Related Party Transactions

12 Months Ended

Dec. 31, 2023

Related Party Transactions [Abstract]

RELATED PARTY TRANSACTIONS

Note 6 RELATED PARTY TRANSACTIONS

Office Space

The Company subleased its office space from an investor through May of 2022. The investor paid all lease costs, including common area maintenance and other property management fees, on the Company’s behalf. These payments were treated as additional capital contributions.

Bridge Debentures

Prior to the conversion of the Bridge Debentures to shares of FOXO Technologies Operating Company Class A Common Stock and subsequent exchange for the Company’s Class A Common Stock at Closing of the Business Combination, there were related party borrowings which are described in more detail in Note 5.

Promissory Note

On June 6, 2022, the Company executed a promissory note pursuant to which it loaned Delwinds an aggregate principal amount of $1,160, which represented $0.035 per share of Delwinds Class A common stock that was not redeemed in connection with the extension of the Special Purpose Acquisition Company’s (“SPAC’s’) termination date from June 15, 2022 to September 15, 2022. The Company loaned Delwinds $387 per month in June 2022, July 2022, and August 2022 prior to the Closing of the Business Combination. The outstanding balance on the promissory note eliminated upon consolidation with the Closing of the Business Combination.

Sponsor Loan

In order to finance transaction costs in connection with a Business Combination, the Sponsor or an affiliate of the Sponsor loaned Delwinds funds for working capital. As of December 31, 2023, $500 was remaining due to the Sponsor and is shown as a related parties promissory notes/payable on the consolidated balance sheet.

Demand Promissory Notes

On September 19, 2023, the Company obtained a $247 loan from Andrew J. Poole, a former director of the Company (the “Loan”), to be used to pay for directors’ and officers’ insurance through November 2023. The Company issued to Mr. Poole a demand promissory note for $247 evidencing the Loan (the “Note”). The Note does not bear interest. The Note is due on demand, and in the absence of any demand, the Note will be due one year from the issuance date. The Note may be prepaid, in whole or in part, without penalty at any time.

On October 2, 2023, the Company obtained a $43 loan from Mr. Poole, (the “Additional Loan”), to be used to pay for the legal fees of Mitchell Silberberg & Knupp LLP through October 2023. The Company issued to Mr. Poole a demand promissory note for $43 evidencing the Additional Loan (the “Additional Note”). The Additional Loan accrues interest in arrears at a rate of 13.25% per annum. The principal sum of the Note is due on demand, and in the absence of any demand, one year from the issuance date. The Note may be prepaid, in whole or in part, without penalty at any time.

The promissory notes discussed above are shown as related parties promissory notes/payable on the consolidated balance sheets.

Management, License and Maintenance Fees

As of December 31, 2023, the Company owed KR8 AI Inc. $595 for management, license and maintenance fees under the terms of the Letter Agreement, which is more fully discussed in Note 1. The Company’s Interim CEO and Interim CFO each are equity owners of the KR8 AI Inc. The $595 is shown as a related parties promissory notes/payable on the December 31, 2023 consolidated balance sheet.

Consulting Agreement

In April 2022, the Company executed a consulting agreement (the “Consulting Agreement”) with an individual (the “Consultant”) considered to be a related party of the Company as a result of his investment in the 2021 Bridge Debentures. The agreement, which expired in April 2023, had a minimum term of twelve months, over which the Consultant was to provide services that included, but not limited to, advisory services relating to the implementation and completion of the Business Combination. Following the execution of the agreement, as compensation for such services to be rendered as well as related expenses over the term of the contract, the Consultant was paid a cash fee of $1,425. The Consulting Agreement also called for the payment of an equity fee as compensation for such services. The Company issued 1,500,000 shares of Legacy FOXO Class A Common Stock to the Consultant during the second quarter of 2022 to satisfy the equity fee that converted into 87,126 shares of the Company’s Class A Common Stock. The Company has determined that all compensation costs related to the Consulting Agreement, including both cash fees and the equity fee, represent remuneration for services to be rendered evenly over the contract term. Thus, all such costs were initially recorded at fair value as prepaid consulting fees in the consolidated balance sheets and were being recognized as selling, general and administrative expenses in the consolidated statements of operations on a straight-line basis over the term of the contract. For the years ended December 31, 2023 and 2022, the Company recognized expenses of $2,676 and $5,649, respectively, related to the Consulting Agreement.

Contractor Agreement

In October 2021, Legacy FOXO entered into a Contractor Agreement with Dr. Murdoc Khaleghi, one of its former directors, under which Dr. Khaleghi served as FOXO’s Chief Medical Officer. The Company paid Dr. Khaleghi $99 for the year ended December 31, 2022. Additionally, Dr. Khaleghi received 80,000 shares of the Company’s Class A Common Stock under the Management Contingent Share Plan related to his service under the Contractor Agreement with the Company recognizing $29 of expense during the year ended December 31, 2022. During the fourth quarter of 2022, Dr. Khaleghi and the Company paused services and payments under this agreement.

Board and Executive Departures:

In addition to Dr. Khaleghi who resigned in 2022, the following Board members and executive officers resigned in 2023:

Mr. Tyler Danielson resigned as Interim Chief Executive Officer on September 14, 2023;

Mr. Robert Potashnick resigned as Chief Financial Officer effective September 13, 2023; and 

Andrew Poole resigned as director on November 21, 2023.

Board and Executive Appointments:

Mark White was appointed on September 19, 2023 as Interim Chief Executive Officer and as a member of the board of directors.

Martin Ward was appointed on September 19, 2023 as Interim Chief Financial Officer

Subsequent to December 31, 2023, the Company entered into a related party license agreement and appointed a new member to its board of directors as more fully discussed in Note 17.

The terms of the foregoing activities, and those discussed in Note 17, are not necessarily indicative of those that would have been agreed to with unrelated parties for similar transactions.