Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2024 | May 14, 2024 | |
Document and Entity Information | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Mar. 31, 2024 | |
Document Transition Report | false | |
Entity File Number | 001-34785 | |
Entity Registrant Name | XWELL, Inc. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 20-4988129 | |
Entity Address, Address Line One | 254 West 31st Street | |
Entity Address, Address Line Two | 11th Floor | |
Entity Address, City or Town | New York | |
Entity Address, State or Province | NY | |
Entity Address, Postal Zip Code | 10001 | |
City Area Code | 212 | |
Local Phone Number | 750-9595 | |
Title of 12(b) Security | Common Stock, par value $0.01 per share | |
Trading Symbol | XWEL | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 4,183,435 | |
Entity Central Index Key | 0001410428 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2024 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | false |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Current assets | ||
Cash and cash equivalents | $ 4,317 | $ 8,437 |
Marketable securities | 14,784 | 14,613 |
Accounts receivable | 2,900 | 1,667 |
Inventory | 834 | 900 |
Other current assets | 1,621 | 949 |
Total current assets | 24,456 | 26,566 |
Restricted cash | 751 | 751 |
Property and equipment, net | 2,139 | 2,454 |
Intangible assets, net | 1,264 | 1,353 |
Operating lease right of use assets, net | 5,651 | 4,656 |
Goodwill | 1,431 | 1,371 |
Other assets | 1,785 | 1,842 |
Total assets | 37,477 | 38,993 |
Current liabilities | ||
Accounts payable | 2,017 | 1,099 |
Accrued expenses and other current liabilities | 3,695 | 4,968 |
Current portion of operating lease liabilities | 2,585 | 2,402 |
Deferred revenue | 890 | 861 |
Total current liabilities | 9,187 | 9,330 |
Long-term liabilities | ||
Operating lease liabilities | 9,525 | 8,692 |
Total liabilities | 18,712 | 18,022 |
Commitments and contingencies (see Note 13) | ||
Equity | ||
Common Stock, $0.01 par value per share, 150,000,000 shares authorized; 4,182,617 and 4,179,631 shares issued and outstanding as of March 31, 2024 and December 31, 2023, respectively | 42 | 42 |
Additional paid-in capital | 470,996 | 470,737 |
Accumulated deficit | (458,365) | (455,853) |
Accumulated other comprehensive loss | (2,099) | (1,924) |
Total equity attributable to XWELL, Inc. | 10,574 | 13,002 |
Noncontrolling interests | 8,191 | 7,969 |
Total equity | 18,765 | 20,971 |
Total liabilities and equity | $ 37,477 | $ 38,993 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) | Mar. 31, 2024 $ / shares shares | Dec. 31, 2023 $ / shares shares |
CONDENSED CONSOLIDATED BALANCE SHEETS | ||
Common stock, par value | $ / shares | $ 0.01 | $ 0.01 |
Common stock, authorized | 150,000,000 | 150,000,000 |
Common stock, issued | 4,182,617 | 4,179,631 |
Common stock, outstanding | 4,182,617 | 4,179,631 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Revenue, net | ||
Total revenue, net | $ 8,726 | $ 7,063 |
Cost of sales | ||
Labor | 4,149 | 4,378 |
Occupancy | 942 | 1,213 |
Products and other operating costs | 964 | 950 |
Total cost of sales | 6,055 | 6,541 |
Gross Profit | 2,671 | 522 |
Depreciation and amortization | 225 | 587 |
Impairment of long-lived assets | 652 | 0 |
Loss on disposal of assets | 132 | |
General and administrative | 2,092 | 3,966 |
Salaries and Benefits | 2,081 | 2,125 |
Total operating expenses | 5,050 | 6,810 |
Operating loss | (2,379) | (6,288) |
Interest income, net | 110 | 393 |
Gain on Investments, realized and unrealized | 135 | 24 |
Foreign exchange gain (loss) | (166) | 85 |
Other non-operating expense, net | (58) | (43) |
Loss before income taxes | (2,358) | (5,829) |
Net loss | (2,358) | (5,829) |
Net loss (income) attributable to noncontrolling interests | (154) | 320 |
Net loss attributable to XWELL, Inc. | (2,512) | (5,509) |
Net loss | (2,358) | (5,829) |
Other comprehensive loss from operations | (175) | (130) |
Comprehensive loss income | $ (2,533) | $ (5,959) |
Loss per share | ||
Basic loss per share (in dollars per share) | $ (0.60) | $ (1.32) |
Diluted loss per share (in dollars per share) | $ (0.60) | $ (1.32) |
Weighted-average number of shares outstanding during the period | ||
Basic (in shares) | 4,182,617 | 4,167,295 |
Diluted (in shares) | 4,182,617 | 4,167,295 |
Services | ||
Revenue, net | ||
Total revenue, net | $ 8,035 | $ 6,467 |
Products | ||
Revenue, net | ||
Total revenue, net | $ 691 | $ 596 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (Parenthetical) | Sep. 28, 2023 |
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS | |
Reverse stock split, conversion ratio | 0.05 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT) - USD ($) $ in Thousands | Common stock | Additional paid-in capital | Accumulated deficit | Accumulated other comprehensive loss | Total Company equity | Non-controlling interests | Total |
Balance Beginning at Dec. 31, 2022 | $ 42 | $ 468,530 | $ (428,112) | $ (534) | $ 39,926 | $ 8,023 | $ 47,949 |
Common Stock, Shares, Outstanding, Beginning Balance at Dec. 31, 2022 | 4,161,613 | ||||||
Issuance of restricted stock units (in shares) | 6,015 | ||||||
Value of Shares Withheld to fund payroll taxes | (22) | (22) | (22) | ||||
Stock-based compensation | 589 | 589 | 23 | 612 | |||
Net loss for the period | (5,509) | (5,509) | (320) | (5,829) | |||
Foreign currency translation | (130) | (130) | 11 | (119) | |||
Balance Ending at Mar. 31, 2023 | $ 42 | 469,097 | (433,621) | (664) | 34,854 | 7,737 | 42,591 |
Common Stock, Shares, Outstanding, Ending Balance at Mar. 31, 2023 | 4,167,628 | ||||||
Balance Beginning at Dec. 31, 2023 | $ 42 | 470,737 | (455,853) | (1,924) | 13,002 | 7,969 | $ 20,971 |
Common Stock, Shares, Outstanding, Beginning Balance at Dec. 31, 2023 | 4,179,631 | 4,179,631 | |||||
Issuance of restricted stock units (in shares) | 2,986 | ||||||
Stock-based compensation | 259 | 259 | 23 | $ 282 | |||
Net loss for the period | (2,512) | (2,512) | 154 | (2,358) | |||
Foreign currency translation | (175) | (175) | 45 | (130) | |||
Balance Ending at Mar. 31, 2024 | $ 42 | $ 470,996 | $ (458,365) | $ (2,099) | $ 10,574 | $ 8,191 | $ 18,765 |
Common Stock, Shares, Outstanding, Ending Balance at Mar. 31, 2024 | 4,182,617 | 4,182,617 |
CONDENSED CONSOLIDATED STATEM_4
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT) (Parenthetical) | Sep. 28, 2023 |
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY | |
Reverse stock split, conversion ratio | 0.05 |
CONDENSED CONSOLIDATED STATEM_5
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Cash flows from operating activities | ||
Net loss | $ (2,358) | $ (5,829) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation and amortization | 225 | 587 |
Impairment of fixed assets | 398 | |
Impairment of operating lease right-of-use assets | 254 | |
Unrealized Gain on marketable securities | (92) | (206) |
Foreign currency remeasurement loss | 166 | 85 |
Amortization of operating lease right of use asset | 286 | 416 |
Stock-based compensation | 282 | 612 |
(Gain) loss on equity investment | (43) | (25) |
Changes in assets and liabilities: | ||
Decrease in inventory | 66 | 166 |
Increase (decrease) in accounts receivable | (1,223) | 843 |
Increase in other assets, current and non-current | (594) | (469) |
Increase in deferred revenue | 29 | 6 |
Decrease in other liabilities, current and non-current | (1,987) | (2,567) |
Increase in accounts payable | 909 | 516 |
Net cash used in operating activities | (3,682) | (5,865) |
Cash flows from investing activities | ||
Acquisition of property and equipment | (291) | (1,404) |
Investment in marketable securities | (80) | (1,882) |
Acquisition of intangibles | (4) | |
Net cash used in investing activities | (371) | (3,290) |
Cash flows from financing activities | ||
Payments for shares withheld on vesting | (22) | |
Net cash used in financing activities | (22) | |
Effect of exchange rate changes on cash, cash equivalents and restricted cash | (67) | 8 |
Decrease in cash, cash equivalents and restricted cash | (4,120) | (9,169) |
Cash, cash equivalents, and restricted cash at beginning of the period | 9,188 | 19,789 |
Cash, cash equivalents, and restricted cash at end of the period | 5,068 | 10,620 |
Non-cash investing and financing transactions | ||
Capital expenditures included in Accounts payable, accrued expenses and other current liabilities | $ 17 | $ 38 |
Business, Basis of Presentation
Business, Basis of Presentation and Liquidity | 3 Months Ended |
Mar. 31, 2024 | |
Business, Basis of Presentation and Liquidity | |
Business, Basis of Presentation and Liquidity | Note 1. Business, Basis of Presentation and Liquidity Overview XWELL is a global wellness company operating multiple brands and focused on bringing restorative, regenerative and reinvigorating products and services to travelers. XWELL currently has four reportable operating segments: XpresSpa®, XpresTest®, Naples Wax Center and Treat™. On October 25, 2022, the Company changed its name to XWELL, Inc. (“XWELL” or the “Company”) from XpresSpa Group, Inc. The Company’s common stock, par value $0.01 per share, which had previously been listed under the trading symbol “XSPA” on the Nasdaq Capital Market, now trades under the trading symbol “XWEL”. The Company filed an amended and restated certificate of incorporation with the Delaware Secretary of State on October 24, 2022 (the “Amended and Restated Certificate”) reflecting the name change. Rebranding to XWELL aligned the Company’s corporate strategy to build a pure-play wellness services company, in both the airport and off-airport marketplaces. XpresSpa XWELL’s subsidiary, XpresSpa Holdings, LLC (“XpresSpa”) has been a global airport retailer of spa services through its XpresSpa spa locations, offering travelers premium spa services, including massage, nail and skin care, as well as spa and travel products. As of March 31, 2024, there were 21 domestic XpresSpa locations in total, 19 Company-owned locations and two franchises. The Company also had 11 international locations operating as of March 31, 2024, including two XpresSpa locations in Dubai International Airport in the United Arab Emirates, one XpresSpa location in Zayad International Airport in Abu Dhabi, UAE, three XpresSpa locations in Schiphol Amsterdam Airport in the Netherlands and five XpresSpa locations in the Istanbul Airport in Turkey. XpresTest The Company, in partnership with certain COVID-19 testing partners, successfully launched its XpresCheck Wellness Centers, in June of 2020, through its XpresTest, Inc. subsidiary (“XpresTest”), which offered COVID-19 and other medical diagnostic testing services to the traveling public, as well as airline, airport and concessionaire employees, and TSA and U.S. Customs and Border Protection agents during the pandemic. During 2022 and 2023, as countries continued to relax their testing requirements resulting in rapid decline of testing volumes at the Company’s XpresCheck locations, the Company closed XpresCheck Wellness Centers. As of December 31, 2023, we have closed all XpresCheck locations. XWELL’s subsidiary, XpresTest, Inc (“XpresTest”) began conducting bio surveillance monitoring with the Centers for Disease Control and Prevention (CDC) in collaboration with Concentric by Ginkgo BioWorks in 2021. The program was extended in January 2022 and renewed in August of 2022 and 2023. In March 2024, the program funding and scope were expanded. HyperPointe XWELL’s subsidiary, gcg Connect, LLC, operating as HyperPointe, provides direct to business marketing support across a number of health and health-related channels. From the creation of marketing campaigns for the pharmaceutical industry, to learning management systems to website and health related content creation, HyperPointe is a complementary service provider to XWELL’s health-focused brands as well as providing the majority of services to the external community. For reporting purposes, the former HyperPointe segment has been consolidated into the XpresTest segment. Treat Treat, which is operating through XWELL’s subsidiary Treat, Inc. (“Treat”) is a wellness brand that provides access to wellness services for travelers at on-site centers (currently located in JFK International Airport). In April 2024, the decision was made to close the location in the Salt Lake City International Airport. Treat offers a full retail product offering and a suite of wellness and spa services. Travelers can purchase time blocks to use our wellness rooms to engage in interactive services like self-guided yoga, meditation and low impact weight exercises or to relax and unplug from the hectic pace of the airport and renew themselves before or after their trip. Naples Wax Center XWELL’s subsidiary Naples Wax Center, LLC, which was acquired on September 12, 2023, for a purchase price of $1,624 operates three high-performing locations with core products and service offerings from face and body waxing to a range of skincare and cosmetic products. The acquisition of Naples Wax Center is intended to enable the Company to move beyond its airport client base with a business that can be adapted to a larger wellness platform while also growing its retail footprint to serve long-term financial goals. TreatStudios In Q4 of 2023, the Company began plans to open its first TreatStudios location in Jacksonville, Florida in 2024. TreatStudios is an out-of-airport concept providing leased space to established wellness service providers. Revenue will be derived from both lease payments received from the wellness practitioners and the sale of retail at the wellness center. The Company believes that these strategic imperatives will be accomplished through development of an infrastructure specifically focused on enabling scalable and efficient growth. Basis of Presentation and Principles of Consolidation The unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and the instructions to Article 8-03 of Regulation S-X, and should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended December 31, 2023, as amended. The consolidated balance sheet as of December 31, 2023 was derived from the audited annual financial statements but does not include all information required by GAAP for annual financial statements. The financial statements include the accounts of the Company, all entities that are wholly owned by the Company, and all entities in which the Company has a controlling financial interest. All adjustments that, in the opinion of management, are necessary for a fair presentation for the periods presented have been reflected by the Company. Such adjustments are of a normal, recurring nature. The results of operations for the three months ended March 31, 2024 are not necessarily indicative of the results that may be expected for the entire fiscal year or for any other interim period. All significant intercompany balances and transactions have been eliminated in consolidation. Reverse Stock Split On September 28, 2023, the Company effected a 1 twenty one Liquidity and Financial Condition As of March 31, 2024, the Company had cash and cash equivalents of $4,317 (excluding restricted cash), $14,784 in marketable securities, and total current assets of $24,456. The Company’s total current liabilities balance, which includes accounts payable, deferred revenue, accrued expenses, and operating lease liabilities was $9,187 as of March 31, 2024 and $9,330 as of December 31, 2023. The working capital surplus was $15,269 as of March 31, 2024, compared to a working capital surplus of $17,236 as of December 31, 2023. The Company significantly reduced operating and overhead expenses in the second half of 2023, while it continues to focus on returning to overall profitability. The Company has taken actions to improve its overall cash position, right sizing its corporate structure and streamlining its operations. The Company is pursuing strategic partnerships that the Company expects will further strengthen the long-term profitability of the business. |
Accounting and Reporting Polici
Accounting and Reporting Policies | 3 Months Ended |
Mar. 31, 2024 | |
Accounting and Reporting Policies | |
Accounting and Reporting Policies | Note 2. Accounting and Reporting Policies Use of estimates The preparation of the accompanying condensed consolidated financial statements in conformity with U.S. GAAP requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the condensed consolidated financial statements and the reported amounts of revenues and expenses for the periods presented. Actual results may differ from such estimates. Significant items subject to such estimates and assumptions include the Company’s long-lived assets, intangibles assets, the useful lives of the Company’s intangible assets, the valuation of stock-based compensation, deferred tax assets and liabilities, income tax uncertainties, and other contingencies. Revenue Recognition Policy XpresSpa, Treat and Naples Wax Center The Company recognizes revenue from the sale of products and services when the services are rendered at XpresSpa, Treat, and Naples Wax Centers locations and from the sale of products at the time products are purchased at the Company’s stores or online usually by credit card, net of discounts and applicable sales taxes. Accordingly, the Company recognizes revenue for the Company’s single performance obligation related to both in-store and online sales at the point at which the service has been performed or the control of the merchandise has passed to the customer. XpresTest During the third quarter of 2022, XpresTest, in partnership with Ginkgo BioWorks in continuation of their support to the CDC’s traveler-based SARS-CoV-2 genomic surveillance program was awarded a new contract. The partnership is expected to support public health and biosecurity services totaling approximately $16,000, with an overall potential to exceed $61,000 based on CDC program options and public health priorities. As COVID-19 sub-variants and other biological threats continue to emerge, the partners plan to expand the program footprint and incorporate innovative modalities and offerings, such as monitoring of wastewater from aircraft lavatories. The current contract with Ginkgo BioWorks related to the above partnership contains fixed pricing for which the Company is entitled to $10,674 for the sample collection (passenger and aircraft wastewater) and $370 for the traveler enrollment initiatives, which represents the amount of consideration that we are entitled. The Company recognizes revenue over time for both sample collection performance obligations, using the input method based on time elapsed to measure progress towards satisfying each of the performance obligations. We recognized the revenue for the traveler enrollment initiative performance obligation in the second quarter of 2023. The Company recognizes revenue ratably (straight line basis) over the term of the contract (one year). The Company recorded $3,306 and $1,670, in revenue for the three months ended March 31, 2024 and 2023, respectively, related to sample collection performance obligations because the Company’s efforts towards satisfying each of the performance obligations are expended evenly throughout the period of performance. HyperPointe The Company’s HyperPointe business provides a broad range of service and support options for HyperPointe’s customers, including technical support services and advanced services. Technical support services represent the majority of these offerings which are distinct performance obligations that are satisfied over time with revenue recognized ratably over the contract term. Advanced services are distinct performance obligations that are satisfied over time with revenue recognized as services are delivered. Revenues billed in advance are treated as deferred revenue, which was $87 and $72 as of March 31, 2024 and December 31, 2023, respectively. The Company excludes all sales taxes assessed to our customers from revenue. Sales taxes assessed on revenues are included in Accrued expenses and other current liabilities on the Company’s condensed consolidated balance sheets until remitted to state agencies. Gift cards, customer rewards and prepaid packages XWELL offers no-fee, non-expiring gift cards to its customers. No revenue is recognized upon the issuance of a gift card and a liability is established for the gift card’s cash value. The liability is relieved, and revenue is recognized upon redemption by the customer. As the gift cards have no expiration date, there is no provision for the reduction in the value of unused card balances. In addition, XWELL maintains a rewards program in which customers earn loyalty points, which can be redeemed for future services. Loyalty points are rewarded upon joining the loyalty program, for customer birthdays, and based upon customer spending. When a customer redeems loyalty points, the Company recognizes revenue for the redeemed cash value and reduces the related loyalty program liability. In 2023 the Company adopted a formal expiration policy whereby any loyalty members with inactivity for an 18-month period will forfeit any unused loyalty rewards. The costs associated with gift cards and reward points are accrued as the rewards are earned by the cardholder and are included in Accrued expenses and other current liabilities Naples Wax Center offers prepaid wax packages that are either unlimited for one year or a set number of services. When the packages are purchased, the sales are recorded as deferred revenue. As services related to prepaid packages are used, revenue is recognized as income. The deferred revenue as of March 31, 2024 was $794 and for the year ended December 31, 2023 deferred revenue was $778. Translation into United States dollars The Company conducts certain transactions in foreign currencies, which are recorded at the exchange rate as of the transaction date. All exchange gains and losses occurring from the remeasurement of monetary balance sheet items denominated in non-dollar currencies are deemed non-operating income in the condensed consolidated statements of operations and comprehensive loss. During the three months ended March 2024, the Company recorded $166 in exchange losses occurring from the remeasurement of monetary balance sheet items denominated in non-dollar currencies. During the three months ended March 2023, the Company recorded $85 in exchange gain. Accounts of the foreign subsidiaries of XpresSpa are translated into United States dollars. Assets and liabilities have been translated primarily at period end exchange rates and revenues and expenses have been translated at average monthly rates for the three months ended March 31, 2024. The translation adjustments arising from the use of different exchange rates are included as foreign currency translation within the condensed consolidated statements of operations and comprehensive income (loss) and condensed consolidated statements of changes in stockholders’ equity. Business Combinations The Company uses the provisions of ASC Topic 805, Business Combinations (“ASC 805”) in the accounting for acquisitions of businesses. ASC 805 requires the Company to use the acquisition method of accounting by recognizing the identifiable tangible and intangible assets acquired and liabilities assumed, and any non-controlling interest in the acquired business, measured at their acquisition date fair values. Goodwill as of the acquisition date is measured as the excess of consideration transferred over the aforementioned amounts. While the Company uses its best estimates and assumptions to accurately apply preliminary values to assets acquired and liabilities assumed at the acquisition date, these estimates are inherently uncertain and subject to refinement. As a result, during the measurement period, which may be up to one year from the acquisition date, the Company may record adjustments to the assets acquired and liabilities assumed with the corresponding offset to goodwill. Upon the conclusion of the measurement period or final determination of the values of the assets acquired or liabilities assumed, whichever comes first, any subsequent adjustments are recorded in the condensed consolidated statements of operations. Accounting for business combinations requires management to make significant estimates and assumptions, especially at the acquisition date, including estimates for intangible assets. Although the Company believes the assumptions and estimates that have been made are reasonable and appropriate, they are based in part on historical experience and information obtained from the acquired companies and are inherently uncertain. Estimates in valuing certain of the intangible assets the Company has acquired include future expected cash flows, and discount rates. Intangible assets Intangible assets include customer relationships, trade names, and technology, which were primarily acquired as part of the acquisition of XpresSpa in December 2016, HyperPointe in 2022 and Naples Wax Center in 2023 and were recorded based on the estimated fair value in purchase price allocation. In addition, intangible assets include software and website development costs that were capitalized as part of the Company’s development of a mobile application and website for the Treat brand. The Company accounts for these costs in accordance with ASC 350-40, Internal-Use Software. The intangible assets are amortized over their estimated useful lives, which are periodically evaluated for reasonableness. The Company’s intangible assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. The fair value is then compared to the carrying value and an impairment charge is recognized by the amount in which the carrying value exceeds the fair value of the asset. In assessing the recoverability of the Company’s intangible assets, the Company must make estimates and assumptions regarding future cash flows and other factors to determine the fair value of the respective assets. These estimates and assumptions could have a significant impact on whether an impairment charge is recognized and the magnitude of any such charge. Fair value estimates are made at a specific point in time, based on relevant information. Goodwill Goodwill represents the cost of a business acquisition in excess of the fair value of the net assets acquired. Goodwill is not amortized and is reviewed for impairment annually, or more frequently if facts and circumstances indicate that it is more likely than not that the fair value of a reporting unit is less than its carrying amount, including goodwill. If it is more likely than not that the fair value of a reporting unit is less than its carrying amount, the company performs a quantitative test to identify and measure the amount of goodwill impairment loss. The Company compares the fair value of the reporting unit with its carrying amount. If the carrying amount exceeds fair value, goodwill of the reporting unit is considered impaired, and that excess is recognized as a goodwill impairment loss. During the quarter ended March 31, 2024, the Company did not record any goodwill impairment loss. Reclassification Certain balances in the unaudited condensed consolidated financial statements for the three months ended March 31, 2023 have been reclassified to conform to the presentation in the unaudited condensed consolidated financial statements for the three months ended March 31, 2024, primarily the presentation of revenue, general and administrative expense, foreign currency exchange gain, and the realized and unrealized gain on investments and other operating expenses. The above separation affected revenue classifications, general and administrative expenses, foreign currency exchange gain, and the realized and unrealized gain on investments and other operating expenses in the comparative 2023 financial statements. Such reclassifications did not have a material impact on the unaudited condensed consolidated financial statements. Impairment of Long-Lived Assets Long-lived assets are tested for impairment at the lowest level at which there are identifiable operating cash flows. The Company’s long-lived assets consist primarily of leasehold improvements and right to use lease assets for each of its locations (considered the asset group). The Company reviews its long-lived assets for recoverability yearly or sooner if events or changes in circumstances indicate that the carrying value of long-lived assets may not be recoverable. If indicators are present, the Company performs a recoverability test by comparing the sum of the estimated undiscounted future cash flows attributable to the asset group in question to its carrying amount. An impairment loss is recognized if it is determined that the long-lived asset group is not recoverable and is calculated based on the excess of the carrying amount of the long-lived asset group over the long-lived asset group’s fair value. The Company estimates the fair value of long-lived assets using present value income approach. Future cash flows are calculated based on forecasts over the estimated remaining useful life of the asset group, which for each of the Company’s locations, is the remaining term of the operating lease. The estimates used to calculate future cash flows are subjective in nature and involve uncertainties and matters of significant judgments and therefore cannot be determined with precision. Changes in assumptions could significantly affect the estimated fair value of each asset group. The Company will calculate the future cash flow using what it believes to be the most predictable of several scenarios. Typically, the changes in assumptions run under different business scenarios would not result in a material change in the assessment of the potential impairment or the impairment amount of a locations long-lived asset group. But if these estimates or related assumptions were to change materially, the Company may be required to record an impairment charge. During the three months ended March 31, 2024 the Company recorded impairment of long-lived assets of $652 compared with $0 impairment of long-lived assets in March 2023. Recently Issued Accounting Standards ASU No. 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures In November 2023, the Financial Accounting Standards Board (FASB) issued ASU No. 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures (ASU 2023-07), which requires an enhanced disclosure of significant segment expenses on an annual and interim basis. This guidance will be effective for the annual periods beginning the year ended December 31, 2024, and for interim periods beginning January 1, 2025. Early adoption is permitted. Upon adoption, the guidance should be applied retrospectively to all prior periods presented in the financial statements. The Company is currently evaluating segment expense disclosures related to its annual report for fiscal year 2024. ASU No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures (ASU 2023-09), which improves the transparency of income tax disclosures by requiring consistent categories and greater disaggregation of information in the effective tax rate reconciliation and income taxes paid disaggregated by jurisdiction. It also includes certain other amendments to improve the effectiveness of income tax disclosures. This guidance will be effective for the annual periods beginning the year ended December 31, 2025. Early adoption is permitted. Upon adoption, the guidance can be applied prospectively or retrospectively. The Company is currently evaluating income tax disclosures related to its annual report for fiscal year 2025. |
Potentially Dilutive Securities
Potentially Dilutive Securities | 3 Months Ended |
Mar. 31, 2024 | |
Potentially Dilutive Securities | |
Potentially Dilutive Securities | Note 3. Potentially Dilutive Securities The table below presents the computation of basic and diluted net loss per share of Common Stock: Three months ended March 31, 2024 2023 Basic numerator: Net loss attributable to XWELL, Inc. $ (2,512) $ (5,509) Basic denominator: Basic weighted average shares outstanding 4,182,617 4,167,295 Basic loss per share $ (0.60) $ (1.32) Net loss per share data presented above excludes from the calculation of diluted net (loss) income, the following potentially dilutive securities, having an anti-dilutive impact, in case of net loss Both vested and unvested options to purchase an equal number of shares of Common Stock 452,474 384,719 Unvested RSUs to issue an equal number of shares of Common Stock 6,458 16,319 Warrants to purchase an equal number of shares of Common Stock — 200 Total number of potentially dilutive securities excluded from the calculation of earnings/(loss) per share attributable to common shareholders 458,932 401,238 Reverse Stock Split On September 28, 2023, the Company effected a 1 twenty one |
Cash, Cash Equivalents, and Res
Cash, Cash Equivalents, and Restricted Cash | 3 Months Ended |
Mar. 31, 2024 | |
Cash, Cash Equivalents, and Restricted Cash | |
Cash, Cash Equivalents, and Restricted Cash | Note 4. Cash, Cash Equivalents, and Restricted Cash A reconciliation of the Company’s cash and cash equivalents in the Unaudited Condensed Consolidated Balance Sheets to cash, cash equivalents and restricted cash in the Unaudited Condensed Consolidated Statements of Cash Flows as of March 31, 2024 and December 31, 2023 is as follows: March 31, 2024 December 31, 2023 Cash denominated in United States dollars $ 1,875 $ 5,726 Cash denominated in currency other than United States dollars 2,155 2,395 Restricted cash 751 751 Credit and debit card receivables 287 316 Total cash, cash equivalents and restricted cash $ 5,068 $ 9,188 The Company places its cash and temporary cash investments with credit quality institutions. At times, such cash denominated in United States dollars may be in excess of the Federal Deposit Insurance Corporation (“FDIC”) insurance limit. As of March 31, 2024, and December 31, 2023, deposits in excess of FDIC limits were $932 and $4,195, respectively. As of March 31, 2024, and December 31, 2023, the Company held cash balances in overseas accounts, totaling $2,155 and $2,395 respectively, which are not insured by the FDIC. If the Company were to distribute the amounts held overseas, the Company would need to follow an approval and distribution process as defined in its operating and partnership agreements, which may delay and/or reduce the availability of that cash to the Company. |
Other current assets
Other current assets | 3 Months Ended |
Mar. 31, 2024 | |
Other current assets | |
Other current assets | Note 5. Other current assets As of March 31, 2024 and December 31, 2023, other current assets consisted of the following: March 31, 2024 December 31, 2023 Prepaid expenses $ 1,602 $ 894 Other 19 55 Total other current assets $ 1,621 $ 949 |
Intangible Assets
Intangible Assets | 3 Months Ended |
Mar. 31, 2024 | |
Intangible Assets | |
Intangible Assets | Note 6. Intangible Assets The following tables provides information regarding the Company’s intangible assets subject to amortization, which consist of the following: March 31, 2024 December 31, 2023 Gross Net Gross Net Carrying Accumulated Carrying Carrying Accumulated Carrying Amount Amortization Amount Amount Amortization Amount Trade names $ 200 $ (12) $ 188 $ 200 $ (6) $ 194 Customer relationships 1,012 (366) 646 1,012 (341) 671 Software 2,593 (2,174) 419 2,593 (2,120) 473 Licenses 35 (24) 11 35 (20) 15 Total intangible assets $ 3,840 $ (2,576) $ 1,264 $ 3,840 $ (2,487) $ 1,353 The Company’s intangible assets are amortized over their expected useful lives. The Company recorded amortization expense of $84 and $382 during the three months ended March 31, 2024 and 2023, respectively. Based on the intangible assets balance as of March 31, 2024, the estimated amortization expense for the remainder of the calendar year and each of the succeeding calendar years is as follows: Calendar Years ending December 31, Amount Remaining 2024 $ 229 2025 307 2026 228 2027 122 2028 122 Thereafter 256 Total $ 1,264 |
Accrued expenses and other curr
Accrued expenses and other current liabilities | 3 Months Ended |
Mar. 31, 2024 | |
Accrued expenses and other current liabilities | |
Accrued expenses and other current liabilities | Note 7. Accrued expenses and other current liabilities As of March 31, 2024 and December 31, 2023, accrued expenses and other current liabilities consisted of the following: March 31, 2024 December 31, 2023 Litigation accrual $ 424 $ 449 Accrued compensation 1,184 2,098 Tax-related liabilities 485 501 Common area maintenance accruals 495 8 Accounts payable accruals 235 913 Gift certificates 508 509 Credit card processing fees 5 8 Other miscellaneous accruals 359 482 Total accrued expenses and other current liabilities $ 3,695 $ 4,968 |
Acquisition of Naples Wax, LLC
Acquisition of Naples Wax, LLC | 3 Months Ended |
Mar. 31, 2024 | |
Acquisition of Naples Wax, LLC | |
Acquisition of Naples Wax, LLC | Note 8. Acquisition of Naples Wax, LLC On September 12, 2023, the Company acquired all of the equity interests in Naples Wax, LLC, d/b/a Naples Wax Centers, a Florida limited liability company (“Naples Wax”), for an aggregate purchase price of $1,624, of which $1,574 was paid in cash at closing. The remaining $50 was held for six months as a holdback to cover any potential indemnification claims. $14 was paid in the quarter ended March 31, 2024. The remaining $36 was offset by operating expenses. The Company applies the provisions of Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 805, Business Combinations (“ASC 805”) in the accounting for acquisitions of businesses. ASC 805 requires the Company to use the acquisition method of accounting by recognizing the identifiable tangible and intangible assets acquired and liabilities assumed, and any non-controlling interest in the acquired business, measured at their acquisition date fair values. Goodwill as of the acquisition date is measured as the excess of consideration transferred over the aforementioned amounts. While the company uses its best estimates and assumptions to accurately apply preliminary values to assets acquired and liabilities assumed at the acquisition date, these estimates are inherently uncertain and subject to refinement. As a result, during the measurement period, which may be up to one year from the acquisition date, the Company may record adjustments to the assets acquired and liabilities assumed with the corresponding offset to goodwill. As of March 31, 2024, no impairment of the Company’s goodwill was required. The purchase accounting for the acquisition remains incomplete as management continues to gather and evaluate information about circumstances that existed as of the acquisition date. Upon the conclusion of the measurement period or final determination of the values of the assets acquired or liabilities assumed, whichever comes first, any subsequent adjustments are recorded in the condensed consolidated statements of operations. Accounting for business combinations requires management to make estimates and assumptions, especially at the acquisition date, including estimates for intangible assets. Although the Company believes the assumptions and estimates that have been made are reasonable and appropriate, they are based in part on historical experience and information obtained from the acquired companies and are inherently uncertain. Estimates in valuing certain of the intangible assets the Company has acquired include future expected cash flows, and discount rates. For income tax purposes, this acquisition of 100% of the units is treated as an asset acquisition. As a result of the acquisition of Naples Wax, the company generated tax deductible goodwill of $1,371. |
Leases
Leases | 3 Months Ended |
Mar. 31, 2024 | |
Leases | |
Leases | Note 9. Leases The Company leases spa and clinic locations at various domestic and international airports. Additionally, the Company leases its corporate office in New York City and other off airport locations in various US cities. Certain leases entered into by the Company are accounted for in accordance with ASC 842. The Company determines if an arrangement is a lease at inception and if it qualifies under ASC 842. The Company’s lease arrangements generally contain fixed payments throughout the term of the lease and most also contain a variable component to determine the lease obligation where a certain percentage of sales is used to calculate the lease payments. The Company enters into leases that expire, are amended and extended, or are extended on a month-to-month basis. Leases are not included in the calculation of the total lease liability and the right of use asset when they are month-to-month. All qualifying leases held by the Company are classified as operating leases. Operating lease assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent its obligation to make lease payments arising from the lease. Operating lease assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. The Company records its operating lease assets and liabilities based on required guaranteed payments under each lease agreement. The Company uses its incremental borrowing rate, which approximates the rate at which the Company can borrow funds on a secured basis, using the information available at commencement date of the lease in determining the present value of guaranteed lease payments. The interest rate implicit in the lease is generally not determinable in transactions where a company is the lessee. The Company reviews all of its existing lease agreements to determine whether there were any modifications to lease agreements and to assess if any agreements should be accounted for pursuant to the guidance in ASC 842. The following is a summary of the activity in the Company’s current and long-term operating lease liabilities for the three months ended March 31, 2024 and 2023: Three months ended March 31, 2024 2023 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ (835) $ (973) As of March 31, 2024, operating leases contain the following future minimum commitments: Calendar Years ending December 31, Amount Remaining 2024 $ 2,577 2025 3,054 2026 1,979 2027 1,866 2028 1,497 2029 1,273 Thereafter 2,609 Total future lease payments 14,855 Less: interest expense at incremental borrowing rate (2,745) Net present value of lease liabilities $ 12,110 Other assumptions and pertinent information related to the Company’s accounting for operating leases are: Weighted average remaining lease term: 5.95 years Weighted average discount rate used to determine present value of operating lease liability: 7.33 % Cash paid for minimum annual rental obligations for the three months ended March 31, 2024 and 2023, were $450 and $662 respectively. Variable lease payments calculated monthly as a percentage of a product and services revenue were $360 and $345 for the three months ended March 31, 2024 and 2023 respectively. |
Other Assets
Other Assets | 3 Months Ended |
Mar. 31, 2024 | |
Other Assets | |
Other Assets | Note 10. Other Assets As of March 31, 2024 and December 31, 2023, assets consisted of the following: March 31, 2024 December 31, 2023 Equity investments $ 92 $ 50 Lease deposits 1,523 1,556 Other 170 236 Other assets $ 1,785 $ 1,842 |
Stockholders' Equity
Stockholders' Equity | 3 Months Ended |
Mar. 31, 2024 | |
Stockholders' Equity | |
Stockholders' Equity | Note 11. Stockholders’ Equity 2023 Reverse Stock Split On September 28, 2023, we effected the “Reverse Stock Split”, whereby every twenty one Stock-based Compensation The Company has a stock-based compensation plan available to grant stock options and RSUs to the Company’s directors, employees and consultants. In September 2020, the Board of Directors approved a new stock-based compensation plan available to grant stock options, restricted stock and Restricted Stock Units (“RSU’s”) aggregating to 250,000 shares of Common Stock, to the Company’s directors, employees and consultants. Shareholder approval of the plan was subsequently obtained on October 28, 2020. On October 4, 2022, shareholders approved the amendment to the Company’s 2020 Equity Incentive Plan to increase the number of shares authorized for issuance under the Plan by 375,000 shares of Common Stock to an aggregate of 625,000 shares. The Company’s previous Employee, Director and Consultant Equity Incentive Plan (the “2012 Plan”) was terminated upon receipt of shareholder approval of the 2020 Plan. Awards granted under the 2012 Plan remain in effect pursuant to their terms. Generally, stock options are granted with exercise prices equal to the fair market value on the date of grant, vest in four In September 2020, XpresTest created a stock-based compensation plan available to grant stock options, restricted stock and RSU’s to the XpresTest’s directors, employees and consultants. Under the XpresTest 2020 Equity Incentive Plan (the “XpresTest Plan”), a maximum of 200 shares of XpresTest common stock may be awarded, which would represent 20% of the total number of shares of common stock of XpresTest as of March 31, 2024. Certain named executive officers, consultants, and directors of the Company are eligible to participate in the XpresTest Plan. The XpresTest Plan RSAs vest upon satisfaction of certain service and performance-based conditions. The fair value of the XpresTest Plan RSAs is determined based on the weighted average of (i) Fair Value of XpresTest under the Indirect Valuation Method developing assumptions for XpresSpa Net Market Cap and XpresSpa standalone Fair Value, and (ii) Direct Valuation Method developing assumptions for XpresTest Representative Forecasted Revenue for 2021 and Peer companies Revenue’s Multiples. As of March 31, 2024 and 2023, there was $74 and $167 respectively of unrecognized stock-based compensation related to the XpresTest Plan. The fair value of stock options is estimated as of the date of grant using the Black-Scholes-Merton (“Black-Scholes”) option-pricing model. The Company uses the simplified method to estimate the expected term of options due to insufficient history and high turnover in the past. The following variables were used as inputs in the model: Share price of the Company’s Common Stock on the grant date: $ 1.50 Exercise price: $ 1.50 Expected volatility: 121.04 % Expected dividend yield: 0 % Annual average risk-free rate: 4.14 % Expected term: 6.32 years Total stock-based compensation for the three months ended March 31, 2024 and 2023 is $282 and $612, respectively. The following tables summarize information about stock options and RSU activity for the three months ended March 31, 2024: RSUs XpresTest RSAs Stock options Weighted Weighted Weighted average average average Exercise No. of grant date No. of grant date No. of exercise price RSUs fair value RSAs fair value options price range Outstanding as of December 31, 2023 11,944 $ 6.08 5.00 $ 47,570 341,205 $ 26.85 $ 4.60 - 49,200 Granted — - — — 150,000 $ 1.50 1.50 Exercised/Vested (2,986) 6.13 — — — — Forfeited (2,500) 5.09 — — (29,278) $ 17.40 $ 1.50 - 34.40 Expired — — — — (9,453) $ 67.89 $ 8.00 - 49,200 Outstanding as of March 31, 2024 6,458 $ 6.74 5.00 $ 47,570 452,474 $ 18.20 $ 1.50 - 7,080 Exercisable as of March 31, 2024 272,683 $ 25.07 $ 4.60- 7,080 |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2024 | |
Income Taxes | |
Income Taxes | Note 12. Income Taxes The Company’s provision for income taxes consists of federal, state, local, and foreign taxes in amounts necessary to align the Company’s year-to-date provision for income taxes with the effective tax rate that the Company expects to achieve for the full year. Each quarter, the Company updates its estimate of the annual effective tax rate and records cumulative adjustments as deemed necessary. The income tax provision for the three months ended March 31, 2024, reflects an estimated global annual effective tax rate of approximately 0% from continuing operations. As of March 31, 2024, deferred tax assets generated from the Company’s U.S. activities were offset by a valuation allowance because realization depends on generating future taxable income, which, in the Company’s estimation, is not more likely than not to be generated before such net operating loss carryforwards expire. Net operating loss carryforwards generated after December 31, 2017 do not expire. The Company expects its effective tax rate for its current fiscal year to be significantly lower than the statutory rate as a result of a full valuation allowance; therefore, any loss before income taxes does not generate a corresponding income tax benefit. Income tax expense/(benefit) for the three months ended March 31, 2024 was $0 which was attributed to state taxing jurisdictions in which a measure of income is utilized to determine a tax liability. The final annual tax rate cannot be determined until the end of the fiscal year; therefore, the actual tax rate could differ from current estimates. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2024 | |
Commitments and Contingencies | |
Commitments and Contingencies | Note 13. Commitments and Contingencies Certain of the Company’s outstanding legal matters include speculative claims for substantial or indeterminate amounts of damages. The Company regularly evaluates developments in its legal matters that could affect the amount of any potential liability and adjusts as appropriate. A significant judgment is required to determine both the likelihood of there being any potential liability and the estimated amount of a loss related to the Company’s legal matters. With respect to the Company’s outstanding legal matters, based on its current knowledge, the Company’s management believes that the amount or range of a potential loss will not, either individually or in the aggregate, have a material adverse effect on its business, consolidated financial position, results of operations or cash flows. However, the outcome of such legal matters is inherently unpredictable and subject to significant uncertainties. The Company evaluated the outstanding legal matters and assessed the probability and likelihood of the occurrence of liability. Based on management’s estimates, the Company has recorded accruals of $424 and $449 as of March 31, 2024 and December 31, 2023, respectively, which is included in Accrued expenses and other current liabilities in the condensed consolidated balance sheets. The Company expenses legal fees in the period in which they are incurred. OTG Management PHL B v. XpresSpa Philadelphia Terminal B et al. On May 9, 2022, a lawsuit was filed in the Philadelphia Court of Common Pleas by OTG Management at Philadelphia International Airport, claiming that XWELL improperly backed out of its sublease for space at Terminal B and now owes between $864 and $2,250 in accelerated rent for the 12-year contract. They claim that by refusing to complete the project, failing to commence and maintain operations, refusing to pay rent and improperly purporting to terminate the lease (among other acts and omissions), XWELL breached the lease. On January 9, 2024, the court placed the matter on Civil Suspense. In addition to those matters specifically set forth herein, the Company and its subsidiaries are involved in various other claims and legal actions that arise in the ordinary course of business. The Company does not believe that the ultimate resolution of these actions will have a material adverse effect on the Company’s financial position, results of operations, liquidity, or capital resources. However, a significant increase in the number of these claims, or one or more successful claims under which the Company incurs greater liabilities than the Company currently anticipates, could materially adversely affect the Company’s business, financial condition, results of operations and cash flows. In the event that an action is brought against the Company or one of its subsidiaries, the Company will investigate the allegation and vigorously defend itself. Leases XWELL is contingently liable to a surety company under certain general indemnity agreements required by various airports relating to its lease agreements. XWELL agrees to indemnify the surety for any payments made on contracts of suretyship, guaranty, or indemnity. The Company believes that all contingent liabilities will be satisfied by its performance under the specified lease agreements. |
Segment Information
Segment Information | 3 Months Ended |
Mar. 31, 2024 | |
Segment Information | |
Segment Information | Note 14. Segment Information As a result of the Company’s transition to a pure-play wellness services company, the Company currently has four reportable operating segments: XpresSpa, XpresTest, Naples Wax Center, and Treat. The Company analyzes the results of the Company’s business through the four reportable segments. The XpresSpa segment provides travelers premium spa services, including massage, nail and skin care, as well as spa and travel products. The XpresTest segment provided diagnostic COVID-19 tests at XpresCheck Wellness Centers in airports, to airport employees and to the traveling public but has transitioned to the CDC’s bio-surveillance program. XpresTest’s HyperPointe business provides a broad range of service and support options for its customers, including technical support services and advanced services. The Treat segment is a wellness brand that provides access to wellness services for travelers at on-site centers. The Naples Wax Center segment operates three high-performing locations with core products and service offerings from face and body waxing to a range of skincare and cosmetic products. The Treat segment is a wellness brand that provides access to wellness services for travelers at on-site centers. The chief operating decision maker evaluates the operating results and performance of the Company’s segments through operating income. Expenses that can be specifically identified with a segment have been included as deductions in determining operating income. Any remaining expenses and other charges are included in Corporate and Other. For the three months ended March 31, 2024 2023 Revenue XpresSpa $ 4,345 $ 4,499 XpresTest 3,643 2,360 Naples Wax 648 — Treat 90 204 Total revenue $ 8,726 $ 7,063 2024 2023 Operating loss XpresSpa $ (2,107) $ (3,132) XpresTest 1,670 (281) Naples Wax (78) — Treat (673) (444) Corporate and other (1,191) (2,431) Total operating loss $ (2,379) $ (6,288) 2024 2023 Depreciation & amortization XpresSpa $ 132 $ 423 XpresTest 26 86 Naples Wax 31 — Treat 19 65 Corporate and other 17 13 Total depreciation & amortization $ 225 $ 587 For the three months ended March 31, 2024 2023 Capital expenditures XpresSpa $ 261 $ 834 XpresTest 28 28 Naples Wax 22 — Treat — 33 Corporate and other — 7 Total capital expenditures $ 311 $ 902 March 31, 2024 December 31, 2023 Long-lived Assets XpresSpa $ 8,383 $ 8,268 XpresTest 58 92 Naples Wax 2,711 1,371 Treat 28 669 Corporate and other 406 438 Total long-lived Assets $ 11,586 $ 10,838 March 31, 2024 December 31, 2023 Assets XpresSpa $ 19,098 $ 18,453 XpresTest 3,197 2,408 Naples Wax 3,784 2,951 Treat 524 848 Corporate and other 10,874 14,333 Total assets $ 37,477 $ 38,993 |
Accounting and Reporting Poli_2
Accounting and Reporting Policies (Policies) | 3 Months Ended |
Mar. 31, 2024 | |
Accounting and Reporting Policies | |
Use of estimates | Use of estimates The preparation of the accompanying condensed consolidated financial statements in conformity with U.S. GAAP requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the condensed consolidated financial statements and the reported amounts of revenues and expenses for the periods presented. Actual results may differ from such estimates. Significant items subject to such estimates and assumptions include the Company’s long-lived assets, intangibles assets, the useful lives of the Company’s intangible assets, the valuation of stock-based compensation, deferred tax assets and liabilities, income tax uncertainties, and other contingencies. |
Revenue Recognition Policy | Revenue Recognition Policy XpresSpa, Treat and Naples Wax Center The Company recognizes revenue from the sale of products and services when the services are rendered at XpresSpa, Treat, and Naples Wax Centers locations and from the sale of products at the time products are purchased at the Company’s stores or online usually by credit card, net of discounts and applicable sales taxes. Accordingly, the Company recognizes revenue for the Company’s single performance obligation related to both in-store and online sales at the point at which the service has been performed or the control of the merchandise has passed to the customer. XpresTest During the third quarter of 2022, XpresTest, in partnership with Ginkgo BioWorks in continuation of their support to the CDC’s traveler-based SARS-CoV-2 genomic surveillance program was awarded a new contract. The partnership is expected to support public health and biosecurity services totaling approximately $16,000, with an overall potential to exceed $61,000 based on CDC program options and public health priorities. As COVID-19 sub-variants and other biological threats continue to emerge, the partners plan to expand the program footprint and incorporate innovative modalities and offerings, such as monitoring of wastewater from aircraft lavatories. The current contract with Ginkgo BioWorks related to the above partnership contains fixed pricing for which the Company is entitled to $10,674 for the sample collection (passenger and aircraft wastewater) and $370 for the traveler enrollment initiatives, which represents the amount of consideration that we are entitled. The Company recognizes revenue over time for both sample collection performance obligations, using the input method based on time elapsed to measure progress towards satisfying each of the performance obligations. We recognized the revenue for the traveler enrollment initiative performance obligation in the second quarter of 2023. The Company recognizes revenue ratably (straight line basis) over the term of the contract (one year). The Company recorded $3,306 and $1,670, in revenue for the three months ended March 31, 2024 and 2023, respectively, related to sample collection performance obligations because the Company’s efforts towards satisfying each of the performance obligations are expended evenly throughout the period of performance. HyperPointe The Company’s HyperPointe business provides a broad range of service and support options for HyperPointe’s customers, including technical support services and advanced services. Technical support services represent the majority of these offerings which are distinct performance obligations that are satisfied over time with revenue recognized ratably over the contract term. Advanced services are distinct performance obligations that are satisfied over time with revenue recognized as services are delivered. Revenues billed in advance are treated as deferred revenue, which was $87 and $72 as of March 31, 2024 and December 31, 2023, respectively. The Company excludes all sales taxes assessed to our customers from revenue. Sales taxes assessed on revenues are included in Accrued expenses and other current liabilities on the Company’s condensed consolidated balance sheets until remitted to state agencies. |
Gift cards, customer rewards and prepaid packages | Gift cards, customer rewards and prepaid packages XWELL offers no-fee, non-expiring gift cards to its customers. No revenue is recognized upon the issuance of a gift card and a liability is established for the gift card’s cash value. The liability is relieved, and revenue is recognized upon redemption by the customer. As the gift cards have no expiration date, there is no provision for the reduction in the value of unused card balances. In addition, XWELL maintains a rewards program in which customers earn loyalty points, which can be redeemed for future services. Loyalty points are rewarded upon joining the loyalty program, for customer birthdays, and based upon customer spending. When a customer redeems loyalty points, the Company recognizes revenue for the redeemed cash value and reduces the related loyalty program liability. In 2023 the Company adopted a formal expiration policy whereby any loyalty members with inactivity for an 18-month period will forfeit any unused loyalty rewards. The costs associated with gift cards and reward points are accrued as the rewards are earned by the cardholder and are included in Accrued expenses and other current liabilities Naples Wax Center offers prepaid wax packages that are either unlimited for one year or a set number of services. When the packages are purchased, the sales are recorded as deferred revenue. As services related to prepaid packages are used, revenue is recognized as income. The deferred revenue as of March 31, 2024 was $794 and for the year ended December 31, 2023 deferred revenue was $778. |
Translation into United States dollars | Translation into United States dollars The Company conducts certain transactions in foreign currencies, which are recorded at the exchange rate as of the transaction date. All exchange gains and losses occurring from the remeasurement of monetary balance sheet items denominated in non-dollar currencies are deemed non-operating income in the condensed consolidated statements of operations and comprehensive loss. During the three months ended March 2024, the Company recorded $166 in exchange losses occurring from the remeasurement of monetary balance sheet items denominated in non-dollar currencies. During the three months ended March 2023, the Company recorded $85 in exchange gain. Accounts of the foreign subsidiaries of XpresSpa are translated into United States dollars. Assets and liabilities have been translated primarily at period end exchange rates and revenues and expenses have been translated at average monthly rates for the three months ended March 31, 2024. The translation adjustments arising from the use of different exchange rates are included as foreign currency translation within the condensed consolidated statements of operations and comprehensive income (loss) and condensed consolidated statements of changes in stockholders’ equity. |
Business Combinations | Business Combinations The Company uses the provisions of ASC Topic 805, Business Combinations (“ASC 805”) in the accounting for acquisitions of businesses. ASC 805 requires the Company to use the acquisition method of accounting by recognizing the identifiable tangible and intangible assets acquired and liabilities assumed, and any non-controlling interest in the acquired business, measured at their acquisition date fair values. Goodwill as of the acquisition date is measured as the excess of consideration transferred over the aforementioned amounts. While the Company uses its best estimates and assumptions to accurately apply preliminary values to assets acquired and liabilities assumed at the acquisition date, these estimates are inherently uncertain and subject to refinement. As a result, during the measurement period, which may be up to one year from the acquisition date, the Company may record adjustments to the assets acquired and liabilities assumed with the corresponding offset to goodwill. Upon the conclusion of the measurement period or final determination of the values of the assets acquired or liabilities assumed, whichever comes first, any subsequent adjustments are recorded in the condensed consolidated statements of operations. Accounting for business combinations requires management to make significant estimates and assumptions, especially at the acquisition date, including estimates for intangible assets. Although the Company believes the assumptions and estimates that have been made are reasonable and appropriate, they are based in part on historical experience and information obtained from the acquired companies and are inherently uncertain. Estimates in valuing certain of the intangible assets the Company has acquired include future expected cash flows, and discount rates. |
Intangible assets | Intangible assets Intangible assets include customer relationships, trade names, and technology, which were primarily acquired as part of the acquisition of XpresSpa in December 2016, HyperPointe in 2022 and Naples Wax Center in 2023 and were recorded based on the estimated fair value in purchase price allocation. In addition, intangible assets include software and website development costs that were capitalized as part of the Company’s development of a mobile application and website for the Treat brand. The Company accounts for these costs in accordance with ASC 350-40, Internal-Use Software. The intangible assets are amortized over their estimated useful lives, which are periodically evaluated for reasonableness. The Company’s intangible assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. The fair value is then compared to the carrying value and an impairment charge is recognized by the amount in which the carrying value exceeds the fair value of the asset. In assessing the recoverability of the Company’s intangible assets, the Company must make estimates and assumptions regarding future cash flows and other factors to determine the fair value of the respective assets. These estimates and assumptions could have a significant impact on whether an impairment charge is recognized and the magnitude of any such charge. Fair value estimates are made at a specific point in time, based on relevant information. |
Goodwill | Goodwill Goodwill represents the cost of a business acquisition in excess of the fair value of the net assets acquired. Goodwill is not amortized and is reviewed for impairment annually, or more frequently if facts and circumstances indicate that it is more likely than not that the fair value of a reporting unit is less than its carrying amount, including goodwill. If it is more likely than not that the fair value of a reporting unit is less than its carrying amount, the company performs a quantitative test to identify and measure the amount of goodwill impairment loss. The Company compares the fair value of the reporting unit with its carrying amount. If the carrying amount exceeds fair value, goodwill of the reporting unit is considered impaired, and that excess is recognized as a goodwill impairment loss. During the quarter ended March 31, 2024, the Company did not record any goodwill impairment loss. |
Reclassification | Reclassification Certain balances in the unaudited condensed consolidated financial statements for the three months ended March 31, 2023 have been reclassified to conform to the presentation in the unaudited condensed consolidated financial statements for the three months ended March 31, 2024, primarily the presentation of revenue, general and administrative expense, foreign currency exchange gain, and the realized and unrealized gain on investments and other operating expenses. The above separation affected revenue classifications, general and administrative expenses, foreign currency exchange gain, and the realized and unrealized gain on investments and other operating expenses in the comparative 2023 financial statements. Such reclassifications did not have a material impact on the unaudited condensed consolidated financial statements. |
Impairment of Long-Lived Assets | Impairment of Long-Lived Assets Long-lived assets are tested for impairment at the lowest level at which there are identifiable operating cash flows. The Company’s long-lived assets consist primarily of leasehold improvements and right to use lease assets for each of its locations (considered the asset group). The Company reviews its long-lived assets for recoverability yearly or sooner if events or changes in circumstances indicate that the carrying value of long-lived assets may not be recoverable. If indicators are present, the Company performs a recoverability test by comparing the sum of the estimated undiscounted future cash flows attributable to the asset group in question to its carrying amount. An impairment loss is recognized if it is determined that the long-lived asset group is not recoverable and is calculated based on the excess of the carrying amount of the long-lived asset group over the long-lived asset group’s fair value. The Company estimates the fair value of long-lived assets using present value income approach. Future cash flows are calculated based on forecasts over the estimated remaining useful life of the asset group, which for each of the Company’s locations, is the remaining term of the operating lease. The estimates used to calculate future cash flows are subjective in nature and involve uncertainties and matters of significant judgments and therefore cannot be determined with precision. Changes in assumptions could significantly affect the estimated fair value of each asset group. The Company will calculate the future cash flow using what it believes to be the most predictable of several scenarios. Typically, the changes in assumptions run under different business scenarios would not result in a material change in the assessment of the potential impairment or the impairment amount of a locations long-lived asset group. But if these estimates or related assumptions were to change materially, the Company may be required to record an impairment charge. During the three months ended March 31, 2024 the Company recorded impairment of long-lived assets of $652 compared with $0 impairment of long-lived assets in March 2023. |
Recently Issued Accounting Standards | Recently Issued Accounting Standards ASU No. 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures In November 2023, the Financial Accounting Standards Board (FASB) issued ASU No. 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures (ASU 2023-07), which requires an enhanced disclosure of significant segment expenses on an annual and interim basis. This guidance will be effective for the annual periods beginning the year ended December 31, 2024, and for interim periods beginning January 1, 2025. Early adoption is permitted. Upon adoption, the guidance should be applied retrospectively to all prior periods presented in the financial statements. The Company is currently evaluating segment expense disclosures related to its annual report for fiscal year 2024. ASU No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures (ASU 2023-09), which improves the transparency of income tax disclosures by requiring consistent categories and greater disaggregation of information in the effective tax rate reconciliation and income taxes paid disaggregated by jurisdiction. It also includes certain other amendments to improve the effectiveness of income tax disclosures. This guidance will be effective for the annual periods beginning the year ended December 31, 2025. Early adoption is permitted. Upon adoption, the guidance can be applied prospectively or retrospectively. The Company is currently evaluating income tax disclosures related to its annual report for fiscal year 2025. |
Potentially Dilutive Securiti_2
Potentially Dilutive Securities (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Potentially Dilutive Securities | |
Schedule of computation of basic and diluted (losses)/net earnings per common share | Three months ended March 31, 2024 2023 Basic numerator: Net loss attributable to XWELL, Inc. $ (2,512) $ (5,509) Basic denominator: Basic weighted average shares outstanding 4,182,617 4,167,295 Basic loss per share $ (0.60) $ (1.32) Net loss per share data presented above excludes from the calculation of diluted net (loss) income, the following potentially dilutive securities, having an anti-dilutive impact, in case of net loss Both vested and unvested options to purchase an equal number of shares of Common Stock 452,474 384,719 Unvested RSUs to issue an equal number of shares of Common Stock 6,458 16,319 Warrants to purchase an equal number of shares of Common Stock — 200 Total number of potentially dilutive securities excluded from the calculation of earnings/(loss) per share attributable to common shareholders 458,932 401,238 |
Cash, Cash Equivalents, and R_2
Cash, Cash Equivalents, and Restricted Cash (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Cash, Cash Equivalents, and Restricted Cash | |
Schedule of cash, cash equivalents, and restricted cash | March 31, 2024 December 31, 2023 Cash denominated in United States dollars $ 1,875 $ 5,726 Cash denominated in currency other than United States dollars 2,155 2,395 Restricted cash 751 751 Credit and debit card receivables 287 316 Total cash, cash equivalents and restricted cash $ 5,068 $ 9,188 |
Other current assets (Tables)
Other current assets (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Other current assets | |
Schedule of other current assets | March 31, 2024 December 31, 2023 Prepaid expenses $ 1,602 $ 894 Other 19 55 Total other current assets $ 1,621 $ 949 |
Intangible Assets (Tables)
Intangible Assets (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Intangible Assets | |
Schedule of carrying amounts for intangible assets subject to amortization | March 31, 2024 December 31, 2023 Gross Net Gross Net Carrying Accumulated Carrying Carrying Accumulated Carrying Amount Amortization Amount Amount Amortization Amount Trade names $ 200 $ (12) $ 188 $ 200 $ (6) $ 194 Customer relationships 1,012 (366) 646 1,012 (341) 671 Software 2,593 (2,174) 419 2,593 (2,120) 473 Licenses 35 (24) 11 35 (20) 15 Total intangible assets $ 3,840 $ (2,576) $ 1,264 $ 3,840 $ (2,487) $ 1,353 |
Schedule of future estimated amortization expense for intangible assets subject to amortization | Calendar Years ending December 31, Amount Remaining 2024 $ 229 2025 307 2026 228 2027 122 2028 122 Thereafter 256 Total $ 1,264 |
Accrued expenses and other cu_2
Accrued expenses and other current liabilities (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Accrued expenses and other current liabilities | |
Schedule of accrued expenses and other current liabilities | March 31, 2024 December 31, 2023 Litigation accrual $ 424 $ 449 Accrued compensation 1,184 2,098 Tax-related liabilities 485 501 Common area maintenance accruals 495 8 Accounts payable accruals 235 913 Gift certificates 508 509 Credit card processing fees 5 8 Other miscellaneous accruals 359 482 Total accrued expenses and other current liabilities $ 3,695 $ 4,968 |
Leases (Tables)
Leases (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Leases | |
Schedule of supplemental cash flow information related to leases | Three months ended March 31, 2024 2023 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ (835) $ (973) |
Schedule of future minimum commitments | Calendar Years ending December 31, Amount Remaining 2024 $ 2,577 2025 3,054 2026 1,979 2027 1,866 2028 1,497 2029 1,273 Thereafter 2,609 Total future lease payments 14,855 Less: interest expense at incremental borrowing rate (2,745) Net present value of lease liabilities $ 12,110 |
Schedule of other assumptions and pertinent information | Weighted average remaining lease term: 5.95 years Weighted average discount rate used to determine present value of operating lease liability: 7.33 % |
Other Assets (Tables)
Other Assets (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Other Assets | |
Schedule of other assets | March 31, 2024 December 31, 2023 Equity investments $ 92 $ 50 Lease deposits 1,523 1,556 Other 170 236 Other assets $ 1,785 $ 1,842 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Stockholders' Equity | |
Schedule of variables used as inputs in calculation of fair value of stock options | Share price of the Company’s Common Stock on the grant date: $ 1.50 Exercise price: $ 1.50 Expected volatility: 121.04 % Expected dividend yield: 0 % Annual average risk-free rate: 4.14 % Expected term: 6.32 years |
Schedule of stock options and restricted stock units activity | RSUs XpresTest RSAs Stock options Weighted Weighted Weighted average average average Exercise No. of grant date No. of grant date No. of exercise price RSUs fair value RSAs fair value options price range Outstanding as of December 31, 2023 11,944 $ 6.08 5.00 $ 47,570 341,205 $ 26.85 $ 4.60 - 49,200 Granted — - — — 150,000 $ 1.50 1.50 Exercised/Vested (2,986) 6.13 — — — — Forfeited (2,500) 5.09 — — (29,278) $ 17.40 $ 1.50 - 34.40 Expired — — — — (9,453) $ 67.89 $ 8.00 - 49,200 Outstanding as of March 31, 2024 6,458 $ 6.74 5.00 $ 47,570 452,474 $ 18.20 $ 1.50 - 7,080 Exercisable as of March 31, 2024 272,683 $ 25.07 $ 4.60- 7,080 |
Segment Information (Tables)
Segment Information (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Segment Information | |
Schedule of segment reporting information, by segment | For the three months ended March 31, 2024 2023 Revenue XpresSpa $ 4,345 $ 4,499 XpresTest 3,643 2,360 Naples Wax 648 — Treat 90 204 Total revenue $ 8,726 $ 7,063 2024 2023 Operating loss XpresSpa $ (2,107) $ (3,132) XpresTest 1,670 (281) Naples Wax (78) — Treat (673) (444) Corporate and other (1,191) (2,431) Total operating loss $ (2,379) $ (6,288) 2024 2023 Depreciation & amortization XpresSpa $ 132 $ 423 XpresTest 26 86 Naples Wax 31 — Treat 19 65 Corporate and other 17 13 Total depreciation & amortization $ 225 $ 587 For the three months ended March 31, 2024 2023 Capital expenditures XpresSpa $ 261 $ 834 XpresTest 28 28 Naples Wax 22 — Treat — 33 Corporate and other — 7 Total capital expenditures $ 311 $ 902 March 31, 2024 December 31, 2023 Long-lived Assets XpresSpa $ 8,383 $ 8,268 XpresTest 58 92 Naples Wax 2,711 1,371 Treat 28 669 Corporate and other 406 438 Total long-lived Assets $ 11,586 $ 10,838 March 31, 2024 December 31, 2023 Assets XpresSpa $ 19,098 $ 18,453 XpresTest 3,197 2,408 Naples Wax 3,784 2,951 Treat 524 848 Corporate and other 10,874 14,333 Total assets $ 37,477 $ 38,993 |
Business, Basis of Presentati_2
Business, Basis of Presentation and Liquidity (Details) $ / shares in Units, $ in Thousands | 3 Months Ended | ||||
Sep. 28, 2023 | Sep. 12, 2023 USD ($) location | Mar. 31, 2024 USD ($) segment location $ / shares | Dec. 31, 2023 USD ($) $ / shares | Oct. 25, 2022 $ / shares | |
Common stock, par value | $ / shares | $ 0.01 | $ 0.01 | $ 0.01 | ||
Number of operating segments | segment | 4 | ||||
Reverse stock split, conversion ratio | 0.05 | ||||
Reverse stock split, multiplying factor for price per share | 20 | ||||
Cash and cash equivalents | $ | $ 4,317 | $ 8,437 | |||
Marketable securities | $ | 14,784 | 14,613 | |||
Total current assets | $ | 24,456 | 26,566 | |||
Total current liabilities | $ | 9,187 | 9,330 | |||
Working capital | $ | $ 15,269 | $ 17,236 | |||
XpresSpa | United States | |||||
Number of operating locations | 21 | ||||
Number of operating locations, company-owned | 19 | ||||
Number of operating locations, franchises | 2 | ||||
XpresSpa | Non-US | |||||
Number of operating locations | 11 | ||||
Naples Wax LLC | |||||
Consideration paid | $ | $ 1,624 | ||||
Number of operating locations | 3 | ||||
Dubai International Airport | XpresSpa | Non-US | |||||
Number of operating locations | 2 | ||||
Zayad International Airport | XpresSpa | Non-US | |||||
Number of operating locations | 1 | ||||
Schiphol Amsterdam Airport | XpresSpa | Non-US | |||||
Number of operating locations | 3 | ||||
Istanbul Airport | XpresSpa | Non-US | |||||
Number of operating locations | 5 |
Accounting and Reporting Poli_3
Accounting and Reporting Policies (Details) - USD ($) $ in Thousands | 3 Months Ended | |||
Mar. 31, 2024 | Mar. 31, 2023 | Sep. 30, 2022 | Dec. 31, 2023 | |
Foreign currency remeasurement gain/(loss) | $ (166) | $ 85 | ||
Impairment of operating lease right-of-use assets | 254 | |||
Deferred revenue | 890 | $ 861 | ||
Impairment of long-lived assets | $ 652 | 0 | ||
Naples Wax LLC | ||||
Deferred revenue, period earned | 1 year | |||
Deferred revenue, inactivity period | 18 months | |||
Deferred revenue | $ 794 | 778 | ||
Impairment loss on goodwill | $ 0 | |||
XpresTest | ||||
Revenue Contract, Term | 1 year | |||
XpresTest | CDC Program Options and Public Health Services | ||||
Unrecognized revenue contract amount | $ 16,000 | |||
XpresTest | Traveler Enrollment Initiatives | CDC Program Options and Public Health Services | ||||
Revenue recognized | 370 | |||
XpresTest | Passenger and Aircraft Wastewater Sample Collection | CDC Program Options and Public Health Services | ||||
Revenue recognized | $ 3,306 | $ 1,670 | ||
Unrecognized revenue contract amount | 10,674 | |||
HyperPointe | ||||
Deferred revenue | $ 87 | $ 72 | ||
Minimum | XpresTest | CDC Program Options and Public Health Services | ||||
Unrecognized revenue contract amount | $ 61,000 |
Potentially Dilutive Securiti_3
Potentially Dilutive Securities (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Earnings Per Share Disclosure. | ||
Net loss attributable to XWELL, Inc | $ (2,512) | $ (5,509) |
Basic weighted average shares outstanding | 4,182,617 | 4,167,295 |
Basic loss per share (in dollars per share) | $ (0.60) | $ (1.32) |
Total number of potentially dilutive securities excluded from the calculation of earnings/(loss) per share attributable to common shareholders | 458,932 | 401,238 |
Both vested and unvested options to purchase an equal number of shares of Common Stock | ||
Earnings Per Share Disclosure. | ||
Total number of potentially dilutive securities excluded from the calculation of earnings/(loss) per share attributable to common shareholders | 452,474 | 384,719 |
Unvested RSUs to issue an equal number of shares of Common Stock | ||
Earnings Per Share Disclosure. | ||
Total number of potentially dilutive securities excluded from the calculation of earnings/(loss) per share attributable to common shareholders | 6,458 | 16,319 |
Warrants to purchase an equal number of shares of Common Stock | ||
Earnings Per Share Disclosure. | ||
Total number of potentially dilutive securities excluded from the calculation of earnings/(loss) per share attributable to common shareholders | 200 |
Potentially Dilutive Securiti_4
Potentially Dilutive Securities - Reverse Stock Split (Details) | Sep. 28, 2023 |
Stockholders' Equity | |
Reverse stock split, conversion ratio | 0.05 |
Reverse stock split, multiplying factor for price per share | 20 |
Cash, Cash Equivalents, and R_3
Cash, Cash Equivalents, and Restricted Cash - Summary of Cash, Cash Equivalents, and Restricted Cash (Details) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 | Mar. 31, 2023 | Dec. 31, 2022 |
Cash, Cash Equivalents, and Restricted Cash | ||||
Cash denominated in United States dollars | $ 1,875 | $ 5,726 | ||
Cash denominated in currency other than United States dollars | 2,155 | 2,395 | ||
Restricted cash | 751 | 751 | ||
Credit and debit card receivables | 287 | 316 | ||
Total cash, cash equivalents and restricted cash | $ 5,068 | $ 9,188 | $ 10,620 | $ 19,789 |
Cash, Cash Equivalents, and R_4
Cash, Cash Equivalents, and Restricted Cash (Details) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Cash, Cash Equivalents, and Restricted Cash | ||
Deposits in excess of FDIC limits | $ 932 | $ 4,195 |
Amount of cash in overseas accounts | $ 2,155 | $ 2,395 |
Other current assets - Schedule
Other current assets - Schedule of Other Current Assets (Details) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Other current assets | ||
Prepaid expenses | $ 1,602 | $ 894 |
Other | 19 | 55 |
Total other current assets | $ 1,621 | $ 949 |
Intangible Assets - Schedule of
Intangible Assets - Schedule of Finite-Lived Intangible Assets (Details) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 3,840 | $ 3,840 |
Accumulated Amortization | (2,576) | (2,487) |
Net Carrying Amount | 1,264 | 1,353 |
Trade names | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 200 | 200 |
Accumulated Amortization | (12) | (6) |
Net Carrying Amount | 188 | 194 |
Customer relationships | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 1,012 | 1,012 |
Accumulated Amortization | (366) | (341) |
Net Carrying Amount | 646 | 671 |
Software | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 2,593 | 2,593 |
Accumulated Amortization | (2,174) | (2,120) |
Net Carrying Amount | 419 | 473 |
Licenses | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 35 | 35 |
Accumulated Amortization | (24) | (20) |
Net Carrying Amount | $ 11 | $ 15 |
Intangible Assets (Details)
Intangible Assets (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Intangible Assets | ||
Amortization expense - intangibles | $ 84 | $ 382 |
Intangible Assets - Amortizatio
Intangible Assets - Amortization Maturity (Details) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Finite-Lived Intangible Assets, Amortization Expense, Maturity Schedule [Abstract] | ||
Remaining 2024 | $ 229 | |
2025 | 307 | |
2026 | 228 | |
2027 | 122 | |
2028 | 122 | |
Thereafter | 256 | |
Total | $ 1,264 | $ 1,353 |
Accrued expenses and other cu_3
Accrued expenses and other current liabilities - Schedule of Accrued Expenses and Other Current Liabilities (Details) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Accrued expenses and other current liabilities | ||
Litigation accrual | $ 424 | $ 449 |
Accrued compensation | 1,184 | 2,098 |
Tax-related liabilities | 485 | 501 |
Common area maintenance accruals | 495 | 8 |
Accounts payable accruals | 235 | 913 |
Gift certificates | 508 | 509 |
Credit card processing fees | 5 | 8 |
Other miscellaneous accruals | 359 | 482 |
Total accrued expenses and other current liabilities | $ 3,695 | $ 4,968 |
Acquisition of Naples Wax, LLC
Acquisition of Naples Wax, LLC (Details) - Naples Wax LLC - USD ($) $ in Thousands | 3 Months Ended | |
Sep. 12, 2023 | Mar. 31, 2024 | |
Acquisition of Naples Wax, LLC | ||
Consideration paid | $ 1,624 | |
Aggregate purchase price paid in cash | 1,574 | $ 14 |
Consideration held back to cover potential indemnification claims | $ 50 | |
Consideration held back term | 6 months | |
Percentage of acquired ownership interests | 100% | |
Impairment of goodwill | 0 | |
Deductible goodwill acquired | $ 1,371 | |
Operating expenses | $ 36 |
Leases - Supplemental Cash Flow
Leases - Supplemental Cash Flow Information Related to Leases (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Leases | ||
Operating cash flows from operating leases | $ (835) | $ (973) |
Leases - Future Minimum Commitm
Leases - Future Minimum Commitments (Details) $ in Thousands | Mar. 31, 2024 USD ($) |
Leases | |
Remaining 2024 | $ 2,577 |
2025 | 3,054 |
2026 | 1,979 |
2027 | 1,866 |
2028 | 1,497 |
2029 | 1,273 |
Thereafter | 2,609 |
Total future lease payments | 14,855 |
Less: interest expense at incremental borrowing rate | (2,745) |
Net present value of lease liabilities | $ 12,110 |
Leases - Other Assumptions and
Leases - Other Assumptions and Pertinent Information (Details) | Mar. 31, 2024 |
Leases | |
Weighted average remaining lease term (years): | 5 years 11 months 12 days |
Weighted average discount rate used to determine present value of operating lease liability: | 7.33% |
Leases (Details)
Leases (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Leases | ||
Cash paid for minimum annual rental | $ 450 | $ 662 |
Variable lease payments | 360 | $ 345 |
Impairment of operating lease right-of-use assets | $ 254 |
Other Assets - Consolidated Bal
Other Assets - Consolidated Balance Sheets (Details) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Other Assets | ||
Equity investments | $ 92 | $ 50 |
Lease deposits | 1,523 | 1,556 |
Other | 170 | 236 |
Other assets | $ 1,785 | $ 1,842 |
Stockholders' Equity - 2023 Rev
Stockholders' Equity - 2023 Reverse Stock Split (Details) | Sep. 28, 2023 |
Stockholders' Equity | |
Reverse stock split, conversion ratio | 0.05 |
Reverse stock split, multiplying factor for price per share | 20 |
Stockholders' Equity - Stockhol
Stockholders' Equity - Stockholders' Equity - Stock-based Compensation (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | ||
Oct. 04, 2022 | Sep. 30, 2020 | Mar. 31, 2024 | Mar. 31, 2023 | |
Stockholders Equity [Line Items] | ||||
Total stock-based compensation | $ 282 | $ 612 | ||
Equity incentive plan 2020 | ||||
Stockholders Equity [Line Items] | ||||
Number of shares authorized (in shares) | 625,000 | 250,000 | ||
Number of additional shares authorized (in shares) | 375,000 | |||
Equity incentive plan 2020 | Employee Stock Option [Member] | ||||
Stockholders Equity [Line Items] | ||||
Award vesting period (in years) | 1 year | |||
Options expiration period (in years) | 10 years | |||
Equity incentive plan 2020 | RSUs | ||||
Stockholders Equity [Line Items] | ||||
Award vesting period (in years) | 1 year | |||
XpresTest 2020 Plan | ||||
Stockholders Equity [Line Items] | ||||
Number of shares authorized (in shares) | 200 | |||
Percentage of shares authorized for issuance (in %) | 20% | |||
Unrecognized stock-based compensation | $ 74 | $ 167 | ||
Maximum | Equity incentive plan 2020 | ||||
Stockholders Equity [Line Items] | ||||
Number of shares available for issuance (in shares) | 141,120 |
Stockholders' Equity - Variable
Stockholders' Equity - Variables Used in Estimating Fair Value of Stock Options (Details) - Employee Stock Option [Member] | 3 Months Ended |
Mar. 31, 2024 $ / shares | |
Stockholders Equity [Line Items] | |
Share price of the Company's Common Stock on the grant date: | $ 1.50 |
Exercise price: | $ 1.50 |
Expected volatility: | 121.04% |
Expected dividend yield: | 0% |
Annual average risk-free rate: | 4.14% |
Expected term: | 6 years 3 months 25 days |
Stockholders' Equity - Stock Op
Stockholders' Equity - Stock Options and RSU Activity (Details) | 3 Months Ended |
Mar. 31, 2024 $ / shares shares | |
Stockholders Equity [Line Items] | |
No. of options, Outstanding, Beginning balance | shares | 341,205 |
No. of options, Granted | shares | 150,000 |
No. of options, Forfeited | shares | (29,278) |
No. of options, Expired | shares | (9,453) |
No. of options, Outstanding, Ending balance | shares | 452,474 |
No. of options, Exercisable | shares | 272,683 |
Weighted average grant date fair value, Beginning balance | $ 26.85 |
Weighted average grant date fair value, Granted | 1.50 |
Weighted average grant date fair value, Forfeited | 17.40 |
Weighted average grant date fair value, Expired | 67.89 |
Weighted average grant date fair value, Ending balance | 18.20 |
Weighted average grant date fair value, Exercisable | 25.07 |
Exercise price range, Granted | $ 1.50 |
RSUs | |
Stockholders Equity [Line Items] | |
RSUs and RSAs Outstanding, Beginning | shares | 11,944 |
No. of RSUs and RSAs, Exercised/Vested | shares | (2,986) |
No. of RSUs and RSAs, Forfeited | shares | (2,500) |
RSUs and RSAs Outstanding, Ending | shares | 6,458 |
Weighted average grant date fair value, RSUs and RSAs, Beginning | $ 6.08 |
Weighted average grant date fair value, RSUs and RSAs exercised/vested | 6.13 |
Weighted average grant date fair value, RSUs and RSAs forfeited | 5.09 |
Weighted average grant date fair value, RSUs and RSAs, Ending | $ 6.74 |
XpresTest RSAs | |
Stockholders Equity [Line Items] | |
RSUs and RSAs Outstanding, Beginning | shares | 5 |
RSUs and RSAs Outstanding, Ending | shares | 5 |
Weighted average grant date fair value, RSUs and RSAs, Beginning | $ 47,570 |
Weighted average grant date fair value, RSUs and RSAs, Ending | 47,570 |
Minimum | |
Stockholders Equity [Line Items] | |
Exercise price range, Outstanding, Beginning balance | 4.60 |
Exercise price range, Forfeited | 1.50 |
Exercise price range, Expired | 8 |
Exercise price range, Outstanding, Ending balance | 1.50 |
Exercise price range, Exercisable | 4.60 |
Maximum | |
Stockholders Equity [Line Items] | |
Exercise price range, Outstanding, Beginning balance | 49,200 |
Exercise price range, Forfeited | 34.40 |
Exercise price range, Expired | 49,200 |
Exercise price range, Outstanding, Ending balance | 7,080 |
Exercise price range, Exercisable | $ 7,080 |
Income Taxes (Details)
Income Taxes (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2024 USD ($) | |
Income Taxes | |
Annual effective tax rate for continuing operations (in %) | 0% |
Income tax expense (benefit) attributable to state taxing jurisdictions | $ 0 |
Commitments and Contingencies (
Commitments and Contingencies (Details) - USD ($) $ in Thousands | May 09, 2022 | Mar. 31, 2024 | Dec. 31, 2023 |
OTG Management PHL B | |||
Loss Contingencies [Line Items] | |||
Sublease contractual term (in years) | 12 years | ||
Accrued expenses and other current liabilities | |||
Loss Contingencies [Line Items] | |||
Estimated litigation liability - current | $ 424 | $ 449 | |
Minimum | OTG Management PHL B | |||
Loss Contingencies [Line Items] | |||
Loss contingency damages sought | $ 864 | ||
Maximum | OTG Management PHL B | |||
Loss Contingencies [Line Items] | |||
Loss contingency damages sought | $ 2,250 |
Segment Information (Details)
Segment Information (Details) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2024 USD ($) segment location | Mar. 31, 2023 USD ($) | Dec. 31, 2023 USD ($) | |
Revenue | |||
Total revenue | $ 8,726 | $ 7,063 | |
Operating loss | |||
Total operating loss | (2,379) | (6,288) | |
Total depreciation & amortization | 225 | 587 | |
Total capital expenditures | 311 | 902 | |
Assets | |||
Total long-lived Assets | 11,586 | $ 10,838 | |
Total assets | $ 37,477 | 38,993 | |
Number of operating segments | segment | 4 | ||
Number of reportable segments | segment | 4 | ||
XpresSpa | |||
Revenue | |||
Total revenue | $ 4,345 | 4,499 | |
Operating loss | |||
Total operating loss | (2,107) | (3,132) | |
Total depreciation & amortization | 132 | 423 | |
Total capital expenditures | 261 | 834 | |
Assets | |||
Total long-lived Assets | 8,383 | 8,268 | |
Total assets | 19,098 | 18,453 | |
XpresTest | |||
Revenue | |||
Total revenue | 3,643 | 2,360 | |
Operating loss | |||
Total operating loss | 1,670 | (281) | |
Total depreciation & amortization | 26 | 86 | |
Total capital expenditures | 28 | 28 | |
Assets | |||
Total long-lived Assets | 58 | 92 | |
Total assets | 3,197 | 2,408 | |
Naples Wax | |||
Revenue | |||
Total revenue | 648 | ||
Operating loss | |||
Total operating loss | (78) | ||
Total depreciation & amortization | 31 | ||
Total capital expenditures | 22 | ||
Assets | |||
Total long-lived Assets | 2,711 | 1,371 | |
Total assets | $ 3,784 | 2,951 | |
Number of High- Performing Locations | location | 3 | ||
Treat | |||
Revenue | |||
Total revenue | $ 90 | 204 | |
Operating loss | |||
Total operating loss | (673) | (444) | |
Total depreciation & amortization | 19 | 65 | |
Total capital expenditures | 33 | ||
Assets | |||
Total long-lived Assets | 28 | 669 | |
Total assets | 524 | 848 | |
Corporate and Other | |||
Operating loss | |||
Total operating loss | (1,191) | (2,431) | |
Total depreciation & amortization | 17 | 13 | |
Total capital expenditures | $ 7 | ||
Assets | |||
Total long-lived Assets | 406 | 438 | |
Total assets | $ 10,874 | $ 14,333 |
Pay vs Performance Disclosure
Pay vs Performance Disclosure - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Pay vs Performance Disclosure | ||
Net Income (Loss) | $ (2,512) | $ (5,509) |
Insider Trading Arrangements
Insider Trading Arrangements | 3 Months Ended |
Mar. 31, 2024 | |
Trading Arrangements, by Individual | |
Rule 10b5-1 Arrangement Adopted | false |
Non-Rule 10b5-1 Arrangement Adopted | false |
Rule 10b5-1 Arrangement Terminated | false |
Non-Rule 10b5-1 Arrangement Terminated | false |