XWELL Inc
For the period ended Sep 30, 2024. Filed Nov 14, 2024.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Sep 30, 2024 · Filed Nov 14, 2024
XWEL$0.59+2.8%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-06-30; filed 2024-08-14.
0001558370-24-012235
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-09-30; filed 2024-11-14.
0001558370-24-015707
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 76 previous paragraphs and 76 current paragraphs.
56 unchanged; 15 reworded; 5 added; 4 removed; 1 previous and 0 current paragraphs rearranged.
Tables are not compared: 18 previous and 18 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (5)
Current report
The decrease in loss on disposal of assets of approximately 98% was primarily due to the impairment of intangible and lease right of use assets that occurred in the three months ended September 30, 2023.
Current report
The increase of approximately 51%, or approximately $1.5 million was primarily attributable to the increase in one-time legal fees of approximately $2.1 million related to the defense of the CPC lawsuit in the three months ended September 30, 2024. This was partially offset by a $.6 million reduction in various other administrative expenses.
Current report
The increase of approximately 61% was primarily due to increased in payroll accruals, including $.4 million in severance related to the executive management change and employee retention credits (ERC) of approximately $1.1 million which reduced prior year salary expenses that were applied in August 2023.
Current report
The decrease of approximately $7,606 was primarily due to the impairment of tangible, right of use, and intangible assets that occurred in the three months ended September 30, 2023.
Current report
The increase of approximately 4% was primarily due to increased payroll accruals, including $.4 million in severance related to the executive management change and employee retention credits (ERC) of approximately $1.1 million which reduced prior year salary expenses that were applied in August 2023.
Removed paragraphs (4)
Previous report
The increase in loss on disposal of assets of approximately 6% was due to the closing of one XpresSpa in Orlando.
Previous report
The decrease of approximately 22% was primarily due to headcount reductions as we continue rightsizing our existing business.
Previous report
The increase of approximately $653 was primarily due to the write-off of the Salt Lake City International Airport Treat location that was closed as of May 1, 2024 and one XpresSpa location in Orlando that was closed as of May 31, 2024.
Previous report
The decrease of approximately 12% was primarily due to headcount reductions as we continue rightsizing our existing business.
Reworded paragraphs (15)
Previous wording
As of June 30, 2024, there were 21 domestic XpresSpa locations in total, 19 Company-owned locations and two franchises. We also had 11 international locations operating as of June 30, 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.
Current wording
As of September 30, 2024, there were 19 domestic XpresSpa locations in total, 17 Company-owned locations and two franchises. We also had 10 international locations operating as of September 30, 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 four XpresSpa locations in the Istanbul Airport in Turkey.
Previous wording
The program was further renewed in August 2023 through a new one-year contract. The revenue to XpresTest from such one-year extension totaled approximately $7,044. In March 2024, the program funding and scope were expanded, a revenue increase of $4,000, to an estimated $11,044 in revenue for XpresTest with new collection locations at U.S. international airports in Miami (MIA) and Chicago (ORD) and the roll out of multi-pathogen testing across the program.
Current wording
The program was further renewed in August 2023 through a new one-year contract. The revenue to XpresTest from such one-year extension totaled approximately $7,044. In March 2024, the program funding and scope were expanded, a revenue increase of $4,000, to an estimated $11,044 in revenue for XpresTest with a new collection station located in Miami International Airport (MIA) and the roll out of multi-pathogen testing across the program. The program was further renewed in August 2024.
Previous wording
The increase in revenue of $1,107 or 14%, was primarily due to the increase in the XpresTest CDC contract and the addition of Naples Wax.
Current wording
The increase in revenue of $954 or 13%, was primarily due to the increase in the XpresTest CDC contract and the addition of Naples Wax.
Previous wording
The decrease in cost of sales of $1,262 or 9%, is a result of three XpresSpa locations closing during 2023. The largest component in the cost of sales is labor costs at the location-level. Cost of sales also includes rent and related occupancy costs, which can primarily include rent based on percentage of sales, as well as other product costs directly associated with the procurement of retail inventory, and other operating costs.
Current wording
The decrease in cost of sales of $8, is a result of schedule optimization in the XpresSpa locations. The largest component in the cost of sales is labor costs at the location-level. Cost of sales also includes rent and related occupancy costs, which can primarily include rent based on percentage of sales, as well as other product costs directly associated with the procurement of retail inventory, and other operating costs.
Previous wording
The decrease in depreciation and amortization of approximately 62% was primarily due to the write-off of the stores that were permanently closed in 2023. Fewer locations resulted in lower depreciation of leasehold improvements. Depreciation and amortization expense also decreased because of the impairments and disposals of fixed assets during the year ended December 31, 2023 and the three months ended March 31, 2024.
Current wording
The decrease in depreciation and amortization of approximately 57% was primarily due to the write-off of the stores that were permanently closed in 2023. Fewer locations resulted in lower depreciation of leasehold improvements. Depreciation and amortization expense also decreased because of the impairments and disposals of fixed assets during the year ended December 31, 2023 and the three months ended September 30, 2024.
Previous wording
The decrease of $8 was primarily due to having less cash in interest bearing accounts.
Current wording
The decrease of $5 was primarily due to having less cash in interest bearing accounts.
Previous wording
Six months ended June 30, 2024, compared to the six months ended June 30, 2023
Current wording
Nine months ended September 30, 2024, compared to the nine months ended September 30, 2023
Previous wording
The increase in revenue of $2,770 or 18%, was primarily due to the increase in the XpresTest CDC contract and the addition of Naples Wax.
Current wording
The increase in revenue of $3,724 or 16%, was primarily due to the increase in the XpresTest CDC contract and the addition of Naples Wax.
Previous wording
The decrease in cost of sales of $782 or 11%, is a result of three XpresSpa locations closing during 2023. The largest component in the cost of sales is labor costs at the location-level. Cost of sales also includes rent and related occupancy costs, which can primarily include rent based on percentage of sales, as well as other product costs directly associated with the procurement of retail inventory, and other operating costs.
Current wording
The decrease in cost of sales of $1,270 or 6%, is a result of three XpresSpa locations closing during 2023. The largest component in the cost of sales is labor costs at the location-level. Cost of sales also includes rent and related occupancy costs, which can primarily include rent based on percentage of sales, as well as other product costs directly associated with the procurement of retail inventory, and other operating costs.
Previous wording
The decrease in depreciation and amortization of approximately 62% was primarily due to the write-off of the stores that were permanently closed in 2023. Fewer locations resulted in lower depreciation of leasehold improvements. Depreciation and amortization expense also decreased because of the impairments and disposals of fixed assets during the year ended December 31, 2023 and the three months ended March 31, 2024.
Current wording
The decrease in depreciation and amortization of approximately 60% was primarily due to the write-off of the stores that were permanently closed in 2023. Fewer locations resulted in lower depreciation of leasehold improvements. Depreciation and amortization expense also decreased because of the impairments and disposals of fixed assets during the year ended December 31, 2023 and the nine months ended September 30, 2024.
Previous wording
The decrease of approximately 3% was primarily due to rightsizing our existing business and optimizing our cost structure. We have significantly reduced operating and overhead expenses while we continue to focus on returning to overall profitability.
Current wording
The decrease of approximately 6% was primarily due to rightsizing our existing business and optimizing our cost structure. We have significantly reduced operating and overhead expenses while we continue to focus on returning to overall profitability. This was partially offset by an increase in one-time legal fees of approximately $2.1 million related to the defense of the CPC lawsuit.
Previous wording
The following is a summary of the transactions included in other non-operating expense, net for the six months ended June 30, 2024 and 2023:
Current wording
The following is a summary of the transactions included in other non-operating expense, net for the nine months ended September 30, 2024 and 2023:
Previous wording
The decrease of $22 was primarily due to having less cash in interest bearing accounts.
Current wording
The decrease of $26 was primarily due to having less cash in interest bearing accounts.
Previous wording
As of June 30, 2024, we had cash and cash equivalents of $5,418 (excluding restricted cash), $12,965 in marketable securities, and total current assets of $23,135. Our total current liabilities balance, which includes accounts payable, deferred revenue, accrued expenses, and operating lease liabilities was $10,440 as of June 30, 2024, and $9,330 as of December 31, 2023. The working capital surplus was $12,695 as of June 30, 2024, compared to a working capital surplus of $17,236 as of December 31, 2023.
Current wording
As of September 30, 2024, we had cash and cash equivalents of $4,365 (excluding restricted cash), $11,660 in marketable securities, and total current assets of $19,513. Our total current liabilities balance, which includes accounts payable, deferred revenue, accrued expenses, and operating lease liabilities was $9,850 as of September 30, 2024, and $9,330 as of December 31, 2023. The working capital surplus was $9,663 as of September 30, 2024, compared to a working capital surplus of $17,236 as of December 31, 2023.
Previous wording
We have carried out an assessment of our ability to continue as a going concern. As of the date of this Quarterly Report on Form 10Q, we believe that we have sufficient liquidity to fund operations for the next twelve months. Our primary liquidity and capital requirements are for the maintenance of our current XpresSpa and Treat locations and brand, as well as the expansion of Naples Wax and our off-airport strategy. During the six months ended June 30, 2024 and 2023, we used $4,125 and $8,618 in operations, respectively.
Current wording
We have carried out an assessment of our ability to continue as a going concern. As of the date of this Quarterly Report on Form 10-Q, we believe that we have sufficient liquidity to fund operations for the next twelve months. Our primary liquidity and capital requirements are for the maintenance of our current XpresSpa and Treat locations and brand, as well as the expansion of Naples Wax and our off-airport strategy. During the nine months ended September 30, 2024 and 2023, we used $7,541 and $12,873 in operations, respectively.
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
The decrease of approximately 29% was primarily due to rightsizing our existing business and optimizing our cost structure. We have significantly reduced operating and overhead expenses while we continue to focus on returning to overall profitability.