Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2023 | Aug. 10, 2023 | |
Document and Entity Information | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Jun. 30, 2023 | |
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 $0.01 per share | |
Trading Symbol | XWEL | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 83,487,663 | |
Entity Central Index Key | 0001410428 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2023 | |
Document Fiscal Period Focus | Q2 | |
Amendment Flag | false |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
Current assets | ||
Cash and cash equivalents | $ 6,378 | $ 19,038 |
Marketable securities | 25,526 | 23,153 |
Accounts receivable | 1,934 | 2,858 |
Inventory | 845 | 1,161 |
Other current assets | 1,445 | 1,122 |
Total current assets | 36,128 | 47,332 |
Restricted cash | 751 | 751 |
Property and equipment, net | 3,867 | 3,666 |
Intangible assets, net | 3,710 | 4,008 |
Operating lease right of use assets, net | 6,392 | 8,276 |
Goodwill | 4,024 | 4,024 |
Other assets | 1,715 | 2,369 |
Total assets | 56,587 | 70,426 |
Current liabilities | ||
Accounts payable | 2,164 | 2,312 |
Accrued expenses and other current liabilities | 4,597 | 5,719 |
Current portion of operating lease liabilities | 2,243 | 2,586 |
Deferred revenue | 262 | 339 |
Total current liabilities | 9,266 | 10,956 |
Long-term liabilities | ||
Operating lease liabilities | 10,321 | 11,521 |
Total liabilities | 19,587 | 22,477 |
Commitments and contingencies (see Note 13) | ||
Equity | ||
Common Stock, $0.01 par value per share, 150,000,000 shares authorized; 83,418,535 and 83,232,262 shares issued and outstanding as of June 30, 2023 and December 31, 2022, respectively | 833 | 832 |
Additional paid-in capital | 468,909 | 467,740 |
Accumulated deficit | (439,351) | (428,112) |
Accumulated other comprehensive loss | (1,128) | (534) |
Total equity attributable to XWELL, Inc. | 29,263 | 39,926 |
Noncontrolling interests | 7,737 | 8,023 |
Total equity | 37,000 | 47,949 |
Total liabilities and equity | $ 56,587 | $ 70,426 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Jun. 30, 2023 | Dec. 31, 2022 |
CONDENSED CONSOLIDATED BALANCE SHEETS | ||
Common stock, par value | $ 0.01 | $ 0.01 |
Common stock, authorized | 150,000,000 | 150,000,000 |
Common stock, issued | 83,418,535 | 83,232,262 |
Common stock, outstanding | 83,418,535 | 83,232,262 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Revenue, net | ||||
Total revenue, net | $ 8,175 | $ 13,597 | $ 15,238 | $ 37,645 |
Cost of sales | ||||
Labor | 4,769 | 5,477 | 9,147 | 10,939 |
Occupancy | 961 | 1,262 | 2,174 | 2,330 |
Products and other operating costs | 1,255 | 5,618 | 2,205 | 14,135 |
Total cost of sales | 6,985 | 12,357 | 13,526 | 27,404 |
Gross Profit | 1,190 | 1,240 | 1,712 | 10,241 |
Depreciation and amortization | 593 | 1,501 | 1,180 | 2,765 |
Loss (gain) on disposal of assets | 18 | (52) | 18 | (52) |
Advertising and promotion expense | 204 | 1,222 | 315 | 2,833 |
IT/Hosting services | 204 | 839 | 913 | 1,506 |
Other general and administrative expenses | 4,895 | 5,497 | 10,298 | 13,407 |
Total operating expenses | 5,914 | 9,007 | 12,724 | 20,459 |
Operating loss | (4,724) | (7,767) | (11,012) | (10,218) |
Interest income, net | 105 | 38 | 229 | 45 |
Realized and unrealized foreign exchange loss | (1,141) | (3) | (1,056) | (5) |
Gain on Securities, realized and unrealized | 201 | 478 | ||
Other non-operating expense, net | (120) | (193) | (147) | (509) |
Loss before income taxes | (5,679) | (7,925) | (11,508) | (10,687) |
Income tax expense | (2) | (2) | ||
Net loss | (5,679) | (7,927) | (11,508) | (10,689) |
Net (income) loss attributable to noncontrolling interests | (51) | 9 | 269 | (1,512) |
Net loss attributable to XWELL, Inc. | (5,730) | (7,918) | (11,239) | (12,201) |
Net loss | (5,679) | (7,927) | (11,508) | (10,689) |
Other comprehensive loss | (464) | (105) | (594) | (146) |
Comprehensive loss | $ (6,143) | $ (8,032) | $ (12,102) | $ (10,835) |
Loss per share | ||||
Basic loss per share (in dollars per share) | $ (0.07) | $ (0.08) | $ (0.13) | $ (0.12) |
Diluted loss per share (in dollars per share) | $ (0.07) | $ (0.08) | $ (0.13) | $ (0.12) |
Weighted-average number of shares outstanding during the period | ||||
Basic (in shares) | 83,410,562 | 95,352,025 | 83,378,408 | 98,458,153 |
Diluted (in shares) | 83,410,562 | 95,352,025 | 83,378,408 | 98,458,153 |
Patient services revenue | ||||
Revenue, net | ||||
Total revenue, net | $ 17 | $ 7,732 | $ 148 | $ 27,121 |
Services | ||||
Revenue, net | ||||
Total revenue, net | 6,869 | 4,787 | 12,641 | 8,564 |
Products | ||||
Revenue, net | ||||
Total revenue, net | 701 | 421 | 1,297 | 766 |
HyperPointe Services | ||||
Revenue, net | ||||
Total revenue, net | 574 | $ 657 | 1,135 | 1,180 |
Other | ||||
Revenue, net | ||||
Total revenue, net | $ 14 | $ 17 | $ 14 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT) - USD ($) $ in Thousands | Common Stock | Treasury Stock | Additional paid-in capital | Accumulated deficit | Accumulated other comprehensive loss | Total Company equity | Non-controlling interests | Total |
Balance Beginning at Dec. 31, 2021 | $ 1,013 | $ 487,306 | $ (395,275) | $ (312) | $ 92,732 | $ 7,203 | $ 99,935 | |
Common Stock, Shares, Outstanding, Beginning Balance at Dec. 31, 2021 | 101,269,349 | |||||||
Issuance of Common Stock for acquisition | $ 5 | 901 | 906 | 906 | ||||
Issuance of Common Stock for acquisition (in shares) | 552,487 | |||||||
Vesting of restricted stock units | $ 4 | (4) | ||||||
Vesting of restricted stock units (shares) | 391,820 | |||||||
Value of Shares Withheld to fund payroll taxes | (73) | (73) | (73) | |||||
Stock-based compensation | 1,543 | 1,543 | 1,543 | |||||
Net loss for the period | (4,283) | (4,283) | 1,521 | (2,762) | ||||
Repurchase and retirement of common stock | $ (71) | (11,024) | (11,095) | (11,095) | ||||
Repurchase and retirement of common stock (in shares) | (7,142,446) | |||||||
Foreign currency translation | (41) | (41) | (41) | |||||
Distributions to noncontrolling interests | (824) | (824) | ||||||
Contributions from noncontrolling interests | 200 | 200 | ||||||
Balance Ending at Mar. 31, 2022 | $ 951 | 478,649 | (399,558) | (353) | 79,689 | 8,100 | 87,789 | |
Common Stock, Shares, Outstanding, Ending Balance at Mar. 31, 2022 | 95,071,210 | |||||||
Balance Beginning at Dec. 31, 2021 | $ 1,013 | 487,306 | (395,275) | (312) | 92,732 | 7,203 | 99,935 | |
Common Stock, Shares, Outstanding, Beginning Balance at Dec. 31, 2021 | 101,269,349 | |||||||
Net loss for the period | (10,689) | |||||||
Balance Ending at Jun. 30, 2022 | $ 954 | $ (1,021) | 479,432 | (407,476) | (458) | 71,431 | 8,508 | 79,939 |
Common Stock, Shares, Outstanding, Ending Balance at Jun. 30, 2022 | 95,360,271 | |||||||
Treasury Stock, Shares, Outstanding, Ending Balance at Jun. 30, 2022 | (1,338,404) | |||||||
Balance Beginning at Mar. 31, 2022 | $ 951 | 478,649 | (399,558) | (353) | 79,689 | 8,100 | 87,789 | |
Common Stock, Shares, Outstanding, Beginning Balance at Mar. 31, 2022 | 95,071,210 | |||||||
Vesting of restricted stock units | $ 3 | (3) | ||||||
Vesting of restricted stock units (shares) | 289,061 | |||||||
Grant of stock options for services | 15 | 15 | 15 | |||||
Stock-based compensation | 771 | 771 | 549 | 1,320 | ||||
Net loss for the period | (7,918) | (7,918) | (9) | (7,927) | ||||
Repurchase of common stock | $ (1,021) | (1,021) | (1,021) | |||||
Repurchase of common stock (in shares) | (1,338,404) | |||||||
Foreign currency translation | (105) | (105) | (105) | |||||
Distributions to noncontrolling interests | (132) | (132) | ||||||
Balance Ending at Jun. 30, 2022 | $ 954 | $ (1,021) | 479,432 | (407,476) | (458) | 71,431 | 8,508 | 79,939 |
Common Stock, Shares, Outstanding, Ending Balance at Jun. 30, 2022 | 95,360,271 | |||||||
Treasury Stock, Shares, Outstanding, Ending Balance at Jun. 30, 2022 | (1,338,404) | |||||||
Balance Beginning at Dec. 31, 2022 | $ 832 | 467,740 | (428,112) | (534) | 39,926 | 8,023 | $ 47,949 | |
Common Stock, Shares, Outstanding, Beginning Balance at Dec. 31, 2022 | 83,232,262 | 83,232,262 | ||||||
Issuance of restricted stock units | $ 1 | (1) | ||||||
Issuance of restricted stock units (in shares) | 120,318 | |||||||
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 | $ 833 | 468,306 | (433,621) | (664) | 34,854 | 7,737 | 42,591 | |
Common Stock, Shares, Outstanding, Ending Balance at Mar. 31, 2023 | 83,352,580 | |||||||
Balance Beginning at Dec. 31, 2022 | $ 832 | 467,740 | (428,112) | (534) | 39,926 | 8,023 | $ 47,949 | |
Common Stock, Shares, Outstanding, Beginning Balance at Dec. 31, 2022 | 83,232,262 | 83,232,262 | ||||||
Net loss for the period | $ (11,508) | |||||||
Balance Ending at Jun. 30, 2023 | $ 833 | 468,909 | (439,351) | (1,128) | 29,263 | 7,737 | $ 37,000 | |
Common Stock, Shares, Outstanding, Ending Balance at Jun. 30, 2023 | 83,418,535 | 83,418,535 | ||||||
Balance Beginning at Mar. 31, 2023 | $ 833 | 468,306 | (433,621) | (664) | 34,854 | 7,737 | $ 42,591 | |
Common Stock, Shares, Outstanding, Beginning Balance at Mar. 31, 2023 | 83,352,580 | |||||||
Issuance of restricted stock units (in shares) | 65,955 | |||||||
Stock-based compensation | 603 | 603 | 23 | 626 | ||||
Net loss for the period | (5,730) | (5,730) | 51 | (5,679) | ||||
Foreign currency translation | (464) | (464) | 46 | (418) | ||||
Distributions to noncontrolling interests | (120) | (120) | ||||||
Balance Ending at Jun. 30, 2023 | $ 833 | $ 468,909 | $ (439,351) | $ (1,128) | $ 29,263 | $ 7,737 | $ 37,000 | |
Common Stock, Shares, Outstanding, Ending Balance at Jun. 30, 2023 | 83,418,535 | 83,418,535 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2023 | Jun. 30, 2022 | |
Cash flows from operating activities | ||
Net loss | $ (11,508) | $ (10,689) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation and amortization | 1,180 | 2,765 |
Unrealized loss on foreign currency remeasurements | 1,103 | |
Loss (gain) on disposal of assets | 18 | (52) |
Unrealized gain on marketable securities | (309) | |
Amortization of operating lease right of use asset | 806 | 828 |
Issuance of shares of Common Stock for services | 15 | |
Stock-based compensation | 1,238 | 2,863 |
Loss on equity investment | 33 | 430 |
Changes in assets and liabilities: | ||
Decrease in inventory | 316 | 684 |
Decrease in accounts receivable | 924 | 186 |
Decrease (increase) in other assets, current and non-current | 65 | (295) |
Decrease in deferred revenue | (77) | (1,027) |
Decrease in other liabilities, current and non-current | (2,592) | (2,803) |
Increase (decrease) in accounts payable | 185 | (1,520) |
Net cash used in operating activities | (8,618) | (8,615) |
Cash flows from investing activities | ||
Acquisition of property and equipment | (1,235) | (4,062) |
Investment in marketable securities | (2,064) | |
Acquisition of HyperPointe net of cash assumed | (4,853) | |
Acquisition of intangibles | (471) | (283) |
Net cash used in investing activities | (3,770) | (9,198) |
Cash flows from financing activities | ||
Repurchase of Common Stock | (12,116) | |
Contributions from noncontrolling interests | 200 | |
Payments for shares withheld on vesting | (22) | (73) |
Repayment of Paycheck Protection Program | (3,584) | |
Distributions to noncontrolling interests | (120) | (956) |
Net cash used in financing activities | (142) | (16,529) |
Effect of exchange rate changes on cash, cash equivalents and restricted cash | (130) | (56) |
Decrease in cash, cash equivalents and restricted cash | (12,660) | (34,398) |
Cash, cash equivalents, and restricted cash at beginning of the period | 19,789 | 106,257 |
Cash, cash equivalents, and restricted cash at end of the period | 7,129 | 71,859 |
Cash paid for | ||
Interest | 10 | |
Income taxes | 122 | 2 |
Non-cash investing and financing transactions | ||
Capital expenditures included in Accounts payable, accrued expenses and other current liabilities | $ 397 | 231 |
Issuance of Common Stock on acquisition of gcg Connect, LLC, d/b/a HyperPointe | $ 906 |
Business, Basis of Presentation
Business, Basis of Presentation and Liquidity | 6 Months Ended |
Jun. 30, 2023 | |
Business, Basis of Presentation and Liquidity | |
Business, Basis of Presentation and Liquidity | Note 1. Business, Basis of Presentation and Liquidity Overview 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” since the opening of the trading market on October 25, 2022. 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. XWELL is a global travel health and wellness services holding company. XWELL currently has four reportable operating segments: XpresSpa ® , Xpres Test ® , Treat ™ , and HyperPointe which was acquired in January 2022. 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 June 30, 2023, there were 25 location in Austin-Bergstrom International Airport to its franchisee which now operates both locations at this airport. The Company also had 10 international locations operating as of June 30, 2023, including two XpresSpa locations in Dubai International Airport in the United Arab Emirates, three XpresSpa locations in Schiphol Amsterdam Airport in the Netherlands and five XpresSpa locations in Istanbul Airport in Turkey. XpresTest The Company, in partnership with certain COVID-19 testing partners, successfully launched its XpresCheck Wellness Centers through its XpresTest, Inc. subsidiary (“XpresTest”), offering testing services, also in airports. During 2022, as countries continued to relax their testing requirements resulting in rapid decline of testing volumes at the Company’s XpresCheck locations, the Company closed all but one XpresCheck Wellness Center. As of June 30, 2023, we have closed all XpresCheck locations. XpresTest began conducting biosurveillance monitoring with the Centers for Disease Control and Prevention (CDC) in collaboration with Concentric by Ginkgo in 2021 and on January 31, 2022, the Company announced the extension of the initial program, bringing the total contract to $5,534. As of August 2022, the program was renewed in partnership with Ginkgo BioWorks for a new two-year contract term which represents approximately $7,331 in revenue (for the first year) for the XpresTest segment. On August 11, 2023, the revenue for the second year was determined to be approximately $6,000. Treat The Treat segment, which is operating through XWELL’s subsidiary Treat, Inc. (“Treat”) is a travel health and wellness brand that provides access to health and wellness services for travelers at on-site centers (currently located in JFK International Airport and in Salt Lake City International Airport). In 2022, the Company’s Treat brand opened new locations in Phoenix Sky Harbor International Airport (pre-security) and Salt Lake City International Airport. With respect to these locations in Phoenix and Salt Lake City, agreements had already been executed with the airports and the decision was made to convert these locations to Treat. By the third quarter of 2022, it became clear that the Treat business required a change in strategy and as a result, the Company began to retool the offerings within the Treat locations by providing additional retail as part of our retail strategy expansion as well as lay the foundation to bring more spa-like services into the Treat location in an attempt to unify our core offering. By the fourth quarter of 2022, the decision was made to close the pre-security Treat location at Phoenix Sky Harbor Airport. As of June 30, 2023, the Treat brand operates at two locations (JFK International Airport and Salt Lake City International Airport). These remaining Treat locations offer a full retail product offering and a suite of wellness and spa services. HyperPointe The Company’s HyperPointe segment, which the Company acquired in January 2022, provides a broad range of service and support options for our customers, including technical support services and advanced services. Basis of Presentation and Principles of Consolidation The unaudited interim 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, 2022, as amended. The condensed consolidated balance sheet as of December 31, 2022 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 as well as variable interest entities in which we are the primary beneficiaries. 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 and six months ended June 30, 2023 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. Liquidity and Financial Condition As of June 30, 2023, the Company had cash and cash equivalents, excluding restricted cash, of $6,378, $25,526 in marketable securities, and total current assets of $36,128. The Company’s total current liabilities balance, which includes accounts payable, deferred revenue, accrued expenses, and operating lease liabilities was approximately $9,266 as of June 30, 2023 and $10,956 as of December 31, 2022. The working capital surplus was $26,862 as of June 30, 2023, compared to a working capital surplus of $36,376 as of December 31, 2022. The Company has significantly reduced operating and overhead expenses since the second half of 2022, while it continues to focus on returning to overall profitability. The Company has taken actions to improve its overall cash position and access to liquidity through equity offerings and debt retirements, by exploring valuable strategic partnerships, right sizing its corporate structure and streamlining its operations. |
Significant Accounting and Repo
Significant Accounting and Reporting Policies | 6 Months Ended |
Jun. 30, 2023 | |
Significant Accounting and Reporting Policies | |
Significant Accounting and Reporting Policies | Note 2. Significant Accounting and Reporting Policies (a) Revenue Recognition Policy XpresSpa The Company recognizes revenue from the sale of XpresSpa products and services when the services are rendered at XpresSpa stores 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. Revenues from the XpresSpa retail and e-commerce businesses are recorded at the time goods are shipped. The Company has also entered into collaborative agreements with marketing partners whereby it sells certain of its partners’ products in its XpresSpa spas. The Company acts as an agent for revenue recognition purposes and therefore records revenue net of the revenue share payable to the partners. Upon receipt of the non-recurring, non-refundable initial collaboration fee, management records a deferred revenue liability and recognizes revenue on a straight-line basis over the life of the collaboration agreement. 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 were 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 we are entitled to $6,761 for the sample collection (passenger and aircraft wastewater) and $570 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. The Company recognizes revenue ratably (straight line basis) over the term of the contract (one year). We will recognize revenue over time for the traveler enrollment initiative performance obligation based on the amount for which we have the right to invoice. The Company recorded $1,688 and $3,358 in revenue during the three and six months ended June 30, 2023 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. During the three months ended June 30, 2023, the Company also recorded $570 for the traveler enrollment initiatives. Treat The Company recognizes revenue from the sale of Treat products and services when the services are rendered at Treat Centers and from the sale of products at the time products are purchased at the Treat Centers 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-centers and online sales at the point at which the service has been performed or the control of the merchandise has passed to the customer. Revenues from the Treat retail and e-commerce businesses are recorded at the time goods are shipped. The Company determined that these PLLCs are variable interest entities due to its equity holder having insufficient capital at risk, and the Company having a variable interest in the PLLCs. As a result of this determination, the total revenue of the PLLCs is designated as revenue for the Company. This revenue is recognized at the point in time at which the service is performed by the PLLCs. HyperPointe Our HyperPointe segment which we acquired in January 2022, provides broad range of service and support options for our 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. Revenue billed in advance are treated as deferred revenue which was $226 and $322 as of June 30, 2023 and December 31, 2022, respectively. The Company recognized $210 from the deferred revenue balance as of December 31, 2022. HyperPointe had unbilled receivables of $291 and $0 as of June 30, 2023 and December 31, 2022, respectively, included in other current assets. 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 ( b) 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 consolidated statements of operations and comprehensive loss. During the three and six months ended June 30, 2023, the Company recognized $1,001 and $1,103, respectively, in foreign exchange losses occurring from the remeasurement of monetary balance sheet items denominated in non-dollar currencies. During the three and six months ended June 30, 2022, the Company did not incur any foreign exchange gains or losses occurring from the remeasurement of monetary balance sheet items denominated in non-dollar currencies. 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 and six months ended June 2023 and 2022. 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. (c) Business Combinations The Company applies the provisions of Financial Accounting Standards Board (“FASB”) (“ 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 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. Critical estimates in valuing certain of the intangible assets the Company has acquired include future expected cash flows, and discount rates. (d) Goodwill The Company accounts for goodwill under FASB ASC 350-30, Intangibles-Goodwill and Other. 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. (e) Reclassification Certain balances in the condensed consolidated financial statements for the three and six months ended June 30, 2022 have been reclassified to conform to the presentation in the condensed consolidated financial statements for the three and six months ended June 30, 2023, primarily the separate classification and presentation of accounts payable, gross profits, advertising and promotion expense, IT/Hosting services, and realized and unrealized foreign exchange loss. The above separation affected accounts payable, accrued expenses and other, general and administrative expenses, and other non-operating expense, net in the comparative 2022 financial statements. Such reclassifications did not have a material impact on the unaudited condensed consolidated financial statements. Recently adopted accounting pronouncements In June 2016, the FASB issued Accounting Standards Update (“ASU”) 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments ("ASU 2016-13"). ASU 2016-13's main goal is to improve financial reporting by requiring earlier recognition of credit losses on financing receivables and other financial assets in scope. The guidance is effective for annual periods beginning after December 15, 2022, including interim periods within those fiscal years. On implementation in 2023, the ASU did not have material impact on the Company’s financial statements. In October 2021, the FASB issued ASU 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers (“ASU 2021-08”). ASU 2021-08 requires contract assets and contract liabilities acquired in a business acquisition to be recognized and measured in accordance with ASC Topic 606, Revenues from Contracts with Customers, which the Company generally expects will result in the recognition and measurement of contract assets and contract liabilities in a manner that is consistent with the acquiree. For the Company, the amendments are effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. The Company implemented the ASU 2021-08 in 2023. Although, the materiality of the application of ASU 2021-08 depends on the recognition and measurement of acquired assets and liabilities associated with future acquisitions, as the Company did not have any acquisition during the three and six months ended June 2023, the adoption of ASU 2021-08 did not have material impact on the Company’s financial statements. |
Potentially Dilutive Securities
Potentially Dilutive Securities | 6 Months Ended |
Jun. 30, 2023 | |
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 Six months ended June 30, June 30, 2023 2022 2023 2022 Basic numerator: Net loss attributable to XWELL, Inc. $ (5,730) $ (7,918) $ (11,239) $ (12,201) Net loss attributable to common shareholders $ (5,730) $ (7,918) $ (11,239) $ (12,201) Basic and diluted denominator: Basic and diluted weighted average shares outstanding 83,410,562 95,352,025 83,378,408 98,458,153 Basic and diluted loss per share $ (0.07) $ (0.08) $ (0.13) $ (0.12) Net loss per share data presented above excludes from the calculation of diluted net loss, 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 7,641,697 4,756,973 7,641,697 4,756,973 Unvested RSUs to issue an equal number of shares of Common Stock 332,638 78,125 332,638 78,125 Warrants to purchase an equal number of shares of Common Stock 4,000 29,460,560 4,000 29,460,560 Total number of potentially dilutive securities excluded from the calculation of loss per share attributable to common shareholders 7,978,335 34,295,658 7,978,335 34,295,658 |
Cash, Cash Equivalents, and Res
Cash, Cash Equivalents, and Restricted Cash | 6 Months Ended |
Jun. 30, 2023 | |
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 Condensed Consolidated Balance Sheets to cash, cash equivalents and restricted cash in the Condensed Consolidated Statements of Cash Flows as of June 30, 2023 and December 31, 2022 is as follows: June 30, 2023 December 31, 2022 Cash denominated in United States dollars $ 3,550 $ 16,344 Cash denominated in currency other than United States dollars 2,686 2,562 Restricted cash 751 751 Credit and debit card receivables 142 132 Total cash, cash equivalents and restricted cash $ 7,129 $ 19,789 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 June 30, 2023 and December 31, 2022, deposits in excess of FDIC limits were $3,552 and $16,069, respectively. As of June 30, 2023 and December 31, 2022, the Company held cash balances in overseas accounts, totaling $2,686 and $2,562 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 | 6 Months Ended |
Jun. 30, 2023 | |
Other current assets | |
Other current assets | Note 5. Other current assets As of June 30, 2023 and December 31, 2022, other current assets consisted of the following: June 30, 2023 December 31, 2022 Prepaid expenses $ 1,075 $ 1,074 Contract assets 291 — Other 79 48 Total other current assets $ 1,445 $ 1,122 |
Intangible Assets
Intangible Assets | 6 Months Ended |
Jun. 30, 2023 | |
Intangible Assets | |
Intangible Assets | Note 6. Intangible Assets The following table provides information regarding the Company’s intangible assets subject to amortization, which consist of the following: June 30, 2023 December 31, 2022 Gross Net Gross Net Carrying Accumulated Carrying Carrying Accumulated Carrying Amount Amortization Amount Amount Amortization Amount Trade names $ 302 $ (37) $ 265 $ 302 $ (24) $ 278 Customer relationships 1,510 (661) 849 1,510 (542) 968 Software 4,646 (2,073) 2,573 4,485 (1,761) 2,724 Licenses 40 (17) 23 55 (17) 38 Total intangible assets $ 6,498 $ (2,788) $ 3,710 $ 6,352 $ (2,344) $ 4,008 The Company’s intangible assets are amortized over their expected useful lives. The Company recorded amortization expense of $377 and $471 during the three months ended June 30, 2023 and 2022, respectively, and $759 and $864 during the six months ended June 30, 2023 and 2022, respectively. Based on the intangible assets balance as of June 30, 2023, 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 2023 $ 834 2024 1,666 2025 502 2026 393 2027 77 Thereafter 238 Total $ 3,710 |
Variable Interest Entities
Variable Interest Entities | 6 Months Ended |
Jun. 30, 2023 | |
Variable Interest Entities | |
Variable Interest Entities | Note 7. Variable Interest Entities Through its XpresCheck Wellness and Treat Centers the Company provided services pursuant to contracts with PLLCs which, in turn contracts with physicians and other medical professional providers to render COVID-19 and other medical diagnostic testing services to airline employees, contractors, concessionaire employees, TSA officers and U.S. Customs and Border Protection agents, and the traveling public. The PLLCs collectively represent the Company’s affiliated medical group. The PLLCs were designed and structured to comply with the relevant laws and regulations governing professional medical practice, which generally prohibits the practice of medicine by lay persons or entities. All of the issued and outstanding equity interests of the PLLCs are owned by a licensed medical professional nominated by the Company (the “Nominee Shareholder”). Upon formation of the PLLCs, and initial issuance of equity interests, the Nominee Shareholder contributes a nominal amount of capital in exchange for their interest in the PLLC. The Company then executes with each PLLC a MSA, which provides for various administrative services, management services and day-to-day activities of the practice to be rendered by the Company through its XpresCheck Wellness Centers. The Company also had exclusive responsibility for the provision of all non-medical services including contracting with customers who access the PLLCs for a medical visit, handling all financial transactions and day-to-day operations of each PLLC, overseeing the establishment of COVID-19 and other medical diagnostic testing services policies, and making recommendations to the PLLC in establishing the guidelines for the employment and compensation of the physicians and other employees of the PLLCs. Notwithstanding their legal form of ownership of equity interests in the PLLC, the primary beneficiary of the affiliated medical group is the Company as it meets both of the following criteria: (i) has the power to make decisions that most significantly affect the economic performance of the affiliated medical group; and (ii) has the obligation to absorb losses or the right to receive benefits that in either case could potentially be significant to the affiliated medical group. The Company consolidated the PLLCs under the VIE model since the Company has the power to direct activities that most significantly impact the PLLCs’ economic performance and the right to receive benefits or the obligation to absorb losses that could potentially be significant to the PLLCs. The total revenue included on the condensed consolidated statements of operations and comprehensive loss for the PLLCs after elimination of intercompany transactions was $17 and $148 for the three and six months ended June 30, 2023, respectively, and $7,732 and $27,121 , for the three and six months ended June 2022, respectively. The aggregate carrying value of total assets and total liabilities included on the condensed balance sheets for the PLLCs after elimination of intercompany transactions were $275 , included in cash and cash equivalents, and $146 , included in accrued expenses and other current liabilities , respectively, as of December 31, 2022. |
Accrued expenses and other curr
Accrued expenses and other current liabilities | 6 Months Ended |
Jun. 30, 2023 | |
Accrued expenses and other current liabilities | |
Accrued expenses and other current liabilities | Note 8. Accrued expenses and other current liabilities As of June 30, 2023 and December 31, 2022, accrued expenses and other current liabilities consisted of the following: June 30, 2023 December 31, 2022 Litigation accrual $ 449 $ 963 Accrued compensation 1,749 2,008 Tax-related liabilities 552 573 Common area maintenance accruals 90 160 Accounts payable accruals 779 754 Gift certificates 495 496 Credit card processing fees 35 33 Other miscellaneous accruals 448 732 Total accrued expenses and other current liabilities $ 4,597 $ 5,719 |
Leases
Leases | 6 Months Ended |
Jun. 30, 2023 | |
Leases | |
Leases | Note 9. Leases The Company leases its retail and diagnostic testing locations at various domestic and international airports. Additionally, the Company leases its corporate office in New York City. During 2022 the Company commenced new leases at Istanbul Airport in Turkey & Salt Lake City International Airport in Utah. At inception, the Company determines if a lease qualifies under ASC 842. Certain of the Company’s lease arrangements contain fixed payments throughout the term of the lease, while others involve a variable component to determine the lease obligation wherein a certain percentage of sales is used to calculate the lease payment. All qualifying leases held by the Company are classified as operating leases. Operating lease right of use assets represent the Company’s right to use an underlying asset for the lease term and operating lease liabilities represent its obligation to make lease payments arising from the lease. Operating lease right of use assets and operating lease liabilities are recognized as of the commencement date based on the present value of lease payments over the lease term. The Company records its operating lease right of use assets and operating lease liabilities based on required guaranteed payments under each lease agreement. The Company uses its incremental borrowing rate as of the commencement date of the lease, which approximates the rate at which the Company can borrow funds on a secured basis, in determining the present value of the guaranteed lease payments. The Company reviews all of its existing lease agreements on a quarterly basis to determine whether there were any modifications to existing lease agreements and to assess if any leases should be accounted for pursuant to the guidance in ASC 842. The Company recalculates the right of use asset and lease liability based on the modified lease terms and adjusts both balances accordingly. Supplemental cash flow information related to leases for the six months ended June 30, 2023 and 2022 were as follows: Six months ended June 30, 2023 2022 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ (1,839) $ (2,031) Leased assets obtained in exchange for new and modified operating lease liabilities $ — $ 3,273 As of June 30, 2023, operating leases contain the following future minimum commitments: Calendar Years ending December 31, Amount Remaining 2023 $ 1,611 2024 3,002 2025 2,649 2026 1,634 2027 1,511 2028 1,132 Thereafter 3,341 Total future lease payments 14,880 Less: interest expense at incremental borrowing rate (2,316) Net present value of lease liabilities $ 12,564 Other assumptions and pertinent information related to the Company’s accounting for operating leases are: Weighted average remaining lease term: 6.15 years Weighted average discount rate used to determine present value of operating lease liability: 7.40 % Cash paid for minimum annual rental obligations during the three and six months ended June 30, 2023 was $598 and $1,259, respectively. Cash paid for minimum annual rental obligations during the three and six months ended June 30, 2022 was $349 and $620, respectively. Variable lease payments calculated monthly as a percentage of product and services revenue, were $365 and $324 for the three months ended June 30, 2023 and 2022, respectively, and $711 and $689 for the six months ended June 30, 2023 and 2022, respectively. |
Other Assets
Other Assets | 6 Months Ended |
Jun. 30, 2023 | |
Other Assets | |
Other Assets | Note 10. Other Assets As of June 30, 2023 and December 31, 2022, assets consisted of the following: June 30, 2023 December 31, 2022 Equity investments $ 71 $ 104 Lease deposits 1,549 1,973 Other 95 292 Other assets $ 1,715 $ 2,369 |
Stockholders' Equity
Stockholders' Equity | 6 Months Ended |
Jun. 30, 2023 | |
Stockholders' Equity | |
Stockholders' Equity | Note 11. Stockholders’ Equity Warrants The following table represents the activity related to the Company’s warrants during the six months ended June 30, 2023. Weighted average Exercise No. of Warrants exercise price price range December 31, 2022 1,172,088 $ 2.00 $ 1.7 - 2.125 Granted — — Exercised — — Expired (1,168,088) 2.01 $ 1.7 - 2.125 June 30, 2023 4,000 $ 2.125 $ 2.125 Share Repurchase Program On August 31, 2021, the Company’s board of directors initially authorized a stock repurchase program that permitted the purchase and repurchase of up to 15 million shares of its common stock through September 15, 2022. In May 2022, the Board increased the share repurchase program by an additional 10 million shares and extended its effectiveness through September 15, 2023. Under this stock repurchase program, management has discretion in determining the conditions under which shares may be purchased from time to time. The program does not require us to repurchase any specific number of shares, and may be modified, suspended or terminated at any time without prior notice. On August 16, 2022, the Inflation Reduction Act of 2022 (the “IR Act”) was signed into federal law. The IR Act provides for, among other things, a new U.S. federal 1% Stock-based Compensation 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 5,000,000 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 2020 Plan to increase the number of shares authorized for issuance under the 2020 Plan by 7,500,000 shares of Common Stock to an aggregate of 12,500,000 shares. 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 equal quarterly installments, and expire 10 years from the date of grant. RSU’s granted generally vest over a period of one year. In September 2020, XpresTest created a stock-based compensation plan available to grant stock options, Restricted Stock Awards (“RSAs”) and RSU’s to 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 June 30, 2023. Certain named executive officers, consultants, and directors of the Company are eligible to participate in the XpresTest Plan. As of June 30, 2023, there is $144 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: $ 0.36 - 0.41 Exercise price: $ 0.36 - 0.41 Expected volatility: 119.41-121.04 % Expected dividend yield: 0 % Annual average risk-free rate: 3.65 - 3.96 % Expected term: 6.32 - 6.41 years Total stock-based compensation for the three months ended June 30, 2023 and 2022 is $626 and $1,320, respectively, and for the six months ended June 30, 2023 and 2022 is $1,238 and $2,863, respectively. The Company had $2,437 and $2,506 of unrecognized stock-based compensation related to the XWELL Stock Options, as of June 30, 2023 and December 31, 2022, respectively. The following table sets forth the Company’s Equity Incentive activities for the six months ended June 30, 2023: 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, 2022 281,250 $ 0.65 5.00 $ 47,570 4,830,029 $ 2.00 $ 0.65 - 2,460 Granted 238,888 0.32 — — 2,886,388 0.40 0.36 - 0.41 Exercised/Vested (187,500) 0.65 — — — — Forfeited — — — — (49,919) 1.32 0.40 - 1.61 Expired — — — — (24,801) 11.75 1.53 - 1,908 Outstanding as of June 30, 2023 332,638 $ 0.41 5.00 $ 47,570 7,641,697 $ 1.37 $ 0.36 - 2,460 Exercisable as of June 30, 2023 3,962,957 $ 1.66 $ 0.40- 2,460 |
Income Taxes
Income Taxes | 6 Months Ended |
Jun. 30, 2023 | |
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 and six months ended June 30, 2023 reflect an estimated global annual effective tax rate of approximately 0% from continuing operations. Discontinued operations for the three and six months ended June 30, 2023 reflected an annual effective tax rate of 0%. As of June 30, 2023, 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 and six months ended June 30, 2023 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 | 6 Months Ended |
Jun. 30, 2023 | |
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 $449 and $963 as of June 30, 2023 and December 31, 2022, respectively, which is included in Accrued expenses and other current liabilities The Company expenses legal fees in the period in which they are incurred. Kyle Collins v. Spa Products Import & Distribution Co., LLC et al This is a combined class action and California Private Attorney’s General Act (“PAGA”) action. Plaintiff seeks to recover wages, penalties and PAGA penalties for claims for (1) failure to provide meal periods, (2) failure to provide rest breaks, (3) failure to pay overtime, (4) inaccurate wage statements, (5) waiting time penalties, and (6) PAGA penalties of $0.1 per employee per pay period per violation. There are approximately 240 current and former employees in the litigation class. The parties agreed to mediation on May 26, 2020, however, due to COVID-19, the parties subsequently stayed all proceedings. The mediation session occurred on March 18, 2021, and the parties reached a settlement which was approved on September 20, 2022 for the amount of $517 and additional payroll taxes of $4 . Funding of the settlement amount occurred on January 26, 2023. 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 OTG has agreed to extend XWELL’s time to respond to the Complaint to September 5, 2023. 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 | 6 Months Ended |
Jun. 30, 2023 | |
Segment Information | |
Segment Information | Note 14. Segment Information As a result of the Company’s transition to a pure-play health and wellness services company, the Company currently has four reportable operating segments: XpresSpa, XpresTest, Treat and HyperPointe, acquired in January 2022. 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 provides diagnostic COVID-19 tests at XpresCheck Wellness Centers in airports, to airport employees and to the traveling public. The Treat segment provides access to integrated care which can seamlessly fit into a post-pandemic world and is designed to deliver on-demand access to integrated healthcare through technology and personalized services, positioned for a traveler to access health care, records and real-time information all in one place, as well as book appointments in the Company’s on-site wellness centers as they reopen . For the three months ended June 30, 2023 2022 Revenue XpresSpa $ 5,228 $ 3,290 XpresTest 2,285 9,253 Treat 88 399 HyperPointe 574 655 Total revenue $ 8,175 $ 13,597 Operating income (loss) XpresSpa $ (2,822) $ (1,958) XpresTest 596 (1,937) Treat (360) (1,460) HyperPointe (113) (275) Corporate and other (2,025) (2,137) Total operating loss $ (4,724) $ (7,767) Depreciation & Amortization XpresSpa $ 431 $ 358 XpresTest 5 606 Treat 67 442 HyperPointe 78 95 Corporate and other 12 — Total Depreciation & Amortization $ 593 $ 1,501 For the six months ended June 30, 2023 2022 Revenue XpresSpa $ 9,727 $ 5,933 XpresTest 4,084 29,849 Treat 292 685 HyperPointe 1,135 1,178 Total revenue $ 15,238 $ 37,645 2023 2022 Operating loss XpresSpa $ (5,954) $ (6,413) XpresTest 571 4,268 Treat (804) (2,756) HyperPointe (369) (552) Corporate and other (4,456) (4,765) Total operating loss $ (11,012) $ (10,218) For the six months ended June 30, 2023 2022 Depreciation & amortization XpresSpa $ 854 $ 701 XpresTest 5 1,135 Treat 132 767 HyperPointe 164 157 Corporate and other 25 5 Total depreciation & amortization $ 1,180 $ 2,765 2023 2022 Capital expenditures XpresSpa $ 1,445 $ 641 XpresTest 45 614 Treat 45 2,123 HyperPointe 11 — Corporate and other 14 54 Total capital expenditures $ 1,560 $ 3,432 June 30, 2023 December 31, 2022 Long-lived Assets XpresSpa $ 10,031 $ 11,851 XpresTest 95 112 Treat 2,191 2,314 HyperPointe 4,044 4,108 Corporate and other 294 409 Total long-lived Assets $ 16,655 $ 18,794 June 30, 2023 December 31, 2022 Assets XpresSpa $ 19,861 $ 21,135 XpresTest 2,049 4,285 Treat 3,115 3,186 HyperPointe 6,326 6,913 Corporate and other 25,236 34,907 Total assets $ 56,587 $ 70,426 |
Significant Accounting and Re_2
Significant Accounting and Reporting Policies (Policies) | 6 Months Ended |
Jun. 30, 2023 | |
Significant Accounting and Reporting Policies | |
Revenue Recognition Policy | (a) Revenue Recognition Policy XpresSpa The Company recognizes revenue from the sale of XpresSpa products and services when the services are rendered at XpresSpa stores 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. Revenues from the XpresSpa retail and e-commerce businesses are recorded at the time goods are shipped. The Company has also entered into collaborative agreements with marketing partners whereby it sells certain of its partners’ products in its XpresSpa spas. The Company acts as an agent for revenue recognition purposes and therefore records revenue net of the revenue share payable to the partners. Upon receipt of the non-recurring, non-refundable initial collaboration fee, management records a deferred revenue liability and recognizes revenue on a straight-line basis over the life of the collaboration agreement. 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 were 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 we are entitled to $6,761 for the sample collection (passenger and aircraft wastewater) and $570 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. The Company recognizes revenue ratably (straight line basis) over the term of the contract (one year). We will recognize revenue over time for the traveler enrollment initiative performance obligation based on the amount for which we have the right to invoice. The Company recorded $1,688 and $3,358 in revenue during the three and six months ended June 30, 2023 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. During the three months ended June 30, 2023, the Company also recorded $570 for the traveler enrollment initiatives. Treat The Company recognizes revenue from the sale of Treat products and services when the services are rendered at Treat Centers and from the sale of products at the time products are purchased at the Treat Centers 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-centers and online sales at the point at which the service has been performed or the control of the merchandise has passed to the customer. Revenues from the Treat retail and e-commerce businesses are recorded at the time goods are shipped. The Company determined that these PLLCs are variable interest entities due to its equity holder having insufficient capital at risk, and the Company having a variable interest in the PLLCs. As a result of this determination, the total revenue of the PLLCs is designated as revenue for the Company. This revenue is recognized at the point in time at which the service is performed by the PLLCs. HyperPointe Our HyperPointe segment which we acquired in January 2022, provides broad range of service and support options for our 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. Revenue billed in advance are treated as deferred revenue which was $226 and $322 as of June 30, 2023 and December 31, 2022, respectively. The Company recognized $210 from the deferred revenue balance as of December 31, 2022. HyperPointe had unbilled receivables of $291 and $0 as of June 30, 2023 and December 31, 2022, respectively, included in other current assets. 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 |
Translation into United States dollars | ( b) 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 consolidated statements of operations and comprehensive loss. During the three and six months ended June 30, 2023, the Company recognized $1,001 and $1,103, respectively, in foreign exchange losses occurring from the remeasurement of monetary balance sheet items denominated in non-dollar currencies. During the three and six months ended June 30, 2022, the Company did not incur any foreign exchange gains or losses occurring from the remeasurement of monetary balance sheet items denominated in non-dollar currencies. 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 and six months ended June 2023 and 2022. 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 | (c) Business Combinations The Company applies the provisions of Financial Accounting Standards Board (“FASB”) (“ 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 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. Critical estimates in valuing certain of the intangible assets the Company has acquired include future expected cash flows, and discount rates. |
Goodwill | (d) Goodwill The Company accounts for goodwill under FASB ASC 350-30, Intangibles-Goodwill and Other. 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. |
Reclassification | (e) Reclassification Certain balances in the condensed consolidated financial statements for the three and six months ended June 30, 2022 have been reclassified to conform to the presentation in the condensed consolidated financial statements for the three and six months ended June 30, 2023, primarily the separate classification and presentation of accounts payable, gross profits, advertising and promotion expense, IT/Hosting services, and realized and unrealized foreign exchange loss. The above separation affected accounts payable, accrued expenses and other, general and administrative expenses, and other non-operating expense, net in the comparative 2022 financial statements. Such reclassifications did not have a material impact on the unaudited condensed consolidated financial statements. |
Recently adopted accounting pronouncements | Recently adopted accounting pronouncements In June 2016, the FASB issued Accounting Standards Update (“ASU”) 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments ("ASU 2016-13"). ASU 2016-13's main goal is to improve financial reporting by requiring earlier recognition of credit losses on financing receivables and other financial assets in scope. The guidance is effective for annual periods beginning after December 15, 2022, including interim periods within those fiscal years. On implementation in 2023, the ASU did not have material impact on the Company’s financial statements. In October 2021, the FASB issued ASU 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers (“ASU 2021-08”). ASU 2021-08 requires contract assets and contract liabilities acquired in a business acquisition to be recognized and measured in accordance with ASC Topic 606, Revenues from Contracts with Customers, which the Company generally expects will result in the recognition and measurement of contract assets and contract liabilities in a manner that is consistent with the acquiree. For the Company, the amendments are effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. The Company implemented the ASU 2021-08 in 2023. Although, the materiality of the application of ASU 2021-08 depends on the recognition and measurement of acquired assets and liabilities associated with future acquisitions, as the Company did not have any acquisition during the three and six months ended June 2023, the adoption of ASU 2021-08 did not have material impact on the Company’s financial statements. |
Potentially Dilutive Securiti_2
Potentially Dilutive Securities (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Potentially Dilutive Securities | |
Schedule of computation of basic and diluted net loss per common stock | Three months ended Six months ended June 30, June 30, 2023 2022 2023 2022 Basic numerator: Net loss attributable to XWELL, Inc. $ (5,730) $ (7,918) $ (11,239) $ (12,201) Net loss attributable to common shareholders $ (5,730) $ (7,918) $ (11,239) $ (12,201) Basic and diluted denominator: Basic and diluted weighted average shares outstanding 83,410,562 95,352,025 83,378,408 98,458,153 Basic and diluted loss per share $ (0.07) $ (0.08) $ (0.13) $ (0.12) Net loss per share data presented above excludes from the calculation of diluted net loss, 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 7,641,697 4,756,973 7,641,697 4,756,973 Unvested RSUs to issue an equal number of shares of Common Stock 332,638 78,125 332,638 78,125 Warrants to purchase an equal number of shares of Common Stock 4,000 29,460,560 4,000 29,460,560 Total number of potentially dilutive securities excluded from the calculation of loss per share attributable to common shareholders 7,978,335 34,295,658 7,978,335 34,295,658 |
Cash, Cash Equivalents, and R_2
Cash, Cash Equivalents, and Restricted Cash (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Cash, Cash Equivalents, and Restricted Cash | |
Schedule of cash, cash equivalents, and restricted cash | June 30, 2023 December 31, 2022 Cash denominated in United States dollars $ 3,550 $ 16,344 Cash denominated in currency other than United States dollars 2,686 2,562 Restricted cash 751 751 Credit and debit card receivables 142 132 Total cash, cash equivalents and restricted cash $ 7,129 $ 19,789 |
Other current assets (Tables)
Other current assets (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Other current assets | |
Schedule of other current assets | June 30, 2023 December 31, 2022 Prepaid expenses $ 1,075 $ 1,074 Contract assets 291 — Other 79 48 Total other current assets $ 1,445 $ 1,122 |
Intangible Assets (Tables)
Intangible Assets (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Intangible Assets | |
Schedule of company's intangible assets | June 30, 2023 December 31, 2022 Gross Net Gross Net Carrying Accumulated Carrying Carrying Accumulated Carrying Amount Amortization Amount Amount Amortization Amount Trade names $ 302 $ (37) $ 265 $ 302 $ (24) $ 278 Customer relationships 1,510 (661) 849 1,510 (542) 968 Software 4,646 (2,073) 2,573 4,485 (1,761) 2,724 Licenses 40 (17) 23 55 (17) 38 Total intangible assets $ 6,498 $ (2,788) $ 3,710 $ 6,352 $ (2,344) $ 4,008 |
Schedule of estimated amortization expense | Calendar Years ending December 31, Amount Remaining 2023 $ 834 2024 1,666 2025 502 2026 393 2027 77 Thereafter 238 Total $ 3,710 |
Accrued expenses and other cu_2
Accrued expenses and other current liabilities (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Accrued expenses and other current liabilities | |
Schedule of accrued expenses and other current liabilities | June 30, 2023 December 31, 2022 Litigation accrual $ 449 $ 963 Accrued compensation 1,749 2,008 Tax-related liabilities 552 573 Common area maintenance accruals 90 160 Accounts payable accruals 779 754 Gift certificates 495 496 Credit card processing fees 35 33 Other miscellaneous accruals 448 732 Total accrued expenses and other current liabilities $ 4,597 $ 5,719 |
Leases (Tables)
Leases (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Leases | |
Schedule of supplemental cash flow information related to leases | Six months ended June 30, 2023 2022 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ (1,839) $ (2,031) Leased assets obtained in exchange for new and modified operating lease liabilities $ — $ 3,273 |
Schedule of future minimum commitments | Calendar Years ending December 31, Amount Remaining 2023 $ 1,611 2024 3,002 2025 2,649 2026 1,634 2027 1,511 2028 1,132 Thereafter 3,341 Total future lease payments 14,880 Less: interest expense at incremental borrowing rate (2,316) Net present value of lease liabilities $ 12,564 |
Schedule of other assumptions and pertinent information | Weighted average remaining lease term: 6.15 years Weighted average discount rate used to determine present value of operating lease liability: 7.40 % |
Other Assets (Tables)
Other Assets (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Other Assets | |
Schedule of other assets | June 30, 2023 December 31, 2022 Equity investments $ 71 $ 104 Lease deposits 1,549 1,973 Other 95 292 Other assets $ 1,715 $ 2,369 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Stockholders' Equity | |
Schedule of information about all warrant activity | Weighted average Exercise No. of Warrants exercise price price range December 31, 2022 1,172,088 $ 2.00 $ 1.7 - 2.125 Granted — — Exercised — — Expired (1,168,088) 2.01 $ 1.7 - 2.125 June 30, 2023 4,000 $ 2.125 $ 2.125 |
Schedule of fair value of stock options estimated | Share price of the Company’s Common Stock on the grant date: $ 0.36 - 0.41 Exercise price: $ 0.36 - 0.41 Expected volatility: 119.41-121.04 % Expected dividend yield: 0 % Annual average risk-free rate: 3.65 - 3.96 % Expected term: 6.32 - 6.41 years |
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, 2022 281,250 $ 0.65 5.00 $ 47,570 4,830,029 $ 2.00 $ 0.65 - 2,460 Granted 238,888 0.32 — — 2,886,388 0.40 0.36 - 0.41 Exercised/Vested (187,500) 0.65 — — — — Forfeited — — — — (49,919) 1.32 0.40 - 1.61 Expired — — — — (24,801) 11.75 1.53 - 1,908 Outstanding as of June 30, 2023 332,638 $ 0.41 5.00 $ 47,570 7,641,697 $ 1.37 $ 0.36 - 2,460 Exercisable as of June 30, 2023 3,962,957 $ 1.66 $ 0.40- 2,460 |
Segment Information (Tables)
Segment Information (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Segment Information | |
Schedule of segment reporting information, by segment | For the three months ended June 30, 2023 2022 Revenue XpresSpa $ 5,228 $ 3,290 XpresTest 2,285 9,253 Treat 88 399 HyperPointe 574 655 Total revenue $ 8,175 $ 13,597 Operating income (loss) XpresSpa $ (2,822) $ (1,958) XpresTest 596 (1,937) Treat (360) (1,460) HyperPointe (113) (275) Corporate and other (2,025) (2,137) Total operating loss $ (4,724) $ (7,767) Depreciation & Amortization XpresSpa $ 431 $ 358 XpresTest 5 606 Treat 67 442 HyperPointe 78 95 Corporate and other 12 — Total Depreciation & Amortization $ 593 $ 1,501 For the six months ended June 30, 2023 2022 Revenue XpresSpa $ 9,727 $ 5,933 XpresTest 4,084 29,849 Treat 292 685 HyperPointe 1,135 1,178 Total revenue $ 15,238 $ 37,645 2023 2022 Operating loss XpresSpa $ (5,954) $ (6,413) XpresTest 571 4,268 Treat (804) (2,756) HyperPointe (369) (552) Corporate and other (4,456) (4,765) Total operating loss $ (11,012) $ (10,218) For the six months ended June 30, 2023 2022 Depreciation & amortization XpresSpa $ 854 $ 701 XpresTest 5 1,135 Treat 132 767 HyperPointe 164 157 Corporate and other 25 5 Total depreciation & amortization $ 1,180 $ 2,765 2023 2022 Capital expenditures XpresSpa $ 1,445 $ 641 XpresTest 45 614 Treat 45 2,123 HyperPointe 11 — Corporate and other 14 54 Total capital expenditures $ 1,560 $ 3,432 June 30, 2023 December 31, 2022 Long-lived Assets XpresSpa $ 10,031 $ 11,851 XpresTest 95 112 Treat 2,191 2,314 HyperPointe 4,044 4,108 Corporate and other 294 409 Total long-lived Assets $ 16,655 $ 18,794 June 30, 2023 December 31, 2022 Assets XpresSpa $ 19,861 $ 21,135 XpresTest 2,049 4,285 Treat 3,115 3,186 HyperPointe 6,326 6,913 Corporate and other 25,236 34,907 Total assets $ 56,587 $ 70,426 |
Business, Basis of Presentati_2
Business, Basis of Presentation and Liquidity (Details) $ / shares in Units, $ in Thousands | 6 Months Ended | 12 Months Ended | ||||
Jun. 30, 2023 USD ($) location segment $ / shares | Dec. 31, 2022 USD ($) location $ / shares | Aug. 11, 2023 USD ($) | Oct. 24, 2022 $ / shares | Aug. 31, 2022 USD ($) | Jan. 31, 2022 USD ($) | |
Common stock, par value | $ / shares | $ 0.01 | $ 0.01 | $ 0.01 | |||
Number of operating segments | segment | 4 | |||||
Contract revenue | $ 291 | |||||
Cash and cash equivalents | 6,378 | $ 19,038 | ||||
Marketable securities | 25,526 | 23,153 | ||||
Total current assets | 36,128 | 47,332 | ||||
Total current liabilities | 9,266 | 10,956 | ||||
Working capital | $ 26,862 | $ 36,376 | ||||
XpresSpa | United States | ||||||
Number of operating locations | location | 25 | |||||
XpresSpa | Non-US | ||||||
Number of airport locations | location | 10 | |||||
XpresTest | ||||||
Contract revenue | $ 6,000 | $ 7,331 | ||||
Treat | ||||||
Number of operating locations | location | 2 | |||||
Austin-Bergstrom International Airport | XpresSpa | ||||||
Number of franchise locations sold | location | 1 | |||||
Dubai International Airport | Non-US | ||||||
Number of operating locations | location | 2 | |||||
Schiphol Amsterdam Airport | Non-US | ||||||
Number of operating locations | location | 3 | |||||
Istanbul Airport | Non-US | ||||||
Number of operating locations | location | 5 | |||||
Centers for Disease Control and Prevention | XpresTest | ||||||
Unrecognized revenue | $ 5,534 |
Significant Accounting and Re_3
Significant Accounting and Reporting Policies (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | Dec. 31, 2022 | Sep. 30, 2022 | Jan. 31, 2022 | |
Total revenue | $ 8,175 | $ 13,597 | $ 15,238 | $ 37,645 | |||
Foreign exchange losses | (1,141) | (3) | (1,056) | (5) | |||
Foreign Currency Gain (Loss) [Member] | |||||||
Foreign exchange losses | 1,001 | $ 0 | 1,103 | $ 0 | |||
XpresTest | Centers for Disease Control and Prevention | |||||||
Unrecognized revenue | $ 5,534 | ||||||
XpresTest | CDC Program Options and Public Health Services | |||||||
Total revenue | 1,688 | 3,358 | |||||
Unrecognized revenue | $ 16,000 | ||||||
XpresTest | Traveler Enrollment Initiatives | CDC Program Options and Public Health Services | |||||||
Contract with customer, liability, current | 570 | 570 | 570 | ||||
XpresTest | Passenger and Aircraft Wastewater Sample Collection | CDC Program Options and Public Health Services | |||||||
Contract with customer, liability, current | 6,761 | ||||||
HyperPointe segment | HyperPointe | |||||||
Revenue recognized | $ 210 | ||||||
Contract with customer, liability, current | 226 | 226 | 322 | ||||
Minimum | XpresTest | CDC Program Options and Public Health Services | |||||||
Unrecognized revenue | $ 61,000 | ||||||
Accounts Receivable | HyperPointe segment | |||||||
Unbilled receivables | $ 291 | $ 291 | $ 0 |
Potentially Dilutive Securiti_3
Potentially Dilutive Securities - (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Earnings Per Share Disclosure. | ||||
Net loss attributable to XWELL, Inc. | $ (5,730) | $ (7,918) | $ (11,239) | $ (12,201) |
Net loss attributable to common shareholders | $ (5,730) | $ (7,918) | $ (11,239) | $ (12,201) |
Basic weighted average shares outstanding | 83,410,562 | 95,352,025 | 83,378,408 | 98,458,153 |
Diluted weighted average shares outstanding | 83,410,562 | 95,352,025 | 83,378,408 | 98,458,153 |
Basic loss per share (in dollars per share) | $ (0.07) | $ (0.08) | $ (0.13) | $ (0.12) |
Diluted loss per share (in dollars per share) | $ (0.07) | $ (0.08) | $ (0.13) | $ (0.12) |
Total number of potentially dilutive securities excluded from the calculation of loss per share attributable to common shareholders | 7,978,335 | 34,295,658 | 7,978,335 | 34,295,658 |
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 loss per share attributable to common shareholders | 7,641,697 | 4,756,973 | 7,641,697 | 4,756,973 |
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 loss per share attributable to common shareholders | 332,638 | 78,125 | 332,638 | 78,125 |
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 loss per share attributable to common shareholders | 4,000 | 29,460,560 | 4,000 | 29,460,560 |
Cash, Cash Equivalents, and R_3
Cash, Cash Equivalents, and Restricted Cash - Summary of Cash, Cash Equivalents, and Restricted Cash (Details) - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 | Jun. 30, 2022 | Dec. 31, 2021 |
Cash, Cash Equivalents, and Restricted Cash | ||||
Cash denominated in United States dollars | $ 3,550 | $ 16,344 | ||
Cash denominated in currency other than United States dollars | 2,686 | 2,562 | ||
Restricted cash | 751 | 751 | ||
Credit and debit card receivables | 142 | 132 | ||
Total cash, cash equivalents and restricted cash | $ 7,129 | $ 19,789 | $ 71,859 | $ 106,257 |
Cash, Cash Equivalents, and R_4
Cash, Cash Equivalents, and Restricted Cash (Details) - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
Cash, Cash Equivalents, and Restricted Cash | ||
Deposits in excess of FDIC limits | $ 3,552 | $ 16,069 |
Amount of cash in overseas accounts | $ 2,686 | $ 2,562 |
Other current assets - Schedule
Other current assets - Schedule of Other Current Assets (Details) - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
Other current assets | ||
Prepaid expenses | $ 1,075 | $ 1,074 |
Contract assets | 291 | |
Other | 79 | 48 |
Total other current assets | $ 1,445 | $ 1,122 |
Intangible Assets - Schedule of
Intangible Assets - Schedule of Finite-Lived Intangible Assets (Details) - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 6,498 | $ 6,352 |
Accumulated Amortization | (2,788) | (2,344) |
Net Carrying Amount | 3,710 | 4,008 |
Trade names | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 302 | 302 |
Accumulated Amortization | (37) | (24) |
Net Carrying Amount | 265 | 278 |
Customer relationships | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 1,510 | 1,510 |
Accumulated Amortization | (661) | (542) |
Net Carrying Amount | 849 | 968 |
Software | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 4,646 | 4,485 |
Accumulated Amortization | (2,073) | (1,761) |
Net Carrying Amount | 2,573 | 2,724 |
Licenses | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 40 | 55 |
Accumulated Amortization | (17) | (17) |
Net Carrying Amount | $ 23 | $ 38 |
Intangible Assets (Details)
Intangible Assets (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Intangible Assets | ||||
Amortization expense | $ 377 | $ 471 | $ 759 | $ 864 |
Intangible Assets - Schedule _2
Intangible Assets - Schedule of Finite-Lived Intangible Assets, Amortization Expense (Details) - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
Finite-Lived Intangible Assets, Amortization Expense, Maturity Schedule [Abstract] | ||
Remaining 2023 | $ 834 | |
2024 | 1,666 | |
2025 | 502 | |
2026 | 393 | |
2027 | 77 | |
Thereafter | 238 | |
Total | $ 3,710 | $ 4,008 |
Variable Interest Entities (Det
Variable Interest Entities (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | Dec. 31, 2022 | |
Variable Interest Entity [Line Items] | |||||
Assets | $ 56,587 | $ 56,587 | $ 70,426 | ||
Liabilities | 19,587 | 19,587 | 22,477 | ||
Total revenue | 8,175 | $ 13,597 | 15,238 | $ 37,645 | |
Variable Interest Entity, Primary Beneficiary | |||||
Variable Interest Entity [Line Items] | |||||
Assets | 275 | ||||
Liabilities | $ 146 | ||||
Total revenue | $ 17 | $ 7,732 | $ 148 | $ 27,121 |
Accrued expenses and other cu_3
Accrued expenses and other current liabilities - Schedule of Accrued Expenses and Other Current Liabilities (Details) - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
Accrued expenses and other current liabilities | ||
Litigation accrual | $ 449 | $ 963 |
Accrued compensation | 1,749 | 2,008 |
Tax-related liabilities | 552 | 573 |
Common area maintenance accruals | 90 | 160 |
Accounts payable accruals | 779 | 754 |
Gift certificates | 495 | 496 |
Credit card processing fees | 35 | 33 |
Other miscellaneous accruals | 448 | 732 |
Total accrued expenses and other current liabilities | $ 4,597 | $ 5,719 |
Leases - Supplemental Cash Flow
Leases - Supplemental Cash Flow Information Related to Leases (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2023 | Jun. 30, 2022 | |
Leases | ||
Operating cash flows from operating leases | $ (1,839) | $ (2,031) |
Leased assets obtained in exchange for new and modified operating lease liabilities | $ 3,273 |
Leases - Future Minimum Commitm
Leases - Future Minimum Commitments (Details) $ in Thousands | Jun. 30, 2023 USD ($) |
Leases | |
Remaining 2023 | $ 1,611 |
2024 | 3,002 |
2025 | 2,649 |
2026 | 1,634 |
2027 | 1,511 |
2028 | 1,132 |
Thereafter | 3,341 |
Total future lease payments | 14,880 |
Less: interest expense at incremental borrowing rate | (2,316) |
Net present value of lease liabilities | $ 12,564 |
Leases - Other Assumptions and
Leases - Other Assumptions and Pertinent Information (Details) | Jun. 30, 2023 |
Leases | |
Weighted average remaining lease term (years): | 6 years 1 month 24 days |
Weighted average discount rate used to determine present value of operating lease liability: | 7.40% |
Leases (Details)
Leases (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Leases | ||||
Operating leases, rent expense | $ 598 | $ 349 | $ 1,259 | $ 620 |
Variable lease payments | $ 365 | $ 324 | $ 711 | $ 689 |
Other Assets - Consolidated Bal
Other Assets - Consolidated Balance Sheets (Details) - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
Equity investments | $ 71 | $ 104 |
Lease deposits | 1,549 | 1,973 |
Other | 95 | 292 |
Other assets | $ 1,715 | $ 2,369 |
Stockholders' Equity - Schedule
Stockholders' Equity - Schedule of Changes In Warrants Activity (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended |
Jun. 30, 2022 | Jun. 30, 2023 | |
Warrants [Line Items] | ||
Repurchase of common stock | $ 1,021 | |
Warrants | ||
Warrants [Line Items] | ||
Outstanding, Opening Balance | 1,172,088 | |
Expired | (1,168,088) | |
Outstanding, Ending Balance | 4,000 | |
Weighted average exercise price, Beginning Balance | $ 2 | |
Weighted average exercise price, Expired | 2.01 | |
Weighted average exercise price, Ending Balance | 2.125 | |
Exercise price range, Ending Balance | 2.125 | |
Warrants | Minimum | ||
Warrants [Line Items] | ||
Exercise price range, Beginning Balance | 1.7 | |
Exercise price range, Expired | 1.7 | |
Warrants | Maximum | ||
Warrants [Line Items] | ||
Exercise price range, Beginning Balance | 2.125 | |
Exercise price range, Expired | $ 2.125 |
Stockholders' Equity - Stockhol
Stockholders' Equity - Stockholders' Equity (Details) $ in Thousands | 1 Months Ended | 3 Months Ended | 6 Months Ended | ||||||||
Oct. 04, 2022 shares | Aug. 03, 2022 shares | May 31, 2022 shares | Sep. 30, 2020 item shares | Jun. 30, 2023 USD ($) shares | Jun. 30, 2022 USD ($) | Mar. 31, 2022 USD ($) | Jun. 30, 2023 USD ($) shares | Jun. 30, 2022 USD ($) shares | Dec. 31, 2022 USD ($) | Aug. 31, 2021 shares | |
Stockholders Equity [Line Items] | |||||||||||
Number of equal quarterly vesting installments | item | 4 | ||||||||||
Stock-based compensation expense | $ | $ 626 | $ 1,320 | $ 1,238 | $ 2,863 | |||||||
Unrecognized stock-based payment cost related to options | $ | 2,437 | 2,437 | $ 2,506 | ||||||||
Repurchase of common stock | $ | $ 1,021 | ||||||||||
Repurchase and retirement of common stock | $ | $ 11,095 | ||||||||||
Share Repurchase Program | |||||||||||
Stockholders Equity [Line Items] | |||||||||||
Repurchase of common stock (in shares) | 8,480,850 | ||||||||||
Repurchase of common stock | $ | $ 12,116 | ||||||||||
Number of Shares Authorized to be Repurchased | 15,000,000 | ||||||||||
Additional shares authorized to be repurchased | 10,000,000 | ||||||||||
Repurchase and retirement of common stock (in shares) | 1,338,404 | 7,142,446 | |||||||||
Stock Compensation Plan | |||||||||||
Stockholders Equity [Line Items] | |||||||||||
Options, expiry period | 10 years | ||||||||||
Options, vesting period | 1 year | ||||||||||
XpresTest 2020 Plan | RSUs | |||||||||||
Stockholders Equity [Line Items] | |||||||||||
Unrecognized stock-based compensation related to the awards | $ | $ 144 | $ 144 | |||||||||
Equity incentive plan 2020 | |||||||||||
Stockholders Equity [Line Items] | |||||||||||
Number of shares authorized | 12,500,000 | 12,500,000 | |||||||||
Number of additional shares authorized | 7,500,000 | ||||||||||
Maximum | Equity incentive plan 2020 | |||||||||||
Stockholders Equity [Line Items] | |||||||||||
Number of shares authorized | 5,000,000 | ||||||||||
Number of stock shares issued | 4,321,334 | ||||||||||
Directors, Employees And Consultants | XpresTest 2020 Plan | |||||||||||
Stockholders Equity [Line Items] | |||||||||||
Percentage of shares authorized for issuance | 20% | ||||||||||
Directors, Employees And Consultants | Maximum | XpresTest 2020 Plan | |||||||||||
Stockholders Equity [Line Items] | |||||||||||
Number of shares authorized | 200 |
Stockholders' Equity - Variable
Stockholders' Equity - Variables Used in Estimating Fair Value of Stock Options (Details) - Stock Options | 6 Months Ended |
Jun. 30, 2023 $ / shares | |
Stockholders Equity [Line Items] | |
Expected volatility Minimum: | 119.41% |
Expected volatility Maximum: | 121.04% |
Expected dividend yield: | 0% |
Annual average risk-free rate Minimum: | 3.65% |
Annual average risk-free rate Maximum: | 3.96% |
Minimum | |
Stockholders Equity [Line Items] | |
Share price of the Company's Common Stock on the grant date: | $ 0.36 |
Exercise price: | $ 0.36 |
Expected term: | 6 years 3 months 25 days |
Maximum | |
Stockholders Equity [Line Items] | |
Share price of the Company's Common Stock on the grant date: | $ 0.41 |
Exercise price: | $ 0.41 |
Expected term: | 6 years 4 months 28 days |
Stockholders' Equity and Warran
Stockholders' Equity and Warrants - Stock Options and RSU Activity (Details) | 6 Months Ended |
Jun. 30, 2023 $ / shares shares | |
Stockholders Equity [Line Items] | |
No. of options, Outstanding, Beginning balance | shares | 4,830,029 |
No. of options, Granted | shares | 2,886,388 |
No. of options, Forfeited | shares | (49,919) |
No. of options, Expired | shares | (24,801) |
No. of options, Outstanding, Ending balance | shares | 7,641,697 |
No. of options, Exercisable | shares | 3,962,957 |
Weighted average grant date fair value, Beginning balance | $ 2 |
Weighted average grant date fair value, Granted | 0.40 |
Weighted average grant date fair value, Forfeited | 1.32 |
Weighted average grant date fair value, Expired | 11.75 |
Weighted average grant date fair value, Ending balance | 1.37 |
Weighted average grant date fair value, Exercisable | $ 1.66 |
RSUs | |
Stockholders Equity [Line Items] | |
No. of options, Outstanding, Beginning balance | shares | 281,250 |
No. of options, Granted | shares | 238,888 |
No. of options, Exercised/Vested | shares | (187,500) |
No. of options, Outstanding, Ending balance | shares | 332,638 |
Weighted average grant date fair value, Beginning balance | $ 0.65 |
Weighted average grant date fair value, Granted | 0.32 |
Weighted average grant date fair value, Exercised/Vested | 0.65 |
Weighted average grant date fair value, Ending balance | $ 0.41 |
XpresTest RSAs | |
Stockholders Equity [Line Items] | |
No. of options, Outstanding, Beginning balance | shares | 5 |
No. of options, Outstanding, Ending balance | shares | 5 |
Weighted average grant date fair value, Beginning balance | $ 47,570 |
Weighted average grant date fair value, Ending balance | 47,570 |
Minimum | |
Stockholders Equity [Line Items] | |
Exercise price range, Outstanding, Beginning balance | 0.65 |
Exercise price range, Granted | 0.36 |
Exercise price range, Forfeited | 0.40 |
Exercise price range, Expired | 1.53 |
Exercise price range, Outstanding, Ending balance | 0.36 |
Exercise price range, Exercisable | 0.40 |
Maximum | |
Stockholders Equity [Line Items] | |
Exercise price range, Outstanding, Beginning balance | 2,460 |
Exercise price range, Granted | 0.41 |
Exercise price range, Forfeited | 1.61 |
Exercise price range, Expired | 1,908 |
Exercise price range, Outstanding, Ending balance | 2,460 |
Exercise price range, Exercisable | $ 2,460 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended |
Jun. 30, 2023 | Jun. 30, 2023 | |
Income Taxes. | ||
Income tax benefit (as a percent) | 0% | 0% |
Effective tax rate, discontinued operations | 0% | 0% |
State | $ 0 | $ 0 |
Commitments and Contingencies (
Commitments and Contingencies (Details) | 6 Months Ended | |||
May 26, 2020 USD ($) employee | Jun. 30, 2023 USD ($) | Dec. 31, 2022 USD ($) | Sep. 20, 2022 USD ($) | |
Kyle Collins | ||||
Loss Contingencies [Line Items] | ||||
Penalties per employee per pay period | $ 0.1 | |||
Number of current and former employees | employee | 240 | |||
Kyle Collins | Settled litigation | ||||
Loss Contingencies [Line Items] | ||||
Settlement amount | $ 517,000 | |||
Additional payroll tax | $ 4,000 | |||
OTG Management PHL B | ||||
Loss Contingencies [Line Items] | ||||
Lease term | 12 years | |||
Accrued expenses and other | ||||
Loss Contingencies [Line Items] | ||||
Estimated litigation liability, current | $ 449,000 | $ 963,000 | ||
Maximum | OTG Management PHL B | ||||
Loss Contingencies [Line Items] | ||||
Loss contingency damages sought | 2,250,000 | |||
Minimum | OTG Management PHL B | ||||
Loss Contingencies [Line Items] | ||||
Loss contingency damages sought | $ 864,000 |
Segment Information - Geographi
Segment Information - Geographical Revenue, Segment Operating Loss and Total Asset Information (Details) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2023 USD ($) | Jun. 30, 2022 USD ($) | Jun. 30, 2023 USD ($) segment | Jun. 30, 2022 USD ($) | Dec. 31, 2022 USD ($) | |
Revenue | |||||
Total revenue | $ 8,175 | $ 13,597 | $ 15,238 | $ 37,645 | |
Operating income (loss) | |||||
Total operating loss | (4,724) | (7,767) | (11,012) | (10,218) | |
Total depreciation & amortization | 593 | 1,501 | 1,180 | 2,765 | |
Total capital expenditures | 1,560 | 3,432 | 1,560 | 3,432 | |
Assets | |||||
Total long-lived assets | 16,655 | 16,655 | $ 18,794 | ||
Total assets | 56,587 | $ 56,587 | 70,426 | ||
Number of reportable segments | segment | 4 | ||||
XpresSpa | |||||
Revenue | |||||
Total revenue | 5,228 | 3,290 | $ 9,727 | 5,933 | |
Operating income (loss) | |||||
Total operating loss | (2,822) | (1,958) | (5,954) | (6,413) | |
Total depreciation & amortization | 431 | 358 | 854 | 701 | |
Total capital expenditures | 1,445 | 641 | 1,445 | 641 | |
Assets | |||||
Total long-lived assets | 10,031 | 10,031 | 11,851 | ||
Total assets | 19,861 | 19,861 | 21,135 | ||
XpresTest | |||||
Revenue | |||||
Total revenue | 2,285 | 9,253 | 4,084 | 29,849 | |
Operating income (loss) | |||||
Total operating loss | 596 | (1,937) | 571 | 4,268 | |
Total depreciation & amortization | 5 | 606 | 5 | 1,135 | |
Total capital expenditures | 45 | 614 | 45 | 614 | |
Assets | |||||
Total long-lived assets | 95 | 95 | 112 | ||
Total assets | 2,049 | 2,049 | 4,285 | ||
Treat | |||||
Revenue | |||||
Total revenue | 88 | 399 | 292 | 685 | |
Operating income (loss) | |||||
Total operating loss | (360) | (1,460) | (804) | (2,756) | |
Total depreciation & amortization | 67 | 442 | 132 | 767 | |
Total capital expenditures | 45 | 2,123 | 45 | 2,123 | |
Assets | |||||
Total long-lived assets | 2,191 | 2,191 | 2,314 | ||
Total assets | 3,115 | 3,115 | 3,186 | ||
HyperPointe | |||||
Revenue | |||||
Total revenue | 574 | 655 | 1,135 | 1,178 | |
Operating income (loss) | |||||
Total operating loss | (113) | (275) | (369) | (552) | |
Total depreciation & amortization | 78 | 95 | 164 | 157 | |
Total capital expenditures | 11 | 11 | |||
Assets | |||||
Total long-lived assets | 4,044 | 4,044 | 4,108 | ||
Total assets | 6,326 | 6,326 | 6,913 | ||
Corporate and Other | |||||
Operating income (loss) | |||||
Total operating loss | (2,025) | (2,137) | (4,456) | (4,765) | |
Total depreciation & amortization | 12 | 25 | 5 | ||
Total capital expenditures | 14 | $ 54 | 14 | $ 54 | |
Assets | |||||
Total long-lived assets | 294 | 294 | 409 | ||
Total assets | $ 25,236 | $ 25,236 | $ 34,907 |