8-K: FOXO Technologies Secures Majority Stockholder Approval for Share Issuances and Reverse Stock Split to Maintain NYSE Listing

FOXO Technologies Inc. announced that its majority stockholder approved several share issuances related to preferred stock and convertible note conversions, along with a 1:1.99 reverse stock split, primarily to ensure compliance with NYSE American LLC Company Guide rules.

Summary

• On June 23, 2025, a stockholder holding approximately 82.08% of FOXO Technologies Inc.'s voting rights approved several key actions via written consent.
• The approvals are deemed necessary by the Company due to its small market capitalization and to comply with NYSE American LLC Company Guide Sections 713 and 711.
• Approved actions include the issuance of Class A Common Stock resulting from conversions of Series A, B, C, and D Cumulative Redeemable Preferred Stock, which may exceed 20% of outstanding shares.
• Approval was also granted for the issuance of Common Stock from conversions of convertible promissory notes and inducement shares, potentially exceeding 20% of outstanding shares.
• The exercise of rights under an Exchange Agreement with Smithline Family Trust II, potentially leading to over 20% share issuance, was approved.
• Issuances to J.H. Darbie & Co., Inc. for finders agreements, potentially exceeding 20% of outstanding shares, received approval.
• The issuance of 40,000 shares of Common Stock to Bret Barnes, a director, under an independent director agreement was approved.
• A proposal to amend the Company's Certificate of Incorporation to effect a reverse stock split at a ratio of 1:1.99, anytime before November 6, 2025, was approved, with the exact effective date at the Board's discretion.
• The Company filed a preliminary Information Statement on Schedule 14C on June 26, 2025, and the approved items will become effective 20 days after the mailing of the definitive Information Statement.

Sentiment

Score: 4

Explanation: The sentiment is slightly negative. While the approvals are positive for compliance, the underlying reasons (small market capitalization, need for reverse split, potential for significant dilution) indicate ongoing challenges for the company.

Positives

• The approvals by the majority stockholder ensure the Company can proceed with necessary share issuances and a reverse stock split, which are critical for maintaining compliance with NYSE American LLC listing requirements.
• Maintaining NYSE listing is crucial for liquidity and investor confidence.
• The majority stockholder's strong support (82.08% voting rights) indicates internal alignment on these strategic actions.

Negatives

• The explicit mention of 'small market capitalization' as a reason for these actions highlights the Company's current valuation challenges.
• The need for a reverse stock split often indicates a low share price, which can be perceived negatively by investors.
• The potential for significant dilution from the various share issuances (many 'may result in total issuances of securities of over 20% of the issued and outstanding shares') could put downward pressure on the stock price.

Risks

• Potential dilution for existing shareholders due to the various share issuances resulting from preferred stock and convertible note conversions.
• Risk of delisting if the Company fails to maintain NYSE American LLC Company Guide compliance, despite these approvals.
• Uncertainty regarding the exact timing and market impact of the 1:1.99 reverse stock split, which could lead to volatility.
• The 'small market capitalization' indicates inherent financial fragility and potential challenges in attracting institutional investment.

Future Outlook

The Company plans to mail the definitive Information Statement on Schedule 14C to its stockholders, after which the approved items will become effective 20 days later. The Board of Directors has sole discretion to determine the exact effective date of the 1:1.99 reverse stock split, which can occur anytime before November 6, 2025.

Management Comments

• "The Company determined that these actions and approvals are necessary because of the small market capitalization of the Company, and while certain transactions may not need the approvals described, it is possible that certain transactions, including separate transactions that may be aggregated by NYSE, will have a right to receive Class A Common Stock in excess of 20% of the issued and outstanding number of shares at the time the transaction was entered into."

Industry Context

This filing reflects common actions taken by publicly traded companies, particularly those with low stock prices or small market capitalizations, to maintain compliance with exchange listing standards. Reverse stock splits are frequently used to increase share price to meet minimum bid requirements, while shareholder approvals for large share issuances are standard for compliance with exchange rules designed to protect existing shareholders from excessive dilution without their consent.

Comparison to Industry Standards

• The 20% issuance threshold requiring shareholder approval (NYSE American LLC Company Guide Section 713) is a common standard across major U.S. exchanges (e.g., Nasdaq also has similar rules), designed to prevent significant dilution without investor consent.
• Reverse stock splits, such as the 1:1.99 ratio proposed by FOXO, are a standard mechanism employed by companies like Sundial Growers (now SNDL Inc.) or Ideanomics Inc. when facing minimum bid price deficiencies to avoid delisting. The specific ratio is often chosen to achieve a target price above the minimum threshold.
• Issuances to directors (Section 711) are also standard and require specific approvals to ensure fair compensation and prevent conflicts of interest, similar to practices seen in companies across various sectors when compensating board members with equity.

Corporate Governance

Related Party Transactions

• Approval for the issuance of shares of Common Stock to Smithline Family Trust II as a result of exercises of rights under the Exchange Agreement dated May 28, 2024, as amended June 10, 2025.
• Approval for the issuance of 40,000 shares of Common Stock to Bret Barnes, a director of the Company, as a result of an independent director agreement entered into on July 24, 2024.

Stakeholder Impact

• Shareholders: Potential for significant dilution from the various share issuances, but also benefit from the Company's efforts to maintain its NYSE listing, which preserves market access and liquidity.
• Management/Board: The approvals provide the necessary authority to execute strategic actions aimed at improving the Company's market position and compliance.
• Creditors/Noteholders: The ability to convert notes into common stock as approved provides a clear path for their investment terms to be met.

Next Steps

• The Company will mail the definitive Information Statement on Schedule 14C to its stockholders of record.
• The approved items will become effective 20 days after the mailing of the definitive Information Statement.
• The Company's Board of Directors will determine the exact effective date for the 1:1.99 reverse stock split, which must occur before November 6, 2025.

Key Dates

Recommendation

Keywords

FOXO Technologies, SEC filing, 8-K, reverse stock split, share issuance, preferred stock conversion, convertible notes, NYSE compliance, corporate governance, stockholder approval, dilution, market capitalization