Item 2.01 |
Completion of Acquisition or Disposition of Assets. |
The
disclosure set forth in the “Introductory Note” above is incorporated into this Item 2.01 by reference. The material
provisions of the Merger Agreement are described in the Proxy Statement, in the section entitled “The Business Combination Proposal (Proposal 2)—The Merger Agreement” beginning on page 127 of the Proxy Statement, which is incorporated by reference herein.
The
Business Combination was approved by Delwinds stockholders at Delwinds’ special meeting of the stockholders held on September
14, 2022 (the “Special Meeting”). At
the Special Meeting, 11,725,545 shares of Delwinds common stock were voted in favor of the proposal to approve the Business Combination,
1,037,959 shares of Delwinds common stock were voted against the proposal, and holders of 98,844 shares of Delwinds common stock abstained
from voting on the proposal.
Holders of 7,967,679 shares of Delwinds Class
A common stock properly exercised their right to have such shares redeemed for a pro rata portion of the trust account holding the proceeds
from Delwinds’ initial public offering, calculated as of two business days prior to the Closing, or approximately $10.14
per share and $80,780,418 in the aggregate.
As consideration for the Merger, an aggregate
of 24,718,705 shares of Class A Common Stock were issued to FOXO’s securityholders.
As
of the Closing Date and immediately following the completion of the Business Combination, the Company had the following securities outstanding:
|
● |
33,862,354 shares of Class A Common Stock; |
|
● |
2,965,500 stock options
to purchase shares of Class A Common Stock, at a weighted average exercise price of approximately $7.13 per share; |
|
● |
1,905,853 warrants, each exercisable for one share of Class A Common
Stock at a price of $6.21 per share (the “Assumed Warrants”); |
|
● |
10,062,500 public warrants,
each exercisable for one share of Class A Common Stock at a price of $11.50 per share (the “Public Warrants”); and |
|
● |
316,250 private placement
warrants, each exercisable for one share of Class A Common Stock at a price of $11.50 per share (the “Private Warrants”). |
As of the Closing Date, the Sponsor forfeited 600,000 shares of Class
B Common Stock and assigned all of its remaining securities of the Company to certain assignees pursuant to securities assignment and
joinder agreements, pursuant to which such assignees became parties to the Existing Letter Agreement, as amended by the Insider Letter
Amendment, the Registration Rights Agreement, dated as of December 10, 2020, and Warrant Agreement, dated as of December 10, 2020, as
applicable.
The Company’s Class A Common Stock commenced trading on the NYSE
American (“NYSE American”) under the symbol “FOXO” on September 16, 2022. The Public Warrants will continue to
trade on the New York Stock Exchange under the symbol “FOXO WS”, and it is anticipated that trading of such warrants will
move to the NYSE American exchange following completion of certain NYSE American procedures. Delwinds’ publicly traded units automatically
separated into their component securities upon the Closing and, as a result, such units no longer trade as a separate security and were
delisted from the New York Stock Exchange.
FORM
10 INFORMATION
Prior
to the Closing, the Company was a shell company (as defined in Rule 12b-2 of the Securities Exchange Act of 1934, as amended (the “Exchange
Act”)) with no operations, formed as a vehicle to effect a business combination with one or more operating businesses. After the
Closing, the Company became a holding company whose only assets consist of equity interests in FOXO. Accordingly, pursuant to Item 2.01(f)
of Form 8-K, the Company is providing below the information that would be included in a Form 10 if it were to file a Form 10. Please
note that the information provided below relates to the combined company after the consummation of the Merger, unless otherwise specifically
indicated or the context otherwise requires.
Cautionary
Note Regarding Forward-Looking Statements
This
Current Report on Form 8-K and documents incorporated by reference herein contain forward-looking statements within the meaning of Section
27A of the Securities Act and Section 21E of the Exchange Act. All statements, other than statements of present or historical fact included
in or incorporated by reference in this Current Report on Form 8-K, regarding the Company’s future financial performance, as well
as the Company’s strategy, future operations, future operating results, financial position, estimated revenues, and losses, projected
costs, prospects, plans and objectives of management are forward-looking statements. In some cases, you can identify forward-looking
statements by terminology such as “plan,” “believe,” “expect,” “anticipate,” “intend,”
“outlook,” “estimate,” “forecast,” “project,” “continue,” “could,”
“may,” “might,” “possible,” “potential,” “predict,” “should,”
“would,” “will,” “seek,” “target,” and other similar words and expressions, but the absence
of these words does not mean that a statement is not forward-looking.
The
forward-looking statements are based on information available as of the date of this Current Report on Form 8-K and on the current expectations,
forecasts and assumptions of the management of the Company, involve a number of judgments, risks and uncertainties and are inherently
subject to changes in circumstances and their potential effects and speak only as of the date of such statements. There can be no assurance
that future developments will be those that have been anticipated. These forward-looking statements involve a number of risks, uncertainties
or other assumptions that may cause actual results or performance to be materially different from those expressed, contemplated or implied
by these forward-looking statements. The Company cautions you that these forward-looking statements are subject to numerous risk and
uncertainties, most of which are all difficult to predict and many of which are beyond the control of the Company.
In
addition, the Company cautions you that the forward-looking statements regarding the Company, which are included in this Current Report
on Form 8-K, are subject to the following factors:
|
● |
actual results may vary
from expectations regarding (and the Company’s ability to meet expectations regarding) the Company’s strategies and future
performance, including the Company’s future business plans or objectives and its ability to invest in growth initiatives; |
|
● |
the Company has a history
of losses and may not achieve or maintain profitability in the future; |
|
● |
the Company faces significant
competition and expects to face increasing competition in many aspects of its business, which could cause our operating results to
suffer; |
|
● |
the Company intends to
apply the relatively new field of epigenetics to life insurance underwriting, which it cannot guarantee will produce the results
it seeks or needs for its business model; |
|
● |
if the Company fails to
grow its business as anticipated, revenues, gross margin and operating margin will be adversely affected; |
|
● |
the effects of the COVID-19
pandemic on the Company’s business and the actions the Company may take in response thereto; |
|
● |
expectations regarding
the time during which the Company will be an “emerging growth company” under the JOBS Act; and |
|
● |
other risks and uncertainties
indicated in the Proxy Statement, including those set forth under the section entitled “Risk Factors” beginning
on page 56 of the Proxy Statement, which are incorporated herein by reference. |
Business
and Properties
The
business of the Company following the Business Combination is described in the Proxy Statement in the section entitled “Information About FOXO” beginning on page 207 of the Proxy Statement, which is incorporated herein by reference.
Risk
Factors
The
risks associated with the Company’s business are described in the Proxy Statement in the section titled “Risk Factors”
beginning on page 56 of the Proxy Statement, which is incorporated herein by reference.
Unaudited
Pro Forma Condensed Combined Financial Information
The
unaudited pro forma condensed combined financial information of the Company as of and for the three months ended June 30, 2022 and for
the year ended December 31, 2021 is set forth in Exhibit 99.1 hereto and is incorporated by reference herein.
Management’s
Discussion and Analysis of Financial Condition and Results of Operations
Management’s
discussion and analysis of the financial condition and results of operation of FOXO prior to the Business Combination is described in
the Proxy Statement in the section entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations of FOXO” beginning on page 230 of the Proxy Statement, which is incorporated herein by reference.
Executive
Compensation
Detailed
information regarding the compensation of FOXO’s named executive officers for the years ended December 31, 2021 and 2020 is
described in the Proxy Statement in the section titled “Executive Compensation of FOXO” beginning on page 276 of the
Proxy Statement, which is incorporated by reference herein.
Detailed
information regarding the compensation of FOXO’s non-employee directors for the year ended December 31, 2021 is described
in the Proxy Statement in the section titled “Director Compensation” beginning on page 282 of the Proxy Statement,
which is incorporated by reference herein.
Executive
Officer and Director Compensation Following the Business Combination
The
Company is still in the process of negotiating, approving, and implementing new employment arrangements with each of its named executive
officers following the Closing, which will govern the terms of their continuing employment with the Company.
Certain
Relationships and Related Transactions
Certain
relationships and related party transactions are described in the Proxy Statement in the section titled “Certain Relationships and Related Person Transactions” beginning on page 283 of the Proxy Statement, which is incorporated herein by reference.
Security
Ownership of Certain Beneficial Owners and Management
The
following table and accompanying footnotes set forth information with respect to the beneficial ownership of the Company’s Common
Stock as of September 15, 2022:
|
● |
each
person known by the Company to be the beneficial owner of more than 5% of outstanding Common Stock on such date; |
|
● |
each
current executive officer of the Company and each member of the Company’s board of directors; and |
|
● |
all
of the Company’s executive officers and directors as a group. |
Beneficial
ownership is determined according to the rules of the SEC, which generally provide that a person has beneficial ownership of a security
if he, she or it possesses sole or shared voting or investment power over that security, including options and warrants that are currently
exercisable or exercisable within 60 days.
Unless
otherwise noted in the footnotes to the following table, and subject to applicable community property laws, the Company believes that
the persons and entities named in the table below have sole voting and investment power with respect to their beneficially owned securities.
Name and Address of Beneficial Owner | |
Number of
Shares of Class A
Common Stock | | |
% of Class | |
Directors and Executive Officers: | |
| | |
| |
Jon Sabes (1) | |
| 6,030,330 | | |
| 16.2 | % |
Andrew Poole (2) | |
| 1,169,162 | | |
| 3.1 | % |
Murdoc Khaleghi (3) | |
| 146,820 | | |
| * | |
Bret Barnes (4) | |
| 50,000 | | |
| * | |
Brian Chen (5) | |
| 1,430,417 | | |
| 3.8 | % |
Tyler Danielson (6) | |
| 814,313 | | |
| 2.2 | % |
Erin Sharoni (7) | |
| 786,622 | | |
| 2.1 | % |
Robby Potashnick (8) | |
| 559,407 | | |
| 1.5 | % |
Michael Will (9) | |
| 542,753 | | |
| 1.5 | % |
All directors and executive officers as a group (9 individuals) | |
| 11,529,824 | | |
| 31.0 | % |
| |
| | | |
| | |
Five Percent Holders: | |
| | | |
| | |
GWG Holdings, Inc. (10) | |
| 4,646,698 | | |
| 12.5 | % |
Cinctive Global Master Fund Ltd. (11) | |
| 1,970,226 | | |
| 5.3 | % |
* |
less than 1%. |
(1) |
Includes 181,511 shares of Class A Common Stock underlying Assumed Warrants held by JK-JBM Family Investment LLC of which Mr. Sabes exercises voting control, 3,507,000 shares of Class A Common Stock held by Mr. Sabes that are subject to forfeiture pursuant to the Management Contingent Share Plan, 807,465 shares of Class A Common Stock underlying vested options and options expected to vest by November 15, 2022 held by Mr. Sabes and 1,161,674 shares of Class A Common Stock held by FOXO Management, LLC of which Mr. Sabes exercises voting control. |
(2) |
Includes 730,142 shares of Class A Common Stock held by Mr. Poole, 42,500 shares of Class A Common Stock underlying Private Warrants held by Mr. Poole and 396,520 shares of Class A Common Stock held in irrevocable trusts for the benefit of Mr. Poole’s children, of which Mr. Poole exercises voting control. |
(3) |
Includes 130,000 shares of Class A Common Stock held by Dr. Khaleghi that are subject to forfeiture pursuant to the Management Contingent Share Plan and 16,820 shares of Class A Common Stock underlying vested options and options expected to vest by November 15, 2022 held by Dr. Khaleghi. |
(4) |
Includes 50,000 shares of Class A Common Stock held by Mr. Barnes that are subject to forfeiture pursuant to the Management Contingent Share Plan. |
(5) |
Includes 760,000 shares of Class A Common Stock held by Mr. Chen that are subject to forfeiture pursuant to the Management Contingent Share Plan and 670,417 shares of Class A Common Stock underlying vested options and options expected to vest by November 15, 2022 held by Mr. Chen. |
(6) |
Includes 760,000 shares of Class A Common Stock held by Mr. Danielson that are subject to forfeiture pursuant to the Management Contingent Share Plan and 36,888 shares of Class A Common Stock underlying vested options and options expected to vest by November 15, 2022 held by Mr. Danielson. |
(7) |
Includes 760,000 shares of Class A Common Stock held by Ms. Sharoni that are subject to forfeiture pursuant to the Management Contingent Share Plan and 26,622 shares of Class A Common Stock underlying vested options and options expected to vest by November 15, 2022 held by Ms. Sharoni. |
(8) |
Includes 510,000 shares of Class A Common Stock held by Mr. Potashnick that are subject to forfeiture pursuant to the Management Contingent Share Plan and 49,407 shares of Class A Common Stock underlying vested options and options expected to vest by November 15, 2022 held by Mr. Potashnick. |
(9) |
Includes 510,000 shares of Class A Common Stock held by Mr. Will that are subject to forfeiture pursuant to the Management Contingent Share Plan and 32,753 shares of Class A Common Stock underlying vested options and options expected to vest by November 15, 2022 held by Mr. Will. |
(10) |
The business address for GWG Holdings, Inc. is 325 North St. Paul Street, Suite 2650, Dallas, TX 75201. |
(11) |
Cinctive Capital Management LP serves as the investment advisor to Cinctive Global Master Fund Ltd. Lawrence Sapanski and Richard Schimel, Co-CIOs of Cinctive Capital Management LP, can be deemed to share voting control and investment power over shares beneficially owned by Cinctive Global Master Fund Ltd. The business address for Cinctive Global Master Fund Ltd. is Maples Corporate Services Limited, Ugland House, South Church Street. Grand Cayman, Cayman Islands, KY1-1104. |
Directors
and Executive Officers
The
Company’s directors and executive officers and the composition of the Board of Directors are described in the Proxy Statement in
the section entitled “Management After the Business Combination—Executive Officers and Directors After the Business Combination”
beginning on page 269 of the Proxy Statement and that information is incorporated herein by reference.
Director
Independence
A
description of the independence of the Company’s directors is described in the Proxy Statement in the section entitled “Management After the Business Combination—Director Independence” beginning on page 271 of the Proxy Statement and that information
is incorporated herein by reference.
Committees
of the Board of Directors
A
description of the Company’s board committees is described in the Proxy Statement in the section entitled “Management After the Business Combination—Board Committees” beginning on page 272 of the Proxy Statement and that information is
incorporated herein by reference.
Director
Compensation
A
description of the Company’s Non-Employee Director Compensation Policy is described in the Proxy Statement in the section entitled
“Director Compensation—Post-Combination Director Compensation” beginning on page 282 of the Proxy Statement
and that information is incorporated herein by reference.
Legal
Proceedings
The
description of legal proceedings of Delwinds is included in the Proxy Statement in the section entitled “Information About Delwinds—Legal Proceedings” beginning on page 195 of the Proxy Statement and that information is incorporated herein by reference.
The
description of legal proceedings of FOXO is included in the Proxy Statement in the section entitled “Information About FOXO—Legal Proceedings” beginning on page 229 of the Proxy Statement and that information is incorporated herein by reference.
Recent
Sales of Unregistered Securities
Reference
is made to the disclosure set forth under Item 3.02 of this Current Report on Form 8-K, which is incorporated herein by reference.
Description
of Registrant’s Securities
A
description of the Company’s securities is in the Proxy Statement in the section titled “Description of Securities of the Combined Company” beginning on page 246 of the Proxy Statement, which is incorporated herein by reference.
Indemnification
of Directors and Officers
Following the consummation of the Merger, the
Company plans to enter into indemnification agreements with each of its directors and executive officers. These indemnification agreements
will provide the directors and executive officers with contractual rights to indemnification for certain expenses, including attorneys’
fees, judgments, fines and settlement amounts incurred by a director or officer in any action or proceeding arising out of their services
as one of the Company’s directors or officers or any other company or enterprise to which the person provides services at the Company’s
request. The foregoing description of the Indemnification Agreements is a summary only and is qualified in its entirety by reference to
the form of Indemnification Agreement, a copy of which is attached as Exhibit 10.17 to this Current Report on Form 8-K and is incorporated
herein by reference.