DEF 14C: FOXO Technologies Plans Reverse Stock Split

FOXO Technologies intends to execute a reverse stock split to boost its stock price and attract institutional investors.

Summary

• FOXO Technologies Inc. plans a reverse stock split of its Class A Common Stock at a ratio between 1:10 and 1:500.
• The reverse split aims to increase the per-share stock price to meet OTCQB listing requirements, which require a sustained trading price of $0.01 or higher.
• The Board of Directors will determine the exact ratio and timing of the split, with the split to be completed before July 31, 2026.
• The reverse split will not change the number of authorized shares but will increase the number of authorized but unissued shares.
• A majority shareholder, Rennova Health, Inc., approved the reverse split on September 2, 2025.
• The reverse split cannot become effective until 20 days from the mailing date of the Definitive Information Statement.

Sentiment

Score: 5

Explanation: The announcement contains both positive and negative aspects. The reverse split aims to improve the stock's appeal to investors, but it also carries the risk of negative perception and further price decline.

Positives

• Aims to increase the per share stock price for a potential quotation on OTCQB.
• Intended to generate greater interest among professional investors and institutions.
• Anticipates greater liquidity and a stronger investor base.
• May reduce certain costs for the company.
• Increases the number of authorized but unissued shares of Common Stock, providing flexibility for future financings and corporate activities.

Negatives

• Reverse stock splits can be viewed negatively by investors, analysts, and other stock market participants.
• Stock price may decline back to pre-reverse split levels.
• The total market capitalization of the Common Stock after the Reverse Split may be lower than before the Reverse Split.
• Increases the number of stockholders who hold less than a round lot, or 100 shares, potentially increasing transaction costs for stockholders selling odd lots.
• Liquidity could be adversely affected by the reduced number of shares outstanding after the Reverse Split.

Risks

• The reverse split may not achieve the intended benefits, and the market price of the Common Stock may not increase.
• Other factors, such as financial results, market conditions, and market perception, may adversely affect the market price of the Common Stock.
• There is no assurance that the market price per share of Common Stock after the Reverse Split will increase in proportion to the reduction in the number of shares of Common Stock outstanding before the Reverse Split.

Future Outlook

The company anticipates that a higher stock price will generate greater interest among professional investors and institutions, leading to greater liquidity and a stronger investor base. The Board may issue additional shares of Common Stock in connection with future financings, employee and director benefit programs and other desirable corporate activities.

Management Comments

• The Board believes that effecting the Reverse Split is in the Company's and our stockholders best interests.
• The Board does not intend for this transaction to be the first step in a series of plans or proposals to effect a going private transaction within the meaning of Rule 13e-3 of the Exchange Act.
• The Board does not intend to issue any Common Stock or securities convertible into Common Stock except on terms that the Board deems to be in the best interests of us and our stockholders.

Industry Context

Reverse stock splits are often used by companies trading at low prices to regain compliance with exchange listing requirements or to improve investor perception. However, they can also signal financial distress or a lack of confidence in future growth.

Comparison to Industry Standards

• Many companies trading on the OTC Markets, such as MedMen Enterprises Inc. and Surge Battery Metals Inc., have used reverse stock splits to maintain listing compliance.
• Compared to other companies that have implemented reverse stock splits, the proposed range of 1:10 to 1:500 is relatively broad, providing the board with significant flexibility.
• Unlike some companies that combine reverse stock splits with a reduction in authorized shares, FOXO Technologies is maintaining its authorized share count, which could be seen as a positive or negative depending on future capital needs.

Stakeholder Impact

• Shareholders: The reverse split will reduce the number of shares they hold, potentially increasing the per-share value but also increasing transaction costs for small holdings.
• Employees: The reverse split may affect the value of stock options and equity-based compensation.
• Investors: The reverse split aims to attract institutional investors and improve market perception.
• Company: The reverse split may help the company meet listing requirements and reduce certain costs.

Next Steps

• The Board will determine the exact ratio for the reverse stock split.
• The Board will file a Certificate of Amendment to the Certificate of Incorporation with the Secretary of State of Delaware.
• The company will notify FINRA of the reverse split at least 10 days prior to the anticipated record date.
• The company will mail a letter of transmittal to each stockholder.

Key Dates

Recommendation

The reverse stock split introduces both opportunities and risks. While it aims to improve the stock's appeal to institutional investors and meet listing requirements, it also carries the risk of negative perception and further price decline. Given these uncertainties, a hold recommendation is appropriate.

Keywords

reverse stock split, FOXO Technologies, stock price, OTCQB, shareholder approval, common stock, Rennova Health