FOXO Technologies : Non Reliance on Previously Issued Financial Report Form 8 K

Item 4.02 Non-Reliance on Previously Issued Financial Statements or a Related Audit Report or Completed Interim Review.

On May 30, 2024, the board of directors (the "Board") of the Company concluded that the previously issued unaudited condensed consolidated financial statements contained in the Company's Quarterly Report on Form 10-Q for the three and nine months ended September 30, 2023 (the "Original 10-Q") should no longer be relied upon because of errors in those financial statements relating to the Company's accounting for outstanding common stock warrants. In connection with the preparation of the Company's Annual Report on Form 10-K for the year ended December 31, 2023, the Company identified errors relating to the accounting for outstanding common stock warrants described below.

In connection with the preparation of the Company's Annual Report on Form 10-K for the year ended December 31, 2023, the Company has determined that the down round provision features of common stock warrants that the Company assumed in a business combination that closed on September 22, 2022 (the "Assumed Warrants") had been triggered on September 19, 2023. The triggering event occurred as a result of the issuance of rights to receive shares (the "Rights") under the terms of a Shares for Services Agreement (the "SSA Agreement") dated September 19, 2023. The SSA Agreement was filed as Exhibit 10.1 to the Company's Current Report on Form 8-K filed with the Commission on September 19, 2023. Under Section 3(b)(i) of the Form of Assumed Warrants, the Rights constituted a dilutive issuance and, as such, required the Company to reduce the per share exercise price of the outstanding Assumed Warrants and proportionally increase the number of Assumed Warrants outstanding.

In accordance with Accounting Standard Update ("ASU") 2017-11, "Earnings Per Share (Topic 260) Distinguishing Liabilities from Equity (Topic 480) Derivatives and Hedging (Topic 815)," as amended, when determining whether certain financial instruments should be classified as liabilities or equity instruments, a down round feature no longer precludes equity classification when assessing whether the instrument is indexed to an entity's own stock. The amendments also clarify existing disclosure requirements for equity-classified instruments. As a result, a freestanding equity-linked financial instrument (or embedded conversion option) no longer would be accounted for as a derivative liability at fair value as a result of the existence of a down round feature. For freestanding equity classified financial instruments, the amendments require entities that present earnings (loss) per share (EPS) in accordance with Topic 260 to recognize the effect of the down round feature when it is triggered. That effect is treated as a deemed dividend and as a reduction of income (or an increase in the net loss) available to common stockholders in basic and diluted EPS.

In May 2021, the Financial Accounting Standards Board (the "FASB") issued ASU 2021-04, "Earnings Per Share (Topic 260), Debt-Modifications and Extinguishments (Subtopic 470-50), Compensation-Stock Compensation (Topic 718), and Derivatives and Hedging-Contracts in Entity's Own Equity (Subtopic 815-40), Issuer's Accounting for Certain Modifications or Exchanges of Freestanding Equity-Classified Written Call Options." The FASB issued this update to clarify and reduce diversity in an issuer's accounting for modifications or exchanges of freestanding equity-classified written call options (for example, warrants) that remain equity classified after modification or exchange. The guidance clarifies whether an issuer should account for a modification or an exchange of a freestanding equity-classified written call option that remains equity classified after modification or exchange as (1) an adjustment to equity (that is, deemed dividends) and, if so, the related earnings per share (EPS) effects, if any, or (2) an expense and, if so, the manner and pattern of recognition. The deemed dividend represents the increase in the fair value of the derivative as a result of the modification.