which was acquired on September 10, 2024.

Non-operating Expense. Non-operating expense was $948 for the three months ended September 30, 2024, compared to $153 for the three months ended September 30, 2023. The increase is primarily related to a $809 increase of interest expense.

Net Loss Attributable to FOXO. Net loss attributable to FOXO was $1,946 for the three months ended September 30, 2024, an improvement of $1,714 or 47% compared to net loss of $3,660 for the three months ended September 30, 2023. The decrease in net loss was primarily related to the decrease in the loss from operations of $2,502, partially offset by an increase in other non-operating expenses of $795. Additionally, deemed dividends of $88 and $912 related to the trigger of the down round provisions of the Smithline Assumed Warrants was recognized in the three months ended September 30, 2024 and 2023, respectively. The deemed dividends resulted in a net loss to common stockholders of $2,034 and $4,572 for the three months ended September 30, 2024 and 2023, respectively.

Analysis of Segment Results:

The following is an analysis of our results by reportable segment for the three months ended September 30, 2024 compared to the three months ended September 30, 2023. The primary earnings/loss measure used for assessing reportable segment performance is segment loss defined as earnings/loss before interest, income taxes and depreciation and amortization not associated with a specific segment. Segment income/loss by reportable segment also excludes corporate and other costs, including management, IT, and overhead costs. For further information regarding our reportable business segments, please refer to our unaudited condensed consolidated financial statements and related notes included elsewhere in this report.

Healthcare

(Dollars in thousands)	Three Months Ended September 30, 2024			Three Months Ended September 30, 2023		Change in $			Change in %
Net revenues	$	1,188		$	-	$	1,188			NM	%
Operating expenses		(1,242	)		-		(1,242	)		NM	%
Less noncontrolling interest		7			-		7			NM	%
Segment loss	$	(47	)	$	-	$	(47	)		NM	%

NM = Not Meaningful

Net revenues. Net revenues were $1,188 for the three months ended September 30, 2024 and represent the net revenues of Myrtle, which was acquired on June 14, 2024, and RCHI, which was acquired on September 10, 2024. Our healthcare segment began with the acquisition of Myrtle.

Segment Loss. Segment loss was $47 for the three months ended September 30, 2024 and represents the $309 of income from RCHI, which was acquired on September 10, 2024, partially offset by the $356 loss from Myrtle, which was acquired on June 14, 2024.

Life and Labs

(Dollars in thousands)	Three Months Ended September 30, 2024			Three Months Ended September 30, 2023			Change in $			Change in %
Net revenues	$	8		$	10		$	(2	)		(25	)%
Operating expenses		(390	)		(418	)		28			7	%
Segment loss	$	(382	)	$	(408	)	$	26			7	%

Net revenues. Net revenues were $8 for the three months ended September 30, 2024 compared to $10 for the three months ended September 30, 2023. The decrease was due to lower royalty revenue and reduced life insurance commissions earned as we ceased placing policies from our legacy agency business.

Segment Loss. Segment loss decreased from $408 for the three months ended September 30, 2023 to $382 for the three months ended September 30, 2024. The decrease was driven by lower employee-related expenses, partially offset by minimum royalties and maintenance fees due under the KR8 Agreement in the three months ended September 30, 2024.

Nine Months Ended September 30, 2024 and 2023

							Change in			Change in
(Dollars in thousands)	2024			2023			$			%
Net revenues	$	1,231		$	35		$	1,196			NM
Operating expenses:
Direct costs of revenues		572			70			502			717	%
Research and development		312			925			(613	)		-66	%
Management contingent share plan		(75	)		(141	)		66			-47	%
Impairment of intangible assets and cloud computing arrangements		-			2,633			(2,633	)		-100	%
Selling, general and administrative		4,195			15,052			(10,857	)		-72	%
Total operating expenses		5,004			18,539			(13,535	)		-73	%
Loss from operations		(3,773	)		(18,504	)		14,731			-80	%
Non-operating expenses		(1,848	)		(4,088	)		2,240			-55	%
Net loss, including noncontrolling interest		(5,621	)		(22,592	)		16,971			-75	%
Net loss attributable to noncontrolling interest		8			-			8			NM
Net loss attributable to FOXO		(5,613	)		(22,592	)		16,979			-75	%
Deemed dividends		(1,054	)		(3,378	)		2,324			-69	%
Net loss to common stockholders	$	(6,667	)	$	(25,970	)	$	19,303			-74	%

NM = Not meaningful

Net revenues. Net revenues were $1,231 for the nine months ended September 30, 2024, compared to $35 for the nine months ended September 30, 2023, an increase of $1,196. Myrtle, acquired on June 14,2024, and RCHI, acquired on September 10, 2024, contributed $1,208 of the increase, partially offset by decreases in Labs and Life revenues of $12.

Direct Costs of Revenues. Direct costs of revenues were $572 for the nine months ended September 30, 2024, compared to direct costs of revenues of $70 for the nine months ended September 30, 2023. The increase resulted from the direct costs of Myrtle and RCHI, which were acquired on June 14, 2024 and September 10, 2024, respectively.

Research and Development. Research and development expenses were $312 for the nine months ended September 30, 2024, compared to $925 for the nine months ended September 30, 2023. The decrease was driven by lower employee-related expenses and professional services as well as research and development projects that are no longer ongoing, which also contributed to the period over period decrease in research and development expenses.

Management Contingent Share Plan. Forfeitures under the Management Contingent Share Plan resulted in a net reduction of expense of $75 for the nine months ended September 30, 2024 compared to a net reduction of expense of $141 for the three months ended September 30, 2023. The change is driven by more forfeitures of these awards in the 2023 period as a result of more employee layoffs and departures in 2023.

Impairment of Intangible Assets and Cloud Computing Arrangements. During the nine months ended September 30, 2023, we determined that the cash flows would no longer support the digital insurance platform, underwriting API, and longevity API and recognized impairment losses of $1,425, $630, and $578, respectively or $2,633 in total.

Selling, General and Administrative. Selling, general and administrative expenses were $4,195 for the nine months ended September 30, 2024 compared to $15,052 for the nine months ended September 30, 2023. The decrease of $10,857, or 72%, was driven by the completion of a consulting agreement as we recognized $2,370 less compensation costs associated with the amortization of consulting agreements in the current period compared to the prior period. Also contributing to the decrease were lower: employee related expenses due to headcount reductions, legal fees, amortization of intangible assets, insurance expense, software license fees and professional fees, among other items. Partially offsetting the decrease in selling, general and administrative expenses were expenses of $396 associated with Myrtle, which was acquired on June 14, 2024 and $303 associated with RCHI, which was acquired on September 10, 2024.

Non-operating Expense. Non-operating expense was $1,848 for the nine months ended September 30, 2024, compared to $4,088 for the nine months ended September 30, 2023. The decrease is primarily related to the loss from PIK Note Amendment and 2022 Debenture Release of $3,521 during the nine months ended September 30, 2023. Also, contributing to the decrease was a reduction in the fair value of warrant liability of $243. Partially offsetting the decrease was an increase of interest expense of $935.

Net Loss Attributable to FOXO. Net loss attributable to FOXO was $5,613 for the nine months ended September 30, 2024, an improvement of $16,979 or 75% compared to net loss of $22,592 for the nine months ended September 30, 2023. The decrease in net loss was primarily related to the decrease in the loss from operations of $14,731, and the decrease in other non-operating expenses of $2,240. Additionally, a deemed dividend of $1,054 related to the trigger of the down round provisions and the extension of the Smithline Assumed Warrants was recognized in the nine months ended September 30, 2024 compared to deemed dividends of $3,378 related to the Exchange Offer and the trigger of the down round provisions of the Smithline Assumed Warrants during the nine months ended September 30, 2023. The deemed dividends resulted in net loss to common stockholders of $6,667 and $25,970 for the nine months ended September 30, 2024 and 2023, respectively.

Analysis of Segment Results:

The following is an analysis of our results by reportable segment for the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023. The primary earnings/loss measure used for assessing reportable segment performance is segment loss defined as earnings/loss before interest, income taxes, and depreciation and amortization not associated with a specific segment. Segment income/loss by reportable segment also excludes corporate and other costs, including management, IT, and overhead costs. For further information regarding our reportable business segments, please refer to our unaudited condensed consolidated financial statements and related notes included elsewhere in this report.

Healthcare

(Dollars in thousands)	Nine Months Ended September 30, 2024			Nine Months Ended September 30, 2023		Change in $			Change in %
Net revenues	$	1,208		$	-	$	1,208			NM	%
Operating expenses		(1,330	)		-		(1,330	)		NM	%
Less noncontrolling interest		8			-		8			NM	%
Segment loss	$	(114	)	$	-	$	(114	)		NM	%

NM = Not Meaningful

Net revenues. Net revenues were $1,208 or the nine months ended September 30, 2024 and represent the net revenue of Myrtle, which was acquired on June 14, 2024, and of RCHI, which was acquired on September 10, 2024. Our healthcare segment began with the acquisition of Myrtle.

Segment Loss. Segment loss was $114 for the nine months ended September 30, 2024 and represents the income of $309 from RCHI, which was acquired on September 10, 2024, partially offset by the $423 loss from Myrtle, which was acquired on June 14, 2024.

Labs and Life

(Dollars in thousands)	Nine Months Ended September 30, 2024			Nine Months Ended September 30, 2023			Change in $			Change in %
Net revenues	$	23		$	35		$	(12	)		(34	)%
Operating expenses		(1,275	)		(1,937	)		662			(34	)%
Segment loss	$	(1,252	)	$	(1,902	)	$	650			(34	)%

Net revenues. Net revenues were $23 for the nine months ended September 30, 2024 compared to $35 for the nine months ended September 30, 2023. The decrease was due to lower royalty revenue and reduced life insurance commissions earned as we ceased placing policies from our legacy agency business.

Segment Loss. Segment loss decreased from $1,902 for the nine months ended September 30, 2023 to $1,252 for the nine months ended September 30, 2024. The decrease was driven by lower employee-related expenses and a $251 loss on the sale of FOXO Life Insurance Company in the nine months ended September 30, 2023, partially offset by minimum royalties and maintenance fees due under the KR8 Agreement in the nine months ended September 30, 2024.

Non-GAAP Financial Measures

To supplement our financial information presented in accordance with U.S. GAAP, management periodically uses certain “non-GAAP financial measures,” as such term is defined under the rules of the SEC, to clarify and enhance understanding of past performance and prospects for the future. Generally, a non-GAAP financial measure is a numerical measure of a company’s operating performance, financial position or cash flows that excludes or includes amounts that are included in or excluded from the most directly comparable measure calculated and presented in accordance with U.S. GAAP. For example, non-GAAP measures may exclude the impact of certain items such as acquisitions, divestitures, gains, losses and impairments, or items outside of management’s control. Management believes that the following non-GAAP financial measure provides investors and analysts useful insight into our financial position and operating performance. Any non-GAAP measure provided should be viewed in addition to, and not as an alternative to, the most directly comparable measure determined in accordance with U.S. GAAP. Further, the calculation of these non-GAAP financial measures may differ from the calculation of similarly titled financial measures presented by other companies and therefore may not be comparable among companies.

Other Operating Data (Adjusted EBITDA):

We use Adjusted EBITDA to evaluate our operating performance. Adjusted EBITDA does not represent and should not be considered an alternative to net income as determined by U.S. GAAP, and our calculations thereof may not be comparable to those reported by other companies. We believe Adjusted EBITDA is an important measure of operating performance and provides useful information to investors because it highlights trends in our business that may not otherwise be apparent when relying solely on U.S. GAAP measures and because it eliminates items that have less bearing on our operating performance. Adjusted EBITDA, as presented herein, is a supplemental measure of our performance that is not required by, or presented in accordance with, U.S. GAAP. We use non-GAAP financial measures as supplements to our U.S. GAAP results in order to provide a more complete understanding of the factors and trends affecting our business. Adjusted EBITDA is a measure of operating performance that is not defined by U.S. GAAP and should not be considered a substitute for net (loss) income as determined in accordance with U.S. GAAP.

We reconcile our non-GAAP financial measure to our net loss, which is its most directly comparable financial measure calculated and presented in accordance with U.S. GAAP. Our management uses Adjusted EBITDA as a financial measure to evaluate the profitability and efficiency of our business mode. Adjusted EBITDA is not presented in accordance with U.S. GAAP.

Adjusted EBITDA provides additional insight into our underlying, ongoing operating performance and facilitates period-to-period comparisons by excluding the earnings impact of interest income and expense, income taxes, depreciation and amortization, non-cash change in fair value of convertible debentures and warrants, stock-based compensation, impairment and certain other infrequent and/or unpredictable non-cash charges or benefits. Management believes that presenting Adjusted EBITDA is more representative of our operational performance and may be more useful for investors.

	For the three months ended September 30,						For the nine months ended September 30,
*(Dollars in thousands)*	2024			2023			2024			2023
Net loss attributable to FOXO	$	(1,946	)	$	(3,660	)	$	(5,613	)	$	(22,592	)
Add: Depreciation and amortization		274			75			796			1,251
Add: Interest expense		957			148			1,800			865
Add: Stock-based compensation		111			(1,312	)		399			2,582
Add: Change in fair value of warrant liability		7			(36	)		(1	)		(244	)
Add: Impairments of intangible assets and cloud computing arrangements		-			-			-			2,633
Add: Loss from PIK Note Amendment and 2022 Debenture Release		-			-			-			3,521

Adjusted EBITDA	$	(597	)	$	(4,785	)	$	(2,619	)	$	(11,984	)

Liquidity and Capital Resources

Sources of Liquidity and Capital

We had cash and cash equivalents of $34 and $38 as of September 30, 2024 and December 31, 2023, respectively. We have incurred net losses since our inception. For the nine months ended September 30, 2024 and 2023, we incurred net losses available to common stockholders of $6,667 and $25,970, respectively. At September 30, 2024, had a working capital deficit and a total stockholders’ deficit of $31,439 and $17,554, respectively. Our operations used cash of $995 and $6,165 for the nine months ended September 30, 2024 and 2023, respectively. We are expecting the Myrtle and RCHI businesses to be cash flow neutral through the remainder of 2024.

Our current revenue is not adequate to fund our operations in the next twelve months and requires us to fund our business through other avenues until the time we achieve adequate scale. Securing additional capital is necessary to execute on our business strategy. We are currently negotiating additional funding with multiple sources.

Financing

During the third quarter of 2023, we completed two tranches of private placements that provided gross proceeds of $450 and $294. After deducting placement agent fees and other offering expenses, the net proceeds from the private placements were $260 and $217.

During the fourth quarter of 2023, we entered into the Strata Purchase Agreement with ClearThink, as supplemented by that certain Supplement to Strata Purchase Agreement, dated as of October 13, 2023, by and between us and ClearThink. During the fourth quarter of 2023, we completed two tranches of private placements under the terms of the Strata Purchase Agreement with ClearThink that provided gross proceeds of $200 and $256. After deducting finder’s fees and other offering expenses, the net proceeds from the private placements were of $186 and $246. On August 13, 2024, the Company entered into Amendment No. 1 to the Strata Purchase Agreement pursuant to which the commitment amount was increased from $2,000 to $5,000.

February 1, 2024 Second Strata Purchase Agreement

On February 1, 2024, we entered into the Second Strata Purchase Agreement with ClearThink. No shares of the Company’s common stock were issued under the Second Strata Purchase Agreement and on August 8, 2024, the Company and ClearThink entered into a termination agreement and all outstanding obligations were terminated.

On January 3, 2024, we issued to ClearThink a promissory note in the principal amount of $75, less an original issue discount of $25, on January 30, 2024, we issued to ClearThink a promissory note in the principal amount of up to $750, less an original issue discount of $250, on May 15, 2024, we issued ClearThink a promissory note in the principal amount of $300 and on August 16, 2024, under the terms of an extension, the principal balance was increased to $350, the discount was increased to $175 and we agreed to issue ClearThink 100,000 shares of our Class A Common Stock. In addition, on August 16, 2024, we issued ClearThink a promissory note in the principal amount of $40 and we received proceeds of $27. We received net cash proceeds totaling $656 during the nine months ended September 30, 2024 from the issuances of these notes payable.

On April 28, 2024, we entered into a Securities Purchase Agreement with LGH pursuant to which we issued to LGH a convertible promissory note in the principal amount of $110 and 200,000 shares of our Class A Common Stock as inducement shares to LGH. We received cash of $100 from the issuance of the convertible promissory note.

On April 30, 2024, we entered into a Securities Purchase Agreement with IG pursuant to which we issued IG a promissory note in the principal amount of $150 and we agreed to issue 100,000 shares of our Class A Common Stock as inducement shares to IG. We received cash of $100 from the issuance of the promissory note. On August 16, 2024, the note was extended to September 30, 2024. Under the extension, we agreed to increase the principal balance by $25 and to issue IG 50,000 shares of our Class A Common Stock. During the period November 1, 2024 to November 15, 2024, the full principal balance and associated accrued interest of the IG promissory note of $195 was converted into 415,000 shares of the Company’s Class A Common Stock.

Pursuant to the acquisition of Myrtle, we issued a non-interest bearing note payable to RHI due on December 31, 2024 in the original principal amount of $1,611. As of September, the principal balance was $707. In addition, we issued a non-interest bearing promissory note due on demand to RHI in the amount of $265 for a portion of the purchase price of Myrtle.

On June 12, 2024, we entered into a Securities Purchase Agreement (the “SPA”) with an institutional investor (the “Purchaser”) pursuant to which we agreed to issue to the Purchaser and subsequent purchasers who will also be parties to the SPA (the Purchaser, together with the purchasers, the “Purchasers”) Senior Notes Payable in the aggregate principal amount of up to $2,800.

The closings of the SPA (each a “Closing,” or, together, the “Closings”) are as follows:

●

On the June 14, 2024, the Purchaser purchased an aggregate of $840 in principal amount of the Senior Note Payable and we received cash proceeds of $750. On July 17, 2024, we issued to the Purchaser 1,108,755 shares of our common stock per the terms of the agreement.

●

On August 1, 2024, the Purchaser purchased an aggregate of $280 in principal amount of the Senior Note Payable and we received cash proceeds of $250.

●

Upon the closing of the acquisition of RCHI, the Purchaser(s) agreed to purchase up to an aggregate of $1,120 in principal amount of the Senior Notes Payable. However, the Purchaser or Purchasers have not yet purchased these additional notes due to conditions of the SPA that have not been met. The terms of the acquisition of RCHI were amended as more fully discussed in Note 5 to the accompanying unaudited condensed consolidated financial statements.

●

Upon the filing of a registration statement by us with the SEC relating to the resale by the Purchasers (and any affiliates) of all shares of Class A Common Stock of the Company beneficially owned by each Purchaser (and any affiliate) the Purchasers have agreed to purchase up to an aggregate of $560 in principal amount of the Senior Notes Payable. The Purchaser or Purchasers have not yet purchased these notes because the conditions to fund have not yet been fully met.

On July 22, 2024, we issued a promissory note to 1800 Diagonal Lending LLC in the principal amount of $169 and we received cash of $125.

On September 10, 2024, we issued a note payable due on September 10, 2026 to RHI in the principal amount of $22,000 for the purchase of RCHI. In addition, we have outstanding the Western Note Payable in the amount of $624, which was owed by RCHI at the time of the acquisition of RCHI.

Going Concern

Our primary uses of cash are to fund our operations as we continue to grow our business, as well as to service our debt. We finalized the acquisition of Myrtle on June 14, 2024 and the acquisition of RCHI on September 10, 2024. We are expecting the Myrtle and RCHI businesses to be cash flow neutral through the remainder of 2024. Capital expenditures have historically not been material to our consolidated operations, and we do not anticipate making material capital expenditures in the remainder of 2024 or in 2025. We expect that our liquidity requirements will continue to consist of working capital, including payments of outstanding debt and accrued liabilities and general corporate expenses associated with the growth of our business. Based on our current operations, we do not have sufficient capital to fund our operations for at least 12 months from the date hereof. We expect to address our liquidity needs through the pursuit of additional funding through a combination of equity or debt financings and additional strategic acquisitions to enable us to fund our operations.

We have taken various actions to bolster our cash position, including raising funds through the private placements and transactions with ClearThink, LGH, IG, 1800 Diagonal Lending LLC, the Purchaser described above, as well as other lenders, and conserving cash by issuing shares of our Class A Common Stock under license agreements, legal settlements, consulting agreements, finder’s fees related to equity and debt financing and consulting agreements, among other transactions. We are also looking at conserving cash by issuing shares of our preferred stock, subject to shareholder approval.

Based on our current operating plan, our cash position as of September 30, 2024, and after taking into account the actions described above, we expect to be able to fund our operations through the second quarter of 2025. Even if our current operating plan is successful, we expect to need additional financing or other increase in our cash and cash equivalents balance to enable us to fund our future operations.

We have based our estimates as to how long we expect we will be able to fund our operations on assumptions that may prove to be wrong, and we could use our available capital resources sooner than we currently expect, in which case we would be required to obtain additional financing sooner than currently projected, which may not be available to us on acceptable terms, or at all. Our failure to raise capital as and when needed would have a negative impact on our financial condition and our ability to pursue our business strategy. We may raise additional capital through equity offerings, debt financings or other capital sources. If we do raise additional capital through public or private equity offerings, or convertible debt offerings, the ownership interest of our existing stockholders will be diluted, and the terms of these securities may include liquidation or other preferences that adversely impact our existing stockholders’ rights. If we raise additional capital through debt financing, we may be subject to covenants limiting or restricting our ability to take certain actions.

Cash Flows

Nine Months Ended September 30, 2024 and 2023

The following table summarizes our cash flow data for the nine months ended September 30, 2024 and 2023 (dollars in thousands):

	Cash Provided by / (Used in)
Nine Months Ended September 30,	2024			2023
Operating Activities	$	(995	)	$	(6,165	)
Investing Activities	$	14		$	-
Financing Activities	$	977		$	692

Operating Activities

Net cash of $995 and $6,164 was used in operating activities in the nine months ended September 30, 2024 and 2023, respectively. The improvement was primarily the result of the $16,979 reduction in the net loss attributable to FOXO, in the nine months ended September 30, 2024 compared to the prior period. The improvement in the nine months ended September 30, 2024 was partially offset by certain noncash items in the 2023 period, including: (i) the loss from PIK Note Amendment and 2022 Debenture Release of $3,521, (ii) higher amortization of consulting fees paid in common stock of $1,719 and (iii) impairment of assets of $2,633, among other items.

Investing Activities

Investing activity in the nine months ended September 30, 2024 provided cash of $14, which represented the cash acquired from the purchases of Myrtle and RCHI. No cash was used or provided by investing activities in the nine months ended September 30, 2023.

Financing Activities

Net cash of $977 was provided by financing activities in the nine months ended September 30, 2024 from the issuances of promissory notes of $1,981, partially offset by a payment of the note payable to RHI of $904 and payments under accounts receivable sales agreements of $100. Cash of $692 was provided by financing activities in the nine months ended September 30, 2023, including $744 from private placements, $247 from the issuance of a related party promissory note, partially offset by $299 of deferred offering costs.

Off-Balance Sheet Financing Arrangements

We have no obligations, assets or liabilities which would be considered off-balance sheet arrangements. We do not participate in transactions that create relationships with unconsolidated entities or financial partnerships, often referred to as variable interest entities, which would have been established for the purpose of facilitating off-balance sheet arrangements.

We have not entered into any off-balance sheet financing arrangements, established any special purpose entities, guaranteed any debt or commitments of other entities, or entered into any non-financial assets.

Contractual Obligations

Our contractual obligations as of September 30, 2024 include (in thousands):

	Amounts Due by Period
*(Dollars in thousands)*	1 Year		2 - 3 years		4 - 5 years		More than 5 years		Total
KR8 Agreement (a)	$	2,322		4,450		4,450		-	$	11,222
Other license agreement (b)		40		40		20		-		100
Note payable (c)		8,354		-		-		-		8,354
Related parties payable (d)		1,261		22,100		-		-		23,361
Related parties ROU lease obligations (e)		1,200		2,400		2,400		1,200		7,200
Supplier and other commitments		54		-		-		-		54
Total	$	13,231		28,990		6,870		1,200	$	50,291

(a)	Amount due under KR8 Agreement include $2,000 for initial license and development fees, $50 per month for maintenance fees and minimum royalty payments. Perpetual management and royalty fees are projected through five years only.

(b)	License agreement remains in place until the licensor’s patents expire or are abandoned. Amounts do not include development milestones that have not been reached as of September 30, 2024.

(c)

Represents the principal and interest balance as of September 30, 2024 for various notes payable, including the Senior PIK notes in the amount of $4,971, which are past due. The Senior PIK Notes are subject to prepayment penalties and interest is paid through the issuance of additional Senior PIK Notes. The ultimate amount required to settle the Senior PIK notes will vary depending on when they are settled. Notes payable are more fully discussed in Note 10 of the accompanying unaudited condensed consolidated financial statements.

(d)	Represents the principal and interest balances as of September 30, 2024 of notes to RHI for acquisitions of Myrtle and RCHI, and Promissory notes 1 and 2. Notes to RHI are more fully discussed in Note 10. Promissory note 1 does not bear interest and Promissory note 2 accrues interest in arrears at a rate of 13.25% per annum. The notes are due on demand, and in the absence of any demand, one year from the issuance date and may be prepaid, in whole or in part, without penalty at any time.

(e)	Includes: (i) facilities lease between Myrtle and a subsidiary of RHI beginning June 14, 2024 for a term of one year with annual options to renew for up to 5 years. Initial monthly base rental amount is $35 and with annual rental increases equal to the greater of 3% and the consumer price index; and (ii) facilities lease between RCHI and a subsidiary of RHI beginning June 1, 2024 for a term of one year with annual options to renew for up to 5 years. Initial monthly base rental amount is $65 and with annual rental increases equal to the greater of 3% and the consumer price index.

Critical Accounting Policies

The preparation of the unaudited condensed consolidated financial statements and related notes included under “Item 1. Financial Statements” and related disclosures in conformity with GAAP. The preparation of these unaudited condensed consolidated financial statements requires the selection of the appropriate accounting principles to be applied and the judgments and assumptions on which to base accounting estimates, which affect the reported amounts of assets and liabilities as of the date of the balance sheets, the reported amounts of revenue and expenses during the reporting periods, and related disclosures. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances at the time such estimates are made. Actual results and outcomes may differ materially from our estimates, judgments, and assumptions. We periodically review our estimates in light of changes in circumstances, facts, and experience. The effects of material revisions in estimates are reflected in the unaudited condensed consolidated financial statements prospectively from the date of the change in estimate.

We define our critical accounting policies and estimates as those that require us to make subjective judgments about matters that are uncertain and are likely to have a material impact on our financial condition and results of operations as well as the specific manner in which we apply those principles. We believe the critical accounting policy used in the preparation of our financial statements which required significant estimates and judgments is as follows:

Going Concern

Our history of losses requires management to critically assess our ability to continue operating as a going concern. For the nine months ended September 30, 2024 and 2023, we incurred net losses to common stockholders of $6,667 and $25,970, respectively. As of September 30, 2024, we had a working capital deficit and a total stockholders’ deficit of $31,439 and $17,554, respectively. Cash of $995 and $6,165 was used in operating activities for the nine months ended September 30, 2024 and 2023, respectively. As of September 30, 2024, we had $34 of available cash and cash equivalents.

On a quarterly basis, we assess going concern uncertainty for our condensed consolidated financial statements to determine if we have sufficient cash and cash equivalents on hand and working capital to operate for a period of at least one year from the date our condensed consolidated financial statements are issued or are available to be issued (the “look-forward period”). Based on conditions that are known and reasonably knowable to us, we consider various scenarios, forecasts, projections, and estimates, and we make certain key assumptions, including the timing and nature of projected cash expenditures or programs, among other factors, and our ability to delay or curtail those expenditures or programs within the look-forward period, if necessary. Until additional equity or debt capital is secured, and the Company begins generating sufficient revenue, reducing losses, and improving future cash flows, there is substantial doubt about the Company’s ability to continue as a going concern. The Company will continue ongoing capital raise initiatives and has demonstrated previous success in raising capital to support its operations.

During the first quarter of 2023, we completed the sale of FOXO Life Insurance Company in order to gain access to the cash held as statutory capital and surplus at FOXO Life Insurance Company, which we used to fund a portion of our operations during 2023. On June 14, 2024 and September 10, 2024, we completed the acquisitions of Myrtle and RCHI, respectively, which are more fully discussed in Note 5 to the unaudited condensed consolidated financial statements included in this report. While Myrtle is still in the startup phase, RCHI, through its hospital BSF, is expected to provide us with positive operating cash flows. In addition, to fund our operations, we continue to (i) pursue additional avenues to capitalize the Company, (ii) pursue additional strategic operating companies, and (iii) commercialize our products to generate revenue.

As previously disclosed, on September 20, 2022, we issued the Senior PIK Notes in an aggregate principal amount of $3,457, each with a maturity date of April 1, 2024. Pursuant to the terms of the Senior PIK Notes, commencing on November 1, 2023, and on each one-month anniversary thereof, we are required to pay the holders of the Senior PIK Notes an equal amount until their outstanding principal balance has been paid in full on the Maturity Date, or, if earlier, upon acceleration or prepayment of the Senior PIK Notes in accordance with their terms. We failed to make the payments due on November 1, 2023 and on each one-month anniversary thereof, which constitutes an event of default under the Senior PIK Notes. On October 18, 2024, the Company entered into the PIK Notes Amendment No. 1. Under the PIK Notes Amendment No.1, which is more fully discussed in Notes 10 and 18 to the accompanying unaudited condensed consolidated financial statements, the Senior PIK Notes would be exchanged for the Company’s Series B Preferred Stock, subject to stockholder approval.

Compliance with NYSE American Continued Listing Requirements

On April 17, 2024, the Company received an official notice of noncompliance from the New York Stock Exchange (“NYSE”) stating that it was not in compliance with NYSE American continued listing standards due to the failure to timely file its Annual Report on Form 10-K for the year ended December 31, 2023 (the “Delinquent Report”) by the filing due date of April 16, 2024 (the “Filing Delinquency”). With the filing of the Delinquent Report and the Quarterly Report on Form 10-Q for the quarter ended March 31, 2024, the Filing Delinquency was cured.

On June 10, 2024, the Company received an official notice of noncompliance from NYSE stating that the Company is not in compliance with NYSE American continued listing standards due to an outstanding balance of listing fees over 180 days old and NYSE provided the Company until June 7, 2024 to provide payment before the Company would become subject to the noncompliance procedures. The Company failed to pay the fee by June 7, 2024, which was extended to August 9, 2024. On August 7, 2024, the Company received a letter from NYSE stating that the Company is back in compliance with the NYSE American continued listed standards pertaining to timely payment of listing fees set forth in Section 1003(f)(iv) of the NYSE American Company Guide. The letter acknowledged that the Company has paid its outstanding balance of fees.

On July 10, 2024, the Company received an official notice of noncompliance from NYSE stating that the Company is not in compliance with Section 1003(a)(ii) of the Company Guide since it reported stockholders’ deficit of $16,167 as of June 30, 2024, and losses from continuing operations and/or net losses in its three most recent fiscal years ended December 31, 2023. The Company is now subject to the procedures and requirements set forth in Section 1009 of the Company Guide.

On June 12, 2023, the Company received an official notice of noncompliance from NYSE Regulation stating that the Company is below compliance with Section 1003(a)(i) in the NYSE American Company Guide since the Company reported stockholders’ deficit of $30 at March 31, 2023, and losses from continuing operations and/or net losses in its two most recent fiscal years ended December 31, 2022. As required by the notice, on July 12, 2023, the Company submitted a compliance plan (the “Plan”) to NYSE advising of actions it has taken or will take to regain compliance with the NYSE American continued listing standards by December 12, 2024, and if NYSE accepts the Plan, the Company will have until December 12, 2024 to comply with the Plan. Should the Plan not be accepted, or the Company be unable to comply with the Plan, then it may make it more difficult for the Company to raise capital and the Company will be delisted in the event it is unable to cure the noncompliance by December 12, 2024.

However, we can provide no assurance that these actions will be successful or that additional sources of financing will be available to us on favorable terms, if at all. As such, until additional equity or debt capital is secured and we begin generating sufficient revenue, there is substantial doubt about the Company’s ability to continue as a going concern for the one-year period following the issuance of the accompanying unaudited condensed consolidated financial statements. As a result of the Company’s acquisition of RCHI on September 10, 2024, the Company believes it will be able to fund its operations until the second quarter of 2025. In any event, if we are unable to fund our operations we will be required to evaluate further alternatives, which could include further curtailing or suspending operations, selling the Company, dissolving and liquidating its assets or seeking protection under the bankruptcy laws. A determination to take any of these actions could occur at a time that is earlier than when we would otherwise exhaust our cash resources.

Factors That May Adversely Affect our Results of Operations

Our results of operations may be adversely affected by various factors that could cause economic uncertainty and volatility in the financial markets, many of which are beyond our control. Our operations are susceptible to additional risks as a result of our recent acquisitions of Myrtle and RCHI – see Part II, Item 1A, “Risk Factors.” Our business could be impacted by, among other things, downturns in the financial markets or in economic conditions, increases in oil prices, inflation, increases in interest rates, supply chain disruptions, declines in consumer confidence and spending, the effects of pandemics, including the resurgence of the COVID-19 pandemic, and the emergence of new variants, and geopolitical instability, such as the military conflicts in Ukraine and Israel. We cannot at this time fully predict the likelihood of one or more of the above events, their duration or magnitude or the extent to which they may negatively impact our business.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information otherwise required under this item.

ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

Disclosure controls and procedures are controls and other procedures designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act is accumulated and communicated to management, including our principal executive officer and our principal financial and accounting officer (the “Certifying Officers”), or persons performing similar functions, as appropriate, to allow timely decisions regarding required disclosure.

Under the supervision and with the participation of our management, including our Certifying Officers, we carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act. Based on the foregoing, our Certifying Officers concluded that our disclosure controls and procedures were not effective as of September 30, 2024.

Management became aware of the material weaknesses described above during the preparation of the Company’s Annual Report on Form 10-K for the year ended December 31, 2023. To address the material weaknesses, the Company performed additional analyses and other procedures, including reviewing the terms of its common stock warrants and the methods used to determine the fair value of its common stock warrants as presented in its unaudited condensed consolidated financial statements at and as of September 30, 2024. However, the material weaknesses have not been fully remediated as of the filing date of this report.

Changes in Internal Control over Financial Reporting

There has been no change in the Company’s internal control over financial reporting, as defined in Rules 13a-15(f) of the Exchange Act, during the Company’s quarter ended September 30, 2024, that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

Limitations on Effectiveness of Controls and Procedures

We do not expect that our disclosure controls and procedures will prevent all errors and all instances of fraud. Disclosure controls and procedures, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the disclosure controls and procedures are met. Further, the design of disclosure controls and procedures must reflect the fact that there are resource constraints, and the benefits must be considered relative to their costs. Because of the inherent limitations in all disclosure controls and procedures, no evaluation of disclosure controls and procedures can provide absolute assurance that we have detected all our control deficiencies and instances of fraud, if any. The design of disclosure controls and procedures also is based partly on certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions.

PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

SEC Investigation

On July 9, 2024, the Company received a letter from the SEC has concluded the investigation and, based on the information it had as of that date, it does not intend to recommend an enforcement action against the Company.

Illumina Inc. Order

On July 10^, 2024, the Company was informed by counsel to Illumina Inc that a summary judgment had been granted to Illumina Inc in the amount of $822. The Company is in discussion with Illumina’s counsel to settle the amount.

Senior PIK Notes Claim

On October 9, 2024, the Company was made aware of a Complaint made by two of the holders of the Company’s Senior PIK Notes claiming $650 and $325, respectively. Although the Company received consent by 50.01% of the holders of the Senior PIK Notes to a conversion amendment, the Company is in the process of seeking counsel in this matter.

ITEM 1A. RISK FACTORS

We face many significant risks in our business, some of which are unknown to us and not presently foreseen. These risks could have a material adverse impact on our business, financial condition and results of operations in the future. In addition to the risk factors set forth below and the other information set forth in this Form 10-Q, you should carefully consider the factors disclosed in Part I, Item 1A, “Risk Factors,” in our Annual Report on Form 10-K for the year ended December 31, 2023, filed with the SEC on June 6, 2024, all of which could materially affect our business, financial condition and future results. With the acquisitions of Myrtle and RCHI, we face added risks associated with these businesses as follows (dollars in thousands):

Our newly acquired behavioral health facility may not become profitable.

We acquired Myrtle from RHI on June 14, 2024. Myrtle was formed in the second quarter of 2022 to pursue opportunities in the behavioral health sector, initially in rural markets. On August 10, 2023, Myrtle was granted a license by the Department of Mental Health and Substance Abuse Services of Tennessee to operate an alcohol and drug treatment facility in Oneida Tennessee. The facility, which is located at the BSF campus, commenced operations and began accepting patients on August 14, 2023. Myrtle offers substance abuse treatments and services that are provided on either an inpatient, residential basis or an outpatient basis. Presently, it offers alcohol and drug residential detoxification and residential rehabilitation treatment services for up to 30 inpatients. To date, Myrtle’s operations have incurred losses and generated negative cash flow from operations and there is no assurance that Myrtle’s operations will become profitable in the future, which would have a negative impact on our results of operations, cash flows and financial condition.

We have incurred significant debt as a result of the acquisitions of Myrtle and RCHI, portions of which are due on demand.

We currently have, and will likely continue to have, a substantial amount of indebtedness. As of September 30, 2024, we had total debt outstanding of $31,565, including promissory notes totaling $22,972 that were issued to RHI in connection with the acquisitions of Myrtle and RCHI. Our indebtedness could, among other things, make it more difficult for us to satisfy our debt and other obligations, require us to use a large portion of our cash flow from operations to repay and service our debt or otherwise create liquidity problems, limit our flexibility to adjust to market conditions and place us at a competitive disadvantage. Restrictive covenants in the agreements governing our indebtedness may adversely affect us.

Our ability to meet our obligations depends on our future performance and capital raising activities, which will be affected by financial, business, economic and other factors, many of which are beyond our control. If our cash flow and capital resources prove inadequate to allow us to pay the principal and interest on our debt and meet our other obligations, including debt covenants, we could face substantial liquidity problems and might be required to dispose of material assets or operations, restructure or refinance our debt, which we may be unable to do on acceptable terms, and forego attractive business opportunities. In addition, the terms of our existing or future debt agreements may restrict us from pursuing any of these alternatives.

Our results of operations may be adversely affected if the Patient Protection and Affordable Care Act (“ACA”) is repealed, replaced or otherwise changed.

The ACA has increased the number of people with health care insurance. It also has reduced Medicare and Medicaid reimbursements. Numerous proposals continue to be discussed to repeal, amend or replace the law. We cannot predict whether any such repeal, amend or replace proposals, or any parts of them, will become law and, if they do, what their substance or timing will be. There is uncertainty whether, when and how the ACA may be changed, what alternative provisions, if any, will be enacted, the timing of enactment and implementation of any alternative provisions and the impact of any alternative provisions on providers as well as other healthcare industry participants. Efforts to repeal or change the ACA or implement other initiatives intended to reform healthcare delivery and financial systems may have an adverse effect on our business and results of operations.

General economic conditions.

Much healthcare spending is discretionary and can be significantly impacted by economic downturns. When patients are experiencing personal financial difficulties or have concerns about general economic conditions, they may choose to defer or forego elective surgeries and other non-emergent procedures, which are generally more profitable lines of business for hospitals. In addition, employers may impose or patients may select a high-deductible insurance plan or no insurance at all, which increases a hospital’s dependence on self-pay revenue. Moreover, a greater number of uninsured patients may seek care in our emergency rooms.

We are unable to quantify the specific impact of current or recent economic conditions on our business, however, we believe that the economic conditions in the service areas in which our hospitals operate may have an adverse impact on our operations. Such impact can be expected to continue to affect not only the healthcare decisions of our patients and potential patients but could also have an adverse impact on the solvency of certain managed care providers and other counterparties to transactions with us.

Healthcare plans have taken steps to control the utilization and reimbursement of healthcare services.

We also face efforts by non-governmental third-party payers, including healthcare plans, to reduce utilization and reimbursement for healthcare services.

The healthcare industry has experienced a trend of consolidation among healthcare insurance plans and payers, resulting in fewer but larger insurance plans with significant bargaining power to negotiate fee arrangements with healthcare providers. These healthcare plans, and independent physician associations, may demand that providers accept discounted fee structures or assume all or a portion of the financial risk associated with providing services to their members through capped payment arrangements. There are also an increasing number of patients enrolling in consumer driven products and high deductible plans that involve greater patient cost-sharing.

The increased consolidation among healthcare plans and payers increases the potential adverse impact of not being, or ceasing to be, a contracted provider with any such insurer. The ACA includes provisions, including ones regarding the creation of healthcare exchanges, which may encourage healthcare insurance plans to increase exclusive contracting.

We expect continuing efforts to reduce reimbursements, to impose more stringent cost controls and to reduce utilization of services. These efforts, including future changes in third-party payer rules, practices and policies or ceasing to be a contracted provider to many healthcare plans, have had and may continue to have a material adverse effect on our business.

Some of our operations are subject to federal and state laws prohibiting “kickbacks” and other laws designed to prohibit payments for referrals and eliminate healthcare fraud.

Federal and state anti-kickback and similar laws prohibit payment, or offers of payment, in exchange for referrals of products and services for which reimbursement may be made by Medicare or other federal and state healthcare programs. Some state laws contain similar prohibitions that apply without regard to the payer of reimbursement for the services. Under a federal statute, known as the “Stark Law” or “self-referral” prohibition, physicians, subject to certain exceptions, are prohibited from referring their Medicare or Medicaid program patients to providers with which the physicians or their immediate family members have a financial relationship, and the providers are prohibited from billing for services rendered in violation of Stark Law referral prohibitions. Violations of the federal Anti-Kickback Law and Stark Law may be punished by civil and criminal penalties, and/or exclusion from participation in federal health care programs, including Medicare and Medicaid. States may impose similar penalties. The ACA significantly strengthened provisions of the Federal False Claims Act and Anti-Kickback Law provisions, and other health care fraud provisions, leading to the possibility of greatly increased qui tam suits by private citizen “relators” for perceived violations of these laws. There can be no assurance that our activities will not come under the scrutiny of regulators and other government authorities or that our practices will not be found to violate applicable laws, rules and regulations or prompt lawsuits by private citizen relators under federal or state false claims laws.

Federal officials responsible for administering and enforcing the healthcare laws and regulations have made a priority of eliminating healthcare fraud. For example, the ACA includes significant new fraud and abuse measures, including required disclosures of financial arrangements with physician customers, lower thresholds for violations and increased potential penalties for violations. Federal funding available for combating health care fraud and abuse generally has increased. While we seek to conduct our business in compliance with all applicable laws and regulations, many of the laws and regulations applicable to our business, particularly those relating to billing and reimbursement of services and those relating to relationships with physicians, hospitals and patients, contain language that has not been interpreted by courts. We must rely on our interpretation of these laws and regulations based on the advice of our counsel and regulatory or law enforcement authorities may not agree with our interpretation of these laws and regulations and may seek to enforce legal remedies or penalties against us for violations.

From time to time we may need to change our operations, particularly pricing or billing practices, in response to changing interpretations of these laws and regulations, or regulatory or judicial determinations with respect to these laws and regulations. These occurrences, regardless of their outcome, could damage our reputation and harm important business relationships that we have with healthcare providers, payers and others. Furthermore, if a regulatory or judicial authority finds that we have not complied with applicable laws and regulations, we would be required to refund amounts that were billed and collected in violation of such laws and regulations. In addition, we may voluntarily refund amounts that were alleged to have been billed and collected in violation of applicable laws and regulations. In either case, we could suffer civil and criminal damages, fines and penalties, exclusion from participation in governmental healthcare programs and the loss of licenses, certificates and authorizations necessary to operate our business, as well as incur liabilities from third-party claims, all of which could harm our operating results and financial condition.

Moreover, regardless of the outcome, if we or physicians or other third parties with whom we do business are investigated by a regulatory or law enforcement authority we could incur substantial costs, including legal fees, and our management may be required to divert a substantial amount of time to an investigation.

To enhance compliance with applicable health care laws, and mitigate potential liability in the event of noncompliance, regulatory authorities, such as the OIG, have recommended the adoption and implementation of a comprehensive health care compliance program that generally contains the elements of an effective compliance and ethics program described in Section 8B2.1 of the United States Sentencing Commission Guidelines Manual, and for many years the OIG has made available a model compliance program. In addition, certain states require that health care providers that engage in substantial business under the state Medicaid program have a compliance program that generally adheres to the standards set forth in the Model Compliance Program. Also, under the ACA, HHS will require suppliers, such as the Company, to adopt, as a condition of Medicare participation, compliance programs that meet a core set of requirements. While we have adopted, or are in the process of adopting, healthcare compliance and ethics programs that generally incorporate the OIG’s recommendations, and training our applicable employees in such compliance, having such a program can be no assurance that we will avoid any compliance issues.

We conduct our business in a heavily regulated industry and changes in regulations or violations of regulations could, directly or indirectly, harm our operating results and financial condition.

The healthcare industry is highly regulated and there can be no assurance that the regulatory environment in which we operate will not change significantly and adversely in the future. Areas of the regulatory environment that may affect our ability to conduct business include, without limitation:

	●	federal and state laws applicable to billing and claims payment;
	●	federal and state laws relating to licensure;
	●	federal and state anti-kickback laws;
	●	federal and state false claims laws;
	●	federal and state self-referral and financial inducement laws, including the federal physician anti-self-referral law, or the Stark Law;
	●	coverage and reimbursement levels by Medicare and other governmental payors and private insurers;
	●	HIPAA, along with the revisions to HIPAA as a result of the Health Information Technology for Economic and Clinical Health Act (“HITECH”), and analogous state laws;
	●	federal and state regulation of privacy, security, electronic transactions and identity theft;
	●	federal, state and local laws governing the handling, transportation and disposal of medical and hazardous waste;
	●	Occupational Safety and Health Administration rules and regulations;
	●	changes to laws, regulations and rules as a result of the ACA; and
	●	changes to other federal, state and local laws, regulations and rules, including tax laws.

These laws and regulations are extremely complex and in many instances, there are no significant regulatory or judicial interpretations of these laws and regulations. Any determination that we have violated these laws or regulations, or the public announcement that we are being investigated for possible violations of these laws or regulations, could harm our operating results and financial condition. In addition, a significant change in any of these laws or regulations may require us to change our business model in order to maintain compliance with these laws or regulations, which could harm our operating results and financial condition.

Failure to comply with complex federal and state laws and regulations related to submission of claims for services can result in significant monetary damages and penalties and exclusion from the Medicare and Medicaid programs.

We are subject to extensive federal and state laws and regulations relating to the submission of claims for payment for services, including those that relate to coverage of our services under Medicare, Medicaid and other governmental health care programs, the amounts that may be billed for our services and to whom claims for services may be submitted.

Our failure to comply with applicable laws and regulations could result in our inability to receive payment for our services or result in attempts by third-party payers, such as Medicare and Medicaid, to recover payments from us that have already been made. Submission of claims in violation of certain statutory or regulatory requirements can result in penalties, including substantial civil money penalties for each item or service billed to Medicare in violation of the legal requirement, and exclusion from participation in Medicare and Medicaid. Government authorities may also assert that violations of laws and regulations related to submission or causing the submission of claims violate the federal False Claims Act (“FCA”) or other laws related to fraud and abuse, including submission of claims for services that were not medically necessary. Violations of the FCA could result in enormous economic liability. The FCA provides that all damages are trebled. For example, we could be subject to FCA liability if it was determined that the services we provided were not medically necessary and not reimbursable, particularly if it were asserted that we contributed to the physician’s referrals of unnecessary services to us. It is also possible that the government could attempt to hold us liable under fraud and abuse laws for improper claims submitted by an entity for services that we performed if we were found to have knowingly participated in the arrangement that resulted in submission of the improper claims.

Our facilities are subject to potential claims for professional liability, including existing or potential claims based on the acts or omissions of third parties, which claims may not be covered by insurance.

Our facilities are subject to potential claims for professional liability in connection with their operations, as well as potentially acquired or discontinued operations. To cover such claims, professional malpractice liability insurance and general liability insurance are maintained in amounts believed to be sufficient for operations, although some claims may exceed the scope or amount of the coverage in effect. The assertion of a significant number of claims, either within a self-insured retention (deductible) or individually or in the aggregate in excess of available insurance, could have a material adverse effect on our results of operations or financial condition. Premiums for professional liability insurance have historically been volatile and we cannot assure you that professional liability insurance will continue to be available on terms acceptable to us, if at all. The operations of hospitals also depend on the professional services of physicians and other trained healthcare providers and technicians in the conduct of their respective operations. There can be no assurance that any legal action stemming from the act or omission of a third party provider of healthcare services would not be brought against one of our hospitals, resulting in significant legal expenses in order to defend against such legal action or to obtain a financial contribution from the third party whose acts or omissions occasioned the legal action.

Our success depends on our ability to attract and retain qualified healthcare professionals. A shortage of qualified healthcare professionals could weaken our ability to deliver healthcare services.

Our operations are dependent on the efforts, ability and experience of healthcare professionals, such as physicians, nurses, therapists, pharmacists and lab technicians. Each facility’s success has been, and will continue to be, influenced by its ability to attract and retain these skilled employees. A shortage of healthcare professionals, the loss of some or all of its key employees or the inability to attract or retain sufficient numbers of qualified healthcare professionals could cause the operating performance of one or more of our facilities to decline.

Our operations are dependent on the local economies and the surrounding areas in which they operate and are concentrated in Tennessee. A significant deterioration in those economies could cause a material adverse effect on our businesses.

Each rural facility operation is dependent upon the local economy where it is located. A significant deterioration in that economy would negatively impact the demand for the facility’s services, as well as the ability of patients and other payers to pay for service as rendered.

Our net revenues are particularly sensitive to regulatory and economic changes in Tennessee. Any change in the current demographic, economic, competitive or regulatory conditions in the state could have an adverse effect on our business, financial condition or results of operations. Changes to the Medicaid program or other health care laws or regulations in Tennessee could also have an adverse effect.

A significant portion of our net revenues is dependent on Medicare and Medicaid payments and possible reductions in Medicare or Medicaid payments or the implementation of other measures to reduce reimbursements may reduce our revenues.

A significant portion of our net revenues is derived from the Medicare and Medicaid programs, which are highly regulated and subject to frequent and substantial changes. Previous legislative changes have resulted in, and future legislative changes may result in, limitations on and reduced levels of payment and reimbursement for a substantial portion of hospital procedures and costs.

Future healthcare legislation or other changes in the administration or interpretation of governmental healthcare programs may have a material adverse effect on our consolidated business, financial condition, results of operations or prospects.

Failure to timely or accurately bill for our services could have a material adverse effect on our business.

Billing for medical services is extremely complicated and is subject to extensive and non-uniform rules and administrative requirements. Depending on the billing arrangement and applicable law, we bill various payers, such as patients, insurance companies, Medicare, Medicaid, physicians, hospitals and employer groups. Changes in laws and regulations could increase the complexity and cost of our billing process. Additionally, auditing for compliance with applicable laws and regulations as well as internal compliance policies and procedures adds further cost and complexity to the billing process.

Missing, incomplete, or incorrect information adds complexity to and slows the billing process, creates backlogs of unbilled services, and generally increases the aging of accounts receivable and bad debt expense. Failure to timely or correctly bill may lead to our not being reimbursed for our services or an increase in the aging of our accounts receivable, which could adversely affect our results of operations and cash flows. Failure to comply with applicable laws relating to billing or even having to pay back amounts incorrectly billed and collected could lead to various penalties, including: (1) exclusion from participation in CMS and other government programs; (2) asset forfeitures; (3) civil and criminal fines and penalties; and (4) the loss of various licenses, certificates and authorizations necessary to operate our business, any of which could have a material adverse effect on our results of operations or cash flows.

There have been times when our accounts receivable have increased at a greater rate than revenue growth and, therefore, have adversely affected our cash flows from operations. We have taken steps to implement systems and processing changes intended to improve billing procedures and related collection results. However, we cannot assure that our ongoing assessment of accounts receivable will not result in the need for additional provisions. Such additional provisions, if implemented, could have a material adverse effect on our operating results.

Our operations may be adversely impacted by the effects of extreme weather conditions, natural disasters such as hurricanes and earthquakes, hostilities or acts of terrorism and other criminal activities.

Our operations are always subject to adverse impacts resulting from extreme weather conditions, natural disasters, hostilities or acts of terrorism or other criminal activities. Such events may result in a temporary decline in the number of patients who seek our services or in our employees’ ability to perform their job duties. In addition, such events may temporarily interrupt our ability to provide our services. The occurrence of any such event and/or a disruption of our operations as a result may adversely affect our results of operations.

Increased competition, including price competition, could have a material adverse impact on our net revenues and profitability.

We operate in a business that is characterized by intense competition. Our major competitors include large national hospitals that possess greater name recognition, larger customer bases, and significantly greater financial resources and employ substantially more personnel than we do. Many of our competitors have long established relationships. Although BSF operates in a community where it is currently the only general acute care hospital, it faces substantial competition from other hospitals in the region. Although these competing hospitals may be many miles away, patients in these markets may travel to these competing hospitals as a result of local physician referrals, managed care plan incentives or personal choices. We cannot assure you that we will be able to compete successfully with such entities in the future.

The healthcare business is intensely competitive both in terms of price and service. Pricing of services is often one of the most significant factors used by patients, health care providers and third-party payers in selecting a provider. As a result of the healthcare industry undergoing significant consolidation, larger providers are able to increase cost efficiencies. This consolidation results in greater price competition. We may be unable to increase cost efficiencies sufficiently, if at all, and as a result, our net earnings and cash flows could be negatively impacted by such price competition. We may also face competition from companies that do not comply with existing laws or regulations or otherwise disregard compliance standards in the industry. Additionally, we may also face changes in fee schedules, competitive bidding for services or other actions or pressures reducing payment schedules as a result of increased or additional competition. Additional competition, including price competition, could have a material adverse impact on our net revenues and profitability.

The effects of the coronavirus pandemic have had, and a reoccurrence would have, a material adverse impact on our business, results of operations and financial condition.

Demand for services at our hospitals was substantially impacted by the COVID-19 pandemic. If the pandemic were to reoccur, we would expect to incur lower net revenues and incur significant losses. Accordingly, additional capital would be required.

The coronavirus pandemic and the steps taken by governments to seek to reduce its spread had a severe impact on the economy and the health care industry in particular. Hospitals were especially affected. Small rural hospitals, such as ours, may be overwhelmed by patients if the pandemic were to reoccur in their local areas. Staffing costs, and concerns due to the potential exposure to infections, would most likely increase, as well as the costs of needed medical supplies necessary to keep the hospitals open. Doctors and patients would likely defer elective procedures and other health care services. Travel bans, social distancing and quarantines could limit access to our facilities. Business closings and layoffs in our local areas would result in the loss of insurance and adversely affect demand for our services, as well as the ability of patients and other payers to pay for services as rendered.

Continued supply chain shortages could increase our costs of operations or adversely affect our results of operations.

Shortages, delays, increased costs, and governmental restrictions arising from the COVID-19 pandemic or arising out of increased demand as the pandemic wanes have disrupted and may continue to disrupt the ability of our facilities to procure items used in their operations. A severe inability to obtain such items or substantially increased costs for the items could have an adverse effect on our results of operations if we are unable to pass such costs along to patients.

Sustained inflation could increase our costs of operations.

The healthcare industry is very labor intensive and salaries and benefits are subject to inflationary pressures, as are supply and other costs. Furthermore, we are unable to predict whether recent inflationary spikes, which were initially thought to be transitory and due to pandemic recovery related demand, labor shortages in selected markets, and supply chain issues, will continue for an extended period of time. Substantially increased costs of personnel, goods, and services could have an adverse effect on our results of operations if we are unable to pass such costs along to patients. The concentration of our patients in persons for whom the cost of treatment is paid for under government programs could substantially limit our ability to pass through such costs.

Failure to maintain the security of patient-related information or compliance with security requirements could damage the Company’s reputation with patients and cause it to incur substantial additional costs and to become subject to litigation.

Pursuant to HIPAA and certain similar state laws, we must comply with comprehensive privacy and security standards with respect to the use and disclosure of protected health information. Under the HITECH amendments to HIPAA, HIPAA was expanded to require certain data breach notifications, to extend certain HIPAA privacy and security standards directly to business associates, to heighten penalties for noncompliance and to enhance enforcement efforts. If the Company does not comply with existing or new laws and regulations relating to protecting the privacy and security of personal or health information, it could be subject to monetary fines, civil penalties or criminal sanctions.

The Company receives certain personal and financial information about its patients. In addition, the Company depends upon the secure transmission of confidential information over public networks, including information permitting cashless payments. While we take reasonable and prudent steps to protect this information, a compromise in the Company’s security systems that results in patient personal information being obtained by unauthorized persons or the Company’s failure to comply with security requirements for financial transactions could adversely affect the Company’s reputation with its customers and others, as well as the Company’s results of operations, financial condition and liquidity. It could also result in litigation against the Company or the imposition of penalties.

Failure of the Company to comply with emerging electronic transmission standards could adversely affect our business.

The failure of our IT systems to keep pace with technological advances may significantly reduce our revenues or increase our expenses. Public and private initiatives to create healthcare information technology (“HCIT”) standards and to mandate standardized clinical coding systems for the electronic exchange of clinical information could require costly modifications to our existing HCIT systems. While we do not expect HCIT standards to be adopted or implemented without adequate time to comply, if we fail to adopt or delay in implementing HCIT standards, we could lose customers and business opportunities.

Compliance with the HIPAA security regulations and privacy regulations may increase the Company’s costs.

The HIPAA privacy and security regulations, including the expanded requirements under HITECH, establish comprehensive federal standards with respect to the use and disclosure of protected health information by health plans, healthcare providers and healthcare clearinghouses, in addition to setting standards to protect the confidentiality, integrity and security of protected health information. The regulations establish a complex regulatory framework on a variety of subjects, including:

	●	the circumstances under which the use and disclosure of protected health information are permitted or required without a specific authorization by the patient, including but not limited to treatment purposes, activities to obtain payments for the Company’s services, and its healthcare operations activities;
	●	a patient’s rights to access, amend and receive an accounting of certain disclosures of protected health information;
	●	the content of notices of privacy practices for protected health information;
	●	administrative, technical and physical safeguards required of entities that use or receive protected health information; and
	●	the protection of computing systems maintaining Electronic Personal Health Information (“ePHI”).

The Company has implemented policies and procedures related to compliance with the HIPAA privacy and security regulations, as required by law. The privacy and security regulations establish a “floor” and do not supersede state laws that are more stringent. Therefore, the Company is required to comply with both federal privacy and security regulations and varying state privacy and security laws. In addition, for healthcare data transfers from other countries relating to citizens of those countries, the Company may also be required to comply with the laws of those other countries. The federal privacy regulations restrict the Company’s ability to use or disclose patient identifiable data, without patient authorization, for purposes other than payment, treatment or healthcare operations (as defined by HIPAA), except for disclosures for various public policy purposes and other permitted purposes outlined in the privacy regulations. HIPAA, as amended by HITECH, provides for significant fines and other penalties for wrongful use or disclosure of protected health information in violation of the privacy and security regulations, including potential civil and criminal fines and penalties. Due to the enactment of HITECH and an increase in the amount of monetary financial penalties, government enforcement has also increased. It is not possible to predict what the extent of the impact on business will be, other than heightened scrutiny and emphasis on compliance. If the Company does not comply with existing or new laws and regulations related to protecting the privacy and security of health information it could be subject to significant monetary fines, civil penalties or criminal sanctions. In addition, other federal and state laws that protect the privacy and security of patient information may be subject to enforcement and interpretations by various governmental authorities and courts resulting in complex compliance issues. For example, the Company could incur damages under state laws pursuant to an action brought by a private party for the wrongful use or disclosure of confidential health information or other private personal information.

Failure in the Company’s information technology systems or delays or failures in the development and implementation of updates or enhancements to those systems could significantly delay billing and otherwise disrupt the Company’s operations or patient relationships.

The Company’s business and patient relationships depend, in part, on the continued performance of its information technology systems. Despite network security measures and other precautions, the Company’s information technology systems are potentially vulnerable to physical or electronic break-ins, computer viruses and similar disruptions. Sustained system failures or interruption of the Company’s systems in one or more of its operations could disrupt the Company’s ability to conduct its business. Breaches with respect to protected health information could result in violations of HIPAA and analogous state laws, and risk the imposition of significant fines and penalties. Failure of the Company’s information technology systems could adversely affect the Company’s business, profitability and financial condition.

Health care reform and related programs (e.g. Health Insurance Exchanges), changes in government payment and reimbursement systems, or changes in payer mix, including an increase in capitated reimbursement mechanisms and evolving delivery models, could have a material adverse impact on the Company’s net revenues, profitability and cash flow.

Our services are billed to private patients, Medicare, Medicaid, commercial clients, managed care organizations (“MCOs”) and third-party insurance companies. Bills may be sent to different payers depending on the medical insurance benefits of a particular patient. Increases in the percentage of services billed to government and managed care payers could have an adverse impact on the Company’s net revenues.

A portion of the third-party insurance fee-for-service revenues are collectible from patients in the form of deductibles, copayments and coinsurance. As patient cost-sharing increases, collectability may be impacted.

In addition, Medicare and Medicaid and private insurers have increased their efforts to control the cost, utilization and delivery of health care services. Measures to regulate health care delivery have resulted in reduced prices, added costs and decreased utilization as well as increased complexity and new regulatory and administrative requirements. Changes to, or repeal of, the ACA, the health care reform legislation passed in 2010, also may continue to affect coverage, reimbursement and utilization of services, as well as administrative requirements, in ways that are currently unpredictable.

The Company expects efforts to impose reduced reimbursement, more stringent payment policies and utilization and cost controls by government and other payers to continue. If the Company cannot offset additional reductions in the payments it receives for its services by reducing costs, increasing the number of patients treated and/or introducing new procedures, it could have a material adverse impact on the Company’s net revenues, profitability and cash flows.

As an employer, health care reform legislation also contains numerous regulations that will require the Company to implement significant process and record keeping changes to be in compliance. These changes increase the cost of providing healthcare coverage to employees and their families. Given the limited release of regulations to guide compliance, as well as potential changes to or repeal of the ACA, the exact impact to employers including the Company is uncertain.

Adverse results in material litigation matters or governmental inquiries could have a material adverse effect upon the Company’s business and financial condition.

The Company may become subject in the ordinary course of business to material legal action related to, among other things, professional liability, contracts and employee-related matters, as well as inquiries and requests for information from governmental agencies and bodies and Medicare or Medicaid payors requesting comment and/or information on allegations of billing irregularities, billing and pricing arrangements, privacy practices and other matters that are brought to their attention through billing audits or third parties. The healthcare industry is subject to substantial Federal and state government regulation and audit. Legal actions could result in substantial monetary damages as well as damage to the Company’s reputation with customers, which could have a material adverse effect upon its business.

ITEM 5. OTHER INFORMATION

During the quarter ended September 30, 2024, no director or officer adopted or terminated any Rule 10b5-1 trading arrangement or non-Rule 10b5-1 trading arrangement, as each term is defined in Item 408(a) of Regulation S-K.

ITEM 6. EXHIBITS

The following exhibits are filed as part of, or incorporated by reference into, this Report.

Exhibit No.	Description	Included	Form	Referenced Exhibit	Filing Date
10.1	Corporate Development Advisory Agreement dated July 25, 2024 with C L Talent Inc.	Filed Herewith

10.2	Advisory Agreement July 25, 2024 with J.H. Darbie & Co., Inc.	Filed Herewith

10.3	Engagement of J.H. Darbie & Co., Inc. dated July 25, 2024	Filed Herewith

10.4	Services Agreement July 25, 2024 with Mark White	Filed Herewith

10.5	Amendment No. 1 dated August 13, 2024 to the Strata Purchase Agreement dated October 13, 2023 with ClearThink Capital Partners, LLC	Filed Herewith

31.1	Certification of the Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.	Filed Herewith

31.2	Certification of the Principal Financial and Accounting Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.	Filed Herewith

32.1#	Certification of the Company’s Principal Executive Officer and Principal Financial and Accounting Officer pursuant to 18 U.S.C. Section 1350.	Furnished Herewith

101.INS	Inline XBRL Instance Document.	Filed Herewith

101.SCH	Inline XBRL Taxonomy Extension Schema Document.	Filed Herewith

101.CAL	Inline XBRL Taxonomy Extension Calculation Linkbase Document.	Filed Herewith

101.DEF	Inline XBRL Taxonomy Extension Definition Linkbase Document.	Filed Herewith

101.LAB	Inline XBRL Taxonomy Extension Label Linkbase Document.	Filed Herewith

101.PRE	Inline XBRL Taxonomy Extension Presentation Linkbase Document.	Filed Herewith

104	Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).	Filed Herewith

#	This certification is deemed not filed for purposes of Section 18 of the Exchange Act or otherwise subject to the liability of that section, nor shall it be deemed incorporated by reference into any filing under the Securities Act or the Exchange Act.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	FOXO TECHNOLOGIES INC.

Date: November 19, 2024	/s/ Mark White
	Name:	Mark White
	Title:	Interim Chief Executive Officer
		(Principal Executive Officer)

Date: November 19, 2024	/s/ Martin Ward
	Name:	Martin Ward
	Title:	Interim Chief Financial Officer
		(Principal Financial and Accounting Officer)