FOXO Technologies (FOXO) - 2024 Q1 - Quarterly Report

Financial Performance - Total revenue for the three months ended March 31, 2024, was $7, a decrease of 46% from $13 in the same period in 2023[167] - Total revenue for FOXO Labs decreased by 43% from $7,000 in Q1 2023 to $4,000 in Q1 2024, primarily due to lower royalty revenue[174] - Total revenue for FOXO Life fell by 50% from $6,000 in Q1 2023 to $3,000 in Q1 2024, driven by a decline in life insurance commissions[176] - Adjusted EBITDA improved from $(3,859,000) in Q1 2023 to $(807,000) in Q1 2024, reflecting a reduction in operating losses[181] Expenses and Losses - Research and development expenses were $165 for the three months ended March 31, 2024, down 47% from $309 in the same period in 2023[168] - Selling, general and administrative expenses decreased by $5,344, or 84%, to $988 for the three months ended March 31, 2024, compared to $6,332 in the same period in 2023[170] - Net loss improved to $1,504 for the three months ended March 31, 2024, an 80% reduction from a net loss of $7,639 in the same period in 2023[172] - Segment losses for FOXO Labs improved by 47%, decreasing from $290,000 in Q1 2023 to $154,000 in Q1 2024, attributed to reduced employee-related expenses[175] - Segment losses for FOXO Life decreased significantly by 99%, from $647,000 in Q1 2023 to $5,000 in Q1 2024, mainly due to lower employee-related expenses and a prior loss on the sale of FOXO Life Insurance Company[177] Cash Flow and Liquidity - Cash and cash equivalents decreased from $38,000 as of December 31, 2023, to $3,000 as of March 31, 2024, indicating liquidity challenges[182] - Net cash provided by operating activities was $1,716,000 in Q1 2024, a significant improvement of 151% compared to cash used of $3,360,000 in Q1 2023[200] - Investing activities in Q1 2024 involved $2,122,000 for acquiring an epigenetic software APP, with no cash used in Q1 2023[201] - Financing activities generated $371,000 in Q1 2024 from promissory notes issued to ClearThink, with no financing activities reported in Q1 2023[203] Capital and Funding Needs - The company anticipates needing additional capital to fund operations and execute its business strategy, as current revenue is insufficient for the next twelve months[183] - The company has a working capital deficit of $16,810 thousand and an accumulated deficit of $14,937 thousand as of March 31, 2024[210] - Total contractual obligations amount to $16,715 thousand, with $7,755 thousand due within one year[206] - The company has $3 thousand in available cash and cash equivalents as of March 31, 2024[210] Compliance and Regulatory Issues - The company failed to make payments on the Senior PIK Notes, which constitutes an event of default, and is in discussions with note holders for amendments[213] - The company has paid $65,000 towards a delinquent balance owed to NYSE and still owes $146,000[221] - The company reported a stockholders' deficit of $30 thousand as of March 31, 2023, and has been advised to submit a compliance plan to regain NYSE listing standards by December 12, 2024[222] - The company is subject to potential delisting from NYSE due to noncompliance with listing standards[218] - The company acknowledges substantial doubt about its ability to continue as a going concern without securing additional capital and generating sufficient revenue[223] Strategic Focus and Initiatives - FOXO Labs anticipates recognizing revenue from sales of Bioinformatics Services and commercialization of research activities, including potential AI platforms[156] - The company paused sales of new life insurance products to conserve cash resources and focus on FOXO Labs[147] - FOXO entered into a Letter Agreement with KR8 to develop a Direct-to-Consumer APP utilizing AI technology for epigenetic biomarker applications[148] - The company has paused the development of the Underwriting Report and Longevity Report due to cash resource constraints[145] - FOXO Labs is shifting its focus to Bioinformatics Services as a primary offering, moving away from its historical ancillary role[158] - The company intends to pursue additional avenues to capitalize operations and commercialize products to generate revenue[212]