FOXO TECHNOLOGIES, INC. ANNOUNCES EXECUTION OF A NON-BINDING ACQUISITION AGREEMENT FOR TWO ASSISTED-LIVING FACILITIES IN FLORIDA FOR A TOTAL CONSIDERATION OF $60 MILLION

Rhea-AI Summary

FOXO Technologies (NYSE American: FOXO) has executed a non-binding acquisition agreement for two assisted living facilities in Florida for a total consideration of $60 million. The facilities comprise 129 and 137 units respectively, with each facility priced at $30 million including milestone-based payments.

The company aims to complete definitive agreements within 60 days, with closing expected 60-120 days thereafter, subject to due diligence and financing conditions. FOXO is considering funding through a new series of preferred stock listing. The company views these acquisitions as strategic entries into the healthcare sector's recurring revenue model, with milestone payments tied to facility revenue increases.

Positive

• Strategic entry into assisted living sector with recurring revenue model
• Potential expansion of healthcare service offerings
• Performance-based milestone payment structure reducing upfront capital requirements
• Combined facility capacity of 266 units

Negative

• Non-binding agreement with significant execution uncertainty
• Substantial financing requirement of $60 million not yet secured
• Potential shareholder dilution through new preferred stock issuance
• Multiple contingencies including due diligence and financing conditions

Insights

Financial Analyst

This non-binding acquisition agreement represents an extraordinarily ambitious expansion attempt by FOXO Technologies, with several critical aspects requiring careful investor scrutiny:

Financing Challenge Scale: The proposed $60M acquisition value is approximately 12.5 times FOXO's current market capitalization of $4.8M, raising significant questions about execution feasibility. The company's plan to finance through preferred stock issuance could result in substantial dilution for current shareholders, depending on the terms and structure.

Asset Fundamentals: The two Florida facilities, with 266 combined units, align with mid-size assisted living facility standards. Typical assisted living facilities in Florida generate annual revenue of $45,000-$65,000 per unit at 85-90% occupancy rates. This suggests potential annual revenue of $10-15M if properly operated, though actual performance metrics of these specific facilities aren't disclosed.

Risk Assessment: Several critical risk factors emerge:

• The non-binding nature and multiple contingencies (due diligence, financing, definitive agreements) create significant execution uncertainty
• The company's lack of operational experience in assisted living facility management could impact performance
• The milestone-based payment structure, while potentially reducing initial capital requirements, may create future financial obligations
• The preferred stock financing mechanism's terms will be crucial, as they could significantly impact the capital structure and existing shareholders' rights

The strategic pivot into assisted living represents a dramatic transformation attempt, shifting from technology to healthcare operations. While the recurring revenue model is attractive, the execution risks and financing challenges are substantial given FOXO's current size and resources. The success of this initiative will heavily depend on the company's ability to secure favorable financing terms and demonstrate operational capabilities in a new sector.

MINNEAPOLIS, MN, Feb. 24, 2025 (GLOBE NEWSWIRE) -- FOXO Technologies Inc. (NYSE American: FOXO) (the “Company or FOXO”), announces that it has executed a non-binding acquisition agreement for two assisted living facilities in Florida.

One facility has 129 units, and the second facility has 137 units. The purchase price for each facility is expected to be $30 million, a portion of which is milestone-based. The parties aim to complete definitive agreements withing 60 days, Closing is expected to occur between 60 and 120 days after completion of definitive agreements and is subject to a number of closing conditions, including satisfactory due diligence and financing.

“We are delighted to have executed this non-binding agreement for these strategic acquisitions,” said Seamus Lagan, Chief Executive Officer of FOXO. “While we cannot confirm that due diligence will have a successful outcome or that we can successfully secure the capital for a new series of preferred stock or list this preferred stock as is being considered as a funding mechanism to complete these acquisitions, we are optimistic that we can complete these acquisitions as planned. We like the recurring revenue and cash flow model in this sector and are confident that diversifying our current services offerings in the health care sector will create significant value and opportunity for our shareholders. The Company has structured the acquisitions with milestone payments related to increased revenues at the facilities and believes these acquisitions will create a viable acquisition model for the Company to use to pursue additional, added value acquisitions for FOXO in the future.”

About FOXO Technologies Inc. (“FOXO”)

FOXO owns and operates three subsidiaries.

Rennova Community Health, Inc., owns and operates Scott County Community Hospital, Inc. (d/b/a Big South Fork Medical), a critical access designated (CAH) hospital in East Tennessee.

Myrtle Recovery Centers, Inc. operates a 30-bed behavioral health facility in East Tennessee providing inpatient services for detox and residential treatment and outpatient services for MAT and OBOT programs.

FOXO Labs, Inc. is a biotechnology company dedicated to improving human health and life span through the development of cutting-edge technology and product solutions for various industries.

For more information about FOXO, visit www.foxotechnologies.com.

Forward-Looking Statements

This press release includes “forward-looking statements” within the meaning of the safe harbor provisions of the United States Private Securities Litigation Reform Act of 1995. Actual results may differ from expectations and, consequently, you should not rely on these forward-looking statements as predictions of future events. Words such as “expect,” “estimate,” “project,” “budget,” “forecast,” “anticipate,” “intend,” “plan,” “may,” “will,” “could,” “should,” “believes,” “predicts,” “potential,” “continue,” and similar expressions are intended to identify such forward-looking statements. These forward-looking statements involve significant risks and uncertainties that could cause the actual results to differ materially from the expected results. Additional information concerning these and other risk factors are contained in the Company’s most recent filings with the Securities and Exchange Commission. The Company cautions readers not to place undue reliance upon any forward-looking statements, which speak only as of the date made. The Company does not undertake or accept any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements to reflect any change in their expectations or any change in events, conditions or circumstances on which any such statement is based, except as required by law.

Contact:

Sebastien Sainsbury
ssainsbury@foxotechnologies.com
(561) 485-0151

FAQ

What is the total value of FOXO's Florida assisted living facilities acquisition?

FOXO Technologies has agreed to acquire two assisted living facilities in Florida for a total consideration of $60 million, with each facility priced at $30 million.

When is FOXO expected to close the Florida facilities acquisition?

The closing is expected to occur between 60 and 120 days after completing definitive agreements, which themselves are targeted for completion within 60 days.

How many units do FOXO's target Florida assisted living facilities have?

The two facilities have a combined total of 266 units, with one facility having 129 units and the second facility having 137 units.

How does FOXO plan to finance the $60 million assisted living facilities acquisition?

FOXO is considering funding the acquisition through a new series of preferred stock issuance and listing, though the financing is not yet secured.

What are the key conditions for FOXO's Florida facilities acquisition to close?

The key conditions include satisfactory completion of due diligence, successful financing arrangement, and completion of definitive agreements.