FOXO 10-Q
Foxo Technologies Inc. (FOXO)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
(Mark One)
| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For
the quarterly period ended
or
| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from __________ to __________
Commission
File Number:
(Exact name of registrant as specified in its charter)
(State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification No.) | |
| (Address of principal executive offices) | (Zip Code) |
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
| Title of Each Class: | Trading Symbol(s) | Name of Each Exchange on Which Registered: | ||
| N/A |
Indicate
by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days.
Indicate
by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule
405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant
was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer, “smaller reporting company” and “emerging growth company” in Rule 12b-2.
| Large accelerated filer | ☐ | Accelerated filer | ☐ | |
| ☒ | Smaller reporting company | |||
| Emerging growth company |
If
an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying
with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes
☐ No
As of August 11, 2026, there were shares of Class A common stock, par value $ per share (the “Class A Common Stock”) of the registrant issued and outstanding.
FOXO TECHNOLOGIES INC.
FORM 10-Q FOR THE QUARTERLY PERIOD ENDED June 30, 2026
TABLE OF CONTENTS
| 2 |
SPECIAL
NOTE REGARDING FORWARD-LOOKING STATEMENTS AND OTHER INFORMATION
CONTAINED IN THIS REPORT
This Quarterly Report on Form 10-Q, or this Report, and the documents incorporated herein by reference contain forward-looking statements which include, without limitation, statements regarding estimates and forecasts of financial and performance metrics, projections of net revenues and operating results from our Healthcare, Life Science Services and Labs segments, reimbursement rates and regulatory developments applicable to our healthcare operations, the potential benefits and growth prospects of our current subsidiaries and any future acquisitions, the potential success of our capital-raising and strategic acquisition initiatives, our ability to continue as a going concern, realization of the value of other aspects of our business identified in this Report, as well as other reports that we file from time to time with the Securities and Exchange Commission. Any statements about our business, financial results, financial condition and operations contained in this Report that are not statements of historical fact may be deemed to be forward-looking statements. These forward-looking statements represent our intentions, plans, expectations, assumptions and beliefs about future events and are subject to risks, uncertainties and other factors.
Without limiting the foregoing, the words “believes,” “anticipates,” “expects,” “intends,” “plans,” “projects,” or similar expressions are intended to identify forward-looking statements. 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 other events occur in the future. Our actual results could differ materially from those expressed or implied by these forward-looking statements as a result of various factors, including the risk factors described in Part I., Item 1A, “Risk Factors,” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2025, which was filed with the U.S. Securities and Exchange Commission (the “SEC”) on April 15, 2026.
Unless expressly indicated or the context requires otherwise, the terms “FOXO,” the “Company,” “we,” “us” or “our” in this Quarterly Report refer to FOXO Technologies Inc., a Delaware corporation, and, where appropriate, its subsidiaries.
| 3 |
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
FOXO technologies inc. and subsidiaries
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
| June 30, | December 31, | |||||||
| 2026 | 2025 | |||||||
| Assets | ||||||||
| Current assets | ||||||||
| Cash and cash equivalents | $ | $ | ||||||
| Accounts receivable, net | ||||||||
| Inventory and supplies | ||||||||
| Prepaid expenses | ||||||||
| Other current assets | ||||||||
| Total current assets | ||||||||
| Property and equipment, net | ||||||||
| Intangible assets, net | ||||||||
| Goodwill | ||||||||
| Right-of-use assets | ||||||||
| Total assets | $ | $ | ||||||
| Liabilities and Stockholders’ Equity | ||||||||
| Current liabilities | ||||||||
| Accounts payable | $ | $ | ||||||
| Accrued expenses | ||||||||
| Notes payable | ||||||||
| Related parties’ notes and loans payable | ||||||||
| Other loans | ||||||||
| Related parties’ payables and accrued expenses | ||||||||
| Right-of-use lease obligations | ||||||||
| Total current liabilities | ||||||||
| Contingent purchase price consideration | ||||||||
| Right-of-use lease obligations, non-current | ||||||||
| Medicare cost report settlement payables | ||||||||
| Total liabilities | ||||||||
| Commitments and contingencies (Note 14) | ||||||||
| Stockholders’ equity (deficit) | ||||||||
| Series A preferred stock, $ par value and $ stated value per share; shares authorized, and shares issued and outstanding as of June 30, 2026 and December 31, 2025, respectively | ||||||||
| Series B preferred stock, $ par value and $ stated value per share; shares authorized, shares issued and outstanding as of June 30, 2026 and December 31, 2025 | ||||||||
| Series C preferred stock, $ par value and $ stated value per share; shares authorized, shares issued and outstanding as of June 30, 2026 and December 31, 2025 | ||||||||
| Series D preferred stock, $ par value and $ stated value per share; shares authorized, and shares issued and outstanding as of June 30, 2026 and December 31, 2025, respectively | ||||||||
| Series E preferred stock, $ par value and $ stated value per share; shares authorized, shares issued and outstanding as of June 30, 2026 and December 31, 2025 | ||||||||
| Class A common stock, $ par value, shares authorized, and shares issued and outstanding as of June 30, 2026 and December 31, 2025, respectively | ||||||||
| Additional paid-in-capital | ||||||||
| Accumulated deficit | ( | ) | ( | ) | ||||
| Total FOXO’s stockholders’ equity | ||||||||
| Noncontrolling interest | ( | ) | ( | ) | ||||
| Total stockholders’ equity | ||||||||
| Total liabilities and stockholders’ equity | $ | $ | ||||||
See Accompanying Notes to Unaudited Condensed Consolidated Financial Statements
| 4 |
Foxo Technologies INc. and subsidiaries
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||
| Net revenues | $ | $ | $ | $ | ||||||||||||
| Operating expenses: | ||||||||||||||||
| Direct costs of revenues | ||||||||||||||||
| Research and development | ||||||||||||||||
| Management contingent share plan (forfeiture) expense | ( | ) | ( | ) | ||||||||||||
| Selling, general and administrative expenses | ||||||||||||||||
| Total operating expenses | ( | ) | ||||||||||||||
| Income (loss) from operations | ( | ) | ||||||||||||||
| Change in fair value of warrant liabilities | ||||||||||||||||
| Gain from extinguishment of Senior PIK Notes | ||||||||||||||||
| Interest expense | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Gain from legal settlements, net | ||||||||||||||||
| Other non-operating expense, net | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Total non-operating expenses, net | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Income (loss) before income taxes | ( | ) | ( | ) | ||||||||||||
| Provision for income taxes | ||||||||||||||||
| Net income (loss), including noncontrolling interest | ( | ) | ( | ) | ||||||||||||
| Net loss attributable to noncontrolling interest | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Net income (loss) attributable to FOXO | $ | $ | ( | ) | $ | $ | ( | ) | ||||||||
| Declared and deemed dividends from preferred stock, including issuances and anti-dilution provisions thereof and triggers of down-round provisions of Assumed Warrants | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Net income (loss) to common stockholders | ( | ) | ( | ) | ||||||||||||
| Preferred stock dividends – undeclared, net | ( | ) | ( | ) | ( | ) | ||||||||||
| Net income (loss) to common stockholders, net of preferred stock dividends – undeclared, net | $ | $ | ( | ) | $ | $ | ( | ) | ||||||||
| Net income (loss) per share of Class A Common Stock, basic | $ | $ | ( | ) | $ | $ | ( | ) | ||||||||
| Net income (loss) per share of Class A Common Stock, diluted | $ | $ | ( | ) | $ | $ | ( | ) | ||||||||
| Weighted average shares of Class A Common Stock, basic | ||||||||||||||||
| Weighted average shares of Class A Common Stock, diluted | ||||||||||||||||
See Accompanying Notes to Unaudited Condensed Consolidated Financial Statements
| 5 |
Foxo Technologies INc. and subsidiaries
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
FOR EACH OF THE QUARTERS IN THE SIX MONTHS ENDED JUNE 30, 2026 AND 2025
| Preferred Stock | Class A Common | Additional | Total FOXO | Total | ||||||||||||||||||||||||||||||||
| Stock | Stock | Paid- | Accumulated | Stockholders’ | Noncontrolling | Stockholders’ | ||||||||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | In-Capital | Deficit | Equity | Interest | Equity | ||||||||||||||||||||||||||||
| Balance, December 31, 2025 | $ | $ | $ | $ | ( | ) | $ | $ | ( | ) | ||||||||||||||||||||||||||
| Net loss to common stockholders | - | - | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||||||||
| Noncontrolling interest | - | - | ( | ) | ( | ) | ||||||||||||||||||||||||||||||
| Common stock issued for conversions of Series A Preferred Stock | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||
| Common stock issued for note payable | - | |||||||||||||||||||||||||||||||||||
| Balance, March 31, 2026 | $ | $ | $ | ( | ) | $ | $ | ( | ) | $ | ||||||||||||||||||||||||||
| Net income to common stockholders | - | - | ||||||||||||||||||||||||||||||||||
| Noncontrolling interest | - | - | ( | ) | ( | ) | ||||||||||||||||||||||||||||||
| Stock based compensation - forfeiture | - | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | |||||||||||||||||||||||||
| Common stock issued for conversions of Series A Preferred Stock | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||||||||
| Exchange of Series A Preferred Stock for notes payable | ( | ) | ( | ) | - | ( | ) | ( | ) | ( | ) | |||||||||||||||||||||||||
| Series D Preferred Stock issued in lieu of common stock for outstanding finder’s fees | - | |||||||||||||||||||||||||||||||||||
| Series E Preferred Stock declared dividends payable in common stock | - | - | ||||||||||||||||||||||||||||||||||
| Common stock issued for note payable extension | - | |||||||||||||||||||||||||||||||||||
| Deemed dividends from anti-dilution provisions of preferred stock | - | - | ||||||||||||||||||||||||||||||||||
| Common stock issued for fractional shares for reverse stock split | - | |||||||||||||||||||||||||||||||||||
| Balance, June 30, 2026 | $ | ( | ) | ( | ) | |||||||||||||||||||||||||||||||
| Preferred Stock | Class A Common | Additional | Total FOXO | Total | ||||||||||||||||||||||||||||||||
| Stock | Stock | Paid- | Accumulated | Stockholders’ | Noncontrolling | Stockholders’ | ||||||||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | In-Capital | Deficit | Equity | Interest | Equity | ||||||||||||||||||||||||||||
| Balance, December 31, 2024 | $ | $ | $ | $ | ( | ) | $ | $ | ( | ) | $ | |||||||||||||||||||||||||
| Net loss to common stockholders | - | - | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||||||||
| Noncontrolling interest | - | - | ( | ) | ( | ) | ||||||||||||||||||||||||||||||
| Stock-based compensation | - | - | ||||||||||||||||||||||||||||||||||
| Common stock issued for conversions of Series A Preferred Stock | ( | ) | ||||||||||||||||||||||||||||||||||
| Issuances of Series B Preferred Stock in exchange for Senior PIK Notes, net of finder’s fees | - | |||||||||||||||||||||||||||||||||||
| Issuances of Series C Preferred Stock for cash investments, net of finder’s fees | - | |||||||||||||||||||||||||||||||||||
| Exchanges of Series B Preferred Stock for Series C Preferred Stock | - | |||||||||||||||||||||||||||||||||||
| Common stock issued for conversions and exchanges of notes payable | - | |||||||||||||||||||||||||||||||||||
| Common stock issued under terms of notes payable | - | |||||||||||||||||||||||||||||||||||
| Common stock issuable under terms of notes payable | - | - | ||||||||||||||||||||||||||||||||||
| Common stock issued and issuable for finder’s fees | - | |||||||||||||||||||||||||||||||||||
| Shares issued under Corporate Development and Advisory Agreement | - | |||||||||||||||||||||||||||||||||||
| Common stock issued for legal settlement | - | |||||||||||||||||||||||||||||||||||
| Deemed dividends from issuances of preferred stock and triggers of down round provisions of Assumed Warrants | - | - | ||||||||||||||||||||||||||||||||||
| Balance, March 31, 2025 | $ | $ | $ | $ | ( | ) | $ | $ | ( | ) | $ | |||||||||||||||||||||||||
| Net loss to common stockholders | - | - | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||||||||
| Noncontrolling interest | - | - | ( | ) | ( | ) | ||||||||||||||||||||||||||||||
| Stock-based compensation | - | - | ||||||||||||||||||||||||||||||||||
| Common stock issued for conversions of Series A Preferred Stock | ( | ) | ||||||||||||||||||||||||||||||||||
| Issuances of Series A Preferred Stock, net of issuance costs | - | |||||||||||||||||||||||||||||||||||
| Issuance of Series C Preferred Stock, net of issuance costs | - | |||||||||||||||||||||||||||||||||||
| Exchanges of Series B Preferred Stock for Series C Preferred Stock | - | |||||||||||||||||||||||||||||||||||
| Common stock issued for conversions of notes payable | - | |||||||||||||||||||||||||||||||||||
| Common stock issued under terms of note payable | - | |||||||||||||||||||||||||||||||||||
| Common stock issuable for finder’s fees | - | - | ||||||||||||||||||||||||||||||||||
| Common stock issued for legal settlement | - | |||||||||||||||||||||||||||||||||||
| Common stock issued for fractional shares in reverse stock split | - | |||||||||||||||||||||||||||||||||||
| Deemed dividends from anti-dilution provisions and issuances of preferred stock | - | - | ||||||||||||||||||||||||||||||||||
| Balance, June 30, 2025 | $ | $ | $ | $ | ( | ) | $ | $ | ( | ) | $ | |||||||||||||||||||||||||
See Accompanying Notes to Unaudited Condensed Consolidated Financial Statements
| 6 |
FOXO TECHNOLOGIES INC. and subsidiaries
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
| Six Months Ended June 30, | ||||||||
| 2026 | 2025 | |||||||
| CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||
| Net income (loss) including noncontrolling interest | $ | $ | ( | ) | ||||
| Adjustments to reconcile net income (loss) to net cash used in operating activities: | ||||||||
| Depreciation and amortization | ||||||||
| Gain from extinguishment of Senior PIK Notes | ( | ) | ||||||
| Equity-based compensation, net of forfeitures | ( | ) | ||||||
| Gain on legal settlements, net | ( | ) | ||||||
| Amortization of consulting fees paid in common stock | ||||||||
| Change in fair value of warrants | ( | ) | ||||||
| Amortization of debt discounts and debt issuance costs | ||||||||
| Non-cash interest expense on right-of-use lease obligations | ||||||||
| Non-cash interest | ||||||||
| RCHI additional purchase price consideration | ||||||||
| Changes in operating assets and liabilities: | ||||||||
| Accounts receivable, net | ( | ) | ( | ) | ||||
| Inventory and supplies | ( | ) | ||||||
| Prepaid expenses | ( | ) | ||||||
| Other current assets | ( | ) | ( | ) | ||||
| Accounts payable | ||||||||
| Accrued and other liabilities, including related parties’ payables | ||||||||
| Right-of-use lease obligations | ( | ) | ( | ) | ||||
| Other liabilities | ||||||||
| Net cash used in operating activities | ( | ) | ( | ) | ||||
| CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||||
| Purchases of furniture and equipment | ( | ) | ( | ) | ||||
| Net cash used in investing activities | ( | ) | ( | ) | ||||
| CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||
| Proceeds from notes payable, net of issuance costs | ||||||||
| Proceeds from other loans | ||||||||
| Borrowings on note payable to RHI | ||||||||
| Payments on notes payable to RHI | ( | ) | ( | ) | ||||
| Payments on notes payable | ( | ) | ( | ) | ||||
| Payments on other loans | ( | ) | ( | ) | ||||
| Proceeds from issuance of preferred stock, net of issuance costs | ||||||||
| Net cash provided by financing activities | ||||||||
| Net change in cash and cash equivalents | ( | ) | ||||||
| Cash and cash equivalents at beginning of period | ||||||||
| Cash and cash equivalents at end of period | $ | $ | ||||||
See Accompanying Notes to Unaudited Condensed Consolidated Financial Statements
| 7 |
Foxo technologies inc. and subsidiaries
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Note 1 DESCRIPTION OF BUSINESS
Overview
FOXO owns and operates four principal subsidiaries.
Rennova Community Health, Inc., (“RCHI”) owns and operates Scott County Community Hospital, Inc. (“SCCH”) (d/b/a Big South Fork Medical Center (“BSF”)), a critical access-designated (“CAH”) hospital located in East Tennessee.
Myrtle Recovery Centers, Inc., (“Myrtle”) a 30-bed behavioral health facility in East Tennessee. Myrtle provides inpatient services for detox and residential treatment and outpatient services for medication assisted treatment (“MAT”) and Office-Based Opiate Treatment Facility (“OBOT”) Programs.
Vector BioSource Inc. (“Vector”) is an information, data and biospecimen sourcing provider serving the biotechnology, clinical research and pharmaceutical research industries.
FOXO Labs, Inc. (“FOXO Labs”) is a biotechnology company dedicated to improving human health and life span through the development of cutting-edge technology and product solutions for various industries.
Myrtle and RCHI were acquired in 2024 from Rennova Health, Inc. (“RHI”). Vector was acquired in September 2025.
Segments
The Company manages and classifies its business into three reportable business segments: (i) Healthcare, (ii) Life Science Services, and (iii) Labs. Myrtle, RCHI and SCCH operate under the Healthcare segment and Vector operates under the Life Science Services segment.
Recent Event
Strategic Technology License Agreement
On May 27, 2026, the Company, together with its wholly-owned subsidiary, FOXO Labs, entered into a Strategic Technology License Agreement (the “STLA”) with Jon R. Sabes, the Company’s founder, and LongevityFP Technologies, LLC, a Minnesota limited liability company controlled by Mr. Sabes (“LongevityFP Technologies”).
The
material terms of the STLA are as follows: (i) License. The Company and FOXO Labs granted LongevityFP Technologies an exclusive,
worldwide license to commercialize the Company’s Epigenetics intellectual property portfolio, including two issued U.S. patents
(U.S. Patent Nos. 11,795,495 and 11,817,214), a 13,000+ individual epigenetic dataset, proprietary machine learning models and algorithms,
and related work product and arrangements (collectively, the “Licensed IP”); (ii) Royalty. LongevityFP Technologies
will pay the Company a royalty equal to 3% of net revenues derived from commercialization of the Licensed IP, subject to an aggregate
cap of $
| 8 |
Note 2 GOING CONCERN AND MANAGEMENT’S PLAN
Under Accounting Standards Codification (“ASC”), Presentation of Financial Statements—Going Concern (Subtopic 205-40) (“ASC 205-40”), the Company has the responsibility to evaluate whether conditions and/or events raise substantial doubt about its ability to meet its future financial obligations as they become due within one year after the date that the financial statements are issued. As required by ASC 205-40, this evaluation shall initially not take into consideration the potential mitigating effects of plans that have not been fully implemented as of the date the financial statements are issued. Management has assessed the Company’s ability to continue as a going concern in accordance with the requirement of ASC 205-40.
The
Company’s history of losses requires management to critically assess its ability to continue operating as a going concern. For
the six months ended June 30, 2026 and 2025, we had net income (loss) attributable to FOXO of $
As
of the date of this report, payments for our operations in the ordinary course are not being made timely. Our total debt has increased
substantially, and many of our promissory notes are in default and accruing default interest and penalties. In May 2026, we
exchanged all of the shares of our Series A Preferred Stock held by two institutional investors for senior unsecured,
non-convertible promissory notes in the aggregate principal amount of approximately $
The Company’s ability to continue as a going concern is dependent on generating net revenues, raising additional equity or debt capital, reducing losses and improving future cash flows. The Company will continue: (i) its ongoing capital-raising initiatives and has demonstrated previous success in raising capital to support its operations; and (ii) to pursue additional strategic operating companies.
See Note 9 for information on promissory notes payable issued and outstanding as of June 30, 2026 and Note 12 for information on preferred stock and common stock issued and outstanding as of June 30, 2026 and Note 16 for financing transactions entered into subsequent to June 30, 2026.
Until such time as the Company is able to generate positive cash flows from operations, it will need to obtain external sources of financing to fund its operations. There can be no assurances that additional sources of financing will be available, or if available at all, on favorable terms. As such, until additional equity or debt capital is secured and the Company begins generating sufficient revenue and operating cash flows, there is substantial doubt about the Company’s ability to continue as a going concern for the one-year period following the issuance of these unaudited condensed consolidated financial statements. If the Company is unable to fund its operations, it will be required to evaluate further alternatives, which could include further curtailing or suspending its operations, selling the Company, dissolving and liquidating its assets or seeking protection under bankruptcy laws. A determination to take any of these actions could occur at a time that is earlier than when the Company would otherwise exhaust its cash resources.
These unaudited condensed consolidated financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.
| 9 |
Note 3 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF PRESENTATION AND PRINCIPLES OF CONSOLIDATION
The unaudited condensed consolidated financial statements were prepared using generally accepted accounting principles for interim financial information and the instructions to Form 10-Q and Regulation S-X. Accordingly, these financial statements do not include all information or notes required by generally accepted accounting principles for annual financial statements and should be read in conjunction with the consolidated financial statements as filed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025. In the opinion of management, the unaudited condensed consolidated financial statements included herein contain all adjustments necessary to present fairly the Company’s consolidated financial position as of June 30, 2026, and the results of its operations and changes in stockholders’ equity and cash flows for the three and six months ended June 30, 2026 and 2025. Such adjustments are of a normal recurring nature. The results of operations for the six months ended June 30, 2026 may not be indicative of results for the year ending December 31, 2026.
The unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and in accordance with Regulation S-X of the SEC. The unaudited condensed consolidated financial statements include the accounts of FOXO and its wholly-owned and majority-owned subsidiaries. All significant inter-company balances and transactions have been eliminated in consolidation.
EMERGING GROWTH COMPANY
The Company is an “emerging growth company,” as defined in Section 2(a) of the Securities Act of 1933 and as modified by the Jumpstart Our Business Startups Act of 2012, and it may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the independent registered public accounting firm attestation requirements of Section 404 of the Sarbanes-Oxley Act, and reduced disclosure obligations regarding executive compensation in its periodic reports and proxy statements. Further, Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Securities Exchange Act of 1934) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such election to opt out is irrevocable. The Company has elected not to opt out of such extended transition period which means that when a standard is issued or revised and it has different application dates for public or private companies, the Company, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make a comparison of the Company’s consolidated financial statements with another public company, which is neither an emerging growth company nor an emerging growth company which has opted out of using the extended transition period difficult because of the potential differences in accounting standards used.
COMPREHENSIVE INCOME (LOSS)
During the three and six months ended June 30, 2026 and 2025, comprehensive income (loss) was equal to the net income (loss) attributable to FOXO presented in the unaudited condensed consolidated statements of operations.
RECLASSIFICATIONS
Accrued interest of $
REVERSE STOCK SPLITS
On
April 17, 2025, the Company’s board of directors (pursuant to a previously obtained shareholder approval) approved the implementation
of a
| 10 |
The First Reverse Stock Split was effective on April 28, 2025. The Second Reverse Stock Split was effective on July 27, 2025. The Third Reverse Stock Split was effective on June 30, 2026.
All share information included in these financial statements has been reflected as if the Reverse Stock Splits occurred as of the earliest period presented.
USE OF ESTIMATES
The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reported period. Management evaluates these estimates and judgments on an ongoing basis and bases its estimates on experience, current and expected future conditions, third-party evaluations, and various other assumptions that management believes are reasonable under the circumstances. Significant estimates and assumptions include the estimates of fair values of assets acquired and liabilities assumed in business combinations, contractual allowances and doubtful account reserves, the recoverability of supplies and long-lived assets, the valuation allowance relating to the Company’s deferred tax assets, the valuations of goodwill, intangible assets, equity and derivative instruments, deemed dividends, litigation and related reserves, among others. It is reasonably possible that actual experience could differ from the estimates and assumptions utilized and would impact future results of operations and cash flows. All revisions to accounting estimates are recognized in the period in which the estimates are revised. A description of each critical estimate is incorporated within the discussion of the related accounting policies which follow.
CASH AND CASH EQUIVALENTS
The Company considers all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents. Cash equivalents are stated at cost, which approximates fair value. At times, cash account balances may exceed insured limits. The Company has not experienced any losses related to such accounts and believes it is not exposed to any significant credit risk on its cash and cash equivalents.
IMPAIRMENT OF GOODWILL AND INTANGIBLE ASSETS
The Company acquired goodwill and intangible assets in 2024 from the acquisitions of Myrtle and RCHI and in 2025 from the acquisition of Vector.
Goodwill is required to be tested annually or whenever events have occurred that suggest that goodwill may be impaired. Goodwill is tested at the reporting unit level. The Company has three reporting units: Myrtle, SCCH and Vector. Step 0 in the goodwill impairment test model is to perform a qualitative analysis. This step is not required but can be applied to determine if it is more likely than not that an impairment has occurred. Step 1 is to perform a quantitative analysis to determine a reporting unit’s fair value and to compare the fair value to the reporting unit’s carrying value. If the carrying value exceeds the unit’s fair value, a goodwill impairment is recorded to adjust the unit’s carrying value to fair value.
The Company reviews its intangible assets to determine potential impairment annually or whenever events or changes in circumstances indicate that the carrying amount of an asset group may not be fully recoverable. For intangible assets, recoverability is measured by comparing the carrying amount of the asset group with the future undiscounted cash flows the assets are expected to generate. Considerable management judgment is necessary to estimate future cash flows. Accordingly, actual results could vary significantly from such estimates. If such assets are considered impaired, an impairment loss is measured by comparing the amount by which the carrying value exceeds the fair value of the long-lived assets.
LEASES
We account for leases in accordance with Accounting Standards Update (“ASU”) No. 2016-02, Leases (Topic 842), which requires leases with durations greater than 12 months to be recognized on the balance sheet. We lease facilities under operating leases with a subsidiary of RHI, a related party. For operating leases with terms greater than 12 months, we record the related right-of-use assets and right-of-use obligations at the present value of lease payments over the term. We do not separate lease and non-lease components of contracts. Our operating leases are more fully discussed in Note 11.
| 11 |
FAIR VALUE OF FINANCIAL INSTRUMENTS
Fair value is defined as the price that would be received for sale of an asset or paid for transfer of a liability, in an orderly transaction between market participants at the measurement date. GAAP establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). These tiers include:
| Level 1 | – | defined as observable inputs such as quoted prices (unadjusted) for identical instruments in active markets. |
| Level 2 | – | defined as inputs other than quoted prices in active markets that are either directly or indirectly observable such as quoted prices for similar instruments in active markets or quoted prices for identical or similar instruments in markets that are not active. |
| Level 3 | – | defined as unobservable inputs in which little or no market data exits, therefore requiring an entity to develop its own assumptions, such as valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable. |
In some circumstances, the inputs used to measure the fair value might be categorized within different levels of the fair value hierarchy. In these instances, the fair value measurement is categorized in its entirety in the fair value hierarchy based on the lowest level input that is significant to the fair value measurement.
At June 30, 2026 and December 31, 2025, the carrying value of the Company’s accounts receivable, notes payable, accounts payable and accrued expenses approximated their fair values due to their short-term natures.
As
of June 30, 2026, the Company did not have any assets and liabilities that were measured using the three-tier fair value hierarchy. As
of June 30, 2026 and December 31, 2025, the Company determined that its warrant liability for its Public Warrants and Private Placement
Warrants that were previously fair valued based on the Level 1 and Level 2 hierarchies of the valuation techniques, respectively, no
longer had any value. However, at June 30, 2025 and December 31, 2024, the fair value of the Public Warrants and Private Placement Warrants
as determined based on the Level 1 and Level 2 hierarchies, resulted in a change in the fair value of warrant liabilities. Therefore,
for the three and six months ended June 30, 2025, the Company recognized non-operating income of $
DERIVATIVE INSTRUMENTS
The Company does not use derivative instruments to hedge exposure to cash flow, market or foreign currency risks. The Company evaluates all of its financial instruments, including preferred stock, convertible debt and stock purchase warrants, to determine if such instruments are derivatives or contain features that qualify as embedded derivatives, pursuant to ASU 2020-06, Debt – Debt with Conversion and Other Options, Subtopic 470-20 and Derivative and Hedging – Contracts in Entity’s Own Equity (Subtopic 815-40, ASC 480, “Distinguishing Liabilities from Equity,” and ASC 815-15, “Derivatives and Hedging – Embedded Derivatives”).
The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is reassessed at the end of each reporting period. When determining whether certain financial instruments should be classified as liabilities or equity instruments, a down-round provision no longer precludes equity classification when assessing whether the instrument is indexed to an entity’s own stock. As a result, a freestanding equity-linked financial instrument (or embedded conversion option) no longer would be accounted for as a derivative liability at fair value as a result of the existence of a down-round provision. Convertible instruments with embedded conversion options that have down-round features are now subject to the specialized guidance in Subtopic 470-20, including related earnings/loss per share guidance in Topic 260.
| 12 |
For freestanding equity classified financial instruments, the amendments require entities that present earnings (loss) per share in accordance with Topic 260 to recognize the effect of the down round feature when it is triggered. That effect is treated as a deemed dividend and as a reduction of income available to common stockholders in basic and diluted earnings/loss per share. This reflects the occurrence of an economic transfer of value to the holder of the instrument, while alleviating the complexity and income statement volatility associated with fair value measurement on an ongoing basis.
REVENUE RECOGNITION POLICY
The Company recognizes revenue in accordance with ASC, “Revenue from Contracts with Customers (Topic 606),” including subsequently issued updates. Under the accounting guidance, revenues are presented net of estimated contractual allowances and estimated implicit price concessions.
Healthcare
The Company’s healthcare segment consists of the operations of Myrtle and RCHI.
Myrtle’s revenues relate to contracts with patients in which its performance obligations are to provide behavioral health care services to its patients. Revenues are recorded during the period in which its obligations to provide health care services are satisfied. Myrtle’s performance obligations for inpatient services are generally satisfied over periods averaging approximately 7 to 28 days depending on the service line, and revenues are recognized based on charges incurred. The contractual relationships with patients, in most cases, also involve third-party payers and the transaction prices for the services provided are dependent upon the terms provided by or negotiated with the third-party payers. The payment arrangements with third-party payers for the services Myrtle provides to its patients typically specify payments at amounts less than its standard charges. Services provided to patients are generally paid at prospectively determined rates per diem.
RCHI’s revenues relate to contracts with patients of BSF in which its performance obligations are to provide health care services to the patients. Revenues are recorded during the period its obligations to provide health care services are satisfied. Its performance obligations for inpatient services are generally satisfied over periods averaging approximately three days, and revenues are recognized based on charges incurred. Its performance obligations for outpatient services, including emergency room-related services, are generally satisfied over a period of less than one day. The contractual relationships with patients, in most cases, also involve a third-party payer (Medicare, Medicaid, managed care health plans and commercial insurance companies) and the transaction prices for the services provided are dependent upon the terms provided by Medicare and Medicaid or negotiated with managed care health plans and commercial insurance companies. The payment arrangements with third-party payers for the services it provides to the related patients typically specify payments at amounts less than our standard charges. Medicare, because of BSF’s designation as a critical access care hospital, generally pays for inpatient and outpatient services at rates related to the hospital’s costs. Services provided to patients having Medicaid coverage are generally paid at prospectively determined rates per discharge, per identified service or per covered member. Agreements with commercial insurance carriers, managed care and preferred provider organizations generally provide for payments based upon predetermined rates per diagnosis, per diem rates or discounted fee-for-service rates.
Laws
and regulations governing Medicare and Medicaid programs are complex and subject to interpretation. Estimated reimbursement amounts are
adjusted in subsequent periods as cost reports are prepared and filed and as final settlements are determined (in relation to certain
government programs, primarily Medicare, this is generally referred to as the “cost report” filing and settlement process).
As of June 30, 2026 and December 31, 2025, a total of $
Management continually reviews the contractual estimation process to consider the frequent changes in managed care contractual terms resulting from contract renegotiations and renewals. Under the revenue recognition accounting guidance, revenues are presented net of estimated contractual allowances and estimated implicit price concessions. The healthcare segment’s net revenues are based upon the estimated amounts it expects to be entitled to receive from third-party payers and patients based, in part, on Medicare and Medicaid rates as discussed above as for each of Myrtle and BSF. The healthcare segment also records estimated implicit price concessions related to uninsured accounts to record self-pay revenues at the estimated amounts it expects to collect.
| 13 |
The collection of outstanding receivables is the healthcare segment’s primary source of operating cash and is critical to its operating performance. The primary collection risks relate to patient accounts for which the primary insurance carrier has paid the amounts covered by the applicable agreement, but patient responsibility amounts (deductibles and copayments) remain outstanding. Implicit price concessions relate primarily to amounts due directly from patients. Accounts are written off when all reasonable internal and external collection efforts have been carried out. The estimates for implicit price concessions are based upon management’s assessment of historical write-offs and expected net collections, business and economic conditions and other collection indicators.
Life Science Services
Our Life Science Services segment’s revenue consists of revenue from Vector from the date of acquisition, which was September 19, 2025. The Company recognizes revenue from the sale of high-quality bio-samples and bulk biological materials for every stage of life science research in accordance with ASC 606. As a result of applying this five-step model under ASC 606, the Company recognizes revenues from its sale of products upon their transfer of control to the customer, which is considered complete at either the time of shipment or arrival at destination based upon agreed upon terms within the contract. The Company’s payment terms for the sale of standard products are typically 30 to 60 days.
Labs
The Company has recorded minor revenues from its Labs segment during the three and six months ended June 30, 2026 and 2025. Labs currently recognizes revenue from collecting a royalty from Illumina, Inc. related to the sales of the Infinium Mouse Methylation Array. The Company applies judgment in determining the customer’s ability and intention to pay based on a variety of factors including the customer’s historical payment experience.
CONTRACTUAL ALLOWANCES AND DOUBTFUL ACCOUNTS POLICY
In accordance with ASC, “Revenue from Contracts with Customers (Topic 606),” including subsequently issued updates, the Company does not present “allowances for doubtful accounts” on its balance sheets, rather its accounts receivable are reported at realizable value, net of estimated contractual allowances and estimated implicit price concessions (also referred to as doubtful accounts), which are estimated and recorded in the period the related revenue is recorded. ASC, “Financial Instruments Credit Losses (Topic 326),” requires that healthcare organizations estimate credit losses on a forward-looking basis taking into account historical collection and payer reimbursement experience as an integral part of the estimation process related to contractual allowances and doubtful accounts. Receivables deemed to be uncollectible are charged against the allowance for doubtful accounts after all collection efforts have ceased or the account is settled for less than the amount originally estimated to be collected. Recoveries of receivables previously written-off are recorded as credits to the allowance for doubtful accounts. Revisions to the allowances for doubtful accounts are recorded as adjustments to revenues.
During
the three months ended June 30, 2026 and 2025, estimated contractual allowances and implicit price concessions of $
| 14 |
INCOME TAXES
Deferred taxes are provided on an asset and liability method whereby deferred tax assets are recognized for deductible temporary differences and operating loss and tax credit carryforwards, and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences between the amounts of assets and liabilities and their tax basis. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment. The Company is required to analyze its filing positions open to review and believes all significant positions have a “more-likely-than-not” likelihood of being upheld based on their technical merit and, accordingly, the Company has not identified any unrecognized tax benefits.
The Company has not recorded income tax provisions or benefits for the income/losses that it incurred for the three and six months ended June 30, 2026 and 2025. While the Company earned book income for the three and six months ended June 30, 2026, the income resulted from the forfeiture of unvested restricted stock under the Management Contingent Share Plan and the reversal of accrued severance that was no longer owed. Neither of these amounts resulted in taxable income for federal and state income taxes. The Company incurred a pre-tax loss for the full year ended December 31, 2025. In addition, the Company believes that its available net operating loss carryforwards would offset future taxable income, if any, for the full year ended December 31, 2026. Therefore, its effective income tax rates were zero for the periods presented and the Company has provided a full valuation allowance for its net deferred tax assets.
Net income (loss) per share of common stock is calculated by dividing net income (loss) to common stockholders by the weighted average number of shares of common stock outstanding during the period. The Company follows the provisions of ASC Topic 260, Earnings Per Share for determining whether outstanding shares that are contingently returnable are included for purposes of calculating net income (loss) to common stockholders per share and determining whether instruments granted in equity-based compensation arrangements are participating securities for purposes of calculating net income (loss) to common stockholders per share. See Note 4, Net Income (Loss) Per Share.
BUSINESS COMBINATIONS
The Company follows the guidance in ASC 805, Business Combinations for determining the appropriate accounting treatment for business acquisitions. Under ASC 805, the assets acquired, and liabilities assumed are recorded as of the acquisition date, at their respective fair values and consolidated with those of the Company. The excess of the purchase prices over the aggregate fair value of the tangible assets acquired and liabilities assumed is treated as goodwill in accordance with ASC 805. During the measurement period or until valuation studies are completed, the provisional amounts used for the purchase price allocation are subject to adjustments for a period not to exceed one year from the date of acquisition. Acquisition costs are expensed as incurred. The accounting for the acquisition of Vector is presented in Note 5, Acquisition.
RECENTLY ISSUED ACCOUNTING STANDARDS
In November 2024, the FASB issued ASU 2024-04, Debt with Conversions and Other Options (Subtopic 470-20), Induced Conversions of Convertible Debt Instruments. The amendments in this ASU clarify when the settlement of a debt instrument should be accounted for as an induced conversion. Under this ASU, (a) to be accounted for as an induced conversion, an inducement offer is required to preserve the form and amount of consideration issuable upon conversion in accordance with the terms of the instrument (rather than only the equity securities issuable upon conversion), (b) whether a settlement of convertible debt is an induced conversion should be assessed as of the date the inducement offer is accepted by the holder, and (c) issuers that have exchanged or modified a convertible debt instrument within the preceding 12 months (that did not result in extinguishment accounting) should use the terms that existed 12 months before the inducement offer was accepted when determining whether induced conversion accounting should be applied. The amendments in this ASU are effective for all entities for annual reporting periods beginning after December 15, 2025, and interim reporting periods within those annual reporting periods. Early adoption is permitted for all entities that have adopted the amendments in ASU 2020-06. The amendments in this ASU permit an entity to apply the new guidance on either a prospective or a retrospective basis. The adoption of this ASU did not have an impact on the Company’s financial statements for the three and six months ended June 30, 2026 and 2025.
| 15 |
In September 2025, the FASB issued ASU 2025-07, Intangibles—Goodwill and Other— Internal-Use Software (Subtopic 350-40). The target of this update is accounting for internal use software. The amendments in this Update remove all references to prescriptive and sequential software development stages (referred to as “project stages”) throughout Subtopic 350-40. Therefore, an entity is required to start capitalizing software costs when both of the following occur: 1. Management has authorized and committed to funding the software project. 2. It is probable that the project will be completed and the software will be used to perform the function intended (referred to as the “probable-to-complete recognition threshold”). In evaluating the probable-to-complete recognition threshold, an entity is required to consider whether there is significant uncertainty associated with the development activities of the software (referred to as “significant development uncertainty”). The two factors to consider in determining whether there is significant development uncertainty are whether: 1. The software being developed has technological innovations or novel, unique, or unproven functions or features, and the uncertainty related to those technological innovations, functions, or features, if identified, has not been resolved through coding and testing. 2. The entity has determined what it needs the software to do (for example, functions or features), including whether the entity has identified or continues to substantially revise the software’s significant performance requirements. The amendments in this Update specify that the disclosures in Subtopic 360-10, Property, Plant, and Equipment—Overall, are required for all capitalized internal-use software costs, regardless of how those costs are presented in the financial statements. Furthermore, the amendments in this Update supersede the website development costs guidance and incorporate the recognition requirements for website-specific development costs from Subtopic 350-50 into Subtopic 350-40. Under current GAAP, entities are required to capitalize development costs incurred for internal-use software depending on the nature of the costs and the project stage during which they occur. The amendments in this ASU improve the operability of the guidance by removing all references to software development project stages so that the guidance is neutral to different software development methods, including methods that entities may use to develop software in the future. The amendments in this ASU are effective for all entities for annual reporting periods beginning after December 15, 2027, and interim reporting periods within those annual reporting periods. Early adoption is permitted as of the beginning of an annual reporting period. The amendments in this ASU permit an entity to apply the new guidance on either a prospective or a retrospective basis. The Company has not yet determined the impact of the adoption of this ASU on its consolidated financial statements.
In December 2025, the FASB issued ASU 2025-11, Interim Reporting Topic 270. The amendments in this Update clarify interim disclosure requirements and the applicability of Topic 270. The amendments in this Update result in a comprehensive list of interim disclosures that are required by GAAP. In developing the list of disclosures required by other Topics, the FASB focused on identifying the interim disclosures that are currently required under GAAP. The objective of the amendments is to provide clarity about the current requirements, rather than evaluate whether to expand or reduce interim disclosure requirements. The amendments in this Update also include a disclosure principle that requires entities to disclose events since the end of the last annual reporting period that have a material impact on the entity. The intent of the disclosure principle, which is modeled after a previous SEC disclosure requirement, is to help entities determine whether disclosures not specified in Topic 270 should be provided in interim reporting periods. The amendments in this Update also clarify the applicability of Topic 270, the types of interim reporting, and the form and content of interim financial statements in accordance with GAAP. The amendments in this Update are effective for interim reporting periods within annual reporting periods beginning after December 15, 2027, for public business entities. Early adoption is permitted. The amendments in this Update can be applied either (1) prospectively or (2) retrospectively to any or all prior periods presented in the financial statements. The Company has not yet determined the additional information that it will be required to provide upon adoption of this ASU.
Other recent accounting standards issued by the FASB, including its Emerging Issues Task Force, the American Institute of Certified Public Accountants, and the SEC did not or are not believed by management to have a material impact on the Company’s present or future consolidated financial statements.
| 16 |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||
| Net income (loss) attributable to FOXO – basic | $ | $ | ( | ) | $ | $ | ( | ) | ||||||||
| Declared and deemed dividends from preferred stock, including issuances and anti-dilution provisions thereof and triggers of down-round provisions of Assumed Warrants | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Net income (loss) to common stockholders | $ | $ | ( | ) | $ | $ | ( | ) | ||||||||
| Preferred stock dividends – undeclared, net | ( | ) | ( | ) | ( | ) | ||||||||||
| Net income (loss) to common stockholders, net of preferred stock dividends – undeclared, net – basic | $ | $ | ( | ) | $ | $ | ( | ) | ||||||||
| Weighted average number of shares of Class A Common Stock - basic | ||||||||||||||||
| Net income (loss) per share available to Class A Common Stock - basic | $ | $ | ( | ) | $ | $ | ( | ) | ||||||||
| Net income (loss) to common stockholders, net of preferred stock dividends – undeclared, net – basic | $ | $ | ( | ) | $ | $ | ( | ) | ||||||||
| Adjust for dilutive preferred stock dividends – undeclared, net | ( | ) | ||||||||||||||
| Adjust for interest expense on convertible notes payable | ||||||||||||||||
| Net income (loss) to common stockholders – diluted | $ | $ | ( | ) | $ | $ | ( | ) | ||||||||
| Basic weighted average number of shares of Class A Common Stock | ||||||||||||||||
| Convertible preferred stock | ||||||||||||||||
| Convertible notes payable | ||||||||||||||||
| Diluted weighted average number of shares of Class A Common Stock | ||||||||||||||||
| Diluted net income (loss) per share available to Class A Common Stock | $ | $ | ( | ) | $ | $ | ( | ) | ||||||||
| Three and Six Months Ended June 30, 2026 | Three and Six Months Ended June 30, 2025 | |||||||
| Preferred stock | ||||||||
| Public and private warrants | ||||||||
| Convertible notes payable | ||||||||
| Vector Warrants | ||||||||
| Stock options | ||||||||
| Total antidilutive shares | ||||||||
At June 30, 2026, in addition to the common stock equivalents listed in the table above, the Company has agreed to issue: (i) an aggregate of seven shares of its Class A Common Stock under the terms of outstanding notes payable, which are discussed in Note 9, and (ii) shares of its Class A Common Stock for dividends declared on its Series E Cumulative Redeemable Secured Preferred Stock (the “Series E Preferred Stock”), which are discussed in Note 12.
| 17 |
Note 5 ACQUISITION
Vector Acquisition
On
September 9, 2025, the Company entered into a Stock Purchase Agreement with Vector, a Wyoming corporation, (the “Vector
SPA”), between the stockholders (each, a “Seller,” or, together, the “Sellers”) owning all of the
issued and outstanding shares of Vector (the “Purchased Shares”) and FOXO Acquisition Corporation, a Florida corporation
and wholly-owned subsidiary of the Company (“FAC”), (the “Vector Acquisition”).
The purchase consideration payable to the Sellers were allocated to the net tangible and intangible assets acquired and liabilities assumed. The Company accounted for the acquisition as a business combination under U.S. GAAP. In accordance with the acquisition method of accounting under ASC Topic 805, “Business Combinations,” (“ASC 805”), the assets acquired and liabilities assumed were recorded as of the acquisition date, at their respective fair values and consolidated with those of the Company.
The
Company completed a valuation study to determine the fair values of the assets acquired in the Vector acquisition. Based on the study
that was prepared by an independent valuation firm, the assets acquired, net of liabilities assumed, were $
During
the measurement period, the amounts used for the purchase price allocation are subject to adjustments for a period not to exceed one
year from the date of acquisition. As a result, the amount of goodwill presented below for the Vector acquisition may be increased or
decreased. Included in the purchase price allocation presented below for Vector is $
| 18 |
The following table shows the allocation of the purchase price of Vector to the identifiable assets acquired and liabilities assumed as of June 30, 2026:
| Vector | ||||
| Initial purchase price | $ | |||
| Additional purchase consideration | ||||
| Total purchase price | $ | |||
| Tangible and intangible assets acquired, and liabilities assumed at fair value: | ||||
| Cash | $ | |||
| Accounts receivable, net | ||||
| Inventory | ||||
| Supplies | ||||
| Prepaid expenses | ||||
| Property and equipment, net | ||||
| Intangible assets | ||||
| Right-of-use lease assets | ||||
| Accounts payable | ( | ) | ||
| Accrued expenses | ( | ) | ||
| Right-of-use lease liabilities | ( | ) | ||
| Note payable | ||||
| Other loans | ( | ) | ||
| Noncontrolling interest | ||||
| Assets acquired, net of liabilities assumed | $ | |||
| Goodwill | $ | |||
In
addition to the goodwill acquired in the Vector acquisition, as of June 30, 2026, the Company recorded additional goodwill of $
In
addition to the purchase prices listed above, the Company incurred acquisition costs consisting of approximately $
The following presents the unaudited pro-forma combined results of operations of the Company for the three and six months ended June 30, 2025 as if the acquisition of Vector occurred on January 1, 2025.
Three Months Ended June 30, 2025 | Six Months Ended June 30, 2025 | |||||||
| Net Revenue | $ | $ | ||||||
| Net loss attributable to FOXO | ( | ) | ( | ) | ||||
| Declared and deemed dividends | ( | ) | ( | ) | ||||
| Net loss to common stockholders | ( | ) | ( | ) | ||||
| Preferred stock dividends – undeclared | ( | ) | ( | ) | ||||
| Net loss to common stockholders, net of preferred stock dividends – undeclared | $ | ( | ) | $ | ( | ) | ||
| Net loss per share: | ||||||||
| Basic and diluted net loss per share available to Class A Common Stock | $ | ) | $ | ) | ||||
| Basic and diluted weighted average number of shares of Class A Common Stock | ||||||||
The unaudited pro forma results of operations do not include any adjustment as a result of the potential additional purchase price consideration of Vector as discussed above.
The unaudited pro-forma results of operations are presented for information purposes only. The unaudited pro-forma results of operations are not intended to present actual results that would have been attained had the acquisition of Vector been completed as of January 1, 2025 or to project potential operating results as of any future date or for any future periods.
Note 6 ACCOUNTS RECEIVABLE, NET
Accounts receivable, net at June 30, 2026 and December 31, 2025 were as follows:
June 30, 2026 | December 31, 2025 | |||||||
| Accounts receivable, gross | $ | $ | ||||||
| Less: | ||||||||
| Allowance for contractual obligations | ( | ) | ( | ) | ||||
| Allowance for doubtful accounts | ( | ) | ( | ) | ||||
| Accounts receivable, net | $ | $ | ||||||
Note 7 INTANGIBLE ASSETS AND GOODWILL
Intangible Assets
The components of intangible assets, net at June 30, 2026 and December 31, 2025 were as follows:
June 30, 2026 | December 31, 2025 | |||||||
| Tradenames | $ | $ | ||||||
| Licenses and permits | ||||||||
| Customer relationships | ||||||||
| Behavioral Health APP | ||||||||
| Gross intangible assets | ||||||||
| Less: accumulated amortization | ( | ) | ( | ) | ||||
| Intangible assets, net | $ | $ | ||||||
The
tradenames, licenses and permits and customer relationships intangible assets resulted from the acquisitions of Myrtle, RCHI and Vector.
The acquisition of Vector is more fully discussed in Note 5. The tradename associated with Vector of $
The
Company recognized amortization expense on its intangible assets of $
Goodwill
Goodwill
was $
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Note 8 ACCRUED EXPENSES
At June 30, 2026 and December 31, 2025, accrued expenses consisted of the following:
| June 30, | December 31, | |||||||
| 2026 | 2025 | |||||||
| Accrued payroll and related liabilities | $ | $ | ||||||
| Accrued severance | ||||||||
| Accrued interest | ||||||||
| Medicare cost report settlement payables | ||||||||
| Patient and third-party liabilities | ||||||||
| Other accrued expenses | ||||||||
| Accrued expenses | $ | $ | ||||||
Included
in the accrued payroll and related liabilities presented in the table above was approximately $
In
connection with the STLA with Mr. Sabes, as more fully discussed in Notes 1 and 14, during the three and six months ended June 30, 2026,
the Company recorded other income of $
In
addition to the current portion of the Medicare cost report settlement payables of $
| Medicare Cost Report Settlement Payables at June 30, 2026 | ||||
| Twelve months ending: | ||||
| June 30, 2027 | $ | |||
| June 30, 2028 | ||||
| June 30, 2029 | ||||
| June 30, 2030 | ||||
| June 30, 2031 | ||||
| Thereafter | ||||
| Total | $ | |||
Related parties’ payables and accrued expenses are presented in Note 10.
Note 9 DEBT
At June 30, 2026 and December 31, 2025, debt consisted of the following:
June 30, 2026 | December 31, 2025 | |||||||
| Notes payable – third parties | $ | $ | ||||||
| Notes and loans payable – related parties | ||||||||
| Other loans | ||||||||
| Total debt | ||||||||
| Less current portion of debt | ( | ) | ( | ) | ||||
| Total debt, net of current portion | $ | $ | ||||||
| 20 |
Notes Payable – Third Parties
At June 30, 2026 and December 31, 2025 notes payable with third parties consisted of the following:
June 30, 2026 | December 31, 2025 | |||||||
| Silverback/Western Note Payable | $ | $ | ||||||
| ClearThink Notes in the aggregate principal amount of $ | ||||||||
| LGH note payable in the principal amount of $ | ||||||||
| IG notes payable in the aggregate principal amount of $ | ||||||||
| 1800 Diagonal notes payable in the aggregate principal amount of $ | ||||||||
| Lucas Ventures notes payable in the aggregate principal amount of $ | ||||||||
| JSC note payable in the aggregate principal amount of $ | ||||||||
| Vista Capital note payable in the principal amount of $ | ||||||||
| REB Holdings note payable in the principal amount of $ | ||||||||
| Promissory notes with institutional investors in the aggregate principal amount
of $ | ||||||||
| Total third-party notes payable | ||||||||
| Less current portion of third-party notes payable | ( | ) | ( | ) | ||||
| Total third-party notes payable, net of current portion | $ | $ | ||||||
Silverback/Western Note Payable
The
Company assumed a promissory note payable to Western Healthcare, LLC (the “Western Note Payable”) that was owed by SCCH at
the time of the acquisition of RCHI. As of December 31, 2024, the principal balance owed was $
In
February 2025, the Western Note Payable was sold to a new holder, Silverback Capital Corporation (“Silverback”), and it was
amended and restated. Per the terms of the amendment and restatement, the principal balance of the note, which included previously accrued
interest expense, was $
| 21 |
Notes Payable to ClearThink Capital Partners, LLC
On
August 16, 2024, the Company issued ClearThink a promissory note in the principal amount of $
On
December 31, 2024, the Company issued ClearThink a promissory note in the principal amount of $
During
the year ended December 31, 2025, the Company issued two additional promissory notes to ClearThink. On January 28, 2025 and March 7,
2025, the Company issued ClearThink promissory notes each in the principal amount of $
As
a result of the issuances of the January 28, 2025 and March 7, 2025 promissory notes, the Company incurred $
The
August 16, 2024 note had an interest rate of
On
March 2, 2026, the Company issued an unsecured promissory note to ClearThink under the terms of a Securities Purchase Agreement. The
principal amount of the note is $
| 22 |
During
the six months ended June 30, 2026 and 2025, the Company received net cash proceeds from ClearThink notes of $
Securities Purchase Agreement Dated November 15, 2024 with LGH Investments
On
November 15, 2024, the Company entered into a Securities Purchase Agreement with LGH pursuant to which the Company issued to LGH a convertible
promissory note in the principal amount of $
Interest
expense on the LGH note, which included default penalties and amortization of debt discount, was $
Securities Purchase Agreements Dated December 24, 2024 and March 4, 2025 with IG Holdings, Inc.
On
December 24, 2024, the Company entered into a Securities Purchase Agreement with IG pursuant to which the Company issued to IG a convertible
promissory note in the principal amount of $
On
March 4, 2025, the Company entered into an additional Securities Purchase Agreement with IG pursuant to which the Company issued to IG
a convertible promissory note in the principal amount of $
| 23 |
On
June 30, 2026, as a result of anti-dilution provisions, the IG notes were convertible into shares of the Company’s Class A Common
Stock at an assumed conversion price of $
Interest
expense on the IG notes, which included default penalties and amortization of debt discount, was $
Securities Purchase Agreements Dated May 21, 2025 and August 6, 2025 with 1800 Diagonal Lending LLC
On
May 21, 2025, the Company issued to 1800 Diagonal a promissory note in the principal amount of $
On
August 6, 2025, the Company issued to 1800 Diagonal a promissory note in the principal amount of $
During
the three months ended June 30, 2026 and 2025, the Company recorded interest expense on notes payable with 1800 Diagonal, including the
amortization of debt discounts, of $
Securities Purchases Agreements with Lucas Ventures Dated November 18, 2024 and February 14, 2025
On
November 18, 2024, the Company entered into a Securities Purchase Agreement with Lucas Ventures LLC, (“Lucas Ventures”) pursuant
to which the Company issued to Lucas Ventures a convertible promissory note in the principal amount of $
On
February 14, 2025, the Company entered into a second Securities Purchase Agreement with Lucas Ventures pursuant to which the Company
issued to Lucas Ventures a convertible promissory note in the principal amount of $
| 24 |
As
a result of the anti-dilution provisions, on June 30, 2026, the Lucas Ventures notes were convertible into shares of the Company’s
Class A Common Stock at an assumed conversion price of $
Interest
expense on the Lucas Ventures notes, which included default penalties and amortization of debt discount, was $
Convertible Promissory Notes with Jefferson Street Capital LLC Under January 7, 2025 Securities Purchase Agreements
On
January 7, 2025, the Company entered into a Securities Purchase Agreement with Jefferson Street Capital LLC (“JSC”) pursuant
to which the Company agreed to issue to JSC convertible promissory notes in the principal amount of up to $
Pursuant
to the Securities Purchase Agreement discussed above, on March 6, 2025, the Company issued JSC a convertible promissory note in the
principal amount of $
During
the six months ended June 30, 2026, the Company recorded $(
Securities Purchase Agreement with Vista Capital Investment, LLC
On
February 27, 2025, the Company entered into a Securities Purchase Agreement with Vista Capital Investment, LLC, (“Vista Capital”)
pursuant to which the Company issued to Vista Capital a convertible promissory note in the principal amount of $
| 25 |
On
June 30, 2026, as a result of anti-dilution provisions, the Vista note was convertible into shares of the Company’s Class A Common
Stock at an assumed conversion price of $
Interest
expense on the Vista note, which included default penalties and amortization of debt discount, was $
Note Payable with REB Holdings LLC
On
June 5, 2026, the Company issued a promissory note to REB Holdings LLC, (“REB Holdings”) in the principal amount of $
Promissory Notes Payable with Institutional Investors
On
January 28, 2026, the Company issued two unsecured promissory notes payable to institutional investors, each with: (i) a principal balance
of $
On
March 15, 2026, the Company issued two additional unsecured promissory notes payable to the institutional investors, each with: (i) a
principal balance of $
$
On
May 6, 2026, the Company issued two unsecured promissory notes payable to institutional investors, each with: (i) a principal balance
of $
| 26 |
Exchange of Series A Preferred Stock for Senior Notes
On
May 12, 2026, the two institutional investors, who also owned approximately and shares of the Company’s Series A Cumulative
Convertible Redeemable Preferred Stock (“Series A Preferred Stock”) with aggregate stated values of approximately $
Other Promissory Note Dated April 8, 2026
On
April 8, 2026, the Company issued a promissory note in the principal amount of $
In addition to the notes discussed above, the Company had additional promissory notes outstanding during portions of the year ended December 31, 2025, including in some cases the six months ended June 30, 2025. These notes were fully repaid or converted into shares of the Company’s Class A Common Stock during 2025. Each of these notes is described in Note 10 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2025. To the extent that these notes were outstanding during any portion of the six months ended June 30, 2025, the interest expense incurred on these notes is included in the interest expense for the three and six months ended June 30, 2025 as stated in the paragraphs above.
Notes and Loans Payable – Related Parties
At June 30, 2026 and December 31, 2025 notes and loans payable with related parties consisted of the following:
June 30, 2026 | December 31, 2025 | |||||||
| Poole Note, dated September 19, 2023 | $ | $ | ||||||
| Additional Poole Note | ||||||||
| Sponsor loan with Mr. Poole | ||||||||
| Note payable to RHI for the acquisition of Myrtle | ||||||||
| Note payable to RHI in connection with the acquisition of Myrtle | ||||||||
| New RCHI Note for the acquisition of RCHI | ||||||||
| Additional RCHI Note for the acquisition of RCHI | ||||||||
| Loans payable to subsidiary of RHI | ||||||||
| Total related parties’ notes payable | ||||||||
| Less current portion of related parties’ notes and loans payable | ( | ) | ( | ) | ||||
| Total related parties’ notes and loans payable, net of current portion | $ | $ | ||||||
| 27 |
Poole Note
On
September 19, 2023, the Company obtained a $
Additional Poole Note
On
October 2, 2023, the Company obtained a $
Sponsor Loan with Mr. Poole
To finance transaction costs in connection with a business combination effective on September 15, 2022, Mr. Poole loaned Delwinds (a predecessor of the Company) funds for working capital.
Note Payable to RHI for the Acquisition of Myrtle
Pursuant
to the acquisition of Myrtle on June 14, 2024, the Company issued a non-interest-bearing note payable to RHI in the amount of $
Note Payable to RHI In Connection with Myrtle Acquisition
The
note payable to RHI dated June 13, 2024, in the original principal amount of $
RCHI Note, New RCHI Note, Additional RCHI Note and Loan Payable for Additional Purchase Price Issued In Connection with the RCHI Acquisition
In
connection with the acquisition of RCHI, RCHI issued a promissory note, (“the RCHI Note”) to RHI. On December 5, 2024, $
The
Company recorded interest expense on the New RCHI Note of $
| 28 |
On
June 30, 2025, the Company issued the Additional RCHI Note in the initial principal amount of $
Loans from Subsidiary of RHI
During
the year ended December 31, 2025, the Company had three loans outstanding from a subsidiary of RHI with original principal balances aggregating
to $
During
the six months ended June 30, 2026, the Company entered into five additional loans with a subsidiary of RHI. The aggregate original principal
balance of the loans totaled $
Other Loans
At
June 30, 2026 and December 31, 2025, the Company had outstanding $
Also
outstanding at June 30, 2026 and December 31, 2025, was a loan assumed in the acquisition of Vector consisting of a credit line with
a balance of $
Note 10 RELATED PARTY TRANSACTIONS
At June 30, 2026 and December 31, 2025, related parties’ payable and accrued expenses consisted of the following:
| June 30, | December 31, | |||||||
| 2026 | 2025 | |||||||
| Accounts payable to Andrew Poole | $ | $ | ||||||
| Accounts payable to InnovaQor | ||||||||
| Accounts payable to RHI | ||||||||
| Rent payable to a subsidiary of RHI | ||||||||
| Accrued interest on related parties’ notes payable (Note 9) | ||||||||
| Accrued dividends payable | ||||||||
| Payables owed to Directors | ||||||||
| Related parties’ payables and accrued expenses | $ | $ | ||||||
Related party notes and loans payable are discussed in Note 9 and, in addition to the transactions discussed in Notes 11, 12, 14 and 16, the Company had the following related party activity during the six months ended June 30, 2026 and 2025:
| 29 |
Accounts Payable to Andrew Poole
The Company owed Mr. Poole, a former director
of the Company, for outstanding invoices totaling $
Health Information Technology Provided By InnovaQor
RCHI
and SCCH contracted with InnovaQor to provide ongoing information technology-related services totaling approximately $
Software Development Agreement with InnovaQor
In
July 2025, Myrtle entered into an agreement with InnovaQor to develop a behavioral health patient engagement mobile application with
a cost of $
Rent and Utilities Owed to RHI and A Subsidiary of RHI Under Facility Leases
As
of June 30, 2026 and December 31, 2025, SCCH and Myrtle owed $
During
the three months ended June 30, 2026 and 2025, the Company incurred $
Note 11 RIGHT-OF-USE LEASE ASSETS AND OBLIGATIONS
Lease Agreements Between Myrtle and RHI and SCCH and RHI
Myrtle
entered into a lease agreement with a subsidiary of RHI under which Myrtle agreed to lease facilities at BSF’s campus beginning
June 14, 2024. The lease is for a term of one year with five annual options to renew for an additional year with an initial monthly base
rental amount of $
On
June 1, 2024, SCCH entered into a “triple net” lease agreement with a subsidiary of RHI under which SCCH agreed to lease
the BSF hospital facilities. The lease is for a term of one year with five annual options to renew for an additional year with an initial
monthly base rental amount of $
The Company has waived payment defaults on these facility leases through December 31, 2026.
Other Lease
Also, included in the table below is a motor vehicle leased by Vector.
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 obligations 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.
| 30 |
The following table presents the Company’s lease-related assets and obligations at June 30, 2026 and December 31, 2025:
Balance Sheet Classification | June 30, 2026 | December 31, 2025 | ||||||||
| Assets: | ||||||||||
| Operating leases | Right-of-use assets | $ | $ | |||||||
| Liabilities: | ||||||||||
| Current: | ||||||||||
| Operating leases | Right-of-use lease obligations | $ | $ | |||||||
| Noncurrent: | ||||||||||
| Operating leases | Right-of-use lease obligations, noncurrent | |||||||||
| Total right-of-use lease obligations | $ | $ | ||||||||
| Weighted average remaining term of operating leases, including option periods expected to renew | ||||||||||
| Discount rate | % | % | ||||||||
The following table presents certain information related to lease expense for the right-of-use operating leases for the three and six months ended June 30, 2026 and 2025:
| Three Months Ended | Six Months Ended | |||||||||||||||
| June 30, | June 30, | |||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||
| Right-of-use operating leases amortization (1) | $ | $ | $ | $ | ||||||||||||
| Right-of-use operating leases interest expense (1) | $ | $ | $ | $ | ||||||||||||
| Right-of-use operating leases interest expense (2) | $ | $ | $ | $ | ||||||||||||
| (1) | |
| (2) |
The following table presents supplemental cash flow information for the six months ended June 30, 2026 and 2025:
| 2026 | 2025 | |||||||
| 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: | ||||
| June 30, 2027 | $ | |||
| June 30, 2028 | ||||
| June 30, 2029 | ||||
| June 30, 2030 | ||||
| Thereafter | ||||
| Total | ||||
| Less interest | ( | ) | ||
| Present value of minimum lease payments | ||||
| Less current portion of right-of-use lease obligations | ( | ) | ||
| Right-of-use lease obligations, net of current portion | $ | |||
| 31 |
Note 12 STOCKHOLDERS’ EQUITY
Authorized Capital
On
March 20, 2026, the Company’s Board of Directors approved an increase to the Company’s authorized shares to
shares, consisting of: (i) shares of Preferred Stock, par value $ per share, and (ii) shares of Class
A Common Stock, par value $ per share. On March 27, 2026, RHI, which is controlled by the Company’s CEO, as a shareholder
representing a majority of the voting control of the Company and holding approximately
Preferred Stock
As of June 30, 2026, the Company was authorized to issue up to 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 June 30, 2026, the Company had outstanding shares of preferred stock consisting of shares of its Series A Preferred Stock, shares of its Series B Preferred Stock, shares of its Series C Cumulative Convertible Redeemable Preferred Stock (the “Series C Preferred Stock”), shares of its Series D Cumulative Convertible Redeemable Preferred Stock (“Series D Preferred Stock”) and shares of its Series E Preferred Stock. The Company’s outstanding shares of preferred stock do not contain mandatory redemption or other features that would require them to be presented on the balance sheet outside of equity and, therefore, they qualify for equity accounting treatment.
Series A Preferred Stock
On
June 30, 2026 and December 31, 2025, the Company had outstanding and shares of its Series A Preferred Stock, respectively.
During the six months ended June 30, 2025, the Company issued shares of its Series A Preferred Stock with a total stated value
$
During
the six months ended June 30, 2026 and 2025, the Company issued shares and shares of its Class A Common Stock, respectively,
pursuant to conversions of shares and shares of the Company’s Series A Preferred Stock, respectively, with stated
values totaling $
Series A Preferred Stock Restructuring with Institutional Investors
As
discussed in Note 9, on May 12, 2026, two institutional investors owning approximately and shares of the Company’s
Series A Preferred Stock, with aggregate stated values of approximately $
As
a result of the exchange of the
shares of Series A Preferred Stock, the Company reduced previously
recorded undeclared dividends by $
The
total stated value and accumulated undeclared dividends of the Series A Preferred Stock at June 30, 2026, of $
| 32 |
Series A Preferred Stock Designation
On
October 16, 2024, the Company’s board of directors approved the designation of shares of Series A Preferred Stock and, on
September 22, 2025, the Company filed an Amended and Restated Certificate of Designation to increase the authorized shares of Series
A Preferred Stock from shares to shares and revised other terms, including a revision to the floor price during 2025, as
reflected below. Each share of Series A Preferred Stock shall have a par value of $ per share and a stated value equal to $
per share. Terms of the Series A Preferred Stock, as amended, include: (i) dividends at
Series B Preferred Stock
On
September 20, 2022, the Company issued to certain investors
During 2025, four holders of Series B Preferred Stock exchanged a total of shares of their Series B Preferred Stock for shares of Series C Preferred Stock, as more fully discussed below, leaving a balance of shares of Series B Preferred Stock outstanding on June 30, 2026 and December 31, 2025.
During
the three months ended June 30, 2026 and 2025, the Company recorded $
Series B Preferred Stock Designation
On
November 27, 2024, the Company authorized up to shares of its Series B Preferred Stock. Each share of Series B Preferred Stock
shall have a par value of $ per share and a stated value equal to $ per share. Terms of the Series B Preferred Stock as amended
during 2025, include: (i) dividends at
| 33 |
Series C Preferred Stock
During
the three months ended March 31, 2025, the Company issued shares of its Series C Preferred Stock to an investor for net cash proceeds
of $
As
a result of the anti-dilution provisions of the Series C Preferred Stock, during the three and six months ended June 30, 2026 and 2025,
the Company recorded deemed dividends of $
Series C Preferred Stock Designation
On
November 27, 2024, the Company authorized up to shares of its Series C Preferred Stock. Each share of Series C Preferred Stock
shall have a par value of $ per share and a stated value equal to $ per share. Terms of the Series C Preferred Stock, as amended
during 2025, include: (i) dividends at
Series D Preferred Stock
During
December 2024, the Company issued shares of its Series D Preferred Stock of which shares were issued pursuant to the termination
of a license agreement and shares were issued under the terms of a shares for services agreement. In connection with the May 15,
2026 Settlement Agreement and Release with J.H. Darbie discussed below, the Company issued shares of its Series D Preferred Stock
during the six months ended June 30, 2026. The total stated value of the Series D Preferred Stock at June 30, 2026, of $
Series D Preferred Stock Designation
On
December 6, 2024, the Company authorized up to shares of its Series D Preferred Stock. Each share of Series D Preferred Stock
shall have a par value of $ per share and a stated value equal to $ per share. Terms of the Series D Preferred Stock, as amended
during 2025, include: (i) no dividends, (ii) no voting rights, except as in regards to any changes related to the Series D Preferred
Stock, and (iii) conversion into shares of the Company’s Class A Common Stock at the higher of $ per share (such dollar amount
not adjusted for reverse and forward stock splits, stock dividends, stock combinations and other similar transactions) or
| 34 |
Series E Preferred Stock
On
September 19, 2025, the Company issued shares of its Series E Preferred Stock with a stated value of $per share, or $
Series E Preferred Stock Designation
On
June 25, 2025, the Company, filed an amendment to the Company’s Certificate of Incorporation in the form of a Certificate of Designation
that authorized for issuance of up to shares of a new series of Preferred Stock, par value $ per share, stated value
of $ per share, which are designated as the Series E Preferred Stock and it established the rights, preferences and limitations thereof.
Terms of the Series E Preferred Stock include (i) cash dividends at
Series E Preferred Stock Dividends Declared
On
June 30, 2026, the Company’s Board of Directors declared Series E Preferred Stock dividends pursuant to the terms discussed in
the paragraph above. Accordingly, at June 30, 2026, the Company has recorded a $
Declared and Deemed Dividends
During the three and six months ended June 30, 2026 and 2025, the Company recorded declared and deemed dividends as follows:
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||
| Declared Dividends: | ||||||||||||||||
| Series E Preferred Stock dividends payable in shares of Class A Common Stock | $ | $ | $ | $ | ||||||||||||
| Series E Preferred Stock dividends payable in cash (accrued at June 30, 2026) | ||||||||||||||||
| Total declared dividends | ||||||||||||||||
| Deemed Dividends: | ||||||||||||||||
| Trigger of anti-dilution provisions of Series C Preferred Stock | ||||||||||||||||
| Issuances of Series A and Series C Preferred Stock | ||||||||||||||||
| Triggers of down-round provisions of Assumed Warrants (a) | ||||||||||||||||
| Total deemed dividends | ||||||||||||||||
| Total Declared and Deemed Dividends | $ | $ | $ | $ | ||||||||||||
| (a) |
Class A Common Stock
As of June 30, 2026 and December 31, 2025, there were and shares of the Company’s Class A Common Stock issued and outstanding, respectively.
Shares Issued Pursuant to Series A Conversions
During the three months ended June 30, 2026 and 2025, the Company issued shares and shares of its Class A Common Stock, respectively, pursuant to conversions of shares and shares of the Company’s Series A Preferred Stock, respectively, and during the six months ended June 30, 2026 and 2025, the Company issued shares and shares of its Class A Common Stock, respectively, pursuant to conversions of and shares of the Company’s Series A Preferred Stock, respectively.
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 $
On May 15, 2025, the Company amended and restated the Strata Purchase Agreement to extend the maturity date to June 30, 2026 and amend the Purchase Price to define the price per share of Common Stock purchased shall equal % of the average of the two (2) lowest daily VWAP during the Valuation Period. shares of the Company’s Class A Common Stock were issued under the terms of the Strata Purchase Agreement, as amended and restated, during the three and six months ended June 30, 2026 and the year ended December 31, 2025 and the agreement has terminated by its terms on June 30, 2026.
| 35 |
Common Stock Issued/Issuable in Connection with Notes Payable
During
the three and six months ended June 30, 2026, shares of the Company’s Class A Common Stock were issued in connection with
the extension of a promissory note payable and during the six months ended June 30, 2026, shares of the Company’s Class
A Common Stock were issued as an inducement for a $
Common Stock Issued to Smithline Family Trust II
During the three and six months ended June 30, 2025, the Company issued and shares of its Class A Common Stock, respectively, under the terms of a legal settlement, as amended, between the Company and Smithline Family Trust II (“Smithline”).
Common Stock Issued to J.H. Darbie & Co., Inc.
During the six months ended June 30, 2025, the Company issued shares of its common stock to J.H. Darbie & Co., Inc. (“J.H. Darbie”) for finder’s fees in connection with notes payable.
During the six months ended June 30, 2025, the Company issued shares of its Class A Common Stock to J.H. Darbie for advisory services and private placement engagement as follows:
Advisory Services
On July 25, 2024, FOXO entered into the advisory agreement with J.H. Darbie pursuant to which J.H. Darbie was engaged as nonexclusive financial adviser. The term of the agreement was six months. As compensation for the services performed under the agreement, the Company issued J.H. Darbie shares of its Class A Common Stock effective January 13, 2025.
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 was 120 days, subject to early termination provisions in the Engagement. Under the Engagement, J.H. Darbie
had 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 performed under the Engagement, the Company issued to J. H. Darbie
shares of its Class A Common Stock effective in January 2025. As additional compensation for the services to be rendered by J.H. Darbie
under the Engagement, FOXO agreed to (i) pay a cash fee to J.H. Darbie equal to
On
November 7, 2024, FOXO and J.H. Darbie entered into an amendment to the Engagement pursuant to which the compensation for the services
to be rendered by J.H. Darbie was revised to a cash fee equal to $
| 36 |
Settlement Agreement and Release with J.H. Darbie
On May 15, 2026, the Company entered into a Settlement Agreement and Release (the “Settlement Agreement”) with J.H. Darbie to resolve all amounts owed under a finder’s fee agreement (as amended), the Advisory Agreement (as amended), and the Private Placement Agreement (as amended) (together, the “J.H. Darbie Agreements”), each of which had terminated pursuant to its terms.
Pursuant
to the Settlement Agreement, in full and complete satisfaction of all present and future obligations to J.H. Darbie under the J.H. Darbie
Agreements, the Company agreed to: (i) issue to J.H. Darbie
shares of the Company’s Series D Preferred Stock convertible
into shares of the Company’s Class A Common Stock; and (ii) pay J.H. Darbie the $
Management Contingent Share Plan
On September 14, 2022, the stockholders of the Company approved the FOXO Technologies Inc. Management Contingent Share Plan (the “Management Contingent Share Plan”). The Management Contingent Share Plan provided for the grant of restricted share awards of the Company’s Class A Common Stock. For the purposes of the Management Contingent Share Plan, shares of the Company’s restricted Class A Common Stock issued in accordance with such plan were considered “vested” when they are no longer subject to forfeiture in accordance with the terms of such plan. Each restricted share award issued under the Management Contingent Share Plan was initially subject to both a time-based vesting component and a performance-based vesting component but was subsequently modified to only require a time-based vesting component. Any restricted stock awards that failed to vest due to a time-based vesting condition, or other conditions not being satisfied, such as termination for cause. were forfeited by the participant and the shares associated with that award were permanently forfeited and cancelled. The Company accounts for forfeitures as they occur.
As a result of the STLA, which is more fully discussed in Note 1, a dispute, which is more fully discussed in Note 14, as to the forfeiture of shares granted to Mr. Sabes under the Management Contingent Share Plan in 2022 was resolved and the parties agreed that the restricted shares did not vest and were forfeited. In 2022, the Company recorded $ million of compensation expense for these shares and the Company retained the expense in its financial statements until the dispute was resolved. As a result of the resolution, in the three and six months ended June 30, 2026, the Company reversed the $ million of compensation expense in accordance with its accounting policy to account for forfeitures as they occur.
Warrants
Public Warrants and Private Placement Warrants
As of June 30, 2026 and December 31, 2025, the Company had outstanding approximately 18 Public Warrants and Private Placement Warrants each with an exercise price per share that is significantly out of the money due to the Reverse Stock Splits and each expiring on September 15, 2027 or earlier upon redemption or liquidation. The fair values of the Public Warrants and the Private Warrants at both June 30, 2026 and December 31, 2025 was nil, as more fully discussed in Note 3. These warrants are more fully described in Note 13 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2025.
| 37 |
Assumed Warrants
Effective
September 15, 2022, the Company consummated a business combination. In connection with business combination, the Company assumed warrants,
referred to as the Assumed Warrants. The Assumed Warrants included 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 current exercise price per share,
then the exercise price of the Assumed Warrants shall be lowered to the new consideration amount on a per share basis with a simultaneous
and corresponding increase in the number of warrants. In February 2025, conversions of the Company’s Series A Preferred Stock into
the Company’s Class A Common Stock resulted in two additional triggers of the down-round provisions. The incremental value of the
modifications to the Assumed Warrants because of the triggers of the down-round provisions during February 2025 resulted in deemed dividends
of $ million in the six months ended June 30, 2025 and an increase in the number of Assumed Warrants outstanding. The incremental
values were measured using the Black Scholes valuation model with the following assumptions: risk free rates ranging from % to %,
volatility ranging from % to %, terms of to days and expected dividend yield of $. On February 23, 2025, the remaining
Vector Warrants
In
connection with the Vector Acquisition, which is more fully discussed in Note 5, on September 19, 2025, the Company issued Vector
Warrants exercisable into shares of the Company’s Class A Common Stock at an exercise price of $
Note 13 BUSINESS SEGMENTS
The
Company manages and classifies its business into
| ● | Healthcare - The Company’s Healthcare segment includes the operations of Myrtle and RCHI’s hospital, BSF. Myrtle offers behavioral health services, primarily substance use disorder treatments and services that are provided on either an inpatient, residential basis or an outpatient basis. 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. | |
| ● | Life Science Services – The Company’s Life Science Services segment began with the acquisition of Vector on September 19, 2025. Vector is an information, data and biospecimen sourcing provider serving the biotechnology, clinical research and pharmaceutical research industries. | |
| ● | Labs - The Company’s Labs segment is commercializing proprietary epigenetic biomarker technology. The Company’s innovative biomarker technology enables the adoption of new saliva-based health and wellness biomarker solutions. 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. |
The primary income measure used for assessing segment performance and making operating decisions is income (losses) before interest, income taxes, depreciation and amortization not associated with a specific segment and is net of noncontrolling interest. 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 of intangible assets. Segment income (loss) is a measure of operating performance that is not defined by U.S. GAAP and should not be considered a substitute for net income (loss) as determined in accordance with U.S. GAAP. Segment income (loss) as presented below is used by our CEO, who is our chief operating decision maker, to measure operating performance.
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Assets by segment as of June 30, 2026 and December 31, 2025 were as follows:
June 30, 2026 | December 31, 2025 | |||||||
| Healthcare | $ | $ | ||||||
| Life Science Services | ||||||||
| Labs | ||||||||
| Corporate and other | ||||||||
| Total assets | $ | $ | ||||||
Summarized below is information about the Company’s operations for the three months ended June 30, 2026 and 2025 by business segment:
| Net Revenues | Segment Basis Income (Loss) (Non-GAAP Presentation) | |||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||
| Healthcare (a) | $ | $ | ( | ) | $ | |||||||||||
| Life Science Services | ( | ) | ||||||||||||||
| Labs | ( | ) | ( | ) | ||||||||||||
Segment Earnings (Loss) | ( | ) | ||||||||||||||
| Management contingent share plan forfeiture (expense) | ( | ) | ||||||||||||||
| Gain on legal settlement | ||||||||||||||||
| Corporate and other | ( | ) | ( | ) | ||||||||||||
| Interest expense | ( | ) | ( | ) | ||||||||||||
| Total | $ | $ | $ | $ | ( | ) | ||||||||||
| (a) |
Summarized below is information about the Company’s operations for the six months ended June 30, 2026 and 2025 by business segment:
| Revenues | Segment Basis Income (Loss) (Non-GAAP Presentation) | |||||||||||||||
| Six Months Ended June 30, 2026 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2026 | Six
Months June 30, 2025 | |||||||||||||
| Healthcare (a) | $ | $ | $ | $ | ||||||||||||
| Life Science Services | ( | ) | ||||||||||||||
| Labs | ( | ) | ( | ) | ||||||||||||
| ( | ) | |||||||||||||||
| Management contingent share plan forfeiture (expense) | ( | ) | ||||||||||||||
| Gain from extinguishment of Senior PIK Notes | ||||||||||||||||
| Gain on legal settlement, net | ||||||||||||||||
| Corporate and other | ( | ) | ( | ) | ||||||||||||
| Interest expense | ( | ) | ( | ) | ||||||||||||
| Total | $ | $ | $ | $ | ( | ) | ||||||||||
| (a) |
Note 14 COMMITMENTS AND CONTINGENCIES
The Company accrues 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 consolidated statements of operations during the period of the change and appropriately reflected in the consolidated balance sheets.
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Legal Proceedings
Former CEO Severance
The Company has disclosed in previous financial filings that the Board of Directors had yet to complete its review into whether Mr. Jon Sabes, a former CEO of the Company was terminated with or without cause on November 14, 2022 and that accordingly, the Company had to make a determination on its obligations under the former CEO’s employment agreement.
On May 27, 2026, the Company, together with its wholly-owned subsidiary, FOXO Labs, entered into the STLA with Mr. Sabes and LongevityFP Technologies. The material terms of the STLA are more fully discussed in Note 1. The STLA includes mutual releases between the Company and Mr. Sabes and resolves all prior matters between the parties, including accrued severance, which is no longer owed as more fully discussed in Note 8, and the forfeiture of restricted stock granted under the Company’s Management Contingent Share Plan, which is more fully discussed in Note 12.
Illumina Judgment
On
June 21, 2024, Hennepin County District Court granted Illumina, Inc.’s Motion for Summary Judgment in the amount of $
Other Matters
In
July 2025, Gateway Group, Inc. filed a legal action in Orange County, California seeking payment of $
In
the second quarter of 2025, Data Shepherd Services, Inc. received a judgment against the Company for an unpaid balance of approximately
$
In
June 2025, func.media inc. filed a legal action in Minnesota seeking a total sum of $
The Company is also party to various other legal proceedings for liabilities, for legacy debts of the Company, and could become a party to claims, and regulatory, tax or government inquiries and investigations that arise in the ordinary course of business. The Company may in the future be subject to additional legal proceedings and disputes.
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Note 15 SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
The supplemental cash flow information for the six months ended June 30, 2026 and 2025 is as follows:
| Six Months Ended June 30, | ||||||||
| 2026 | 2025 | |||||||
| Cash interest paid | $ | $ | ||||||
| Cash income taxes paid | $ | $ | ||||||
| Non-cash investing and financing activities: | ||||||||
| Purchase of RCHI | $ | $ | ||||||
| Payable to RHI for additional purchase price of RCHI | $ | $ | ||||||
| Series B Preferred Stock issued in exchange for note payable, net of finder’s fees | $ | $ | ||||||
| Non-cash interest, including default penalties | $ | $ | ||||||
| Declared and deemed dividends from preferred stock, including issuances and anti-dilution provisions thereof and triggers of down-round provisions of Assumed Warrants | $ | $ | ||||||
| Preferred stock dividends – undeclared | $ | $ | ||||||
| Class A Common Stock issued for legal settlement | $ | $ | ||||||
| Class A Common Stock issued for conversions and exchanges of notes payable | $ | $ | ||||||
| Series A Preferred Stock exchanged for Notes Payable | $ | $ | ||||||
| Notes payable issued in exchange for Series A Preferred Stock | $ | $ | ||||||
| Series D Preferred Stock issued in lieu of common stock for finder’s fees | $ | $ | ||||||
| Common Stock issued/issuable under the terms of notes payable | $ | $ | ||||||
| Common stock issuable to finder for finder’s fees | $ | $ | ||||||
Note 16 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. Other than as described below, the Company did not identify any subsequent events that would have required adjustment or disclosure in the unaudited condensed consolidated financial statements.
Promissory Notes with Institutional Investors Dated July 17, 2026
On
July 17, 2026, the Company issued two unsecured promissory notes payable to institutional investors, each with: (i) a principal balance
of $
Issuances of Class A Common Stock
During
the period July 1, 2026 to August 11, 2026, the Company issued shares of its Class A Common Stock upon conversions of $
On July 10, 2026, shares of the Company’s Class A Common Stock were issued in lieu of fractional shares in the Third Reverse Stock Split.
Asset Purchase Agreement with Grifols Bio Supplies, Inc.
On July 22, 2026, Vector entered into an asset purchase agreement (the “Purchase Agreement”) with Grifols Bio Supplies, Inc., a subsidiary of Grifols S.A. (the “Seller”), pursuant to which Vector (or a subsidiary of Vector) agreed to purchase certain assets and assume certain liabilities associated with four U.S.-based blood collection centers operated by the Seller (the “Acquisition”).
The
Purchase Agreement provides for aggregate cash consideration of $
Consummation of the Acquisition is subject to the satisfaction or waiver of customary closing conditions, including the absence of any governmental order prohibiting the transaction, the accuracy of the parties’ representations and warranties and performance of their respective covenants, and the receipt of specified consents. In addition, the closing is conditioned upon Vector obtaining a new and separate FDA license to operate the acquired assets, independent of the Seller’s existing FDA license, as well as a new and separate CLIA certification in Tennessee (and any other state in which Vector operates the business) and a waste-management permit issued by the applicable Miami city authority, in each case independent of the Seller’s existing certifications and permits.
Either party may terminate the Purchase Agreement if the closing has not occurred on or before the date that is nine months after the date of the Purchase Agreement (the “Long Stop Date”). The Company currently anticipates that the closing will occur in the third or fourth quarter of 2026.
We do not currently have sufficient capital to fund the cash consideration, and we will need to secure additional financing to complete the acquisition. There can be no assurance that these conditions will be satisfied, that the necessary financing will be available on acceptable terms or at all, or that the acquisition will close within the timeframe we anticipate or at all.
Proposed Reverse Stock Split
On August 13, 2026,
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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 summarize 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, 2025, 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.
Formation
We were formed as a limited liability company on November 11, 2019, following our separation from GWG Holdings, Inc. We were previously named InsurTech Holdings, LLC and FOXO BioScience LLC. On November 13, 2020, FOXO Bioscience LLC completed a conversion to a C Corporation and became FOXO.
Effective September 15, 2022, we consummated our previously announced business combination pursuant to the Merger Agreement, whereby DWIN Merger Sub Inc. merged with and into Legacy FOXO, with Legacy FOXO surviving as a wholly-owned subsidiary of the Company. Upon consummation of our business combination, our name changed from Delwinds Insurance Acquisition Corp. to FOXO Technologies Inc.
Overview
As of June 30, 2026, FOXO owns and operates four principal subsidiaries.
Myrtle Recovery Centers, Inc., (“Myrtle”) a 30-bed behavioral health facility in East Tennessee. Myrtle provides inpatient services for detox and residential treatment and outpatient services for medication assisted treatment (“MAT”) and OBOT Programs.
Rennova Community Health, Inc., (“RCHI”) owns and operates Scott County Community Hospital, Inc. (“SCCH”) (d/b/a Big South Fork Medical Center (“BSF”)), a critical access-designated (“CAH”) hospital in East Tennessee.
Vector BioSource Inc. (“Vector”) is an information, data and biospecimen sourcing provider serving the biotechnology, clinical research and pharmaceutical research industries.
FOXO Labs, Inc. is a biotechnology company dedicated to improving human health and life span through the development of cutting-edge technology and product solutions for various industries.
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Our Business Segments
We manage and classify our business into three reportable business segments: (i) Healthcare, (ii) Life Science Services and (iii) Labs.
| ● | Healthcare - The Company’s healthcare segment includes Myrtle and RCHI’s hospital SCCH, doing business as BSF. Myrtle offers behavioral health services, primarily substance use disorder treatments and services that are provided on either an inpatient, residential basis or an outpatient basis. 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. |
| ● | Life Science Services – The Company’s Life Science Services segment began with the acquisition of Vector on September 19, 2025. Vector is an information, data and biospecimen sourcing provider serving the biotechnology, clinical research and pharmaceutical research industries. |
| ● | Labs - The Company’s Labs segment is commercializing proprietary epigenetic biomarker technology. The Company’s innovative biomarker technology enables the adoption of new saliva-based health and wellness biomarker solutions. 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. |
Reverse Stock Splits
On April 17, 2025, the Company’s board of directors (pursuant to a previously-obtained shareholder approval) approved the implementation of a 1-for-10 reverse stock split, such that every 10 shares of the Company’s Class A Common Stock will be combined into one issued and outstanding share of Class A Common Stock, the First Reverse Stock Split. On July 17, 2025, the Company’s board of directors (pursuant to previously-obtained shareholder approval) approved the implementation of a 1-for-1.99 reverse stock split, such that every 1.99 shares of the Company’s Class A Common Stock will be combined into one issued and outstanding share of the Company’s Class A Common Stock, the Second Reverse Stock Split. On June 30, 2026, the Company’s board of directors (pursuant to previously obtained shareholder approval) approved the implementation of a 1-for-3,000 reverse stock split, such that every 3,000 shares of the Company’s Class A Common Stock will be combined into one issued and outstanding share of the Company’s Class A Common Stock, the Third Reverse Stock Split. The reverse stock splits did not result in a change in the $0.0001 par value per share of the Company’s Class A Common Stock.
The First Reverse Stock Split was effective on April 28, 2025. The Second Reverse Stock Split was effective on July 27, 2025. The Third Reverse Stock Split was effective on June 30, 2026.
All share amounts herein have been adjusted to reflect the reverse stock split.
Acquisition of Vector Under Stock Purchase Agreement
On September 9, 2025, the Company entered into the Stock Purchase Agreement with Vector, (the “Vector SPA”), between the stockholders (each, a “Seller,” or, together, the “Sellers”) owning all of the issued and outstanding equity securities of Vector (the “Purchased Shares”) and FOXO Acquisition Corporation, a Florida corporation and wholly-owned subsidiary of the Company (“FAC”), (the “Vector Acquisition”). Pursuant to the SPA, upon closing on September 19, 2025, the Sellers exchanged the Purchased Shares for (i) $500,000 in cash, (ii) 60,000 shares of the Company’s Series E Cumulative Redeemable Secured Preferred Stock (the “Series E Preferred Stock”) with a stated value of $25.00 per share, or a total stated value of $1,500,000, (iii) 128,950 three year warrants to purchase shares of the Company’s Class A Common Stock with an exercise price of $15.51 per share (the “Vector Warrants”), which was equal to the closing price of the Company’s Class A Common Stock on the trading day immediately prior to closing, plus 10%, (subject to adjustment) valued at $769,826 and (iv) up to 80,000 shares of Series E Preferred Stock to be issued to the Sellers on or before 120 days after the two-year anniversary of the closing; provided that, such shares will only be issued in the event that the Qualifying Revenue (as defined in the Vector SPA) of the Business (as defined in the Vector SPA) during the 12-month period between the first and second anniversary of the closing are at least $4,000,000; provided, further, that in the event that less than $4,000,000 of Qualifying Revenues are actually collected by Vector on or before 90 days after the second anniversary of the closing, the number of shares of Series E Preferred Stock to be issued to the Sellers will be reduced by an amount equal to one share for each $25.00 of Qualifying Revenues less than $4,000,000 collected by such date; and, provided, further, if a Change of Control (as defined in the Vector SPA) of the Company occurs prior to the two-year anniversary of the closing, all of the up to 80,000 shares of Series E Preferred Stock will be issued to the Sellers as of the date of such Change of Control. Pursuant to the Vector SPA, the Sellers have the right, but not obligation, to repurchase the Purchased Shares under certain limited circumstances at fair market value as determined by a third party and subject to a floor. As of June 30, 2026, the Company has recorded $500,000 of additional contingent purchase price consideration, which amount was based on the estimated value of additional shares of Series E Preferred Stock that will be owed pursuant to current projections of Qualifying Revenue.
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Vector is an information, data and biospecimen sourcing provider serving the biotechnology, clinical research and pharmaceutical research industries.
Current Business Strategy
Myrtle Recovery Centers, Inc.
We acquired Myrtle on June 14, 2024 under the terms of a stock exchange agreement with RHI. 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.
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 patients. On November 1, 2023, Myrtle began accepting patients at its 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. On April 11, 2023, Myrtle sold shares of its common stock equivalent to a 1.961% ownership stake in the subsidiary for de minimis value to an unaffiliated individual licensed as a physician in Tennessee. The shares have certain transfer restrictions, including the right of the subsidiary to transfer the shares to another physician licensed in Tennessee for de minimis value. The shares were sold to the individual for Tennessee healthcare regulatory reasons.
We plan to expand the Myrtle business model by acquiring additional operating facilities and by replicating the model in other rural hospital properties or suitable premises.
Rennova Community Health, Inc.
We acquired RCHI on September 10, 2024 under the terms of a stock exchange agreement with RHI. RCHI’s wholly-owned subsidiary, SCCH, is an east Tennessee based Critical Access Designated (CAH) 25-bed hospital licensed by the state of Tennessee, offering quality healthcare services for Oneida and the surrounding areas. SCCH is doing business as BSF. BSF consists 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. The hospital first opened in late 1955 and was known as Scott County Community Hospital. The hospital has been operated by RCHI since August 2017.
We plan to grow this division by expansion of services at its BSF campus and acquisitions in targeted areas.
Vector BioSource Inc.
Vector is an information, data and biospecimen sourcing provider serving the biotechnology, clinical research and pharmaceuticals research industries. Vector plans to transform the biospecimen sourcing landscape with an innovative AI-driven platform that it believes will provide researchers’ immediate access to bio-samples, including, whole blood samples, bulk serum collections and toxicology urine specimens. The Company is actively pursuing an acquisition in the sector that, if successful, will deliver an FDA-approved collection and processing capability in the US from which Vector can aggressively grow its business. Vector is also actively seeking international sourcing partners that can provide certain (rare) disease state samples for the research and development sector only. Vector has initiated its first agreement with a partner in India and has been successful in sourcing samples from there as well as from Latin America to satisfy certain orders received.
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We plan to grow this division by organic expansion of the current business and acquisition of similar or complementary businesses.
FOXO Labs
Our epigenetics subsidiary has been serving as a pioneer in the development and integration of epigenetic biomarkers into state-of-the-art underwriting protocols and consumer engagement tools. We are using next-generation technology to transform human health and longevity.
Epigenetic technology has been proven to provide health, lifestyle, and longevity insights that have never before been accessible to humans—from just a single saliva sample. Using saliva-based epigenetic biomarkers, we are eliminating the need for invasive collection, allowing us to provide scientists with advanced epigenetic testing services and bioinformatic tools that support groundbreaking research.
We believe there is growing demand for direct-to-consumer wellness testing and epigenetic data analysis tools and are concentrating efforts on: (1) our Bioinformatics Services offering, a suite of bioinformatic tools to help researchers process, analyze, and interpret epigenetic data; and (2) research and development in the fields of health and wellness testing powered by machine learning and artificial intelligence (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). To further these goals, we intend to leverage the extensive epigenetic data we have generated in our clinical trials and the expertise of our team and continue building strategic alliances with new partners in academia, business, healthcare and government. We also intend to frequently evaluate and develop commercialization opportunities for our product and service offerings and our research findings.
On May 27, 2026, the Company, together with its wholly-owned subsidiary, FOXO Labs, entered into a Strategic Technology License Agreement (the “STLA”) with Jon R. Sabes, the Company’s founder, and LongevityFP Technologies, LLC, a Minnesota limited liability company controlled by Mr. Sabes (“LongevityFP Technologies”).
The material terms of the STLA are as follows: (i) License. The Company and FOXO Labs granted LongevityFP Technologies an exclusive, worldwide license to commercialize the Company’s Epigenetics intellectual property portfolio, including two issued U.S. patents (U.S. Patent Nos. 11,795,495 and 11,817,214), a 13,000+ individual epigenetic dataset, proprietary machine learning models and algorithms, and related work product and arrangements (collectively, the “Licensed IP”); (ii) Royalty. LongevityFP Technologies will pay the Company a royalty equal to 3% of net revenues derived from commercialization of the Licensed IP, subject to an aggregate cap of $1,300,000; (iii) Acquisition Option. LongevityFP Technologies received an exclusive, irrevocable ten-year option to acquire majority ownership of FOXO Labs. Upon a “Track A” exercise, LongevityFP Technologies acquires 100% of FOXO Labs and issues the Company a preferred membership interest representing 40% of LongevityFP Technologies’s fully diluted common equity. Upon a “Track B” exercise, FOXO Labs issues LongevityFP Technologies 60% of FOXO Labs’s fully diluted equity, with the Company retaining 40%; (iv) IP Retention. The Company retains ownership of FOXO Labs and the Licensed IP throughout the license period.
Net Revenues
Healthcare generates revenues from hospital and ancillary services as well as substance abuse treatments, including inpatient and outpatient services. Life Science Services generates revenues from sales of biological materials, such as blood and urine to the pharmaceutical and biotechnology research sectors. Labs currently recognizes revenues from collecting a royalty from Illumina, Inc. related to the sales of the Infinium Mouse Methylation Array.
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Results of Operations
Three Months Ended June 30, 2026 and 2025
| Three Months Ended | ||||||||||||||||
| June 30, | Change in | Change in | ||||||||||||||
| 2026 | 2025 | $ | % | |||||||||||||
| Net revenues | $ | 4,715,016 | $ | 5,218,373 | $ | (503,357 | ) | -9.65 | % | |||||||
| Operating expenses: | ||||||||||||||||
| Direct costs of revenues | 2,395,326 | 1,975,325 | 420,001 | 21.26 | % | |||||||||||
| Research and development | 23,700 | 40,183 | (16,483 | ) | -41.02 | % | ||||||||||
| Management contingent share plan (forfeiture) expense | (9,129,890 | ) | 18,878 | (9,148,768 | ) | NM | ||||||||||
| Selling, general and administrative expenses | 2,677,438 | 2,616,866 | 60,572 | 2.31 | % | |||||||||||
| Total operating income (expenses) | (4,033,426 | ) | 4,651,252 | (8,684,678 | ) | NM | % | |||||||||
| Income (loss) from operations | 8,748,442 | 567,121 | 8,181,321 | NM | ||||||||||||
| Change in fair value of warrant liabilities | - | 7,576 | (7,576 | ) | -100.00 | % | ||||||||||
| Interest expense | (1,310,833 | ) | (1,008,751 | ) | (302,082 | ) | 29.95 | % | ||||||||
| Gain from legal settlement | 1,648,377 | - | 1,648,377 | 0.00 | % | |||||||||||
| Other non-operating income (expenses), net | (949,093 | ) | (92,252 | ) | (856,841 | ) | NM | % | ||||||||
| Provision for income taxes | - | - | NM | % | ||||||||||||
| Net income (loss), including noncontrolling interest | 8,136,893 | (526,306 | ) | 8,663,199 | NM | |||||||||||
| Noncontrolling interest | 3,192 | 4,285 | (1,093 | ) | -25.51 | % | ||||||||||
| Net income (loss) attributable to FOXO | 8,140,085 | (522,021 | ) | 8,662,106 | NM | |||||||||||
| Preferred stock dividends and deemed dividends | (135,605 | ) | (265,070 | ) | 129,465 | -48.84 | % | |||||||||
| Net income (loss) to common stockholders | $ | 8,004,480 | $ | (787,091 | ) | $ | 8,791,571 | NM | ||||||||
NM - Not Meaningful
Net Revenues. Net revenues were $4.7 million for the three months ended June 30, 2026, compared to $5.2 million for the three months ended June 30, 2025, a decrease of $0.5 million. We attribute the decrease in net revenues for the three months ended June 30, 2026 to RCHI recording $0.6 million of net revenues from the State of Tennessee’s Hospital Improvement Plan (“THIP”) during the three months ended June 30, 2026 compared to $2.5 million of net revenues from the THIP recorded in the three months ended June 30, 2025. The THIP is designed to increase revenues for hospitals serving TennCare patients. Excluding the impact of the THIP revenues, RCHI’s net revenues increased by $1.1 million in the three months ended June 30, 2026 compared to the 2025 period due to increased volume, including an increase in swing-bed patient services. A “swing-bed” is a change in reimbursement status, as the billing status “swings” from billing for acute care services to billing for post-acute skilled nursing services, despite the fact that the patient stays in the same physical location. Partially offsetting the decrease in net revenues was an increase in Myrtle’s net revenues of $0.1 million due to increased patient days and Vector’s net revenues of $0.2 million. Vector was acquired on September 19, 2025.
Direct Costs of Revenues. Direct costs of revenues were $2.4 million for the three months ended June 30, 2026, compared to $2.0 million of direct costs of revenues for the three months ended June 30, 2025. Myrtle’s direct costs of revenues increased by $52,000 and RCHI’s increased by $260,000. In addition, Vector, acquired on September 19, 2025, contributed $0.1 million of the increase. As a percentage of net revenues, direct costs of revenues were 51% and 38% for the three months ended June 30, 2026 and 2025, respectively.
Research and Development. Research and development expenses were $23,700 and $40,183 for the three months ended June 30, 2026 and 2025, respectively. We incurred less compensation costs in the 2026 period.
Management Contingent Share Plan. Management Contingent Share Plan forfeiture for the three months ended June 30, 2026 of $9.1 million represents the forfeiture of unvested shares under the plan by the former founder of the Company in connection with the STLA. The expense of $18,878 for the three months ended June 30, 2025 resulted from the partial vesting of a share during the period. As of June 30, 2026, all shares previously issued under the plan have been forfeited.
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Selling, General and Administrative. Selling, general and administrative expenses were $2.7 million for the three months ended June 30, 2026, compared to $2.6 million for the three months ended June 30, 2025. We attribute the increase to Vector’s selling, general and administrative expenses of $0.3 million and $0.2 million of operating interest on right of use lease obligations, partially offset by decreases in Corporate expenses and Healthcare wages.
Change in Fair Value of Warrant Liabilities. The fair value of warrant liabilities decreased by $0 and $7,576 in the three months ended June 30, 2026 and 2025, respectively. Changes in fair values resulted from changes in the quoted prices of the Public Warrants on the OTC Pink Marketplace. The warrants have no intrinsic value.
Interest Expense. Interest expense was $1.3 million for the three months ended June 30, 2026 compared to $1.0 million for the three months ended June 30, 2025. The increase was due to the increase in notes payable and interest on Medicare cost report settlements during the three months ending June 30, 2026 compared to the 2025 period and $0.4 million of payment default penalties and default interest that was incurred in the three months ended June 30, 2026 compared to $0.3 million in the three months ended June 30, 2025. Partially offsetting the increase in the three months ended June 30, 2026 was $0.2 million of interest on the right-of-use operating lease obligations that is included in selling, general and administrative expenses in the 2026 period.
Gain From Legal Settlement. The gain from legal settlement in the three months ended June 30, 2026 resulted from the reversal of $1.5 million of accrued severance and $0.1 million of accrued legal fees that were no longer owed under the terms of the STLA.
Other Non-Operating Expenses, Net. Other non-operating expenses, net was $0.9 million for the three months ended June 30, 2026, compared to $0.1 million for the three months ended June 30, 2025. The other non-operating expenses, net for the three months ended June 30, 2026 resulted primarily from a $0.8 million 2023 pre-RCHI acquisition Medicare cost report settlement, $0.2 million of penalties and interest for nonpayment of payroll taxes and $68,706 of RCHI additional purchase price, partially offset by $0.1 million of hospital cafeteria income. The other non-operating expenses, net for the three months ended June 30, 2025 resulted primarily from $0.1 million of penalties and interest for nonpayment of payroll taxes.
Net Income (Loss) Attributable to FOXO. Net income attributable to FOXO was $8.1 million for the three months ended June 30, 2026 compared to a net loss attributable to FOXO of $0.5 million for the three months ended June 30, 2025. Excluding the impact of the forfeiture of the unvested Management Contingent Share Plan shares, we incurred a loss from operations of $0.4 million for the three months ended June 30, 2026 compared to income of $0.6 million for the three months ended June 30, 2025. We attribute the change of $1.0 million primarily to the decrease in net revenues in the 2026 period. Also contributing was an increase in direct costs as a percentage of net revenues in the 2026 period. Excluding the impact of the forfeiture of the unvested Management Contingent Share Plan shares, the net loss attributable to FOXO was $1.0 million in the three months ended June 30, 2026 compared to $0.5 million in the comparable 2025 period as the gain from legal settlement partially offset the impact of the decrease in net revenues and the increases in interest expense and other non-operating expenses, net. We recorded declared dividends on our Series E Preferred Stock and deemed dividends from the anti-dilution provisions of preferred stock totaling $0.1 million in the three months ended June 30, 2026 compared to deemed dividends in the three months ended June 30, 2025 of $0.3 million, which resulted from the issuances of and triggers of the down-round provisions of preferred stock. Including these declared and deemed dividends, the net income (loss) to common stockholders was $8.0 million and ($0.8) million for the three months ended June 30, 2026 and 2025, respectively.
| 47 |
Six Months Ended June 30, 2026 and 2025
| Six Months Ended | ||||||||||||||||
| June 30, | Change in | Change in | ||||||||||||||
| 2026 | 2025 | $ | % | |||||||||||||
| Net revenues | $ | 9,883,052 | $ | 8,388,293 | $ | 1,494,759 | 17.82 | % | ||||||||
| Operating expenses: | ||||||||||||||||
| Direct costs of revenues | 4,929,539 | 3,879,261 | 1,050,278 | 27.07 | % | |||||||||||
| Research and development | 59,250 | 70,183 | (10,933 | ) | -15.58 | % | ||||||||||
| Management contingent share plan (forfeiture) expense | (9,129,890 | ) | 37,756 | (9,167,646 | ) | NM | ||||||||||
| Selling, general and administrative expenses | 5,552,562 | 5,380,952 | 171,610 | 3.19 | % | |||||||||||
| Total operating expenses | 1,411,461 | 9,368,152 | (7,956,691 | ) | -84.93 | % | ||||||||||
| Income (loss) from operations | 8,471,591 | (979,859 | ) | 9,451,450 | NM | |||||||||||
| Change in fair value of warrant liabilities | - | 39,170 | (39,170 | ) | -100.00 | % | ||||||||||
| Gain from extinguishment of Senior PIK Notes | - | 1,863,834 | (1,863,834 | ) | -100.00 | % | ||||||||||
| Interest expense | (2,283,968 | ) | (1,898,543 | ) | (385,425 | ) | 20.30 | % | ||||||||
| Gain from legal settlements, net | 1,630,127 | - | 1,630,127 | 0.00 | % | |||||||||||
| Other non-operating expenses, net | (1,136,043 | ) | (171,716 | ) | (964,327 | ) | NM | % | ||||||||
| Provision for income taxes | - | - | - | NM | % | |||||||||||
| Net income (loss), including noncontrolling interest | 6,681,707 | (1,147,114 | ) | 7,828,821 | NM | |||||||||||
| Noncontrolling interest | 6,405 | 8,635 | (2,230 | ) | -25.83 | % | ||||||||||
| Net income (loss) attributable to FOXO | 6,688,112 | (1,138,479 | ) | 7,826,591 | NM | |||||||||||
| Preferred stock dividends and deemed dividends | (135,605 | ) | (437,195 | ) | 301,590 | -68.98 | % | |||||||||
| Net income (loss) to common stockholders | $ | 6,552,507 | $ | (1,575,674 | ) | $ | 8,128,181 | NM | ||||||||
NM- Not Meaningful
Net Revenues. Net revenues were $9.9 million for the six months ended June 30, 2026, compared to $8.4 million for the six months ended June 30, 2025. Vector, acquired on September 19, 2025, contributed $0.6 million of the increase, Myrtle contributed approximately $0.3 million of the increase and RCHI contributed approximately $0.6 million of the increase. We attribute the increase in Myrtle’s net revenue to increased patient days. Partially offsetting the increase in RCHI’s net revenues for the six months ended June 30, 2026 compared to the six months ended June 30, 2025 were net revenues of $1.2 million from the THIP in the six months ended June 30, 2026 compared to net revenues of $2.5 million from the THIP in the six months ended June 30 2025. The THIP is designed to increase revenues for hospitals serving TennCare patients. Excluding the THIP revenue, RCHI’s net revenues increased by approximately $1.9 million in the six months ended June 30, 2026 compared to the 2025 period. We attribute the increase in RCHI’s net revenues to increased volume, including an increase in swing-bed patient services. A “swing-bed” is a change in reimbursement status, as the billing status “swings” from billing for acute care services to billing for post-acute skilled nursing services, despite the fact that the patient stays in the same physical location.
Direct Costs of Revenues. Direct costs of revenues were $4.9 million and $3.9 million for six months ended June 30, 2026 and 2025, respectively. Vector, acquired on September 19, 2025, contributed $0.4 million of the increase and RCHI’s increased by $0.6 million. As a percentage of net revenues, direct costs of net revenues were 50% and 46% for the six months ended June 30, 2026 and 2025, respectively.
Research and Development. Research and development expenses were $59,250 and $70,183 for the six months ended June 30, 2026 and 2025, respectively. We incurred less compensation costs in the 2026 period.
Management Contingent Share Plan. Management Contingent Share Plan forfeiture for the six months ended June 30, 2026 of $9.1 million represents the forfeiture of unvested shares under the plan by the former founder of the Company in connection with the STLA. The expense for the six months ended June 30, 2025 resulted from the partial vesting of a share during the period. As of June 30, 2026, all shares previously issued under the plan have been forfeited.
| 48 |
Selling, General and Administrative. Selling, general and administrative expenses were $5.6 million for the six months ended June 30, 2026, compared to $5.4 million for the six months ended June 30, 2025. We attribute the increase to Vector’s selling, general and administrative expenses of $0.5 million and $0.4 million of operating interest on right of use lease obligations, partially offset by a decrease of $0.6 million in Corporate expenses and Healthcare wages.
Change in Fair Value of Warrant Liabilities. The fair value of warrant liabilities decreased by $0 and $39,170 in the six months ended June 30, 2026 and 2025, respectively. Changes in fair values resulted from changes in the quoted prices of the Public Warrants on the OTC Pink Marketplace. The warrants have no intrinsic value.
Gain from Extinguishment of Senior PIK Notes. During the six months ended June 30, 2025, we exchanged $5.4 million of Senior PIK Notes, which included $1.9 million of accrued interest, for $3.5 million of stated value of our Series B Preferred Stock resulting in a gain of $1.9 million.
Interest Expense. Interest expense was $2.3 million for the six months ended June 30, 2026 compared to $1.9 million for the six months ended June 30, 2025. The increase was due to the increase in notes payable and interest on Medicare cost report settlements during the six months ending June 30, 2026 compared to the 2025 period and $0.9 million of default penalties and default interest that was incurred in the six months ended June 30, 2026 compared to default penalties and default interest of $0.3 million that was incurred in the 2025 period. Partially offsetting the increase in the six months ended June 30, 2026 was $0.4 million of interest on the right-of-use operating lease obligations that is included in selling, general and administrative expenses in the 2026 period and interest on the Senior PIK Notes that were exchanged for Series B Preferred Stock in January 2025.
Gain From Legal Settlement, Net. The gain from legal settlement, net in the six months ended June 30, 2026 resulted primarily from the reversal of $1.5 million of accrued severance and $0.1 million of accrued legal fees that were no longer owed under the terms of the STLA.
Other Non-Operating Expenses, Net. Other non-operating expenses, net was $1.1 million for the six months ended June 30, 2026 compared to other non-operating expenses, net of $0.2 million for the six months ended June 30, 2025. The other non-operating expenses, net for the six months ended June 30, 2026 resulted primarily from a $0.8 million 2023 pre-RCHI acquisition Medicare cost report settlement, $0.4 million of penalties and interest for nonpayment of payroll taxes and $0.1 million of RCHI additional purchase price, partially offset by $0.1 million of hospital cafeteria income. The other non-operating expenses, net in the six months ended June 30, 2025 resulted primarily from $0.3 million of penalties and interest for nonpayment of payroll taxes, partially offset by hospital cafeteria income of $0.1 million.
Net Income (Loss) Attributable to FOXO. Net income attributable to FOXO was $6.7 million for the six months ended June 30, 2026 compared to a net loss attributable to FOXO of $1.1 million for the six months ended June 30, 2025. Excluding the impact of the forfeiture of the unvested Management Contingent Share Plan shares, we incurred a loss from operations of $0.7 million for the six months ended June 30, 2026 compared to a loss from operations of $1.0 million for the six months ended June 30, 2025. We attribute the improvement to the increase in net revenues in the 2026 period. Excluding the impact of the forfeiture of the unvested Management Contingent Share Plan shares, the net loss attributable to FOXO was $2.4 million in the six months ended June 30, 2026 compared to $1.1 million in the comparable 2025 period as a result of the increase in total non-operating expenses in the six months ended June 30, 2026 compared to the 2025 period. We recorded declared dividends on our Series E Preferred Stock and deemed dividends from the anti-dilution provisions of our preferred stock totaling $0.1 million the six months ended June 30, 2026 compared to $0.4 million of deemed dividends from the anti-dilution provisions of and the issuances of preferred stock and the triggers of the down round provisions of the Assumed Warrants in the six months ended June 30, 2025. Including these declared and deemed dividends, the net income (loss) to common stockholders was $6.6 million and $(1.6) million for the six months ended June 30, 2026 and 2025, respectively.
Analysis of Segment Results:
The following is an analysis of our results by reportable segment for the three and six months ended June 30, 2026 compared to the three and six months ended June 30, 2025. The primary earnings/loss measure used for assessing reportable segment performance is segment income/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.
| 49 |
Healthcare
Three Months Ended June 30, 2026 | Three Months Ended June 30, 2025 | Change in $ | Change in % | |||||||||||||
| Net revenues | $ | 4,470,352 | $ | 5,210,557 | $ | (740,205 | ) | -14 | % | |||||||
| Operating expenses | (4,915,486 | ) | (3,927,391 | ) | (988,095 | ) | 25 | % | ||||||||
| Noncontrolling interest | 3,192 | 4,285 | (1,093 | ) | -26 | % | ||||||||||
| Segment (Loss) Income | $ | (441,942 | ) | $ | 1,287,451 | $ | (1,729,393 | ) | NM | % | ||||||
NM – Not Meaningful
Net Revenues. Net revenues were $4.5 million and $5.2 million for the three months ended June 30, 2026 and 2025, respectively, a decrease of $0.7 million. Net revenues for the three months ended June 30, 2026, include Myrtle’s net revenues of $0.6 million and RCHI’s net revenues of $3.9 million. Net revenues for the three months ended June 30, 2025, include Myrtle’s net revenues $0.5 million and RCHI’s net revenues of $4.7 million. We attribute the decrease in RCHI’s net revenues for the three months ended June 30, 2026 compared to the 2025 period to RCHI recording $0.6 million of net revenues from the THIP compared to $2.5 million of net revenues from the THIP recorded in the three months ended June 30, 2025. The THIP is designed to increase revenues for hospitals serving TennCare patients. Excluding the THIP net revenues, Healthcare’s net revenue increased by $1.2 million.
Segment (Loss) Income. Segment loss was $0.5 million for the three months ended June 30, 2026, compared to segment income of $1.3 million for the three months ended June 30, 2025. We attribute the change to the decrease in THIP revenues as discussed above.
Life Science Services
Three Months Ended June 30, 2026 | Three Months Ended June 30, 2025 | Change in $ | Change in % | |||||||||||
| Net revenues | $ | 238,462 | $ | - | $ | 238,462 | NM | |||||||
| Operating expenses | (423,956 | ) | - | (423,956 | ) | NM | ||||||||
| Segment Loss | $ | (185,494 | ) | $ | - | $ | (185,494 | ) | NM | |||||
NM = Not meaningful
Net Revenues. Net revenues were $0.2 million for the three months ended June 30, 2026 and represent net revenues from Vector that was acquired on September 19, 2025.
Segment Loss. Segment loss was $0.2 million for the three months ended June 30, 2026 and represents the loss from Vector.
Labs
Three Months Ended June 30, 2026 | Three Months Ended June 30, 2025 | Change in $ | Change in % | |||||||||||||
| Net revenues | $ | 6,202 | $ | 7,816 | $ | (1,614 | ) | -21 | % | |||||||
| Operating expenses | (24,927 | ) | (41,259 | ) | 16,332 | -40 | % | |||||||||
| Segment Loss | $ | (18,725 | ) | $ | (33,443 | ) | $ | 14,718 | -44 | % | ||||||
Net Revenues. Net revenues were $6,202 and $7,816 for the three months ended June 30, 2026 and 2025, respectively. Net revenues consist of commissions and royalty income.
| 50 |
Segment Loss. Segment loss decreased to $18,725 for the three months ended June 30, 2026 compared to a loss of $33,443 for the three months ended June 30, 2025 due to a reduction in compensation-related expenses.
Healthcare
Six Months Ended June 30, 2026 | Six Months Ended June 30, 2025 | Change in $ | Change in % | |||||||||||||
| Net revenues | $ | 9,268,903 | $ | 8,371,988 | $ | 896,915 | 11 | % | ||||||||
| Operating expenses | (9,086,735 | ) | (7,937,770 | ) | (1,148,965 | ) | 14 | % | ||||||||
| Noncontrolling interest | 6,405 | 8,635 | (2,230 | ) | -26 | % | ||||||||||
| Segment Income | $ | 188,573 | $ | 442,853 | $ | (252,050 | ) | -57 | % | |||||||
Net Revenues. Net revenues were $9.3 million for the six months ended June 30, 2026 and represent Myrtle’s net revenues of $1.3 million and RCHI’s net revenues of $8.0 million. Net revenues for the six months ended June 30, 2025 of $8.4 million represent Myrtle’s net revenues of $1.0 million and RCHI’s net revenues of $7.4 million. We attribute the increase in RCHI’s net revenues to increased volume and an increase in swing-bed patient services. A “swing-bed” is a change in reimbursement status, as the billing status “swings” from billing for acute care services to billing for post-acute skilled nursing services, despite the fact that the patient stays in the same physical location. Partially offsetting the increase in RCHI’s net revenues for the six months ended June 30, 2026 compared to the 2025 period were net revenues of $1.2 million from the THIP in the six months ended June 30, 2026 compared to net revenues of $2.5 million from the THIP in the six months ended June 30 2025. The THIP is designed to increase revenues for hospitals serving TennCare patients. Excluding the impact of the THIP net revenues, Healthcare’s net revenue increased in the six months ended June 30, 2026 by approximately $2.2 million.
Segment Income. Segment income was $0.2 million for the six months ended June 30, 2026 compared to segment income of $0.4 million for the six months ended June 30, 2025, respectively. We attribute the decrease to the increase in operating expenses, partially offset by an increase in net revenues.
Life Science Services
Six Months Ended June 30, 2026 | Six Months Ended June 30, 2025 | Change in $ | Change in % | |||||||||||
| Net revenues | $ | 599,712 | $ | - | $ | 599,712 | NM | |||||||
| Operating expenses | (923,752 | ) | - | (923,752 | ) | NM | ||||||||
| Segment Loss | $ | (324,040 | ) | $ | - | $ | (324,040 | ) | NM | |||||
NM = Not meaningful
Net Revenues. Net revenues were $0.6 million for the six months ended June 30, 2026 and represent net revenues from Vector that was acquired on September 19, 2025.
Segment Loss. Segment loss was $0.3 million for the six months ended June 30, 2026 and represents the loss from Vector.
Labs
Six Months Ended June 30, 2026 | Six Months Ended June 30, 2025 | Change in $ | Change in % | |||||||||||||
| Net revenues | $ | 14,437 | $ | 16,305 | $ | (1,868 | ) | -11 | % | |||||||
| Operating expenses | (61,683 | ) | (72,753 | ) | 11,070 | -15 | % | |||||||||
| Segment Loss | $ | (47,246 | ) | $ | (56,448 | ) | $ | 9,202 | -16 | % | ||||||
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Net Revenues. Net revenues were $14,437 for the six months ended June 30, 2026 compared to $16,305 for the six months ended June 30, 2025. Net revenues consist of commissions and royalty income.
Segment Loss. Segment loss decreased to $47,246 for the six months ended June 30, 2026 from $56,448 for the six months ended June 30, 2025 due primarily to a reduction in compensation-related expenses.
Other Operating Data:
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 income (loss) as determined in accordance with U.S. GAAP.
We reconcile our non-GAAP financial measure to our net income (loss) attributable to FOXO, 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 model. Adjusted EBITDA is not presented in accordance with U.S. GAAP and should not be considered a substitute for U.S. GAAP. Adjusted EBITDA includes adjustments for provision for income taxes, as applicable, interest income and expense, depreciation and amortization, equity-based compensation/forfeitures, and certain other infrequent and/or unpredictable non-cash charges or benefits, such as impairments, legal settlements, extinguishment of debt, changes in fair value of warrant liabilities, adjustments for right-of-use operating lease expense and adjustments to include pro forma operating performance of acquisitions as if they had occurred at the beginning of the earliest period presented.
Adjusted EBITDA
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||
| Income (loss) attributable to FOXO | $ | 8,140,085 | $ | (522,021 | ) | $ | 6,688,112 | $ | (1,138,479 | ) | ||||||
| Add: Depreciation and amortization | 175,793 | 146,774 | 346,887 | 289,818 | ||||||||||||
| Add: Interest expense, excluding interest for right-of-use obligations | 1,310,833 | 792,718 | 2,283,968 | 1,462,024 | ||||||||||||
| Add: Equity-based compensation (forfeiture) expense | (9,129,890 | ) | 18,878 | (9,129,890 | ) | 46,594 | ||||||||||
| Add: Gain from extinguishment of debt | - | - | - | (1,863,834 | ) | |||||||||||
| Add: Gain from legal settlements, net | (1,648,377 | ) | - | (1,630,127 | ) | - | ||||||||||
| Add: Change in fair value of warrant liability | - | (7,576 | ) | - | (39,170 | ) | ||||||||||
| Add: Amortization of consulting fees paid in stock | - | 115,686 | 212,590 | |||||||||||||
Add: 2023 pre-acquisition RCHI Medicare cost report settlement | 750,767 | - | 750,767 | - | ||||||||||||
| Add: Interest expense for right-of-use obligations | 193,727 | 216,033 | 393,595 | 436,519 | ||||||||||||
| Subtotal | (207,062 | ) | 760,492 | (296,688 | ) | (593,938 | ) | |||||||||
| Add: Right-of-use operating lease expense (pro forma for Vector for 2025) | (312,688 | ) | (301,065 | ) | (622,754 | ) | (602,130 | ) | ||||||||
| Add: Pro forma 2025 adjusted EBITDA for Vector | - | 2,554 | - | (11,580 | ) | |||||||||||
| Adjusted EBITDA | $ | (519,750 | ) | $ | 461,981 | $ | (919,442 | ) | $ | (1,207,648 | ) | |||||
See also the Management’s Discussion and Analysis of Financial Condition and Results of Operations for the comparisons of net revenues for the three and six months ended June 30, 2026 and 2025.
| 52 |
Liquidity and Capital Resources
Sources of Liquidity and Capital
For the six months ended June 30, 2026 and 2025, we incurred net income (loss) attributable to FOXO of $6.7 million and $(1.1) million, respectively. However, excluding the impact of the non-cash Management Contingent Share Plan forfeiture, the Company incurred a net loss attributable to FOXO of $2.4 million for the six months ended June 30, 2026. As of June 30, 2026, we had a working capital deficit of $35.9 million. Cash used in operations was $0.3 million and $3.7 million for the six months ended June 30, 2026 and 2025, respectively. We expect to incur additional losses in future periods. Our current revenue and operating cash flow is not adequate to fund our operations for the next twelve months and requires us to fund our business through other sources until the time we achieve adequate scale. Securing additional capital is necessary to execute our business strategy.
Third Party Promissory Notes Payable
As of June 30, 2026, the total principal balance of third-party promissory notes payable was $11.6 million, which was net of $0.1 million of debt discounts. In addition, $0.2 million of accrued interest was owed on these notes.
During the six months ended June 30, 2026, we issued nine third-party promissory notes with principal balances totaling $1.6 million and we received net proceeds from the issuances of $1.3 million. In addition, as discussed below, we exchanged 7,775 shares of our Series A Preferred Stock for $7.8 million of aggregated principal balance of two, non-convertible and noninterest bearing promissory notes.
During the six months ended June 30, 2026, we issued 50,000 shares of our Class A Common Stock valued at $15,000 as an inducement to the issuance of a promissory note with a principal balance of $115,000 dated March 2, 2026, and on April 27, 2026, we issued an additional 50,000 shares of our common stock valued at $15,000 for the extension of the maturity date of the promissory note.
During the six months ended June 30, 2025, we issued 330 shares of our Class A Common Stock for conversions and exchanges of $1.9 million of promissory notes payable and related accrued interest, including the Western Note Payable (“the Western Note”) discussed below. In addition, during the six months ended June 30, 2025, we issued 11 shares of our Class A Common Stock as inducements and commitment shares under the terms of various promissory notes
In February 2025, the Western Note, which we assumed when we acquired SCCH, was sold to a new third party holder, Silverback Capital Corporation (“Silverback”), and it was amended and restated. Per the terms of the amendment and restatement, the principal balance of the note, which included previously accrued interest expense, totaled $1.1 million, the maturity date was February 26, 2026 and the note was convertible into shares of our Class A Common Stock at a conversion price equal to 90% of the average VWAP for the five trading days prior to conversion. During the six months ended June 30, 2025, Silverback converted $0.5 million of the principal balance of the Western Note into 106 shares of our Class A Common Stock leaving a principal balance outstanding of $0.6 million. The Western Note is currently in default as Silverback failed to make further payments to Western Healthcare, LLC and it is probable that no further conversions of the principal balance into shares of our Class A Common Stock will take place.
| 53 |
In January 2025, we exchanged all outstanding Senior PIK Notes (including all accrued and unpaid interest) (which total value was $5.4 million on the date of the exchange) into 3,457.5 shares of our Series B Preferred Stock with a total stated value of $3.5 million. As a result of the exchange, during the six months ended June 30, 2025, the Company recorded a gain from extinguishment of the Senior PIK Notes of $1.9 million,
At June 30, 2026, $2.4 million of the outstanding principal balance and associated one-time accrued interest of third-party promissory notes (excluding the Western Note, which was purchased by a third party that failed to make further payments to Western Healthcare LLC and it is probable that no further conversions of the principal balance into shares of our Class A Common Stock will take place) were convertible into 8.8 million shares of our Class A Common Stock per the conversion terms of the notes. Each of these notes is more fully discussed in Note 9 to the accompanying unaudited condensed consolidated financial statements.
Related Party Promissory Notes and Loans Payable
On September 10, 2024, we issued a note payable that had a maturity date of September 10, 2026 to RHI in the principal amount of $22.0 million for the purchase of RCHI. During December, 2024, we exchanged $21.0 million of the promissory note owed to RHI for 21,000 shares of our Series A Preferred Stock with a stated value of $1,000 per share and we issued to RHI a new promissory note in the principal amount of $1.0 million due on June 5, 2025. At June 30, 2026, the note is in default and the Company is in discussions with RHI about extending the maturity date of the note which extension we expect to receive. During the year ended December 31, 2025, we issued an additional note payable to RHI in the principal amount of $6.1 million for additional purchase price consideration for the purchase of RCHI, of which $5.0 million was exchanged for 5,000 shares of our Series A Preferred Stock with a stated value of $1,000 per share on August 18, 2025 leaving an additional note due to RHI at December 31, 2025 of $1.1 million. During the six months ended June 30, 2026, we increased the additional note payable to RHI by $0.1 million for additional purchase price consideration for the purchase of RCHI for a balance of $1.2 million at June 30, 2026.
In addition, to the notes and loan discussed in the paragraph above, we have outstanding at June 30, 2026: (i) a note payable to RHI in the amount of $264,565 for the purchase of Myrtle; (ii) a note payable to RHI in the original amount of $1.6 million, which was the amount owed by Myrtle to RHI on the date that we acquired Myrtle, which balance was $1.3 million at June 30, 2026; (iii) a loans payable to RHI in the amount of $1.0 million for working capital purposes; and (iv) we have outstanding at June 30, 2026, three additional promissory notes payable to related parties totaling $0.8 million. The total amount of notes and loans payable owed to RHI and its subsidiaries from the Company and its subsidiaries at June 30, 2026 was $4.7 million. Each of these notes is more fully discussed in Note 9 to the accompanying unaudited condensed consolidated financial statements.
Other Loans
At June 30, 2026, we had outstanding a loan issued under an accounts receivable sales agreement of $22,131 and a credit line assumed in the acquisition of Vector with a balance of $20,827.
Preferred Stock
As of June 30, 2026, we had outstanding shares of preferred stock consisting of: (i) 11,420 shares of our Series A Preferred Stock that were issued for the purchase of RCHI and for cash investment, which amount is net of conversions into common stock and exchanges for notes payable; (ii) 3,245 shares of our Series B Preferred Stock that were issued in exchange for the Senior PIK Notes; (iii) 304 shares of our Series C Preferred Stock, a portion of which were issued for cash and a portion of which were issued in exchange of our Series B Preferred Stock; (iv) 4,712 shares of our Series D Preferred Stock of which 4,312 were issued for settlement of legal fees and accrued expenses and 400 shares that were issued in lieu of common stock for finder’s fees in connection with debt financings; and (v) 68,000 shares of our Series E Preferred Stock, 60,000 of which were issued for the acquisition of Vector and 8,000 of which were issued to RHI for payment of $0.2 million of a note payable. All our outstanding shares of preferred stock have a stated value of $1,000 per share except for our Series E Preferred Stock, which has a stated value of $25 per share.
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During the six months ended June 30, 2026, we issued 400 shares of our Series D Preferred Stock to satisfy our obligation for outstanding finder’s fees payable in connection with debt financings. During the six months ended June 30, 2025, we issued 3,400 shares of our Series A Preferred Stock with a total stated value of$3.4 million ($1,000 per share) and received gross proceeds of $3.35 million and incurred issuance costs of $350,000. In addition, we issued 60 shares of our Series C Preferred Stock for net cash of $44,825 during the six months ended June 30, 2025. During the six months ended June 30, 2026 and 2025, we issued 488,666 shares and 2,854 shares of our Class A Common Stock, respectively, pursuant to conversions of 146.6 shares and 6,290.17 shares of our Series A Preferred Stock, respectively, with stated values totaling $146,600 and $6.3 million, respectively.
Series A Preferred Stock Restructuring with Institutional Investors
On May 12, 2026, two institutional investors owning approximately 5,307 and 2,468 shares of our Series A Preferred Stock, with aggregate stated values of approximately $5.3 million and $2.5 million, respectively, exchanged their shares for the Senior Notes with principal amounts equal to the stated values of the exchanged preferred shares, or approximately $5.3 million and $2.5 million, respectively, for a combined aggregate principal amount of approximately $7.8 million. The Senior Notes are nonconvertible, noninterest bearing and mature on May 12, 2027.
Going Concern
Our primary uses of cash are to fund our operations as we continue to grow our business, including Vector that we acquired on September 19, 2025, as well as to service our debt. Capital expenditures have historically not been material to our consolidated operations, and we do not anticipate making material capital expenditures over the next 12 months unless we secure additional capital to expand the current operations. 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 the size of our current operations, we do not have sufficient capital to fund our corporate overhead 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 financing and additional strategic acquisitions that we expect will contribute to positive cash flow to enable us to fund our operations. Completing such acquisitions requires significant additional capital that has not yet been secured.
We have taken various actions to bolster our cash position, including raising funds through the private placements and the issuances of promissory notes and other loans, and conserving cash by issuing shares of our preferred stock and shares of our Class A Common Stock under exchange agreements, license agreements, legal settlements, consulting agreements, finder’s fees related to equity and debt financing and consulting agreements, among other transactions, as an alternative to paying in cash.
Based on our current operating plan, our cash position as of June 30, 2026, and after taking into account the actions described above, we do not expect to be able to fund our operations through the twelve months ended June 30, 2027 without the need for additional financing or other increases in our cash and cash equivalents balances 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 funding 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.
The accompanying unaudited condensed consolidated financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.
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The following table presents our capital resources as of June 30, 2026 and December 31, 2025:
| June 30, | December 31, | Change Increase | ||||||||||
| 2026 | 2025 | (Decrease) | ||||||||||
| Cash | $ | 58,409 | $ | 207,453 | $ | (149,044 | ) | |||||
| Working capital (deficit) | (35,853,244 | ) | (25,546,280 | ) | 10,306,964 | |||||||
| Total debt, net of discounts of $100,874 and $119,122, respectively | 17,207,576 | 7,292,040 | 9,915,536 | |||||||||
| Total stockholders’ equity | 913,219 | 11,076,300 | (10,163,081 | ) | ||||||||
The following table summarizes our cash flow data for the six months ended June 30, 2026 and 2025:
Cash Provided by/ (Used in) | ||||||||
| Six Months Ended June 30, | 2026 | 2025 | ||||||
| Operating Activities | $ | (279,224 | ) | $ | (3,716,303 | ) | ||
| Investing Activities | $ | (9,374 | ) | $ | (14,900 | ) | ||
| Financing Activities | $ | 139,554 | $ | 3,984,724 | ||||
Operating Activities
Our net cash used in operating activities in the six months ended June 30, 2026 was $0.3 million compared to $3.7 million, or $3.4 million less than was used in the six months ended June 30, 2025. Our sources of cash in the six months ended June 30, 2026 were primarily accounts payable and accrued expenses, which provided more operating cash than in the 2025 period.
Investing Activities
Investing activities used $9,374 and $14,900 in the six months ended June 30, 2026 and 2025, respectively. The cash used in investing activities resulted from purchases of property and equipment.
Financing Activities
Net cash provided by financing activities for six months ended June 30, 2026 was $0.1 million compared to $4.0 million for the six months ended June 30, 2025. Net cash provided by financing activities for the six months ended June 30, 2026, included $1.3 million from the issuances of third party notes payable and $2.1 million of borrowings from related party loans and note payable, partially offset by $2.4 million of payments of related party loans and note payable, $0.7 million of payments of third party notes payable and $0.2 million of payments on other loans. Net cash provided by financing activities for the six months ended June 30, 2025, included $3.1 million from the issuances of preferred stock, $1.1 million from the issuances of third party notes payable and $0.3 million from other loans, partially offset by $0.3 million of payments on other loans and $0.1 million of payments of third party notes payable.
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.
Critical Accounting Policies
The preparation of the consolidated financial statements and related notes included under “Item 1. Financial Statements” and related disclosures in conformity with U.S. 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 consolidated financial statements prospectively from the date of the change in estimate.
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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 policies used in the preparation of our financial statements which require significant estimates and judgments are as follows:
IMPAIRMENT OF GOODWILL AND INTANGIBLE ASSETS
Goodwill is required to be tested annually or whenever events have occurred that suggest that goodwill may be impaired. Goodwill is tested at the reporting unit level. The Company has three reporting units: Myrtle, SCCH and Vector. Step 0 in the goodwill impairment test model is to perform a qualitative analysis. This step is not required but can be applied to determine if it is more likely than not that an impairment has occurred. Step 1 is to perform a quantitative analysis to determine a reporting unit’s fair value and to compare the fair value to the reporting unit’s carrying value. If the carrying value exceeds the unit’s fair value, a goodwill impairment is recorded to adjust the unit’s carrying value to fair value.
The Company reviews its intangible assets to determine potential impairment annually or whenever events or changes in circumstances indicate that the carrying amount of an asset group may not be fully recoverable. For intangible assets, recoverability is measured by comparing the carrying amount of the asset group with the future undiscounted cash flows the assets are expected to generate. Considerable management judgment is necessary to estimate future cash flows. Accordingly, actual results could vary significantly from such estimates. If such assets are considered impaired, an impairment loss is measured by comparing the amount by which the carrying value exceeds the fair value of the long-lived assets.
REVENUE RECOGNITION POLICY
The Company recognizes revenue in accordance with ASC, “Revenue from Contracts with Customers (Topic 606),” including subsequently issued updates. Under the accounting guidance, revenues are presented net of estimated contractual allowances and estimated implicit price concessions.
Healthcare
The Company’s healthcare segment consists of the operations of Myrtle and of RCHI.
Myrtle’s revenues relate to contracts with patients in which its performance obligations are to provide behavioral health care services to its patients. Revenues are recorded during the period in which its obligations to provide health care services are satisfied. Myrtle’s performance obligations for inpatient services are generally satisfied over periods averaging approximately 7 to 28 days depending on the service line, and revenues are recognized based on charges incurred. The contractual relationships with patients, in most cases, also involve third-party payers and the transaction prices for the services provided are dependent upon the terms provided by or negotiated with the third-party payers. The payment arrangements with third-party payers for the services Myrtle provides to its patients typically specify payments at amounts less than its standard charges. Services provided to patients are generally paid at prospectively determined rates per diem.
RCHI’s revenues relate to contracts with patients of BSF in which its performance obligations are to provide health care services to the patients. Revenues are recorded during the period its obligations to provide health care services are satisfied. Its performance obligations for inpatient services are generally satisfied over periods averaging approximately three days, and revenues are recognized based on charges incurred. Its performance obligations for outpatient services, including emergency room-related services, are generally satisfied over a period of less than one day. The contractual relationships with patients, in most cases, also involve a third-party payer (Medicare, Medicaid, managed care health plans and commercial insurance companies) and the transaction prices for the services provided are dependent upon the terms provided by Medicare and Medicaid or negotiated with managed care health plans and commercial insurance companies. The payment arrangements with third-party payers for the services it provides to the related patients typically specify payments at amounts less than our standard charges. Medicare, because of BSF’s designation as a critical access care hospital, generally pays for inpatient and outpatient services at rates related to the hospital’s costs. Services provided to patients having Medicaid coverage are generally paid at prospectively determined rates per discharge, per identified service or per covered member. Agreements with commercial insurance carriers, managed care and preferred provider organizations generally provide for payments based upon predetermined rates per diagnosis, per diem rates or discounted fee-for-service rates.
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Laws and regulations governing Medicare and Medicaid programs are complex and subject to interpretation. Estimated reimbursement amounts are adjusted in subsequent periods as cost reports are prepared and filed and as final settlements are determined (in relation to certain government programs, primarily Medicare, this is generally referred to as the “cost report” filing and settlement process). As of June 30, 2026 and December 31, 2025, $2.3 million and $1.9 million, respectively, of Medicare cost report settlement liabilities were recorded.
Management continually reviews the contractual estimation process to consider the frequent changes in managed care contractual terms resulting from contract renegotiations and renewals. Under the revenue recognition accounting guidance, revenues are presented net of estimated contractual allowances and estimated implicit price concessions. The healthcare segment’s net revenues are based upon the estimated amounts it expects to be entitled to receive from third-party payers and patients based, in part, on Medicare and Medicaid rates as discussed above as for each of Myrtle and BSF. The healthcare segment also records estimated implicit price concessions related to uninsured accounts to record self-pay revenues at the estimated amounts it expects to collect.
The collection of outstanding receivables is the healthcare segment’s primary source of operating cash and is critical to its operating performance. The primary collection risks relate to patient accounts for which the primary insurance carrier has paid the amounts covered by the applicable agreement, but patient responsibility amounts (deductibles and copayments) remain outstanding. Implicit price concessions relate primarily to amounts due directly from patients. Accounts are written off when all reasonable internal and external collection efforts have been carried out. The estimates for implicit price concessions are based upon management’s assessment of historical write-offs and expected net collections, business and economic conditions and other collection indicators.
Life Science Services
Our Life Science Services segment’s revenue consists of revenue from Vector, which was acquired on September 19, 2025. The Company recognizes revenue from the sale of high-quality bio-samples and bulk biological materials for every stage of life science research in accordance with ASC 606. As a result of applying this five-step model under ASC 606, the Company recognizes revenues from its sale of products upon their transfer of control to the customer, which is considered complete at either the time of shipment or arrival at destination based upon agreed upon terms within the contract. The Company’s payment terms for the sale of standard products are typically 30 to 60 days.
Labs
The Company has recorded minor revenues from its Labs segment during the three and six months ended June 30, 2026 and 2025. Labs currently recognizes revenue from collecting a royalty from Illumina, Inc. related to the sales of the Infinium Mouse Methylation Array. The Company applies judgment in determining the customer’s ability and intention to pay based on a variety of factors including the customer’s historical payment experience.
CONTRACTUAL ALLOWANCES AND DOUBTFUL ACCOUNTS POLICY
In accordance with ASC, “Revenue from Contracts with Customers (Topic 606),” including subsequently issued updates, the Company does not present “allowances for doubtful accounts” on its balance sheets, rather its accounts receivable are reported at realizable value, net of estimated contractual allowances and estimated implicit price concessions (also referred to as doubtful accounts), which are estimated and recorded in the period the related revenue is recorded. ASC, “Financial Instruments Credit Losses (Topic 326),” requires that healthcare organizations estimate credit losses on a forward-looking basis taking into account historical collection and payer reimbursement experience as an integral part of the estimation process related to contractual allowances and doubtful accounts. Receivables deemed to be uncollectible are charged against the allowance for doubtful accounts after all collection efforts have ceased or the account is settled for less than the amount originally estimated to be collected. Recoveries of receivables previously written-off are recorded as credits to the allowance for doubtful accounts. Revisions to the allowances for doubtful accounts are recorded as adjustments to revenues.
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During the three months ended June 30, 2026 and 2025, estimated contractual allowances and implicit price concessions of $21.1 million and $ 17.2 million, respectively, have been recorded as reductions to revenues and accounts receivable balances to enable the Company to record its revenues and accounts receivable at the estimated amounts it expects to collect and during the six months ended June 30, 2026 and 2025, estimated contractual allowances and implicit price concessions of $40.6 million and $34.7 million, respectively, have been recorded as reductions to revenues and accounts receivable balances to enable the Company to record its revenues and accounts receivable at the estimated amounts it expects to collect. As required by Topic 606, after deducting estimated contractual allowances and implicit price concessions from the healthcare segment’s revenues for the three months ended June 30, 2026 and 2025, the Company recorded healthcare net revenues of $4.5 million and $5.2 million, respectively and for the six months ended June 30, 2026 and 2025, $9.3 million and $8.4 million, respectively. The Company continues to review the provisions for contractual allowances and implicit price concessions.
BUSINESS COMBINATIONS
The Company follows the guidance in ASC 805, Business Combinations for determining the appropriate accounting treatment for business acquisitions. Under ASC 805, the assets acquired, and liabilities assumed are recorded as of the acquisition date, at their respective fair values and consolidated with those of the Company. The excess of the purchase prices over the aggregate fair value of the tangible assets acquired and liabilities assumed is treated as goodwill in accordance with ASC 805. During the measurement period or until valuation studies are completed, the provisional amounts used for the purchase price allocation are subject to adjustments for a period not to exceed one year from the date of acquisition. Acquisition costs are expensed as incurred.
Going Concern
On a quarterly basis, we assess going concern uncertainty for our 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 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, there is substantial doubt about the Company’s ability to continue as a going concern.
Recent Accounting Pronouncements
In November 2024, the FASB issued ASU 2024-04, Debt with Conversions and Other Options (Subtopic 470-20), Induced Conversions of Convertible Debt Instruments. The amendments in this ASU clarify when the settlement of a debt instrument should be accounted for as an induced conversion. Under this ASU, (a) to be accounted for as an induced conversion, an inducement offer is required to preserve the form and amount of consideration issuable upon conversion in accordance with the terms of the instrument (rather than only the equity securities issuable upon conversion), (b) whether a settlement of convertible debt is an induced conversion should be assessed as of the date the inducement offer is accepted by the holder, and (c) issuers that have exchanged or modified a convertible debt instrument within the preceding 12 months (that did not result in extinguishment accounting) should use the terms that existed 12 months before the inducement offer was accepted when determining whether induced conversion accounting should be applied. The amendments in this ASU are effective for all entities for annual reporting periods beginning after December 15, 2025, and interim reporting periods within those annual reporting periods. Early adoption is permitted for all entities that have adopted the amendments in ASU 2020-06. The amendments in this ASU permit an entity to apply the new guidance on either a prospective or a retrospective basis. The adoption of this ASU did not have an impact on the Company’s financial statements for the three and six months ended June 30, 2026 and 2025.
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In September 2025, the FASB issued ASU 2025-07, Intangibles—Goodwill and Other— Internal-Use Software (Subtopic 350-40). The target of this update is accounting for internal use software. The amendments in this Update remove all references to prescriptive and sequential software development stages (referred to as “project stages”) throughout Subtopic 350-40. Therefore, an entity is required to start capitalizing software costs when both of the following occur: 1. Management has authorized and committed to funding the software project. 2. It is probable that the project will be completed and the software will be used to perform the function intended (referred to as the “probable-to-complete recognition threshold”). In evaluating the probable-to-complete recognition threshold, an entity is required to consider whether there is significant uncertainty associated with the development activities of the software (referred to as “significant development uncertainty”). The two factors to consider in determining whether there is significant development uncertainty are whether: 1. The software being developed has technological innovations or novel, unique, or unproven functions or features, and the uncertainty related to those technological innovations, functions, or features, if identified, has not been resolved through coding and testing. 2. The entity has determined what it needs the software to do (for example, functions or features), including whether the entity has identified or continues to substantially revise the software’s significant performance requirements. The amendments in this Update specify that the disclosures in Subtopic 360-10, Property, Plant, and Equipment—Overall, are required for all capitalized internal-use software costs, regardless of how those costs are presented in the financial statements. Furthermore, the amendments in this Update supersede the website development costs guidance and incorporate the recognition requirements for website-specific development costs from Subtopic 350-50 into Subtopic 350-40. Under current GAAP, entities are required to capitalize development costs incurred for internal-use software depending on the nature of the costs and the project stage during which they occur. The amendments in this ASU improve the operability of the guidance by removing all references to software development project stages so that the guidance is neutral to different software development methods, including methods that entities may use to develop software in the future. The amendments in this ASU are effective for all entities for annual reporting periods beginning after December 15, 2027, and interim reporting periods within those annual reporting periods. Early adoption is permitted as of the beginning of an annual reporting period. The amendments in this ASU permit an entity to apply the new guidance on either a prospective or a retrospective basis. The Company has not yet determined the impact of the adoption of this ASU on its consolidated financial statements.
In December 2025, the FASB issued ASU 2025-11, Interim Reporting Topic 270. The amendments in this Update clarify interim disclosure requirements and the applicability of Topic 270. The amendments in this Update result in a comprehensive list of interim disclosures that are required by GAAP. In developing the list of disclosures required by other Topics, the FASB focused on identifying the interim disclosures that are currently required under GAAP. The objective of the amendments is to provide clarity about the current requirements, rather than evaluate whether to expand or reduce interim disclosure requirements. The amendments in this Update also include a disclosure principle that requires entities to disclose events since the end of the last annual reporting period that have a material impact on the entity. The intent of the disclosure principle, which is modeled after a previous SEC disclosure requirement, is to help entities determine whether disclosures not specified in Topic 270 should be provided in interim reporting periods. The amendments in this Update also clarify the applicability of Topic 270, the types of interim reporting, and the form and content of interim financial statements in accordance with GAAP. The amendments in this Update are effective for interim reporting periods within annual reporting periods beginning after December 15, 2027, for public business entities. Early adoption is permitted. The amendments in this Update can be applied either (1) prospectively or (2) retrospectively to any or all prior periods presented in the financial statements. The Company has not yet determined the additional information that it will be required to provide upon adoption of this ASU.
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. This risk is amplified by our current need to secure additional capital. Our business could be impacted by, among other things, downturns in the financial markets or in economic conditions, Medicare and Medicaid cost reimbursement, increases in oil prices, inflation, increases in interest rates, supply chain disruptions, declines in consumer confidence and spending, a resurgence of the COVID-19 pandemic and/or the emergence of new variants or new pandemics, cyber security risks and geopolitical instability. 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.
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ITEM 4. CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedure
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.
In our Annual Report on Form 10-K for the year ended December 31, 2025, we identified material weaknesses in our internal control over financial reporting. Specifically, the Company did not maintain effective: (i) entry-level controls, including controls over risk assessment and monitoring to identify and address risks of material misstatement in the consolidated financial statements and related disclosures; (ii) effective controls over the financial reporting process; and (iii) controls over complex and non-routine transactions. As of June 30, 2026, we concluded that these material weaknesses continued to exist.
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 June 30, 2026.
Notwithstanding such material weaknesses, management believes that the unaudited condensed consolidated financial statements included in this Form 10-Q fairly present in all material respects the Company’s financial condition, results of operations and cash flows for the periods and dates presented.
Changes in Internal Control over Financial Reporting
There were no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that occurred during the quarter ended June 30, 2026 that have materially affected, or are reasonably likely to materially affect, our 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.
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PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
From time to time, the Company may be involved in a variety of claims, lawsuits, investigations and proceedings related to contractual disputes, employment matters, regulatory and compliance matters, intellectual property rights and other litigation arising in the ordinary course of business. The Company operates in a highly regulated industry which may inherently lend itself to legal matters. Management is aware that litigation has associated costs and that results of adverse litigation verdicts could have a material effect on the Company’s financial position or results of operations.
Former CEO Severance
The Company has disclosed in previous financial filings certain matters between Mr. Jon Sabes, a former CEO of the Company, and the Company.
On May 27, 2026, the Company, together with its wholly-owned subsidiary, FOXO Labs, entered into the STLA with Mr. Sabes and LongevityFP Technologies. The material terms of the STLA are more fully discussed in Note 10 to the accompanying unaudited condensed consolidated financial statements. The STLA includes mutual releases between the Company and Mr. Sabes and resolves all prior matters between the parties, including accrued severance, which is no longer owed, and the forfeiture of shares under the Company’s Management Contingent Share Plan.
Illumina Judgment
On June 21, 2024, Hennepin County District Court granted Illumina, Inc.’s Motion for Summary Judgment in the amount of $0.8 million against the Company. The Company entered into a settlement agreement with Illumina on July 23, 2025 to settle this judgment over time. $100,000 was paid at the time of settlement and $723,065 is payable in five additional quarterly payments of $144,613 per payment. The Company is currently in default of its requirements for payment under the settlement agreement but believes this default will be rectified without repercussion when the Company secures additional capital.
Other Matters
In July 2025, Gateway Group, Inc. filed a legal action in Orange County, California seeking payment of $120,000. This amount is included as a liability in the Company’s financial statements. To date, there is no resolution to this matter.
In the second quarter of 2025, Data Shepherd Services, Inc. received a judgment against the Company for an unpaid balance of approximately $58,000. This amount is included as a liability in the Company’s financial statements. To date, there is no resolution to this matter.
In June 2025, func.media inc. filed a legal action in Minnesota seeking a total sum of $123,250. This amount is included as a liability in the Company’s financial statements. On October 16, 2025 the Company entered into a settlement agreement to pay $90,000 on an agreed payment schedule of $15,000 each month for six months as full resolution of this matter. If all payments are made when due all remaining amounts over $90,000 will be waived. The Company is currently in default of the payment schedule in the settlement agreement.
The Company is also party to various other legal proceedings for liabilities, for legacy debts of the Company, and could become a party to claims, and regulatory, tax or government inquiries and investigations that arise in the ordinary course of business. The Company may in the future be subject to additional legal proceedings and disputes.
ITEM 1A. RISK FACTORS
Our business is subject to numerous risks and uncertainties, including those described in Part I, Item 1A, “Risk Factors,” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2025, filed with the SEC on April 15, 2026 (the “2025 Annual Report”). You should carefully consider the risk factors set forth in the 2025 Annual Report, as well as the following material changes to our risk factors since the filing of the 2025 Annual Report:
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We effected a 1-for-3,000 reverse stock split of our Class A Common Stock in June 2026, our third reverse stock split since April 2025, and the market price of our Class A Common Stock may continue to decline.
On June 30, 2026, we effected a 1-for-3,000 reverse stock split of our Class A Common Stock, following a 1-for-10 reverse stock split effected in April 2025 and a 1-for-1.99 reverse stock split effected in July 2025. There can be no assurance that the market price of our Class A Common Stock will increase in proportion to the reduction in the number of outstanding shares, that any increase in the per-share price will be sustained, or that the reverse stock split will improve the liquidity of, or investor interest in, our Class A Common Stock. Our Class A Common Stock trades on the OTC market, which generally involves limited trading volume and greater price volatility than a national securities exchange. The need for repeated reverse stock splits reflects sustained downward pressure on our stock price, and we may be required to effect additional reverse stock splits in the future. A low or declining stock price, together with the substantial number of shares issuable upon conversion of our outstanding convertible securities, could further impair our ability to raise capital and could adversely affect the value of an investment in our Class A Common Stock.
We have significant and increasing indebtedness, including senior unsecured notes that restrict our ability to incur senior debt, and our substantial debt-service and liquidity obligations raise substantial doubt about our ability to continue as a going concern.
Our total debt has increased substantially, and many of our promissory notes are in default and accruing default interest and penalties. In May 2026, we exchanged all of the shares of our Series A Preferred Stock held by two institutional investors for senior unsecured, non-convertible promissory notes in the aggregate principal amount of approximately $7.8 million, which mature on the earlier of May 12, 2027 or an event of default. Under the terms of these senior notes, we have agreed not to incur any other indebtedness that is senior in preference to the notes while they remain outstanding, and we are required to repay the notes upon completion of a public offering or an up-listing to a recognized stock exchange. These restrictions may limit our ability to obtain additional senior financing on favorable terms, or at all, at a time when we require additional capital to fund our operations. Our cash on hand, our working capital deficit, our history of operating losses, our defaults under existing obligations, and our dependence on external financing and related-party funding raise substantial doubt about our ability to continue as a going concern.
Our Strategic Technology License Agreement with our founder may limit the value we realize from our epigenetics intellectual property and could result in the loss of control of our FOXO Labs subsidiary.
In May 2026, we and our subsidiary FOXO Labs entered into a Strategic Technology License Agreement (the “STLA”) with our founder, Jon R. Sabes, and LongevityFP Technologies, LLC, an entity controlled by Mr. Sabes. The STLA grants LongevityFP Technologies an exclusive, worldwide license to commercialize our epigenetics intellectual property portfolio in exchange for a royalty of 3% of net revenues, subject to an aggregate cap of $1,300,000. As a result, our ability to independently commercialize, and the economic upside we may realize from, our epigenetics intellectual property is significantly limited. The STLA also grants LongevityFP Technologies an exclusive, irrevocable ten-year option to acquire majority ownership of FOXO Labs, the exercise of which would result in our loss of control of that subsidiary. Because the STLA was entered into with our founder and an entity he controls, it presents actual or potential conflicts of interest, and its terms may be less favorable to us than those we could have obtained from another party.
We may be unable to complete our proposed acquisition of blood collection center assets from Grifols, or to realize its anticipated benefits, and the acquisition would require capital we do not currently have.
In July 2026, our subsidiary Vector entered into an asset purchase agreement to acquire assets associated with four U.S.-based blood collection centers for aggregate cash consideration of $3,500,000 payable at closing, plus a contingent earn-out of up to $1,000,000. Consummation of the acquisition is subject to a number of closing conditions that are outside our control, including our obtaining a new and separate FDA license, a new and separate CLIA certification in Tennessee, and a waste-management permit from the applicable Miami authority, as well as the receipt of specified consents. We do not currently have sufficient capital to fund the cash consideration, and we will need to secure additional financing to complete the acquisition. There can be no assurance that these conditions will be satisfied, that the necessary financing will be available on acceptable terms or at all, or that the acquisition will close within the timeframe we anticipate or at all. Either party may terminate the agreement if the closing has not occurred within nine months of signing. Even if completed, we may be unable to integrate the acquired operations successfully or to achieve the anticipated benefits, including the EBITDA levels required for the earn-out.
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The issuance of shares upon conversion of our outstanding convertible securities, together with our recently increased authorized share capital, may result in substantial dilution to our stockholders.
We have a substantial number of shares of Class A Common Stock issuable upon conversion of our outstanding convertible preferred stock and convertible notes, many of which are convertible at variable or reduced conversion prices as a result of down-round and anti-dilution provisions. In 2026, we increased our authorized capital to 25,020,000,000 shares, consisting of 25,000,000,000 shares of Class A Common Stock and 20,000,000 shares of preferred stock. The conversion of these securities, the triggering of additional down-round adjustments, and the issuance of additional shares to fund our operations may result in substantial dilution to existing holders of our Class A Common Stock and may place additional downward pressure on the market price of our Class A Common Stock.
We are controlled by Rennova Health, Inc., which is controlled by our Chief Executive Officer, and its interests may conflict with those of our other stockholders.
Rennova Health, Inc. (“RHI”), which is controlled by our Chief Executive Officer, holds a substantial majority of our voting power (approximately 99.12% of our voting rights as of the August 13, 2026 record date for our most recent stockholder action) and is able to control the outcome of matters submitted to our stockholders, including the election of directors, amendments to our organizational documents, and the approval of significant corporate transactions, in each case without the approval of our other stockholders. In addition, we are party to numerous financing, note, lease, and other arrangements with RHI and its affiliates. The interests of RHI may differ from, or conflict with, the interests of our other stockholders, and this concentration of control and related-party dependence may limit the ability of our other stockholders to influence corporate matters and could adversely affect the market price of our Class A Common Stock.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
Promissory Notes Extension Shares
On April 27, 2026, the Company entered into Amendment No. 1 to Promissory Note (the “ClearThink Note Amendment”), which extended the maturity date of the note to May 15, 2026. As compensation for the extension of the maturity date: 50,000 shares of the Company’s Class A Common Stock were issued by the Company to the holder.
Shares Issued Pursuant to Series A Conversions
On April 13, 2026, a holder of our Series A Preferred Stock was issued 93,333 shares of Class A Common Stock pursuant to the conversion of 28.0 shares of Series A Preferred Stock.
On May 7, 2026, a holder of our Series A Preferred Stock was issued 33,000 shares of Class A Common Stock pursuant to the conversion of 9.9 shares of Series A Preferred Stock.
Series D Preferred Stock Issued to J.H. Darbie & Co., Inc.
On May 15, 2026, in connection with a Settlement Agreement and Release with J.H. Darbie & Co., Inc., the Company issued 400 shares of its Series D Preferred Stock in satisfaction of $348,454 of finder’s fees owed to J.H. Darbie under a prior finder’s fee agreement, as more fully discussed in Note 12 to the accompanying condensed consolidated financial statements.
Senior Notes Issued in Exchange for Series A Preferred Stock
On May 12, 2026, the Company issued senior unsecured, non-convertible promissory notes in the aggregate principal amount of approximately $7.8 million to two institutional investors in exchange for, and in cancellation of, an aggregate of 7,775 shares of the Company’s Series A Preferred Stock, as more fully discussed in Note 9 to the accompanying condensed consolidated financial statements.
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The shares of Class A Common Stock issued upon conversion of the Series A Preferred Stock and the Senior Notes issued in exchange for the Series A Preferred Stock, in each case described above, were issued in reliance upon the exemption from registration afforded by Section 3(a)(9) of the Securities Act, as securities exchanged by the Company with its existing security holders where no commission or other remuneration was paid or given directly or indirectly for soliciting such exchange.
The 400 shares of Series D Preferred Stock issued to J.H. Darbie & Co., Inc., and the shares of Class A Common Stock issued as inducement and extension consideration in connection with promissory notes, in each case described above, were issued in reliance upon the exemption from registration afforded by Section 4(a)(2) of the Securities Act and Rule 506(b) of Regulation D thereunder, based in part on the representations of the recipients, each of whom the Company believes was an accredited investor that acquired the securities for investment and not with a view to distribution.
ITEM 5. OTHER INFORMATION
Rule 10b5-1 Arrangements
During
the quarter ended June 30, 2026, no director or officer
ITEM 6. EXHIBITS
The following exhibits are filed as part of, or incorporated by reference into, this Quarterly Report.
| Exhibit No. | Description | Included | Form | Referenced Exhibit |
Filing Date | |||||
| 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 | ||||||||
| 32.2# | Certification of the Company’s 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. |
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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: August 14, 2026 | /s/ Seamus Lagan | |
| Name: | Seamus Lagan | |
| Title: | Chief Executive Officer | |
| (Principal Executive Officer) | ||
| Date: August 14, 2026 | /s/ Celene Grant | |
| Name: | Celene Grant | |
| Title: | Chief Financial Officer | |
| (Principal Financial and Accounting Officer) | ||
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