STOCKHOLDERS’ EQUITY |
3 Months Ended |
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Mar. 31, 2026 | |
| Equity [Abstract] | |
| STOCKHOLDERS’ EQUITY | Note 12 STOCKHOLDERS’ EQUITY
Authorized Capital
At March 31, 2026, the Company’s authorized shares of all capital stock, par value $ per share, of shares consisted of (i) shares of preferred stock and (ii) shares of Class A Common Stock. Pursuant to the authorization and approval previously provided by its stockholders, the Company filed a Certificate of Amendment to its Certificate of Incorporation, as amended, with the Secretary of State of Delaware to increase its authorized shares of Class A Common Stock from shares to shares, which filing became effective on January 18, 2026.
Subsequent to March 31, 2026, the number of authorized shares of the Company’s capital stock increased to shares consisting of shares of preferred stock and shares of its Class A Common Stock, as more fully discussed in Note 16.
As a result of voting rights in the Series A Preferred Stock, ownership of Series A Preferred Stock by RHI and irrevocable proxies entered into on February 3, 2025 and May 8, 2025, between RHI and holders of the Company’s Series A Preferred Stock, RHI has the ability to increase the number of authorized shares of the Company’s Class A Common Stock in its sole and absolute discretion. As of the March 20, 2026 record date established in connection with the March 2026 authorized share increase, RHI held approximately 97.59% of the Company’s voting rights directly or through proxy. Therefore, the Company is confident that, through RHI (Mr. Lagan is the CEO of both the Company and RHI), it has the ability to ensure that it has and/or can obtain sufficient authorized shares of its Class A Common Stock to cover all potentially dilutive common shares outstanding.
Preferred Stock
As of March 31, 2026, the Company was authorized to issue up to shares of preferred stock with such designations, voting and other rights and preferences as may be determined from time to time by the Company’s board of directors, which amount was subsequently increased to shares, as discussed above and in Note 16. As of March 31, 2026, the Company had outstanding shares of preferred stock consisting of shares of its Series A Preferred Stock, shares of its Series B Preferred Stock, shares of its Series C Cumulative Convertible Redeemable Preferred Stock (the “Series C Preferred Stock”), shares of its Series D Cumulative Convertible Redeemable Preferred Stock (“Series D Preferred Stock”) and shares of its Series E Preferred Stock. The Company’s outstanding shares of preferred stock do not contain mandatory redemption or other features that would require them to be presented on the balance sheet outside of equity and, therefore, they qualify for equity accounting treatment.
Series A Preferred Stock
On March 31, 2026 and December 31, 2025, the Company had outstanding and shares of its Series A Preferred Stock, respectively. During the three months ended March 31, 2026 and 2025, the Company issued shares and shares of its Class A Common Stock, respectively, pursuant to conversions of shares and shares of the Company’s Series A Preferred Stock, respectively. shares of Series A Preferred Stock were issued during the three months ended March 31, 2026 and 2025.
During the three months ended March 31, 2026 and 2025, the Company recorded $0.2 million and $0.1 million, respectively, of undeclared dividends on its Series A Preferred Stock and the total accumulated undeclared dividends were $1.0 million as of March 31, 2026. The total stated value and accumulated undeclared dividends of the Series A Preferred Stock at March 31, 2026, of $20.2 million, were convertible into approximately billion shares of the Company’s Class A Common Stock at an assumed conversion price of $0.0001 per share. The terms of the Series A Preferred Stock, as amended, are as follows:
Series A Preferred Stock Designation
On October 16, 2024, the Company’s board of directors approved the designation of shares of Series A Preferred Stock and, on September 22, 2025, the Company filed an Amended and Restated Certificate of Designation to increase the authorized shares of Series A Preferred Stock from shares to shares and revised other terms, including a revision to the floor price during 2025, as reflected below. Each share of Series A Preferred Stock shall have a par value of $ per share and a stated value equal to $ per share. Terms of the Series A Preferred Stock, as amended, include: (i) dividends at 5% per annum, (ii) voting rights, which include voting as one class with the common stockholders and the holder shall be entitled to cast that number of votes determined by dividing the stated value per share by $ and (iii) conversion into shares of the Company’s Class A Common Stock at the higher of $0.0001 per share (such dollar amount not adjusted for reverse and forward stock splits, stock dividends, stock combinations and other similar transactions) or 90% of the average VWAP for the five trading days prior to the date of the conversion notice and to allow cash dividends to be paid to holders to the Company’s Series E Preferred Stock, among other terms.
Series B Preferred Stock
On September 20, 2022, the Company issued to certain investors 15% Senior Promissory Notes (the “Senior PIK Notes”) in an aggregate principal amount of $3.5 million, each with a maturity date of April 1, 2024 (the “Maturity Date”). The Company failed to make the payments when due, which constituted an event of default under the Senior PIK Notes. On October 18, 2024, the Company entered into Amendment No. 1 to the Senior PIK Notes (the “PIK Notes Amendment No. 1”). Under the PIK Notes Amendment No.1, on January 22, 2025, the Senior PIK Notes (not including accrued and unpaid Interest (as defined in the Senior PIK Notes) which was waived as part of the automatic exchange) were automatically exchanged into a number of shares of Series B Preferred Stock equal to the Original Principal Amount (as defined in the Senior PIK Notes) divided by the Stated Value ($) of Series B Preferred Stock, or shares of Series B Preferred Stock Upon the automatic exchange, all Senior PIK Notes (including all accrued and unpaid interest) (which total value was $5.4 million on the date of the exchange) were exchanged into Series B Preferred Stock, cancelled and satisfied in full. As a result of the automatic exchange, during the three months ended March 31, 2025, the Company recorded a gain from extinguishment of Senior PIK Notes of $1.9 million, which represented the accrued and unpaid interest, which was waived per the terms of the automatic exchange. The Company recorded a finder’s fee of $175,000 in connection with the automatic exchange. Finder’s fee agreements are more fully discussed below.
During 2025, four holders of Series B Preferred Stock exchanged a total of shares of their Series B Preferred Stock for shares of Series C Preferred Stock, as more fully discussed below, leaving a balance of shares of Series B Preferred Stock outstanding on March 31, 2026 and December 31, 2025.
During the three months ended March 31, 2026 and 2025, the Company recorded $40,563 and $31,988, respectively, of undeclared dividends on its Series B Preferred Stock. The total stated value and the accumulated undeclared dividends of the Series B Preferred Stock at March 31, 2026, of $3.4 million, were convertible into approximately billion shares of the Company’s Class A Common Stock at an assumed conversion price of $0.0001 per share.
Series B Preferred Stock Designation
On November 27, 2024, the Company authorized up to shares of its Series B Preferred Stock. Each share of Series B Preferred Stock shall have a par value of $ per share and a stated value equal to $ per share. Terms of the Series B Preferred Stock as amended during 2025, include: (i) dividends at 5% per annum, (ii) voting rights, which include voting as one class with the common stockholders, (iii) conversion into shares of the Company’s Class A Common Stock at the higher of $0.0001 per share or 90% of the average VWAP for the five trading days prior to the date of the conversion notice and (iv) no conversions prior to the first anniversary of the original issue date, among other terms.
Series C Preferred Stock
During the three months ended March 31, 2025, the Company issued shares of its Series C Preferred Stock to an investor for net cash proceeds of $44,825. Per the terms of this issuance and an issuance to an investor of shares of the Company’s Series C Preferred Stock for cash in the fourth quarter of 2024, these investors, who were also holder’s of Series B Preferred Stock could exchange their Series B Preferred Stock for shares of Series C Preferred Stock at a premium. The two investors elected to make the exchange during the three months ended March 31, 2025 and, as a result, the Company exchanged shares of its Series B Preferred Stock for shares of its Series C Preferred Stock. The Company recorded deemed dividends of $75,000 for the issuances, which represented the difference between the $225,000 stated value of the Series C Preferred Stock issued and the $150,000 stated value of the Series B Preferred Stock exchanged. During the remainder of 2025, the Company issued to an investor shares of its Series C Preferred Stock for gross proceeds of $$62,500 and, as a result, the Company exchanged an additional shares of its Series B Preferred Stock for shares of its Series C Preferred Stock resulting in a total of shares of Series C Preferred Stock issued. During the remainder of 2025, shares of Series C Preferred Stock were converted into shares of the Company’s Class a Common Stock leaving shares of Series C Preferred Stock outstanding as of December 31, 2025 and March 31, 2026.
During the three months ended March 31, 2026 and 2025, the Company recorded $3,797 and $3,526, respectively, of undeclared dividends on its Series C Preferred Stock and the total accumulated undeclared dividends were $14,344 as of March 31, 2026. The total stated value and the accumulated undeclared dividends of the Series C Preferred Stock at March 31, 2026, of $0.3 million, were convertible into approximately billion shares of the Company’s Class A Common Stock at an assumed conversion price of $0.0001 per share.
Series C Preferred Stock Designation
On November 27, 2024, the Company authorized up to shares of its Series C Preferred Stock. Each share of Series C Preferred Stock shall have a par value of $ per share and a stated value equal to $ per share. Terms of the Series C Preferred Stock, as amended during 2025, include: (i) dividends at 5% per annum, (ii) voting rights, which include voting as one class with the common stockholders and each share of Series C Preferred Stock shall have one vote, (iii) conversion into shares of the Company’s Class A Common Stock at the higher of $ per share or 90% of the average VWAP for the five trading days prior to the date of the conversion notice, (iv) no conversions prior to the first six months of the original issue date or until a registration statement registering the underlying shares of common stock is declared effective, among other terms.
Series D Preferred Stock
During December 2024, the Company issued shares of its Series D Preferred Stock with a stated value of $ per share of which shares were issued pursuant to the termination of a license agreement and shares were issued under the terms of a shares for services agreement. The total stated value of the Series D Preferred Stock at March 31, 2026, of $4.3 million, were convertible into approximately billion shares of the Company’s Class A Common Stock at an assumed conversion price of $0.0001 per share.
Series D Preferred Stock Designation
On December 6, 2024, the Company authorized up to shares of its Series D Preferred Stock. Each share of Series D Preferred Stock shall have a par value of $ per share and a stated value equal to $ per share. Terms of the Series D Preferred Stock, as amended during 2025, include: (i) no dividends, (ii) no voting rights, except as in regards to any changes related to the Series D Preferred Stock, and (iii) conversion into shares of the Company’s Class A Common Stock at the higher of $ per share or 90% of the average VWAP for the five trading days prior to the date of the conversion notice, among other terms.
Series E Preferred Stock
On September 19, 2025, the Company issued shares of its Series E Preferred Stock with a stated value of $ per share, or $1.5 million in total, to the Sellers for the acquisition of Vector, which is more fully discussed in Note 5. In addition, on February 6, 2026, the Company entered into a Series E Preferred Stock Exchange Agreement effective December 31, 2025 with RHI. Pursuant to the exchange and in full satisfaction and extinguishment of $200,000 in aggregate of previously advanced amounts made by RHI during the period from December 4, 2025 to December 10, 2025 under the terms of the note payable to RHI in connection with the acquisition of Myrtle, as more fully discussed in Note 9, the Company issued to RHI shares of it Series E Preferred Stock with a stated value of $200,000. Accordingly, at March 31, 2026 and December 31, 2025, the Company had outstanding shares of its Series E Preferred Stock with a total stated value of $1.7 million.
Series E Preferred Stock Designation
On June 25, 2025, the Company, filed an amendment to the Company’s Certificate of Incorporation in the form of a Certificate of Designation that authorized for issuance of up to shares of a new series of Preferred Stock, par value $ per share, stated value of $ per share, which are designated as the Series E Preferred Stock and it established the rights, preferences and limitations thereof. Terms of the Series E Preferred Stock include (i) cash dividends at 2.5% per annum and stock dividends at 5% per annum payable if and when declared, (ii) no voting rights, and (iii) no conversion provisions, among other terms.
Class A Common Stock
As of March 31, 2026 and December 31, 2025, there were and shares of the Company’s Class A Common Stock issued and outstanding, respectively.
Shares Issued Pursuant to Series A Conversions
During the three months ended March 31, 2026 and 2025, the Company issued shares and shares of its Class A Common Stock, respectively, pursuant to conversions of shares and shares of the Company’s Series A Preferred Stock, respectively.
October 13, 2023 Strata Purchase Agreement
On October 13, 2023, the Company entered into a Strata Purchase Agreement (the “Strata Purchase Agreement”) with ClearThink, as supplemented by that certain Supplement to Strata Purchase Agreement, dated as of October 13, 2023, by and between the Company and ClearThink. Pursuant to the Strata Purchase Agreement, after the satisfaction of certain commencement conditions, including, without limitation, the effectiveness of the Registration Statement, ClearThink has agreed to purchase from the Company, from time to time upon delivery by the Company to ClearThink of request notices, and subject to the other terms and conditions set forth in the Strata Purchase Agreement, up to an aggregate of $2.0 million of the Company’s Class A Common Stock. On August 13, 2024, the Company entered into Amendment No. 1 to the Strata Purchase Agreement pursuant to which the commitment amount was increased from $2.0 million to $5.0 million.
On May 15, 2025, the Company amended and restated the Strata Purchase Agreement to extend the maturity date to June 30, 2026 and amend the Purchase Price to define the price per share of Common Stock purchased shall equal % of the average of the two (2) lowest daily VWAP during the Valuation Period.
shares of the Company’s Class A Common Stock were issued under the terms of the Strata Purchase Agreement, as amended and restated, during the three months ended March 31, 2026 and the year ended December 31, 2025.
Common Stock Issued/Issuable in Connection with Notes Payable
During the three months ended March 31, 2026, shares of the Company’s Class A Common Stock were issued as an inducement for a $115,000 promissory note payable and the Company had outstanding obligations to issue an additional shares of its common stock as inducements and commitment shares under the terms of promissory notes payable. During the three months ended March 31, 2025, the Company issued shares of its Class A Common Stock for conversions and exchanges of $828,474 of promissory notes payable and related accrued interest. In addition, during the three months ended March 31, 2025, the Company issued shares of its Class A Common Stock as inducements and commitment shares under the terms of various promissory notes and it agreed to issue an additional shares of its common stock as inducements and commitment shares under the terms of promissory notes. The value of the shares issued and issuable under the terms of and conversions and exchanges of promissory notes are more fully discussed in Note 9.
Common Stock Issued to Smithline Family Trust II
During the three months ended March 31, 2025, the Company issued shares of its Class A Common Stock under the terms of a legal settlement, as amended, between the Company and Smithline Family Trust II (“Smithline”).
Common Stock Issued to J.H. Darbie & Co., Inc.
During the three months ended March 31, 2025, the Company issued shares of its common stock J.H. Darbie & Co., Inc. (“J.H. Darbie”) for finder’s fees in connection with notes payable.
During the three months ended March 31, 2025, the Company issued shares of its Class A Common Stock to J.H. Darbie for advisory services and private placement engagement as follows:
Advisory Services
On July 25, 2024, FOXO entered into the advisory agreement with J.H. Darbie pursuant to which J.H. Darbie was engaged as nonexclusive financial adviser. The term of the agreement was six months. As compensation for the services performed under the agreement, the Company issued J.H. Darbie shares of its Class A Common Stock effective January 13, 2025.
Private Placement Engagement
On July 25, 2024, FOXO engaged J.H. Darbie, on an exclusive basis, to provide services in connection with private placements (the “Engagement”). The term of the Engagement was 120 days, subject to early termination provisions in the Engagement. Under the Engagement, J.H. Darbie has a right of first refusal for all financing, cash, common stock or convertible securities, debt or equity, for six months after the termination of the Engagement. As compensation for the services performed under the Engagement, the Company issued to J. H. Darbie shares of its Class A Common Stock effective in January 2025. As additional compensation for the services to be rendered by J.H. Darbie under the Engagement, FOXO agreed to (i) pay a cash fee to J.H. Darbie equal to 3% of the principal amount of the securities to be exchanged and 5% of gross proceeds raised from the sale of the securities to customers of J.H. Darbie; and (ii) issue to J.H. Darbie warrants to purchase a number of shares of the Company’s Class A Common Stock equal to the cash fee.
On November 7, 2024, FOXO and J.H. Darbie entered into an amendment to the Engagement pursuant to which the compensation for the services to be rendered by J.H. Darbie was revised to a cash fee equal to $175,000 for advising, 10% of gross proceeds raised from the sale of the securities to customers of J.H. Darbie, and common stock equal to 5% of the cash fee. The common stock issued will have piggyback rights and be priced at the closing price the date the offering closes. Again, on November 22, 2024, FOXO and J.H. Darbie entered into an amendment to the Engagement pursuant to which the scope of the engagement was revised to an exchange of debt from existing lenders of FOXO to equity. Therefore, during the three months ended March 31, 2025, the Company accrued a cash fee of $175,000 in connection with the issuance of its Series B Preferred Stock in exchange for the Senior PIK Notes as more fully discussed above.
Warrants
Public Warrants and Private Placement Warrants
As of March 31, 2026 and December 31, 2025, the Company had outstanding 50,566 Public Warrants and 1,589 Private Placement Warrants each with an exercise price of $2,289 per share and each expiring on September 15, 2027 or earlier upon redemption or liquidation. The fair values of the Public Warrants and the Private Warrants at March 31, 2026 and December 31, 2025 was nil, as more fully discussed in Note 3. These warrants are more fully described in Note 13 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2025.
Assumed Warrants
Effective September 15, 2022, the Company consummated a business combination. At the closing of the business combination, the Company assumed warrants, referred to as the Assumed Warrants. The Assumed Warrants included down round provisions that should the Company issue common stock or common stock equivalents, excluding certain exempt issuances, for consideration of less than the then current exercise price per share, then the exercise price of the Assumed Warrants shall be lowered to the new consideration amount on a per share basis with a simultaneous and corresponding increase in the number of warrants. On February 23, 2024, 30,095 Assumed Warrants expired by their terms and on February 24, 2024, Assumed Warrants exercisable into 70,802 shares of the Company’s Common Stock were extended until February 23, 2025. As a result of triggers of the down-round provisions during 2024 and the exchange of 15,704 of the warrants under an exchange agreement with Smithline, 237,513 Assumed Warrants were outstanding with an exercise price of $4.36 per share at December 31, 2024. In February 2025, conversions of the Company’s Series A Preferred Stock into the Company’s Class A Common Stock resulted in two additional triggers of the down-round provisions. The incremental value of the modifications to the Assumed Warrants because of the triggers of the down-round provisions during February 2025 resulted in deemed dividends of $ million in the three months ended March 31, 2025 and an increase in the number of Assumed Warrants outstanding. The incremental values were measured using the Black Scholes valuation model with the following assumptions: risk free rates ranging from % to %, volatility ranging from % to %, terms of to days and expected dividend yield of $. On February 23, 2025, the remaining 264,898 Assumed Warrants with an exercise price of $3.855 per share expired per their terms.
Vector Warrants
In connection with the Vector Acquisition, which is more fully discussed in Note 5, on September 19, 2025, the Company issued Vector Warrants exercisable into shares of the Company’s Class A Common Stock at an exercise price of $0.00517 per share (subject to adjustment) valued at $. The Vector Warrants were immediately exercisable, subject to a beneficial ownership limitation of 9.99%, and expire on September 19, 2028. The value of the Vector Warrants was determined using the Black Scholes valuation model with the following assumptions: risk free rate of %, volatility of %, term of years and expected dividend yield of $.
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