RIGHT-OF-USE LEASE ASSET AND LIABILITY

6 Months Ended

Jun. 30, 2024

Right-of-use Lease Asset And Liability

RIGHT-OF-USE LEASE ASSET AND LIABILITY

Note 11 RIGHT-OF-USE LEASE ASSET AND LIABILITY

As discussed in Note 5, FOXO leases facilities for its Myrtle operations under an operating lease with RHI. For operating leases with terms greater than 12 months, including annual options that are expected to be renewed, FOXO records the related right-of-use asset and right-of-use lease liability at the present value of lease payments over the term. FOXO does not separate lease and non-lease components of contracts.

FOXO uses an estimated borrowing interest rate at lease commencement as its interest rate, as its operating lease does not provide a readily determinable implicit interest rate.

The following table presents FOXO’s lease-related asset and liability at June 30, 2024 and December 31, 2023:

	Balance Sheet Classification	June 30, 2024			December 31, 2023
Assets:
Operating lease	Right-of-use operating lease asset	$	1,458		$	-
Liabilities:
Current:
Operating lease	Right-of-use operating lease liability	$	110		$	-
Noncurrent:
Operating lease	Right-of-use operating lease liability		1,348			-
Total right-of-use lease liability		$	1,458		$	-
Remaining term of operating lease, including option periods expected to renew			5.9 years			n/a
Interest rate			22.0	%		n/a

The following table presents certain information related to lease expense for the right-of-use operating lease for the three and six months ended June 30, 2024 and 2023:

	Three-Months Ended				Six-Months Ended
	June 30,				June 30,
	2024		2023		2024		2023
Right-of-use operating lease amortization (1)	$	4	$	-	$	4	$	-
Right-of-use operating lease interest expense (2)		15		-		15		-

The following table presents supplemental cash flow information for the six months ended June 30, 2024 and 2023:

	Six Months Ended June 30, 2024		Six Months Ended June 30, 2023
Operating cash flows for right-of-use operating lease	$	-	$	-

(1)	Expense is included in selling, general and administrative expenses in the unaudited condensed consolidated statement of operations.
(2)	Expense is included in interest expense in the unaudited condensed consolidated statements of operations.

Aggregate future minimum lease payments under the right-of-use operating lease are as follows:

	Right-of-Use Operating Lease
Twelve months ending:
July 1, 2024 to June 30, 2025	$	421
July 1, 2025 to June 30, 2026		433
July 1, 2026 to June 30, 2027		446
July 1, 2027 to June 30, 2028		460
July 1, 2028 to June 30, 2029		473
Thereafter		464
Total		2,697
Less interest		(1,239	)
Present value of minimum lease payments		1,458
Less current portion of right-of-use lease liability		(110	)
Right-of-use lease liability, net of current portion	$	1,348