0001558370-23-019060 | 10-Q | XBRL Viewer

Print Document View Excel Document

Income Taxes (Details) - USD ($) $ in Thousands	3 Months Ended	9 Months Ended
Income Taxes (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Sep. 30, 2023
Income Taxes.
Income tax benefit (as a percent)	0.00%	0.00%
State	$ 0	$ 0

Segment Information

9 Months Ended

Sep. 30, 2023

Segment Information

Segment Information

Note 14. Segment Information

As a result of the Company’s transition to a pure-play wellness services company, the Company currently has three reportable operating segments: XpresSpa, XpresTest (inclusive of its Hyperpointe acquisition), Treat (inclusive of its Naples Wax acquisition). The Company analyzes the results of the Company’s business through the three 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. The Treat segment is a wellness brand that provides access to wellness services for travelers at on-site centers. HyperPointe provides a broad range of service and support options for its customers, including technical support services and advanced services. Naples Wax Center 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 chief operating decision maker evaluates the operating results and performance of the Company’s segments through operating income. Expenses that can be specifically identified with a segment have been included as deductions in determining operating income. Any remaining expenses and other charges are included in Corporate and Other.


	For the three months ended
	September 30,
	2023		2022
Revenue
XpresSpa	$	4,955	$	3,557
XpresTest		2,322		6,754
Treat		191		425
Corporate and other		—		—
Total revenue	$	7,468	$	10,736

Operating income (loss)
XpresSpa	$	(2,947)	$	(2,508)
XpresTest		(5,267)		(1,885)
Treat		28		(1,282)
Corporate and other		(2,290)		(1,979)
Total operating loss (including impairment)	$	(10,476)	$	(7,654)

Depreciation & Amortization
XpresSpa	$	421	$	364
XpresTest		91		662
Treat		66		520
HyperPointe		—		—
Corporate and other		12		18
Total Depreciation & Amortization	$	590	$	1,564

Impairment / loss on disposal of assets
XpresSpa	$	1,460	$	—
XpresTest		5,338		1,040
Treat		—		—
Corporate and other		—		—
Total Impairment / loss on disposal of assets	$	6,798	$	1,040


	For the nine months ended
	September 30,
	2023		2022
Revenue
XpresSpa	$	14,682	$	9,490
XpresTest		7,541		37,781
Treat		483		1,110
Corporate and other		—		—
Total revenue	$	22,706	$	48,381

	2023		2022
Operating loss
XpresSpa	$	(8,901)	$	(8,921)
XpresTest		(5,067)		1,831
Treat		(776)		(4,038)
Corporate and other		(6,744)		(6,744)
Total operating loss (including impairment)	$	(21,488)	$	(17,872)



	2023		2022
Depreciation & amortization
XpresSpa	$	1,275	$	1,065
XpresTest		260		1,954
Treat		198		1,287
Corporate and other		37		23
Total depreciation & amortization	$	1,770	$	4,329

Impairment / loss on disposal of assets
XpresSpa	$	1,468	$	—
XpresTest		5,348		988
Treat		—		—
Corporate and other		—		—
Total Impairment / loss on disposal of assets	$	6,816	$	988

Capital expenditures
XpresSpa	$	1,596	$	1,413
XpresTest		80		675
Treat		56		3,329
Corporate and other		28		55
Total capital expenditures	$	1,760	$	5,472



	September 30, 2023		December 31, 2022
Long-lived Assets
XpresSpa	$	9,514	$	11,851
XpresTest		118		4,220
Treat		2,118		2,314
Corporate and other		467		409
Total long-lived Assets	$	12,217	$	18,794


	September 30, 2023		December 31, 2022
Assets
XpresSpa	$	17,626	$	21,135
XpresTest		1,935		11,198
Treat		4,016		3,186
Corporate and other		20,973		34,907
Total assets	$	44,550	$	70,426

- Definition

The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 31
-URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8924-108599

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 34
-URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8981-108599

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 21
-Subparagraph (a)
-URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8721-108599

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 40
-URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e9031-108599

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 32
-Subparagraph (f)
-URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8933-108599

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 32
-Subparagraph (e)
-URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8933-108599

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 26
-URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8844-108599

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 41
-URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e9038-108599

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 32
-Subparagraph (d)
-URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8933-108599

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 22
-URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8736-108599

Reference 11: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 42
-URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e9054-108599

Reference 12: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 15
-URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8657-108599

Reference 13: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 21
-Subparagraph (b)
-URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8721-108599

Reference 14: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-URI https://asc.fasb.org/topic&trid=2134510

+ Details

Stockholders' Equity - Stockholders' Equity (Details) $ in Thousands			1 Months Ended		3 Months Ended			9 Months Ended
	Oct. 04, 2022 shares	Aug. 03, 2022 shares	May 31, 2022 shares	Sep. 30, 2020 item shares	Sep. 30, 2023 USD ($) shares	Sep. 30, 2022 USD ($)	Jun. 30, 2022 USD ($)	Sep. 30, 2023 USD ($) shares	Sep. 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 \| $					$ 594	$ 483		$ 1,832	$ 3,294
Unrecognized stock-based payment cost related to options \| $					1,938			1,938		$ 2,506
Repurchase of common stock \| $						$ 11,673	$ 1,021
Share Repurchase Program
Stockholders Equity [Line Items]
Repurchase of common stock (in shares)									424,042
Repurchase of common stock \| $									$ 12,116
Number of Shares Authorized to be Repurchased											750,000
Additional shares authorized to be repurchased			500,000
Repurchase and retirement of common stock (in shares)		66,920							357,122
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 \| $					$ 120			$ 120
Equity incentive plan 2020
Stockholders Equity [Line Items]
Number of shares authorized					625,000			625,000
Number of additional shares authorized	375,000
Maximum \| Equity incentive plan 2020
Stockholders Equity [Line Items]
Number of shares authorized				250,000
Number of stock shares issued								239,493
Directors, Employees And Consultants \| XpresTest 2020 Plan
Stockholders Equity [Line Items]
Percentage of shares authorized for issuance				20.00%
Directors, Employees And Consultants \| Maximum \| XpresTest 2020 Plan
Stockholders Equity [Line Items]
Number of shares authorized				200

Intangible Assets

9 Months Ended

Sep. 30, 2023

Intangible Assets

Intangible Assets

Note 6. Intangible Assets

The changes in the carrying amount of intangible assets for the nine months ended September 30, 2023 were as follows:


	Gross
	Intangible
	Assets
Balance as of December 31, 2022	$	6,352
Acquisition of Naples Wax		1,624
Acquisition of Intangible Assets		468
Impairment of Assets		(3,281)
Retirement of Fully-Amortized Assets		(562)
Currency Translation Adjustment		(18)
Balance as of September 30, 2023	$	4,583

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


	September 30, 2023						December 31, 2022
	Gross				Net		Gross				Net
	Carrying		Accumulated		Carrying		Carrying		Accumulated		Carrying
	Amount		Amortization		Amount		Amount		Amortization		Amount
Trade names	$	—	$	—	$	—	$	302	$	(24)	$	278
Customer relationships		1,936		(312)		1,624		1,510		(542)		968
Software		2,609		(2,078)		531		4,485		(1,761)		2,724
Licenses		38		(19)		19		55		(17)		38
Total intangible assets	$	4,583	$	(2,409)	$	2,174	$	6,352	$	(2,344)	$	4,008

The Company’s intangible assets are amortized over their expected useful lives. The Company recorded amortization expense of $396 and $474 during the three months ended September 30, 2023 and 2022, respectively, and $1,155 and $1,338 during the nine months ended September 30, 2023 and 2022, respectively.

Based on the intangible assets balance as of September 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	$	108
2024		432
2025		426
2026		338
2027		232
Thereafter		638
Total	$	2,174

Cash, Cash Equivalents, and Restricted Cash (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Cash, Cash Equivalents, and Restricted Cash
Deposits in excess of FDIC limits	$ 1,612	$ 16,069
Amount of cash in overseas accounts	$ 2,358	$ 2,562

Segment Information - Geographical Revenue, Segment Operating Loss and Total Asset Information (Details) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023 USD ($) item	Sep. 30, 2022 USD ($)	Sep. 30, 2023 USD ($) segment item	Sep. 30, 2022 USD ($)	Sep. 12, 2023 Center	Dec. 31, 2022 USD ($)
Revenue
Total revenue	$ 7,468	$ 10,736	$ 22,706	$ 48,381
Operating income (loss)
Total operating loss (including impairment)	(10,476)	(7,654)	(21,488)	(17,872)
Total depreciation & amortization	590	1,564	1,770	4,329
Total Impairment / loss on disposal of assets	6,798	1,040	6,816	988
Total capital expenditures	1,760	5,472	1,760	5,472
Assets
Total long-lived assets	12,217		12,217			$ 18,794
Total assets	$ 44,550		$ 44,550			70,426
Number of reportable segments \| segment			3
Naples Wax LLC
Assets
Number of High- Performing Locations	3		3		3
XpresSpa
Revenue
Total revenue	$ 4,955	3,557	$ 14,682	9,490
Operating income (loss)
Total operating loss (including impairment)	(2,947)	(2,508)	(8,901)	(8,921)
Total depreciation & amortization	421	364	1,275	1,065
Total Impairment / loss on disposal of assets	1,460		1,468
Total capital expenditures	1,596	1,413	1,596	1,413
Assets
Total long-lived assets	9,514		9,514			11,851
Total assets	17,626		17,626			21,135
XpresTest
Revenue
Total revenue	2,322	6,754	7,541	37,781
Operating income (loss)
Total operating loss (including impairment)	(5,267)	(1,885)	(5,067)	1,831
Total depreciation & amortization	91	662	260	1,954
Total Impairment / loss on disposal of assets	5,338	1,040	5,348	988
Total capital expenditures	80	675	80	675
Assets
Total long-lived assets	118		118			4,220
Total assets	1,935		1,935			11,198
Treat
Revenue
Total revenue	191	425	483	1,110
Operating income (loss)
Total operating loss (including impairment)	28	(1,282)	(776)	(4,038)
Total depreciation & amortization	66	520	198	1,287
Total capital expenditures	56	3,329	56	3,329
Assets
Total long-lived assets	2,118		2,118			2,314
Total assets	4,016		4,016			3,186
Corporate and Other
Operating income (loss)
Total operating loss (including impairment)	(2,290)	(1,979)	(6,744)	(6,744)
Total depreciation & amortization	12	18	37	23
Total capital expenditures	28	$ 55	28	$ 55
Assets
Total long-lived assets	467		467			409
Total assets	$ 20,973		$ 20,973			$ 34,907

Other current assets

9 Months Ended

Sep. 30, 2023

Other current assets

Other current assets

Note 5. Other current assets

As of September 30, 2023 and December 31, 2022, other current assets consisted of the following:


	September 30, 2023		December 31, 2022
Prepaid expenses	$	1,419	$	1,074
Contract assets		187		—
Other		57		48
Total other current assets	$	1,663	$	1,122

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT) (Parenthetical)	Sep. 28, 2023
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT)
Reverse stock split, conversion ratio	0.05

Leases

9 Months Ended

Sep. 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 2023, the Company commenced a new lease for its corporate office. 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 nine months ended September 30, 2023 and 2022 were as follows:


	Nine months ended September 30,
	2023		2022
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	(2,668)	$	(3,072)
Leased assets obtained in exchange for new and modified operating lease liabilities	$	174	$	7,380

As of September 30, 2023, operating leases contain the following future minimum commitments:


Calendar Years ending December 31,	Amount
Remaining 2023	$	814
2024		3,093
2025		2,699
2026		1,615
2027		1,491
2028		1,111
Thereafter		3,259
Total future lease payments		14,082
Less: interest expense at incremental borrowing rate		(2,584)
Net present value of lease liabilities	$	11,498

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


Weighted average remaining lease term:	5.98	years
Weighted average discount rate used to determine present value of operating lease liability:	7.37	%

Cash paid for minimum annual rental obligations during the three and nine months ended September 30, 2023 was $503 and $1,762, respectively. Cash paid for minimum annual rental obligations during the three and nine months ended September 30, 2022 was $445 and $1,191, respectively.

Variable lease payments calculated monthly as a percentage of product and services revenue, were $302 and $397 for the three months ended September 30, 2023 and 2022, respectively, and $1,013 and $1,085 for the nine months ended September 30, 2023 and 2022, respectively.

Segment Information (Tables)

9 Months Ended

Sep. 30, 2023

Segment Information

Schedule of segment reporting information, by segment


	For the three months ended
	September 30,
	2023		2022
Revenue
XpresSpa	$	4,955	$	3,557
XpresTest		2,322		6,754
Treat		191		425
Corporate and other		—		—
Total revenue	$	7,468	$	10,736

Operating income (loss)
XpresSpa	$	(2,947)	$	(2,508)
XpresTest		(5,267)		(1,885)
Treat		28		(1,282)
Corporate and other		(2,290)		(1,979)
Total operating loss (including impairment)	$	(10,476)	$	(7,654)

Depreciation & Amortization
XpresSpa	$	421	$	364
XpresTest		91		662
Treat		66		520
HyperPointe		—		—
Corporate and other		12		18
Total Depreciation & Amortization	$	590	$	1,564

Impairment / loss on disposal of assets
XpresSpa	$	1,460	$	—
XpresTest		5,338		1,040
Treat		—		—
Corporate and other		—		—
Total Impairment / loss on disposal of assets	$	6,798	$	1,040


	For the nine months ended
	September 30,
	2023		2022
Revenue
XpresSpa	$	14,682	$	9,490
XpresTest		7,541		37,781
Treat		483		1,110
Corporate and other		—		—
Total revenue	$	22,706	$	48,381

	2023		2022
Operating loss
XpresSpa	$	(8,901)	$	(8,921)
XpresTest		(5,067)		1,831
Treat		(776)		(4,038)
Corporate and other		(6,744)		(6,744)
Total operating loss (including impairment)	$	(21,488)	$	(17,872)



	2023		2022
Depreciation & amortization
XpresSpa	$	1,275	$	1,065
XpresTest		260		1,954
Treat		198		1,287
Corporate and other		37		23
Total depreciation & amortization	$	1,770	$	4,329

Impairment / loss on disposal of assets
XpresSpa	$	1,468	$	—
XpresTest		5,348		988
Treat		—		—
Corporate and other		—		—
Total Impairment / loss on disposal of assets	$	6,816	$	988

Capital expenditures
XpresSpa	$	1,596	$	1,413
XpresTest		80		675
Treat		56		3,329
Corporate and other		28		55
Total capital expenditures	$	1,760	$	5,472



	September 30, 2023		December 31, 2022
Long-lived Assets
XpresSpa	$	9,514	$	11,851
XpresTest		118		4,220
Treat		2,118		2,314
Corporate and other		467		409
Total long-lived Assets	$	12,217	$	18,794


	September 30, 2023		December 31, 2022
Assets
XpresSpa	$	17,626	$	21,135
XpresTest		1,935		11,198
Treat		4,016		3,186
Corporate and other		20,973		34,907
Total assets	$	44,550	$	70,426

Potentially Dilutive Securities

9 Months Ended

Sep. 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				Nine months ended
	September 30,				September 30,
	2023		2022		2023		2022
Basic numerator:
Net loss attributable to XWELL, Inc.	$	(9,918)	$	(7,179)	$	(21,157)	$	(19,380)
Net loss attributable to common shareholders	$	(9,918)	$	(7,179)	$	(21,157)	$	(19,380)
Basic and diluted denominator:
Basic and diluted weighted average shares outstanding		4,173,894		4,731,066		4,170,629		4,858,393
Basic and diluted loss per share	$	(2.38)	$	(1.52)	$	(5.07)	$	(3.99)

Both vested and unvested options to purchase an equal number of shares of Common Stock		377,717		235,668		377,717		235,668
Unvested RSUs to issue an equal number of shares of Common Stock		14,444		1,953		14,444		1,953
Warrants to purchase an equal number of shares of Common Stock		200		856,203		200		856,203
Total number of potentially dilutive securities excluded from the calculation of loss per share attributable to common shareholders		392,361		1,093,824		392,361		1,093,824

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	$ 51		$ 488,268	$ (395,275)	$ (312)	$ 92,732	$ 7,203	$ 99,935
Common Stock, Shares, Outstanding, Beginning Balance at Dec. 31, 2021	5,063,467
Issuance of Common Stock for acquisition			906			906		906
Issuance of Common Stock for acquisition (in shares)	27,624
Vesting of restricted stock units (shares)	19,591
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	$ (3)		(11,092)			(11,095)		(11,095)
Repurchase and retirement of common stock (in shares)	(357,122)
Foreign currency translation					(41)	(41)		(41)
Distributions to noncontrolling interests							(824)	(824)
Contributions from noncontrolling interests							200	200
Balance Ending at Mar. 31, 2022	$ 48		479,552	(399,558)	(353)	79,689	8,100	87,789
Common Stock, Shares, Outstanding, Ending Balance at Mar. 31, 2022	4,753,560
Balance Beginning at Dec. 31, 2021	$ 51		488,268	(395,275)	(312)	92,732	7,203	99,935
Common Stock, Shares, Outstanding, Beginning Balance at Dec. 31, 2021	5,063,467
Net loss for the period								(18,368)
Balance Ending at Sep. 30, 2022	$ 42		468,058	(414,655)	(560)	52,885	8,642	61,527
Common Stock, Shares, Outstanding, Ending Balance at Sep. 30, 2022	4,161,613
Balance Beginning at Mar. 31, 2022	$ 48		479,552	(399,558)	(353)	79,689	8,100	87,789
Common Stock, Shares, Outstanding, Beginning Balance at Mar. 31, 2022	4,753,560
Vesting of restricted stock units (shares)	14,453
Grant of stock 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)		(66,920)
Foreign currency translation					(105)	(105)		(105)
Distributions to noncontrolling interests							(132)	(132)
Balance Ending at Jun. 30, 2022	$ 48	$ (1,021)	480,338	(407,476)	(458)	71,431	8,508	79,939
Common Stock, Shares, Outstanding, Ending Balance at Jun. 30, 2022	4,768,013
Treasury Stock, Shares, Outstanding, Ending Balance at Jun. 30, 2022		(66,920)
Vesting of restricted stock units (shares)	12,812
Grant of stock for services			16			16		16
Stock-based compensation			392			392	91	483
Net loss for the period				(7,179)		(7,179)	(500)	(7,679)
Repurchase of common stock	$ (6)	$ 1,021	(12,688)			(11,673)		(11,673)
Repurchase of common stock (in shares)	(619,212)	66,920
Foreign currency translation					(102)	(102)	(3)	(105)
Contributions from noncontrolling interests							546	546
Balance Ending at Sep. 30, 2022	$ 42		468,058	(414,655)	(560)	52,885	8,642	61,527
Common Stock, Shares, Outstanding, Ending Balance at Sep. 30, 2022	4,161,613
Balance Beginning at Dec. 31, 2022	$ 42		468,530	(428,112)	(534)	39,926	8,023	$ 47,949
Common Stock, Shares, Outstanding, Beginning Balance at Dec. 31, 2022	4,161,613							4,161,613
Value of shares withheld to fund payroll taxes			(22)			(22)		$ (22)
Issuance of restricted stock units (in shares)	6,015
Stock-based compensation			589			589	23	612
Net loss for the period				(5,509)		(5,509)	(320)	(5,829)
Foreign currency translation					(130)	(130)	11	(119)
Balance Ending at Mar. 31, 2023	$ 42		469,097	(433,621)	(664)	34,854	7,737	42,591
Common Stock, Shares, Outstanding, Ending Balance at Mar. 31, 2023	4,167,628
Balance Beginning at Dec. 31, 2022	$ 42		468,530	(428,112)	(534)	39,926	8,023	$ 47,949
Common Stock, Shares, Outstanding, Beginning Balance at Dec. 31, 2022	4,161,613							4,161,613
Net loss for the period								$ (21,486)
Balance Ending at Sep. 30, 2023	$ 42		470,270	(449,269)	(1,642)	19,401	7,869	$ 27,270
Common Stock, Shares, Outstanding, Ending Balance at Sep. 30, 2023	4,174,381							4,174,381
Balance Beginning at Mar. 31, 2023	$ 42		469,097	(433,621)	(664)	34,854	7,737	$ 42,591
Common Stock, Shares, Outstanding, Beginning Balance at Mar. 31, 2023	4,167,628
Issuance of restricted stock units (in shares)	3,297
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	$ 42		469,700	(439,351)	(1,128)	29,263	7,737	37,000
Common Stock, Shares, Outstanding, Ending Balance at Jun. 30, 2023	4,170,925
Grant of stock for services			3			3		3
Issuance of restricted stock units (in shares)	3,456
Stock-based compensation			567			567	24	591
Net loss for the period				(9,918)		(9,918)	(60)	(9,978)
Foreign currency translation					(514)	(514)	18	(496)
Contributions from noncontrolling interests							150	150
Balance Ending at Sep. 30, 2023	$ 42		$ 470,270	$ (449,269)	$ (1,642)	$ 19,401	$ 7,869	$ 27,270
Common Stock, Shares, Outstanding, Ending Balance at Sep. 30, 2023	4,174,381							4,174,381

Potentially Dilutive Securities (Tables)

9 Months Ended

Sep. 30, 2023

Potentially Dilutive Securities

Schedule of computation of basic and diluted net loss per common stock


	Three months ended				Nine months ended
	September 30,				September 30,
	2023		2022		2023		2022
Basic numerator:
Net loss attributable to XWELL, Inc.	$	(9,918)	$	(7,179)	$	(21,157)	$	(19,380)
Net loss attributable to common shareholders	$	(9,918)	$	(7,179)	$	(21,157)	$	(19,380)
Basic and diluted denominator:
Basic and diluted weighted average shares outstanding		4,173,894		4,731,066		4,170,629		4,858,393
Basic and diluted loss per share	$	(2.38)	$	(1.52)	$	(5.07)	$	(3.99)

Both vested and unvested options to purchase an equal number of shares of Common Stock		377,717		235,668		377,717		235,668
Unvested RSUs to issue an equal number of shares of Common Stock		14,444		1,953		14,444		1,953
Warrants to purchase an equal number of shares of Common Stock		200		856,203		200		856,203
Total number of potentially dilutive securities excluded from the calculation of loss per share attributable to common shareholders		392,361		1,093,824		392,361		1,093,824

Leases - Future Minimum Commitments (Details) $ in Thousands	Sep. 30, 2023 USD ($)
Leases
Remaining 2023	$ 814
2024	3,093
2025	2,699
2026	1,615
2027	1,491
2028	1,111
Thereafter	3,259
Total future lease payments	14,082
Less: interest expense at incremental borrowing rate	(2,584)
Net present value of lease liabilities	$ 11,498

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022
Cash flows from operating activities
Net loss	$ (21,486)	$ (18,368)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	1,770	4,329
Impairment of long lived assets	6,782	677
Impairment of long-lived assets		715
Foreign currency remeasurement loss	690	7
Loss on disposal of assets	34	273
Gain on lease termination	(821)
Unrealized gain on marketable securities	(668)
Amortization of operating lease right of use asset	1,163	1,357
Stock-based compensation	1,832	3,346
Loss on equity investment	53	528
Changes in assets and liabilities:
Decrease in inventory	192	794
Decrease (increase) in accounts receivable	1,665	(352)
Increase in other assets, current and non-current	(336)	(2,265)
Increase in deferred revenue	(266)	(1,015)
Increase in other liabilities, current and non-current	(3,226)	(3,913)
Decrease in accounts payable	(251)	(2,866)
Net cash used in operating activities	(12,873)	(17,406)
Cash flows from investing activities
Acquisition of property and equipment	(1,639)	(5,797)
Investment in marketable securities	(1,991)
Sale of marketable securities	4,500
Acquisition of intangibles	(468)	(279)
Net cash used in investing activities	(1,172)	(10,929)
Cash flows from financing activities
Repurchase of Common Stock		(23,789)
Contributions from noncontrolling interests	150	746
Payments for shares withheld on vesting	(22)	(73)
Repayment of Paycheck Protection Program		(3,584)
Distributions to noncontrolling interests	(120)	(956)
Net cash provided by (used in) financing activities	8	(27,656)
Effect of exchange rate changes on cash, cash equivalents and restricted cash	(174)	(86)
Decrease in cash, cash equivalents and restricted cash	(14,211)	(56,077)
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	5,578	50,180
Cash paid for
Interest		10
Income taxes	142	5
Non-cash investing and financing transactions
Capital expenditures included in Accounts payable, accrued expenses and other current liabilities	197	592
Issuance of Common Stock on acquisition of gcg Connect, LLC, d/b/a HyperPointe		906
Naples Wax LLC
Cash flows from investing activities
Acquisition net of cash assumed	$ (1,574)
HyperPointe
Cash flows from investing activities
Acquisition net of cash assumed		$ (4,853)

Cash, Cash Equivalents, and Restricted Cash - Summary of Cash, Cash Equivalents, and Restricted Cash (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022	Sep. 30, 2022	Dec. 31, 2021
Cash, Cash Equivalents, and Restricted Cash
Cash denominated in United States dollars	$ 2,203	$ 16,344
Cash denominated in currency other than United States dollars	2,358	2,562
Restricted cash	751	751
Credit and debit card receivables	266	132
Total cash, cash equivalents and restricted cash	$ 5,578	$ 19,789	$ 50,180	$ 106,257

Intangible Assets - Schedule of Finite-Lived Intangible Assets (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	$ 4,583	$ 6,352
Accumulated Amortization	(2,409)	(2,344)
Net Carrying Amount	2,174	4,008
Trade names
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount		302
Accumulated Amortization		(24)
Net Carrying Amount		278
Customer relationships
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	1,936	1,510
Accumulated Amortization	(312)	(542)
Net Carrying Amount	1,624	968
Software
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	2,609	4,485
Accumulated Amortization	(2,078)	(1,761)
Net Carrying Amount	531	2,724
Licenses
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	38	55
Accumulated Amortization	(19)	(17)
Net Carrying Amount	$ 19	$ 38

Acquisition of Naples Wax, LLC

9 Months Ended

Sep. 30, 2023

Acquisition of Naples Wax, LLC

Acquisition of Naples Wax, LLC

Note 8. Acquisition of Naples Wax, LLC

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. 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.

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 approximately $1,624, of which $1,574 was paid in cash at closing. The remaining $50 will be held for six months as a holdback to cover any potential indemnification claims. For the period ending September 30, 2023, the acquisition is preliminarily included in intangible assets while the Company determines the appropriate purchase price allocation during the measurement period.

Stockholders' Equity - Variables Used in Estimating Fair Value of Stock Options (Details) - Stock Options	9 Months Ended
	Sep. 30, 2023 $ / shares
Stockholders Equity [Line Items]
Expected volatility Minimum:	119.41%
Expected volatility Maximum:	121.04%
Expected dividend yield:	0.00%
Annual average risk-free rate Minimum:	3.65%
Annual average risk-free rate Maximum:	4.19%
Minimum
Stockholders Equity [Line Items]
Share price of the Company's Common Stock on the grant date:	$ 4.60
Exercise price:	$ 4.60
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:	$ 8.00
Exercise price:	$ 8.00
Expected term:	6 years 4 months 28 days

Leases - Supplemental Cash Flow Information Related to Leases (Details) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022
Leases
Operating cash flows from operating leases	$ (2,668)	$ (3,072)
Leased assets obtained in exchange for new and modified operating lease liabilities	$ 174	$ 7,380

Accrued expenses and other current liabilities (Tables)

9 Months Ended

Sep. 30, 2023

Accrued expenses and other current liabilities

Schedule of accrued expenses and other current liabilities



	September 30, 2023		December 31, 2022
Litigation accrual	$	449	$	963
Accrued compensation		1,047		2,008
Tax-related liabilities		465		573
Common area maintenance accruals		291		160
Vendor-related accruals		892		754
Gift certificates		494		496
Credit card processing fees		7		33
Other miscellaneous accruals		553		732
Total accrued expenses and other current liabilities	$	4,198	$	5,719

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (Parenthetical)	Sep. 28, 2023
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
Reverse stock split, conversion ratio	0.05

Leases (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
Leases (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Leases
Operating leases, rent expense	$ 503	$ 445	$ 1,762	$ 1,191
Variable lease payments	$ 302	$ 397	$ 1,013	$ 1,085

CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Current assets
Cash and cash equivalents	$ 4,827	$ 19,038
Marketable Securities	21,311	23,153
Accounts receivable	1,193	2,858
Inventory	968	1,161
Other current assets	1,663	1,122
Total current assets	29,962	47,332
Restricted cash	751	751
Property and equipment, net	3,801	3,666
Intangible assets, net	2,174	4,008
Operating lease right of use assets, net	6,075	8,276
Goodwill		4,024
Other assets	1,787	2,369
Total assets	44,550	70,426
Current liabilities
Accounts payable	1,511	2,312
Accrued expenses and other current liabilities	4,198	5,719
Current portion of operating lease liabilities	2,375	2,586
Deferred revenue	73	339
Total current liabilities	8,157	10,956
Long-term liabilities
Operating lease liabilities	9,123	11,521
Total liabilities	17,280	22,477
Commitments and contingencies (see Note 13)
Equity
Common Stock, $0.01 par value per share, 150,000,000 shares authorized; 4,174,381 and 4,161,613 shares issued and outstanding as of September 30, 2023 and December 31, 2022, respectively	42	42
Additional paid-in capital	470,270	468,530
Accumulated deficit	(449,269)	(428,112)
Accumulated other comprehensive loss	(1,642)	(534)
Total equity attributable to XWELL, Inc.	19,401	39,926
Noncontrolling interests	7,869	8,023
Total equity	27,270	47,949
Total liabilities and equity	$ 44,550	$ 70,426

Significant Accounting and Reporting Policies (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended		12 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022	Dec. 31, 2022
Total revenue	$ 7,468	$ 10,736	$ 22,706	$ 48,381
Foreign currency remeasurement gain/(loss)	366	(2)	(690)	(7)
Impairment loss on goodwill			4,024
Impairment expense related to intangible assets	2,758
Foreign Currency Gain (Loss)
Foreign currency remeasurement gain/(loss)	366	0	690	0
XpresTest \| CDC Program Options and Public Health Services
Total revenue	1,603		5,531
Unrecognized revenue		16,000		16,000
XpresTest \| Traveler Enrollment Initiatives \| CDC Program Options and Public Health Services
Contract with customer, liability, current		570		570
XpresTest \| Passenger and Aircraft Wastewater Sample Collection \| CDC Program Options and Public Health Services
Contract with customer, liability, current		6,761		6,761
HyperPointe segment \| HyperPointe
Revenue recognized					$ 210
Contract with customer, liability, current	56		56		322
Minimum \| XpresTest \| CDC Program Options and Public Health Services
Unrecognized revenue		$ 61,000		$ 61,000
Accounts Receivable \| HyperPointe segment
Unbilled receivables	$ 187		$ 187		$ 0

Stockholders' Equity and Warrants - Stock Options and RSU Activity (Details)	9 Months Ended
	Sep. 30, 2023 $ / shares shares
Stockholders Equity [Line Items]
No. of options, Outstanding, Beginning balance \| shares	241,501
No. of options, Granted \| shares	148,069
No. of options, Forfeited \| shares	(8,006)
No. of options, Expired \| shares	(3,847)
No. of options, Outstanding, Ending balance \| shares	377,717
No. of options, Exercisable \| shares	206,304
Weighted average grant date fair value, Beginning balance	$ 40.00
Weighted average grant date fair value, Granted	7.88
Weighted average grant date fair value, Forfeited	26.27
Weighted average grant date fair value, Expired	100.79
Weighted average grant date fair value, Ending balance	26.70
Weighted average grant date fair value, Exercisable	$ 29.69
RSUs
Stockholders Equity [Line Items]
No. of options, Outstanding, Beginning balance \| shares	14,063
No. of options, Granted \| shares	16,944
No. of options, Exercised/Vested \| shares	(16,563)
No. of options, Outstanding, Ending balance \| shares	14,444
Weighted average grant date fair value, Beginning balance	$ 13.00
Weighted average grant date fair value, Granted	5.70
Weighted average grant date fair value, Exercised/Vested	11.76
Weighted average grant date fair value, Ending balance	5.86
Minimum
Stockholders Equity [Line Items]
Exercise price range, Outstanding, Beginning balance	13.00
Exercise price range, Granted	4.60
Exercise price range, Forfeited	8.00
Exercise price range, Expired	8.00
Exercise price range, Outstanding, Ending balance	4.60
Exercise price range, Exercisable	8.00
Maximum
Stockholders Equity [Line Items]
Exercise price range, Outstanding, Beginning balance	49,200
Exercise price range, Granted	8.00
Exercise price range, Forfeited	32.20
Exercise price range, Expired	38,160
Exercise price range, Outstanding, Ending balance	49,200
Exercise price range, Exercisable	$ 49,200

Leases - Other Assumptions and Pertinent Information (Details)	Sep. 30, 2023
Leases
Weighted average remaining lease term (years):	5 years 11 months 23 days
Weighted average discount rate used to determine present value of operating lease liability:	7.37%

Business, Basis of Presentation and Liquidity

9 Months Ended

Sep. 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. 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.

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 three reportable operating segments: XpresSpa^®, XpresTest^®, and Treat^™.

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 September 30, 2023, there were 21 operating XpresSpa domestic locations. During 2022, the Company sold one location in Austin-Bergstrom International Airport to its franchisee which now operates both locations at that airport. The Company also had 10 international locations operating as of September 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 September 30, 2023, we have closed all XpresCheck locations.

XpresTest began conducting bio-surveillance 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. Effective as of August 12, 2023, the revenue for the second year was determined to be approximately $6,675.

For reporting purposes, the former Hyperpointe segment has been consolidated into the XpresTest segment. This determination was made given that XpresTest and Hyperpointe are managed by its Chief Executive Officer, Ezra Ernst, as a single segment.

HyperPointe, 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.

Treat

The Treat segment, 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 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 its retail strategy expansion as well as lay the foundation to bring more spa-like services into the Treat locations in an attempt to unify its 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 September 30, 2023, the Treat brand operated at two locations in the airport (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.

On September 12, 2023, XWELL acquired Naples Wax, LLC, a group of upscale hair removal boutiques in Florida, for a purchase price of approximately $1.6 million. Known for providing a memorable customer experience, Naples Wax Center 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 enables the company to move beyond its airport client base with a business it can adapt a larger wellness platform while also growing its retail footprint to serve its long-term financial expectations.

For reporting purposes, the Naples Wax acquisition is consolidated under the Treat segment.

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 nine months ended September 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.

Reverse Stock Split

On September 28, 2023, the Company effected a 1-for-20 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.

Liquidity and Financial Condition

As of September 30, 2023, the Company had cash and cash equivalents of $4,827 (excluding restricted cash), $21,311 in marketable securities, and total current assets of $29,962. The Company’s total current liabilities balance, which includes accounts payable, deferred revenue, accrued expenses, and operating lease liabilities was approximately $8,157 as of September 30, 2023 and $10,956 as of December 31, 2022. The working capital surplus was $21,805 as of September 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, rightsizing its corporate structure and streamlining its operations.

Other Assets - Consolidated Balance Sheets (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Equity investments	$ 51	$ 104
Lease deposits	1,537	1,973
Other	199	292
Other assets	$ 1,787	$ 2,369

Cash, Cash Equivalents, and Restricted Cash

9 Months Ended

Sep. 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 Unaudited Condensed Consolidated Balance Sheets to cash, cash equivalents and restricted cash in the Unaudited Condensed Consolidated Statements of Cash Flows as of September 30, 2023 and December 31, 2022 is as follows:


	September 30, 2023		December 31, 2022
Cash denominated in United States dollars	$	2,203	$	16,344
Cash denominated in currency other than United States dollars		2,358		2,562
Restricted cash		751		751
Credit and debit card receivables		266		132
Total cash, cash equivalents and restricted cash	$	5,578	$	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 September 30, 2023 and December 31, 2022, deposits in excess of FDIC limits were $1,612 and $16,069,

respectively. As of September 30, 2023 and December 31, 2022, the Company held cash balances in overseas accounts, totaling $2,358 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 Assets (Tables)

9 Months Ended

Sep. 30, 2023

Other Assets

Schedule of other assets


	September 30, 2023		December 31, 2022
Equity investments	$	51	$	104
Lease deposits		1,537		1,973
Other		199		292
Other assets	$	1,787	$	2,369

Intangible Assets - Schedule of Finite-Lived Intangible Assets, Amortization Expense (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Finite-Lived Intangible Assets, Amortization Expense, Maturity Schedule [Abstract]
Remaining 2023	$ 108
2024	432
2025	426
2026	338
2027	232
Thereafter	638
Total	$ 2,174	$ 4,008

Other Assets

9 Months Ended

Sep. 30, 2023

Other Assets

Other Assets

Note 10. Other Assets

As of September 30, 2023 and December 31, 2022, assets consisted of the following:


	September 30, 2023		December 31, 2022
Equity investments	$	51	$	104
Lease deposits		1,537		1,973
Other		199		292
Other assets	$	1,787	$	2,369

Stockholders' Equity (Tables)

9 Months Ended

Sep. 30, 2023

Stockholders' Equity

Schedule of information about all warrant activity


		Weighted average		Exercise
	No. of Warrants	exercise price		price range
December 31, 2022	58,604	$	40.00	$	34.0 - 42.5
Granted	—		—
Exercised	—		—
Expired	(58,404)		40.20	$	34.0 - 42.5
September 30, 2023	200	$	42.50	$	42.50

Schedule of fair value of stock options estimated


Share price of the Company’s Common Stock on the grant date:	$	4.60 - 8.00
Exercise price:	$	4.60 - 8.00
Expected volatility:		119.41-121.04	%
Expected dividend yield:		0	%
Annual average risk-free rate:		3.65 - 4.19	%
Expected term:		6.32 - 6.41	years

Stock options and restricted stock units activity


	RSUs			Stock options
		Weighted			Weighted
		average			average		Exercise
	No. of	grant date		No. of	exercise		price
	RSUs	fair value		options	price		range
Outstanding as of December 31, 2022	14,063	$	13.00	241,501	$	40.00	$	13.00 - 49,200
Granted	16,944		5.70	148,069		7.88		4.60 - 8.00
Exercised/Vested	(16,563)		11.76	—		—
Forfeited	—		—	(8,006)		26.27		8.00 - 32.20
Expired	—		—	(3,847)		100.79		8.00 - 38,160
Outstanding as of September 30, 2023	14,444	$	5.86	377,717	$	26.70	$	4.60 - 49,200
Exercisable as of September 30, 2023				206,304	$	29.69	$	8.00 - 49,200

Intangible Assets (Tables)

9 Months Ended

Sep. 30, 2023

Intangible Assets

Schedule of company's intangible assets


	Gross
	Intangible
	Assets
Balance as of December 31, 2022	$	6,352
Acquisition of Naples Wax		1,624
Acquisition of Intangible Assets		468
Impairment of Assets		(3,281)
Retirement of Fully-Amortized Assets		(562)
Currency Translation Adjustment		(18)
Balance as of September 30, 2023	$	4,583

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


	September 30, 2023						December 31, 2022
	Gross				Net		Gross				Net
	Carrying		Accumulated		Carrying		Carrying		Accumulated		Carrying
	Amount		Amortization		Amount		Amount		Amortization		Amount
Trade names	$	—	$	—	$	—	$	302	$	(24)	$	278
Customer relationships		1,936		(312)		1,624		1,510		(542)		968
Software		2,609		(2,078)		531		4,485		(1,761)		2,724
Licenses		38		(19)		19		55		(17)		38
Total intangible assets	$	4,583	$	(2,409)	$	2,174	$	6,352	$	(2,344)	$	4,008

Schedule of estimated amortization expense


Calendar Years ending December 31,	Amount
Remaining 2023	$	108
2024		432
2025		426
2026		338
2027		232
Thereafter		638
Total	$	2,174

Business, Basis of Presentation and Liquidity (Details) $ / shares in Units, $ in Thousands			9 Months Ended	12 Months Ended
	Sep. 28, 2023 item	Sep. 12, 2023 USD ($) Center	Sep. 30, 2023 USD ($) segment location item $ / shares	Dec. 31, 2022 USD ($) location $ / shares	Aug. 12, 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			3
Contract revenue			$ 187
Reverse stock split conversion ratio	0.05
Reverse stock split, Multiplying factor for price per share \| item	20
Cash and cash equivalents			4,827	$ 19,038
Marketable Securities			21,311	23,153
Total current assets			29,962	47,332
Total current liabilities			8,157	10,956
Working capital			$ 21,805	$ 36,376
XpresSpa \| United States
Number of operating locations \| location			21
XpresSpa \| Non-US
Number of airport locations \| location			10
XpresTest
Contract revenue					$ 6,675		$ 7,331
Treat
Number of operating locations \| location			2
Naples Wax LLC
Payments to acquire business		$ 1,574
Number of High- Performing Locations		3	3
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

CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical)	Sep. 30, 2023 $ / shares shares	Dec. 31, 2022 $ / shares shares
CONDENSED CONSOLIDATED BALANCE SHEETS
Common stock, par value \| $ / shares	$ 0.01	$ 0.01
Common stock, authorized	150,000,000	150,000,000
Common stock, issued	4,174,381	4,161,613
Common stock, outstanding	4,174,381	4,161,613

Cash, Cash Equivalents, and Restricted Cash (Tables)

9 Months Ended

Sep. 30, 2023

Cash, Cash Equivalents, and Restricted Cash

Schedule of cash, cash equivalents, and restricted cash


	September 30, 2023		December 31, 2022
Cash denominated in United States dollars	$	2,203	$	16,344
Cash denominated in currency other than United States dollars		2,358		2,562
Restricted cash		751		751
Credit and debit card receivables		266		132
Total cash, cash equivalents and restricted cash	$	5,578	$	19,789

Potentially Dilutive Securities - (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Earnings Per Share Disclosure.
Net loss attributable to XWELL, Inc.	$ (9,918)	$ (7,179)	$ (21,157)	$ (19,380)
Net loss attributable to common shareholders	$ (9,918)	$ (7,179)	$ (21,157)	$ (19,380)
Basic weighted average shares outstanding	4,173,894	4,731,066	4,170,629	4,858,393
Diluted weighted average shares outstanding	4,173,894	4,731,066	4,170,629	4,858,393
Basic loss per share (in dollars per share)	$ (2.38)	$ (1.52)	$ (5.07)	$ (3.99)
Diluted loss per share (in dollars per share)	$ (2.38)	$ (1.52)	$ (5.07)	$ (3.99)
Total number of potentially dilutive securities excluded from the calculation of loss per share attributable to common shareholders	392,361	1,093,824	392,361	1,093,824
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	377,717	235,668	377,717	235,668
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	14,444	1,953	14,444	1,953
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	200	856,203	200	856,203

Commitments and Contingencies

9 Months Ended

Sep. 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 September 30, 2023 and December 31, 2022, 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 October 20, 2023, the parties filed a Stipulation to Hold the Matter in 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.

Accrued expenses and other current liabilities - Schedule of Accrued Expenses and Other Current Liabilities (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Accrued expenses and other current liabilities
Litigation accrual	$ 449	$ 963
Accrued compensation	1,047	2,008
Tax-related liabilities	465	573
Common area maintenance accruals	291	160
Vendor-related accruals	892	754
Gift certificates	494	496
Credit card processing fees	7	33
Other miscellaneous accruals	553	732
Total accrued expenses and other current liabilities	$ 4,198	$ 5,719

Other current assets (Tables)

9 Months Ended

Sep. 30, 2023

Other current assets

Schedule of other current assets


	September 30, 2023		December 31, 2022
Prepaid expenses	$	1,419	$	1,074
Contract assets		187		—
Other		57		48
Total other current assets	$	1,663	$	1,122

Accrued expenses and other current liabilities

9 Months Ended

Sep. 30, 2023

Accrued expenses and other current liabilities

Accrued expenses and other current liabilities

Note 7. Accrued expenses and other current liabilities

As of September 30, 2023 and December 31, 2022, accrued expenses and other current liabilities consisted of the following:



	September 30, 2023		December 31, 2022
Litigation accrual	$	449	$	963
Accrued compensation		1,047		2,008
Tax-related liabilities		465		573
Common area maintenance accruals		291		160
Vendor-related accruals		892		754
Gift certificates		494		496
Credit card processing fees		7		33
Other miscellaneous accruals		553		732
Total accrued expenses and other current liabilities	$	4,198	$	5,719

Income Taxes

9 Months Ended

Sep. 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 nine months ended September 30, 2023 reflects an estimated global annual effective tax rate of approximately 0% from continuing operations.

As of September 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 nine months ended September 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.

- Definition

The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section 50
-Paragraph 21
-URI https://asc.fasb.org/extlink&oid=121826272&loc=d3e32857-109319

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section S99
-Paragraph 2
-Subparagraph (SAB Topic 11.C)
-URI https://asc.fasb.org/extlink&oid=122134291&loc=d3e330215-122817

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section 50
-Paragraph 17
-Subparagraph (b)
-URI https://asc.fasb.org/extlink&oid=121826272&loc=d3e32809-109319

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SAB TOPIC 6.I.5.Q1)
-URI https://asc.fasb.org/extlink&oid=122134291&loc=d3e330036-122817

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section 50
-Paragraph 14
-URI https://asc.fasb.org/extlink&oid=121826272&loc=d3e32705-109319

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 270
-Section 50
-Paragraph 1
-URI https://asc.fasb.org/extlink&oid=6424409&loc=d3e44925-109338

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-URI https://asc.fasb.org/topic&trid=2144680

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 30
-Section 50
-Paragraph 2
-Subparagraph (a)
-URI https://asc.fasb.org/extlink&oid=6424122&loc=d3e41874-109331

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 235
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08(h)(2))
-URI https://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690

+ Details

Acquisition of Naples Wax, LLC (Details) - Naples Wax LLC $ in Thousands	Sep. 12, 2023 USD ($)
Acquisition of Naples Wax, LLC
Aggregate purchase price paid in cash	$ 1,574
Aggregate initial purchase price	1,624
Consideration held back to cover potential indemnification claims	$ 50
Consideration held back term	6 months

Significant Accounting and Reporting Policies

9 Months Ended

Sep. 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 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 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. 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 $1,603 and $5,531 in revenue during the three and nine months ended September 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.

HyperPointe, 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 is treated as deferred revenue which was $56 and $322 as of September 30, 2023 and December 31, 2022, respectively. The Company has recognized $210 of the December 31, 2022 deferred revenue balance in 2023. HyperPointe had unbilled receivables of $187 and $0 as of September 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 on the Company’s unaudited condensed consolidated balance sheets until remitted to state agencies.

Treat

The Company recognizes revenue from the sale of Treat and Naples Wax products and services when the services are rendered at Treat Centers and Naples Wax Centers and from the sale of products at the time products are purchased at the Treat Centers, online, and the Naples Wax Centers 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.

(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 unaudited condensed consolidated statements of operations and comprehensive loss. During the three and nine months ended September 30, 2023, the Company recognized a gain of $366 and a loss of $690, respectively, as a result of foreign exchange, occurring from the remeasurement of monetary balance sheet items denominated in non-dollar currencies. During the three and nine months ended September 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 nine months ended September 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 unaudited condensed consolidated statements of changes in stockholders’ equity.

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.

(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. During the quarter ended September 30, 2023, the Company recognized an impairment charge of $4,024, which is included in Impairment of long-lived assets in the Company’s unaudited condensed consolidated statements of operations and comprehensive income (loss).

(e) Reclassification

Certain balances in the unaudited condensed consolidated financial statements for the three and nine months ended September 30, 2022 have been reclassified to conform to the presentation in the unaudited condensed consolidated financial statements for the three and nine months ended September 30, 2023, primarily the separate classification and presentation of accounts payable, gross profits, advertising and promotion expense, IT/Hosting services, and foreign exchange remeasurement gain/(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.

(f) 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 airport 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 groups 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 airport locations, is the remaining term of the operating lease.

The Company recorded an impairment expense related to intangible assets of $2,758 during the quarter ended September 30, 2023, which is included in Impairment of long-lived assets in the Company’s consolidated statements of operations and comprehensive income (loss). The expense was primarily related to the impairment of intangible assets for the Company’s Treat segment and Hyperpointe business.

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 materiality of the application of ASU 2021-08 depends on the recognition and measurement of acquired assets and liabilities associated with future acquisitions.

Other current assets - Schedule of Other Current Assets (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Other current assets
Prepaid expenses	$ 1,419	$ 1,074
Contract assets	187
Other	57	48
Total other current assets	$ 1,663	$ 1,122

Commitments and Contingencies (Details) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2023	Dec. 31, 2022
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	$ 963
Maximum \| OTG Management PHL B
Loss Contingencies [Line Items]
Loss contingency damages sought	2,250
Minimum \| OTG Management PHL B
Loss Contingencies [Line Items]
Loss contingency damages sought	$ 864

Document and Entity Information - shares	9 Months Ended
Document and Entity Information - shares	Sep. 30, 2023	Nov. 09, 2023
Document and Entity Information
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Sep. 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		4,179,631
Entity Central Index Key	0001410428
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2023
Document Fiscal Period Focus	Q3
Amendment Flag	false

Leases (Tables)

9 Months Ended

Sep. 30, 2023

Leases

Schedule of supplemental cash flow information related to leases


	Nine months ended September 30,
	2023		2022
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	(2,668)	$	(3,072)
Leased assets obtained in exchange for new and modified operating lease liabilities	$	174	$	7,380

Schedule of future minimum commitments


Calendar Years ending December 31,	Amount
Remaining 2023	$	814
2024		3,093
2025		2,699
2026		1,615
2027		1,491
2028		1,111
Thereafter		3,259
Total future lease payments		14,082
Less: interest expense at incremental borrowing rate		(2,584)
Net present value of lease liabilities	$	11,498

Schedule of other assumptions and pertinent information


Weighted average remaining lease term:	5.98	years
Weighted average discount rate used to determine present value of operating lease liability:	7.37	%

Intangible Assets - Company's Intangible Assets Subject to Amortization (Details) $ in Thousands	9 Months Ended
	Sep. 30, 2023 USD ($)
Intangible Assets
Balance	$ 6,352
Acquisition of Naples Wax	1,624
Acquisition of intangible Assets	468
Impairment of Assets	(3,281)
Retirement of Fully-Amortized Assets	(562)
Currency Translation Adjustment	(18)
Balance	$ 4,583

Stockholders' Equity

9 Months Ended

Sep. 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 nine months ended September 30, 2023.


		Weighted average		Exercise
	No. of Warrants	exercise price		price range
December 31, 2022	58,604	$	40.00	$	34.0 - 42.5
Granted	—		—
Exercised	—		—
Expired	(58,404)		40.20	$	34.0 - 42.5
September 30, 2023	200	$	42.50	$	42.50

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 750,000 shares of its common stock through September 15, 2022. In May 2022, the Board increased the share repurchase program by an additional 500,000 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. Under the program, the Company purchased 424,042 shares for $12,116 and retired 357,122 of these purchased shares during the nine months ended September 30, 2022, and the remaining 66,920 shares were retired on August 3, 2022.

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% excise tax on certain repurchases of stock by publicly traded U.S. domestic corporations and certain U.S. domestic subsidiaries of publicly traded foreign corporations occurring on or after January 1, 2023. The excise tax is imposed on the repurchasing corporation itself, not its shareholders from which shares are repurchased. The amount of the excise tax is generally 1% of the fair market value of the shares repurchased at the time of the repurchase. However, for purposes of calculating the excise tax, repurchasing corporations are permitted to net the fair market value of certain new stock issuances against the fair market value of stock repurchases during the same taxable year. In addition, certain exceptions apply to the excise tax. The U.S. Department of the Treasury (the “Treasury”) has been given authority to provide regulations and other guidance to carry out and prevent the abuse or avoidance of the excise tax.

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 250,000 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 375,000 of Common Stock to an aggregate of 625,000 shares. Under the 2020 Equity Incentive Plan (the “2020 Plan”), a maximum of 239,493 of Common Stock may be issued as of September 30, 2023. 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 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 September 30, 2023. Certain named executive officers, consultants, and directors of the Company are eligible to participate in the XpresTest Plan. As of September 30, 2023, there is $120 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:	$	4.60 - 8.00
Exercise price:	$	4.60 - 8.00
Expected volatility:		119.41-121.04	%
Expected dividend yield:		0	%
Annual average risk-free rate:		3.65 - 4.19	%
Expected term:		6.32 - 6.41	years

Total stock-based compensation for the three months ended September 30, 2023 and 2022 is $594 and $483, respectively, and for the nine months ended September 30, 2023 and 2022 is $1,832 and $3,294, respectively. The Company had $1,938 and $2,506 of unrecognized stock-based compensation related to the XWELL Stock Options, as of September 30, 2023 and December 31, 2022, respectively.

The following table sets forth the Company’s Equity Incentive activities for the nine months ended September 30, 2023:


	RSUs			Stock options
		Weighted			Weighted
		average			average		Exercise
	No. of	grant date		No. of	exercise		price
	RSUs	fair value		options	price		range
Outstanding as of December 31, 2022	14,063	$	13.00	241,501	$	40.00	$	13.00 - 49,200
Granted	16,944		5.70	148,069		7.88		4.60 - 8.00
Exercised/Vested	(16,563)		11.76	—		—
Forfeited	—		—	(8,006)		26.27		8.00 - 32.20
Expired	—		—	(3,847)		100.79		8.00 - 38,160
Outstanding as of September 30, 2023	14,444	$	5.86	377,717	$	26.70	$	4.60 - 49,200
Exercisable as of September 30, 2023				206,304	$	29.69	$	8.00 - 49,200

- Definition

The entire disclosure for shareholders' equity comprised of portions attributable to the parent entity and noncontrolling interest, including other comprehensive income. Includes, but is not limited to, balances of common stock, preferred stock, additional paid-in capital, other capital and retained earnings, accumulated balance for each classification of other comprehensive income and amount of comprehensive income.

+ References

Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-URI https://asc.fasb.org/topic&trid=2208762

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 13
-Subparagraph (b)
-URI https://asc.fasb.org/extlink&oid=126973232&loc=SL123496158-112644

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 13
-URI https://asc.fasb.org/extlink&oid=126973232&loc=SL123496158-112644

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 14
-Subparagraph (c)
-URI https://asc.fasb.org/extlink&oid=126973232&loc=SL123496171-112644

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 14
-Subparagraph (b)
-URI https://asc.fasb.org/extlink&oid=126973232&loc=SL123496171-112644

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.3-04)
-URI https://asc.fasb.org/extlink&oid=120397183&loc=d3e187085-122770

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 18
-Subparagraph (d)
-URI https://asc.fasb.org/extlink&oid=126973232&loc=SL123496189-112644

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 13
-Subparagraph (g)
-URI https://asc.fasb.org/extlink&oid=126973232&loc=SL123496158-112644

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 18
-Subparagraph (a)
-URI https://asc.fasb.org/extlink&oid=126973232&loc=SL123496189-112644

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 13
-Subparagraph (h)
-URI https://asc.fasb.org/extlink&oid=126973232&loc=SL123496158-112644

Reference 11: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 14
-Subparagraph (a)
-URI https://asc.fasb.org/extlink&oid=126973232&loc=SL123496171-112644

Reference 12: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 18
-Subparagraph (b)
-URI https://asc.fasb.org/extlink&oid=126973232&loc=SL123496189-112644

Reference 13: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 16
-Subparagraph (b)
-URI https://asc.fasb.org/extlink&oid=126973232&loc=SL123496180-112644

Reference 14: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 13
-Subparagraph (i)
-URI https://asc.fasb.org/extlink&oid=126973232&loc=SL123496158-112644

Reference 15: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 235
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08(e)(1))
-URI https://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690

Reference 16: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 815
-SubTopic 40
-Section 50
-Paragraph 6
-Subparagraph (a)
-URI https://asc.fasb.org/extlink&oid=126731327&loc=SL126733271-114008

+ Details

Significant Accounting and Reporting Policies (Policies)	9 Months Ended
	Sep. 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 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 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. 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 $1,603 and $5,531 in revenue during the three and nine months ended September 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. HyperPointe, 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 is treated as deferred revenue which was $56 and $322 as of September 30, 2023 and December 31, 2022, respectively. The Company has recognized $210 of the December 31, 2022 deferred revenue balance in 2023. HyperPointe had unbilled receivables of $187 and $0 as of September 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 on the Company’s unaudited condensed consolidated balance sheets until remitted to state agencies. Treat The Company recognizes revenue from the sale of Treat and Naples Wax products and services when the services are rendered at Treat Centers and Naples Wax Centers and from the sale of products at the time products are purchased at the Treat Centers, online, and the Naples Wax Centers 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.
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 unaudited condensed consolidated statements of operations and comprehensive loss. During the three and nine months ended September 30, 2023, the Company recognized a gain of $366 and a loss of $690, respectively, as a result of foreign exchange, occurring from the remeasurement of monetary balance sheet items denominated in non-dollar currencies. During the three and nine months ended September 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 nine months ended September 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 unaudited condensed consolidated statements of changes in stockholders’ equity.
Business Combinations	(c) Business Combinations 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. 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. During the quarter ended September 30, 2023, the Company recognized an impairment charge of $4,024, which is included in Impairment of long-lived assets in the Company’s unaudited condensed consolidated statements of operations and comprehensive income (loss).
Reclassification	(e) Reclassification Certain balances in the unaudited condensed consolidated financial statements for the three and nine months ended September 30, 2022 have been reclassified to conform to the presentation in the unaudited condensed consolidated financial statements for the three and nine months ended September 30, 2023, primarily the separate classification and presentation of accounts payable, gross profits, advertising and promotion expense, IT/Hosting services, and foreign exchange remeasurement gain/(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.
Impairment of long-lived assets	(f) 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 airport 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 groups 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 airport locations, is the remaining term of the operating lease. The Company recorded an impairment expense related to intangible assets of $2,758 during the quarter ended September 30, 2023, which is included in Impairment of long-lived assets in the Company’s consolidated statements of operations and comprehensive income (loss). The expense was primarily related to the impairment of intangible assets for the Company’s Treat segment and Hyperpointe business.
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 materiality of the application of ASU 2021-08 depends on the recognition and measurement of acquired assets and liabilities associated with future acquisitions.

Intangible Assets (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
Intangible Assets (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Intangible Assets
Amortization expense	$ 396	$ 474	$ 1,155	$ 1,338

Stockholders' Equity - Schedule of Changes In Warrants Activity (Details) - Warrants	9 Months Ended
	Sep. 30, 2023 $ / shares shares
Warrants [Line Items]
Outstanding, Opening Balance \| shares	58,604
Expired \| shares	(58,404)
Outstanding, Ending Balance \| shares	200
Weighted average exercise price, Beginning Balance	$ 40.00
Weighted average exercise price, Expired	40.20
Weighted average exercise price, Ending Balance	42.50
Exercise price range, Ending Balance	42.50
Minimum
Warrants [Line Items]
Exercise price range, Beginning Balance	34.0
Exercise price range, Expired	34.0
Maximum
Warrants [Line Items]
Exercise price range, Beginning Balance	42.5
Exercise price range, Expired	$ 42.5

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Revenue, net
Total revenue, net	$ 7,468	$ 10,736	$ 22,706	$ 48,381
Cost of sales
Labor	4,462	5,222	13,609	16,161
Occupancy	1,063	1,082	3,237	3,412
Products and other operating costs	852	3,035	3,057	17,170
Total cost of sales	6,377	9,339	19,903	36,743
Gross Profit	1,091	1,397	2,803	11,638
Depreciation and amortization	590	1,564	1,770	4,329
Impairment of long-lived assets	6,782	677	6,782	677
Impairment of operating lease right-of-use assets		38		38
Loss on disposal of assets	16	325	34	273
Advertising and promotion expense	313	863	628	3,696
IT/Hosting services	273	741	1,186	2,247
Other general and administrative expenses	3,593	4,843	13,891	18,250
Total operating expenses	11,567	9,051	24,291	29,510
Operating loss	(10,476)	(7,654)	(21,488)	(17,872)
Interest income, net	105	114	334	159
Foreign exchange remeasurement gain/(loss)	366	(2)	(690)	(7)
Gain on Securities, realized and unrealized	225		703
Other non-operating expense, net	(198)	(134)	(345)	(643)
Loss before income taxes	(9,978)	(7,676)	(21,486)	(18,363)
Income tax expense		(3)		(5)
Net loss	(9,978)	(7,679)	(21,486)	(18,368)
Net (income) loss attributable to noncontrolling interests	60	500	329	(1,012)
Net loss attributable to XWELL, Inc.	(9,918)	(7,179)	(21,157)	(19,380)
Net loss	(9,978)	(7,679)	(21,486)	(18,368)
Other comprehensive loss	(514)	(102)	(1,108)	(248)
Comprehensive loss	$ (10,492)	$ (7,781)	$ (22,594)	$ (18,616)
Loss per share
Basic loss per share (in dollars per share)	$ (2.38)	$ (1.52)	$ (5.07)	$ (3.99)
Diluted loss per share (in dollars per share)	$ (2.38)	$ (1.52)	$ (5.07)	$ (3.99)
Weighted-average number of shares outstanding during the period
Basic (in shares)	4,173,894	4,731,066	4,170,629	4,858,393
Diluted (in shares)	4,173,894	4,731,066	4,170,629	4,858,393
Patient services revenue
Revenue, net
Total revenue, net		$ 4,607	$ 148	$ 31,728
Services
Revenue, net
Total revenue, net	$ 6,709	5,583	20,485	15,341
Products
Revenue, net
Total revenue, net	747	542	2,044	1,308
Other
Revenue, net
Total revenue, net	$ 12	$ 4	$ 29	$ 4