FOXO TECHNOLOGIES, INC., PROVIDES UPDATE ON RECENT ACOMPLISHMENTS AND BUSINESS STRATEGY

Rhea-AI Summary

FOXO Technologies Inc. (NYSE American: FOXO) has provided a shareholder update outlining recent accomplishments and future strategy. The company has transformed from minimal revenues to acquiring businesses with potential for $20M+ annual profitable revenue. They've improved shareholders' equity by over $21M through debt-to-equity restructuring to meet NYSE American listing requirements.

FOXO operates three main businesses: FOXO Labs (epigenetics division with 13,000+ individual dataset), Myrtle Recovery Centers (30-bed behavioral health facility expecting $3-4M annual revenue), and Scott County Community Hospital (Big South Fork Medical Center). The company has converted approximately $6M of additional debt to equity through preferred stock issuance and is actively seeking healthcare sector acquisition opportunities.

Key priorities include growing rural hospital and behavioral health businesses, monetizing the epigenetics division, and potentially pursuing additional healthcare acquisitions. The company plans to update its web presence and complete various work steps within 30-60 days.

Positive

• Improved shareholders' equity by over $21M through debt restructuring
• Acquired businesses with potential for $20M+ annual profitable revenue
• Secured in-network insurance contracts for Myrtle Recovery Centers
• Successfully converted $6M additional debt to equity
• Built substantial epigenetics database with 13,000+ individuals

Negative

• Had $17M shareholders deficit as of September 30, 2024
• Minimal net revenues since inception prior to acquisitions
• Requires additional capital to execute business strategy
• Ongoing need for debt restructuring

Insights

Financial Restructuring & Healthcare Business Analyst

FOXO Technologies' transformation represents a pivotal shift from a research-focused enterprise to an operational healthcare provider, marked by three strategic developments:

• Financial Restructuring: The conversion of over $21 million in debt to equity, primarily through convertible preferred stock, demonstrates sophisticated financial engineering to meet NYSE American listing requirements while minimizing immediate dilution. This structure provides breathing room for operational execution while protecting the company's public listing status.
• Revenue Generation Strategy: The acquisition of Myrtle Recovery Centers and Big South Fork Medical Center establishes immediate revenue streams in underserved rural markets. The behavioral health facility's projected $3-4 million annual revenue potential, combined with the critical access hospital operations, creates a foundation for sustainable cash flow generation. The rural healthcare focus is particularly strategic given enhanced reimbursement rates for critical access hospitals and increasing demand for behavioral health services.
• Asset Optimization: The company's approach to its epigenetics division - considering potential spinoff while maintaining its value proposition - indicates a pragmatic strategy to unlock shareholder value. The database of 13,000 individuals' epigenetic data represents a valuable asset in the emerging AI-driven healthcare analytics market.

The immediate challenges include capital requirements for growth initiatives and operational integration of disparate healthcare services. The success of this transformation will depend on management's ability to execute their rural healthcare strategy while maintaining sufficient liquidity for operations and growth. The focus on behavioral health and rural hospital services aligns with current healthcare market demands, particularly in underserved areas where government support and reimbursement rates can enhance profitability.

MINNEAPOLIS, MN, Jan. 28, 2025 (GLOBE NEWSWIRE) -- FOXO Technologies Inc. (NYSE American: FOXO) (the “Company”), provides a brief shareholder letter from Seamus Lagan, recently appointed CEO of FOXO on what has been achieved in recent months and what is planned for 2025 and beyond.

Dear Fellow Shareholders,

Our recent shareholders meeting on January 17^th concluded the requirements of 2024 acquisition agreements and resulted in a change of control of the Company. The accomplishments in the second half of 2024 have been key to what we believe is becoming a very successful turnaround of our Company and has created a foundation from which we believe we can build a significant and profitable revenue-driven enterprise.

We have gone from having minimal net revenues since inception to having acquired businesses that that with investment, have the potential to deliver in excess of $20 million of profitable net revenues per annum.

We disclosed a shareholders deficit in excess of $17 million at September 30, 2024 and subsequently restructured a significant amount of debt to equity in the fourth quarter to meet NYSE American continued listing rules that require in excess of $4 million in shareholders’ equity, an improvement of in excess of $21 million in shareholders’ equity. We continue to negotiate with debt holders and have recently disclosed additional transactions of approximately $6 million of further debt being converted to equity. The majority of these transactions have been completed by issuing convertible preferred stock that cannot currently be converted to free trading of our Class A common stock.

Our business strategy for 2025 is to grow our acquired rural hospital and behavioral health businesses and pursue a strategy to monetize our existing epigenetics division. We are also actively seeking and evaluating additional acquisition opportunities in the healthcare sector, including senior living, which we may or may not be able to complete.

Current points of interest:

• We look forward to the timely filing of our 2024 audited financials in our Form 10-K.
• We are considering our options for the capital required to execute on our business strategy.
• We will continue to negotiate the potential exchange of existing debt and other liabilities to equity to improve our balance sheet.
• We are in preliminary discussions that may lead to additional acquisitions that we believe will increase shareholder value, however we have not reached agreement to complete any additional acquisitions at this time and we may not succeed in doing so.
• We are in the process of restructuring our web site and social media and online presence to better inform our shareholders and interested parties of our services and ongoing accomplishments and provide details of our management team, Board of Directors and governance policies. We expect these work steps will be completed in the next 30-60 days
  

We operate three businesses;

Epigenetics: FOXO Lab’s., remains a pioneer in epigenetic biomarker discovery and commercialization. Our mission is to extend and enhance human life through advanced prognostics, therapeutic solutions, and lifestyle improvements. We have generated epigenetic data for over 13,000 individuals through internal research and external collaborations. This extensive dataset, paired with broad phenotypic information means the Company is well positioned for continued innovation and business growth in the rapidly evolving field of AI-driven healthcare and life span solutions. By combining the fields of epigenetics and artificial intelligence, FOXO Labs’ pioneering approach sets a new standard for personalized healthcare. The Company is now positioned to launch a direct-to-consumer prognostic that will provide actionable information and guidance to improve well-being and life span.

We will continue to consider all options to create value for our shareholders from this business, which may include a spin out at a time in the future if it is viable to do so. For more information about our technology, visit www.foxotechnologies.com

Myrtle Recovery Centers, Inc., operates a 30-bed behavioural health facility in East Tennessee. It provides inpatient services for Detoxification and Residential Treatment and outpatient services for Medication-assisted treatment (MAT) and Office-Based Opioid Treatment (OBOT) programs. The facility was opened in August 2023 and has secured in-network contracts with various insurance company payors. We anticipate growing this business to having profitable annual net revenues of approximately $3-4M and plan to replicate the service delivery model in other locations. More recently, we have seen significant increases in census as marketing efforts have intensified and additional payor contracts have been executed. Further information can be found at www.myrtlerecoverycenters.com

In the third quarter of 2024 we completed the acquisition of Scott County Community Hospital, Inc. (d/b/a Big South Fork Medical Center), a critical access designated (CAH) hospital located in East Tennessee. The hospital provides emergency services, outpatient services (including laboratory and radiology services) and inpatient services. We are considering options available to us to open additional hospital facilities at other locations in East Tennessee. Further information can be found at www.bsfmedical.com

The accomplishments of FOXO in recent months have resulted in a significant turnaround and created a number of attractive opportunities for the Company and its shareholders. We have challenges to overcome and objectives to achieve for 2025 and remain thankful for the continued support from our shareholders. My management team and I will endeavor to deliver results and accomplishments we can all be proud of and enjoy.

Sincerely
Seamus Lagan, CEO

About FOXO Technologies Inc. (“FOXO”)

FOXO owns and operates three subsidiaries.

Foxo Lab’s, 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.

Myrtle Recovery Centers, Inc., a 30-bed behavioural health facility in East Tennessee. Myrtle provides inpatient services for detox and residential treatment and outpatient services for MAT and OBOT Programs.

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.

Forward-Looking Statements

This press release contains forward-looking statements. These statements are made under the “safe harbor” provisions of the U.S. Private Securities Litigation Reform Act of 1995. Statements that are not historical facts, including statements about the FOXO’s beliefs and expectations, are forward-looking statements. Forward-looking statements involve inherent risks and uncertainties, and a number of factors could cause actual results to differ materially from those contained in any forward-looking statement. These factors include, but are not limited to the risk of changes in the competitive and highly regulated industries in which FOXO operates; variations in operating performance across competitors or changes in laws and regulations affecting FOXO’s business; the ability to implement FOXO’s business plans, forecasts, and other expectations; the ability to obtain financing; the risk that FOXO has a history of losses and may not achieve or maintain profitability in the future; potential inability of FOXO to establish or maintain relationships required to advance its goals or to achieve its commercialization and development plans; the enforceability of FOXO’s intellectual property, including its patents and the potential infringement on the intellectual property rights of others; and the risk of downturns and a changing regulatory landscape in the highly competitive biotechnology industry or in the markets or industries in which FOXO operates. The foregoing list of factors is not exhaustive. Readers should carefully consider the foregoing factors and the other risks and uncertainties discussed in FOXO’s most recent reports on Forms 10-K and 10-Q, particularly the “Risk Factors” sections of those reports, and in other documents FOXO has filed, or will file, with the SEC. These filings identify and address other important risks and uncertainties that could cause actual events and results to differ materially from those contained in the forward-looking statements. Forward-looking statements speak only as of the date they are made. Readers are cautioned not to put undue reliance on forward-looking statements, and FOXO assumes no obligation and do not intend to update or revise these forward-looking statements, whether as a result of new information, future events, or otherwise.

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

FAQ

What is FOXO's projected revenue potential from its newly acquired businesses?

FOXO's newly acquired businesses have the potential to deliver in excess of $20 million of profitable net revenues per annum with proper investment.

How much debt has FOXO Technologies converted to equity in recent transactions?

FOXO has recently disclosed transactions of approximately $6 million of debt being converted to equity, following earlier significant debt restructuring in Q4 2024.

What is the expected annual revenue for FOXO's Myrtle Recovery Centers?

Myrtle Recovery Centers is anticipated to generate profitable annual net revenues of approximately $3-4 million.

How did FOXO improve its shareholders' equity to meet NYSE American listing requirements?

FOXO restructured significant debt to equity in Q4 2024, improving shareholders' equity by over $21 million to meet the NYSE American requirement of over $4 million in shareholders' equity.

How many individuals are included in FOXO's epigenetic database?

FOXO has generated epigenetic data for over 13,000 individuals through internal research and external collaborations.