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Table of Contents

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2024

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ___ to ___

Commission file number: 001-34785

XWELL, Inc.

(Exact Name of Registrant as Specified in its Charter)

Delaware

 

20-4988129

(State or other jurisdiction of
incorporation or organization)

 

(I.R.S. Employer
Identification No.)

 

 

 

254 West 31st Street, 11th Floor, New York, NY

 

10001

(Address of principal executive offices)

 

(Zip Code)

(Registrant’s Telephone Number, Including Area Code): (212) 750-9595

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

    

Trading Symbol(s)

    

Name of each exchange on which registered

Common Stock, par value $0.01 per share

 

XWEL

 

The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.   Yes      No 

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes       No  

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act:

Large accelerated filer

Accelerated filer

Non-accelerated filer

Smaller reporting company

Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.   

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes     No  

As of May 14, 2024, 4,183,435 shares of the registrant’s common stock were outstanding.

Table of Contents

XWELL, Inc. and Subsidiaries

Table of Contents

    

Page

PART I. FINANCIAL INFORMATION

3

Item 1.

Condensed Consolidated Financial Statements (Unaudited)

3

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

24

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

29

Item 4.

Controls and Procedures

29

PART II. OTHER INFORMATION

30

Item 1.

Legal Proceedings

30

Item 1A.

Risk Factors

30

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

30

Item 3.

Defaults Upon Senior Securities

30

Item 4.

Mine Safety Disclosures

30

Item 5.

Other Information

30

Item 6.

Exhibits

31

2

Table of Contents

PART I - FINANCIAL INFORMATION

Item 1.Condensed Consolidated Financial Statements (Unaudited)

XWELL, Inc. and Subsidiaries

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

(In thousands, except share and per share data)

    

March 31, 

    

December 31, 

2024

2023

Current assets

 

  

 

  

Cash and cash equivalents

$

4,317

$

8,437

Marketable Securities

14,784

14,613

Accounts receivable

2,900

1,667

Inventory

 

834

 

900

Other current assets

 

1,621

 

949

Total current assets

 

24,456

 

26,566

Restricted cash

 

751

 

751

Property and equipment, net

 

2,139

 

2,454

Intangible assets, net

 

1,264

 

1,353

Operating lease right of use assets, net

 

5,651

 

4,656

Goodwill

1,431

1,371

Other assets

 

1,785

 

1,842

Total assets

$

37,477

$

38,993

Current liabilities

 

  

 

  

Accounts payable

$

2,017

$

1,099

Accrued expenses and other current liabilities

3,695

4,968

Current portion of operating lease liabilities

2,585

2,402

Deferred revenue

890

861

Total current liabilities

 

9,187

 

9,330

Long-term liabilities

 

 

Operating lease liabilities

 

9,525

 

8,692

Total liabilities

18,712

18,022

Commitments and contingencies (see Note 13)

 

  

 

  

Equity

 

  

 

  

Common Stock, $0.01 par value per share, 150,000,000 shares authorized; 4,182,617 and 4,179,631 shares issued and outstanding as of March 31, 2024 and December 31, 2023, respectively

42

42

Additional paid-in capital

 

470,996

 

470,737

Accumulated deficit

 

(458,365)

 

(455,853)

Accumulated other comprehensive loss

 

(2,099)

 

(1,924)

Total equity attributable to XWELL, Inc.

 

10,574

 

13,002

Noncontrolling interests

 

8,191

 

7,969

Total equity

 

18,765

 

20,971

Total liabilities and equity

$

37,477

$

38,993

The accompanying notes form an integral part of these unaudited condensed consolidated financial statements.

3

Table of Contents

XWELL, Inc. and Subsidiaries

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(Unaudited)

(In thousands, except share and per share data)

Three months ended March 31, 

    

    

2024

    

2023

    

Revenue, net

 

 

  

 

  

 

Services

8,035

6,467

Products

 

691

 

596

 

Total revenue, net

 

8,726

 

7,063

 

Cost of sales

 

  

 

  

 

Labor

 

4,149

 

4,378

 

Occupancy

 

942

 

1,213

 

Products and other operating costs

 

964

 

950

 

Total cost of sales

 

6,055

 

6,541

 

Gross Profit

$

2,671

$

522

Depreciation and amortization

 

225

 

587

 

Impairment of long-lived assets

652

-

Loss on disposal of assets

-

132

General and administrative

 

2,092

 

3,966

 

Salaries and Benefits

2,081

2,125

Total operating expenses

 

5,050

 

6,810

 

Operating loss

 

(2,379)

 

(6,288)

 

Interest income, net

 

110

 

393

 

Gain on Investments, realized and unrealized

135

24

Foreign exchange gain (loss)

(166)

85

Other non-operating expense, net

 

(58)

 

(43)

 

Loss before income taxes

 

(2,358)

 

(5,829)

 

Income tax expense

 

-

 

-

 

Net loss

(2,358)

(5,829)

Net loss (income) attributable to noncontrolling interests

 

(154)

 

320

 

Net loss attributable to XWELL, Inc.

$

(2,512)

$

(5,509)

Net loss

$

(2,358)

$

(5,829)

Other comprehensive loss from operations

 

(175)

 

(130)

Comprehensive loss income

$

(2,533)

$

(5,959)

Loss per share

 

  

 

  

Basic and diluted loss per share

$

(0.60)

$

(1.32)

Weighted-average number of shares outstanding during the period*

 

  

 

  

Basic

 

4,182,617

 

4,167,295

Diluted

 

4,182,617

 

4,167,295

*Adjusted to reflect the impact of the 1:20 reverse stock split that became effective on September 28, 2023.

The accompanying notes form an integral part of these unaudited condensed consolidated financial statements.

4

Table of Contents

XWELL, Inc. and Subsidiaries

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (DEFICIT)

(Unaudited)

(In thousands, except share and per share data)

    

    

Accumulated

    

    

    

Additional

other

Total

Non-

Common stock

paid- 

Accumulated

comprehensive

Company

controlling

Total

    

Shares

    

Amount

in capital

    

deficit

    

loss

    

equity

    

interests

    

equity

December 31, 2023

4,179,631

$

42

$

470,737

$

(455,853)

$

(1,924)

$

13,002

$

7,969

$

20,971

Issuance of restricted stock units

2,986

Stock-based compensation

259

259

23

282

Net loss for the period

(2,512)

(2,512)

154

(2,358)

Foreign currency translation

(175)

(175)

45

(130)

March 31, 2024

4,182,617

$

42

$

470,996

$

(458,365)

$

(2,099)

$

10,574

$

8,191

$

18,765

The accompanying notes form an integral part of these unaudited condensed consolidated financial statements.

5

Table of Contents

XWELL, Inc. and Subsidiaries

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (DEFICIT) (Continued)

(Unaudited)

(In thousands, except share and per share data)

    

    

    

Accumulated

    

    

    

Additional

other

Total

Non-

Common stock*

paid- 

Accumulated

comprehensive

Company

controlling

Total

    

Shares

    

Amount

    

in capital

    

deficit

    

loss

    

equity

    

interests

    

equity

December 31, 2022

4,161,613

$

42

$

468,530

$

(428,112)

$

(534)

$

39,926

$

8,023

$

47,949

Issuance of restricted stock

6,015

`

Value of shares withheld to fund payroll taxes

(22)

(22)

(22)

Stock-based compensation

589

589

23

612

Net loss for the period

(5,509)

(5,509)

(320)

(5,829)

Foreign currency translation

(130)

(130)

11

(119)

March 31, 2023

4,167,628

$

42

$

469,097

$

(433,621)

$

(664)

$

34,854

$

7,737

$

42,591

*Adjusted to reflect the impact of the 1:20 reverse stock split that became effective on September 28, 2023.

The accompanying notes form an integral part of these unaudited condensed consolidated financial statements.

6

Table of Contents

XWELL, Inc. and Subsidiaries

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

(In thousands)

Three months ended March 31, 

    

2024

    

2023

Cash flows from operating activities

 

  

 

  

Net loss

$

(2,358)

$

(5,829)

Adjustments to reconcile net loss to net cash used in operating activities:

 

 

Depreciation and amortization

 

225

 

587

Impairment of fixed assets

 

398

 

Impairment of operating lease right-of-use assets

254

Unrealized Gain on marketable securities

(92)

(206)

Foreign currency remeasurement loss

166

85

Amortization of operating lease right of use asset

286

416

Stock-based compensation

 

282

 

612

(Gain) loss on equity investment

(43)

(25)

Changes in assets and liabilities:

 

 

Decrease in inventory

66

 

166

Increase (decrease) in accounts receivable

(1,223)

843

Increase in other assets, current and non-current

(594)

 

(469)

Increase in deferred revenue

29

6

Decrease in other liabilities, current and non-current

(1,987)

(2,567)

Increase in accounts payable

909

 

516

Net cash used in operating activities

 

(3,682)

 

(5,865)

Cash flows from investing activities

 

  

 

Acquisition of property and equipment

 

(291)

 

(1,404)

Investment in marketable securities

(80)

(1,882)

Acquisition of intangibles

 

 

(4)

Net cash used in investing activities

 

(371)

 

(3,290)

Cash flows from financing activities

 

 

Payments for shares withheld on vesting

(22)

Net cash used in financing activities

 

 

(22)

Effect of exchange rate changes on cash, cash equivalents and restricted cash

 

(67)

 

8

Decrease in cash, cash equivalents and restricted cash

 

(4,120)

 

(9,169)

Cash, cash equivalents, and restricted cash at beginning of the period

9,188

19,789

Cash, cash equivalents, and restricted cash at end of the period

$

5,068

$

10,620

Cash paid for

 

 

Interest

$

$

Income taxes

$

Non-cash investing and financing transactions

 

 

Capital expenditures included in Accounts payable, accrued expenses and other current liabilities

$

17

$

38

The accompanying notes form an integral part of these unaudited condensed consolidated financial statements.

7

Table of Contents

XWELL, Inc. and Subsidiaries

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

(In thousands, except for share and per share data)

Note 1. Business, Basis of Presentation and Liquidity

Overview

XWELL is a global wellness company operating multiple brands and focused on bringing restorative, regenerative and reinvigorating products and services to travelers. XWELL currently has four reportable operating segments: XpresSpa®, XpresTest®, Naples Wax Center and Treat™.

On October 25, 2022, the Company changed its name to XWELL, Inc. (“XWELL” or the “Company”) from XpresSpa Group, Inc. The Company’s common stock, par value $0.01 per share, which had previously been listed under the trading symbol “XSPA” on the Nasdaq Capital Market, now trades under the trading symbol “XWEL”. The Company filed an amended and restated certificate of incorporation with the Delaware Secretary of State on October 24, 2022 (the “Amended and Restated Certificate”) reflecting the name change. Rebranding to XWELL aligned the Company’s corporate strategy to build a pure-play wellness services company, in both the airport and off-airport marketplaces.

XpresSpa

XWELL’s subsidiary, XpresSpa Holdings, LLC (“XpresSpa”) has been a global airport retailer of spa services through its XpresSpa spa locations, offering travelers premium spa services, including massage, nail and skin care, as well as spa and travel products.

As of March 31, 2024, there were 21 domestic XpresSpa locations in total, 19 Company-owned locations and two franchises. The Company also had 11 international locations operating as of March 31, 2024, including two XpresSpa locations in Dubai International Airport in the United Arab Emirates, one XpresSpa location in Zayad International Airport in Abu Dhabi, UAE, three XpresSpa locations in Schiphol Amsterdam Airport in the Netherlands and five XpresSpa locations in the Istanbul Airport in Turkey.

XpresTest

The Company, in partnership with certain COVID-19 testing partners, successfully launched its XpresCheck Wellness Centers, in June of 2020, through its XpresTest, Inc. subsidiary (“XpresTest”), which offered COVID-19 and other medical diagnostic testing services to the traveling public, as well as airline, airport and concessionaire employees, and TSA and U.S. Customs and Border Protection agents during the pandemic. During 2022 and 2023, as countries continued to relax their testing requirements resulting in rapid decline of testing volumes at the Company’s XpresCheck locations, the Company closed XpresCheck Wellness Centers. As of December 31, 2023, we have closed all XpresCheck locations.

XWELL’s subsidiary, XpresTest, Inc (“XpresTest”) began conducting bio surveillance monitoring with the Centers for Disease Control and Prevention (CDC) in collaboration with Concentric by Ginkgo BioWorks in 2021. The program was extended in January 2022 and renewed in August of 2022 and 2023. In March 2024, the program funding and scope were expanded.

HyperPointe

XWELL’s subsidiary, gcg Connect, LLC, operating as HyperPointe, provides direct to business marketing support across a number of health and health-related channels.  From the creation of marketing campaigns for the pharmaceutical industry, to learning management systems to website and health related content creation, HyperPointe is a complementary service provider to XWELL’s health-focused brands as well as providing the majority of services to the external community.

For reporting purposes, the former HyperPointe segment has been consolidated into the XpresTest segment.

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Treat

Treat, which is operating through XWELL’s subsidiary Treat, Inc. (“Treat”) is a wellness brand that provides access to wellness services for travelers at on-site centers (currently located in JFK International Airport). In April 2024, the decision was made to close the location in the Salt Lake City International Airport.

Treat offers a full retail product offering and a suite of wellness and spa services. Travelers can purchase time blocks to use our wellness rooms to engage in interactive services like self-guided yoga, meditation and low impact weight exercises or to relax and unplug from the hectic pace of the airport and renew themselves before or after their trip.

Naples Wax Center

XWELL’s subsidiary Naples Wax Center, LLC, which was acquired on September 12, 2023, for a purchase price of $1,624 operates three high-performing locations with core products and service offerings from face and body waxing to a range of skincare and cosmetic products. The acquisition of Naples Wax Center is intended to enable the Company to move beyond its airport client base with a business that can be adapted to a larger wellness platform while also growing its retail footprint to serve long-term financial goals.

TreatStudios

In Q4 of 2023, the Company began plans to open its first TreatStudios location in Jacksonville, Florida in 2024.  TreatStudios is an out-of-airport concept providing leased space to established wellness service providers.  Revenue will be derived from both lease payments received from the wellness practitioners and the sale of retail at the wellness center.

The Company believes that these strategic imperatives will be accomplished through development of an infrastructure specifically focused on enabling scalable and efficient growth.

Basis of Presentation and Principles of Consolidation

The unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and the instructions to Article 8-03 of Regulation S-X, and should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended December 31, 2023, as amended. The consolidated balance sheet as of December 31, 2023 was derived from the audited annual financial statements but does not include all information required by GAAP for annual financial statements. The financial statements include the accounts of the Company, all entities that are wholly owned by the Company, and all entities in which the Company has a controlling financial interest. All adjustments that, in the opinion of management, are necessary for a fair presentation for the periods presented have been reflected by the Company. Such adjustments are of a normal, recurring nature. The results of operations for the three months ended March 31, 2024 are not necessarily indicative of the results that may be expected for the entire fiscal year or for any other interim period. All significant intercompany balances and transactions have been eliminated in consolidation.

Reverse Stock Split

On September 28, 2023, the Company effected a 1-for-20 reverse stock split, (the “Reverse Stock Split”) whereby every twenty shares of its Common Stock were reduced to one share of its Common Stock and the price per share of its Common Stock was multiplied by 20. All references to shares and per share amounts have been adjusted to reflect the reverse stock split.

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Liquidity and Financial Condition

As of March 31, 2024, the Company had cash and cash equivalents of $4,317 (excluding restricted cash), $14,784 in marketable securities, and total current assets of $24,456. The Company’s total current liabilities balance, which includes accounts payable, deferred revenue, accrued expenses, and operating lease liabilities was $9,187 as of March 31, 2024 and $9,330 as of December 31, 2023. The working capital surplus was $15,269 as of March 31, 2024, compared to a working capital surplus of $17,236 as of December 31, 2023.

The Company significantly reduced operating and overhead expenses in the second half of 2023, while it continues to focus on returning to overall profitability.

The Company has taken actions to improve its overall cash position, right sizing its corporate structure and streamlining its operations. The Company is pursuing strategic partnerships that the Company expects will further strengthen the long-term profitability of the business.

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Note 2. Accounting and Reporting Policies

Use of estimates

The preparation of the accompanying condensed consolidated financial statements in conformity with U.S. GAAP requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the condensed consolidated financial statements and the reported amounts of revenues and expenses for the periods presented. Actual results may differ from such estimates. Significant items subject to such estimates and assumptions include the Company’s long-lived assets, intangibles assets, the useful lives of the Company’s intangible assets, the valuation of stock-based compensation, deferred tax assets and liabilities, income tax uncertainties, and other contingencies.

Revenue Recognition Policy

XpresSpa, Treat and Naples Wax Center

The Company recognizes revenue from the sale of products and services when the services are rendered at XpresSpa, Treat, and Naples Wax Centers locations and from the sale of products at the time products are purchased at the Company’s stores or online usually by credit card, net of discounts and applicable sales taxes. Accordingly, the Company recognizes revenue for the Company’s single performance obligation related to both in-store and online sales at the point at which the service has been performed or the control of the merchandise has passed to the customer.

XpresTest

During the third quarter of 2022, XpresTest, in partnership with Ginkgo BioWorks in continuation of their support to the CDC’s traveler-based SARS-CoV-2 genomic surveillance program was awarded a new contract. The partnership is expected to support public health and biosecurity services totaling approximately $16,000, with an overall potential to exceed $61,000 based on CDC program options and public health priorities. As COVID-19 sub-variants and other biological threats continue to emerge, the partners plan to expand the program footprint and incorporate innovative modalities and offerings, such as monitoring of wastewater from aircraft lavatories. The current contract with Ginkgo BioWorks related to the above partnership contains fixed pricing for which the Company is entitled to $10,674 for the sample collection (passenger and aircraft wastewater) and $370 for the traveler enrollment initiatives, which represents the amount of consideration that we are entitled. The Company recognizes revenue over time for both sample collection performance obligations, using the input method based on time elapsed to measure progress towards satisfying each of the performance obligations. We recognized the revenue for the traveler enrollment initiative performance obligation in the second quarter of 2023. The Company recognizes revenue ratably (straight line basis) over the term of the contract (one year). The Company recorded $3,306 and $1,670, in revenue for the three months ended March 31, 2024 and 2023, respectively, related to sample collection performance obligations because the Company’s efforts towards satisfying each of the performance obligations are expended evenly throughout the period of performance.

HyperPointe

The Company’s HyperPointe business provides a broad range of service and support options for HyperPointe’s customers, including technical support services and advanced services. Technical support services represent the majority of these offerings which are distinct performance obligations that are satisfied over time with revenue recognized ratably over the contract term. Advanced services are distinct performance obligations that are satisfied over time with revenue recognized as services are delivered.  Revenues billed in advance are treated as deferred revenue, which was $87 and $72 as of March 31, 2024 and December 31, 2023, respectively.

The Company excludes all sales taxes assessed to our customers from revenue. Sales taxes assessed on revenues are included in Accrued expenses and other current liabilities on the Company’s condensed consolidated balance sheets until remitted to state agencies.

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Gift cards, customer rewards and prepaid packages

XWELL offers no-fee, non-expiring gift cards to its customers. No revenue is recognized upon the issuance of a gift card and a liability is established for the gift card’s cash value. The liability is relieved, and revenue is recognized upon redemption by the customer. As the gift cards have no expiration date, there is no provision for the reduction in the value of unused card balances.

In addition, XWELL maintains a rewards program in which customers earn loyalty points, which can be redeemed for future services. Loyalty points are rewarded upon joining the loyalty program, for customer birthdays, and based upon customer spending. When a customer redeems loyalty points, the Company recognizes revenue for the redeemed cash value and reduces the related loyalty program liability. In 2023 the Company adopted a formal expiration policy whereby any loyalty members with inactivity for an 18-month period will forfeit any unused loyalty rewards.

The costs associated with gift cards and reward points are accrued as the rewards are earned by the cardholder and are included in Accrued expenses and other current liabilities in the condensed consolidated balance sheets until used.

Naples Wax Center offers prepaid wax packages that are either unlimited for one year or a set number of services. When the packages are purchased, the sales are recorded as deferred revenue. As services related to prepaid packages are used, revenue is recognized as income. The deferred revenue as of March 31, 2024 was $794 and for the year ended December 31, 2023 deferred revenue was $778.

Translation into United States dollars

The Company conducts certain transactions in foreign currencies, which are recorded at the exchange rate as of the transaction date. All exchange gains and losses occurring from the remeasurement of monetary balance sheet items denominated in non-dollar currencies are deemed non-operating income in the condensed consolidated statements of operations and comprehensive loss.  During the three months ended March 2024, the Company recorded $166 in exchange losses occurring from the remeasurement of monetary balance sheet items denominated in non-dollar currencies. During the three months ended March 2023, the Company recorded $85 in exchange gain.

Accounts of the foreign subsidiaries of XpresSpa are translated into United States dollars. Assets and liabilities have been translated primarily at period end exchange rates and revenues and expenses have been translated at average monthly rates for the three months ended March 31, 2024. The translation adjustments arising from the use of different exchange rates are included as foreign currency translation within the condensed consolidated statements of operations and comprehensive income (loss) and condensed consolidated statements of changes in stockholders’ equity.

Business Combinations

The Company uses the provisions of ASC Topic 805, Business Combinations (“ASC 805”) in the accounting for acquisitions of businesses. ASC 805 requires the Company to use the acquisition method of accounting by recognizing the identifiable tangible and intangible assets acquired and liabilities assumed, and any non-controlling interest in the acquired business, measured at their acquisition date fair values. Goodwill as of the acquisition date is measured as the excess of consideration transferred over the aforementioned amounts.

While the Company uses its best estimates and assumptions to accurately apply preliminary values to assets acquired and liabilities assumed at the acquisition date, these estimates are inherently uncertain and subject to refinement. As a result, during the measurement period, which may be up to one year from the acquisition date, the Company may record adjustments to the assets acquired and liabilities assumed with the corresponding offset to goodwill. Upon the conclusion of the measurement period or final determination of the values of the assets acquired or liabilities assumed, whichever comes first, any subsequent adjustments are recorded in the condensed consolidated statements of operations.

Accounting for business combinations requires management to make significant estimates and assumptions, especially at the acquisition date, including estimates for intangible assets. Although the Company believes the assumptions and estimates that have been made are reasonable and appropriate, they are based in part on historical experience and

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information obtained from the acquired companies and are inherently uncertain. Estimates in valuing certain of the intangible assets the Company has acquired include future expected cash flows, and discount rates.

Intangible assets

Intangible assets include customer relationships, trade names, and technology, which were primarily acquired as part of the acquisition of XpresSpa in December 2016, HyperPointe in 2022 and Naples Wax Center in 2023 and were recorded based on the estimated fair value in purchase price allocation. In addition, intangible assets include software and website development costs that were capitalized as part of the Company’s development of a mobile application and website for the Treat brand. The Company accounts for these costs in accordance with ASC 350-40, Internal-Use Software. The intangible assets are amortized over their estimated useful lives, which are periodically evaluated for reasonableness.

The Company’s intangible assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. The fair value is then compared to the carrying value and an impairment charge is recognized by the amount in which the carrying value exceeds the fair value of the asset. In assessing the recoverability of the Company’s intangible assets, the Company must make estimates and assumptions regarding future cash flows and other factors to determine the fair value of the respective assets. These estimates and assumptions could have a significant impact on whether an impairment charge is recognized and the magnitude of any such charge. Fair value estimates are made at a specific point in time, based on relevant information.

Goodwill

Goodwill represents the cost of a business acquisition in excess of the fair value of the net assets acquired. Goodwill is not amortized and is reviewed for impairment annually, or more frequently if facts and circumstances indicate that it is more likely than not that the fair value of a reporting unit is less than its carrying amount, including goodwill. If it is more likely than not that the fair value of a reporting unit is less than its carrying amount, the company performs a quantitative test to identify and measure the amount of goodwill impairment loss. The Company compares the fair value of the reporting unit with its carrying amount. If the carrying amount exceeds fair value, goodwill of the reporting unit is considered impaired, and that excess is recognized as a goodwill impairment loss. During the quarter ended March 31, 2024, the Company did not record any goodwill impairment loss.

Reclassification

Certain balances in the unaudited condensed consolidated financial statements for the three months ended March 31, 2023 have been reclassified to conform to the presentation in the unaudited condensed consolidated financial statements for the three months ended March 31, 2024, primarily the presentation of revenue, general and administrative expense, foreign currency exchange gain, and the realized and unrealized gain on investments and other operating expenses. The above separation affected revenue classifications, general and administrative expenses, foreign currency exchange gain, and the realized and unrealized gain on investments and other operating expenses in the comparative 2023 financial statements. Such reclassifications did not have a material impact on the unaudited condensed consolidated financial statements.

Impairment of Long-Lived Assets

Long-lived assets are tested for impairment at the lowest level at which there are identifiable operating cash flows. The Company’s long-lived assets consist primarily of leasehold improvements and right to use lease assets for each of its locations (considered the asset group). The Company reviews its long-lived assets for recoverability yearly or sooner if events or changes in circumstances indicate that the carrying value of long-lived assets may not be recoverable. If indicators are present, the Company performs a recoverability test by comparing the sum of the estimated undiscounted future cash flows attributable to the asset group in question to its carrying amount. An impairment loss is recognized if it is determined that the long-lived asset group is not recoverable and is calculated based on the excess of the carrying amount of the long-lived asset group over the long-lived asset group’s fair value. The Company estimates the fair value of long-lived assets using present value income approach. Future cash flows are calculated based on forecasts over the estimated remaining useful life of the asset group, which for each of the Company’s locations, is the remaining term of the operating lease.

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The estimates used to calculate future cash flows are subjective in nature and involve uncertainties and matters of significant judgments and therefore cannot be determined with precision. Changes in assumptions could significantly affect the estimated fair value of each asset group. The Company will calculate the future cash flow using what it believes to be the most predictable of several scenarios. Typically, the changes in assumptions run under different business scenarios would not result in a material change in the assessment of the potential impairment or the impairment amount of a locations long-lived asset group. But if these estimates or related assumptions were to change materially, the Company may be required to record an impairment charge.

During the three months ended March 31, 2024 the Company recorded impairment of  long-lived assets of $652 compared with $0 impairment of long-lived assets in March 2023.

Recently Issued Accounting Standards

ASU No. 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures

In November 2023, the Financial Accounting Standards Board (FASB) issued ASU No. 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures (ASU 2023-07), which requires an enhanced disclosure of significant segment expenses on an annual and interim basis. This guidance will be effective for the annual periods beginning the year ended December 31, 2024, and for interim periods beginning January 1, 2025. Early adoption is permitted. Upon adoption, the guidance should be applied retrospectively to all prior periods presented in the financial statements. The Company is currently evaluating segment expense disclosures related to its annual report for fiscal year 2024.

ASU No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures

In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures (ASU 2023-09), which improves the transparency of income tax disclosures by requiring consistent categories and greater disaggregation of information in the effective tax rate reconciliation and income taxes paid disaggregated by jurisdiction. It also includes certain other amendments to improve the effectiveness of income tax disclosures. This guidance will be effective for the annual periods beginning the year ended December 31, 2025. Early adoption is permitted. Upon adoption, the guidance can be applied prospectively or retrospectively. The Company is currently evaluating income tax disclosures related to its annual report for fiscal year 2025.

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Note 3. Potentially Dilutive Securities

The table below presents the computation of basic and diluted net loss per share of Common Stock:

Three months ended

March 31, 

    

2024

    

2023

Basic numerator:

 

  

 

  

Net loss attributable to XWELL, Inc.

$

(2,512)

$

(5,509)

Basic denominator:

 

 

  

Basic weighted average shares outstanding

 

4,182,617

 

4,167,295

Basic loss per share

$

(0.60)

$

(1.32)

Net loss per share data presented above excludes from the calculation of diluted net (loss) income, the following potentially dilutive securities, having an anti-dilutive impact, in case of net loss

 

  

 

  

Both vested and unvested options to purchase an equal number of shares of Common Stock

 

452,474

 

384,719

Unvested RSUs to issue an equal number of shares of Common Stock

 

6,458

 

16,319

Warrants to purchase an equal number of shares of Common Stock

 

 

200

Total number of potentially dilutive securities excluded from the calculation of earnings/(loss) per share attributable to common shareholders

 

458,932

 

401,238

Reverse Stock Split

On September 28, 2023, the Company effected a 1-for-20 reverse stock split, (the “Reverse Stock Split”) whereby every twenty shares of its Common Stock were reduced to one share of its Common Stock and the price per share of its Common Stock was multiplied by 20. All references to shares and per share amounts have been adjusted to reflect the reverse stock split.

Note 4. Cash, Cash Equivalents, and Restricted Cash

A reconciliation of the Company’s cash and cash equivalents in the Unaudited Condensed Consolidated Balance Sheets to cash, cash equivalents and restricted cash in the Unaudited Condensed Consolidated Statements of Cash Flows as of March 31, 2024 and December 31, 2023 is as follows:

    

March 31, 2024

    

December 31, 2023

Cash denominated in United States dollars

$

1,875

$

5,726

Cash denominated in currency other than United States dollars

 

2,155

 

2,395

Restricted cash

751

751

Credit and debit card receivables

 

287

 

316

Total cash, cash equivalents and restricted cash

$

5,068

$

9,188

The Company places its cash and temporary cash investments with credit quality institutions. At times, such cash denominated in United States dollars may be in excess of the Federal Deposit Insurance Corporation (“FDIC”) insurance limit. As of March 31, 2024, and December 31, 2023, deposits in excess of FDIC limits were $932 and $4,195, respectively. As of March 31, 2024, and December 31, 2023, the Company held cash balances in overseas accounts, totaling $2,155 and $2,395 respectively, which are not insured by the FDIC. If the Company were to distribute the amounts held overseas, the Company would need to follow an approval and distribution process as defined in its operating and partnership agreements, which may delay and/or reduce the availability of that cash to the Company.

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Note 5. Other current assets

As of March 31, 2024 and December 31, 2023, other current assets consisted of the following:

March 31, 2024

December 31, 2023

Prepaid expenses

$

1,602

$

894

Other

 

19

 

55

Total other current assets

$

1,621

$

949

Note 6. Intangible Assets

The following tables provides information regarding the Company’s intangible assets subject to amortization, which consist of the following:

March 31, 2024

December 31, 2023

Gross

Net

Gross

Net

Carrying

Accumulated

Carrying

Carrying

Accumulated

Carrying

    

Amount

    

Amortization

    

Amount

    

Amount

    

Amortization

    

Amount

Trade names

$

200

$

(12)

$

188

$

200

$

(6)

$

194

Customer relationships

1,012

(366)

646

1,012

(341)

671

Software

 

2,593

 

(2,174)

 

419

 

2,593

 

(2,120)

 

473

Licenses

35

(24)

11

35

(20)

15

Total intangible assets

$

3,840

$

(2,576)

$

1,264

$

3,840

$

(2,487)

$

1,353

The Company’s intangible assets are amortized over their expected useful lives. The Company recorded amortization expense of $84 and $382 during the three months ended March 31, 2024 and 2023, respectively.

Based on the intangible assets balance as of March 31, 2024, the estimated amortization expense for the remainder of the calendar year and each of the succeeding calendar years is as follows:

Calendar Years ending December 31, 

    

Amount

Remaining 2024

$

229

2025

 

307

2026

 

228

2027

 

122

2028

122

Thereafter

256

Total

$

1,264

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Note 7. Accrued expenses and other current liabilities

As of March 31, 2024 and December 31, 2023, accrued expenses and other current liabilities consisted of the following:

    

March 31, 2024

December 31, 2023

Litigation accrual

$

424

$

449

Accrued compensation

 

1,184

 

2,098

Tax-related liabilities

 

485

 

501

Common area maintenance accruals

495

8

Accounts payable accruals

235

913

Gift certificates

 

508

 

509

Credit card processing fees

5

8

Other miscellaneous accruals

 

359

 

482

Total accrued expenses and other current liabilities

$

3,695

$

4,968

Note 8. Acquisition of Naples Wax, LLC

On September 12, 2023, the Company acquired all of the equity interests in Naples Wax, LLC, d/b/a Naples Wax Centers, a Florida limited liability company (“Naples Wax”), for an aggregate purchase price of $1,624, of which $1,574 was paid in cash at closing. The remaining $50 was held for six months as a holdback to cover any potential indemnification claims. $14 was paid in the quarter ended March 31, 2024. The remaining $36 was offset by operating expenses.

The Company applies the provisions of Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 805, Business Combinations (“ASC 805”) in the accounting for acquisitions of businesses. ASC 805 requires the Company to use the acquisition method of accounting by recognizing the identifiable tangible and intangible assets acquired and liabilities assumed, and any non-controlling interest in the acquired business, measured at their acquisition date fair values. Goodwill as of the acquisition date is measured as the excess of consideration transferred over the aforementioned amounts.

While the company uses its best estimates and assumptions to accurately apply preliminary values to assets acquired and liabilities assumed at the acquisition date, these estimates are inherently uncertain and subject to refinement. As a result, during the measurement period, which may be up to one year from the acquisition date, the Company may record adjustments to the assets acquired and liabilities assumed with the corresponding offset to goodwill. As of March 31, 2024, no impairment of the Company’s goodwill was required. The purchase accounting for the acquisition remains incomplete as management continues to gather and evaluate information about circumstances that existed as of the acquisition date. Upon the conclusion of the measurement period or final determination of the values of the assets acquired or liabilities assumed, whichever comes first, any subsequent adjustments are recorded in the condensed consolidated statements of operations.

Accounting for business combinations requires management to make estimates and assumptions, especially at the acquisition date, including estimates for intangible assets. Although the Company believes the assumptions and estimates that have been made are reasonable and appropriate, they are based in part on historical experience and information obtained from the acquired companies and are inherently uncertain. Estimates in valuing certain of the intangible assets the Company has acquired include future expected cash flows, and discount rates.

For income tax purposes, this acquisition of 100% of the units is treated as an asset acquisition. As a result of the acquisition of Naples Wax, the company generated tax deductible goodwill of $1,371.

Note 9. Leases

The Company leases spa and clinic locations at various domestic and international airports. Additionally, the Company leases its corporate office in New York City and other off airport locations in various US cities. Certain leases entered into by the Company are accounted for in accordance with ASC 842. The Company determines if an arrangement is a lease at

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inception and if it qualifies under ASC 842. The Company’s lease arrangements generally contain fixed payments throughout the term of the lease and most also contain a variable component to determine the lease obligation where a certain percentage of sales is used to calculate the lease payments. The Company enters into leases that expire, are amended and extended, or are extended on a month-to-month basis. Leases are not included in the calculation of the total lease liability and the right of use asset when they are month-to-month.

All qualifying leases held by the Company are classified as operating leases. Operating lease assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent its obligation to make lease payments arising from the lease. Operating lease assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. The Company records its operating lease assets and liabilities based on required guaranteed payments under each lease agreement. The Company uses its incremental borrowing rate, which approximates the rate at which the Company can borrow funds on a secured basis, using the information available at commencement date of the lease in determining the present value of guaranteed lease payments. The interest rate implicit in the lease is generally not determinable in transactions where a company is the lessee.

The Company reviews all of its existing lease agreements to determine whether there were any modifications to lease agreements and to assess if any agreements should be accounted for pursuant to the guidance in ASC 842.

The following is a summary of the activity in the Company’s current and long-term operating lease liabilities for the three months ended March 31, 2024 and 2023:

Three months ended March 31, 

    

2024

    

2023

Cash paid for amounts included in the measurement of lease liabilities:

Operating cash flows from operating leases

$

(835)

$

(973)

As of March 31, 2024, operating leases contain the following future minimum commitments:

Calendar Years ending December 31, 

    

Amount

Remaining 2024

$

2,577

2025

 

3,054

2026

 

1,979

2027

 

1,866

2028

 

1,497

2029

1,273

Thereafter

 

2,609

Total future lease payments

 

14,855

Less: interest expense at incremental borrowing rate

 

(2,745)

Net present value of lease liabilities

$

12,110

Other assumptions and pertinent information related to the Company’s accounting for operating leases are:

Weighted average remaining lease term:

5.95

years

Weighted average discount rate used to determine present value of operating lease liability:

 

7.33

%

Cash paid for minimum annual rental obligations for the three months ended March 31, 2024 and 2023, were $450 and $662 respectively.

Variable lease payments calculated monthly as a percentage of a product and services revenue were $360 and $345 for the three months ended March 31, 2024 and 2023 respectively.

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Note 10. Other Assets

As of March 31, 2024 and December 31, 2023, assets consisted of the following:

    

March 31, 2024

    

December 31, 2023

Equity investments

$

92

$

50

Lease deposits

 

1,523

 

1,556

Other

170

236

Other assets

$

1,785

$

1,842

Note 11. Stockholders’ Equity

2023 Reverse Stock Split

On September 28, 2023, we effected the “Reverse Stock Split”, whereby every twenty shares of our common stock were reduced to one share of our common stock and the price per share of our common stock was multiplied by 20. All references to shares and per share amounts, including shares of common stock underlying stock options, warrants, and applicable exercise prices, have been retroactively adjusted for all periods presented herein to give effect to the Reverse Stock Split as required in accordance with United States of America generally accepted accounting principles.

Stock-based Compensation

The Company has a stock-based compensation plan available to grant stock options and RSUs to the Company’s directors, employees and consultants.

In September 2020, the Board of Directors approved a new stock-based compensation plan available to grant stock options, restricted stock and Restricted Stock Units (“RSU’s”) aggregating to 250,000 shares of Common Stock, to the Company’s directors, employees and consultants. Shareholder approval of the plan was subsequently obtained on October 28, 2020. On October 4, 2022, shareholders approved the amendment to the Company’s 2020 Equity Incentive Plan to increase the number of shares authorized for issuance under the Plan by 375,000 shares of Common Stock to an aggregate of 625,000 shares. Under the 2020 Equity Incentive Plan (the “2020 Plan”), a maximum of 141,120 shares of Common Stock remained available for issuance as of March 31, 2024.  

The Company’s previous Employee, Director and Consultant Equity Incentive Plan (the “2012 Plan”) was terminated upon receipt of shareholder approval of the 2020 Plan.  Awards granted under the 2012 Plan remain in effect pursuant to their terms. Generally, stock options are granted with exercise prices equal to the fair market value on the date of grant, vest in four 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 and RSU’s to the XpresTest’s directors, employees and consultants. Under the XpresTest 2020 Equity Incentive Plan (the “XpresTest Plan”), a maximum of 200 shares of XpresTest common stock may be awarded, which would represent 20% of the total number of shares of common stock of XpresTest as of March 31, 2024. Certain named executive officers, consultants, and directors of the Company are eligible to participate in the XpresTest Plan. The XpresTest Plan RSAs vest upon satisfaction of certain service and performance-based conditions. The fair value of the XpresTest Plan RSAs is determined based on the weighted average of (i) Fair Value of XpresTest under the Indirect Valuation Method developing assumptions for XpresSpa Net Market Cap and XpresSpa standalone Fair Value, and (ii) Direct Valuation Method developing assumptions for XpresTest Representative Forecasted Revenue for 2021 and Peer companies Revenue’s Multiples.

As of March 31, 2024 and 2023, there was $74 and $167 respectively of unrecognized stock-based compensation related to the XpresTest Plan.

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The fair value of stock options is estimated as of the date of grant using the Black-Scholes-Merton (“Black-Scholes”) option-pricing model. The Company uses the simplified method to estimate the expected term of options due to insufficient history and high turnover in the past. 

The following variables were used as inputs in the model:

Share price of the Company’s Common Stock on the grant date:

$

1.50

Exercise price:

$

1.50

Expected volatility:

 

121.04

%

Expected dividend yield:

 

0

%

Annual average risk-free rate:

 

4.14

%

Expected term:

 

6.32

years

Total stock-based compensation for the three months ended March 31, 2024 and 2023 is $282 and $612, respectively.

The following tables summarize information about stock options and RSU activity for the three months ended March 31, 2024:

RSUs

XpresTest RSAs

Stock options

    

    

Weighted

    

    

Weighted

    

    

Weighted

    

average

average

average

Exercise

No. of

grant date

No. of

grant date

No. of

exercise

price

RSUs

fair value

RSAs

fair value

options

price

range

Outstanding as of December 31, 2023

11,944

$

6.08

5.00

$

47,570

341,205

$

26.85

$

4.60 - 49,200

Granted

-

150,000

$

1.50

1.50

Exercised/Vested

(2,986)

6.13

Forfeited

(2,500)

5.09

(29,278)

$

17.40

$

1.50 - 34.40

Expired

 

(9,453)

$

67.89

$

8.00 - 49,200

Outstanding as of March 31, 2024

6,458

$

6.74

5.00

$

47,570

452,474

$

18.20

$

1.50 - 7,080

Exercisable as of March 31, 2024

272,683

$

25.07

$

4.60- 7,080

Note 12. Income Taxes

The Company’s provision for income taxes consists of federal, state, local, and foreign taxes in amounts necessary to align the Company’s year-to-date provision for income taxes with the effective tax rate that the Company expects to achieve for the full year. Each quarter, the Company updates its estimate of the annual effective tax rate and records cumulative adjustments as deemed necessary. The income tax provision for the three months ended March 31, 2024, reflects an estimated global annual effective tax rate of approximately 0% from continuing operations.

As of March 31, 2024, deferred tax assets generated from the Company’s U.S. activities were offset by a valuation allowance because realization depends on generating future taxable income, which, in the Company’s estimation, is not more likely than not to be generated before such net operating loss carryforwards expire. Net operating loss carryforwards generated after December 31, 2017 do not expire. The Company expects its effective tax rate for its current fiscal year to be significantly lower than the statutory rate as a result of a full valuation allowance; therefore, any loss before income taxes does not generate a corresponding income tax benefit. Income tax expense/(benefit) for the three months ended March 31, 2024 was $0 which was attributed to state taxing jurisdictions in which a measure of income is utilized to determine a tax liability. The final annual tax rate cannot be determined until the end of the fiscal year; therefore, the actual tax rate could differ from current estimates.

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Note 13. Commitments and Contingencies

Certain of the Company’s outstanding legal matters include speculative claims for substantial or indeterminate amounts of damages. The Company regularly evaluates developments in its legal matters that could affect the amount of any potential liability and adjusts as appropriate. A significant judgment is required to determine both the likelihood of there being any potential liability and the estimated amount of a loss related to the Company’s legal matters.

With respect to the Company’s outstanding legal matters, based on its current knowledge, the Company’s management believes that the amount or range of a potential loss will not, either individually or in the aggregate, have a material adverse effect on its business, consolidated financial position, results of operations or cash flows. However, the outcome of such legal matters is inherently unpredictable and subject to significant uncertainties. The Company evaluated the outstanding legal matters and assessed the probability and likelihood of the occurrence of liability. Based on management’s estimates, the Company has recorded accruals of $424 and $449 as of March 31, 2024 and December 31, 2023, respectively, which is included in Accrued expenses and other current liabilities in the condensed consolidated balance sheets.

The Company expenses legal fees in the period in which they are incurred.

OTG Management PHL B v. XpresSpa Philadelphia Terminal B et al.

On May 9, 2022, a lawsuit was filed in the Philadelphia Court of Common Pleas by OTG Management at Philadelphia International Airport, claiming that XWELL improperly backed out of its sublease for space at Terminal B and now owes between $864 and $2,250 in accelerated rent for the 12-year contract.  They claim that by refusing to complete the project, failing to commence and maintain operations, refusing to pay rent and improperly purporting to terminate the lease (among other acts and omissions), XWELL breached the lease. On January 9, 2024, the court placed the matter on Civil Suspense.

In addition to those matters specifically set forth herein, the Company and its subsidiaries are involved in various other claims and legal actions that arise in the ordinary course of business. The Company does not believe that the ultimate resolution of these actions will have a material adverse effect on the Company’s financial position, results of operations, liquidity, or capital resources. However, a significant increase in the number of these claims, or one or more successful claims under which the Company incurs greater liabilities than the Company currently anticipates, could materially adversely affect the Company’s business, financial condition, results of operations and cash flows.

In the event that an action is brought against the Company or one of its subsidiaries, the Company will investigate the allegation and vigorously defend itself.

Leases

XWELL is contingently liable to a surety company under certain general indemnity agreements required by various airports relating to its lease agreements. XWELL agrees to indemnify the surety for any payments made on contracts of suretyship, guaranty, or indemnity. The Company believes that all contingent liabilities will be satisfied by its performance under the specified lease agreements.

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Note 14. Segment Information

As a result of the Company’s transition to a pure-play wellness services company, the Company currently has four reportable operating segments: XpresSpa, XpresTest, Naples Wax Center, and Treat. The Company analyzes the results of the Company’s business through the four reportable segments. The XpresSpa segment provides travelers premium spa services, including massage, nail and skin care, as well as spa and travel products. The XpresTest segment provided diagnostic COVID-19 tests at XpresCheck Wellness Centers in airports, to airport employees and to the traveling public but has transitioned to the CDC’s bio-surveillance program. XpresTest’s HyperPointe business provides a broad range of service and support options for its customers, including technical support services and advanced services. The Treat segment is a wellness brand that provides access to wellness services for travelers at on-site centers. The Naples Wax Center segment operates three high-performing locations with core products and service offerings from face and body waxing to a range of skincare and cosmetic products. The Treat segment is a wellness brand that provides access to wellness services for travelers at on-site centers.

The chief operating decision maker evaluates the operating results and performance of the Company’s segments through operating income. Expenses that can be specifically identified with a segment have been included as deductions in determining operating income. Any remaining expenses and other charges are included in Corporate and Other.

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For the three months ended

March 31, 

    

2024

    

2023

Revenue

 

  

 

  

XpresSpa

$

4,345

$

4,499

XpresTest

3,643

2,360

Naples Wax

648

Treat

90

204

Total revenue

$

8,726

$

7,063

2024

    

2023

Operating loss

 

  

 

  

XpresSpa

$

(2,107)

$

(3,132)

XpresTest

1,670

(281)

Naples Wax

(78)

Treat

(673)

(444)

Corporate and other

 

(1,191)

 

(2,431)

Total operating loss

$

(2,379)

$

(6,288)

2024

2023

Depreciation & amortization

XpresSpa

$

132

$

423

XpresTest

 

26

 

86

Naples Wax

31

Treat

19