Foxo Technologies, a Minneapolis-based biotech startup, is facing a potential bankruptcy situation unless it can secure new financing quickly. The company made a filing with the U.S. Securities and Exchange Commission, stating that without the necessary financing, it will be unable to fund its operations. In addition to the risk of bankruptcy, Foxo is also considering the possibility of dissolving or liquidating assets if necessary.
To reduce operating expenses, Foxo Technologies is implementing staff reductions, with plans to cut its workforce from 22 to 15 employees. The company went public in September 2022 through a merger with a Texas-based special purpose acquisition company. However, its financial performance since then has been less than desirable.
Foxo Technologies developed a saliva test designed to identify biomarkers related to longevity, intending to market the data to life insurance companies. However, the company reported a significant decline in revenue for the first quarter of this year compared to the previous year.
In May, first-quarter revenue stood at $13,000, down from $40,000 in the same quarter of the previous year. Moreover, the company reported a net loss of $7.6 million for the quarter, compared to a net loss of $12.3 million in the same period last year.
Since going public, Foxo has faced internal challenges, including the ousting of its former CEO, Jon Sabes, and his brother, Steven Sabes, who served as the chief operating officer. In addition, the company is under investigation by the SEC, which is seeking documents related to the Sabes’ exit from the company.
The uncertain financial situation and staff reductions have cast a shadow on Foxo Technologies’ stock performance. While the company’s stock opened at $9.15 a share on its first day of trading, it has significantly declined in value since then, closing at 15 cents a share on Friday and 14 cents a share on Monday. As of now, company officials have not responded to requests for comment on the matter.
