Document And Entity Information
Document And Entity Information - shares | 9 Months Ended | |
Sep. 30, 2022 | Nov. 18, 2022 | |
Document Information Line Items | ||
Entity Registrant Name | FOXO TECHNOLOGIES INC. | |
Trading Symbol | FOXO | |
Document Type | 10-Q | |
Current Fiscal Year End Date | --12-31 | |
Entity Common Stock, Shares Outstanding | 31,187,069 | |
Amendment Flag | false | |
Entity Central Index Key | 0001812360 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Document Period End Date | Sep. 30, 2022 | |
Document Fiscal Year Focus | 2022 | |
Document Fiscal Period Focus | Q3 | |
Entity Small Business | true | |
Entity Emerging Growth Company | true | |
Entity Shell Company | false | |
Entity Ex Transition Period | false | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Entity File Number | 001-39783 | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 85-1050265 | |
Entity Address, Address Line One | 729 N. Washington Ave | |
Entity Address, Address Line Two | Suite 600 | |
Entity Address, City or Town | Minneapolis | |
Entity Address, State or Province | MN | |
Entity Address, Postal Zip Code | 55401 | |
City Area Code | (612) | |
Local Phone Number | 562-9447 | |
Title of 12(b) Security | Class A Common Stock, par value $0.0001 | |
Security Exchange Name | NYSE | |
Entity Interactive Data Current | Yes |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Current assets | ||
Cash and cash equivalents | $ 10,454 | $ 6,856 |
Supplies | 2,057 | 295 |
Prepaid expenses | 511 | 444 |
Prepaid consulting fees | 4,758 | |
Other current assets | 20 | 23 |
Total current assets | 17,800 | 7,618 |
Property and equipment, net | 136 | 187 |
Intangible assets | 2,071 | 191 |
Investments | 100 | 100 |
Reinsurance recoverables | 18,754 | 19,463 |
Cloud computing arrangements | 4,709 | 2,745 |
Forward purchase collateral | 27,919 | |
Total assets | 71,489 | 30,304 |
Current liabilities | ||
Accounts payable | 2,706 | 3,456 |
Related party payable | 500 | |
Shares payable | 384 | |
Parallel run advance | 256 | |
Accrued and other liabilities | 504 | 402 |
Forward purchase put derivative | 1,284 | |
Forward purchase collateral derivative | 27,378 | |
Related party convertible debentures | 9,967 | |
Convertible debentures | 22,236 | |
Total current liabilities | 33,012 | 36,061 |
Warrant liability | 1,038 | |
Long term debt | 2,918 | |
Policy reserves | 18,754 | 19,463 |
Total liabilities | 55,722 | 55,524 |
Commitments and contingencies (Note 13) | ||
Preferred stock, $0.0001 par value; 10,000,000 shares authorized, none issued or outstanding as of September 30, 2022 | ||
Class A common stock, $0.0001 par value, 500,000,000 shares authorized, 33,027,830 issued and outstanding as of September 30, 2022 | 3 | |
Undesignated preferred stock, $.00001 par value; 90,000,000 shares authorized, none issued and outstanding as of December 31, 2021) | ||
Non-redeemable preferred stock series A, $.00001 par value; 10,000,000 shares authorized, 8,000,000 shares issued and outstanding as of December 31, 2021 | 21,854 | |
Common stock class A, $.00001 par value; 800,000,000 shares authorized; 30,208 shares issued and outstanding as of December 31, 2021) | ||
Common stock class B, $.00001 par value, 100,000,000 shares authorized; 2,000,000 shares issued and outstanding as of December 31, 2021) | ||
Additional paid-in capital | 144,672 | 4,902 |
Accumulated deficit | (128,908) | (51,976) |
Total stockholders’ equity (deficit) | 15,767 | (25,220) |
Total Liabilities and Stockholders’ Equity (Deficit) | $ 71,489 | $ 30,304 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parentheticals) - $ / shares | Sep. 30, 2022 | Dec. 31, 2021 |
Preferred stock, shares issued | 10,000,000 | |
Undesignated preferred stock, par value (in Dollars per share) | $ 0.00001 | |
Undesignated preferred stock,shares authorized | 90,000,000 | |
Undesignated preferred stock, shares issued | ||
Undesignated preferred stock, shares outstanding | ||
Preferred Stock [Member] | ||
Preferred stock, par value (in Dollars per share) | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized | 10,000,000 | |
Preferred stock, shares issued | ||
Preferred stock, shares outstanding | ||
Class A Common Stock | FOXO Technologies Inc. | ||
Common stock, par value (in Dollars per share) | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 500,000,000 | 500,000,000 |
Common stock, shares issued | 33,027,830 | 33,027,830 |
Common stock, shares outstanding | 33,027,830 | 33,027,830 |
Class A Common Stock | FOXO Technologies Operating Company | ||
Common stock, par value (in Dollars per share) | $ 0.00001 | $ 0.00001 |
Common stock, shares authorized | 800,000,000 | 800,000,000 |
Common stock, shares issued | 30,208 | |
Common stock, shares outstanding | 30,208 | |
Non-Redeemable Preferred stock Series A | ||
Preferred stock, par value (in Dollars per share) | $ 0.00001 | $ 0.00001 |
Preferred stock, shares authorized | 10,000,000 | 10,000,000 |
Preferred stock, shares issued | 8,000,000 | 8,000,000 |
Preferred stock, shares outstanding | 8,000,000 | 8,000,000 |
Class B Common Stock | FOXO Technologies Operating Company | ||
Common stock, par value (in Dollars per share) | $ 0.00001 | $ 0.00001 |
Common stock, shares authorized | 100,000,000 | 100,000,000 |
Common stock, shares issued | 2,000,000 | |
Common stock, shares outstanding | 2,000,000 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Total revenue | $ 14 | $ 31 | $ 93 | $ 93 |
Operating expenses: | ||||
Research and development | 558 | 1,665 | 2,160 | 4,321 |
Selling, general and administrative | 8,269 | 2,721 | 17,239 | 7,640 |
Total operating expenses | 8,827 | 4,386 | 19,399 | 11,961 |
Loss from operations | (8,813) | (4,355) | (19,306) | (11,868) |
Non-cash change in fair value of convertible debentures | (3,697) | (22,571) | (28,180) | (24,890) |
Change in fair value of warrant liability | 1,349 | 1,349 | ||
Change in fair value of forward purchase put derivative | (1,284) | (1,284) | ||
Change in fair value of forward purchase collateral derivative | (27,378) | (27,378) | ||
Other expense | (779) | (2) | (883) | (31) |
Interest expense | (424) | (313) | (1,250) | (825) |
Total other expense | (32,213) | (22,886) | (57,626) | (25,746) |
Loss before income taxes | (41,026) | (27,241) | (76,932) | (37,614) |
Provision for income taxes | ||||
Net loss | $ (41,026) | $ (27,241) | $ (76,932) | $ (37,614) |
Class A Common Stock | ||||
Operating expenses: | ||||
Net loss per common stock, basic and diluted (in Dollars per share) | $ (6.7) | $ (4.68) | $ (12.88) | $ (6.47) |
Consolidated Statements of Op_2
Consolidated Statements of Operations (Parentheticals) - $ / shares | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Class A Common Stock | ||||
Net loss per common stock, basic and diluted | $ (6.70) | $ (4.68) | $ (12.88) | $ (6.47) |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders’ Equity (Deficit) - USD ($) $ in Thousands | FOXO Technologies Operating Company Series A Preferred Stock | FOXO Technologies Operating Company Class A Common Stock | FOXO Technologies Operating Company Class B Common Stock | FOXO Technologies Inc. Class A Common Stock | Stockholder Subscription Receivable | Additional Paid-in- Capital | Accumulated Deficit | Total |
Balance at Dec. 31, 2020 | $ 21,854 | $ (3,750) | $ 4,104 | $ (13,488) | $ 8,720 | |||
Balance (in Shares) at Dec. 31, 2020 | 8,000,000 | 2,000,000 | ||||||
Net loss | (37,614) | (37,614) | ||||||
Lease contributions | 410 | 410 | ||||||
Equity-based compensation | 102 | 102 | ||||||
Equity-based compensation (in Shares) | ||||||||
Subscriptions received | 3,750 | 3,750 | ||||||
Warrants issued | 13 | 13 | ||||||
Issuance of shares for restricted stock (in Shares) | 30,000 | |||||||
Balance at Sep. 30, 2021 | $ 21,854 | 4,629 | (51,102) | (24,619) | ||||
Balance (in Shares) at Sep. 30, 2021 | 8,000,000 | 30,000 | 2,000,000 | |||||
Balance at Jun. 30, 2021 | $ 21,854 | (1,250) | 4,447 | (23,861) | 1,190 | |||
Balance (in Shares) at Jun. 30, 2021 | 8,000,000 | 30,000 | 2,000,000 | |||||
Net loss | (27,241) | (27,241) | ||||||
Lease contributions | 137 | 137 | ||||||
Lease contributions (in Shares) | ||||||||
Equity-based compensation | 45 | 45 | ||||||
Equity-based compensation (in Shares) | ||||||||
Subscriptions received | 1,250 | 1,250 | ||||||
Subscriptions received (in Shares) | ||||||||
Balance at Sep. 30, 2021 | $ 21,854 | 4,629 | (51,102) | (24,619) | ||||
Balance (in Shares) at Sep. 30, 2021 | 8,000,000 | 30,000 | 2,000,000 | |||||
Balance at Dec. 31, 2021 | $ 21,854 | 4,902 | (51,976) | (25,220) | ||||
Balance (in Shares) at Dec. 31, 2021 | 8,000,000 | 30,208 | 2,000,000 | |||||
Net loss | (45,437) | (45,437) | ||||||
Lease contributions | 225 | 225 | ||||||
Equity-based compensation | 717 | 717 | ||||||
Equity-based compensation (in Shares) | ||||||||
Warrant repurchase | (507) | (507) | ||||||
Issuance of shares for exercised stock options (in Shares) | 14,946 | |||||||
Forward purchase agreement reset price impact | 6,900 | 6,900 | ||||||
Forward purchase agreement reset price impact (in Shares) | 1,500,000 | |||||||
Conversion of Series A Preferred Stock | $ (21,854) | 21,854 | ||||||
Conversion of Series A Preferred Stock (in Shares) | (8,000,000) | 8,000,000 | ||||||
Conversion of Bridge Loans | 88,975 | 88,975 | ||||||
Conversion of Bridge Loans (in Shares) | 15,172,729 | |||||||
Conversion of Class B Common Stock (in Shares) | 2,000,000 | (2,000,000) | ||||||
Conversion of existing Class A Common Stock | $ 1 | 1 | ||||||
Conversion of existing Class A Common Stock (in Shares) | (26,717,883) | 15,518,705 | ||||||
Reverse recapitalization | $ 1 | 19,677 | 19,678 | |||||
Reverse recapitalization (in Shares) | 8,143,649 | |||||||
Net loss | (31,495) | (31,495) | ||||||
Equity-based compensation | $ 1 | 329 | 330 | |||||
Equity-based compensation (in Shares) | 9,175,000 | |||||||
Cantor Commitement Fee | 1,600 | 1,600 | ||||||
Cantor Commitement Fee (in Shares) | 190,476 | |||||||
Balance at Sep. 30, 2022 | $ 3 | 144,672 | (128,908) | 15,767 | ||||
Balance (in Shares) at Sep. 30, 2022 | 33,027,830 | |||||||
Balance at Jun. 30, 2022 | $ 21,854 | 12,026 | (87,882) | (54,002) | ||||
Balance (in Shares) at Jun. 30, 2022 | 8,000,000 | 1,545,154 | 2,000,000 | |||||
Net loss | (9,531) | (9,531) | ||||||
Equity-based compensation | 211 | 211 | ||||||
Equity-based compensation (in Shares) | ||||||||
Conversion of Series A Preferred Stock | $ (21,854) | 21,854 | ||||||
Conversion of Series A Preferred Stock (in Shares) | (8,000,000) | 8,000,000 | ||||||
Conversion of Bridge Loans | 88,975 | 88,975 | ||||||
Conversion of Bridge Loans (in Shares) | 15,172,729 | |||||||
Conversion of Class B Common Stock (in Shares) | 2,000,000 | (2,000,000) | ||||||
Conversion of existing Class A Common Stock | $ 1 | 1 | ||||||
Conversion of existing Class A Common Stock (in Shares) | (26,717,883) | 15,518,705 | ||||||
Reverse recapitalization | $ 1 | 19,677 | 19,678 | |||||
Reverse recapitalization (in Shares) | 8,143,649 | |||||||
Net loss | (31,495) | (31,495) | ||||||
Equity-based compensation | $ 1 | 329 | 330 | |||||
Equity-based compensation (in Shares) | 9,175,000 | |||||||
Cantor Commitement Fee | 1,600 | 1,600 | ||||||
Cantor Commitement Fee (in Shares) | 190,476 | |||||||
Balance at Sep. 30, 2022 | $ 3 | $ 144,672 | $ (128,908) | $ 15,767 | ||||
Balance (in Shares) at Sep. 30, 2022 | 33,027,830 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net loss | $ (76,932) | $ (37,614) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation | 159 | 71 |
Equity-based compensation | 1,002 | 8 |
Cantor Commitment Fee | 1,600 | |
Amortization of consulting fees | 2,954 | |
Change in fair value of convertible debentures | 28,180 | 24,890 |
Change in fair value of forward purchase agreement collateral derivative | 27,378 | |
Change in fair value of warrants | (1,349) | |
Change in fair value of forward purchase agreement put derivative | 1,284 | |
Conversion of accrued interest | 593 | |
Contributions in the form of rent payments | 225 | 410 |
Amortization of right-of-use assets | 20 | |
Accretion of operating lease liabilities | (20) | |
Recognition of prepaid offering costs upon election of fair value option | 107 | |
Accretion of interest earned on investment in convertible promissory note | (26) | |
Other | 13 | |
Changes in operating assets and liabilities: | ||
Supplies | (1,762) | (296) |
Prepaid expenses, consulting fees, and other current assets | (1,002) | 55 |
Cloud computing arrangements | (1,941) | (1,701) |
Reinsurance recoverables | 709 | 88 |
Accounts payable | (489) | 2,247 |
Accrued and other liabilities | 761 | 197 |
Policy reserves | (709) | (88) |
Net cash used in operating activities | (19,232) | (11,746) |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Purchase of property and equipment | (108) | (73) |
Asset acquisition, net of cash acquired | (63) | |
Development of internal use software | (1,622) | (9) |
Acquisition of convertible promissory note | (50) | |
Net cash used in investing activities | (1,730) | (195) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Proceeds from issuance of related party convertible debentures | 3,250 | |
Proceeds from issuance of convertible debentures | 28,000 | 7,250 |
Warrant repurchase | (507) | |
Senior PIK Notes proceeds | 3,458 | |
Reverse recapitalization proceeds | 23,226 | |
Forward purchase agreement escrow | (29,135) | |
Forward purchase agreement proceeds | 484 | |
Forward purchase agreement collateral release to Meteora | 733 | |
Deferred offering costs | (539) | |
Related party promissory note | (1,160) | |
Proceeds received from stockholder subscription receivable | 3,750 | |
Net cash provided by financing activities | 24,560 | 14,250 |
Net increase in cash and cash equivalents | 3,598 | 2,309 |
Cash and cash equivalents at beginning of period | 6,856 | 8,123 |
Cash and cash equivalents at end of period | 10,454 | 10,432 |
NONCASH INVESTING AND FINANCING ACTIVITIES: | ||
Conversion of phantom equity to stock options | $ 54 | |
Conversion of debt | 88,382 | |
Conversion of preferred stock | 21,854 | |
Accrued internal use software | $ 239 |
Description of Business
Description of Business | 9 Months Ended |
Sep. 30, 2022 | |
Accounting Policies [Abstract] | |
DESCRIPTION OF BUSINESS | Note 1 DESCRIPTION OF BUSINESS FOXO Technologies Inc. (“FOXO” or the “Company”), f/k/a Delwinds Insurance Acquisition Corp. (“Delwinds”), a Delaware corporation, was originally formed in April 2020 as a publicly traded special purpose company for the purpose of effecting a merger, capital stock exchange, asset acquisition, reorganization, or similar business combination involving one or more businesses. FOXO is a leader in commercializing epigenetic biomarker technology to support groundbreaking scientific research and disruptive next-generation business initiatives. The Company applies automated machine learning and artificial intelligence technologies to discover epigenetic biomarkers of human health, wellness and aging. The Company has been building a life insurance business to support the commercial applications of its epigenetic biomarker underwriting technology and consumer engagement platform service business. On August 20, 2021, the Company completed its acquisition of Memorial Insurance Company of America (“MICOA”) and renamed it FOXO Life Insurance Company. The Company manages and reports results of operations for two reportable business segments: FOXO Life, the Company’s life insurance business operations, and FOXO Labs, the Company’s epigenetic biomarker technology business operations. The Business Combination On February 24, 2022, Delwinds entered into a definitive Agreement and Plan of Merger, dated as of February 24, 2022, as amended on April 26, 2022, July 6, 2022 and August 12, 2022 (the “Merger Agreement”), with FOXO Technologies Inc., now known as FOXO Technologies Operating Company (“FOXO Technologies Operating Company”), DWIN Merger Sub Inc., a Delaware corporation and a wholly owned subsidiary of Delwinds (“Merger Sub”), and DIAC Sponsor LLC (the “Sponsor”), in its capacity as the representative of the stockholders of Delwinds from and after the closing (the “Closing”) of the transactions contemplated by the FOXO Transaction Agreement (collectively, the “Transaction” or the “Business Combination”). Simultaneously with the execution of the Merger Agreement, Delwinds entered into a Common Stock Purchase Agreement (the “ELOC Agreement”) with CF Principal Investments LLC (the “Cantor Investor”), pursuant to which, assuming satisfaction of certain conditions and subject to limitations set forth in the ELOC Agreement, the Company would have the right, from time to time to sell the Cantor Investor up to $40,000 in shares of the Company’s Class A common stock (the “Class A Common Stock”) until the first day of the next month following the 36-month anniversary of when the Securities and Exchange Commission (“SEC”) has declared effective a registration statement covering the resale of such shares of Class A Common Stock or until the date on which the facility has been fully utilized, if earlier. The Business Combination was approved by Delwinds’ stockholders on September 14, 2022 and closed on September 15, 2022 (the “Closing Date”) whereby Merger Sub merged into FOXO Technologies Operating Company, with FOXO Technologies Operating Company surviving the merger as a wholly owned subsidiary of the Company (the “Combined Company”), and with FOXO Technologies Operating Company security holders becoming security holders of the Combined Company. Immediately upon the Closing, the name of Delwinds was changed to FOXO Technologies Inc. Following the Closing, FOXO is a holding company whose wholly-owned subsidiary, FOXO Technologies Operating Company, conducts all of the core business operations. FOXO Technologies Operating Company maintains its two wholly-owned subsidiaries, FOXO Labs Inc. and FOXO Life, LLC. FOXO Labs maintains a wholly-owned subsidiary, Scientific Testing Partners, LLC, while FOXO Life Insurance Company is a wholly-owned subsidiary of FOXO Life, LLC. References to “FOXO” and the “Company” in these unaudited consolidated financial statements refer to FOXO Technologies Operating Company and its wholly-owned subsidiaries prior to the Closing and FOXO Technologies Inc. following the Closing. In accordance with the terms of the Merger Agreement, at Closing, the Company (i) acquired 100% of the issued and outstanding FOXO Technologies Operating Company Class A common stock (the “FOXO Class A Common Stock”) in exchange for equity consideration in the form of the Company’s Class A Common Stock, (ii) acquired 100% of the issued and outstanding shares of FOXO Technologies Operating Company Class B common stock (the “FOXO Class B Common Stock”) in exchange for equity consideration in the form of the Company’s Class A Common Stock. Immediately prior to the Closing, the following transactions occurred: ● 8,000,000 shares of FOXO Technologies Operating Company Series A preferred stock (the “FOXO Preferred Stock”) were exchanged for 8,000,000 shares of FOXO Class A Common Stock. ● The 2021 Bridge Debentures (as defined in Note 5) in the principal amount, together with accrued and unpaid interest, of $24,402 were converted into 6,759,642 shares of FOXO Class A Common Stock. ● The holders of the 2022 Bridge Debentures (as defined in Note 5) in the principal amount, together with accrued and unpaid interest, of $34,496 were converted into 7,810,509 shares of FOXO Class A Common Stock. As a result of and upon the Closing, among other things, (1) all outstanding shares of FOXO Class A Common Stock (after giving effect to the conversion of the FOXO Preferred Stock, the 2021 Bridge Debentures, and 2022 Bridge Debentures into share of FOXO Class A Common Stock) and FOXO Class B Common Stock were converted into 15,518,705 shares of the Company’s Class A Common Stock, (2) all FOXO options and FOXO warrants outstanding immediately before the Closing (“Assumed Options” and “Assumed Warrants”, as applicable) were assumed and converted, subject to adjustment pursuant to the terms of the Merger Agreement, into options and warrants, respectively, of the Company, exercisable for share of the Company’s Class A Common Stock and (3) other than the Assumed Options and Assumed Warrants, all other convertible securities and other rights to purchase capital stock of FOXO Technologies Operating Company were retired and terminated, if they were not converted, exchanged or exercised for FOXO Technologies Operating Company stock immediately prior the Closing. |
Liquidity and Management's Plan
Liquidity and Management's Plan | 9 Months Ended |
Sep. 30, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
LIQUIDITY AND MANAGEMENT'S PLAN | Note 2 LIQUIDITY AND MANAGEMENT’S PLAN The Company’s history of losses requires management to critically assess its ability to continue operating as a going concern. For the three and nine months ended September 30, 2022, the Company incurred a net loss of $41,026 and $76,932, respectively. As of September 30, 2022, the Company had an accumulated deficit of $128,908. Cash used in operating activities for the nine months ended September 30, 2022 was $19,232. As of September 30, 2022, the Company had $5,453 of available cash and cash equivalents, excluding amounts required to be held as statutory capital and surplus by FOXO Life Insurance Company. The Company’s ability to continue as a going concern is dependent on generating revenue, raising additional equity or debt capital, reducing losses and improving future cash flows. The Company will continue ongoing capital raise initiatives and has demonstrated previous success in raising capital to support its operations. For instance, in the first and second quarters of 2022, the Company issued convertible debentures for $28,000 that has subsequently converted to equity. However, the Company can provide no assurance that these actions will be successful or that additional sources of financing will be available on favorable terms, if at all. As such, until additional equity or debt capital is secured and the Company begins generating sufficient revenue, there is substantial doubt about the Company’s ability to continue as a going concern for the one-year period following the issuance of these unaudited consolidated financial statements. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2022 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | Note 3 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES BASIS OF PRESENTATION AND PRINCIPLES OF CONSOLIDATION The unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information and the instructions to Form 10-Q and Article 10 of Regulation S-X of the SEC. Certain information or footnote disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted, pursuant to the rules and regulations of the SEC for interim financial reporting. Accordingly, the unaudited consolidated financial statements do not include all information and footnotes necessary for a complete presentation of financial position, results of operations or cash flows. The unaudited consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements as of and for the year ended December 31, 2021 and the notes thereto. The consolidated balance sheet data as of December 31, 2021 was derived from the audited consolidated financial statements as of that date but does not include all disclosures required by U.S. GAAP. In the opinion of management, the unaudited consolidated financial statements include all adjustments of a normal or recurring nature, which are necessary for a fair presentation of financial position, operating results and cash flows for the periods presented. Operating results for the three and nine months ended September 30, 2022 are not necessarily indicative of the results that may be expected for the year ending December 31, 2022. Pursuant to the Business Combination, the acquisition of FOXO Technologies Operating Company by Delwinds was accounted for as a reverse recapitalization in accordance with U.S. GAAP (the “Reverse Recapitalization”). Under this method, Delwinds was treated as the “acquired” company for financial reporting purposes. For accounting purposes the Reverse Recapitalization was treated as the equivalent of FOXO Technologies Operating Company issuing equity securities for the net assets of Delwinds, accompanied by a recapitalization. The net assets of Delwinds are stated at historical cost, with no goodwill or other intangible asset being recorded. The condensed assets, liabilities and results of operations prior the Reverse Recapitalization are those of FOXO Technologies Operating Company. The unaudited consolidated financial statements include the accounts of FOXO and its wholly-owned subsidiaries. All intercompany balances and transactions are 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 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. USE OF ESTIMATES The preparation of the unaudited consolidated 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 revenue 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. It is reasonably possible that actual experience could differ from the estimates and assumptions utilized. 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. PROPERTY AND EQUIPMENT, NET Property and equipment is recorded at cost. The cost of additions and betterments are capitalized and expenditures for repairs and maintenance are expensed in the period incurred. When property and equipment is sold or retired, the related cost and accumulated depreciation are removed from the consolidated balance sheets and any gain or loss is included in the consolidated statements of operations as incurred. When property and equipment is abandoned before the end of its previously estimated useful life the depreciable life is revised to the shorter remaining useful life. Property and equipment is presented net of accumulated depreciation. Depreciation is computed using the straight-line method over the estimated useful lives of the assets, which are generally three years for computers and office equipment and seven years for furniture and fixtures. Leasehold improvements are depreciated over the shorter of their estimated useful life or the remaining term of the lease. IMPAIRMENT OF LONG-LIVED ASSETS The Company reviews its long-lived assets, including property and equipment and right-of-use 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. Recoverability is measured by comparing the carrying amount of the asset group with the future undiscounted cash flows the assets are expected to generate. If such assets are considered impaired, an impairment loss would be measured by comparing the amount by which the carrying value exceeds the fair value of the long-lived assets. Management determined that there was no impairment of long-lived assets as of September 30, 2022 and December 31, 2021. CAPITALIZED IMPLEMENTATION COSTS The Company capitalizes certain development costs associated with internal use software and cloud computing arrangements incurred during the application development stage. The Company expenses costs associated with preliminary project phase activities, training, maintenance, and any post-implementation costs as incurred. Capitalized costs related to projects to develop internal use software are included within intangible assets on the consolidated balance sheets, while capitalized costs related to cloud computing arrangements are included within cloud computing arrangements on the consolidated balance sheets. Capitalized costs will be amortized on a straight-line basis once application development is complete based on the estimated life of the asset or the expected term of the contract, as applicable. Application development was ongoing as of September 30, 2022 for all such projects and thus no amortization has been recorded to date. 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. 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 stock purchase warrants and forward share purchase obligations, to determine if such instruments are derivatives or contain features that qualify as embedded derivatives, pursuant to ASC 480, “Distinguishing Liabilities from Equity,” “Derivatives and Hedging – Embedded Derivatives.” DEBT The Company issued convertible debentures to related and nonrelated parties, which included original issue discounts, conversion features and detachable warrants, as further discussed in Note 5 to these consolidated financial statements. The detachable warrants represent freestanding, separable equity-linked financial instruments recorded at fair value. The fair value of the detachable warrants is calculated using a Black-Scholes valuation model. The Company elected the fair value option for the convertible debt, which requires recognition at fair value upon issuance and on each balance sheet date thereafter. Changes in the estimated fair value are recognized as non-cash change in fair value of convertible debentures in the consolidated statements of operations. As a result of applying the fair value option, direct costs and fees related to the issuance of the convertible debt were expensed and not deferred. REVENUE RECOGNITION The Company’s revenues consist of royalties based on the Company’s epigenetic biomarker research, agents’ commissions earned on the sale, servicing and placement of life insurance policies, and epigenetic testing services sold primarily to research organizations. Revenues are recognized when control of the promised goods or services is transferred to the Company’s customers, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those goods or services. To recognize revenues, the Company applies the following five step approach: (i) identify the contract with a customer, (ii) identify the performance obligations in the contract, (iii) determine the transaction price, (iv) allocate the transaction price to the performance obligations in the contract, and (v) recognize revenues when a performance obligation is satisfied. The Company accounts for a contract when it has approval and commitment from all parties, the rights of the parties are identified, payment terms are identified, the contract has commercial substance and collectability of consideration is probable. 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. As of September 30, 2022 and December 31, 2021, the Company had no contract assets or liabilities related to revenue arrangements or transactions. FOXO Labs — Epigenetic biomarker royalties The Company has granted a license to Illumina, Inc. (“Illumina”) for the exclusive right to manufacture and sell infinium mouse methylation arrays using the Company’s research on epigenetic biomarkers in exchange for a royalty on global sales. Illumina provides reporting to the Company so that revenue can be properly recognized as the license is used. Revenue is recorded net as the Company is not considered the principal in the transaction. Epigenetic biomarker royalties are recorded with the FOXO Labs reportable segment. During the third quarter of 2022, the royalty was reduced from 5% to 1.25% in exchange for eliminating a purchase commitment for mouse methylation arrays as further discussed in Note 13. FOXO LIFE — Life insurance commissions FOXO Life, LLC, currently an insurance agency, receives insurance commission revenue from the distribution and sale of life insurance policies based on a percentage of the premiums paid by its customers. These commission revenues are substantially recognized at a point in time on the effective date of the associated policies when control of the policy transfers to the client, as well as deferring certain revenues to reflect delivery of services over the contract period and are reported within the FOXO Life reportable segment. Commissions are fixed at the contract effective date and generally are based on a percentage of premiums for insurance coverage. Commission rates vary depending on a variety of factors, including the type of risk being placed, the particular underwriting enterprise’s demand, expected loss experience of the particular risk of coverage, and historical benchmarks surrounding the level of effort necessary for the Company to place and service the insurance contract. The Company recognizes approximately 80% of commissions earned from the initial life insurance placement on the effective date of the underlying insurance contract. The amount of revenue recognized is based on costs to provide services up and through that effective date, including an appropriate estimate of profit margin on a portfolio basis (a practical expedient as defined in ASC 606, Revenue from Contracts with Customers FOXO Labs — Epigenetic biomarker services FOXO Labs receives epigenetic biomarker services revenue from the performance of lab services. The Company’s performance obligation is satisfied when the Company completes the epigenetic biomarker data analysis. At the completion of the biomarker testing, results are reviewed and released to the customer. The Company subsequently bills the organization for the epigenetic biomarker data based on the transaction price, which reflects the amount the Company has rights to under present contracts. Revenue is recognized and reported within the FOXO Labs reportable segment over the life of the contract as work is performed, as FOXO Labs has an enforceable right to payment as the performance is being completed. The Company elected the practical expedient to expense contract costs as incurred related to services provided because the contract term is less than one year. EQUITY-BASED COMPENSATION The Company measures all equity-based payments, including options and restricted stock to employees, service providers and nonemployee directors, using a fair-value based method. The cost of services received from employees and nonemployee directors in exchange for awards of equity instruments is recognized in the consolidated statements of operations based on the estimated fair value of those awards on the grant date or reporting date, if required to be remeasured, and amortized on a straight-line basis over the requisite service period. The Black-Scholes valuation model requires the input of assumptions, including the exercise price, volatility, expected term, discount rate, and the fair value of the underlying stock on the date of grant. These inputs are provided at the grant date for an equity classified award and each measurement date for a liability classified award. See Note 8 for additional disclosures regarding the equity-based compensation program. RESEARCH AND DEVELOPMENT COSTS Research and development costs are expensed as incurred. Research and development expenses consist primarily of personnel costs and related benefits, as well as costs for outside consultants and professional services. 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. NET LOSS PER SHARE Net loss per share of common stock is calculated by dividing net loss 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 Net Loss Per Share ASSET ACQUISITIONS The Company follows the guidance in ASC 805, Business Combinations REINSURANCE The Company is subject to a 100% coinsurance agreement with the seller of MICOA, Security National Life Insurance Company. The amounts reported in the consolidated balance sheets as reinsurance recoverables include amounts billed to reinsurers on losses paid as well as estimates of amounts expected to be recovered from reinsurers on insurance liabilities that have not yet been paid. Reinsurance recoverables on unpaid losses are estimated based upon assumptions consistent with those used in establishing the liabilities related to the underlying reinsured contracts. Insurance liabilities are reported gross of reinsurance recoverables. Management believes reinsurance recoverables are appropriately established. Reinsurance premiums are reflected in income in a manner consistent with the recognition of premiums on the reinsured contracts. Reinsurance does not extinguish the Company’s primary liability under the policies written. The Company regularly evaluates the financial condition of the reinsurer and establishes allowances for uncollectible reinsurance recoverables as appropriate. Revenues on traditional life insurance products subject to this reinsurance agreement consist of direct premiums reported as earned when due. Premium income includes premiums on reinsured policies and is reduced by premiums ceded. Expenses under the reinsurance agreement are also reduced by the amount ceded. POLICY RESERVES The Company establishes liabilities for amounts payable under insurance policies, including traditional life insurance and annuities. Generally, amounts are payable over an extended period. Liabilities for future policy benefits of traditional life insurance have been computed by using a net level premium method based upon estimates at the time of issue for investment yields, mortality and withdrawals. These estimates include provisions for experience less favorable than initially expected. Mortality assumptions are based on industry experience expressed as a percentage of standard mortality tables. Annuity liabilities are primarily associated with deferred annuity contracts. The deferred annuity contracts credit interest based on a fixed rate. Liabilities for deferred annuities are included without reduction for potential surrender charges. The liability is equal to accumulated deposits, plus interest credited, less policyholder withdrawals. Reserving assumptions for interest rates, mortality and expense are “locked in” upon the acquisition date for traditional life insurance contracts; significant changes in experience or assumptions may require the Company to provide for extended future losses by establishing premium deficiency reserves. Premium deficiency reserves are determined based on best estimate assumptions that exist at the time the premium deficiency reserve is established and do not include a provision for adverse deviation. RECENTLY ISSUED ACCOUNTING STANDARDS In December 2019, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes (“ASU 2019-12”). ASU 2019-12 removed certain exceptions to the general principles in ASC 740 and clarified and amended existing guidance to improve consistent application. This amended guidance was effective for public entities for interim and annual periods beginning after December 15, 2021. The Company adopted ASU 2019-12 effective January 1, 2022 and it did not have a material impact on the Company’s consolidated financial statements. Other pronouncements issued by the FASB with future effective dates are either not applicable or are not expected to have a material impact on the Company’s financial position, results of operations or cash flows. |
Intangible Assets and Cloud Com
Intangible Assets and Cloud Computing Arrangements | 9 Months Ended |
Sep. 30, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
INTANGIBLE ASSETS AND CLOUD COMPUTING ARRANGEMENTS | Note 4 INTANGIBLE ASSETS AND CLOUD COMPUTING ARRANGEMENTS The components of intangible assets as of September 30, 2022 and December 31, 2021 were as follows: September 30, December 31, Insurance license $ 63 $ 63 Longevity pipeline 512 75 Underwriting API 839 53 Longevity API 657 - Intangible assets $ 2,071 $ 191 The acquisition of MICOA was accounted for as an asset acquisition and an indefinite-lived insurance license intangible asset was recognized for $63. As this intangible asset has been deemed to have an indefinite life, the asset is not subject to amortization, but is assessed for impairment annually, unless conditions arise that necessitate more frequent evaluation. During the year ended December 31, 2021, the Company began developing internal use software related to the development of a longevity methylation pipeline for epigenetic data and underwriting application programming interface (“API”). During the nine months ended September 30, 2022, the Company began developing a longevity API to show the results derived from the longevity pipeline. The Company has capitalized costs incurred during the application development stage and has determined that once completed, these intangible assets will have a finite life. Application development on these projects is ongoing as of September 30, 2022. Amortization will be recorded on a straight-line basis when the assets are ready for their intended use. The components of cloud computing arrangements as of September 30, 2022 and December 31, 2021 were as follows: September 30, December 31, Digital insurance platform $ 2,966 $ 1,980 Health study tool 1,743 765 Cloud computing arrangements $ 4,709 $ 2,745 The Company entered into a cloud computing arrangement to develop a digital insurance platform and health study tool. Costs related to the application development phase are included in cloud computing arrangements. As of September 30, 2022, the application development phase remains ongoing for the digital insurance platform and health study tool. Amortization will be recorded on a straight-line basis over the expected term of the contract when the assets are ready for their intended use. The Company’s internal use software and cloud computing arrangements, including the longevity pipeline, underwriting API, longevity API, digital insurance platform and health study tool, include amounts capitalized for interest. |
Debt
Debt | 9 Months Ended |
Sep. 30, 2022 | |
Debt Disclosure [Abstract] | |
DEBT | Note 5 DEBT 15% Senior PIK Notes On September 20, 2022, the Company entered into separate Securities Purchase Agreements with accredited investors pursuant to which the Company issued its 15% Senior PIK Notes (the “Senior PIK Notes”) in the aggregate principal amount of $3,458. The Company received net proceeds of $2,918, after deducting fees and expenses of $540. The Senior PIK Notes bear interest at 15% per annum, paid in arrears quarterly by payment in kind through increasing the principal amount. The Senior PIK Notes mature on April 1, 2024 (the “Maturity Date”). Commencing on November 1, 2023, the Company is required to pay the holders of the Senior PIK Notes and on each one month anniversary thereof an equal amount until the outstanding principal balance has been paid in full on the Maturity Date. In addition, the Company has agreed that any proceeds from the sale of shares of Class A Common Stock under the ELOC Agreement will be used only for the amortization of the Senior PIK Notes until paid in full. If the Senior PIK Notes are prepaid in the first year, the Company is required to pay the holders in addition to the original principal amount the interest that would have been payable through the first year. The Company has agreed to no additional equity or debt financing, without the consent of a majority of the holders of the Senior PIK Notes, other than to be utilized for amortization of the Senior PIK Notes. The Company shall not incur other indebtedness, except for certain exempt indebtedness, until such time the Senior PIK Notes are repaid in full, however the Senior PIK Notes are unsecured. 2021 Bridge Debentures During the first quarter of 2021, the Company entered into separate Securities Purchase Agreements with accredited investors (the “2021 Bridge Investors”), pursuant to which the Company issued its 12.5% Original Issue Discount (“OID”) Convertible Debentures for $11,812 in aggregate principal (“2021 Bridge Debentures”). The Company received net proceeds of $9,612 from the sale of the 2021 Bridge Debentures, after an OID of 12.5% and deducting fees and expenses of $888. The 2021 Bridge Debentures were executed in three tranches, with $7,883 in aggregate principal issued on January 25, 2021, $3,367 in aggregate principal issued on February 23, 2021, and $562 in aggregate principal issued on March 4, 2021. Convertible debentures for $3,656 in aggregate principal that were issued on January 25, 2021 to the Company’s Chief Executive Officer, Chief Operating Officer, and to an individual who provides consulting services to the Company were presented as related party debt. Each issuance of 2021 Bridge Debentures included detachable warrants for the right to purchase up to a total of 1,905,853 shares, after giving effect to the conversion of FOXO Class A Common Stock to the Company’s Class A Common Stock. Additional detachable warrants were issued to the underwriter of the issuance of the 2021 Bridge Debentures. The Company concluded the detachable warrants represent freestanding equity-linked financial instruments to be recorded at their fair value on each respective issuance date. The fair value of the detachable warrants was determined using a Black-Scholes valuation model. The additional underwriter warrants were subsequently assigned and surrendered to the Company in exchange for cash payments of approximately $507 during the second quarter of 2022. The 2021 Bridge Debentures accrued interest at a rate of 12% per annum and require interest only payments on a quarterly basis. The 2021 Bridge Debentures initially had a term of twelve months, but the Company retained the right to extend the maturity date for each issuance for an additional three-month period, a right which was exercised for each issuance during the first quarter 2022. In the first quarter of 2022, the Company entered into an amendment with the 2021 Bridge Investors (the “2021 Bridge Amendment”). The 2021 Bridge Amendment was executed to provide the Company additional time to finalize the Business Combination. The 2021 Bridge Amendment amended the terms of the 2021 Bridge Debentures to, among other things: (i) permit the Company to undertake another offering of convertible debentures, (ii) allow the Company to extend the maturity dates of the 2021 Bridge Debentures an additional five months following the end of the initial three-month extension period, discussed above, and (iii) implement additional amounts owed on the outstanding balance of the 2021 Bridge Debentures under certain circumstances, the first of which related to the signing of the Merger Agreement and resulted in an increase in the outstanding balance of approximately 135%, which was followed by an additional increase of approximately 145% of the outstanding balance when the 2021 Bridge Debentures remained outstanding at the end of the initial three-month extension period. 2022 Bridge Debentures During the first and second quarters of 2022, the Company entered into separate Securities Purchase Agreements with accredited investors (the “2022 Bridge Investors”), pursuant to which the Company issued its 10% OID Convertible Debentures for $30,800 in aggregate principal (“2022 Bridge Debentures”). The Company received net proceeds of $28,000 from the sale of the 2022 Bridge Debentures, after an OID of 10%. The 2022 Bridge Debentures were issued in three tranches, with $16,500 in aggregate principal issued on March 1, 2022, $8,250 in aggregate principal issued on March 3, 2022 and the remaining $6,050 in aggregate principal issued on April 27, 2022. The 2022 Bridge Debentures had a term of twelve months from the initial issuance dates and accrued interest at a rate of 12% per annum, of which 12 months was guaranteed. The Company retained the right to extend the maturity date for each issuance for an additional three-month period and incur an extension amount rate of 130% of the outstanding balance. The Company also had the option to prepay the 2022 Bridge Debentures at an amount equal to 120% of the sum of the outstanding principal and unpaid interest thereon if done within 365 days of the original issue date and 130% if during the extension period. In connection with the sale of the 2022 Bridge Debentures, FOXO entered into a letter agreement between FOXO and an in institutional investor (the “Bridge Investor Side Letter”) pursuant to which FOXO agreed to issue such investor in connection with the Closing, such number of shares of FOXO Class A Common Stock, to be issued immediately prior to the Closing, that would be exchangeable into 350,000 shares of Class A Common Stock. Pursuant to the terms of the Bridge Investor Side Letter, the institutional investor was issued 602,578 shares of FOXO Class A Common Stock which were then exchanged for 350,000 shares of Class A Common Stock. During the nine months ended September 30, 2022, the Company recognized contractual interest expense of $1,627 on the 2021 Bridge Debentures, comprised of $508 for related party holders and $1,119 for nonrelated party holders. During the three months ended September 30, 2022, the Company recognized contractual interest expense of $593 on the 2021 Bridge Debentures, comprised of $181 for related party holders and $412 for nonrelated party holders. The contractual interest expense on the 2022 Bridge Debentures was included in the fair value of the debt since the amount was known at the time of each issuance. The contractual interest on the 2022 Bridge Debentures as well as for the three months ended September 30, 2022 on the 2021 Bridge Debentures converted to shares of FOXO Class A Common Stock and subsequently exchanged for the Company’s Class A Common Stock as part of the Business Combination. |
Related Party Transactions
Related Party Transactions | 9 Months Ended |
Sep. 30, 2022 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | Note 6 RELATED PARTY TRANSACTIONS Office Space The Company subleased its office space from the holder of the FOXO Preferred Stock through May of 2022. The holder of the FOXO Preferred Stock paid all lease costs, including common area maintenance and other property management fees, on the Company’s behalf. These payments were treated as additional capital contributions. Bridge Debentures Prior to the conversion of the Bridge Debentures to shares of FOXO Technologies Operating Company Class A and subsequent exchange for Class A Common Stock of the Company at Closing of the Business Combination, there were related party borrowings which are described in more detail in Note 5. Promissory Note On June 6, 2022, the Company executed a promissory note, pursuant to which it loaned Delwinds an aggregate principal amount of $1,160, which represented $0.035 per share of Delwinds Class A common stock that was not redeemed in connection with the extension of the SPAC’s termination date from June 15, 2022 to September 15, 2022. The Company loaned Delwinds $387 per month in June 2022, July 2022, and August 2022 prior to Closing of the Business Combination. The outstanding balance on the promissory note eliminated upon consolidation with the Closing of the Business Combination. Sponsor Loan In order to finance transaction costs in connection with a Business Combination, the Sponsor or an affiliate of the Sponsor loaned Delwinds funds for working capital. As of September 30, 2022, $500 was remaining due to the sponsor and is shown as a related party payable in the consolidated balance sheet. Consulting Agreement In April 2022, the Company executed a consulting agreement with an individual (the “Consultant”) considered to be a related party of the Company as a result of his investment in the 2021 Bridge Debentures. The agreement has a term of twelve months, over which the Consultant is to provide services that include, but are not limited to, advisory services relating to the implementation and completion of the Business Combination. Following the execution of the agreement, as compensation for such services to be rendered as well as related expenses over the term of the contract, the Consultant was paid a cash fee of $1,425. The consulting agreement also calls for the payment of an equity fee as compensation for such services. The Company issued 1,500,000 shares of FOXO Class A Common Stock to the Consultant during the second quarter of 2022 to satisfy the equity fee. The Company has determined that all compensation costs related to the consulting agreement, including both cash fees and the equity fee, represent remuneration for services to be rendered evenly over the contract term. Thus, all such costs were initially recorded at fair value as prepaid consulting fees in the consolidated balance sheet and are being recognized as selling, general and administrative expenses in the consolidated statement of operations on a straight-line basis over the term of the contract. For the three and nine months ended September 30, 2022, $2,081 and $3,568 in expenses, respectively, were recognized related to the consulting agreement. |
Stockholders_ Equity
Stockholders’ Equity | 9 Months Ended |
Sep. 30, 2022 | |
Stockholders' Equity Note [Abstract] | |
STOCKHOLDERS' EQUITY | Note 7 STOCKHOLDERS’ EQUITY The unaudited consolidated statements of stockholders’ equity (deficit) reflects the Reserve Recapitalization. In connection with the Business Combination, the Company adopted the second amended and restated certificate of incorporation (the “Amended and Restated Company Charter”) to, among other things, increased the total number of authorized shares of all capital stock, par value $0.0001 per share, to 510,000,000 shares, consisting of (i) 500,000,000 shares of Class A Common Stock and (ii) 10,000,000 shares of preferred stock. Also in connection with the Business Combination, 632,500 shares of Class B Common Stock were converted, on a one-to-one basis, into shares of Class A Common Stock, and as of September 30, 2022, there were no ELOC Agreement Under the ELOC Agreement, the Company has the right to sell to the Cantor Investor up to $40,000 in shares of Class A Common Stock for a period until the first day of the month next following the 36-month anniversary of when the SEC has declared effective a registration statement covering the resale of such share of Class A Common Stock or until the date on which the facility has been fully utilized, if earlier. The purchase price of the shares of Class A Common Stock will be 97% of the volume weighted average price per share (“VWAP”) of the Class A Common Stock during the applicable purchase date on which the Company has timely delivered written notice to the Cantor Investor directing it to purchase shares of Class A Common Stock under the ELOC Agreement. The ELOC Agreement provides for a commitment fee (the “Cantor Commitment Fee”) payable to the Cantor Investor at Closing for its irrevocable commitment to purchase shares of Class A Common Stock upon the terms and conditions of the ELOC Agreement. The Cantor Commitment fee was paid by the issuance of 190,476 shares of Class A Common Stock and is recorded in selling, general and administrative expenses in the consolidated statement of operations. The Company has the right to terminate the ELOC Agreement at any time, at no cost or penalty, upon 10 trading days’ prior written notice. Additionally, the Cantor Investor has the right to terminate the ELOC Agreement on the seventh trading day following the Closing if the total market capitalization of the Company is less than $100 million as of such date. Preferred Stock The Amended and Restated Company Charter authorizes the Company to issue 10,000,000 shares of preferred stock with such designations, voting and other rights and preferences as may be determined from time to time by the Company’s board of directors. As of September 30, 2022, there were no shares of preferred stock issued or outstanding. Warrants Public Warrants and Private Placement Warrants The Company issued 10,062,500 common stock warrants in connection with Delwinds’ initial public offering (the “IPO”) (the “Public Warrants”). Simultaneously with the closing of the IPO, Delwinds consummated the private placement of 316,250 common stock warrants (the “Private Placement Warrants”). Public Warrants may only be exercised for a whole number of shares. No fractional warrants will be issued upon separation of the Units and only whole warrants will trade. Each Public Warrant entitles the holder to purchase one share of Class A Common Stock at a price of $11.50 per share, subject to adjustment. The Public Warrants become exercisable 30 days after the completion of a Business Combination. The Public Warrants will expire five years after the completion of a Business Combination or earlier upon redemption or liquidation. The Company is not obligated to deliver any shares of Class A Common Stock pursuant to the exercise of a warrant and has no obligation to settle such warrant exercise unless a registration statement under the Securities Act with respect to the shares of Class A Common Stock underlying the warrants is then effective and a prospectus relating thereto is current, subject to the Company satisfying its obligations with respect to registration. No warrant will be exercisable, and the Company will not be obligated to issue shares of Class A Common Stock upon exercise of a warrant unless Class A Common Stock issuable upon such warrant exercise has been registered, qualified or deemed to be exempt under the securities laws of the state of residence of the registered holder of the warrants. The Company has agreed that as soon as practicable will file with the SEC a registration statement covering the shares of Class A Common Stock issuable upon exercise of the warrants. If the registration statement covering the shares of Class A Common Stock issuable upon exercise of the warrants is not effective by the 60th business day after the closing of a Business Combination, warrant holders may, until such time as there is an effective registration statement and during any period when the Company will have failed to maintain an effective registration statement, exercise warrants on a “cashless basis” in accordance with Section 3(a)(9) of the Securities Act or another exemption. Notwithstanding the foregoing, if a registration statement covering the Class A Common Stock issuable upon exercise of the warrants is not effective within a specified period following the consummation of the Business Combination, warrant holders may, until such time as there is an effective registration statement and during any period when the Company shall have failed to maintain an effective registration statement, exercise warrants on a cashless basis pursuant to the exemption provided by Section 3(a)(9) of the Securities Act, provided that such exemption is available. If that exemption, or another exemption, is not available, holders will not be able to exercise their warrants on a cashless basis. Once the warrants become exercisable, the Company may redeem the Public Warrants: ● in whole and not in part; ● at a price of $0.01 per warrant; ● upon not less than 30 days’ prior written notice of redemption given after the warrants become exercisable; and ● if, and only if, the reported last sale price of the Company’s Class A Common Stock equals or exceeds $18.00 per share for any 20 trading days within a 30-trading day period commencing once the warrants become exercisable and ending three business days before the Company sends the notice of redemption to the warrant holders. If and when the warrants become redeemable by the Company, the Company may not exercise its redemption right if the issuance of shares of common stock upon exercise of the warrants is not exempt from registration or qualification under applicable state blue sky laws or the Company is unable to effect such registration or qualification. If the Company calls the Public Warrants for redemption, management will have the option to require all holders that wish to exercise the Public Warrants to do so on a “cashless basis”. The exercise price and number of shares of Class A common stock issuable upon exercise of the warrants may be adjusted in certain circumstances including in the event of a stock dividend, or recapitalization, reorganization, merger or consolidation. However, the warrants will not be adjusted for issuance of Class A Common Stock at a price below its exercise price. Additionally, in no event will the Company be required to net cash settle the warrants. The Private Placement Warrants are identical to the Public Warrants underlying the Units sold in the Initial Public Offering, except that the Private Placement Warrants and the Class A Common Stock issuable upon the exercise of the Private Placement Warrants are not transferable, assignable or salable until 30 days after the completion of a Business Combination, subject to certain limited exceptions. Additionally, the Private Placement Warrants are exercisable on a cashless basis and be non-redeemable so long as they are held by the initial purchasers or their permitted transferees. If the Private Placement Warrants are held by someone other than the initial purchasers or their permitted transferees, the Private Placement Warrants will be redeemable by the Company and exercisable by such holders on the same basis as the Public Warrants. Assumed Warrants At Closing, the Company assumed common stock warrants to purchase FOXO Class A Common Stock and exchanged such common stock warrants for common stock warrants to purchase 1,905,853 shares of the Company’s Class A Common Stock. Each Assumed Warrant entitles the holder to purchase one share of Class A Common Stock at a price of $6.21 per share, subject to adjustment. The Assumed Warrants are exercisable over a three-year period from the date of issuance. Shares Payable The Company entered into a termination agreement with a vendor associated with the Business Combination. The Company agreed to provide 300,000 shares in connection with the agreement which have not been issued as of September 30, 2022. The obligation to issue shares is recorded in the consolidated balance sheet as shares payable. |
Equity-Based Compensation
Equity-Based Compensation | 9 Months Ended |
Sep. 30, 2022 | |
Share-Based Payment Arrangement [Abstract] | |
EQUITY-BASED COMPENSATION | Note 8 EQUITY-BASED COMPENSATION 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 purposes of the Management Contingent Share Plan are to (a) secure and retain the services of certain key employees and service providers and (b) incentivize such key employees and service providers to exert maximum efforts for the success of the Company and its affiliates. The number of shares of Class A Common Stock that may be issued under the Management Contingent Share Plan is 9,200,000 shares, subject to equitable adjustment for shares splits, share dividends, combinations, recapitalizations and the like after the Closing, including to account for any equity securities into which such shares are exchanged or converted. The Management Contingent Share Plan provides for the grant of restricted share awards of Class A Common Stock. All of the shares of Class A Common Stock issued to a FOXO employee at the Closing were issued pursuant to a “Restricted Share Award,” the terms of which shall apply to all shares issued to such recipient. For the purposes of the Management Contingent Share Plan, shares of restricted Class A Common Stock issued in accordance with such plan will be 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 will be subject to both a time-based vesting component and a performance-based vesting component. Time-Based Vesting Each restricted share award shall be subject to three service-based vesting conditions: a) Sixty percent (60%) of a participant’s restricted share award will become vested on the third anniversary of the Closing if the participant is still employed by the company on such date (and has been continuously employed by the company from the date of grant through such vesting date). b) An additional twenty percent (20%) of a participant’s restricted share award will become vested on the fourth anniversary of the Closing if the participant is still employed by the company on such date (and has been continuously employed by the company from the date of grant through such vesting date). c) The final twenty percent (20%) of a participant’s restricted share award will become vested on the fifth anniversary of the Closing if the participant is still employed by the company on such date (and has been continuously employed by the company from the date of grant through such vesting date). Performance-Based Vesting In addition, to time-based vesting, one-third of each restricted share award may only become vested upon satisfaction of each of the following three performance-based conditions: 1. The operational launch of digital online insurance products by FOXO LIFE Insurance Company (or its functional equivalent under a managing general agency relationship with a life insurance company), with at least 100 policies sold, within one year following the Closing; 2. The signing of a commercial research collaboration agreement with an insurance company or reinsurance company for saliva-based epigenetic biomarkers in life insurance underwriting within two years following the Closing; and 3. The implementation of saliva-based epigenetic biomarkers in life insurance underwriting by the Company, with at least 250 policies sold using such underwriting, within two years following the Closing. On July 6, 2022, the Company executed a Memorandum of Understanding and Pilot Research Agreement (the “Agreement”) with both a life insurance carrier and a reinsurer. The purpose of the Agreement is to conduct a parallel run study, using a minimum of 2,500 participants, comparing traditional medical underwriting results to those obtained through use of the Company’s saliva-based epigenetic biomarker technology. The Agreement is intended to assess the value of the Company’s technology for a saliva-based next-generation underwriting protocol and will help determine whether the parties will later enter into a commercial agreement. The Agreement commenced in the third quarter of 2022 and will continue until the sooner of project completion, project termination, or the Company and the life insurance carrier entering into a commercial agreement for the scaled rollout of FOXO’s technology in the life insurance carrier’s underwriting processes. Accordingly, the Company has met the commercial research collaboration agreement performance condition and has begun recognizing expense upon completion of the Business Combination. For both the three and nine months ended September 30, 2022 the Company has recognized $289 of expense related to the vesting of the Management Contingent Share Plan based on the fair value at grant date of $7.81 per share. Service Based-Conditions The Management Contingent Share Plan provides that in the event of the death, disability, or termination without cause of the CEO, service-based conditions will not apply. Forfeiture of Restricted Share Awards If a performance-based condition is not achieved within the specified timeframe, then the one-third portion of each restricted share award that is associated to that performance-based condition will be permanently forfeited. The Committee shall be solely responsible for monitoring and determining whether or not any performance-based condition is achieved, and any such determination shall be final and conclusive. Any restricted stock awards that fail to vest due to a time-based vesting condition not being satisfied will be forfeited by the participant and the shares associated with that award will be permanently forfeited and cancelled. Upon closing of the Business Combination 9,200,000 shares were issued and 9,175,000 remained outstanding as of September 30, 2022 under the Management Contingent Share Plan. 2022 Equity Incentive Plan On September 14, 2022, the stockholders of the Company approved the FOXO Technologies Inc. 2022 Equity Incentive Plan (the “2022 Plan”). The 2022 Plan permits the grant of equity-based awards to employees, directors and consultants. The number of shares of Class A Common Stock that may be issued under the 2022 Plan is As of September 30, 2022, no awards were granted under the 2022 Plan. 2020 Stock Incentive Plan FOXO Technologies Operating Company adopted the 2020 Stock Incentive Plan (the “2020 Plan”) to attract, retain, incentivize and reward qualified employees, nonemployee directors and consultants. Immediately prior to Closing, vested and unvested stock options were outstanding to purchase 5,105,648 shares of FOXO Class A Common Stock. At Closing, the Combined Company assumed the stock options granted pursuant to the 2020 Plan to purchase FOXO Class A Common Stock and exchanged such stock options to purchase 2,965,500 shares of the Company’s Class A Common Stock at a weighted-average exercise price of approximately $7.13 per share. All remaining terms of the Assumed Options were unchanged. |
Forward Purchase Agreement
Forward Purchase Agreement | 9 Months Ended |
Sep. 30, 2022 | |
Forward Purchase Agreement [Abstract] | |
FORWARD PURCHASE AGREEMENT | Note 9 FORWARD PURCHASE AGREEMENT The Company entered into a Forward Share Purchase Agreement with Meteora Capital Partners and its affiliates (collectively, “Meteora”) for a forward purchase transaction. Prior to the Closing, Meteora agreed not to redeem 2,873,728 shares of Class A Common Stock (the “Meteora Shares”) in connection with the Business Combination. Meteora has the right to sell the Meteora Shares in the open market and on the fifteen (15) month anniversary of the Closing of the Business Combination (the” Put Date”) may obligate the Company to purchase the shares from Meteora should any not have been sold in the open market. In connection with the Forward Share Purchase Agreement, the Company and Meteora entered into an escrow agreement (the “Escrow Agreement”) where $29,135, based on the Meteora Shares and the corresponding redemption price from the Business Combination, was deposited into escrow by the Company (the “Prepayment Amount”). There are a few scenarios in which the Forward Purchase Agreement can be settled either before or on the Date: i. At any time prior to the Put Date, Meteora may sell the Meteora Shares to any third party following the Business Combination but before the Put Date in the open market. If Meteora sells any shares prior to the Put Date, an amount equal to the product of the number of Meteora Shares sold multiplied by 92.5% of a reset price (the “Reset Price”) will be released from the Escrow Account and paid to the Company (the “Open Market Sale Payment”), and an amount equal to the product of (a) the portion of the Meteora Shares that Meteora sells in the open market and (b) the difference between the (i) the per share escrow amount and (ii) the Open Market Sale Payment, will be released from the Escrow Account to Meteora. The Reset Price shall initially be $10.00 and, thereafter, shall be subject to weekly adjustments during the term of the Forward Purchase Agreement based on the then current Reset Price and volume weighted average trading prices (“VWAP”) of the Company’s Class A Common Stock for the immediately preceding week. ii. On the Put Date, if any of the Meteora Shares subject to the Forward Purchase Agreement remain unsold, Meteora is entitled to a) the product of the unsold Meteora Shares multiplied by the Redemption Price which will be released from the Escrow Account, and b) the Company will be required to transfer to Meteora maturity consideration equal to the product of $0.05 per Meteora Share sold to the Company and the number of days between the closing of the Business Combination and the Put Date divided by 30 days. iii. The Put Date may be accelerated and occur prior to the fifteen month anniversary of the Closing of the Business Combination upon the occurrence of certain events and circumstances set forth in the Forward Share Purchase Agreement, including a) if the VWAP of the Company’s Class A Common Stock falls below $2.50 per share during any 20 of 30 consecutive trading days, b) if the Forward Purchase Agreement is early terminated, or c) if the Company’s Class A Common Stock is delisted from a national exchange. If the Put Date is accelerated, the Company would follow the maturity consideration described above. The Company has determined that the Prepayment Amount is collateral with the amount recorded in the unaudited consolidated balance sheet within forward purchase collateral. In accordance with ASC 480, Distinguishing Liabilities from Equity, , the Company has determined that Meteora’s ability to require the Company to repurchase shares in certain situations is accounted for as a freestanding derivative. The derivative, referred to as the forward purchase put derivative is recorded as a liability on the Company’s unaudited consolidated balance sheet. Additionally, the Company has recorded a derivative based on the amount of collateral that may be provided to Meteora and has recorded it as a liability, referred to as the forward purchase collateral derivative, on the Company’s unaudited consolidated balance sheet. The Company has prepared fair value measurements for both the forward purchase derivatives as of the Closing and September 30, 2022, which is described in Note 11. The Company remeasures the fair value of the forward purchase derivatives each reporting period and the change in fair value is recorded in current earnings. |
Net Loss Per Share
Net Loss Per Share | 9 Months Ended |
Sep. 30, 2022 | |
Earnings Per Share [Abstract] | |
NET LOSS PER SHARE | Note 10 NET LOSS PER SHARE The Business Combination was accounted for as a reverse recapitalization by which FOXO Technologies Operating Company issued equity for the net assets of Delwinds accompanied by a recapitalization. Earnings per share has been recast for all historical periods to reflect the Company’s capital structure for all comparative periods. The Company excluded the effect of the 9,175,000 Management Contingent Shares outstanding as of September 30, 2022 from the computation of basic net loss per share in three and nine months ended September 30, 2022, as the conditions to trigger the vesting of the Management Contingent Shares had not been satisfied as of September 30, 2022. The Company excluded the effect of the Public Warrants, the Private Placement Warrants, the Assumed Options, and Assumed Warrants from the computation of diluted net loss per share in the three and nine months ended September 30, 2022 as their inclusion would have been anti-dilutive because the Company was in a loss position for such periods. The Assumed Options, the Assumed Warrants, and the 2021 Bridge Debentures were excluded from the three and nine months ended September 30, 2021 as their inclusion would have been anti-dilutive. For the three and nine months ended September 30, 2022, the 2021 Bridge Debentures and 2022 Bridge Debentures were included in basic and diluted net loss per share from the date of closing as the Bridge Debentures were converted into FOXO Class A Common Stock and subsequently exchanged for the Company’s Class A Common Stock upon completion of the Business Combination. The following table sets forth the calculation of basic and diluted earnings per share for the periods indicated based on the weighted average number of shares outstanding during the respective periods: Three Three Nine Nine Net loss available to common shares $ (41,026 ) $ (27,241 ) $ (76,932 ) $ (37,614 ) Basic and diluted weighted average number of Class A Common Stock 6,122 5,826 5,975 5,817 Basic and diluted net loss available to Class A Common Stock $ (6.70 ) $ (4.68 ) $ (12.88 ) $ (6.47 ) The following Class A common stock equivalents have been excluded from the computation of diluted net loss per common share as the effect would be antidilutive and reduce the net loss per common stock (shares in thousands): As of September 30, 2022 2021 Series A preferred stock - 4,646,698 2021 Bridge Debentures - 6,759,642 2022 Bridge Debentures - 7,810,509 Public and private warrants 10,378,750 - Assumed warrants 1,905,853 1,905,853 Assumed options 2,965,500 2,965,500 Total antidilutive shares 15,250,103 24,088,202 |
Fair Value Measurements
Fair Value Measurements | 9 Months Ended |
Sep. 30, 2022 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE MEASUREMENTS | Note 11 FAIR VALUE MEASUREMENTS The following table presents information about the Company’s assets and liabilities that are measured on a recurring basis as of September 30, 2022 and December 31, 2021 and indicates the fair value hierarchy of the valuation techniques that the Company utilized to determine such fair value. Fair Value Measurements Using Inputs Considered as: Fair Value Level 1 Level 2 Level 3 September 30, 2022 Liabilities: Warrant liability $ 1,038 $ 1,006 $ 32 $ - Forward purchase collateral derivative 27,378 - - 27,378 Forward purchase put derivative 1,284 - - 1,284 Total liabilities $ 29,700 $ 1,006 $ 32 $ 28,662 Fair Value Measurements Using Inputs Considered as: Fair Value Level 1 Level 2 Level 3 December 31, 2021 Liabilities: 2021 Bridge Debentures $ 32,203 $ - $ - $ 32,203 Total liabilities $ 32,203 $ - $ - $ 32,203 Warrant Liability The Public Warrants and Private Placement Warrants are accounted for as liabilities in accordance with ASC 815-40 and are presented within warrant liability on the Company’s balance sheet. The warrant liability is measured at fair value on the date of the Closing and on a recurring basis, with any changes in the fair value presented as change in fair value of warrant liability in the Company’s statement of operations. Measurement at Closing and Subsequent Measurement The Company established the fair value for the Public and Private Placement Warrants on the date of the Closing, and subsequent fair value as of September 30, 2022. The measurement of the Public Warrants as of Closing and as September 30, 2022 is classified as Level 1 due to the use of an observable market quote in an active market under ticker FOXO-WT. As the transfer of the Private Placement Warrants to anyone outside of a small group of individuals who are permitted transferees would result in the Private Placement Warrants having substantially the same terms as the Public Warrants, the Company determined the fair value of each Private Placement Warrant is equivalent to that of each Public Warrant, with an insignificant adjustment for short-term marketability restrictions. As such, the Private Placement Warrants are classified as Level 2. Forward Purchase Derivatives The Company established the fair value of both the forward purchase put derivative and the forward purchase collateral derivative on the date of the Closing, and subsequent fair value as of September 30, 2022 with amounts included in net income as a change in fair value of forward purchase put derivative and a change in fair value of forward purchase collateral derivative. The estimated fair value of the forward purchase derivatives was calculated using a Monte Carlo simulation and used significant unobservable inputs. Future estimates of trading prices were based on volatility assumptions that impact the estimated Reset Price and Meteora’s corresponding sales in the open market. The forward purchase derivatives are classified as Level 3 due to the use of unobservable inputs. For additional information on the forward purchase derivatives see Note 9. Bridge Debentures The Company elected the fair value option to account for both the 2021 Bridge Debentures and 2022 Bridge Debentures (collectively, the “Bridge Debentures”). The Bridge Debentures are measured at fair value on a recurring basis given the Company’s election of the fair value option for measuring such liabilities. The fair value of the Bridge Debentures is determined based on significant unobservable inputs including the likelihood of voluntary or mandatory conversion, and the estimated date at which conversion will take place, which causes them to be classified as a Level 3 measurement within the fair value hierarchy. The recorded fair value of the Bridge Debentures and the non-cash change in fair value recorded in the consolidated statements of operations could change materially if differing inputs and assumptions were to be utilized. However, the valuations used assumptions and estimates the Company believes would be made by a market participant in making the same valuations as of the issuance date and each subsequent reporting period. The Company elected the fair value option to better depict the ultimate liability associated with the Bridge Debentures, including all features and embedded derivatives in the Securities Purchase Agreements. The Bridge Debentures accounted for under the fair value option election represented debt host financial instruments containing certain embedded features that would otherwise be required to be bifurcated from the debt host and recognized as separate derivative liabilities subject to initial and subsequent periodic fair value measurement in accordance with U.S. GAAP. When the fair value option election is applied to financial liabilities, bifurcation of embedded derivatives is not required, and the financial liability in totality is recorded at its issue-date estimated fair value and then subsequently remeasured at estimated fair value on a recurring basis as of each balance sheet date thereafter. Upon remeasurement, the portion of a change in estimated fair value attributable to a change in instrument-specific credit risk is recognized as a component of other comprehensive income (loss) and the remaining amount of a change in estimated fair value is to be recognized in the consolidated statements of operations. As a result of electing the fair value option, direct costs and fees related to the issuance of the Bridge Debentures were expensed and not deferred. For all reporting periods during the year ended December 31, 2021, the estimated fair value of the 2021 Bridge Debentures was calculated using a Monte Carlo simulation, which incorporated significant unobservable inputs such as the likelihood of term extension and voluntary or mandatory conversion. Additionally, the December 31, 2021 used an implied borrowing rate of 52.0% as an input to the fair value measurement. None of the change in fair value for the was deemed to be attributable to instrument-specific credit risk and thus the full amount of such change was recognized in the consolidated statements of operations. During 2022, prior to conversion, the estimated fair value of the Bridge Debentures was calculated using a probability-weighted expected return model. This change in valuation methodology was driven by the execution of the Merger Agreement on February 24, 2022, which made the ultimate value to holders of the Bridge Debentures upon voluntary or mandatory conversion clearer. Prior to conversion, the Bridge Debentures were recorded at their ultimate fair value based on purchase consideration attributed to the outstanding principal and using a probability-weighted expected return model. At conversion, the Company was able to determine the fair value of both the 2021 Bridge Debentures and 2022 Bridge Debentures based on the completion of the Business Combination. Immediately prior to the Closing of the Business Combination, the 2021 Bridge Debentures and 2022 Bridge Debentures were converted to 6,759,642 and 7,810,509 shares of FOXO Technologies Operating Company Class A common stock, respectively and fair value measurements were no longer performed as the debt was no longer outstanding. For further details on this conversion, stockholders’ equity of the Combined Company, and the Business Combination, refer to Notes 1, 3, 5, and 7. None of the change in estimated fair value of the Bridge Debentures from December 31, 2021 to conversion was deemed to be attributable to instrument-specific credit risk and thus the full amount of such change was recognized in the consolidated statements of operations. The following tables provide a summary of changes in Level 3 liabilities measured at fair value on a recurring basis: 2022 Bridge 2021 Bridge Total Balance, June 30, 2021 $ - $ 12,819 $ 12,819 Losses included in net loss - 22,571 22,571 Balance, September 30, 2021 $ - $ 35,390 $ 35,390 2022 Bridge 2021 Bridge Forward Forward Total Balance, June 30, 2022 $ 46,733 $ 37,953 $ - $ - $ 84,686 Losses included in net loss 2,810 887 - - 3,697 Balance at Conversion 49,543 38,840 - - 88,383 Transfer out (49,543 ) (38,840 ) - - (88,383 ) Losses included in net loss - - 1,284 27,378 28,662 Balance, September 30, 2022 $ - $ - $ 1,284 $ 27,378 $ 28,662 2022 Bridge 2021 Bridge Total Balance, December 31, 2020 $ - $ - $ - Debt Issuance - 10,500 10,500 Losses included in net loss - 24,890 24,890 Balance, September 30, 2021 $ - $ 35,390 $ 35,390 2022 Bridge 2021 Bridge Forward Forward Total Balance, December 31, 2021 $ - $ 32,203 $ - $ - $ 32,203 Debt Issuance 28,000 - - - 28,000 Losses included in net loss 21,543 6,637 - - 28,180 Balance at Conversion 49,543 38,840 - - 88,383 Transfer out (49,543 ) (38,840 ) - - (88,383 ) Losses included in net loss - - 1,284 27,378 28,662 Balance, September 30, 2022 $ - $ - $ 1,284 $ 27,378 $ 28,662 |
Business Segment
Business Segment | 9 Months Ended |
Sep. 30, 2022 | |
Segment Reporting [Abstract] | |
BUSINESS SEGMENT | Note 12 BUSINESS SEGMENT The Company manages and classifies its business into two reportable business segments: ● FOXO Labs is commercializing proprietary epigenetic biomarker technology to be used for underwriting risk classification in the global life insurance industry. The Company’s innovative biomarker technology enables the adoption of new saliva-based health and wellness biomarker solutions for underwriting and risk assessment. The Company’s research demonstrates that epigenetic biomarkers, collected from saliva, provide measures of individual health and wellness for the factors used in life insurance underwriting traditionally obtained through blood and urine specimens. ● FOXO Life is redefining the relationship between consumers and insurer by combining life insurance with a dynamic molecular health and wellness platform. FOXO Life seeks to transform the value proposition of the life insurance carrier from a provider of mortality risk protection products to a partner supporting its customers’ healthy longevity. FOXO Life’s multi-omic health and wellness platform will provide life insurance consumers with valuable information and insights about their individual health and wellness to support longevity. FOXO Labs generates revenue by collecting epigenetic services royalties. FOXO Life generates revenue from the sale of life insurance products. Asset information is not used by the Chief Operating Decision Maker (“CODM”) or included in the information provided to the CODM to make decisions and allocate resources. The primary income measure used for assessing segment performance and making operating decisions is earnings before interest, income taxes, depreciation, amortization, and equity-based compensation (“Segment Earnings”). 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 any non-cash changes in fair value. Summarized below is information about the Company’s operations for the three and nine months ended September 30, 2022 and September 30, 2021 by business segment: Three Months Ended September 30, Nine Months Ended September 30, Revenue Earnings Revenue Earnings 2022 2021 2022 2021 2022 2021 2022 2021 FOXO Labs $ 7 $ 23 $ (499 ) $ (1,632 ) $ 71 $ 67 $ (1,952 ) $ (4,268 ) FOXO Life 7 8 (1,157 ) (831 ) 22 26 (3,070 ) (1,667 ) 14 31 (1,656 ) (2,463 ) 93 93 (5,022 ) (5,935 ) Corporate and other (a) (38,946 ) (24,465 ) (70,660 ) (30,854 ) Interest expense (424 ) (313 ) (1,250 ) (825 ) Total $ 14 $ 31 $ (41,026 ) $ (27,241 ) $ 93 $ 93 $ (76,932 ) $ (37,614 ) (a) Corporate and other includes equity-based compensation, including the consulting agreement and Cantor Commitment Fee, expense of $3,866 and $42 as well as depreciation expense of $74 and $25 for the three months ended September 30, 2022 and 2021, respectively. Corporate and other includes equity-based compensation, including the consulting agreement and Cantor Commitment Fee, expense of $5,556 and $8 as well as depreciation expense of $159 and $71 for the nine months ended September 30, 2022 and 2021, respectively. The three months ended September 30, 2022 and 2021 included $31,010 and $22,571 for the changes in fair value of convertible debentures, warrant liability, and forward purchase derivatives. The nine months ended September 30, 2022 and 2021 also included $55,493 and $24,890 for the changes in fair value of convertible debentures, warrant liability, and forward purchase derivatives. See Notes 5, 6, 7, 9 and 11 for additional information. |
Commitments, Contingencies, and
Commitments, Contingencies, and Sponsored Research | 9 Months Ended |
Sep. 30, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS, CONTINGENCIES, AND SPONSORED RESEARCH | Note 13 COMMITMENTS, CONTINGENCIES, AND SPONSORED RESEARCH The Company is a party to various vendor and license agreements and sponsored research arrangements in the normal course of business that create commitments and contractual obligations. Vendor Agreements The Company entered into an agreement to purchase supplies from an unrelated party in December 2019. The agreement required a purchase of 10,000 units over the 3-year term of the contract. The Company had $788 remaining on its purchase obligation and in July of 2022, the Company amended the vendor agreement under which it was previously committed to purchasing 10,000 units of supplies over a three-year term. That amendment resulted in the elimination of the $788 commitment remaining under the agreement in exchange for a reduced royalty rate to be received by the Company on future sales of infinium mouse methylation arrays. License Agreements In April 2017, the Company entered into a license agreement with The Regents of University of California (the “Regents”) to develop and commercialize the DNA Methylation Based Predictor of Mortality. The agreement remains in effect through the life of the Regents’ patents related to this license agreement. The Company is required to pay license maintenance fees on each anniversary date of agreement execution. The Company is liable to the Regents for an earned royalty of net sales of licensed products or licensed methods. In February 2021, the Company entered into another license agreement with the Regents for GrimAge and PhenoAge technology. The agreement remains in effect through the life of the Regents’ patents related to this license agreement. In consideration of the license and rights granted under the license agreement, the Company made a one-time cash payment and will make maintenance payments on each anniversary of the Agreement. The Company will pay the Regents for each assay internally used and a royalty on external net sales. Additionally, the contract includes development milestones and fees related to achieving commercial sales and a comparative longitudinal study of health outcomes. Harvard University’s Brigham and Women’s Hospital During the second quarter of 2022, the Company entered into an agreement and license option with The Brigham and Women’s Hospital, Inc. (the “Hospital”) to conduct epigenetic profiling of associations between epigenetic aging and numerous behavioral, lifestyle, dietary and clinical risk factors, as well as major morbidity and mortality outcomes. The Company refers to this study as VECTOR. Specific aims of this research include: (i) to examine epigenetic association with lifestyle and dietary factors, including smoking history, physical activity, body mass index, alcohol intake, dietary patterns, dietary supplement use, and aspirin used; (ii) to examine epigenetic association with major morbidity including cardiovascular disease, cancer, type 2 diabetes, hypertension, liver disease, renal disease, and respiratory disease, (iii) to conduct an National Death Index Plus search to update and extend mortality follow up on Harvard University’s Physicians’ Health Study (“PHS’), and (iv) utilizing the newly expanded PHS mortality follow-up data, to examine epigenetic association with lifespan, longevity, and mortality. In addition, the epigenetic resources contained in the PHS studies have the potential to contribute and extend to large meta-analyses and validation studies of epigenetic association and understanding of these factors and their impact on human aging acceleration. The Company is responsible for payments up to $849 related to the agreement, half of which was paid upon contract execution during the second quarter of 2022. Remaining payments are due as follows: (i) 20% upon the enrollment of the first patient, (ii) 20% upon the enrollment of the final patient and (iii) 10% upon lab receipt of shipments for all initially planned assays. Costs associated with the clinical trial agreement are being recorded as research and development expenses in the consolidated statements of operations. U.S. Department of Health and Human Services In June 2020, the Company entered into a cooperative research and development agreement (“CRADA) with the U.S. Department of Health and Human Services (“HHS”) and agencies of U.S. Public Health Services within the HHS, as well as the National Institute on Deafness and other Communication Disorders (“NIDCD”), to enhance understanding of epigenetic gene regulation in Recurrent Respiratory Papillomatosis (“RRP”). Under the CRADA agreement, the Company is granted an exclusive option to elect an exclusive or nonexclusive commercialization license, with terms of the license that reflect the nature of the invention, the relative contributions of the respective parties, a plan for the development and marketing, and the costs of subsequent research and development needed to bring the invention to market. The Company is responsible for payment of all fees related to CRADA patents. As part of the CRADA agreement, the Company agreed to provide funding totaling $200 under the two-year term of the agreement. The Company recognized $29 and $25 in sponsored research expenses related to this agreement during the three months ended September 30, 2022 and 2021, respectively, and $75 and $29 in sponsored research expenses related to this agreement during the nine months ended September 30, 2022 and 2021, respectively. These amounts are recorded within research and development expenses in the consolidated statements of operations. The Children’s Hospital of Philadelphia In February 2021, the Company entered into a sponsored research agreement with The Children’s Hospital of Philadelphia (“CHOP”) to develop new methods and software implementations for the processing and analysis of Illumina Infinium DNA methylation technology, including the Infinium EPIC+ Human Array and the infinium mouse methylation array. The intent of the research agreement is to create open-source software that will be able to import data from any Infinium DNA methylation array and conduct state-of-the-art processing and quality control of the data in an automated fashion. In consideration for sponsoring the research, the Company shall have a first and exclusive option to negotiate for a revenue-bearing exclusive license to any patent rights or other intellectual property rights for CHOP intellectual property or CHOP’s interests in any joint intellectual property. Additionally, the Company agrees to reimburse CHOP for fees relating to maintaining the patents. As part of the CHOP Agreement, the Company will provide funding totaling $311 over a two-year period, commencing February 1, 2021. The Company recognized $40 and $38 in sponsored research expenses during the three months ended September 30, 2022 and 2021, respectively, and $119 and $101 in sponsored research expenses during the nine months ended September 30, 2022 and 2021, respectively. These amounts are recorded within research and development expenses in the consolidated statements of operations. Parallel Run Study During the third quarter of 2022, the Company executed a Memorandum of Understanding and Pilot Research Agreement (the “Agreement”) with both a life insurance carrier and a reinsurer. The purpose of the Agreement is to conduct a parallel run study, using a minimum of 2,500 participants, comparing traditional medical underwriting results to those obtained through use of the Company’s saliva-based epigenetic biomarker technology. The Agreement is intended to assess the value of the Company’s technology for a saliva-based next-generation underwriting protocol and will help determine whether the parties will later enter into a commercial agreement. The Agreement commenced in the third quarter of 2022 and will continue until the sooner of project completion, project termination, or the Company and the life insurance carrier entering into a commercial agreement for the scaled rollout of FOXO’s technology in the life insurance carrier’s underwriting processes. The Company has determined that costs associated with the agreement will be recorded as research and development expenses in the consolidated statements of operations in accordance with accounting standards codification guidance. The agreement stipulates that the life insurance carrier and reinsurer will share in costs equally with the Company up to $200 each. Cost sharing reimbursements received from the life insurance carrier and reinsurer have been recorded within parallel run advance in the consolidated balance sheet as of September 30, 2022 and are being recognized as contra expenses in the consolidated statement of operations as the Company incurs costs related to the agreement. Litigation The Company may be involved in various claims and legal actions arising in the ordinary course of business. In the opinion of management, the ultimate disposition of these matters will not have a material adverse effect on the Company’s financial position or liquidity. The Company is not aware of any material legal or regulatory matters threatened or pending against the Company. |
Subsequent Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2022 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | Note 14 SUBSEQUENT EVENTS The Company evaluated subsequent events and transactions that occurred after the balance sheet date up to November 21, 2022, the date that the unaudited 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 accompanying unaudited financial statements. ELOC Agreement On November 8, 2022, the ELOC Agreement between the Cantor Investor and the Company was terminated and the corresponding prepaid offering costs were expensed. Forward Purchase Agreement On November 11, 2022, the Forward Purchase Agreement between Meteora and the Company was amended to allow Meteora to retain 500,000 of shares as maturity consideration associated with the Put Date. The agreement was terminated resulting in the settlement of the forward purchase derivatives, elimination of the forward purchase collateral, and repurchase of the remaining shares subject to the Forward Purchase Agreement that Meteora had not already sold in the open market and were not part of the maturity consideration. CEO Severance In connection with his termination, the Company may be obligated to pay the former CEO cash severance equal to thirty-six months of his base salary. The Company is currently reviewing its obligations to the CEO with respect to compensation and severance.. |
Accounting Policies, by Policy
Accounting Policies, by Policy (Policies) | 9 Months Ended |
Sep. 30, 2022 | |
Accounting Policies [Abstract] | |
BASIS OF PRESENTATION AND PRINCIPLES OF CONSOLIDATION | BASIS OF PRESENTATION AND PRINCIPLES OF CONSOLIDATION The unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information and the instructions to Form 10-Q and Article 10 of Regulation S-X of the SEC. Certain information or footnote disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted, pursuant to the rules and regulations of the SEC for interim financial reporting. Accordingly, the unaudited consolidated financial statements do not include all information and footnotes necessary for a complete presentation of financial position, results of operations or cash flows. The unaudited consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements as of and for the year ended December 31, 2021 and the notes thereto. The consolidated balance sheet data as of December 31, 2021 was derived from the audited consolidated financial statements as of that date but does not include all disclosures required by U.S. GAAP. In the opinion of management, the unaudited consolidated financial statements include all adjustments of a normal or recurring nature, which are necessary for a fair presentation of financial position, operating results and cash flows for the periods presented. Operating results for the three and nine months ended September 30, 2022 are not necessarily indicative of the results that may be expected for the year ending December 31, 2022. Pursuant to the Business Combination, the acquisition of FOXO Technologies Operating Company by Delwinds was accounted for as a reverse recapitalization in accordance with U.S. GAAP (the “Reverse Recapitalization”). Under this method, Delwinds was treated as the “acquired” company for financial reporting purposes. For accounting purposes the Reverse Recapitalization was treated as the equivalent of FOXO Technologies Operating Company issuing equity securities for the net assets of Delwinds, accompanied by a recapitalization. The net assets of Delwinds are stated at historical cost, with no goodwill or other intangible asset being recorded. The condensed assets, liabilities and results of operations prior the Reverse Recapitalization are those of FOXO Technologies Operating Company. The unaudited consolidated financial statements include the accounts of FOXO and its wholly-owned subsidiaries. All intercompany balances and transactions are eliminated in consolidation. |
EMERGING GROWTH COMPANY | 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 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. |
USE OF ESTIMATES | USE OF ESTIMATES The preparation of the unaudited consolidated 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 revenue 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. It is reasonably possible that actual experience could differ from the estimates and assumptions utilized. 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 | 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. |
PROPERTY AND EQUIPMENT, NET | PROPERTY AND EQUIPMENT, NET Property and equipment is recorded at cost. The cost of additions and betterments are capitalized and expenditures for repairs and maintenance are expensed in the period incurred. When property and equipment is sold or retired, the related cost and accumulated depreciation are removed from the consolidated balance sheets and any gain or loss is included in the consolidated statements of operations as incurred. When property and equipment is abandoned before the end of its previously estimated useful life the depreciable life is revised to the shorter remaining useful life. Property and equipment is presented net of accumulated depreciation. Depreciation is computed using the straight-line method over the estimated useful lives of the assets, which are generally three years for computers and office equipment and seven years for furniture and fixtures. Leasehold improvements are depreciated over the shorter of their estimated useful life or the remaining term of the lease. |
IMPAIRMENT OF LONG-LIVED ASSETS | IMPAIRMENT OF LONG-LIVED ASSETS The Company reviews its long-lived assets, including property and equipment and right-of-use 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. Recoverability is measured by comparing the carrying amount of the asset group with the future undiscounted cash flows the assets are expected to generate. If such assets are considered impaired, an impairment loss would be measured by comparing the amount by which the carrying value exceeds the fair value of the long-lived assets. Management determined that there was no impairment of long-lived assets as of September 30, 2022 and December 31, 2021. |
CAPITALIZED IMPLEMENTATION COSTS | CAPITALIZED IMPLEMENTATION COSTS The Company capitalizes certain development costs associated with internal use software and cloud computing arrangements incurred during the application development stage. The Company expenses costs associated with preliminary project phase activities, training, maintenance, and any post-implementation costs as incurred. Capitalized costs related to projects to develop internal use software are included within intangible assets on the consolidated balance sheets, while capitalized costs related to cloud computing arrangements are included within cloud computing arrangements on the consolidated balance sheets. Capitalized costs will be amortized on a straight-line basis once application development is complete based on the estimated life of the asset or the expected term of the contract, as applicable. Application development was ongoing as of September 30, 2022 for all such projects and thus no amortization has been recorded to date. |
FAIR VALUE OF FINANCIAL INSTRUMENTS | 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. |
DERIVATIVE INSTRUMENTS | 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 stock purchase warrants and forward share purchase obligations, to determine if such instruments are derivatives or contain features that qualify as embedded derivatives, pursuant to ASC 480, “Distinguishing Liabilities from Equity,” “Derivatives and Hedging – Embedded Derivatives.” |
DEBT | DEBT The Company issued convertible debentures to related and nonrelated parties, which included original issue discounts, conversion features and detachable warrants, as further discussed in Note 5 to these consolidated financial statements. The detachable warrants represent freestanding, separable equity-linked financial instruments recorded at fair value. The fair value of the detachable warrants is calculated using a Black-Scholes valuation model. The Company elected the fair value option for the convertible debt, which requires recognition at fair value upon issuance and on each balance sheet date thereafter. Changes in the estimated fair value are recognized as non-cash change in fair value of convertible debentures in the consolidated statements of operations. As a result of applying the fair value option, direct costs and fees related to the issuance of the convertible debt were expensed and not deferred. |
REVENUE RECOGNITION | REVENUE RECOGNITION The Company’s revenues consist of royalties based on the Company’s epigenetic biomarker research, agents’ commissions earned on the sale, servicing and placement of life insurance policies, and epigenetic testing services sold primarily to research organizations. Revenues are recognized when control of the promised goods or services is transferred to the Company’s customers, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those goods or services. To recognize revenues, the Company applies the following five step approach: (i) identify the contract with a customer, (ii) identify the performance obligations in the contract, (iii) determine the transaction price, (iv) allocate the transaction price to the performance obligations in the contract, and (v) recognize revenues when a performance obligation is satisfied. The Company accounts for a contract when it has approval and commitment from all parties, the rights of the parties are identified, payment terms are identified, the contract has commercial substance and collectability of consideration is probable. 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. As of September 30, 2022 and December 31, 2021, the Company had no contract assets or liabilities related to revenue arrangements or transactions. FOXO Labs — Epigenetic biomarker royalties The Company has granted a license to Illumina, Inc. (“Illumina”) for the exclusive right to manufacture and sell infinium mouse methylation arrays using the Company’s research on epigenetic biomarkers in exchange for a royalty on global sales. Illumina provides reporting to the Company so that revenue can be properly recognized as the license is used. Revenue is recorded net as the Company is not considered the principal in the transaction. Epigenetic biomarker royalties are recorded with the FOXO Labs reportable segment. During the third quarter of 2022, the royalty was reduced from 5% to 1.25% in exchange for eliminating a purchase commitment for mouse methylation arrays as further discussed in Note 13. FOXO LIFE — Life insurance commissions FOXO Life, LLC, currently an insurance agency, receives insurance commission revenue from the distribution and sale of life insurance policies based on a percentage of the premiums paid by its customers. These commission revenues are substantially recognized at a point in time on the effective date of the associated policies when control of the policy transfers to the client, as well as deferring certain revenues to reflect delivery of services over the contract period and are reported within the FOXO Life reportable segment. Commissions are fixed at the contract effective date and generally are based on a percentage of premiums for insurance coverage. Commission rates vary depending on a variety of factors, including the type of risk being placed, the particular underwriting enterprise’s demand, expected loss experience of the particular risk of coverage, and historical benchmarks surrounding the level of effort necessary for the Company to place and service the insurance contract. The Company recognizes approximately 80% of commissions earned from the initial life insurance placement on the effective date of the underlying insurance contract. The amount of revenue recognized is based on costs to provide services up and through that effective date, including an appropriate estimate of profit margin on a portfolio basis (a practical expedient as defined in ASC 606, Revenue from Contracts with Customers FOXO Labs — Epigenetic biomarker services FOXO Labs receives epigenetic biomarker services revenue from the performance of lab services. The Company’s performance obligation is satisfied when the Company completes the epigenetic biomarker data analysis. At the completion of the biomarker testing, results are reviewed and released to the customer. The Company subsequently bills the organization for the epigenetic biomarker data based on the transaction price, which reflects the amount the Company has rights to under present contracts. Revenue is recognized and reported within the FOXO Labs reportable segment over the life of the contract as work is performed, as FOXO Labs has an enforceable right to payment as the performance is being completed. The Company elected the practical expedient to expense contract costs as incurred related to services provided because the contract term is less than one year. |
EQUITY-BASED COMPENSATION | EQUITY-BASED COMPENSATION The Company measures all equity-based payments, including options and restricted stock to employees, service providers and nonemployee directors, using a fair-value based method. The cost of services received from employees and nonemployee directors in exchange for awards of equity instruments is recognized in the consolidated statements of operations based on the estimated fair value of those awards on the grant date or reporting date, if required to be remeasured, and amortized on a straight-line basis over the requisite service period. The Black-Scholes valuation model requires the input of assumptions, including the exercise price, volatility, expected term, discount rate, and the fair value of the underlying stock on the date of grant. These inputs are provided at the grant date for an equity classified award and each measurement date for a liability classified award. See Note 8 for additional disclosures regarding the equity-based compensation program. |
RESEARCH AND DEVELOPMENT COSTS | RESEARCH AND DEVELOPMENT COSTS Research and development costs are expensed as incurred. Research and development expenses consist primarily of personnel costs and related benefits, as well as costs for outside consultants and professional services. |
INCOME TAXES | 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. |
NET LOSS PER SHARE | NET LOSS PER SHARE Net loss per share of common stock is calculated by dividing net loss 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 Net Loss Per Share |
ASSET ACQUISITIONS | ASSET ACQUISITIONS The Company follows the guidance in ASC 805, Business Combinations |
REINSURANCE | REINSURANCE The Company is subject to a 100% coinsurance agreement with the seller of MICOA, Security National Life Insurance Company. The amounts reported in the consolidated balance sheets as reinsurance recoverables include amounts billed to reinsurers on losses paid as well as estimates of amounts expected to be recovered from reinsurers on insurance liabilities that have not yet been paid. Reinsurance recoverables on unpaid losses are estimated based upon assumptions consistent with those used in establishing the liabilities related to the underlying reinsured contracts. Insurance liabilities are reported gross of reinsurance recoverables. Management believes reinsurance recoverables are appropriately established. Reinsurance premiums are reflected in income in a manner consistent with the recognition of premiums on the reinsured contracts. Reinsurance does not extinguish the Company’s primary liability under the policies written. The Company regularly evaluates the financial condition of the reinsurer and establishes allowances for uncollectible reinsurance recoverables as appropriate. Revenues on traditional life insurance products subject to this reinsurance agreement consist of direct premiums reported as earned when due. Premium income includes premiums on reinsured policies and is reduced by premiums ceded. Expenses under the reinsurance agreement are also reduced by the amount ceded. |
POLICY RESERVES | POLICY RESERVES The Company establishes liabilities for amounts payable under insurance policies, including traditional life insurance and annuities. Generally, amounts are payable over an extended period. Liabilities for future policy benefits of traditional life insurance have been computed by using a net level premium method based upon estimates at the time of issue for investment yields, mortality and withdrawals. These estimates include provisions for experience less favorable than initially expected. Mortality assumptions are based on industry experience expressed as a percentage of standard mortality tables. Annuity liabilities are primarily associated with deferred annuity contracts. The deferred annuity contracts credit interest based on a fixed rate. Liabilities for deferred annuities are included without reduction for potential surrender charges. The liability is equal to accumulated deposits, plus interest credited, less policyholder withdrawals. Reserving assumptions for interest rates, mortality and expense are “locked in” upon the acquisition date for traditional life insurance contracts; significant changes in experience or assumptions may require the Company to provide for extended future losses by establishing premium deficiency reserves. Premium deficiency reserves are determined based on best estimate assumptions that exist at the time the premium deficiency reserve is established and do not include a provision for adverse deviation. |
RECENTLY ISSUED ACCOUNTING STANDARDS | RECENTLY ISSUED ACCOUNTING STANDARDS In December 2019, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes (“ASU 2019-12”). ASU 2019-12 removed certain exceptions to the general principles in ASC 740 and clarified and amended existing guidance to improve consistent application. This amended guidance was effective for public entities for interim and annual periods beginning after December 15, 2021. The Company adopted ASU 2019-12 effective January 1, 2022 and it did not have a material impact on the Company’s consolidated financial statements. Other pronouncements issued by the FASB with future effective dates are either not applicable or are not expected to have a material impact on the Company’s financial position, results of operations or cash flows. |
Intangible Assets and Cloud C_2
Intangible Assets and Cloud Computing Arrangements (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of components of intangible assets | September 30, December 31, Insurance license $ 63 $ 63 Longevity pipeline 512 75 Underwriting API 839 53 Longevity API 657 - Intangible assets $ 2,071 $ 191 |
Schedule of components of cloud computing arrangements | September 30, December 31, Digital insurance platform $ 2,966 $ 1,980 Health study tool 1,743 765 Cloud computing arrangements $ 4,709 $ 2,745 |
Net Loss Per Share (Tables)
Net Loss Per Share (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Earnings Per Share [Abstract] | |
Schedule of basic and diluted earnings per share | Three Three Nine Nine Net loss available to common shares $ (41,026 ) $ (27,241 ) $ (76,932 ) $ (37,614 ) Basic and diluted weighted average number of Class A Common Stock 6,122 5,826 5,975 5,817 Basic and diluted net loss available to Class A Common Stock $ (6.70 ) $ (4.68 ) $ (12.88 ) $ (6.47 ) |
Schedule of antidilutive and reduce the net loss per common stock | As of September 30, 2022 2021 Series A preferred stock - 4,646,698 2021 Bridge Debentures - 6,759,642 2022 Bridge Debentures - 7,810,509 Public and private warrants 10,378,750 - Assumed warrants 1,905,853 1,905,853 Assumed options 2,965,500 2,965,500 Total antidilutive shares 15,250,103 24,088,202 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Fair Value Disclosures [Abstract] | |
Schedule of assets and liabilities that are measured on a recurring basis | Fair Value Measurements Using Inputs Considered as: Fair Value Level 1 Level 2 Level 3 September 30, 2022 Liabilities: Warrant liability $ 1,038 $ 1,006 $ 32 $ - Forward purchase collateral derivative 27,378 - - 27,378 Forward purchase put derivative 1,284 - - 1,284 Total liabilities $ 29,700 $ 1,006 $ 32 $ 28,662 Fair Value Measurements Using Inputs Considered as: Fair Value Level 1 Level 2 Level 3 December 31, 2021 Liabilities: 2021 Bridge Debentures $ 32,203 $ - $ - $ 32,203 Total liabilities $ 32,203 $ - $ - $ 32,203 |
Schedule of changes in level 3 liabilities measured at fair value on a recurring basis | 2022 Bridge 2021 Bridge Total Balance, June 30, 2021 $ - $ 12,819 $ 12,819 Losses included in net loss - 22,571 22,571 Balance, September 30, 2021 $ - $ 35,390 $ 35,390 2022 Bridge 2021 Bridge Forward Forward Total Balance, June 30, 2022 $ 46,733 $ 37,953 $ - $ - $ 84,686 Losses included in net loss 2,810 887 - - 3,697 Balance at Conversion 49,543 38,840 - - 88,383 Transfer out (49,543 ) (38,840 ) - - (88,383 ) Losses included in net loss - - 1,284 27,378 28,662 Balance, September 30, 2022 $ - $ - $ 1,284 $ 27,378 $ 28,662 2022 Bridge 2021 Bridge Total Balance, December 31, 2020 $ - $ - $ - Debt Issuance - 10,500 10,500 Losses included in net loss - 24,890 24,890 Balance, September 30, 2021 $ - $ 35,390 $ 35,390 2022 Bridge 2021 Bridge Forward Forward Total Balance, December 31, 2021 $ - $ 32,203 $ - $ - $ 32,203 Debt Issuance 28,000 - - - 28,000 Losses included in net loss 21,543 6,637 - - 28,180 Balance at Conversion 49,543 38,840 - - 88,383 Transfer out (49,543 ) (38,840 ) - - (88,383 ) Losses included in net loss - - 1,284 27,378 28,662 Balance, September 30, 2022 $ - $ - $ 1,284 $ 27,378 $ 28,662 |
Business Segment (Tables)
Business Segment (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Segment Reporting [Abstract] | |
Schedule of operations by business segment | Three Months Ended September 30, Nine Months Ended September 30, Revenue Earnings Revenue Earnings 2022 2021 2022 2021 2022 2021 2022 2021 FOXO Labs $ 7 $ 23 $ (499 ) $ (1,632 ) $ 71 $ 67 $ (1,952 ) $ (4,268 ) FOXO Life 7 8 (1,157 ) (831 ) 22 26 (3,070 ) (1,667 ) 14 31 (1,656 ) (2,463 ) 93 93 (5,022 ) (5,935 ) Corporate and other (a) (38,946 ) (24,465 ) (70,660 ) (30,854 ) Interest expense (424 ) (313 ) (1,250 ) (825 ) Total $ 14 $ 31 $ (41,026 ) $ (27,241 ) $ 93 $ 93 $ (76,932 ) $ (37,614 ) (a) Corporate and other includes equity-based compensation, including the consulting agreement and Cantor Commitment Fee, expense of $3,866 and $42 as well as depreciation expense of $74 and $25 for the three months ended September 30, 2022 and 2021, respectively. Corporate and other includes equity-based compensation, including the consulting agreement and Cantor Commitment Fee, expense of $5,556 and $8 as well as depreciation expense of $159 and $71 for the nine months ended September 30, 2022 and 2021, respectively. The three months ended September 30, 2022 and 2021 included $31,010 and $22,571 for the changes in fair value of convertible debentures, warrant liability, and forward purchase derivatives. The nine months ended September 30, 2022 and 2021 also included $55,493 and $24,890 for the changes in fair value of convertible debentures, warrant liability, and forward purchase derivatives. See Notes 5, 6, 7, 9 and 11 for additional information. |
Description of Business (Detail
Description of Business (Details) - USD ($) | 9 Months Ended | |
Sep. 30, 2022 | Feb. 24, 2022 | |
Business Combination [Member] | ||
Description of Business (Details) [Line Items] | ||
Business combination, description | Immediately prior to the Closing, the following transactions occurred: ●8,000,000 shares of FOXO Technologies Operating Company Series A preferred stock (the “FOXO Preferred Stock”) were exchanged for 8,000,000 shares of FOXO Class A Common Stock. ●The 2021 Bridge Debentures (as defined in Note 5) in the principal amount, together with accrued and unpaid interest, of $24,402 were converted into 6,759,642 shares of FOXO Class A Common Stock. ●The holders of the 2022 Bridge Debentures (as defined in Note 5) in the principal amount, together with accrued and unpaid interest, of $34,496 were converted into 7,810,509 shares of FOXO Class A Common Stock. | |
Common Class A [Member] | ||
Description of Business (Details) [Line Items] | ||
Investor shares (in Dollars) | $ 40,000 | |
Issued and outstanding percentage | 100% | |
Common Class B [Member] | ||
Description of Business (Details) [Line Items] | ||
Issued and outstanding percentage | 100% | |
Converted stock (in Shares) | 15,518,705 |
Liquidity and Management's Pl_2
Liquidity and Management's Plan (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Jun. 30, 2022 | Mar. 31, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||||||
Net loss | $ (41,026) | $ (27,241) | $ (76,932) | $ (37,614) | ||
Accumulated deficit | 128,908 | |||||
Cash used in operating activities | 19,232 | |||||
Cash and cash equivalents | $ 5,453 | $ 5,453 | ||||
Convertible debentures | $ 28,000 | $ 28,000 |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Details) | 3 Months Ended | 9 Months Ended |
Mar. 31, 2022 | Sep. 30, 2022 | |
Summary of Significant Accounting Policies (Details) [Line Items] | ||
Percenatge of commissions earned | 80% | |
Percentage of commission and fee revenues | 15% | 5% |
Percentage of coinsurance agreement | 100% | |
Minimum [Member] | ||
Summary of Significant Accounting Policies (Details) [Line Items] | ||
Percentage of royalty | 5% | |
Maximum [Member] | ||
Summary of Significant Accounting Policies (Details) [Line Items] | ||
Percentage of royalty | 1.25% |
Intangible Assets and Cloud C_3
Intangible Assets and Cloud Computing Arrangements (Details) $ in Thousands | 9 Months Ended |
Sep. 30, 2022 USD ($) | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible asset | $ 63 |
Intangible Assets and Cloud C_4
Intangible Assets and Cloud Computing Arrangements (Details) - Schedule of components of intangible assets - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2022 | Dec. 31, 2021 | |
Schedule of components of intangible assets [Abstract] | ||
Insurance license | $ 63 | $ 63 |
Longevity pipeline | 512 | 75 |
Underwriting API | 839 | 53 |
Longevity API | 657 | |
Intangible assets | $ 2,071 | $ 191 |
Intangible Assets and Cloud C_5
Intangible Assets and Cloud Computing Arrangements (Details) - Schedule of components of cloud computing arrangements - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Intangible Assets and Cloud Computing Arrangements (Details) - Schedule of components of cloud computing arrangements [Line Items] | ||
Other assets | $ 4,709 | $ 2,745 |
Digital insurance platform [Member] | ||
Intangible Assets and Cloud Computing Arrangements (Details) - Schedule of components of cloud computing arrangements [Line Items] | ||
Other assets | 2,966 | 1,980 |
Health study tool [Member] | ||
Intangible Assets and Cloud Computing Arrangements (Details) - Schedule of components of cloud computing arrangements [Line Items] | ||
Other assets | $ 1,743 | $ 765 |
Debt (Details)
Debt (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | 6 Months Ended | 9 Months Ended | ||||||||
Sep. 20, 2022 | Mar. 31, 2022 | Mar. 31, 2021 | Sep. 30, 2022 | Mar. 31, 2022 | Sep. 30, 2021 | Jun. 30, 2022 | Sep. 30, 2022 | Sep. 30, 2021 | Mar. 04, 2021 | Feb. 23, 2021 | Jan. 25, 2021 | |
Debt (Details) [Line Items] | ||||||||||||
Senior notes percentage | 15% | 15% | ||||||||||
Aggregate principal amount | $ 3,458 | |||||||||||
Net proceeds | 2,918 | |||||||||||
Fees and expenses | $ 540 | |||||||||||
Bridge debentures, percentage | 15% | 15% | ||||||||||
Outstanding percentage | 130% | |||||||||||
Series of Individually Immaterial Business Acquisitions [Member] | ||||||||||||
Debt (Details) [Line Items] | ||||||||||||
Business combination, description | Immediately prior to the Closing, the following transactions occurred: ●8,000,000 shares of FOXO Technologies Operating Company Series A preferred stock (the “FOXO Preferred Stock”) were exchanged for 8,000,000 shares of FOXO Class A Common Stock. ●The 2021 Bridge Debentures (as defined in Note 5) in the principal amount, together with accrued and unpaid interest, of $24,402 were converted into 6,759,642 shares of FOXO Class A Common Stock. ●The holders of the 2022 Bridge Debentures (as defined in Note 5) in the principal amount, together with accrued and unpaid interest, of $34,496 were converted into 7,810,509 shares of FOXO Class A Common Stock. | |||||||||||
2021 Bridge Debentures [Member] | ||||||||||||
Debt (Details) [Line Items] | ||||||||||||
Net proceeds | $ 9,612 | |||||||||||
Fees and expenses | $ 888 | |||||||||||
Bridge debentures, percentage | 12.50% | |||||||||||
Convertible debentures | $ 11,812 | |||||||||||
Aggregate principal amount | $ 562 | $ 3,367 | $ 7,883 | |||||||||
Cash payments | $ 507 | |||||||||||
Accrued interest, percentage | 12% | 12% | ||||||||||
Interest expense | $ 593 | $ 181 | $ 1,627 | $ 508 | ||||||||
Nonrelated party holders | $ 1,119 | |||||||||||
Amount of nonrelated party | $ 412 | |||||||||||
2021 Bridge Debentures [Member] | Common Class A [Member] | ||||||||||||
Debt (Details) [Line Items] | ||||||||||||
Warrants right of purchase (in Shares) | 1,905,853 | |||||||||||
2021 Bridge Debentures [Member] | Series of Individually Immaterial Business Acquisitions [Member] | ||||||||||||
Debt (Details) [Line Items] | ||||||||||||
Business combination, description | The 2021 Bridge Amendment was executed to provide the Company additional time to finalize the Business Combination. The 2021 Bridge Amendment amended the terms of the 2021 Bridge Debentures to, among other things: (i) permit the Company to undertake another offering of convertible debentures, (ii) allow the Company to extend the maturity dates of the 2021 Bridge Debentures an additional five months following the end of the initial three-month extension period, discussed above, and (iii) implement additional amounts owed on the outstanding balance of the 2021 Bridge Debentures under certain circumstances, the first of which related to the signing of the Merger Agreement and resulted in an increase in the outstanding balance of approximately 135%, which was followed by an additional increase of approximately 145% of the outstanding balance when the 2021 Bridge Debentures remained outstanding at the end of the initial three-month extension period. | |||||||||||
2021 Bridge Debentures [Member] | Chief Executive Officer [Member] | ||||||||||||
Debt (Details) [Line Items] | ||||||||||||
Aggregate principal amount | $ 3,656 | |||||||||||
2022 Bridge Debentures [Member] | ||||||||||||
Debt (Details) [Line Items] | ||||||||||||
Bridge debentures description | The Company received net proceeds of $28,000 from the sale of the 2022 Bridge Debentures, after an OID of 10%. The 2022 Bridge Debentures were issued in three tranches, with $16,500 in aggregate principal issued on March 1, 2022, $8,250 in aggregate principal issued on March 3, 2022 and the remaining $6,050 in aggregate principal issued on April 27, 2022. | The Company received net proceeds of $28,000 from the sale of the 2022 Bridge Debentures, after an OID of 10%. The 2022 Bridge Debentures were issued in three tranches, with $16,500 in aggregate principal issued on March 1, 2022, $8,250 in aggregate principal issued on March 3, 2022 and the remaining $6,050 in aggregate principal issued on April 27, 2022. | ||||||||||
Interest rate percentage | 12% | 12% | ||||||||||
Outstanding percentage | 120% | |||||||||||
Unpaid interest rate | 130% | 130% | ||||||||||
2022 Bridge Debentures [Member] | Common Class A [Member] | ||||||||||||
Debt (Details) [Line Items] | ||||||||||||
Common Stock, share issued (in Shares) | 350,000 | 350,000 | ||||||||||
Investor shares (in Shares) | 602,578 | 602,578 | ||||||||||
Common stock shares (in Shares) | 350,000 | 350,000 | ||||||||||
Bridge Loan [Member] | 2021 Bridge Debentures [Member] | ||||||||||||
Debt (Details) [Line Items] | ||||||||||||
Bridge debentures, percentage | 12.50% | 12.50% |
Related Party Transactions (Det
Related Party Transactions (Details) - USD ($) $ / shares in Units, $ in Thousands | 1 Months Ended | 3 Months Ended | 9 Months Ended | |
Jun. 06, 2022 | Apr. 30, 2022 | Sep. 30, 2022 | Sep. 30, 2022 | |
Related Party Transactions (Details) [Line Items] | ||||
Company loan, description | The Company loaned Delwinds $387 per month in June 2022, July 2022, and August 2022 prior to Closing of the Business Combination. | |||
Related party payable | $ 500 | $ 500 | ||
Agreement term period | 12 months | |||
Cash fee | $ 1,425 | |||
Expenses | $ 2,081 | $ 3,568 | ||
Class A Common Stock [Member] | ||||
Related Party Transactions (Details) [Line Items] | ||||
Aggregate principal amount | $ 1,160 | |||
Per share of aggregate principal amount (in Dollars per share) | $ 0.035 | |||
Shares issued (in Shares) | 1,500,000 |
Stockholders_ Equity (Details)
Stockholders’ Equity (Details) $ / shares in Units, $ in Millions | 9 Months Ended |
Sep. 30, 2022 USD ($) $ / shares shares | |
Stockholders’ Equity (Details) [Line Items] | |
Per share (in Dollars per share) | $ / shares | $ 0.0001 |
Authorized shares | 510,000,000 |
Shares of preferred stock | 10,000,000 |
Common stock issued | |
Common Stock outstanding | |
Total market capitalization (in Dollars) | $ | $ 100 |
Shares of preferred stock | 10,000,000 |
Public warrants expire period | 5 years |
Warrants, description | Once the warrants become exercisable, the Company may redeem the Public Warrants: ●in whole and not in part; ●at a price of $0.01 per warrant; ●upon not less than 30 days’ prior written notice of redemption given after the warrants become exercisable; and ●if, and only if, the reported last sale price of the Company’s Class A Common Stock equals or exceeds $18.00 per share for any 20 trading days within a 30-trading day period commencing once the warrants become exercisable and ending three business days before the Company sends the notice of redemption to the warrant holders. |
Agreed to shares | 300,000 |
Assumed Warrants [Member] | |
Stockholders’ Equity (Details) [Line Items] | |
Common stock per share (in Dollars per share) | $ / shares | $ 6.21 |
Initial public offering [Member] | |
Stockholders’ Equity (Details) [Line Items] | |
Common stock issued | 10,062,500 |
Private Placement Warrants [Member] | |
Stockholders’ Equity (Details) [Line Items] | |
Shares of common stock warrants | 316,250 |
Class A Common Stock [Member] | |
Stockholders’ Equity (Details) [Line Items] | |
Per share (in Dollars per share) | $ / shares | $ 11.5 |
Shares of common stock | 500,000,000 |
Common stock issued | 1 |
Investor shares | 40,000 |
Percentage of weighted average price per share | 97% |
Issuance shares | 190,476 |
Purchase of shares | 1,905,853 |
Class A Common Stock [Member] | Assumed Warrants [Member] | |
Stockholders’ Equity (Details) [Line Items] | |
Common stock issued | 1 |
Class B Common Stock [Member] | |
Stockholders’ Equity (Details) [Line Items] | |
Common stock issued | 632,500 |
Equity-Based Compensation (Deta
Equity-Based Compensation (Details) $ / shares in Units, $ in Thousands | 9 Months Ended |
Sep. 30, 2022 USD ($) $ / shares shares | |
Equity-Based Compensation (Details) [Line Items] | |
Shares subject to equitable adjustment | 9,200,000 |
Time-based vesting, description | Each restricted share award shall be subject to three service-based vesting conditions: a)Sixty percent (60%) of a participant’s restricted share award will become vested on the third anniversary of the Closing if the participant is still employed by the company on such date (and has been continuously employed by the company from the date of grant through such vesting date). b)An additional twenty percent (20%) of a participant’s restricted share award will become vested on the fourth anniversary of the Closing if the participant is still employed by the company on such date (and has been continuously employed by the company from the date of grant through such vesting date). c)The final twenty percent (20%) of a participant’s restricted share award will become vested on the fifth anniversary of the Closing if the participant is still employed by the company on such date (and has been continuously employed by the company from the date of grant through such vesting date). |
Management Contingent Share Plan [Member] | |
Equity-Based Compensation (Details) [Line Items] | |
Vesting expenses (in Dollars) | $ | $ 289 |
Fair value at grant date (in Dollars per share) | $ / shares | $ 7.81 |
Shares issued | 9,200,000 |
Shares outstanding | 9,175,000 |
2022 Equity Incentive Plan [Member] | |
Equity-Based Compensation (Details) [Line Items] | |
Shares issued | 3,286,235 |
2020 Stock Incentive Plan [Member] | |
Equity-Based Compensation (Details) [Line Items] | |
Stock options outstanding | 2,965,500 |
Weighted-average exercise price (in Dollars per share) | $ / shares | $ 7.13 |
Class A Common Stock [Member] | 2020 Stock Incentive Plan [Member] | |
Equity-Based Compensation (Details) [Line Items] | |
Stock options outstanding | 5,105,648 |
Forward Purchase Agreement (Det
Forward Purchase Agreement (Details) $ / shares in Units, $ in Thousands | 9 Months Ended |
Sep. 30, 2022 USD ($) $ / shares shares | |
Forward Purchase Agreement (Details) [Line Items] | |
Purchase agreement (in Dollars) | $ | $ 29,135 |
Reset price percentage | 92.50% |
Price per share | $ 10 |
Product price per share | $ 0.05 |
Common Class A [Member] | |
Forward Purchase Agreement (Details) [Line Items] | |
Redeem shares agreement (in Shares) | shares | 2,873,728 |
Price per share | $ 2.5 |
Net Loss Per Share (Details)
Net Loss Per Share (Details) | 9 Months Ended |
Sep. 30, 2022 shares | |
Earnings Per Share [Abstract] | |
Management contingent shares | 9,175,000 |
Net Loss Per Share (Details) -
Net Loss Per Share (Details) - Schedule of basic and diluted earnings per share - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Schedule of Basic and Diluted Earnings Per Share [Abstract] | ||||
Net loss available to common shares | $ (41,026) | $ (27,241) | $ (76,932) | $ (37,614) |
Class A Common Stock [Member] | ||||
Schedule of Basic and Diluted Earnings Per Share [Abstract] | ||||
Basic and diluted weighted average number | 6,122 | 5,826 | 5,975 | 5,817 |
Basic and diluted net loss available | $ (6.7) | $ (4.68) | $ (12.88) | $ (6.47) |
Net Loss Per Share (Details) _2
Net Loss Per Share (Details) - Schedule of basic and diluted earnings per share (Parentheticals) - Class A Common Stock [Member] - $ / shares | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Schedule of Basic and Diluted Earnings Per Share [Abstract] | ||||
Basic and diluted weighted average number | 6,122 | 5,826 | 5,975 | 5,817 |
Basic and diluted net loss available | $ (6.70) | $ (4.68) | $ (12.88) | $ (6.47) |
Net Loss Per Share (Details) _3
Net Loss Per Share (Details) - Schedule of antidilutive and reduce the net loss per common stock - shares | Sep. 30, 2022 | Sep. 30, 2021 |
Schedule of antidilutive and reduce the net loss per common stock [Abstract] | ||
Series A preferred stock | 4,646,698 | |
Public and private warrants | 10,378,750 | |
Assumed warrants | 1,905,853 | 1,905,853 |
Assumed options | 2,965,500 | 2,965,500 |
Total antidilutive shares | 15,250,103 | 24,088,202 |
2021 Bridge Debentures [Member] | ||
Schedule of antidilutive and reduce the net loss per common stock [Abstract] | ||
Bridge Debentures | 6,759,642 | |
2022 Bridge Debentures [Member] | ||
Schedule of antidilutive and reduce the net loss per common stock [Abstract] | ||
Bridge Debentures | 7,810,509 |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - shares | 9 Months Ended | 12 Months Ended |
Sep. 30, 2022 | Dec. 31, 2021 | |
Fair Value Measurements (Details) [Line Items] | ||
Implied borrowing rate | 52% | |
2021 Bridge Debentures [Member] | ||
Fair Value Measurements (Details) [Line Items] | ||
Debentures of converted shares | 6,759,642 | |
2022 Bridge Debentures [Member] | ||
Fair Value Measurements (Details) [Line Items] | ||
Debentures of converted shares | 7,810,509 |
Fair Value Measurements (Deta_2
Fair Value Measurements (Details) - Schedule of assets and liabilities that are measured on a recurring basis - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Liabilities: | ||
Total liabilities | $ 29,700 | $ 32,203 |
Level 1 [Member] | ||
Liabilities: | ||
Total liabilities | 1,006 | |
Level 2 [Member] | ||
Liabilities: | ||
Total liabilities | 32 | |
Level 3 [Member] | ||
Liabilities: | ||
Total liabilities | 28,662 | 32,203 |
Warrant liability [Member] | ||
Liabilities: | ||
Total liabilities | 1,038 | |
Warrant liability [Member] | Level 1 [Member] | ||
Liabilities: | ||
Total liabilities | 1,006 | |
Warrant liability [Member] | Level 2 [Member] | ||
Liabilities: | ||
Total liabilities | 32 | |
Warrant liability [Member] | Level 3 [Member] | ||
Liabilities: | ||
Total liabilities | ||
Forward Purchase Collateral Derivative [Member] | ||
Liabilities: | ||
Total liabilities | 27,378 | |
Forward Purchase Collateral Derivative [Member] | Level 1 [Member] | ||
Liabilities: | ||
Total liabilities | ||
Forward Purchase Collateral Derivative [Member] | Level 2 [Member] | ||
Liabilities: | ||
Total liabilities | ||
Forward Purchase Collateral Derivative [Member] | Level 3 [Member] | ||
Liabilities: | ||
Total liabilities | 27,378 | |
Forward purchase put derivative [Memebr] | ||
Liabilities: | ||
Total liabilities | 1,284 | |
Forward purchase put derivative [Memebr] | Level 1 [Member] | ||
Liabilities: | ||
Total liabilities | ||
Forward purchase put derivative [Memebr] | Level 2 [Member] | ||
Liabilities: | ||
Total liabilities | ||
Forward purchase put derivative [Memebr] | Level 3 [Member] | ||
Liabilities: | ||
Total liabilities | $ 1,284 | |
2021 Bridge Debentures [Memebr] | ||
Liabilities: | ||
Total liabilities | 32,203 | |
2021 Bridge Debentures [Memebr] | Level 1 [Member] | ||
Liabilities: | ||
Total liabilities | ||
2021 Bridge Debentures [Memebr] | Level 2 [Member] | ||
Liabilities: | ||
Total liabilities | ||
2021 Bridge Debentures [Memebr] | Level 3 [Member] | ||
Liabilities: | ||
Total liabilities | $ 32,203 |
Fair Value Measurements (Deta_3
Fair Value Measurements (Details) - Schedule of changes in level 3 liabilities measured at fair value on a recurring basis - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Balance at beginning | $ 84,686 | $ 12,819 | $ 32,203 | |
Debt Issuance | 28,000 | 10,500 | ||
Balance at Conversion | 88,383 | 88,383 | ||
Transfer out | (88,383) | (88,383) | ||
Losses included in net loss | 28,662 | 28,662 | ||
Balance at ending | 28,662 | 35,390 | 28,662 | 35,390 |
Losses included in net loss | 3,697 | 22,571 | 28,180 | 24,890 |
Bridge Debentures 2022 [Member] | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Balance at beginning | 46,733 | |||
Debt Issuance | 28,000 | |||
Balance at Conversion | 49,543 | 49,543 | ||
Transfer out | (49,543) | (49,543) | ||
Losses included in net loss | ||||
Balance at ending | ||||
Losses included in net loss | 2,810 | 21,543 | ||
Bridge Debentures 2021 [Member] | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Balance at beginning | 37,953 | 12,819 | 32,203 | |
Debt Issuance | 10,500 | |||
Balance at Conversion | 38,840 | 38,840 | ||
Transfer out | (38,840) | (38,840) | ||
Losses included in net loss | ||||
Balance at ending | 35,390 | 35,390 | ||
Losses included in net loss | 887 | $ 22,571 | 6,637 | $ 24,890 |
Forward Purchase Put Derivative [Member] | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Balance at beginning | ||||
Debt Issuance | ||||
Balance at Conversion | ||||
Transfer out | ||||
Losses included in net loss | 1,284 | 1,284 | ||
Balance at ending | 1,284 | 1,284 | ||
Losses included in net loss | ||||
Forward Purchase Collateral Derivative [Member] | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Balance at beginning | ||||
Debt Issuance | ||||
Balance at Conversion | ||||
Transfer out | ||||
Losses included in net loss | 27,378 | 27,378 | ||
Balance at ending | 27,378 | 27,378 | ||
Losses included in net loss |
Business Segment (Details)
Business Segment (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Segment Reporting [Abstract] | ||||
Consulting agreement expense | $ 3,866 | $ 42 | $ 5,556 | $ 8 |
Depreciation expense | 74 | 25 | 159 | 71 |
Changes in fair value of convertible debentures, warrant liability, and forward purchase derivative | $ 31,010 | $ 22,571 | $ 55,493 | $ 24,890 |
Business Segment (Details) - Sc
Business Segment (Details) - Schedule of operations by business segment - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | ||
Segment Reporting Information [Line Items] | |||||
Revenue | $ 14 | $ 31 | $ 93 | $ 93 | |
Earnings | (1,656) | (2,463) | (5,022) | (5,935) | |
Corporate and other | [1] | (38,946) | (24,465) | (70,660) | (30,854) |
Interest expense | (424) | (313) | (1,250) | (825) | |
Total revenue | 14 | 31 | 93 | 93 | |
Total Earnings | (41,026) | (27,241) | (76,932) | (37,614) | |
FOXO Labs [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Revenue | 7 | 23 | 71 | 67 | |
Earnings | (499) | (1,632) | (1,952) | (4,268) | |
FOXO Life [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Revenue | 7 | 8 | 22 | 26 | |
Earnings | $ (1,157) | $ (831) | $ (3,070) | $ (1,667) | |
[1]Corporate and other includes equity-based compensation, including the consulting agreement and Cantor Commitment Fee, expense of $3,866 and $42 as well as depreciation expense of $74 and $25 for the three months ended September 30, 2022 and 2021, respectively. Corporate and other includes equity-based compensation, including the consulting agreement and Cantor Commitment Fee, expense of $5,556 and $8 as well as depreciation expense of $159 and $71 for the nine months ended September 30, 2022 and 2021, respectively. The three months ended September 30, 2022 and 2021 included $31,010 and $22,571 for the changes in fair value of convertible debentures, warrant liability, and forward purchase derivatives. The nine months ended September 30, 2022 and 2021 also included $55,493 and $24,890 for the changes in fair value of convertible debentures, warrant liability, and forward purchase derivatives. See Notes 5, 6, 7, 9 and 11 for additional information. |
Commitments, Contingencies, a_2
Commitments, Contingencies, and Sponsored Research (Details) - USD ($) | 1 Months Ended | 3 Months Ended | 9 Months Ended | ||||
Feb. 01, 2021 | Jul. 31, 2022 | Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Jun. 30, 2022 | |
Commitments, Contingencies, and Sponsored Research (Details) [Line Items] | |||||||
Number of purchase unit (in Shares) | 10,000 | 10,000 | |||||
Contract term | 3 years | ||||||
Remaining purchase obligation | $ 788 | $ 788 | |||||
Contract agreement payments | $ 849 | ||||||
Enrollment description. | (i) 20% upon the enrollment of the first patient, (ii) 20% upon the enrollment of the final patient and (iii) 10% upon lab receipt of shipments for all initially planned assays. Costs associated with the clinical trial agreement are being recorded as research and development expenses in the consolidated statements of operations. | ||||||
Agreement amount | $ 200 | ||||||
Research expenses | 40 | $ 38 | $ 119 | $ 101 | |||
Minimum of participants (in Shares) | 2,500 | ||||||
Insurance cost | $ 200 | ||||||
Vendor Agreements [Member] | |||||||
Commitments, Contingencies, and Sponsored Research (Details) [Line Items] | |||||||
Remaining purchase obligation | 788 | 788 | |||||
CRADA agreement [Member] | |||||||
Commitments, Contingencies, and Sponsored Research (Details) [Line Items] | |||||||
Research expenses | $ 29 | $ 25 | $ 75 | $ 29 | |||
CHOP Agreement [Member] | |||||||
Commitments, Contingencies, and Sponsored Research (Details) [Line Items] | |||||||
Agreement amount | $ 311 |
Subsequent Events (Details)
Subsequent Events (Details) | Nov. 11, 2022 shares |
Forecast [Member] | |
Subsequent Events (Details) [Line Items] | |
Shares of maturity consideration | 500,000 |