Foxo Technologies has terminated Jon Sabes, its founder, chief executive and chairman of the board, two months after going public.
Foxo Technologies, Minnesota's newest public company, ousts its founder and CEO
The board terminated Jon Sabes and his brother the same day the company delayed its quarterly financial report.
November 16, 2022 at 9:20PM
The Minneapolis-based company's decision, announced Tuesday, is one in a series of sudden executive changes and setbacks. It also terminated chief operating officer Steven Sabes, the CEO's brother, and announced the recent resignation of chief product officer Erin Sharoni.
On Monday, Foxo postponed the release of its third quarter financial report, scheduled for later that day.
Foxo went public in September after completing a merger with Houston-based Delwinds Insurance Acquisition Corp., a special purpose acquisition company (SPAC). Delwinds' stock was listed on the New York Stock Exchange up until the merger, trading at more than $8 a share the day it combined with Foxo.
Since its public debut, Foxo's stock has trended downward, trading at less than $1 a share since October 18. On Tuesday, it closed at 49 cents, down 12.8% on the news of the management changes. The stock closed at less than 46 cents a share on Wednesday.
Foxo's main product is a saliva test used to gather epigenetic and biological aging information. That "longevity research" material can be sold to life insurance companies that are underwriting policies.
On Wednesday, Connecticut-based Kons Law Firm issued a statement inviting shareholders to join a proposed class action lawsuit over investment losses.
Foxo is still a startup. For 2021, it posted a net loss of $38.5 million.
The company's board has tapped chief technology officer Tyler Danielson as its interim CEO and launched a search for its next chief executive.
"I look forward to working with the board and management team to ensure a smooth transition, and I am excited to continue advancing our goal of making healthy longevity fundamental to the insurance industry," Danielson said in a statement.
The board has appointed Bret Barnes, a current director, as the new chairman of the board.
A company filing with the U.S. Securities and Exchange Commission indicated that Jon Sabes will remain on the board of directors, though the company did not respond Wednesday to a request for comment.
The filing also states that under the former CEO's employment agreement it may have an obligation to pay Jon Sabes a severance package equal to 3 years of his base salary. Per the filing, "the company is currently reviewing its obligations to Jon Sabes pursuant to such employment agreement."
Previous financial filings indicated that Jon Sabes' base salary in 2021 was $480,000.
SPACs are an alternative way for companies to go public. They are shell companies with no business operations that raise millions through initial public offerings. The SPAC then acquires or merges with a private, existing company. Through that process, the target company becomes public.
While 2021 was a frenzied year for new listings through both traditional and SPAC structures, overall market volatility has significantly slowed the IPO market this year.
The number of SPACs going public this year is down 86%, according to data from New York-based SPAC Insider.
Eight Minnesota companies closed IPOs last year, but Foxo has been the state's only new public company so far this year.
The funding is expected to give more than 5,000 Minnesotans, especially in rural areas, high-speed broadband access across the state and help at least 139 businesses and 368 farms.
