MINNEAPOLIS, MN – FOXO Technologies Inc. has amended its Certificate of Incorporation to authorize the issuance of up to 35,000 shares of Series A Cumulative Convertible Redeemable Preferred Stock, as filed with the Delaware Secretary of State on October 18, 2024. This action expands the company's capital structure and establishes specific rights and preferences for the new series of preferred stock.
The Series A Preferred Stock, with a par value of $0.0001 per share, grants holders cumulative cash dividends at a rate of 5% per annum of the stated $1,000 value per share. Dividends are expected to be paid quarterly starting March 15, 2025. In terms of voting rights, Series A Preferred Stock holders will have significant influence on corporate decisions, including alterations to the company's charter or issuance of new stock that affects the preferred shares' standing.
In the event of a liquidation, dissolution, or winding-up of the company, holders of Series A Preferred Stock are entitled to receive a preferential payout before any distributions are made to common stockholders. Additionally, each share of Series A Preferred Stock is convertible into common stock, under certain conditions, based on a formula related to the preferred stock's stated value and the common stock's volume-weighted average price (VWAP).
The company also disclosed ongoing legal matters, including a judgment against them by Illumina (NASDAQ:ILMN), Inc. for $821,670.40 and legal actions initiated by holders of the company's Senior PIK Notes. FOXO Technologies is in settlement discussions with Illumina and has reached an agreement with the majority of Senior PIK Note holders to exchange their notes for shares of a new series of preferred stock, Series B, subject to stockholder approval.
This financial maneuvering and the settlement of legal disputes are part of the company's broader efforts to restructure its financial obligations and strengthen its balance sheet. The information contained in this article is based on a press release statement.
FOXO Technologies, operating under the SIC code for Commercial Physical & Biological Research, is listed on the NYSE American under the ticker symbol FOXO. The company's strategic decisions, including the amendment to its Certificate of Incorporation and the handling of its legal and financial challenges, reflect its ongoing efforts to navigate the complexities of the biotech industry.
In other recent news, FOXO Technologies Inc. has made several strategic moves to strengthen its financial position and operational capabilities. The company has reached an agreement to convert outstanding senior debt into equity, a decision aimed at resolving a default on its 15% Senior Promissory Notes. Concurrently, FOXO Technologies has finalized the strategic acquisition of Rennova Community Health (NYSE:CYH), Inc., expanding its presence in the healthcare sector.
The company also expanded its equity financing agreement with ClearThink Capital Partners, LLC, increasing the commitment from $2 million to $5 million. FOXO Technologies has also regained compliance with the New York Stock Exchange American continued listing standards, eliminating the risk of delisting that the company previously faced.
In a series of other developments, FOXO Technologies has engaged in strategic agreements and modifications to its executive compensation structure. It has signed a Corporate Development Advisory Agreement with C L Talent Inc., and engaged J.H. Darbie & Co., Inc. as a nonexclusive financial adviser. Lastly, the company has revised its executive compensation, replacing an interim employment agreement with a new Services Agreement with Mark White.
InvestingPro Insights
FOXO Technologies' recent financial maneuvers, including the authorization of Series A Preferred Stock and ongoing settlement discussions, are taking place against a backdrop of significant financial challenges. According to InvestingPro data, the company's market capitalization stands at a modest $1.88 million, reflecting investor skepticism about its prospects.
InvestingPro Tips highlight that FOXO is "not profitable over the last twelve months" and "suffers from weak gross profit margins." This is corroborated by the company's financials, which show a negative gross profit margin of -5.16% and an operating income margin of -6425.16% for the last twelve months as of Q2 2024. These figures underscore the financial pressures that may have led to the company's recent capital restructuring efforts.
The company's revenue for the same period was $0.15 million, with a concerning year-over-year revenue decline of 66.08%. However, there's a silver lining in the quarterly revenue growth of 133.33% as of Q2 2024, suggesting some recent improvement in sales performance.
FOXO's stock price has also been under pressure, with InvestingPro reporting a one-year price total return of -83.34% as of the latest data. This poor stock performance aligns with the InvestingPro Tip noting that the "stock has taken a big hit over the last six months."
For investors seeking a more comprehensive analysis, InvestingPro offers 12 additional tips for FOXO Technologies, providing a deeper understanding of the company's financial health and market position.
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