0001558370-24-005211 | 10-K | XBRL Viewer

Intangible Assets (Tables)

12 Months Ended

Dec. 31, 2023


	December 31, 2023						December 31, 2022
	Gross				Net		Gross				Net
	Carrying		Accumulated		Carrying		Carrying		Accumulated		Carrying
	Amount		Amortization		Amount		Amount		Amortization		Amount
Trade names	$	200	$	(6)	$	194	$	302	$	(24)	$	278
Customer relationships		1,012		(341)		671		1,510		(542)		968
Software		2,593		(2,120)		473		4,485		(1,761)		2,724
Licenses		35		(20)		15		55		(17)		38
Total intangible assets	$	3,840	$	(2,487)	$	1,353	$	6,352	$	(2,344)	$	4,008

Schedule of estimated amortization expense


Calendar Years ending December 31,	Amount
2024	$	316
2025		310
2026		229
2027		122
2028		122
Thereafter		254
Total	$	1,353

Segment Information

12 Months Ended

Dec. 31, 2023

Segment Information

Segment Information

Note 15. Segment Information

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

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

The Company currently operates in two geographical regions: United States and all other countries, which include Netherlands, Turkey and United Arab Emirates. The following table represents the geographical revenue, and total long-lived asset information as of and for the years ended December 31, 2023 and 2022. There were no concentrations of geographical revenue and long-lived assets related to any single foreign country that were material to the Company’s consolidated financial statements. Long-lived assets include property and equipment, restricted cash, equity investments, security deposits, right of use lease assets and goodwill.


	For the years ended
	December 31,
	2023		2022
Revenue
United States	$	24,944	$	52,250
All other countries		5,165		3,689
Total revenue	$	30,109	$	55,939
Long-lived assets
United States	$	8,169	$	15,084
All other countries		2,669		3,710
Total long-lived assets	$	10,838	$	18,794

The Company’s continuing operating segments are defined as components of an enterprise about which separate financial information is available that is regularly evaluated by the enterprise’s CODM in deciding how to allocate resources and in assessing performance.


	For the years ended
	December 31,
	2023		2022
Revenue
XpresSpa	$	19,067	$	13,680
XpresTest		9,912		40,867
Naples Wax		686		—
Treat		444		1,392
Corporate and other		—		—
Total revenue	$	30,109	$	55,939

	For the years ended
	December 31,
	2023		2022
Operating loss
XpresSpa	$	(12,951)	$	(12,910)
XpresTest		(4,701)		1,238
Naples Wax		162		—
Treat		(2,315)		(10,577)
Corporate and other		(8,401)		(8,914)
Total operating loss	$	(28,206)	$	(31,163)

	For the years ended
	December 31,
	2023		2022
Depreciation & Amortization
XpresSpa	$	1,443	$	1,479
XpresTest		276		2,043
Naples Wax		36		—
Treat		264		1,876
Corporate and other		46		31
Total depreciation & amortization	$	2,065	$	5,429

	For the years ended
	December 31,
	2023		2022
Capital Expenditures
XpresSpa	$	1,678	$	2,134
XpresTest		82		775
Naples Wax		—		—
Treat		60		3,274
Corporate and other		27		110
Total capital expenditures	$	1,847	$	6,293

	As of December 31,
	2023		2022
Long-lived Assets
XpresSpa	$	8,268		11,851
XpresTest		92		4,220
Naples Wax		1,371		—
Treat		669		2,314
Corporate and other		438		409
Total long-lived Assets	$	10,838	$	18,794

	As of December 31,
	2023		2022
Assets
XpresSpa	$	18,453	$	21,135
XpresTest		2,408		11,198
Naples Wax		2,951		—
Treat		848		3,186
Corporate and other		14,333		34,907
Total assets	$	38,993	$	70,426

Long-lived assets includes property and equipment, right of use lease assets, security deposits, equity investments, goodwill and restricted cash.

The Company performed impairment assessments of long-lived assets and operating lease right-of-use asset for the years ended December 31, 2023 and 2022. Based upon the results of the impairment tests, the Company recorded impairment expenses of long-lived assets for approximately $234, $925 and $4,024 for its XpresSpa, Treat and XpresTest’s HyperPointe business segments respectively for the year ended December 31, 2023. Additionally, the Company recorded impairment expenses of lease right-of-use asset for approximately $484, and $442 for its XpresSpa and Treat segments respectively for the year ended December 31, 2023. For the year ended December 31, 2022 the Company recorded impairment expenses of long-lived assets for approximately $619, $677 and $3,373 for its XpresSpa, XpresTest and Treat segments respectively and impairment expenses of operating lease right-of-use asset for approximately $936, $38 and $136 for its XpresSpa, XpresTest and Treat segments, respectively.

- 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
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 22
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482810/280-10-50-22

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 15
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482810/280-10-50-15

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 31
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482810/280-10-50-31

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 32
-Subparagraph (d)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482810/280-10-50-32

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 42
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482810/280-10-50-42

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 32
-Subparagraph (f)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482810/280-10-50-32

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 40
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482810/280-10-50-40

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
-Name Accounting Standards Codification
-Publisher FASB
-URI https://asc.fasb.org//280/tableOfContent

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 26
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482810/280-10-50-26

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 34
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482810/280-10-50-34

Reference 11: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 41
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482810/280-10-50-41

Reference 12: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 21
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482810/280-10-50-21

Reference 13: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 21
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482810/280-10-50-21

Reference 14: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 32
-Subparagraph (e)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482810/280-10-50-32

+ Details

General (Details) $ / shares in Units, $ in Thousands	3 Months Ended	9 Months Ended	12 Months Ended
General (Details) $ / shares in Units, $ in Thousands	Sep. 30, 2023 USD ($) $ / shares	Sep. 30, 2023 USD ($) $ / shares	Dec. 31, 2023 USD ($) segment location item $ / shares	Dec. 31, 2022 USD ($) $ / shares	Sep. 12, 2023 Center	Oct. 24, 2022 $ / shares shares
Common stock, par value \| $ / shares	$ 0.01	$ 0.01	$ 0.01	$ 0.01		$ 0.01
Number of operating segments \| segment			4
Cash and cash equivalents \| $	$ 4,827	$ 4,827	$ 8,437	$ 19,038
Marketable Securities \| $	21,311	21,311	14,613	23,153
Total current assets \| $	29,962	29,962	26,566	47,332
Total current liabilities \| $	8,157	8,157	9,330	10,956
Working capital \| $			17,236	36,376
Net loss \| $	$ (11,591)	$ (23,099)	$ (28,029)	$ (32,629)
XpresSpa \| United States
Number of operating locations \| location			21
Number of operating locations, company owned \| location			19
Number of operating locations, franchises \| location			2
XpresSpa \| Non-US
Number of airport locations \| location			11
Naples Wax LLC
Number of High- Performing Locations			3		3
Dubai International Airport \| Non-US
Number of operating locations \| location			2
Zayad International Airport \| Non-US
Number of operating locations \| location			1
Schiphol Amsterdam Airport \| Non-US
Number of operating locations \| location			3
Istanbul Airport \| Non-US
Number of operating locations \| location			5
Series A Convertible Preferred stock
Preferred stock, par value \| $ / shares						$ 0.01
Preferred stock, authorized \| shares						6,968
Preferred stock, outstanding \| shares						0
Series D Convertible Preferred Stock
Preferred stock, par value \| $ / shares						$ 0.01
Preferred stock, authorized \| shares						500,000
Preferred stock, outstanding \| shares						0
Series E Convertible Preferred Stock.
Preferred stock, par value \| $ / shares						$ 0.01
Preferred stock, authorized \| shares						2,397,060
Preferred stock, outstanding \| shares						0
Series F Convertible Preferred Stock.
Preferred stock, par value \| $ / shares						$ 0.01
Preferred stock, authorized \| shares						9,000
Preferred stock, outstanding \| shares						0

Restatement of Previously Issued Financial Statements

12 Months Ended

Dec. 31, 2023

Restatement of Previously Issued Financial Statements

Restatement of Previously Issued Financial Statements

Note 19. Restatement of Previously Issued Financial Statements (Unaudited)

In connection with the preparation of the Company’s annual 10-K for the year ended December 31, 2023, the Company concluded that in the prior quarter it had not appropriately accounted for the impairment of long-lived assets. These errors led to an understatement of impairment expenses and an overstatement of long-lived assets during the impacted periods.

The Company’s management and in agreement with the audit committee have determined that the previously issued unaudited financial statements for the three and nine-month period ended September 30, 2023 “the Affected period” should no longer be relied upon due to this error and require restatement. The financial effect of this error from previously reported information for the quarter ended September 30, 2023, resulted in an increase in net loss of $1,613, primarily as a result of additional impairment expense on the Company’s Treat segment right-of-use and fixed assets.

The following presents a reconciliation of the impacted financial statements as filed to the restated amounts as of September 30, 2023. The previously reported amounts reflect those included in the filing of the Company’s Quarterly Report on Form 10-Q as of and for the period ended September 30, 2023, filed with the SEC on November 14, 2023.

The amounts labelled as “Restated” represent the effects of this restatement due to additional impairment expense on the Company’s Treat segment right-of-use and fixed assets.


			Restatement
	As Filed		Adjustments		As restated
	September 30,		September 30,		September 30,
	2023		2023		2023
	(unaudited)		(unaudited)		(unaudited)
Current assets
Cash and cash equivalents	$	4,827	$	—	$	4,827
Marketable Securities		21,311		—		21,311
Accounts receivable		1,193		—		1,193
Inventory		968		—		968
Other current assets		1,663		—		1,663
Total current assets		29,962		—		29,962

Restricted cash		751		—		751
Property and equipment, net		3,801		(1,096)		2,705
Intangible assets, net		2,174		—		2,174
Operating lease right of use assets, net		6,075		(517)		5,558
Other assets		1,787		—		1,787
Total assets	$	44,550	$	(1,613)	$	42,937

Current liabilities
Accounts payable	$	1,511	$	—	$	1,511
Accrued expenses and other current liabilities		4,198		—		4,198
Current portion of operating lease liabilities		2,375		—		2,375
Deferred revenue		73		—		73
Total current liabilities		8,157		—		8,157

Long-term liabilities
Operating lease liabilities		9,123		—		9,123
Total liabilities		17,280		—		17,280
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		—		470,270
Accumulated deficit		(449,269)		(1,613)		(450,882)
Accumulated other comprehensive loss		(1,642)		—		(1,642)
Total equity attributable to XWELL, Inc.		19,401		(1,613)		17,788
Noncontrolling interests		7,869		—		7,869
Total equity		27,270		(1,613)		25,657
Total liabilities and equity	$	44,550	$	(1,613)	$	42,937


			Restatement						Restatement
	As Filed		Adjustments		As Restated		As Filed		Adjustments		As Restated
	Three months		Three months		Three months		Nine months		Nine months		Nine months
	ended		ended		ended		ended		ended		ended
	September 30,		September 30,		September 30,		September 30		September 30		September 30
	2023		2023		2023		2023		2023		2023
	(unaudited)		(unaudited)		(unaudited)		(unaudited)		(unaudited)		(unaudited)
Revenue, net
Patient services revenue	$	—	$	—	$	—	$	148	$	—	$	148
Services		6,709		—		6,709		20,485		—		20,485
Products		747		—		747		2,044		—		2,044
Other		12		—		12		29		—		29
Total revenue, net		7,468		—		7,468		22,706		—		22,706

Cost of sales
Labor		4,462		—		4,462		13,609		—		13,609
Occupancy		1,063		—		1,063		3,237		—		3,237
Products and other operating costs		852		—		852		3,057		—		3,057
Total cost of sales		6,377		—		6,377		19,903		—		19,903

Gross Profit		1,091		—		1,091		2,803		—		2,803

Depreciation and amortization		590		—		590		1,770		—		1,770
Impairment of long-lived assets		6,782		1,096		7,878		6,782		1,096		7,878
Impairment of operating lease right-of-use assets		—		517		517		—		517		517
Loss on disposal of assets		16		—		16		34		—		34
Advertising and promotion expense		313		—		313		628		—		628
IT/Hosting services		273		—		273		1,186		—		1,186
Other general and administrative expenses		3,593		—		3,593		13,891		—		13,891
Total operating expenses		11,567		1,613		13,180		24,291		1,613		25,904
Operating loss		(10,476)		(1,613)		(12,089)		(21,488)		(1,613)		(23,101)
Interest income, net		105		—		105		334		—		334
Foreign exchange remeasurement gain/(loss)		366		—		366		(690)		—		(690)
Gain on Securities, realized and unrealized		225		—		225		703		—		703
Other non-operating expense, net		(198)		—		(198)		(345)		—		(345)
Loss before income taxes		(9,978)		(1,613)		(11,591)		(21,486)		(1,613)		(23,099)
Income tax expense		—		—		—		—		—		—
Net loss		(9,978)		(1,613)		(11,591)		(21,486)		(1,613)		(23,099)
Net (income) loss attributable to noncontrolling interests		60		—		60		329		—		329
Net loss attributable to XWELL, Inc.	$	(9,918)	$	(1,613)	$	(11,531)	$	(21,157)	$	(1,613)	$	(22,770)

Net loss	$	(9,978)	$	(1,613)	$	(11,591)	$	(21,486)	$	(1,613)	$	(23,099)
Other comprehensive loss		(514)		—		(514)		(1,108)		—		(1,108)
Comprehensive loss from continuing operations		(10,492)		(1,613)		(12,105)		(22,594)		(1,613)		(24,207)
Comprehensive loss	$	(10,492)	$	(1,613)	$	(12,105)	$	(22,594)	$	(1,613)	$	(24,207)

Loss per share
Basic and diluted loss per share*	$	(2.38)	$	(0.39)	$	(2.76)	$	(5.07)	$	(0.39)	$	(5.46)
Weighted-average number of shares outstanding during the period
Basic and diluted*		4,173,894		4,173,894		4,173,894		4,170,629		4,170,629		4,170,629
Diluted		4,173,894		4,173,894		4,173,894		4,170,629		4,170,629		4,170,629

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


											Accumulated
							Additional				other		Total		Non-
	Common stock			Treasury Stock			paid-		Accumulated		comprehensive		Company		controlling		Total
	Shares*	Amount		Shares*	Amount		in capital		deficit		loss		equity		interests		equity
December 31, 2022	4,161,613	$	42	—		—	$	468,530	$	(428,112)	$	(534)	$	39,926	$	8,023	$	47,949
Issuance of restricted stock units	6,015		—	—		—		—		—		—		—		—		—
Value of shares withheld to fund payroll taxes	—		—	—		—		(22)		—		—		(22)		—		(22)
Stock-based compensation	—		—	—		—		589		—		—		589		23		612
Net loss for the period	—		—	—		—		—		(5,509)		—		(5,509)		(320)		(5,829)
Foreign currency translation	—		—	—		—		—		—		(130)		(130)		11		(119)
March 31, 2023	4,167,628	$	42	—	$	—	$	469,097	$	(433,621)	$	(664)	$	34,854	$	7,737	$	42,591
Issuance of restricted stock units	3,297		—	—		—		—		—		—		—		—		—
Stock-based compensation	—		—	—		—		603		—		—		603		23		626
Distributions to noncontrolling interests	—		—	—		—		—		—		—		—		(120)		(120)
Foreign currency translation	—		—	—		—		—		—		(464)		(464)		46		(418)
Net loss for the period	—		—	—		—		—		(5,730)		—		(5,730)		51		(5,679)
June 30, 2023	4,170,925	$	42	—	$	—	$	469,700	$	(439,351)	$	(1,128)	$	29,263	$	7,737	$	37,000
Issuance of restricted stock units	3,456		—	—		—		—		—		—		—		—		—
Stock-based compensation	—		—	—		—		567		—		—		567		24		591
Grant of stock for services	—		—	—		—		3		—		—		3		—		3
Contributions from noncontrolling interests	—		—	—		—		—		—		—		—		150		150
Foreign currency translation	—		—	—		—		—		—		(514)		(514)		18		(496)
Net loss for the period	—		—	—		—		—		(9,918)		—		(9,918)		(60)		(9,978)
September 30, 2023 as filed	4,174,381	$	42	—	$	—	$	470,270	$	(449,269)	$	(1,642)	$	19,401	$	7,869	$	27,270
Restatement	—		—	—		—		—		(1,613)		—		(1,613)		—		(1,613)
September 30, 2023 as restated	4,174,381	$	42	—	$	—	$	470,270	$	(450,882)	$	(1,642)	$	17,788	$	7,869	$	25,657

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


			Restatement
	As Filed		Adjustments		As Restated
	September 30		September 30		September 30
	2023		2023		2023
	(unaudited)		(unaudited)		(unaudited)
Cash flows from operating activities
Net loss	$	(21,486)	$	(1,613)	$	(23,099)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		1,770		—		1,770
Impairment of long lived assets		6,782		1,613		8,395
Foreign currency remeasurement loss		690		—		690
Loss on disposal of assets		34		—		34
Gain on lease termination		(821)		—		(821)
Unrealized gain on marketable securities		(668)		—		(668)
Amortization of operating lease right of use asset		1,163		—		1,163
Stock-based compensation		1,832		—		1,832
Loss on equity investment		53		—		53
Changes in assets and liabilities:
Decrease in inventory		192		—		192
Decrease (increase) in accounts receivable		1,665		—		1,665
Increase in other assets, current and non-current		(336)		—		(336)
Increase in deferred revenue		(266)		—		(266)
Increase in other liabilities, current and non-current		(3,226)		—		(3,226)
Decrease in accounts payable		(251)		—		(251)
Net cash used in operating activities		(12,873)		—		(12,873)
Cash flows from investing activities
Acquisition of property and equipment		(1,639)		—		(1,639)
Investment in marketable securities		(1,991)		—		(1,991)
Sale of marketable securities		4,500		—		4,500
Acquisition of Naples Wax		(1,574)		—		(1,574)
Acquisition of intangibles		(468)		—		(468)
Net cash used in investing activities		(1,172)		—		(1,172)
Cash flows from financing activities
Contributions from noncontrolling interests		150		—		150
Payments for shares withheld on vesting		(22)		—		(22)
Distributions to noncontrolling interests		(120)		—		(120)
Net cash provided by (used in) financing activities		8		—		8
Effect of exchange rate changes on cash, cash equivalents and restricted cash		(174)		—		(174)
Decrease in cash, cash equivalents and restricted cash		(14,211)		—		(14,211)
Cash, cash equivalents, and restricted cash at beginning of the period		19,789		—		19,789
Cash, cash equivalents, and restricted cash at end of the period	$	5,578	$	—	$	5,578
Cash paid for
Income taxes	$	142	$	—	$	142
Non-cash investing and financing transactions
Capital expenditures included in Accounts payable, accrued expenses and other current liabilities	$	197	$	—	$	197

Segment Information - Geographical Revenue, Segment Operating Loss and Total Asset Information (Details) $ in Thousands	3 Months Ended	9 Months Ended	12 Months Ended
	Sep. 30, 2023 USD ($)	Sep. 30, 2023 USD ($)	Dec. 31, 2023 USD ($) segment location item	Dec. 31, 2022 USD ($)	Sep. 12, 2023 Center
Revenue
Total revenue			$ 30,109	$ 55,939
Operating loss
Total operating loss (including impairment)	$ (12,089)	$ (23,101)	(28,206)	(31,163)
Total depreciation & amortization	590	1,770	2,065	5,429
Total capital expenditures			1,847	6,293
Assets
Total long-lived assets			10,838	18,794
Total assets	$ 42,937	$ 42,937	$ 38,993	70,426
Number of operating segments \| segment			4
Number of reportable segments \| segment			4
Number of locations operated \| location			2
Naples Wax LLC
Assets
Number of High- Performing Locations			3		3
XpresSpa
Revenue
Total revenue			$ 19,067	13,680
Operating loss
Total operating loss (including impairment)			(12,951)	(12,910)
Total depreciation & amortization			1,443	1,479
Total capital expenditures			1,678	2,134
Assets
Total long-lived assets			8,268	11,851
Total assets			18,453	21,135
XpresTest
Revenue
Total revenue			9,912	40,867
Operating loss
Total operating loss (including impairment)			(4,701)	1,238
Total depreciation & amortization			276	2,043
Total capital expenditures			82	775
Assets
Total long-lived assets			92	4,220
Total assets			2,408	11,198
Naples Wax
Revenue
Total revenue			686
Operating loss
Total operating loss (including impairment)			162
Total depreciation & amortization			36
Assets
Total long-lived assets			1,371
Total assets			2,951
Treat
Revenue
Total revenue			444	1,392
Operating loss
Total operating loss (including impairment)			(2,315)	(10,577)
Total depreciation & amortization			264	1,876
Total capital expenditures			60	3,274
Assets
Total long-lived assets			669	2,314
Total assets			848	3,186
Corporate and Other
Operating loss
Total operating loss (including impairment)			(8,401)	(8,914)
Total depreciation & amortization			46	31
Total capital expenditures			27	110
Assets
Total long-lived assets			438	409
Total assets			14,333	34,907
United States
Revenue
Total revenue			24,944	52,250
Assets
Total long-lived assets			8,169	15,084
All other countries
Revenue
Total revenue			5,165	3,689
Assets
Total long-lived assets			$ 2,669	$ 3,710

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY - USD ($)
$ in Thousands

Common stock

Additional paid-in capital

Accumulated deficit

Accumulated other comprehensive loss

Total Company equity

Non-controlling interests

Total

Balance Beginning at Dec. 31, 2021

$ 51

^[1]

$ 488,268

$ (395,275)

$ (312)

$ 92,732

$ 7,203

$ 99,935

Common Stock, Shares, Outstanding, Beginning Balance at Dec. 31, 2021

^[1]

5,063,467

Issuance of Common Stock for acquisition

906

Issuance of Common Stock for acquisition (in shares)

^[1]

27,624

Vesting of restricted stock units (shares)

^[1]

46,857

Value of Shares Withheld to fund payroll taxes

(73)

Stock-based compensation

3,106

664

3,770

Net loss for the period

(32,837)

208

(32,629)

Repurchase and retirement of common stock

$ (9)

^[1]

(23,780)

(23,789)

Repurchase and retirement of common stock (in shares)

^[1]

(976,335)

Foreign currency translation

(222)

(121)

(343)

Distributions to noncontrolling interests

(956)

Contributions from noncontrolling interests

1,025

Grant of stock options for services

103

Balance Ending at Dec. 31, 2022

$ 42

^[1]

468,530

(428,112)

(534)

39,926

8,023

$ 47,949

Common Stock, Shares, Outstanding, Ending Balance at Dec. 31, 2022

4,161,613

^[1]

4,161,613

Balance Beginning at Dec. 31, 2022

$ 42

^[1]

468,530

(428,112)

(534)

39,926

8,023

$ 47,949

Common Stock, Shares, Outstanding, Beginning Balance at Dec. 31, 2022

4,161,613

^[1]

4,161,613

Net loss for the period

$ (23,099)

Balance Ending at Sep. 30, 2023

$ 42

470,270

(450,882)

(1,642)

17,788

7,869

$ 25,657

Common Stock, Shares, Outstanding, Ending Balance at Sep. 30, 2023

4,174,381

Balance Beginning at Dec. 31, 2022

$ 42

^[1]

468,530

(428,112)

(534)

39,926

8,023

$ 47,949

Common Stock, Shares, Outstanding, Beginning Balance at Dec. 31, 2022

4,161,613

^[1]

4,161,613

Value of Shares Withheld to fund payroll taxes

(22)

$ (22)

Stock-based compensation

2,226

2,319

Net loss for the period

(27,741)

(288)

(28,029)

Foreign currency translation

(1,390)

111

(1,279)

Distributions to noncontrolling interests

(120)

Contributions from noncontrolling interests

150

Grant of stock options for services

Issuance of restricted stock units (in shares)

^[1]

18,018

Balance Ending at Dec. 31, 2023

$ 42

^[1]

470,737

(455,853)

(1,924)

13,002

7,969

$ 20,971

Common Stock, Shares, Outstanding, Ending Balance at Dec. 31, 2023

4,179,631

^[1]

4,179,631

Net loss for the period

$ (11,591)

Balance Ending at Sep. 30, 2023

$ 42

$ 470,270

$ (450,882)

$ (1,642)

$ 17,788

$ 7,869

$ 25,657

Common Stock, Shares, Outstanding, Ending Balance at Sep. 30, 2023

4,174,381

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

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

Stock-based Compensation - Stock Options and RSU Activity (Details) - $ / shares	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
Stockholders Equity [Line Items]
No. of options, Outstanding, Beginning balance	241,501	141,344
No. of options, Granted	148,069	117,517
No. of options, Exercised/Vested	0
No. of options, Forfeited	(16,699)	(12,252)
No. of options, Expired	(31,666)	(5,108)
No. of options, Outstanding, Ending balance	341,205	241,501
No. of options, Exercisable	244,271	103,063
Weighted average grant date fair value, Beginning balance	$ 40.00	$ 51.40
Weighted average grant date fair value, Granted	7.88	29.20
Weighted average grant date fair value, Exercised/Vested	0
Weighted average grant date fair value, Forfeited	24.08	31.00
Weighted average grant date fair value, Expired	38.69	121.0
Weighted average grant date fair value, Ending balance	26.85	40.00
Weighted average grant date fair value, Exercisable	$ 26.65	$ 51.20
RSUs
Stockholders Equity [Line Items]
No. of options, Outstanding, Beginning balance	14,063	30,000
No. of options, Granted	16,944	26,563
No. of options, Exercised/Vested	(19,063)	(42,500)
No. of options, Forfeited	0
No. of options, Expired	0
No. of options, Outstanding, Ending balance	11,944	14,063
Weighted average grant date fair value, Beginning balance	$ 13.00	$ 32.60
Weighted average grant date fair value, Granted	5.70	16.80
Weighted average grant date fair value, Exercised/Vested	10.85	29.20
Weighted average grant date fair value, Forfeited	0
Weighted average grant date fair value, Expired	0
Weighted average grant date fair value, Ending balance	6.08	13.00
Minimum
Stockholders Equity [Line Items]
Exercise price range, Outstanding, Beginning balance	13.00	23.80
Exercise price range, Granted	4.65	13.00
Exercise price range, Forfeited	8.00	28.60
Exercise price range, Expired	8.00	28.80
Exercise price range, Outstanding, Ending balance	4.60	13.00
Exercise price range, Exercisable	4.60	23.80
Maximum
Stockholders Equity [Line Items]
Exercise price range, Outstanding, Beginning balance	49,200	49,200
Exercise price range, Granted	8.00	32.80
Exercise price range, Forfeited	32.20	76.40
Exercise price range, Expired	38,160	44,640
Exercise price range, Outstanding, Ending balance	49,200	49,200
Exercise price range, Exercisable	$ 49,200	$ 49,200

Cash, Cash Equivalents, and Restricted Cash (Details) - USD ($) $ in Thousands	Dec. 31, 2023	Dec. 31, 2022
Cash, Cash Equivalents, and Restricted Cash
Deposits in excess of FDIC limits	$ 4,195	$ 16,069
Amount of cash in overseas accounts	$ 2,395	$ 2,562

Restatement of Previously Issued Financial Statements - Additional Information (Details) - USD ($) $ in Thousands	3 Months Ended	9 Months Ended	12 Months Ended
	Sep. 30, 2023	Sep. 30, 2023	Dec. 31, 2023	Dec. 31, 2022
Reclassification [Line Items]
Net loss	$ (11,531)	$ (22,770)	$ (27,741)	$ (32,837)
Impairment of long-lived assets	(7,878)	$ (7,878)	$ 3,927	$ 4,669
Restatement adjustment
Reclassification [Line Items]
Net loss	(1,613)
Impairment of long-lived assets	$ 1,613
Error Correction, Type [Extensible Enumeration]	xwel:CorrectionInImpairmentAnalysisOnLongLivedAssetsMember

- Definition

The portion of profit or loss for the period, net of income taxes, which is attributable to the parent.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 235
-SubTopic 10
-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08(g)(1)(ii))
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480678/235-10-S99-1

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Topic 323
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 3
-Subparagraph (c)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481687/323-10-50-3

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Topic 825
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 28
-Subparagraph (f)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482907/825-10-50-28

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Topic 220
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 6
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482765/220-10-50-6

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Topic 250
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 3
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147483443/250-10-50-3

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Topic 250
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 1
-Subparagraph (b)(2)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147483443/250-10-50-1

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Topic 815
-SubTopic 40
-Name Accounting Standards Codification
-Section 65
-Paragraph 1
-Subparagraph (f)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480175/815-40-65-1

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Topic 250
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 8
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147483443/250-10-50-8

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Topic 250
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 9
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147483443/250-10-50-9

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Topic 250
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 11
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147483443/250-10-50-11

Reference 11: http://www.xbrl.org/2003/role/disclosureRef
-Topic 250
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 11
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147483443/250-10-50-11

Reference 12: http://www.xbrl.org/2003/role/disclosureRef
-Topic 250
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 4
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147483443/250-10-50-4

Reference 13: http://www.xbrl.org/2003/role/exampleRef
-Topic 946
-SubTopic 830
-Name Accounting Standards Codification
-Section 55
-Paragraph 10
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480167/946-830-55-10

Reference 14: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
-SubTopic 220
-Name Accounting Standards Codification
-Section 45
-Paragraph 7
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147483581/946-220-45-7

Reference 15: http://www.xbrl.org/2003/role/disclosureRef
-Topic 944
-SubTopic 220
-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SX 210.7-04(18))
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147483586/944-220-S99-1

Reference 16: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 22
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482810/280-10-50-22

Reference 17: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
-SubTopic 220
-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SX 210.6-07(9))
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147483575/946-220-S99-1

Reference 18: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
-SubTopic 220
-Name Accounting Standards Codification
-Section S99
-Paragraph 3
-Subparagraph (SX 210.6-09(1)(d))
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147483575/946-220-S99-3

Reference 19: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 10
-Name Accounting Standards Codification
-Section S99
-Paragraph 1A
-Subparagraph (SX 210.13-01(a)(4)(i))
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480097/470-10-S99-1A

Reference 20: http://www.xbrl.org/2009/role/commonPracticeRef
-Topic 470
-SubTopic 10
-Name Accounting Standards Codification
-Section S99
-Paragraph 1A
-Subparagraph (SX 210.13-01(a)(4)(ii))
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480097/470-10-S99-1A

Reference 21: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 10
-Name Accounting Standards Codification
-Section S99
-Paragraph 1A
-Subparagraph (SX 210.13-01(a)(4)(iii)(A))
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480097/470-10-S99-1A

Reference 22: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 10
-Name Accounting Standards Codification
-Section S99
-Paragraph 1A
-Subparagraph (SX 210.13-01(a)(4)(iv))
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480097/470-10-S99-1A

Reference 23: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 10
-Name Accounting Standards Codification
-Section S99
-Paragraph 1A
-Subparagraph (SX 210.13-01(a)(5))
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480097/470-10-S99-1A

Reference 24: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 10
-Name Accounting Standards Codification
-Section S99
-Paragraph 1B
-Subparagraph (SX 210.13-02(a)(4)(i))
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480097/470-10-S99-1B

Reference 25: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 10
-Name Accounting Standards Codification
-Section S99
-Paragraph 1B
-Subparagraph (SX 210.13-02(a)(4)(iii)(A))
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480097/470-10-S99-1B

Reference 26: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 10
-Name Accounting Standards Codification
-Section S99
-Paragraph 1B
-Subparagraph (SX 210.13-02(a)(4)(iii)(B))
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480097/470-10-S99-1B

Reference 27: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 10
-Name Accounting Standards Codification
-Section S99
-Paragraph 1B
-Subparagraph (SX 210.13-02(a)(4)(iv))
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480097/470-10-S99-1B

Reference 28: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 10
-Name Accounting Standards Codification
-Section S99
-Paragraph 1B
-Subparagraph (SX 210.13-02(a)(5))
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480097/470-10-S99-1B

Reference 29: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 30
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482810/280-10-50-30

Reference 30: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 32
-Subparagraph (f)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482810/280-10-50-32

Reference 31: http://www.xbrl.org/2003/role/disclosureRef
-Topic 260
-SubTopic 10
-Name Accounting Standards Codification
-Section 45
-Paragraph 60B
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482689/260-10-45-60B

Reference 32: http://www.xbrl.org/2003/role/exampleRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 31
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482810/280-10-50-31

Reference 33: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 32
-Subparagraph (c)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482810/280-10-50-32

Reference 34: http://www.xbrl.org/2003/role/disclosureRef
-Topic 205
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 7
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147483499/205-20-50-7

Reference 35: http://fasb.org/us-gaap/role/ref/legacyRef
-Topic 230
-SubTopic 10
-Name Accounting Standards Codification
-Section 45
-Paragraph 28
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482740/230-10-45-28

Reference 36: http://www.xbrl.org/2003/role/disclosureRef
-Topic 220
-SubTopic 10
-Name Accounting Standards Codification
-Section 45
-Paragraph 1A
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482790/220-10-45-1A

Reference 37: http://www.xbrl.org/2003/role/disclosureRef
-Topic 220
-SubTopic 10
-Name Accounting Standards Codification
-Section 45
-Paragraph 1B
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482790/220-10-45-1B

Reference 38: http://fasb.org/us-gaap/role/ref/legacyRef
-Topic 220
-SubTopic 10
-Name Accounting Standards Codification
-Section S99
-Paragraph 2
-Subparagraph (SX 210.5-03(20))
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147483621/220-10-S99-2

Reference 39: http://fasb.org/us-gaap/role/ref/legacyRef
-Topic 942
-SubTopic 220
-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SX 210.9-04(22))
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147483589/942-220-S99-1

+ Details

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

Income Taxes

12 Months Ended

Dec. 31, 2023

Income Taxes.

Income Taxes

Note 17. Income Taxes

For the years ended December 31, 2023 and 2022, the loss before income taxes consisted of the following:


	2023		2022
Domestic	$	(27,573)	$	(32,445)
Foreign		(421)		(129)
	$	(27,994)	$	(32,574)

Income tax expense for the years ended December 31, 2023 and 2022 consisted of the following:


	For the years ended December 31,
	2023		2022
Current:
Federal	$	—	$	—
State		15		41
Foreign		20		14
Deferred:
Federal		—		—
	$	35	$	55

Income tax expense differed from the amounts computed by applying the applicable United States federal income tax rate to loss from continuing operations before taxes on income as a result of the following:


	For the years ended December 31,
	2023			2022
Loss from operations before income taxes	$	(27,994)		$	(32,574)
Tax rate		21	%		21	%

Computed “expected” tax benefit		(5,879)			(6,841)
State taxes, net of federal income tax (expense) benefit		(1,027)			706
Change in valuation allowance		9,166			7,015
Adjustment JV Basis		—			339
Nondeductible expenses		212			341
Other Adjustments		2			—
Return to Provision Adjustment		(1,860)			(94)
International Rate Differential		(14)			—
State Deferred Rate Change		(87)			(570)
Asset Impairment Adjustment		(730)			(810)
Other items		252			(31)
Income tax expense	$	35		$	55

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of the Company’s deferred tax assets and liabilities as of December 31, 2023 and 2022 are as follows:


	December 31,
	2023		2022
Deferred income tax assets
Net operating loss carryforwards	$	60,263	$	51,932
Stock-based compensation		1,532		1,029
Intangible assets and other		7,629		7,298
Net deferred income tax assets		69,424		60,259
Less:
Valuation allowance		(69,424)		(60,259)
Net deferred income tax assets	$	—	$	—

The Company assesses the need for a valuation allowance related to its deferred income tax assets by considering whether it is more likely than not that some portion or all of the deferred income tax assets will not be realized. A valuation allowance has been recorded against the Company’s deferred income tax assets, as it is in the opinion of management that it is more likely than not that the net operating loss carryforwards (“NOL”) will not be utilized in the foreseeable future.

The cumulative valuation allowance as of December 31, 2023 is $69,424 which will be reduced if and when the Company determines that the deferred income tax assets are more likely than not to be realized.


As of January 1, 2022	$	53,298
Charged to cost and expenses		6,864
Return to provision true-up and other		97
As of December 31, 2022		60,259
Charged to cost and expenses		7,299
Return to provision true-up and other		1,866
As of December 31, 2023	$	69,424

As of December 31, 2023, the Company’s estimated aggregate total NOLs were $150,926 for U.S. federal purposes, expiring 20 years from the respective tax years to which they relate, and $97,968 for U.S. federal purposes with an indefinite life due to new regulations in the Tax Cuts and Jobs Act of 2017. The NOL amounts are presented before Internal Revenue Code, Section 382 limitations (“Section 382”). The Tax Reform Act of 1986 imposed substantial restrictions on the utilization of NOL and tax credits in the event of an ownership change of a corporation. Thus, the Company’s ability to utilize all such NOL and credit carryforwards may be limited. The Coronavirus Aid, Relief, and Economic Security Act or “CARES Act” was enacted subsequent to the December 31, 2019 period, on March 27, 2020. The CARES act provided for favorable business provisions. However, the Company does not anticipate the income tax provision changes to materially benefit the Company.

The Company files its tax returns in the U.S. federal jurisdiction, as well as in various state and local jurisdictions. The company is not currently under audit in any taxing jurisdictions. The federal statute of limitations for audit consideration is 3 years from the filing date, and generally states implement a statute of limitations between 3 and 5 years.

- 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
-Topic 946
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 13
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480990/946-20-50-13

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Topic 235
-SubTopic 10
-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08(h)(2))
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480678/235-10-S99-1

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-Name Accounting Standards Codification
-Publisher FASB
-URI https://asc.fasb.org//740/tableOfContent

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 14
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482685/740-10-50-14

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 21
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482685/740-10-50-21

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-SubTopic 270
-Name Accounting Standards Codification
-Section 50
-Paragraph 1
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482526/740-270-50-1

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 17
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482685/740-10-50-17

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-SubTopic 10
-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SAB TOPIC 6.I.5.Q1)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147479360/740-10-S99-1

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-SubTopic 10
-Name Accounting Standards Codification
-Section S99
-Paragraph 2
-Subparagraph (SAB Topic 11.C)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147479360/740-10-S99-2

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-SubTopic 30
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482603/740-30-50-2

+ Details

Other Assets - Consolidated Balance Sheets (Details) - USD ($) $ in Thousands	Dec. 31, 2023	Sep. 30, 2023	Dec. 31, 2022
Other Assets
Equity investments	$ 50		$ 104
Lease deposits	1,556		1,973
Other	236		292
Other assets	$ 1,842	$ 1,787	$ 2,369

Segment Information - Additional Information (Details) - USD ($) $ in Thousands	3 Months Ended	9 Months Ended	12 Months Ended
	Sep. 30, 2023	Sep. 30, 2023	Dec. 31, 2023	Dec. 31, 2022
Accrued Expenses And Other Current Liabilities [Line Items]
Impairment of long-lived assets	$ (7,878)	$ (7,878)	$ 3,927	$ 4,669
Impairment of operating lease right-of-use assets	$ 517	$ 517	926	1,110
XpresSpa
Accrued Expenses And Other Current Liabilities [Line Items]
Impairment of long-lived assets			234	619
Impairment of operating lease right-of-use assets			484	936
XpresTest
Accrued Expenses And Other Current Liabilities [Line Items]
Impairment of long-lived assets				677
Impairment of operating lease right-of-use assets				38
Treat Segment
Accrued Expenses And Other Current Liabilities [Line Items]
Impairment of long-lived assets			925	3,373
Impairment of operating lease right-of-use assets			442	$ 136
HyperPointe
Accrued Expenses And Other Current Liabilities [Line Items]
Impairment of long-lived assets			$ 4,024

Restatement of Previously Issued Financial Statements - Statements of Changes in Equity (Details) - USD ($)
$ in Thousands

3 Months Ended

9 Months Ended

12 Months Ended

Sep. 30, 2023

Jun. 30, 2023

Mar. 31, 2023

Sep. 30, 2023

Dec. 31, 2023

Dec. 31, 2022

Reclassification [Line Items]

Balance Beginning

$ 47,949

$ 99,935

Common Stock, Shares, Outstanding, Beginning Balance

4,161,613

Value of Shares Withheld to fund payroll taxes

$ (22)

(73)

Stock-based compensation

2,319

3,770

Grant of stock options for services

103

Contributions from noncontrolling interests

150

1,025

Distributions to noncontrolling interests

(120)

(956)

Foreign currency translation

(1,279)

(343)

Net loss for the period

$ (11,591)

$ (23,099)

(28,029)

(32,629)

Balance Ending

$ 25,657

$ 20,971

$ 47,949

Common Stock, Shares, Outstanding, Ending Balance

4,174,381

4,179,631

4,161,613

Common stock

Reclassification [Line Items]

Balance Beginning

^[1]

$ 42

$ 51

Common Stock, Shares, Outstanding, Beginning Balance

^[1]

4,161,613

5,063,467

Issuance of restricted stock units (in shares)

^[1]

18,018

Balance Ending

$ 42

^[1]

$ 42

^[1]

Common Stock, Shares, Outstanding, Ending Balance

4,174,381

4,179,631

^[1]

4,161,613

^[1]

Additional paid-in capital

Reclassification [Line Items]

Balance Beginning

$ 468,530

$ 488,268

Value of Shares Withheld to fund payroll taxes

(22)

(73)

Stock-based compensation

2,226

3,106

Grant of stock options for services

103

Balance Ending

$ 470,270

470,270

470,737

468,530

Accumulated deficit

Reclassification [Line Items]

Balance Beginning

(428,112)

(395,275)

Net loss for the period

(27,741)

(32,837)

Balance Ending

(450,882)

(455,853)

(428,112)

Accumulated other comprehensive loss

Reclassification [Line Items]

Balance Beginning

(534)

(312)

Foreign currency translation

(1,390)

(222)

Balance Ending

(1,642)

(1,924)

(534)

Total Company equity

Reclassification [Line Items]

Balance Beginning

39,926

92,732

Value of Shares Withheld to fund payroll taxes

(22)

(73)

Stock-based compensation

2,226

3,106

Grant of stock options for services

103

Foreign currency translation

(1,390)

(222)

Net loss for the period

(27,741)

(32,837)

Balance Ending

17,788

13,002

39,926

Non-controlling interests

Reclassification [Line Items]

Balance Beginning

8,023

7,203

Stock-based compensation

664

Contributions from noncontrolling interests

150

1,025

Distributions to noncontrolling interests

(120)

(956)

Foreign currency translation

111

(121)

Net loss for the period

(288)

208

Balance Ending

7,869

7,969

8,023

Previously Reported

Reclassification [Line Items]

Balance Beginning

37,000

$ 42,591

47,949

Value of Shares Withheld to fund payroll taxes

(22)

Stock-based compensation

591

626

612

Grant of stock options for services

Contributions from noncontrolling interests

150

Distributions to noncontrolling interests

(120)

Foreign currency translation

(496)

(418)

(119)

Net loss for the period

(9,978)

(5,679)

(5,829)

(21,486)

Balance Ending

27,270

37,000

42,591

27,270

47,949

Previously Reported | Common stock

Reclassification [Line Items]

Balance Beginning

$ 42

Common Stock, Shares, Outstanding, Beginning Balance

4,170,925

4,167,628

4,161,613

Issuance of restricted stock units (in shares)

3,456

3,297

6,015

Balance Ending

$ 42

Common Stock, Shares, Outstanding, Ending Balance

4,174,381

4,170,925

4,167,628

4,174,381

4,161,613

Previously Reported | Additional paid-in capital

Reclassification [Line Items]

Balance Beginning

$ 469,700

$ 469,097

$ 468,530

Value of Shares Withheld to fund payroll taxes

(22)

Stock-based compensation

567

603

589

Grant of stock options for services

Balance Ending

470,270

469,700

469,097

470,270

$ 468,530

Previously Reported | Accumulated deficit

Reclassification [Line Items]

Balance Beginning

(439,351)

(433,621)

(428,112)

Net loss for the period

(9,918)

(5,730)

(5,509)

Balance Ending

(449,269)

(439,351)

(433,621)

(449,269)

(428,112)

Previously Reported | Accumulated other comprehensive loss

Reclassification [Line Items]

Balance Beginning

(1,128)

(664)

(534)

Foreign currency translation

(514)

(464)

(130)

Balance Ending

(1,642)

(1,128)

(664)

(1,642)

(534)

Previously Reported | Total Company equity

Reclassification [Line Items]

Balance Beginning

29,263

34,854

39,926

Value of Shares Withheld to fund payroll taxes

(22)

Stock-based compensation

567

603

589

Grant of stock options for services

Foreign currency translation

(514)

(464)

(130)

Net loss for the period

(9,918)

(5,730)

(5,509)

Balance Ending

19,401

29,263

34,854

19,401

39,926

Previously Reported | Non-controlling interests

Reclassification [Line Items]

Balance Beginning

7,737

8,023

$ 8,023

Stock-based compensation

Contributions from noncontrolling interests

150

Distributions to noncontrolling interests

(120)

Foreign currency translation

Net loss for the period

(60)

(320)

Balance Ending

7,869

$ 7,737

7,869

$ 8,023

Restatement Adjustments

Reclassification [Line Items]

Net loss for the period

(1,613)

Balance Ending

(1,613)

Restatement Adjustments | Accumulated deficit

Reclassification [Line Items]

Balance Ending

(1,613)

Restatement Adjustments | Total Company equity

Reclassification [Line Items]

Balance Ending

$ (1,613)

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

Acquisition of Naples Wax, LLC

12 Months Ended

Dec. 31, 2023

Acquisition of Naples Wax, LLC

Acquisition of Naples Wax, LLC

Note 9. Acquisition of Naples Wax, LLC

On September 12, 2023, the Company acquired all of the equity interests in Naples Wax, LLC, d/b/a Naples Wax Centers, a Florida limited liability company (“Naples Wax”), for an aggregate purchase price of $1,624, of which $1,574 was paid in cash at closing. The remaining $50 will be held for six months as a holdback to cover any potential indemnification claims and included in accrued expenses and other current liabilities on the consolidated balance sheet as of December 31, 2023.

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

For income tax purposes, this acquisition of 100% of the units is treated as an asset acquisition. As a result of the acquisition of Naples Wax, the company generated tax deductible goodwill of $1.371 million.


Consideration paid	$	1,624

Fair value of assets acquired and liabilities assumed

Cash and cash equivalents	$	180
Prepaid expenses and other assets		13
Customer relationships		700
Trade name		200

Deferred revenue		(811)
Accounts payable		(25)
Accrued expenses and other liabilities		(4)
Total fair value of assets acquired and liabilities assumed		253
Goodwill	$	1,371

Determination of the fair values of the acquired assets and assumed liabilities (and the related determination of estimated lives of depreciable tangible and identifiable intangible assets) requires significant judgment.

The fair value of intangible assets other than Goodwill was determined primarily using income approaches. This included estimated multi-period excess earnings valuation method for Customer relationships and the relief-from-royalty valuation for the tradename.

The following table sets forth the significant assumptions utilized when valuing the Customer Relationships:


Customer relationships Attrition Rate	15.00	%

Existing Customer Growth	75.00	%

Business Development Expense for New Customers	5.70	%

Customer relationships Discount Rate	31.00	%

Estimated Remaining Economic Life (Years) (approx.)	7	yrs

The following table sets forth the significant assumptions utilized when valuing the Tradename:


% of Revenue Attributable to Trade Name	100.00	%

Royalty Rate	2.00	%

Trade Name Discount Rate	31.00	%

Remaining Economic Life (Years)	9	yrs

Net earnings/(loss) per Share of Common Stock (Details)
$ / shares in Units, $ in Thousands

3 Months Ended

9 Months Ended

12 Months Ended

Sep. 28, 2023

item

Sep. 30, 2023

$ / shares

Sep. 30, 2023

$ / shares

Dec. 31, 2023

USD ($)

$ / shares

Dec. 31, 2022

USD ($)

$ / shares

Earnings Per Share Disclosure.

Net loss attributable to common shareholders | $

$ (27,741)

$ (32,837)

Basic weighted average shares outstanding

4,173,894

4,170,629

4,175,220

^[1]

4,682,767

^[1]

Basic loss per share (in dollars per share) | $ / shares

$ (2.76)

$ (5.46)

$ (6.64)

$ (7.01)

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

353,149

314,169

Reverse stock split, conversion ratio

0.05

Reverse stock split, Multiplying factor for price per share | item

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

Earnings Per Share Disclosure.

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

341,205

241,501

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

Earnings Per Share Disclosure.

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

11,944

14,063

Warrants to purchase an equal number of shares of Common Stock

Earnings Per Share Disclosure.

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

58,605

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

Property and Equipment (Tables)

12 Months Ended

Dec. 31, 2023

Property and Equipment

Schedule of property and equipment


	December 31,
	2023		2022		Useful Life
Leasehold improvements	$	5,848	$	8,692	Average 5-8 years
Furniture and fixtures		821		1,214	3-4 years
Other operating equipment		680		760	Maximum 5 years
		7,349		10,666
Accumulated depreciation		(4,895)		(7,000)
Total property and equipment, net	$	2,454	$	3,666

Other Assets (Tables)

12 Months Ended

Dec. 31, 2023

Other Assets

Schedule of other assets


	December 31, 2023		December 31, 2022
Equity investments	$	50	$	104
Lease deposits		1,556		1,973
Other		236		292
Other assets	$	1,842	$	2,369

Stock-based Compensation - Variables Used in Estimating Fair Value of Stock Options (Details) - Employee Stock Option [Member]	12 Months Ended
	Dec. 31, 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:	$ 8.20
Exercise price:	$ 8.20
Expected term:	6 years 4 months 28 days

Stock-based Compensation (Details) $ in Thousands		1 Months Ended			12 Months Ended
Stock-based Compensation (Details) $ in Thousands	Oct. 04, 2022 shares	May 31, 2022 shares	Aug. 31, 2021 shares	Sep. 30, 2020 item shares	Dec. 31, 2023 USD ($) item shares	Dec. 31, 2022 USD ($)
Stockholders Equity [Line Items]
Number of equal quarterly vesting installments \| item				4	4
Stock-based compensation expense \| $					$ 2,319	$ 3,770
Weighted average remaining contractual term					7 years 8 months 15 days	7 years 9 months 29 days
Aggregate Intrinsic Value of Options Outstanding and Vested \| $					$ 0	$ 0
Share Repurchase Program
Stockholders Equity [Line Items]
Repurchase of common stock (in shares)		10	15
Stock Compensation Plan
Stockholders Equity [Line Items]
Options, expiry period				10 years	10 years
Options, vesting period				1 year	1 year
Non-vested Stock Options
Stockholders Equity [Line Items]
Unrecognized stock-based payment cost \| $					$ 1,246	2,506
Non-Vested RSUs
Stockholders Equity [Line Items]
Unrecognized stock-based payment cost \| $					73	$ 183
XpresTest 2020 Plan \| RSUs
Stockholders Equity [Line Items]
Unrecognized stock-based compensation related to the awards \| $					$ 96
Equity incentive plan 2020
Stockholders Equity [Line Items]
Number of shares authorized					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					249,899
Directors, Employees And Consultants \| XpresTest 2020 Plan
Stockholders Equity [Line Items]
Number of shares authorized				200
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

Leases (Details) - USD ($) $ in Thousands	3 Months Ended	9 Months Ended	12 Months Ended
Leases (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Sep. 30, 2023	Dec. 31, 2023	Dec. 31, 2022
Leases
Cash paid for minimum annual rental			$ 2,018	$ 928
Variable lease payments			1,326	1,392
Operating leases, rent expense			3,824	3,917
Impairment of operating lease right-of-use assets	$ 517	$ 517	$ 926	$ 1,110

Cash, Cash Equivalents, and Restricted Cash - Summary of Cash, Cash Equivalents, and Restricted Cash (Details) - USD ($) $ in Thousands	Dec. 31, 2023	Sep. 30, 2023	Dec. 31, 2022	Dec. 31, 2021
Cash, Cash Equivalents, and Restricted Cash
Cash denominated in United States dollars	$ 5,726		$ 16,344
Cash denominated in currency other than United States dollars	2,395		2,562
Restricted cash	751		751
Credit and debit card receivables	316		132
Total cash, cash equivalents and restricted cash	$ 9,188	$ 5,578	$ 19,789	$ 106,257

- Definition

Amount of currency on hand as well as demand deposits with banks or financial institutions. Includes other kinds of accounts that have the general characteristics of demand deposits. Excludes cash and cash equivalents within disposal group and discontinued operation.

+ References + Details

Intangible Assets - Schedule of Finite-Lived Intangible Assets (Details) - USD ($) $ in Thousands	Dec. 31, 2023	Dec. 31, 2022
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	$ 3,840	$ 6,352
Accumulated Amortization	(2,487)	(2,344)
Net Carrying Amount	1,353	4,008
Trade names
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	200	302
Accumulated Amortization	(6)	(24)
Net Carrying Amount	194	278
Customer relationships
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	1,012	1,510
Accumulated Amortization	(341)	(542)
Net Carrying Amount	671	968
Software
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	2,593	4,485
Accumulated Amortization	(2,120)	(1,761)
Net Carrying Amount	473	2,724
Licenses
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	35	55
Accumulated Amortization	(20)	(17)
Net Carrying Amount	$ 15	$ 38

Restatement of Previously Issued Financial Statements (Tables)

12 Months Ended

Dec. 31, 2023

Restatement of Previously Issued Financial Statements

Schedule of reconciliation of the impacted financial statements


			Restatement
	As Filed		Adjustments		As restated
	September 30,		September 30,		September 30,
	2023		2023		2023
	(unaudited)		(unaudited)		(unaudited)
Current assets
Cash and cash equivalents	$	4,827	$	—	$	4,827
Marketable Securities		21,311		—		21,311
Accounts receivable		1,193		—		1,193
Inventory		968		—		968
Other current assets		1,663		—		1,663
Total current assets		29,962		—		29,962

Restricted cash		751		—		751
Property and equipment, net		3,801		(1,096)		2,705
Intangible assets, net		2,174		—		2,174
Operating lease right of use assets, net		6,075		(517)		5,558
Other assets		1,787		—		1,787
Total assets	$	44,550	$	(1,613)	$	42,937

Current liabilities
Accounts payable	$	1,511	$	—	$	1,511
Accrued expenses and other current liabilities		4,198		—		4,198
Current portion of operating lease liabilities		2,375		—		2,375
Deferred revenue		73		—		73
Total current liabilities		8,157		—		8,157

Long-term liabilities
Operating lease liabilities		9,123		—		9,123
Total liabilities		17,280		—		17,280
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		—		470,270
Accumulated deficit		(449,269)		(1,613)		(450,882)
Accumulated other comprehensive loss		(1,642)		—		(1,642)
Total equity attributable to XWELL, Inc.		19,401		(1,613)		17,788
Noncontrolling interests		7,869		—		7,869
Total equity		27,270		(1,613)		25,657
Total liabilities and equity	$	44,550	$	(1,613)	$	42,937


			Restatement						Restatement
	As Filed		Adjustments		As Restated		As Filed		Adjustments		As Restated
	Three months		Three months		Three months		Nine months		Nine months		Nine months
	ended		ended		ended		ended		ended		ended
	September 30,		September 30,		September 30,		September 30		September 30		September 30
	2023		2023		2023		2023		2023		2023
	(unaudited)		(unaudited)		(unaudited)		(unaudited)		(unaudited)		(unaudited)
Revenue, net
Patient services revenue	$	—	$	—	$	—	$	148	$	—	$	148
Services		6,709		—		6,709		20,485		—		20,485
Products		747		—		747		2,044		—		2,044
Other		12		—		12		29		—		29
Total revenue, net		7,468		—		7,468		22,706		—		22,706

Cost of sales
Labor		4,462		—		4,462		13,609		—		13,609
Occupancy		1,063		—		1,063		3,237		—		3,237
Products and other operating costs		852		—		852		3,057		—		3,057
Total cost of sales		6,377		—		6,377		19,903		—		19,903

Gross Profit		1,091		—		1,091		2,803		—		2,803

Depreciation and amortization		590		—		590		1,770		—		1,770
Impairment of long-lived assets		6,782		1,096		7,878		6,782		1,096		7,878
Impairment of operating lease right-of-use assets		—		517		517		—		517		517
Loss on disposal of assets		16		—		16		34		—		34
Advertising and promotion expense		313		—		313		628		—		628
IT/Hosting services		273		—		273		1,186		—		1,186
Other general and administrative expenses		3,593		—		3,593		13,891		—		13,891
Total operating expenses		11,567		1,613		13,180		24,291		1,613		25,904
Operating loss		(10,476)		(1,613)		(12,089)		(21,488)		(1,613)		(23,101)
Interest income, net		105		—		105		334		—		334
Foreign exchange remeasurement gain/(loss)		366		—		366		(690)		—		(690)
Gain on Securities, realized and unrealized		225		—		225		703		—		703
Other non-operating expense, net		(198)		—		(198)		(345)		—		(345)
Loss before income taxes		(9,978)		(1,613)		(11,591)		(21,486)		(1,613)		(23,099)
Income tax expense		—		—		—		—		—		—
Net loss		(9,978)		(1,613)		(11,591)		(21,486)		(1,613)		(23,099)
Net (income) loss attributable to noncontrolling interests		60		—		60		329		—		329
Net loss attributable to XWELL, Inc.	$	(9,918)	$	(1,613)	$	(11,531)	$	(21,157)	$	(1,613)	$	(22,770)

Net loss	$	(9,978)	$	(1,613)	$	(11,591)	$	(21,486)	$	(1,613)	$	(23,099)
Other comprehensive loss		(514)		—		(514)		(1,108)		—		(1,108)
Comprehensive loss from continuing operations		(10,492)		(1,613)		(12,105)		(22,594)		(1,613)		(24,207)
Comprehensive loss	$	(10,492)	$	(1,613)	$	(12,105)	$	(22,594)	$	(1,613)	$	(24,207)

Loss per share
Basic and diluted loss per share*	$	(2.38)	$	(0.39)	$	(2.76)	$	(5.07)	$	(0.39)	$	(5.46)
Weighted-average number of shares outstanding during the period
Basic and diluted*		4,173,894		4,173,894		4,173,894		4,170,629		4,170,629		4,170,629
Diluted		4,173,894		4,173,894		4,173,894		4,170,629		4,170,629		4,170,629

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


											Accumulated
							Additional				other		Total		Non-
	Common stock			Treasury Stock			paid-		Accumulated		comprehensive		Company		controlling		Total
	Shares*	Amount		Shares*	Amount		in capital		deficit		loss		equity		interests		equity
December 31, 2022	4,161,613	$	42	—		—	$	468,530	$	(428,112)	$	(534)	$	39,926	$	8,023	$	47,949
Issuance of restricted stock units	6,015		—	—		—		—		—		—		—		—		—
Value of shares withheld to fund payroll taxes	—		—	—		—		(22)		—		—		(22)		—		(22)
Stock-based compensation	—		—	—		—		589		—		—		589		23		612
Net loss for the period	—		—	—		—		—		(5,509)		—		(5,509)		(320)		(5,829)
Foreign currency translation	—		—	—		—		—		—		(130)		(130)		11		(119)
March 31, 2023	4,167,628	$	42	—	$	—	$	469,097	$	(433,621)	$	(664)	$	34,854	$	7,737	$	42,591
Issuance of restricted stock units	3,297		—	—		—		—		—		—		—		—		—
Stock-based compensation	—		—	—		—		603		—		—		603		23		626
Distributions to noncontrolling interests	—		—	—		—		—		—		—		—		(120)		(120)
Foreign currency translation	—		—	—		—		—		—		(464)		(464)		46		(418)
Net loss for the period	—		—	—		—		—		(5,730)		—		(5,730)		51		(5,679)
June 30, 2023	4,170,925	$	42	—	$	—	$	469,700	$	(439,351)	$	(1,128)	$	29,263	$	7,737	$	37,000
Issuance of restricted stock units	3,456		—	—		—		—		—		—		—		—		—
Stock-based compensation	—		—	—		—		567		—		—		567		24		591
Grant of stock for services	—		—	—		—		3		—		—		3		—		3
Contributions from noncontrolling interests	—		—	—		—		—		—		—		—		150		150
Foreign currency translation	—		—	—		—		—		—		(514)		(514)		18		(496)
Net loss for the period	—		—	—		—		—		(9,918)		—		(9,918)		(60)		(9,978)
September 30, 2023 as filed	4,174,381	$	42	—	$	—	$	470,270	$	(449,269)	$	(1,642)	$	19,401	$	7,869	$	27,270
Restatement	—		—	—		—		—		(1,613)		—		(1,613)		—		(1,613)
September 30, 2023 as restated	4,174,381	$	42	—	$	—	$	470,270	$	(450,882)	$	(1,642)	$	17,788	$	7,869	$	25,657

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


			Restatement
	As Filed		Adjustments		As Restated
	September 30		September 30		September 30
	2023		2023		2023
	(unaudited)		(unaudited)		(unaudited)
Cash flows from operating activities
Net loss	$	(21,486)	$	(1,613)	$	(23,099)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		1,770		—		1,770
Impairment of long lived assets		6,782		1,613		8,395
Foreign currency remeasurement loss		690		—		690
Loss on disposal of assets		34		—		34
Gain on lease termination		(821)		—		(821)
Unrealized gain on marketable securities		(668)		—		(668)
Amortization of operating lease right of use asset		1,163		—		1,163
Stock-based compensation		1,832		—		1,832
Loss on equity investment		53		—		53
Changes in assets and liabilities:
Decrease in inventory		192		—		192
Decrease (increase) in accounts receivable		1,665		—		1,665
Increase in other assets, current and non-current		(336)		—		(336)
Increase in deferred revenue		(266)		—		(266)
Increase in other liabilities, current and non-current		(3,226)		—		(3,226)
Decrease in accounts payable		(251)		—		(251)
Net cash used in operating activities		(12,873)		—		(12,873)
Cash flows from investing activities
Acquisition of property and equipment		(1,639)		—		(1,639)
Investment in marketable securities		(1,991)		—		(1,991)
Sale of marketable securities		4,500		—		4,500
Acquisition of Naples Wax		(1,574)		—		(1,574)
Acquisition of intangibles		(468)		—		(468)
Net cash used in investing activities		(1,172)		—		(1,172)
Cash flows from financing activities
Contributions from noncontrolling interests		150		—		150
Payments for shares withheld on vesting		(22)		—		(22)
Distributions to noncontrolling interests		(120)		—		(120)
Net cash provided by (used in) financing activities		8		—		8
Effect of exchange rate changes on cash, cash equivalents and restricted cash		(174)		—		(174)
Decrease in cash, cash equivalents and restricted cash		(14,211)		—		(14,211)
Cash, cash equivalents, and restricted cash at beginning of the period		19,789		—		19,789
Cash, cash equivalents, and restricted cash at end of the period	$	5,578	$	—	$	5,578
Cash paid for
Income taxes	$	142	$	—	$	142
Non-cash investing and financing transactions
Capital expenditures included in Accounts payable, accrued expenses and other current liabilities	$	197	$	—	$	197

Accounting and Reporting Policies (Policies)

12 Months Ended

Dec. 31, 2023

Accounting and Reporting Policies

Basis of presentation and principles of consolidation

The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America. The consolidated financial statements include the accounts of the Company, all entities that are wholly owned by the Company, and all entities in which the Company has a controlling financial interest. All significant intercompany balances and transactions have been eliminated in consolidation.

Use of estimates

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

Translation into United States dollars

The Company conducts certain transactions in foreign currencies, which are recorded at the exchange rate as of the transaction date. All exchange gains and losses occurring from the remeasurement of monetary balance sheet items denominated in non-dollar currencies are deemed non-operating income in the consolidated statements of operations and comprehensive loss. During 2023 and 2022, the Company recorded $738 and $664, respectively, in exchange 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 year end exchange rates and revenues and expenses have been translated at average monthly rates for the year. The translation adjustments arising from the use of different exchange rates are included as foreign currency translation within the consolidated statements of operations and comprehensive income (loss) and consolidated statements of changes in stockholders’ equity.

Cash and cash equivalents

The Company maintains cash in checking and money market accounts with financial institutions. The Company has established guidelines relating to diversification and maturities of its investments in order to minimize credit risk and maintain high liquidity of funds. The Company considers all highly liquid investments purchased with an original maturity of three months or less from the time they are acquired to be cash equivalents. The Company had $4,025 of such investments as of December 31, 2023 and $1,885 as of December 31, 2022.

Accounts Receivables

Accounts receivables are reported at their outstanding unpaid principal balances, net of allowances for credit loss. The Company periodically assesses its accounts and other receivables for collectability on a specific identification basis. The Company provides for an allowance for credit loss based on management’s estimate of uncollectible amounts considering age, collection history, and any other factors considered appropriate. Payments are generally due within 30 days of invoice. The Company writes off accounts receivable against the allowance for credit loss when a balance is determined to be uncollectible. During the year ended December 31, 2023 and 2022, the Company did not write off any accounts receivable. The Company did not record an allowance for credit loss for the year ended December 31, 2023 and December 31, 2022, respectively.

Inventory

All inventory is valued at the lower of cost or net realizable value. Cost is determined using a weighted-average cost method.

Intangible assets

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

The Company’s intangible assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. The fair value is then compared to the carrying value and an impairment charge is recognized by the amount in which the carrying value exceeds the fair value of the asset. In assessing the recoverability of the Company’s intangible assets, the Company must make estimates and assumptions regarding future cash flows and other factors to determine the fair value of the respective assets. These estimates and assumptions could have a significant impact on whether an impairment charge is recognized and also the magnitude of any such charge. Fair value estimates are made at a specific point in time, based on relevant information. During the years ended December 31, 2023 and 2022, the Company recognized impairment of $2,768 and $110 respectively.

The Company also impaired intangible assets pertaining to its Treat and XpresTest segments.

Property and Equipment

Property and equipment are recorded at historical cost and primarily consists of leasehold improvements, furniture and fixtures, and other operating equipment. Depreciation is calculated on a straight-line basis over the estimated useful lives of the assets. Leasehold improvements are depreciated over the lesser of the lease term or economic useful life. Maintenance and repairs are charged to expense, and renovations or improvements that extend the service lives of the Company’s assets are capitalized over the lesser of the extension period or life of the improvement.

Impairment of long-lived assets

Long-lived assets are tested for impairment at the lowest level at which there are identifiable operating cash flows, which is at the individual airport location for the XpresSpa and XpresTest businesses. 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 flow was 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 completed an assessment of its property and equipment and operating lease right of use assets for impairment as of December 31, 2023 and 2022. Based upon the results of the impairment test, the Company recorded an impairment expense related to property and equipment of $1,159 and $4,559 as of December 31, 2023 and 2022, respectively. Additionally, the Company recorded an impairment expense related to operating lease right of use assets and $926, and $1,110 as of December 31, 2023 and 2022, respectively. Both impairment charges are recorded on the consolidated statements of operations and comprehensive loss. The expense was primarily related to the impairment of leasehold improvements made to the Company’s Treat and Spa locations and its operating lease right of use assets where

Leases

The right of use asset (“ROU”) on the Company’s consolidated balance sheet represents a lessee’s right to use an asset over the life of a lease. Operating lease ROU assets and lease liabilities are recognized at commencement date based on the present value of lease payments over the lease term, plus any lease payments made to the lessor before the lease commencement date, plus any initial direct costs incurred, minus any lease incentives received. The amortization period for the right of use asset is from the lease commencement date to the earlier of the end of the lease term or the end of the useful life of the asset. Our lease terms may include options to extend or terminate the lease when it is reasonably certain that we will exercise that option. Lease expense for lease payments is recognized on a straight-line basis over the lease term. The Company has elected to exclude all short-term leases (i.e, leases with term of 12 months or less) from recognition on the balance sheet.

The Company’s lease liabilities are determined by calculating the present value of all future lease payments using the rate implicit in the lease if it can be readily determined, or the lessee’s incremental borrowing rate. The Company uses its incremental borrowing rate at the inception of the lease to determine the present value of future lease payments as the rate implicit in its leases could not be readily determined.

Certain leases provide for contingent rents that are not measurable at inception. These contingent rents are primarily based on a percentage of sales that are in excess of a predetermined level, an increase based on a change in the consumer price index or fair market value. These amounts are excluded from the calculation of the right of use asset and lease liability under ASC 842. Minimum rent under these leases is included in the determination of rent expense when it is probable that the expense has been incurred and the amount can be reasonably estimated.

Restricted cash

Restricted cash, which is listed as a separate line item in the consolidated balance sheets, represents balances at financial institutions to secure bonds and letters of credit as required by the Company’s various lease agreements.

Equity investments

Equity investments are carried at fair value with the changes in fair value recorded in the consolidated statement of operations and other comprehensive income (loss) in accordance with ASU 2016-01. The Company will perform a qualitative assessment on an annual basis and recognize impairment if there are sufficient indicators that the fair value of the investment is less than the carrying value. As of the year ended December 31, 2023, there were no indicators of impairment.

Revenue recognition

XpresSpa, Treat and Naples Wax Center

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

XpresTest

During the third quarter of 2022, XpresTest, in partnership with Ginkgo BioWorks in continuation of their support to the CDC’s traveler-based SARS-CoV-2 genomic surveillance program was awarded a new contract. The partnership is expected to support public health and biosecurity services totaling approximately $16,000, with an overall potential to exceed $61,000 based on CDC program options and public health priorities. As COVID-19 sub-variants and other biological threats continue to emerge, the partners plan to expand the program footprint and incorporate innovative modalities and offerings, such as monitoring of wastewater from aircraft lavatories. The current contract with Ginkgo BioWorks related to the above partnership contains fixed pricing for which the Company is entitled to $6,674 for the sample collection (passenger and aircraft wastewater) and $370 for the traveler enrollment initiatives, which represents the amount of consideration that we are entitled. The Company recognizes revenue over time for both sample collection performance obligations, using the input method based on time elapsed to measure progress towards satisfying each of the performance obligations. We recognized the revenue for the traveler enrollment initiative performance obligation in the second quarter of 2023. The Company recognizes revenue ratably (straight line basis) over the term of the contract (one year). The Company recorded $7,521 and $2,617, in revenue for the years ended December 31, 2023 and 2022, respectively, related to sample collection performance obligations because the Company’s efforts towards satisfying each of the performance obligations are expended evenly throughout the period of performance.

HyperPointe

The Company’s HyperPointe business provides broad range of service and support options for HyperPointe’s customers, including technical support services and advanced services. Technical support services represent the majority of these offerings which are distinct performance obligations that are satisfied over time with revenue recognized ratably over the contract term. Advanced services are distinct performance obligations that are satisfied over time with revenue recognized as services are delivered. Revenue billed in advance are treated as deferred revenue which was $72 and $322 as of December 31, 2023 and 2022, respectively.

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

Gift cards, customer rewards and prepaid packages

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

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

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

Naples Wax Center offers prepaid wax packages that are either unlimited for one year or a set number of services. When the packages are purchased, the sales are recorded as deferred revenue. As services related to prepaid packages are used,

revenue is recognized as income. The deferred revenue as of September 12, 2023, when Naples Wax Center was acquired was $811 and for the year ended December 31, 2023 deferred revenue was $778.

Segment reporting

ASC 280, Segment Reporting, establishes standards for reporting information about operating segments. Operating segments are defined as components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision maker, or decision-making group, in deciding how to allocate resources and in assessing performance. The Company’s chief operating decision maker is the Chief Executive Officer, who reviews the financial performance and the results of operations of the segments prepared in accordance with U.S. GAAP when making decisions about allocating resources and assessing performance of the Company. The Company currently has four reportable operating segments: XpresSpa. XpresTest, Naples Wax Center and Treat. See Note 15. Segment Information.

There are currently no intersegment revenues. Asset information by operating segment is presented below since the chief operating decision maker reviews this information by segment. The reporting segments follow the same accounting policies used in the preparation of the Company’s audited consolidated financial statements.

Pre-opening costs

Pre-opening and start-up activity costs, which include rent and occupancy, supplies, advertising, and other direct expenses incurred prior to the opening of a new store, are expensed in the period in which they are incurred.

Cost of sales

Cost of sales consists of location operating costs. These costs include all costs that are directly attributable to the location’s operations and include:

●

payroll and related benefits for the location’s operations and management;

●

rent, percentage rent and occupancy costs;

●

the cost of merchandise and testing supplies;

●

freight, shipping and handling costs;

●

production costs;

●

inventory shortage and valuation adjustments; and

●

costs associated with sourcing operations.

Stock-based compensation

Stock-based compensation is recognized as an expense in the consolidated statements of operations and comprehensive loss and such cost is measured at the grant-date fair value of the equity-settled award. 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 fair value of Restricted Stock Units (“RSUs”) is calculated as of the date of grant using the grant date closing share price multiplied by the number of RSUs granted. The expense is recognized on a straight-line basis, over the requisite service period. The Company uses the simplified method to estimate the expected term of options due to insufficient history and high turnover

in the past. Expected volatility is estimated based on a weighted average historical volatility of the Company. The risk-free rate for the expected term of the option is based on the United States Treasury yield curve as of the date of grant. The Company recognizes forfeitures as they occur. The Company issues new stock to deliver shares under its Equity Plan.

Income taxes

Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. A valuation allowance is provided for the amount of deferred tax assets that, based on available evidence, are not more likely than not to be realized. Tax benefits related to excess deductions on stock-based compensation arrangements are recognized when they reduce taxes payable.

In assessing the need for a valuation allowance, the Company looks at cumulative losses in recent years, estimates of future taxable earnings, feasibility of tax planning strategies, the ability to realize tax benefit carryforwards, and other relevant information. Valuation allowances related to deferred tax assets can be impacted by changes to tax laws, changes to statutory tax rates and future taxable earnings. Ultimately, the actual tax benefits to be realized will be based upon future taxable earnings levels, which are very difficult to predict. In the event that actual results differ from these estimates in future periods, the Company will be required to adjust the valuation allowance.

The Company recognizes the effect of income tax positions only if those positions are more likely than not of being sustained. Recognized income tax positions are measured at the largest amount that is greater than 50% of being realized. Changes in recognition or measurement are reflected in the period in which the change in judgment occurs. The Company had no uncertain tax positions as of December 31, 2023 and 2022.

Noncontrolling interests

Noncontrolling interests represent the noncontrolling holders’ percentage share of earnings or losses from; i) the subsidiaries, in which the Company holds a majority, but less than 100%, ownership interest, ii) Variable Interest Entities, where the Company is a primary beneficiary (See sub note Variable Interest Entities below, and the results of which are included in the Company’s consolidated statements of operations and comprehensive loss. Net loss attributable to noncontrolling interests represents the proportionate share of the noncontrolling holders’ ownership in certain subsidiaries of XpresSpa and of XpresTest.

Net income/(loss) per common share

Basic net income (loss) per share is computed by dividing the net income (loss) attributable to common shareholders for the period by the weighted-average number of shares of Common Stock outstanding during the period. Diluted net income (loss) per share is computed by dividing the net loss attributable to the Company for the period by the weighted-average number of shares of Common Stock plus dilutive potential Common Stock considered outstanding during the period.

Commitments and contingencies

Certain conditions may exist as of the date the financial statements are issued, which may result in a loss to the Company, but which will only be resolved when one or more future events occur or fail to occur.

The Company assesses such contingent liabilities, and such assessment inherently involves an exercise of judgment. In assessing loss contingencies related to legal proceedings that are pending against the Company or un-asserted claims that

may result in such proceedings, the Company evaluates the perceived merits of any legal proceedings or un-asserted claims as well as the perceived merits of the amount of relief sought or expected to be sought therein.

If the assessment of a contingency indicates that it is probable that a material loss has been incurred and the amount of the liability can be estimated, then the estimated liability would be accrued in the Company’s financial statements. If the assessment indicates that a potentially material loss contingency is not probable but is reasonably possible, or is probable but cannot be estimated, then the nature of the contingent liability, and an estimate of the range of possible losses, if determinable and material, would be disclosed. Loss contingencies considered remote are generally not disclosed unless they involve guarantees, in which case the guarantees would be disclosed. Legal costs expected to be incurred in connection with a loss contingency are expensed as incurred.

Variable Interest Entities

The Company evaluates its ownership, contractual, pecuniary, and other interests in entities to determine if it has any variable interest in a variable interest entity (“VIE”). These evaluations are complex and involve judgment. If the Company determines that an entity in which it holds a contractual or ownership interest is a VIE and that the Company is the primary beneficiary, the Company consolidates such entity in its consolidated financial statements. The primary beneficiary of a VIE is the party that meets both of the following criteria: (i) has the power to make decisions that most significantly affect the economic performance of the VIE; and (ii) has the obligation to absorb losses or the right to receive benefits that in either case could potentially be significant to the VIE. Management performs ongoing reassessments of whether changes in the facts and circumstances regarding the Company’s involvement with a VIE will cause the consolidation conclusion to change. Changes in consolidation status are applied prospectively.

As of the year ended December 31, 2023, there were no VIE’s remaining.

Business Combinations

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

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

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

Goodwill

Goodwill represents the cost of a business acquisition in excess of the fair value of the net assets acquired. Goodwill is not amortized and is reviewed for impairment annually, or more frequently if facts and circumstances indicate that it is more

likely than not that the fair value of a reporting unit is less than its carrying amount, including goodwill. If it is more likely than not that the fair value of a reporting unit is less than its carrying amount, the company performs a quantitative test to identify and measure the amount of goodwill impairment loss. The Company compares the fair value of the reporting unit with its carrying amount. If the carrying amount exceeds fair value, goodwill of the reporting unit is considered impaired, and that excess is recognized as a goodwill impairment loss.

During the quarter ended September 30, 2023, the Company identified a triggering event, related to the Goodwill associated with XpresTest’s HyperPointe business, and as a result recognized an impairment charge of $4,024, which is in the Goodwill impairment on the consolidated statements of operations and comprehensive loss.

Advertising Costs

Advertising costs are expensed as incurred. Advertising expenses amounted to approximately $696 and $4,645 for the years ended December 31, 2023 and 2022, respectively.

Fair value measurements

The Company measures fair value in accordance with ASC 820-10, Fair Value Measurements and Disclosures. ASC 820-10 clarifies that fair value is an exit price, representing the amount that would be received by selling an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or a liability. As a basis for considering such assumptions, ASC 820-10 establishes a three-tier value hierarchy, which prioritizes the inputs used in the valuation methodologies in measuring fair value:

Level 1: Unadjusted quoted prices in active markets for identical assets or liabilities accessible to the reporting entity at the measurement date.

Level 2: Other than quoted prices included in Level 1 inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the asset or liability.

Level 3: Unobservable inputs for the asset or liability used to measure fair value to the extent that observable inputs are not available, thereby allowing for situations in which there is little, if any, market activity for the asset or liability at measurement date.

The fair value hierarchy also requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value.

Reclassification

Certain balances in the 2022 consolidated financial statements have been reclassified to conform to the presentation in the 2023 consolidated financial statements, primarily the separate classification and presentation of general and administrative, salaries and benefits, impairments and loss on disposal of assets. Such reclassifications did not have a material impact on the consolidated financial statements.

Recently adopted accounting pronouncements

Accounting Standards Update No. 2020-06—Debt--Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40)

Issued in August 2020, this update is intended to reduce the unnecessary complexity of the current guidance thus resulting in more accurate accounting for convertible instruments and consistent treatment from one entity to the next. Under current GAAP, there are five accounting models for convertible debt instruments. Except for the traditional convertible debt model that recognizes a convertible debt instrument as a single debt instrument, the other four models, with their different measurement guidance, require that a convertible debt instrument be separated (using different separation approaches) into a debt component and an equity or a derivative component. Convertible preferred stock also is required to be assessed under similar models. The Financial Accounting Standard Board (“FASB”) decided to simplify the accounting for convertible instruments by removing certain separation models currently included in other accounting guidance that were being applied to current accounting for convertible instruments. Under the amendments in this update, an embedded conversion feature no longer needs to be separated from the host contract for convertible instruments with conversion features that are not required to be accounted for as derivatives. Consequently, a convertible debt instrument will be accounted for as a single liability measured at its amortized cost and a convertible preferred stock will be accounted for as a single equity instrument measured at its historical cost, as long as no other features require bifurcation and recognition as derivatives. The FASB also decided to add additional disclosure requirements in an attempt to improve the usefulness and relevance of the information being provided. The new standard is effective for fiscal years beginning after December 15, 2021, and interim periods within those fiscal years. The Company adopted ASU 2020-06 as of the reporting period beginning January 1, 2022. The adoption of this update did not have a material impact on the Company’s consolidated financial statements.

ASU 2021-04: Issuer’s Accounting for Certain Modifications or Exchanges of Freestanding Equity Classified Written Call Options

In May 2021, the FASB issued ASU 2021-04, “Issuer’s Accounting for Certain Modifications or Exchanges of Freestanding Equity Classified Written Call Options’” (“ASU 2021-04”), which introduces a new way for companies to account for warrants either as stock compensation or derivatives. Under the new guidance, if the modification does not change the instrument’s classification as equity, the company accounts for the modification as an exchange of the original instrument for a new instrument. In general, if the fair value of the “new” instrument is greater than the fair value of the “original” instrument, the excess is recognized based on the substance of the transaction, as if the issuer has paid cash. The effective date of the standard is for interim and annual reporting periods beginning after December 15, 2021 for all entities. The Company adopted ASU 2021-04 as of the reporting period beginning January 1, 2022. The adoption of this update did not have a material impact on the Company’s consolidated financial statements.

ASU 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers

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 adoption of this guidance did not have a material impact on our consolidated financial statements and related disclosures.

Recently Issued Accounting Standards

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

In November 2023, the Financial Accounting Standards Board (FASB) issued ASU No. 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures (ASU 2023-07), which requires an enhanced disclosure of

significant segment expenses on an annual and interim basis. This guidance will be effective for the annual periods beginning the year ended December 31, 2024, and for interim periods beginning January 1, 2025. Early adoption is permitted. Upon adoption, the guidance should be applied retrospectively to all prior periods presented in the financial statements. The Company is currently evaluating segment expense disclosures related to its annual report for fiscal year 2024.

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

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

Stock-based Compensation (Tables)

12 Months Ended

Dec. 31, 2023

Stock-based Compensation

Schedule of fair value of stock options estimated


Share price of the Company’s Common Stock on the grant date:	$	4.60 - 8.20
Exercise price:	$	4.60 - 8.20
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

The following tables summarize information about stock options and RSU activity during the year ended December 31, 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		4.65 - 8.00
Exercised/Vested	(19,063)		10.85	—		—
Forfeited	—		—	(16,699)		24.08		8.00 - 32.20
Expired	—		—	(31,666)		38.69		8.00 - 38,160
Outstanding as of December 31, 2023	11,944	$	6.08	341,205	$	26.85	$	4.60 - 49,200
Exercisable as of December 31, 2023				244,271	$	26.65	$	4.60 - 49,200

The following tables summarize information about stock options and RSU activity during the year ended December 31, 2022:


	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, 2021	30,000	$	32.60	141,344	$	51.40	$	23.80 - 49,200
Granted	26,563		16.80	117,517		29.20		13.00 - 32.80
Exercised/Vested	(42,500)		29.20	—		—
Forfeited	—		—	(12,252)		31.00		28.60 - 76.40
Expired	—		—	(5,108)		121.0		28.80 - 44,640
Outstanding as of December 31, 2022	14,063	$	13.00	241,501	$	40.00	$	13.00 - 49,200
Exercisable as of December 31, 2022				103,063	$	51.20	$	23.80 - 49,200

Intangible Assets - Schedule of Finite-Lived Intangible Assets, Amortization Expense (Details) - USD ($) $ in Thousands	Dec. 31, 2023	Dec. 31, 2022
Finite-Lived Intangible Assets, Amortization Expense, Maturity Schedule [Abstract]
2024	$ 316
2025	310
2026	229
2027	122
2028	122
Thereafter	254
Total	$ 1,353	$ 4,008

Net earnings/(loss) per Share of Common Stock

12 Months Ended

Dec. 31, 2023

Net earnings/(loss) per Share of Common Stock

Net earnings/(loss) per Share of Common Stock

Note 3. Net earnings/(loss) per Share of Common Stock

The table below presents the computation of basic and diluted (losses)/net earnings per common share:


	Year ended
	December 31,
	2023		2022
Basic numerator:
Net loss attributable to common shareholders	$	(27,741)	$	(32,837)
Basic denominator:
Basic weighted average shares outstanding		4,175,220		4,682,767
Basic loss per share	$	(6.64)	$	(7.01)

Net loss per share data presented above excludes from the calculation of diluted net loss, the following potentially dilutive securities, having an anti-dilutive impact, in case of net loss
Both vested and unvested options to purchase an equal number of shares of Common Stock		341,205		241,501
Unvested RSUs to issue an equal number of shares of Common Stock		11,944		14,063
Warrants to purchase an equal number of shares of Common Stock		—		58,605
Total number of potentially dilutive securities excluded from the calculation of earnings/(loss) per share attributable to common shareholders		353,149		314,169

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.

Fair Value Measurements

12 Months Ended

Dec. 31, 2023

Fair Value Measurements

Fair Value Measurements

Note 13. Fair Value Measurements

Fair value is the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. A fair value hierarchy exists, which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The three levels of inputs that may be used to measure fair value are:

Level 1: Inputs are quoted prices (unadjusted) for identical assets or liabilities in active markets.

Level 2: Pricing inputs are other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reported date.

Level 3: Unobservable inputs, that are supported by little or no market activity and are developed based on the best information available in the circumstances. For example, inputs derived through extrapolation or interpolation that cannot be corroborated by observable market data.

The following table presents the placement in the fair value hierarchy of the Company’s assets and liabilities measured at fair value on a recurring and nonrecurring basis as of December 31, 2023 and 2022. Assets and liabilities that are measured at fair value on a nonrecurring basis relate primarily to tangible property and equipment, right-of-use assets, and other intangible assets, which are remeasured when the derived fair value is below carrying value in the consolidated balance sheets. Recoverability is based on estimated undiscounted cash flows or other relevant observable/unobservable measures. For these assets, the Company does not periodically adjust carrying value to fair value except in the event of impairment. If it is determined that impairment has occurred, the carrying value of the asset is reduced to fair value and the difference

is included in Impairment of long-lived assets and Impairment of operating lease right-of-use assets on the consolidated statements of operations and comprehensive loss.


			Fair value measurement at reporting date using
			Quoted prices in
			active markets		Significant other		Significant
			for identical		observable		unobservable
	Balance		assets (Level 1)		inputs (Level 2)		inputs (Level 3)
As of December 31, 2023:
Recurring fair value measurements
Equity securities:
Route1, Inc.	$	50	$	—	$	50	$	—
Total equity securities		50		—		50		—
Total recurring fair value measurements	$	50	$	—	$	50	$	—
Nonrecurring fair value measurements
Property and equipment		2,454		—		—		2,454
Intangible assets		1,353		—		—		1,353
Total nonrecurring fair value measurements	$	3,807	$	—	$	—	$	3,807

As of December 31, 2022
Recurring fair value measurements
Equity securities:
Route1, Inc.	$	104	$	—	$	104	$	—
Total equity securities		104		—		104		—
Total recurring fair value measurements	$	104	$	—	$	104	$	—
Nonrecurring fair value measurements
Intangible assets		4,008		—		—		4,008
Total nonrecurring fair value measurements	$	4,008	$	—	$	—	$	4,008

In addition to the above, the Company’s financial instruments as of December 31, 2023 and 2022 consisted of cash and cash equivalents, receivables and accounts payable. The carrying amounts of all the aforementioned financial instruments approximate fair value because of the short-term maturities of these instruments.

The fair values of the Company’s asset groups were determined using the income approach. The income approach incorporated the use of a discounted cash flow method in which the estimated future cash flows and terminal values for the Company were discounted to a present value using a discount rate. Cash flow projections are based on management’s estimates of economic and market conditions which drive key assumptions of revenue growth rates, operating margins, capital expenditures and working capital requirements. The discount rate in turn is based on the specific risk characteristics of the Company, the weighted average cost of capital and its underlying forecast.

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

+ References + Details

Other Current Assets

12 Months Ended

Dec. 31, 2023

Other Current Assets

Other Current Assets

Note 5. Other Current Assets

As of December 31, 2023, and 2022, the Company’s other current assets were comprised of the following:


	December 31, 2023		December 31, 2022
Prepaid expenses	$	894	$	1,074
Other		55		48
Total other current assets	$	949	$	1,122

Prepaid expenses are predominantly comprised of financed and prepaid insurance policies which have terms of one year or less.

Restatement of Previously Issued Financial Statements - Statements of Balance Sheets (Parenthetical) (Details) - $ / shares	Dec. 31, 2023	Sep. 30, 2023	Dec. 31, 2022	Oct. 24, 2022
Reclassification [Line Items]
Common stock, par value	$ 0.01	$ 0.01	$ 0.01	$ 0.01
Common stock, authorized	150,000,000	150,000,000	150,000,000
Common stock, issued	4,179,631	4,174,381	4,161,613
Common stock, outstanding	4,179,631	4,174,381	4,161,613

Commitments and Contingencies (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
OTG Management PHL B
Loss Contingencies [Line Items]
Lease term	12 years
Accounts payable, 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

Acquisition of Naples Wax, LLC (Details) - USD ($) $ in Thousands	Sep. 12, 2023	Dec. 31, 2023	Dec. 31, 2022
Acquisition of Naples Wax, LLC
Goodwill		$ 1,371	$ 4,024
Fair value of assets acquired and liabilities assumed
Goodwill		$ 1,371	$ 4,024
Naples Wax LLC
Acquisition of Naples Wax, LLC
Aggregate purchase price paid in cash	$ 1,574
Consideration paid	1,624
Consideration held back to cover potential indemnification claims	$ 50
Consideration held back term	6 months
Percentage of units acquired		100.00%
Goodwill	$ 1,371	$ 1,371
Fair value of assets acquired and liabilities assumed
Cash and cash equivalents	180
Prepaid expenses and other assets	13
Deferred revenue	(811)
Accounts payable	(25)
Accrued expenses and other liabilities	(4)
Total fair value of assets acquired and liabilities assumed	253
Goodwill	1,371	$ 1,371
Naples Wax LLC \| Customer relationships
Fair value of assets acquired and liabilities assumed
Other intangible assets, net	700
Naples Wax LLC \| Trade names
Fair value of assets acquired and liabilities assumed
Other intangible assets, net	$ 200

Acquisition of Naples Wax, LLC (Tables)

12 Months Ended

Dec. 31, 2023

Business Acquisition [Line Items]

Schedule of recognized identified assets acquired and liabilities assumed


Consideration paid	$	1,624

Fair value of assets acquired and liabilities assumed

Cash and cash equivalents	$	180
Prepaid expenses and other assets		13
Customer relationships		700
Trade name		200

Deferred revenue		(811)
Accounts payable		(25)
Accrued expenses and other liabilities		(4)
Total fair value of assets acquired and liabilities assumed		253
Goodwill	$	1,371

Naples Wax LLC | Customer relationships

Business Acquisition [Line Items]

Schedule of significant assumptions utilized in valuation of intangible assets


Customer relationships Attrition Rate	15.00	%

Existing Customer Growth	75.00	%

Business Development Expense for New Customers	5.70	%

Customer relationships Discount Rate	31.00	%

Estimated Remaining Economic Life (Years) (approx.)	7	yrs

Naples Wax LLC | Trade names

Business Acquisition [Line Items]

Schedule of significant assumptions utilized in valuation of intangible assets


% of Revenue Attributable to Trade Name	100.00	%

Royalty Rate	2.00	%

Trade Name Discount Rate	31.00	%

Remaining Economic Life (Years)	9	yrs

General

12 Months Ended

Dec. 31, 2023

General

General

Note 1. General

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. In pursuance, the Company amended and restated its certificate of incorporation filed with the Delaware Secretary of State on October 24, 2022 (the “Amended and Restated Certificate”). Rebranding to XWELL aligned the Company’s corporate strategy to build a pure-play health and wellness services company, both in the airport and off airport marketplaces.

In addition, prior to filing the Amended and Restated Certificate, the Company filed a Certificate of Elimination (the “Certificate of Elimination”) with respect to its Series A Convertible Preferred Stock, par value $0.01 per share, Series D Convertible Preferred Stock, par value $0.01 per share, Series E Convertible Preferred Stock, par value $0.01 per share, and Series F Convertible Preferred Stock, par value $0.01 per share (collectively, the “Eliminated Preferred Stock”) with the Delaware Secretary of State, becoming effective as of at 11:59 p.m., Eastern Time on October 24, 2022.

The Certificate of Elimination (i) eliminated the previous designation of 6,968 shares of Series A Convertible Preferred Stock, none of which were outstanding at the time of filing, (ii) eliminated the previous designation of 500,000 shares of Series D Convertible Preferred Stock, none of which were outstanding at the time of filing, (iii) eliminated the previous designation of 2,397,060 shares of Series E Convertible Preferred Stock, none of which were outstanding at the time of filing, (iv) eliminated the previous designation of 9,000 shares of Series F Convertible Preferred Stock, none of which were outstanding at the time of filing, (v) caused such shares of Eliminated Preferred Stock to resume the status of authorized but unissued shares of preferred stock of the Company and (vi) eliminated all reference to the Eliminated Preferred Stock from the Company’s Certificate of Incorporation filed with the Secretary of State of the State of Delaware and effective prior to the effective time of the Amended and Restated Certificate.

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

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. Most of XpresSpa spa locations were closed between March 2020 and September 2021, largely due to the airport traffic remaining at insufficient levels to support operations at a unit level.

As of December 31, 2023, there were 21 domestic XpresSpa locations in total, 19 Company owned and 2 franchises. The Company also had 11 international locations operating as of December 31, 2023, including two XpresSpa locations in Dubai International Airport in the United Arab Emirates, one XpresSpa location in Zayad International Airport in Abu Dhabi UAE, three XpresSpa locations in Schiphol Amsterdam Airport in the Netherlands and five XpresSpa locations in Istanbul Airport in Turkey.

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

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

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

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, Treat opened a new location in Phoenix Sky Harbor International Airport but by the fourth quarter of 2022, the decision was made to close this location. The remaining Treat locations offer a full retail product offering and a suite of wellness and spa services. Travelers can purchase time blocks to use our wellness rooms to engage in interactive services like self-guided yoga, meditation and low impact weight exercises or to relax and unplug from the hectic pace of the airport and renew themselves before or after their trip.

XWELL’s subsidiary Naples Wax Center, LLC, which was acquired on September 12, 2023, for a purchase price of $1,624 operates a group of upscale hair removal boutiques in Florida. There are currently three Naples Wax Center locations with core products and service offerings from face and body waxing to a range of skincare and cosmetic products.

Liquidity and Financial Condition

As of December 31, 2023, the Company had approximately $8,437 of cash and cash equivalents, $14,613 in marketable securities, and total current assets of approximately $26,566. The Company’s total current liabilities balance, which includes accounts payable, deferred revenue, accrued expenses, and operating lease liabilities was approximately $9,330 as of December 31, 2023. The working capital surplus was $17,236 as of December 31, 2023, compared to a working capital surplus of $36,376 as of December 31, 2022.

The Company has significantly reduced operating and overhead expenses in the second half of 2022 and 2023, while it continues to focus on returning to overall profitability.

The Company has taken actions to improve its overall cash position, right sizing its corporate structure and streamlining its operations, while at the same time the Company is aggressively trying to get the company to profitability which the Company believes will strengthen the Company’s stock price and put the Company in a stronger position to be able to raise capital in 2024 and beyond. The Company is aggressively pursuing strategic partnerships that the Company expects will further strengthen the long-term profitability of the business, which puts the Company in a position of strength as the Company raise more capital.

Leases (Tables)

12 Months Ended

Dec. 31, 2023

Leases

Schedule of supplemental cash flow information related to leases


	Year ended December 31,
	2023		2022
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	(3,483)	$	(4,092)
Leased assets obtained in exchange for new and modified operating lease liabilities	$	174	$	6,891
Leased assets surrendered in exchange for termination of operating lease liabilities	$	—	$	—

Schedule of future minimum commitments


Calendar Years ending December 31,	Amount
2024	$	3,105
2025		2,714
2026		1,628
2027		1,505
2028		1,125
Thereafter		3,313
Total future lease payments		13,390
Less: interest expense at incremental borrowing rate		(2,296)
Net present value of lease liabilities	$	11,094

Schedule of other assumptions and pertinent information


Weighted average remaining lease term:	5.94	years
Weighted average discount rate used to determine present value of operating lease liability:	7.25	%

Restatement of Previously Issued Financial Statements - Statements of Cash Flows (Details) - USD ($) $ in Thousands	3 Months Ended			9 Months Ended	12 Months Ended
	Sep. 30, 2023	Jun. 30, 2023	Mar. 31, 2023	Sep. 30, 2023	Dec. 31, 2023	Dec. 31, 2022
Cash flows from operating activities
Net loss	$ (11,591)			$ (23,099)	$ (28,029)	$ (32,629)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	590			1,770	2,065	5,429
Impairment of long lived assets				8,395	1,159	4,559
Foreign currency remeasurement loss				690	738
Loss on disposal of assets, net				34	34	834
Gain on lease termination				(821)	(821)
Unrealized gain on marketable securities				(668)	(877)
Amortization of operating lease right of use asset				1,163	1,481	1,844
Stock-based compensation				1,832	2,319	3,770
Loss on equity investment				53	54	618
Changes in assets and liabilities:
Decrease in inventory				192	261	592
Decrease (increase) in accounts receivable				1,665	1,191	(1,835)
Decrease (increase) in other assets, current and non-current				(336)	512	(457)
Decrease (increase) in deferred revenue				(266)	(289)	(933)
Decrease in other liabilities, current and non-current				(3,226)	(3,105)	(4,056)
Decrease in accounts payable				(251)	(488)	(3,247)
Net cash used in operating activities				(12,873)	(16,074)	(24,188)
Cash flows from investing activities
Acquisition of property and equipment				(1,639)	(1,905)	(6,464)
Investment in marketable securities				(1,991)		(23,153)
Sale of marketable securities				4,500	9,417
Acquisition of intangibles				(468)	(468)	(373)
Net cash provided by (used in) investing activities				(1,172)	5,650	(34,843)
Cash flows from financing activities
Contributions from noncontrolling interests				150	150	1,025
Payments for shares withheld on vesting				(22)	(22)	(73)
Distributions to noncontrolling interests				(120)	(120)	(956)
Net cash provided by (used in) financing activities				8	8	(27,377)
Effect of exchange rate changes on cash, cash equivalents and restricted cash				(174)	(185)	(60)
Decrease in cash, cash equivalents and restricted cash				(14,211)	(10,601)	(86,468)
Cash, cash equivalents, and restricted cash at beginning of the year			$ 19,789	19,789	19,789	106,257
Cash, cash equivalents, and restricted cash at end of the year	5,578			5,578	9,188	19,789
Cash paid for
Income taxes				142
Non-cash investing and financing transactions
Capital expenditures included in Accounts payable, accrued expenses and other current liabilities				197	17	544
Previously Reported
Cash flows from operating activities
Net loss	(9,978)	$ (5,679)	(5,829)	(21,486)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	590			1,770
Impairment of long lived assets				6,782
Foreign currency remeasurement loss				690
Loss on disposal of assets, net				34
Gain on lease termination				(821)
Unrealized gain on marketable securities				(668)
Amortization of operating lease right of use asset				1,163
Stock-based compensation				1,832
Loss on equity investment				53
Changes in assets and liabilities:
Decrease in inventory				192
Decrease (increase) in accounts receivable				1,665
Decrease (increase) in other assets, current and non-current				(336)
Decrease (increase) in deferred revenue				(266)
Decrease in other liabilities, current and non-current				(3,226)
Decrease in accounts payable				(251)
Net cash used in operating activities				(12,873)
Cash flows from investing activities
Acquisition of property and equipment				(1,639)
Investment in marketable securities				(1,991)
Sale of marketable securities				4,500
Acquisition of intangibles				(468)
Net cash provided by (used in) investing activities				(1,172)
Cash flows from financing activities
Contributions from noncontrolling interests				150
Payments for shares withheld on vesting				(22)
Distributions to noncontrolling interests				(120)
Net cash provided by (used in) financing activities				8
Effect of exchange rate changes on cash, cash equivalents and restricted cash				(174)
Decrease in cash, cash equivalents and restricted cash				(14,211)
Cash, cash equivalents, and restricted cash at beginning of the year			$ 19,789	19,789	19,789
Cash, cash equivalents, and restricted cash at end of the year	5,578			5,578		$ 19,789
Cash paid for
Income taxes				142
Non-cash investing and financing transactions
Capital expenditures included in Accounts payable, accrued expenses and other current liabilities				197
Restatement Adjustments
Cash flows from operating activities
Net loss	$ (1,613)			(1,613)
Adjustments to reconcile net loss to net cash used in operating activities:
Impairment of long lived assets				1,613
Naples Wax LLC
Cash flows from investing activities
Acquisition net of cash assumed				(1,574)	$ (1,394)
Naples Wax LLC \| Previously Reported
Cash flows from investing activities
Acquisition net of cash assumed				$ (1,574)

Income Taxes (Tables)

12 Months Ended

Dec. 31, 2023

Income Taxes.

Schedule of loss before income taxes, domestic and foreign


	2023		2022
Domestic	$	(27,573)	$	(32,445)
Foreign		(421)		(129)
	$	(27,994)	$	(32,574)

Schedule of components of income tax expense (benefit)


	For the years ended December 31,
	2023		2022
Current:
Federal	$	—	$	—
State		15		41
Foreign		20		14
Deferred:
Federal		—		—
	$	35	$	55

Schedule of effective income tax rate reconciliation


	For the years ended December 31,
	2023			2022
Loss from operations before income taxes	$	(27,994)		$	(32,574)
Tax rate		21	%		21	%

Computed “expected” tax benefit		(5,879)			(6,841)
State taxes, net of federal income tax (expense) benefit		(1,027)			706
Change in valuation allowance		9,166			7,015
Adjustment JV Basis		—			339
Nondeductible expenses		212			341
Other Adjustments		2			—
Return to Provision Adjustment		(1,860)			(94)
International Rate Differential		(14)			—
State Deferred Rate Change		(87)			(570)
Asset Impairment Adjustment		(730)			(810)
Other items		252			(31)
Income tax expense	$	35		$	55

Schedule of deferred tax assets and liabilities


	December 31,
	2023		2022
Deferred income tax assets
Net operating loss carryforwards	$	60,263	$	51,932
Stock-based compensation		1,532		1,029
Intangible assets and other		7,629		7,298
Net deferred income tax assets		69,424		60,259
Less:
Valuation allowance		(69,424)		(60,259)
Net deferred income tax assets	$	—	$	—

Summary of valuation allowance


As of January 1, 2022	$	53,298
Charged to cost and expenses		6,864
Return to provision true-up and other		97
As of December 31, 2022		60,259
Charged to cost and expenses		7,299
Return to provision true-up and other		1,866
As of December 31, 2023	$	69,424

Stockholders' Equity and Warrants (Tables)

12 Months Ended

Dec. 31, 2023

Stockholders' Equity and Warrants

Schedule of information about all warrant activity


		Weighted average		Exercise
	No. of warrant	exercise price		price range
December 31, 2022	58,605	$	40.00	$	34 - 42.5
Granted	—	$	—	$
Exercised	—	$	—	$
Expired	(58,605)	$	40.00	$	34 - 42.5
December 31, 2023	—	$	—		—

CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
Cash flows from operating activities
Net loss	$ (28,029)	$ (32,629)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	2,065	5,429
Impairment of fixed assets	1,159	4,559
Impairment of goodwill	4,024
Impairment of intangible assets	2,768	110
Impairment of operating lease right-of-use assets	926	1,110
Unrealized gain on marketable securities	(877)
Foreign currency remeasurement loss	738
Loss on disposal of assets, net	34	834
Gain on lease termination	(821)
Amortization of operating lease right of use asset	1,481	1,844
Issuance of shares of Common Stock for services	3	103
Stock-based compensation	2,319	3,770
Loss on equity investment	54	618
Changes in assets and liabilities:
Decrease in inventory	261	592
Decrease (increase) in accounts receivable	1,191	(1,835)
Decrease (increase) in deferred revenue	(289)	(933)
Decrease (increase) in other assets, current and non-current	512	(457)
Decrease in other liabilities, current and non-current	(3,105)	(4,056)
Decrease in accounts payable	(488)	(3,247)
Net cash used in operating activities	(16,074)	(24,188)
Cash flows from investing activities
Acquisition of property and equipment	(1,905)	(6,464)
Investment in marketable securities		(23,153)
Sale of marketable securities	9,417
Acquisition of intangibles	(468)	(373)
Net cash provided by (used in) investing activities	5,650	(34,843)
Cash flows from financing activities
Repurchase of Common Stock		(23,789)
Contributions from noncontrolling interests	150	1,025
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	(27,377)
Effect of exchange rate changes on cash, cash equivalents and restricted cash	(185)	(60)
Decrease in cash, cash equivalents and restricted cash	(10,601)	(86,468)
Cash, cash equivalents, and restricted cash at beginning of the year	19,789	106,257
Cash, cash equivalents, and restricted cash at end of the year	9,188	19,789
Cash paid for
Interest		10
Income taxes	35	55
Non-cash investing and financing transactions
Capital expenditures included in Accounts payable, accrued expenses and other current liabilities	17	544
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	$ (1,394)
HyperPointe
Cash flows from investing activities
Acquisition net of cash assumed		$ (4,853)

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS - USD ($)
$ in Thousands

12 Months Ended

Dec. 31, 2023

Dec. 31, 2022

Revenue, net

Total revenue, net

$ 30,109

$ 55,939

Cost of sales

Labor

17,932

21,437

Occupancy

4,473

4,138

Products and other operating costs

4,023

18,316

Total cost of sales

26,428

43,891

Gross Profit

3,681

12,048

Depreciation and amortization

2,065

5,429

Impairment of long-lived assets

3,927

4,669

Goodwill impairment

4,024

Loss on disposal of assets, net

834

Impairment of operating lease right-of-use assets

926

1,110

General and administrative

12,957

21,178

Salaries and benefits

7,954

9,991

Total operating expenses

31,887

43,211

Operating loss

(28,206)

(31,163)

Interest income, net

448

384

Foreign exchange loss

(738)

(664)

Gain on securities, realized and unrealized

912

Other non-operating expense, net

(410)

(1,131)

Loss before income taxes

(27,994)

(32,574)

Income tax expense

(35)

(55)

Net loss

(28,029)

(32,629)

Net (income) loss attributable to noncontrolling interests

288

(208)

Net loss attributable to XWELL, Inc.

(27,741)

(32,837)

Net loss

(28,029)

(32,629)

Foreign currency translation

(1,390)

(222)

Comprehensive loss

$ (29,419)

$ (32,851)

Loss per share

Basic loss per share (in dollars per share)

$ (6.64)

$ (7.01)

Diluted loss per share (in dollars per share)

$ (6.64)

$ (7.01)

Weighted-average number of shares outstanding during the period

Basic (in shares)

^[1]

4,175,220

4,682,767

Diluted (in shares)

^[1]

4,175,220

4,682,767

Patient services revenue

Revenue, net

Total revenue, net

$ 250

$ 32,776

Services

Revenue, net

Total revenue, net

27,053

21,227

Products

Revenue, net

Total revenue, net

2,766

1,930

Other

Revenue, net

Total revenue, net

$ 40

$ 6

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

Other Current Assets (Tables)

12 Months Ended

Dec. 31, 2023

Other Current Assets

Schedule of other current assets


	December 31, 2023		December 31, 2022
Prepaid expenses	$	894	$	1,074
Other		55		48
Total other current assets	$	949	$	1,122

Accrued Expenses and Other Current Liabilities

12 Months Ended

Dec. 31, 2023

Accrued Expenses and Other Current Liabilities

Accrued Expenses and Other Current Liabilities

Note 16. Accrued Expenses and Other Current Liabilities

As of December 31, 2023, and 2022, the Company’s accrued expenses and other current liabilities were comprised of the following:


	December 31, 2023		December 31, 2022
Litigation accrual	$	449	$	963
Accrued compensation		2,098		2,008
Tax-related liabilities		501		573
Common area maintenance accruals		8		160
AP Accruals		913		754
Gift certificates		509		496
Credit card processing fees		8		33
Other miscellaneous accruals		482		732
Total accrued expenses and other current liabilities	$	4,968	$	5,719

Restatement of Previously Issued Financial Statements - Statements of Changes in Equity (Parenthetical) (Details)	Sep. 28, 2023
Restatement of Previously Issued Financial Statements
Reverse stock split conversion ratio	0.05

Segment Information (Tables)

12 Months Ended

Dec. 31, 2023

Segment Information

Schedule of revenue from external customers and long-lived assets, by geographical areas


	For the years ended
	December 31,
	2023		2022
Revenue
United States	$	24,944	$	52,250
All other countries		5,165		3,689
Total revenue	$	30,109	$	55,939
Long-lived assets
United States	$	8,169	$	15,084
All other countries		2,669		3,710
Total long-lived assets	$	10,838	$	18,794

Schedule of segment reporting information, by segment


	For the years ended
	December 31,
	2023		2022
Revenue
XpresSpa	$	19,067	$	13,680
XpresTest		9,912		40,867
Naples Wax		686		—
Treat		444		1,392
Corporate and other		—		—
Total revenue	$	30,109	$	55,939

	For the years ended
	December 31,
	2023		2022
Operating loss
XpresSpa	$	(12,951)	$	(12,910)
XpresTest		(4,701)		1,238
Naples Wax		162		—
Treat		(2,315)		(10,577)
Corporate and other		(8,401)		(8,914)
Total operating loss	$	(28,206)	$	(31,163)

	For the years ended
	December 31,
	2023		2022
Depreciation & Amortization
XpresSpa	$	1,443	$	1,479
XpresTest		276		2,043
Naples Wax		36		—
Treat		264		1,876
Corporate and other		46		31
Total depreciation & amortization	$	2,065	$	5,429

	For the years ended
	December 31,
	2023		2022
Capital Expenditures
XpresSpa	$	1,678	$	2,134
XpresTest		82		775
Naples Wax		—		—
Treat		60		3,274
Corporate and other		27		110
Total capital expenditures	$	1,847	$	6,293

	As of December 31,
	2023		2022
Long-lived Assets
XpresSpa	$	8,268		11,851
XpresTest		92		4,220
Naples Wax		1,371		—
Treat		669		2,314
Corporate and other		438		409
Total long-lived Assets	$	10,838	$	18,794

	As of December 31,
	2023		2022
Assets
XpresSpa	$	18,453	$	21,135
XpresTest		2,408		11,198
Naples Wax		2,951		—
Treat		848		3,186
Corporate and other		14,333		34,907
Total assets	$	38,993	$	70,426

Cash, Cash Equivalents, and Restricted Cash

12 Months Ended

Dec. 31, 2023

Cash, Cash Equivalents, and Restricted Cash

Cash, Cash Equivalents, and Restricted Cash

Note 4. Cash, Cash Equivalents, and Restricted Cash


	December 31, 2023		December 31, 2022
Cash denominated in United States dollars	$	5,726	$	16,344
Cash denominated in currency other than United States dollars		2,395		2,562
Restricted cash		751		751
Credit and debit card receivables		316		132
Total cash, cash equivalents and restricted cash	$	9,188	$	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. At December 31, 2023 and 2022, deposits in excess of FDIC limits were $4,195 and $16,069. As of December 31, 2023 and 2022, the Company held cash balances in overseas accounts, totaling $2,395 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.

Stockholders' Equity and Warrants (Details) $ / shares in Units, $ in Thousands			1 Months Ended		12 Months Ended
	Sep. 28, 2023 item	Aug. 16, 2022 USD ($)	May 31, 2022 shares	Aug. 31, 2021 shares	Dec. 31, 2023 $ / shares shares
Warrants [Line Items]
Threshold value of shares repurchases \| $		$ 1,000
Reverse stock split, conversion ratio	0.05
Reverse stock split, Multiplying factor for price per share \| item	20
Share Repurchase Program
Warrants [Line Items]
Repurchase of common stock (in shares) \| shares			10	15
Warrants
Warrants [Line Items]
Outstanding, Opening Balance \| shares					58,605
Expired \| shares					(58,605)
Weighted average exercise price, Beginning Balance					$ 40.00
Weighted average exercise price, Expired					40.00
Warrants \| Minimum
Warrants [Line Items]
Exercise price range, Beginning Balance					34
Exercise price range, Expired					34
Warrants \| Maximum
Warrants [Line Items]
Exercise price range, Beginning Balance					42.5
Exercise price range, Expired					$ 42.5

Intangible Assets (Details) - USD ($) $ in Thousands	12 Months Ended
Intangible Assets (Details) - USD ($) $ in Thousands	Dec. 31, 2023	Dec. 31, 2022
Finite-Lived Intangible Assets [Line Items]
Impairment of intangible assets	$ 2,768	$ 110
Impairment, Intangible Asset, Finite-Lived, Statement of Income or Comprehensive Income [Extensible Enumeration]	Impairment of Long-Lived Assets Held-for-use	Impairment of Long-Lived Assets Held-for-use
Amortization expense	$ 1,240	$ 1,766
Minimum \| HyperPointe
Finite-Lived Intangible Assets [Line Items]
Expected useful lives (in years)	5 years
Maximum \| HyperPointe
Finite-Lived Intangible Assets [Line Items]
Expected useful lives (in years)	12 years
Trade names
Finite-Lived Intangible Assets [Line Items]
Expected useful lives (in years)	6 years
Software
Finite-Lived Intangible Assets [Line Items]
Impairment of intangible assets		$ 110
Software \| Minimum
Finite-Lived Intangible Assets [Line Items]
Expected useful lives (in years)	3 years
Software \| Maximum
Finite-Lived Intangible Assets [Line Items]
Expected useful lives (in years)	5 years
Trade names, customer relationships and software
Finite-Lived Intangible Assets [Line Items]
Impairment of intangible assets	$ 2,768

Property and Equipment

12 Months Ended

Dec. 31, 2023

Property and Equipment

Property and Equipment

Note 6. Property and Equipment

Property and equipment are comprised of three categories: leasehold improvements, furniture and fixtures, and other operating equipment as of December 31, 2023 and 2022 as follows:


	December 31,
	2023		2022		Useful Life
Leasehold improvements	$	5,848	$	8,692	Average 5-8 years
Furniture and fixtures		821		1,214	3-4 years
Other operating equipment		680		760	Maximum 5 years
		7,349		10,666
Accumulated depreciation		(4,895)		(7,000)
Total property and equipment, net	$	2,454	$	3,666

Depreciation is computed using the straight-line method over the estimated useful lives of the related assets. Leasehold improvements are depreciated over the shorter of remaining lease term or economic useful life (which is on average 5-8 years).

The Company performed assessments of its property and equipment for impairment for the years ended December 31, 2023 and 2022 and based upon the results of the impairment tests, the Company recorded impairment expenses of approximately $1,159 and $4,559, respectively, which is included in Impairment of long-lived assets on the consolidated statements of operations and comprehensive loss. The impairment expense is primarily related to the underperformance of the Company’s Treat locations at the JFK and Salt Lake City airports.

During the years ended December 31, 2023 and 2022, the Company recorded $825 and $3,663 respectively of depreciation expense.

Other Assets (Details) - USD ($) $ in Thousands	12 Months Ended
Other Assets (Details) - USD ($) $ in Thousands	Dec. 31, 2023	Dec. 31, 2022
Security deposits	$ 1,556	$ 1,973
Other nonoperating income expense
Unrealized loss on remeasurement of common stock and/or warrants	54	618
Route1 Inc
Fair value of the investment	$ 50	$ 104

Income Taxes - Changes to Valuation Allowance (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
Income Taxes [Line Items]
Beginning Balance	$ 60,259	$ 53,298
Return to provision true-up and other	1,866	97
Ending Balance	69,424	60,259
Continuing Operations
Income Taxes [Line Items]
Charged to cost and expenses	$ 7,299	$ 6,864

Leases - Future Minimum Commitments (Details) $ in Thousands	Dec. 31, 2023 USD ($)
Leases
2024	$ 3,105
2025	2,714
2026	1,628
2027	1,505
2028	1,125
Thereafter	3,313
Total future lease payments	13,390
Less: interest expense at incremental borrowing rate	(2,296)
Net present value of lease liabilities	$ 11,094

Document and Entity Information - USD ($)	12 Months Ended
Document and Entity Information - USD ($)	Dec. 31, 2023	Apr. 15, 2024	Jun. 30, 2023
Document and Entity Information
Document Type	10-K
Document Annual Report	true
Document Period End Date	Dec. 31, 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 Well-known Seasoned Issuer	No
Entity Voluntary Filers	No
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
ICFR Auditor Attestation Flag	false
Document Financial Statement Error Correction [Flag]	true
Document Financial Statement Restatement Recovery Analysis [Flag]	false
Entity Shell Company	false
Entity Public Float			$ 16,663,729
Entity Common Stock, Shares Outstanding		4,183,435
Auditor Name	Marcum LLP
Auditor Location	East Hanover, New Jersey
Auditor Firm ID	688
Entity Central Index Key	0001410428
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2023
Document Fiscal Period Focus	FY
Amendment Flag	false

Net earnings/(loss) per Share of Common Stock (Tables)

12 Months Ended

Dec. 31, 2023

Net earnings/(loss) per Share of Common Stock

Schedule of computation of basic and diluted (losses)/net earnings per common share


	Year ended
	December 31,
	2023		2022
Basic numerator:
Net loss attributable to common shareholders	$	(27,741)	$	(32,837)
Basic denominator:
Basic weighted average shares outstanding		4,175,220		4,682,767
Basic loss per share	$	(6.64)	$	(7.01)

Net loss per share data presented above excludes from the calculation of diluted net loss, the following potentially dilutive securities, having an anti-dilutive impact, in case of net loss
Both vested and unvested options to purchase an equal number of shares of Common Stock		341,205		241,501
Unvested RSUs to issue an equal number of shares of Common Stock		11,944		14,063
Warrants to purchase an equal number of shares of Common Stock		—		58,605
Total number of potentially dilutive securities excluded from the calculation of earnings/(loss) per share attributable to common shareholders		353,149		314,169

Other Assets

12 Months Ended

Dec. 31, 2023

Other Assets

Other Assets

Note 7. Other Assets

Other assets in the consolidated balance sheets are comprised of the following as of December 31, 2023 and 2022:


	December 31, 2023		December 31, 2022
Equity investments	$	50	$	104
Lease deposits		1,556		1,973
Other		236		292
Other assets	$	1,842	$	2,369

As of December 31, 2023 and 2022, the equity investment in Route1 had a readily determinable fair value of $50 and $104, respectively. The Company recorded an unrealized loss of $54 in 2023 and an unrealized loss of $618 in 2022, in connection with the remeasurement of the shares of our common stock of Route1 it obtained in the 2018 sale of Group Mobile to Route1. The loss/gain is included in Other non-operating income (expense), net on the consolidated statement of operations and comprehensive income (loss) for the years ended December 31, 2023 and 2022.

Also included in Other assets as of December 31, 2023 and 2022 were $1,556 and $1,973, respectively, of security deposits made pursuant to various lease agreements, which will be returned to the Company at the end of the leases.

Accrued Expenses and Other Current Liabilities (Tables)

12 Months Ended

Dec. 31, 2023

Accrued Expenses and Other Current Liabilities

Schedule of accrued expenses and other current liabilities


	December 31, 2023		December 31, 2022
Litigation accrual	$	449	$	963
Accrued compensation		2,098		2,008
Tax-related liabilities		501		573
Common area maintenance accruals		8		160
AP Accruals		913		754
Gift certificates		509		496
Credit card processing fees		8		33
Other miscellaneous accruals		482		732
Total accrued expenses and other current liabilities	$	4,968	$	5,719

Accrued Expenses and Other Current Liabilities - Schedule of Accrued Expenses and Other Current Liabilities (Details) - USD ($) $ in Thousands	Dec. 31, 2023	Sep. 30, 2023	Dec. 31, 2022
Accrued Expenses and Other Current Liabilities
Litigation accrual	$ 449		$ 963
Accrued compensation	2,098		2,008
Tax-related liabilities	501		573
Common area maintenance accruals	8		160
AP Accruals	913		754
Gift certificates	509		496
Credit card processing fees	8		33
Other miscellaneous accruals	482		732
Total accrued expenses and other current liabilities	$ 4,968	$ 4,198	$ 5,719

Acquisition of Naples Wax, LLC - Fair value assumptions of intangible assets (Details) - Income approach - Naples Wax LLC	Dec. 31, 2023 Y
Customer relationships \| Attrition rate
Acquisition of Naples Wax, LLC
Acquired finite lived intangible asset, measurement input	15.00
Customer relationships \| Existing customer growth
Acquisition of Naples Wax, LLC
Acquired finite lived intangible asset, measurement input	75.00
Customer relationships \| Business development expense for new customers
Acquisition of Naples Wax, LLC
Acquired finite lived intangible asset, measurement input	5.70
Customer relationships \| Discount rate
Acquisition of Naples Wax, LLC
Acquired finite lived intangible asset, measurement input	31.00
Customer relationships \| Estimated remaining economic life (Years)
Acquisition of Naples Wax, LLC
Acquired finite lived intangible asset, measurement input	7
Trade names \| Discount rate
Acquisition of Naples Wax, LLC
Acquired finite lived intangible asset, measurement input	31.00
Trade names \| Estimated remaining economic life (Years)
Acquisition of Naples Wax, LLC
Acquired finite lived intangible asset, measurement input	9
Trade names \| Percent of revenue attributable to intangible assets
Acquisition of Naples Wax, LLC
Acquired finite lived intangible asset, measurement input	100.00
Trade names \| Royalty rate
Acquisition of Naples Wax, LLC
Acquired finite lived intangible asset, measurement input	2.00

Accounting and Reporting Policies

12 Months Ended

Dec. 31, 2023

Accounting and Reporting Policies

Accounting and Reporting Policies

Note 2. Accounting and Reporting Policies

Basis of presentation and principles of consolidation

Use of estimates

Translation into United States dollars

Cash and cash equivalents

Accounts Receivables

Inventory

All inventory is valued at the lower of cost or net realizable value. Cost is determined using a weighted-average cost method.

Intangible assets

The Company also impaired intangible assets pertaining to its Treat and XpresTest segments.

Property and Equipment

Impairment of long-lived assets

management determined that the locations discounted future cash flows were not sufficient to recover the carrying value of these assets over the remaining lease term.

Leases

Restricted cash

Equity investments

Revenue recognition

XpresSpa, Treat and Naples Wax Center

XpresTest

HyperPointe

Gift cards, customer rewards and prepaid packages

revenue is recognized as income. The deferred revenue as of September 12, 2023, when Naples Wax Center was acquired was $811 and for the year ended December 31, 2023 deferred revenue was $778.

Segment reporting

Pre-opening costs

Cost of sales

Cost of sales consists of location operating costs. These costs include all costs that are directly attributable to the location’s operations and include:

●

payroll and related benefits for the location’s operations and management;

●

rent, percentage rent and occupancy costs;

●

the cost of merchandise and testing supplies;

●

freight, shipping and handling costs;

●

production costs;

●

inventory shortage and valuation adjustments; and

●

costs associated with sourcing operations.

Stock-based compensation

Income taxes

Noncontrolling interests

Net income/(loss) per common share

Commitments and contingencies

Variable Interest Entities

As of the year ended December 31, 2023, there were no VIE’s remaining.

Business Combinations

Goodwill

Advertising Costs

Advertising costs are expensed as incurred. Advertising expenses amounted to approximately $696 and $4,645 for the years ended December 31, 2023 and 2022, respectively.

Fair value measurements

Level 1: Unadjusted quoted prices in active markets for identical assets or liabilities accessible to the reporting entity at the measurement date.

The fair value hierarchy also requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value.

Reclassification

Recently adopted accounting pronouncements

Accounting Standards Update No. 2020-06—Debt--Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40)

ASU 2021-04: Issuer’s Accounting for Certain Modifications or Exchanges of Freestanding Equity Classified Written Call Options

ASU 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers

Recently Issued Accounting Standards

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

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

Restatement of Previously Issued Financial Statements - Statements of Operations and Comprehensive Loss (Details) - USD ($)
$ / shares in Units, $ in Thousands

3 Months Ended

9 Months Ended

12 Months Ended

Sep. 30, 2023

Jun. 30, 2023

Mar. 31, 2023

Sep. 30, 2023

Dec. 31, 2023

Dec. 31, 2022

Revenue, net

Total revenue, net

$ 7,468

$ 22,706

$ 30,109

$ 55,939

Cost of sales

Labor

4,462

13,609

17,932

21,437

Occupancy

1,063

3,237

4,473

4,138

Products and other operating costs

852

3,057

4,023

18,316

Total cost of sales

6,377

19,903

26,428

43,891

Gross Profit

1,091

2,803

3,681

12,048

Depreciation and amortization

590

1,770

2,065

5,429

Impairment of long-lived assets

7,878

(3,927)

(4,669)

Impairment of operating lease right-of-use assets

517

926

1,110

Loss on disposal of assets, net

834

Advertising and promotion expense

313

628

IT/Hosting services

273

1,186

Other general and administrative expenses

3,593

13,891

Total operating expenses

13,180

25,904

31,887

43,211

Operating loss

(12,089)

(23,101)

(28,206)

(31,163)

Interest income, net

105

334

448

384

Foreign exchange loss

366

(690)

(738)

(664)

Gain on securities, realized and unrealized

225

703

912

Other non-operating expense, net

(198)

(345)

(410)

(1,131)

Loss before income taxes

(11,591)

(23,099)

(27,994)

(32,574)

Income tax expense

(35)

(55)

Net loss

(11,591)

(23,099)

(28,029)

(32,629)

Net (income) loss attributable to noncontrolling interests

329

288

(208)

Net loss attributable to XWELL, Inc.

(11,531)

(22,770)

(27,741)

(32,837)

Other comprehensive loss from operations

(514)

(1,108)

Comprehensive loss from continuing operations

(12,105)

(24,207)

Comprehensive loss

$ (12,105)

$ (24,207)

$ (29,419)

$ (32,851)

Loss per share

Basic loss per share (in dollars per share)

$ (2.76)

$ (5.46)

$ (6.64)

$ (7.01)

Diluted loss per share (in dollars per share)

$ (2.76)

$ (5.46)

$ (6.64)

$ (7.01)

Weighted-average number of shares outstanding during the period

Basic (in shares)

4,173,894

4,170,629

4,175,220

^[1]

4,682,767

^[1]

Diluted (in shares)

4,173,894

4,170,629

4,175,220

^[1]

4,682,767

^[1]

Patient services revenue

Revenue, net

Total revenue, net

$ 148

$ 250

$ 32,776

Services

Revenue, net

Total revenue, net

$ 6,709

20,485

27,053

21,227

Products

Revenue, net

Total revenue, net

747

2,044

2,766

1,930

Other

Revenue, net

Total revenue, net

$ 40

$ 6

Previously Reported

Revenue, net

Total revenue, net

7,468

22,706

Cost of sales

Labor

4,462

13,609

Occupancy

1,063

3,237

Products and other operating costs

852

3,057

Total cost of sales

6,377

19,903

Gross Profit

1,091

2,803

Depreciation and amortization

590

1,770

Impairment of long-lived assets

6,782

Loss on disposal of assets, net

Advertising and promotion expense

313

628

IT/Hosting services

273

1,186

Other general and administrative expenses

3,593

13,891

Total operating expenses

11,567

24,291

Operating loss

(10,476)

(21,488)

Interest income, net

105

334

Foreign exchange loss

366

(690)

Gain on securities, realized and unrealized

225

703

Other non-operating expense, net

(198)

(345)

Loss before income taxes

(9,978)

(21,486)

Net loss

(9,978)

$ (5,679)

$ (5,829)

(21,486)

Net (income) loss attributable to noncontrolling interests

329

Net loss attributable to XWELL, Inc.

(9,918)

(21,157)

Other comprehensive loss from operations

(514)

(1,108)

Comprehensive loss from continuing operations

(10,492)

(22,594)

Comprehensive loss

$ (10,492)

$ (22,594)

Loss per share

Basic loss per share (in dollars per share)

$ (2.38)

$ (5.07)

Diluted loss per share (in dollars per share)

$ (2.38)

$ (5.07)

Weighted-average number of shares outstanding during the period

Basic (in shares)

4,173,894

4,170,629

Diluted (in shares)

4,173,894

4,170,629

Previously Reported | Patient services revenue

Revenue, net

Total revenue, net

$ 148

Previously Reported | Services

Revenue, net

Total revenue, net

$ 6,709

20,485

Previously Reported | Products

Revenue, net

Total revenue, net

747

2,044

Previously Reported | Other

Revenue, net

Total revenue, net

Restatement Adjustments

Cost of sales

Impairment of long-lived assets

1,096

Impairment of operating lease right-of-use assets

517

Total operating expenses

1,613

Operating loss

(1,613)

Loss before income taxes

(1,613)

Net loss

(1,613)

Net loss attributable to XWELL, Inc.

(1,613)

Comprehensive loss from continuing operations

(1,613)

Comprehensive loss

$ (1,613)

Loss per share

Basic loss per share (in dollars per share)

$ (0.39)

Diluted loss per share (in dollars per share)

$ (0.39)

Weighted-average number of shares outstanding during the period

Basic (in shares)

4,173,894

4,170,629

Diluted (in shares)

4,173,894

4,170,629

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

Income Taxes (Details) $ in Thousands	12 Months Ended
Income Taxes (Details) $ in Thousands	Dec. 31, 2023 USD ($)
Income Taxes.
Operating loss carryforwards	$ 150,926
Expiring period	20 years
Operating loss carry forwards without limitation	$ 97,968

Long-term Notes and Convertible Notes

12 Months Ended

Dec. 31, 2023

Long-term Notes and Convertible Notes

Long-term Notes and Convertible Notes

Note 11. Long-term Notes and Convertible Notes

Paycheck Protection Program

On May 1, 2020, the Company entered into a U.S. Small Business Administration (“SBA”) Paycheck Protection Program (“the PPP”) promissory note in the principal amount of $5,653 payable to Bank of America, NA (“Bank of America”) evidencing a PPP loan (the “PPP Loan”). The PPP Loan bore interest at a rate of 1% per annum. No payments were due

on the PPP Loan during a six-month deferral period commencing on May 2, 2020. Commencing one month after the expiration of the deferral period and continuing on the same day of each month thereafter until the maturity date of the PPP Loan, the Company was obligated to make monthly payments of principal and interest, each in such equal amount required to fully amortize the principal amount outstanding on the PPP Loan by the maturity date, which was May 2, 2022. The PPP loan balance was $3,584 as of December 31, 2021. The PPP loan was paid off in full on the maturity date of May 2, 2022.

- Definition

The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1B
-Subparagraph (h)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1B

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Topic 235
-SubTopic 10
-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08(c))
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480678/235-10-S99-1

Reference 3: http://fasb.org/us-gaap/role/ref/legacyRef
-Topic 470
-Name Accounting Standards Codification
-Publisher FASB
-URI https://asc.fasb.org//470/tableOfContent

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1B
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1B

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1B
-Subparagraph (g)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1B

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1B
-Subparagraph (i)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1B

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1C
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1C

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1C
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1C

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1C
-Subparagraph (c)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1C

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1E
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1E

Reference 11: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1I
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1I

Reference 12: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1I
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1I

Reference 13: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1I
-Subparagraph (d)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1I

+ Details

Insider Trading Arrangements	3 Months Ended
Insider Trading Arrangements	Dec. 31, 2023
Trading Arrangements, by Individual
Rule 10b5-1 Arrangement Adopted	false
Non-Rule 10b5-1 Arrangement Adopted	false
Rule 10b5-1 Arrangement Terminated	false
Non-Rule 10b5-1 Arrangement Terminated	false

Income Taxes - Income Tax Benefit (Expense) Attributable to the Operating Loss (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
Current:
Federal	$ 0	$ 0
State	15	41
Foreign	20	14
Deferred:
Federal	0	0
Total	$ 35	$ 55

Leases

12 Months Ended

Dec. 31, 2023

Leases

Leases

Note 10. Leases

The Company leases spa and clinic locations at various domestic and international airports. Additionally, the Company leases its corporate office in New York City and other off airport locations in various US cities. Certain leases entered into by the Company are accounted for in accordance with ASC 842. The Company determines if an arrangement is a lease at inception and if it qualifies under ASC 842. The Company’s lease arrangements generally contain fixed payments throughout the term of the lease and most also contain a variable component to determine the lease obligation where a certain percentage of sales is used to calculate the lease payments. The Company enters into leases that expire, are amended and extended, or are extended on a month-to-month basis. Leases are not included in the calculation of the total lease liability and the right of use asset when they are month-to-month.

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

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

The following is a summary of the activity in the Company’s current and long-term operating lease liabilities for the year ended December 31, 2023 and 2022:


	Year ended December 31,
	2023		2022
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	(3,483)	$	(4,092)
Leased assets obtained in exchange for new and modified operating lease liabilities	$	174	$	6,891
Leased assets surrendered in exchange for termination of operating lease liabilities	$	—	$	—

As of December 31, 2023, future minimum operating leases commitments are as follows:


Calendar Years ending December 31,	Amount
2024	$	3,105
2025		2,714
2026		1,628
2027		1,505
2028		1,125
Thereafter		3,313
Total future lease payments		13,390
Less: interest expense at incremental borrowing rate		(2,296)
Net present value of lease liabilities	$	11,094

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


Weighted average remaining lease term:	5.94	years
Weighted average discount rate used to determine present value of operating lease liability:	7.25	%

Cash paid for minimum annual rental obligations for the years ended December 31, 2023 and 2022, were $2,018 and $928 respectively.

Variable lease payments calculated monthly as a percentage of a product and services revenue were $1,326 and $1,392 for the years ended December 31, 2023 and 2022 respectively.

Rent expense for operating leases for the years ended December 31, 2023 and 2022 were $3,824 and $3,917, respectively.

The Company performed assessments of its right of use lease assets for impairment for the years ended December 31, 2023 and 2022. Based upon the results of the impairment tests, the Company recorded impairment expenses of approximately $926 and $1,110 which is included in Impairment of operating lease right-of-use assets on the consolidated statement of operations and comprehensive income (loss) for the years ended December 31, 2023 and 2022 respectively.

Restatement of Previously Issued Financial Statements - Statements of Operations and Comprehensive Loss (Parenthetical) (Details)	Sep. 28, 2023
Restatement of Previously Issued Financial Statements
Reverse stock split conversion ratio	0.05

CONSOLIDATED BALANCE SHEETS (Parenthetical)	Sep. 28, 2023	Dec. 31, 2023 $ / shares shares	Sep. 30, 2023 $ / shares shares	Dec. 31, 2022 $ / shares shares	Oct. 24, 2022 $ / shares
CONSOLIDATED BALANCE SHEETS
Common stock, par value \| $ / shares		$ 0.01	$ 0.01	$ 0.01	$ 0.01
Common stock, authorized		150,000,000	150,000,000	150,000,000
Common stock, issued		4,179,631	4,174,381	4,161,613
Common stock, outstanding		4,179,631	4,174,381	4,161,613
Reverse stock split, conversion ratio	0.05

Income Taxes - Deferred Tax Assets (Liabilities) (Details) - USD ($) $ in Thousands	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
Deferred income tax assets
Net operating loss carryforwards	$ 60,263	$ 51,932
Stock-based compensation	1,532	1,029
Intangible assets and other	7,629	7,298
Net deferred income tax assets	69,424	60,259
Less:
Valuation allowance	$ (69,424)	$ (60,259)	$ (53,298)

Income Taxes - Components of income (loss) before income taxes (Details) - USD ($) $ in Thousands	3 Months Ended	9 Months Ended	12 Months Ended
	Sep. 30, 2023	Sep. 30, 2023	Dec. 31, 2023	Dec. 31, 2022
Income Taxes.
Domestic			$ (27,573)	$ (32,445)
Foreign			(421)	(129)
Total	$ (11,591)	$ (23,099)	$ (27,994)	$ (32,574)

- Definition

Amount of income (loss) from continuing operations, including income (loss) from equity method investments, before deduction of income tax expense (benefit), and income (loss) attributable to noncontrolling interest.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 944
-SubTopic 220
-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SX 210.7-04(11))
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147483586/944-220-S99-1

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 22
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482810/280-10-50-22

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 30
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482810/280-10-50-30

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 32
-Subparagraph (f)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482810/280-10-50-32

Reference 5: http://www.xbrl.org/2003/role/exampleRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 31
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482810/280-10-50-31

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 32
-Subparagraph (c)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482810/280-10-50-32

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Topic 942
-SubTopic 235
-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SX 210.9-05(b)(2))
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147479557/942-235-S99-1

Reference 8: http://fasb.org/us-gaap/role/ref/legacyRef
-Name Accounting Standards Codification
-Section 25
-Paragraph 1
-SubTopic 20
-Topic 940
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481913/940-20-25-1

Reference 9: http://fasb.org/us-gaap/role/ref/legacyRef
-Topic 220
-SubTopic 10
-Name Accounting Standards Codification
-Section S99
-Paragraph 2
-Subparagraph (SX 210.5-03(10))
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147483621/220-10-S99-2

Reference 10: http://fasb.org/us-gaap/role/ref/legacyRef
-Topic 942
-SubTopic 220
-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SX 210.9-04(15))
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147483589/942-220-S99-1

+ Details

Restatement of Previously Issued Financial Statements - Statements of Balance Sheets (Details) - USD ($)
$ in Thousands

Dec. 31, 2023

Sep. 30, 2023

Jun. 30, 2023

Mar. 31, 2023

Dec. 31, 2022

Dec. 31, 2021

Current assets

Cash and cash equivalents

$ 8,437

$ 4,827

$ 19,038

Marketable Securities

14,613

21,311

23,153

Accounts receivable

1,667

1,193

2,858

Inventory

900

968

1,161

Other current assets

949

1,663

1,122

Total current assets

26,566

29,962

47,332

Restricted cash

751

Property and equipment, net

2,454

2,705

3,666

Intangible assets, net

1,353

2,174

4,008

Operating lease right of use assets, net

4,656

5,558

8,276

Other assets

1,842

1,787

2,369

Total assets

38,993

42,937

70,426

Current liabilities

Accounts payable

1,099

1,511

2,312

Accrued expenses and other current liabilities

4,968

4,198

5,719

Current portion of operating lease liabilities

2,402

2,375

2,586

Deferred revenue

861

339

Total current liabilities

9,330

8,157

10,956

Long-term liabilities

Operating lease liabilities

8,692

9,123

11,521

Total liabilities

18,022

17,280

22,477

Commitments and contingencies (see Note 13)

Equity

Common Stock, $0.01 par value per share, 150,000,000 shares authorized; 4,179,631 and 4,161,613 shares issued and outstanding as of December 31, 2023 and December 31, 2022, respectively

^[1]

Additional paid-in capital

470,737

470,270

468,530

Accumulated deficit

(455,853)

(450,882)

(428,112)

Accumulated other comprehensive loss

(1,924)

(1,642)

(534)

Total equity attributable to XWELL, Inc.

13,002

17,788

39,926

Noncontrolling interests

7,969

7,869

8,023

Total equity

20,971

25,657

47,949

$ 99,935

Total liabilities and equity

$ 38,993

42,937

70,426

Previously Reported

Current assets

Cash and cash equivalents

4,827

Marketable Securities

21,311

1,193

968

1,663

29,962

751

Property and equipment, net

3,801

Intangible assets, net

2,174

Operating lease right of use assets, net

6,075

Other assets

1,787

Total assets

44,550

Current liabilities

Accounts payable

1,511

Accrued expenses and other current liabilities

4,198

Current portion of operating lease liabilities

2,375

Deferred revenue

Total current liabilities

8,157

Long-term liabilities

Operating lease liabilities

9,123

Total liabilities

17,280

Equity

Common Stock, $0.01 par value per share, 150,000,000 shares authorized; 4,179,631 and 4,161,613 shares issued and outstanding as of December 31, 2023 and December 31, 2022, respectively

Additional paid-in capital

470,270

Accumulated deficit

(449,269)

Accumulated other comprehensive loss

(1,642)

Total equity attributable to XWELL, Inc.

19,401

Noncontrolling interests

7,869

Total equity

27,270

$ 37,000

$ 42,591

$ 47,949

Total liabilities and equity

44,550

Restatement Adjustments

Current assets

Property and equipment, net

(1,096)

Operating lease right of use assets, net

(517)

Total assets

(1,613)

Equity

Accumulated deficit

(1,613)

Total equity attributable to XWELL, Inc.

(1,613)

Total equity

(1,613)

Total liabilities and equity

$ (1,613)

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

Cash, Cash Equivalents, and Restricted Cash (Tables)

12 Months Ended

Dec. 31, 2023

Cash, Cash Equivalents, and Restricted Cash

Schedule of cash, cash equivalents, and restricted cash


	December 31, 2023		December 31, 2022
Cash denominated in United States dollars	$	5,726	$	16,344
Cash denominated in currency other than United States dollars		2,395		2,562
Restricted cash		751		751
Credit and debit card receivables		316		132
Total cash, cash equivalents and restricted cash	$	9,188	$	19,789

Fair Value Measurements (Tables)

12 Months Ended

Dec. 31, 2023

Fair Value Measurements

Schedule of asset and liabilities measured at fair value on recurring and nonrecurring basis


			Fair value measurement at reporting date using
			Quoted prices in
			active markets		Significant other		Significant
			for identical		observable		unobservable
	Balance		assets (Level 1)		inputs (Level 2)		inputs (Level 3)
As of December 31, 2023:
Recurring fair value measurements
Equity securities:
Route1, Inc.	$	50	$	—	$	50	$	—
Total equity securities		50		—		50		—
Total recurring fair value measurements	$	50	$	—	$	50	$	—
Nonrecurring fair value measurements
Property and equipment		2,454		—		—		2,454
Intangible assets		1,353		—		—		1,353
Total nonrecurring fair value measurements	$	3,807	$	—	$	—	$	3,807

As of December 31, 2022
Recurring fair value measurements
Equity securities:
Route1, Inc.	$	104	$	—	$	104	$	—
Total equity securities		104		—		104		—
Total recurring fair value measurements	$	104	$	—	$	104	$	—
Nonrecurring fair value measurements
Intangible assets		4,008		—		—		4,008
Total nonrecurring fair value measurements	$	4,008	$	—	$	—	$	4,008

Stockholders' Equity and Warrants

12 Months Ended

Dec. 31, 2023

Stockholders' Equity and Warrants

Stockholders' Equity and Warrants

Note 12. Stockholders’ Equity and Warrants

2023 Reverse Stock Split

On September 28, 2023, we effected a 1-for-20 reverse stock split (the “Reverse Stock Split”), whereby every twenty shares of our common stock were reduced to one share of our common stock and the price per share of our common stock was multiplied by 20. All references to shares and per share amounts, including shares of common stock underlying stock options, warrants, and applicable exercise prices, have been retroactively adjusted for all periods presented herein to give effect to the Reverse Stock Split as required in accordance with United States of America generally accepted accounting principles.

Share Repurchase Program

On August 31, 2021, the Company’s board of directors initially authorized a stock repurchase program that permitted the purchase and repurchase of up to 15 million shares of its common stock through September 15, 2022. In May 2022, the Board increased the share repurchase program by an additional 10 million shares and extended its effectiveness through September 15, 2023. Under this stock repurchase program, management has discretion in determining the conditions under which shares may be purchased from time to time. The program does not require us to repurchase any specific number of shares, and may be modified, suspended or terminated at any time without prior notice. The Board share repurchase program expired September 15, 2023.

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. Exceptions may apply, for example, if the repurchases are less than $1,000 or issued to employees. 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.

Warrants

The following table represents the activity related to the Company’s warrants during the year ended December 31, 2023:


		Weighted average		Exercise
	No. of warrant	exercise price		price range
December 31, 2022	58,605	$	40.00	$	34 - 42.5
Granted	—	$	—	$
Exercised	—	$	—	$
Expired	(58,605)	$	40.00	$	34 - 42.5
December 31, 2023	—	$	—		—

Income Taxes - Income Tax Benefit (Expense) (Details) - USD ($) $ in Thousands	3 Months Ended	9 Months Ended	12 Months Ended
	Sep. 30, 2023	Sep. 30, 2023	Dec. 31, 2023	Dec. 31, 2022
Income Taxes.
Loss from operations before income taxes	$ (11,591)	$ (23,099)	$ (27,994)	$ (32,574)
Tax rate			21.00%	21.00%
Computed "expected" tax benefit			$ (5,879)	$ (6,841)
State taxes, net of federal income tax (expense) benefit			(1,027)	706
Change in valuation allowance			9,166	7,015
Adjustment JV Basis				339
Nondeductible expenses			212	341
Other Adjustments			2
Return to Provision Adjustment			(1,860)	(94)
International Rate Differential			(14)
State Deferred Rate Change			(87)	(570)
Asset Impairment Adjustment			(730)	(810)
Other items			252	(31)
Income tax expense			$ 35	$ 55

Other Current Assets - Schedule of Other Current Assets (Details) - USD ($) $ in Thousands	Dec. 31, 2023	Sep. 30, 2023	Dec. 31, 2022
Other Current Assets
Prepaid expenses	$ 894		$ 1,074
Other	55		48
Total other current assets	$ 949	$ 1,663	$ 1,122

Intangible Assets

12 Months Ended

Dec. 31, 2023

Intangible Assets

Intangible Assets

Note 8. Intangible Assets

The following table provides information regarding the Company’s intangible assets, which consist of the following:


	December 31, 2023						December 31, 2022
	Gross				Net		Gross				Net
	Carrying		Accumulated		Carrying		Carrying		Accumulated		Carrying
	Amount		Amortization		Amount		Amount		Amortization		Amount
Trade names	$	200	$	(6)	$	194	$	302	$	(24)	$	278
Customer relationships		1,012		(341)		671		1,510		(542)		968
Software		2,593		(2,120)		473		4,485		(1,761)		2,724
Licenses		35		(20)		15		55		(17)		38
Total intangible assets	$	3,840	$	(2,487)	$	1,353	$	6,352	$	(2,344)	$	4,008

The Company’s trade names and customer relationships relates to the Naples Wax Center, software relates to certain capitalized third-party costs related to a new website and a point-of-sale system, and licenses relates to certain capitalized costs of foreign acquisition.

The fair values of the Company’s long-lived assets were determined using the income approach. The income approach incorporated the use of a discounted cash flow method in which the estimated future cash flows and terminal values for the Company were discounted to a present value using a discount rate. Cash flow projections are based on management’s estimates of economic and market conditions which drive key assumptions of revenue growth rates, operating margins, capital expenditures and working capital requirements. The discount rate in turn is based on the specific risk characteristics of the Company, the weighted average cost of capital and its underlying forecast.

In the year ended December 31, 2023, the Company recorded an impairment of $2,768 related to trade names, customer relationships and software which is included in Impairment of long-lived assets on the consolidated statement of operations and comprehensive loss for the year ended December 31, 2023. In the year ended December 31, 2022, the Company recorded impairment of $110 related to software. The increase in impairment expense of intangible assets is primarily related to XpresTest’s HyperPointe business and Treat.

The Company’s intangible assets are amortized over their expected useful lives, which is six years for trade names and five and three years for software, whereas the intangibles obtained because of the Naples Wax Center acquisition have an estimated life of 5 to 12 years. During the years ended December 31, 2023, and 2022, the Company recorded amortization expense of $1,240 and $1,766 respectively related to its intangible assets.

Estimated amortization expense for the Company’s intangible assets at December 31, 2023 is as follows:


Calendar Years ending December 31,	Amount
2024	$	316
2025		310
2026		229
2027		122
2028		122
Thereafter		254
Total	$	1,353

Long-term Notes and Convertible Notes - Paycheck Protection Program (Details) - Paycheck Protection Program - USD ($) $ in Thousands	May 01, 2020	Dec. 31, 2021
Debt Instrument [Line Items]
Debt instrument, face amount	$ 5,653
Interest rate (as a percent)	1.00%
Payments on PPP Loan	$ 0
Deferral period	6 months
Debt outstanding		$ 3,584

- Definition

Line items represent financial concepts included in a table. These concepts are used to disclose reportable information associated with domain members defined in one or many axes to the table.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 835
-SubTopic 30
-Name Accounting Standards Codification
-Section 50
-Paragraph 1
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482900/835-30-50-1

Reference 2: http://www.xbrl.org/2009/role/commonPracticeRef
-Topic 235
-SubTopic 10
-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08(f))
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480678/235-10-S99-1

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Topic 235
-SubTopic 10
-Name Accounting Standards Codification
-Section S99
-Paragraph 3
-Subparagraph (SX 210.12-04(a))
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480678/235-10-S99-3

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1B
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1B

Reference 5: http://www.xbrl.org/2003/role/exampleRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 55
-Paragraph 69B
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481568/470-20-55-69B

Reference 6: http://www.xbrl.org/2003/role/exampleRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 55
-Paragraph 69C
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481568/470-20-55-69C

Reference 7: http://www.xbrl.org/2003/role/exampleRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 55
-Paragraph 69E
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481568/470-20-55-69E

Reference 8: http://www.xbrl.org/2003/role/exampleRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 55
-Paragraph 69F
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481568/470-20-55-69F

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1B
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1B

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1B
-Subparagraph (c)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1B

Reference 11: http://www.xbrl.org/2003/role/exampleRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1B
-Subparagraph (d)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1B

Reference 12: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1B
-Subparagraph (e)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1B

Reference 13: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1B
-Subparagraph (f)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1B

Reference 14: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1B
-Subparagraph (h)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1B

Reference 15: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1D
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1D

Reference 16: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1D
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1D

Reference 17: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1D
-Subparagraph (c)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1D

Reference 18: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1E
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1E

Reference 19: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1E
-Subparagraph (c)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1E

Reference 20: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1E
-Subparagraph (d)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1E

Reference 21: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1F
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1F

Reference 22: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1F
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1F

Reference 23: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1F
-Subparagraph (b)(1)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1F

Reference 24: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1F
-Subparagraph (b)(2)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1F

Reference 25: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1I
-Subparagraph (c)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1I

+ Details

- Definition

Amount, after deduction of unamortized premium (discount) and debt issuance cost, of long-term debt. Excludes lease obligation.

+ References + Details

Leases - Other Assumptions and Pertinent Information (Details)	Dec. 31, 2023
Leases
Weighted average remaining lease term (years):	5 years 11 months 8 days
Weighted average discount rate used to determine present value of operating lease liability:	7.25%

Fair Value Measurements (Details) - USD ($) $ in Thousands	Dec. 31, 2023	Dec. 31, 2022
Fair Value, Recurring
Equity securities	$ 50	$ 104
Total fair value measurements	50	104
Fair Value, Recurring \| Fair Value, Inputs, Level 2
Equity securities	50	104
Total fair value measurements	50	104
Fair Value, Nonrecurring
Property, plant and equipment	2,454
Intangible assets	1,353	4,008
Total fair value measurements	3,807	4,008
Fair Value, Nonrecurring \| Fair Value, Inputs, Level 3 [Member]
Property, plant and equipment	2,454
Intangible assets	1,353	4,008
Total fair value measurements	3,807	4,008
Route1 Inc
Equity securities	50	104
Route1 Inc \| Fair Value, Recurring
Equity securities	50	104
Route1 Inc \| Fair Value, Recurring \| Fair Value, Inputs, Level 2
Equity securities	$ 50	$ 104

Commitments and Contingencies

12 Months Ended

Dec. 31, 2023

Commitments and Contingencies

Commitments and Contingencies

Note 18. 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 makes adjustments as appropriate. 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 December 31, 2023 and December 31, 2022 respectively, which is included in Accrued expenses and other current liabilities in the consolidated balance sheets.

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

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

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

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

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

Leases

XpresSpa is contingently liable to a surety company under certain general indemnity agreements required by various airports relating to its lease agreements. XpresSpa 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.

Leases - Supplemental Cash Flow Information Related to Leases (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
Leases
Operating cash flows from operating leases	$ (3,483)	$ (4,092)
Leased assets obtained in exchange for new and modified operating lease liabilities	$ 174	$ 6,891

CONSOLIDATED BALANCE SHEETS - USD ($)
$ in Thousands

Dec. 31, 2023

Sep. 30, 2023

Dec. 31, 2022

Dec. 31, 2021

Current assets

Cash and cash equivalents

$ 8,437

$ 4,827

$ 19,038

Marketable Securities

14,613

21,311

23,153

Accounts receivable

1,667

1,193

2,858

Inventory

900

968

1,161

Other current assets

949

1,663

1,122

Total current assets

26,566

29,962

47,332

Restricted cash

751

Property and equipment, net

2,454

2,705

3,666

Intangible assets, net

1,353

2,174

4,008

Operating lease right of use assets, net

4,656

5,558

8,276

Goodwill

1,371

4,024

Other assets

1,842

1,787

2,369

Total assets

38,993

42,937

70,426

Current liabilities

Accounts payable

1,099

1,511

2,312

Accrued expenses and other current liabilities

4,968

4,198

5,719

Current portion of operating lease liabilities

2,402

2,375

2,586

Deferred revenue

861

339

Total current liabilities

9,330

8,157

10,956

Long-term liabilities

Operating lease liabilities

8,692

9,123

11,521

Total liabilities

18,022

17,280

22,477

Commitments and contingencies (see Note 18)

Equity

Common Stock, $0.01 par value per share, 150,000,000 shares authorized; 4,179,631 and 4,161,613 shares issued and outstanding as of December 31, 2023 and December 31, 2022, respectively

^[1]

Additional paid-in capital

470,737

470,270

468,530

Accumulated deficit

(455,853)

(450,882)

(428,112)

Accumulated other comprehensive loss

(1,924)

(1,642)

(534)

Total equity attributable to XWELL, Inc.

13,002

17,788

39,926

Noncontrolling interests

7,969

7,869

8,023

Total equity

20,971

25,657

47,949

$ 99,935

Total liabilities and equity

$ 38,993

$ 42,937

$ 70,426

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

Property and Equipment (Details) - USD ($) $ in Thousands	9 Months Ended	12 Months Ended
Property and Equipment (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2023	Dec. 31, 2022
Property and equipment, Gross		$ 7,349	$ 10,666
Accumulated depreciation		(4,895)	(7,000)
Total property and equipment, net	$ 2,705	2,454	3,666
Impairment on property and equipment		1,159	4,559
Reduction of remaining right of use asset and lease liability	$ 821	821
Depreciation expense		825	3,663
Leasehold improvements
Property and equipment, Gross		$ 5,848	$ 8,692
Leasehold improvements \| Minimum [Member]
Property and equipment, useful life		5 years	5 years
Leasehold improvements \| Maximum [Member]
Property and equipment, useful life		8 years	8 years
Furniture and fixtures
Property and equipment, Gross		$ 821	$ 1,214
Furniture and fixtures \| Minimum [Member]
Property and equipment, useful life		3 years	3 years
Furniture and fixtures \| Maximum [Member]
Property and equipment, useful life		4 years	4 years
Other operating equipment
Property and equipment, Gross		$ 680	$ 760
Other operating equipment \| Maximum [Member]
Property and equipment, useful life		5 years	5 years

Stock-based Compensation

12 Months Ended

Dec. 31, 2023

Stock-based Compensation

Stock-based Compensation

Note 14. Stock-based Compensation

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

In September 2020, the Board of Directors approved a new stock-based compensation plan available to grant stock options, restricted stock and Restricted Stock Units (“RSU’s”) aggregating to 250,000 shares of Common Stock, to the Company’s directors, employees and consultants. Shareholder approval of the plan was subsequently obtained on October 28, 2020. On October 4, 2022, shareholders approved the amendment to the Company’s 2020 Equity Incentive Plan to increase the

number of shares authorized for issuance under the Plan by 375,000 shares of Common Stock to an aggregate of 625,000 shares. Under the 2020 Equity Incentive Plan (the “2020 Plan”), a maximum of 249,899 shares of Common Stock remained available for issuance as of December 31, 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 and RSU’s to the XpresTest’s directors, employees and consultants. Under the XpresTest 2020 Equity Incentive Plan (the “XpresTest Plan”), a maximum of 200 shares of XpresTest common stock may be awarded, which would represent 20% of the total number of shares of common stock of XpresTest as of December 31, 2023. Certain named executive officers, consultants, and directors of the Company are eligible to participate in the XpresTest Plan. The XpresTest Plan RSAs vest upon satisfaction of certain service and performance-based conditions. The fair value of the XpresTest Plan RSAs is determined based on the weighted average of (i) Fair Value of XpresTest under the Indirect Valuation Method developing assumptions for XpresSpa Net Market Cap and XpresSpa standalone Fair Value, and (ii) Direct Valuation Method developing assumptions for XpresTest Representative Forecasted Revenue for 2021 and Peer companies Revenue’s Multiples.

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 December 31, 2023, there is $96 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 - 8.20
Exercise price:	$	4.60 - 8.20
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 expense for the years ended December 31, 2023 and 2022 was $2,319 and $3,770 respectively.

The following tables summarize information about stock options and RSU activity during the year ended December 31, 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		4.65 - 8.00
Exercised/Vested	(19,063)		10.85	—		—
Forfeited	—		—	(16,699)		24.08		8.00 - 32.20
Expired	—		—	(31,666)		38.69		8.00 - 38,160
Outstanding as of December 31, 2023	11,944	$	6.08	341,205	$	26.85	$	4.60 - 49,200
Exercisable as of December 31, 2023				244,271	$	26.65	$	4.60 - 49,200

The following tables summarize information about stock options and RSU activity during the year ended December 31, 2022:


	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, 2021	30,000	$	32.60	141,344	$	51.40	$	23.80 - 49,200
Granted	26,563		16.80	117,517		29.20		13.00 - 32.80
Exercised/Vested	(42,500)		29.20	—		—
Forfeited	—		—	(12,252)		31.00		28.60 - 76.40
Expired	—		—	(5,108)		121.0		28.80 - 44,640
Outstanding as of December 31, 2022	14,063	$	13.00	241,501	$	40.00	$	13.00 - 49,200
Exercisable as of December 31, 2022				103,063	$	51.20	$	23.80 - 49,200

The weighted average remaining contractual term for options outstanding as of December 31, 2023 and 2022 was 7.71 years and 7.83 years, respectively.

As of December 31, 2023, Aggregate Intrinsic Value of Options Outstanding and Vested was $0. As of December 31, 2022, Aggregate Intrinsic Value of Options Outstanding and Vested was $0.

Unrecognized stock-based payment cost related to non-vested stock options as of December 31, 2023 and 2022 were $1,246 and $2,506, respectively.

Unrecognized stock-based payment cost related to non-vested RSUs as of December 31, 2023 and 2022 were $73 and $183, respectively.

Accounting and Reporting Policies (Details) $ in Thousands	3 Months Ended	9 Months Ended	12 Months Ended
Accounting and Reporting Policies (Details) $ in Thousands	Sep. 30, 2023 USD ($)	Sep. 30, 2023 USD ($)	Dec. 31, 2023 USD ($) entity segment location	Dec. 31, 2022 USD ($)	Sep. 12, 2023 USD ($)	Sep. 30, 2022 USD ($)
Foreign currency remeasurement gain/(loss)	$ 366	$ (690)	$ (738)	$ (664)
Cash equivalents			4,025	1,885
Impairment of intangible assets			2,768	110
Impairment on property and equipment			1,159	4,559
Impairment of operating lease right-of-use assets	517	517	926	1,110
Total revenue	7,468	22,706	30,109	55,939
Deferred revenue	73	$ 73	$ 861	339
Number of reportable segments \| segment			4
Uncertain tax positions			$ 0	0
Advertising expenses			696	4,645
Impairment loss on goodwill			4,024
Allowance for credit loss			$ 0	0
Variable interest entities. \| entity			0
Prepaid Packages Services \| Naples Wax LLC
Contract with customer, liability, current			$ 778		$ 811
XpresTest
Impairment of operating lease right-of-use assets				38
XpresTest \| CDC Program Options and Public Health Services
Total revenue			7,521	2,617
Unrecognized revenue						$ 16,000
XpresTest \| Traveler Enrollment Initiatives \| CDC Program Options and Public Health Services
Contract with customer, liability, current						370
XpresTest \| Passenger and Aircraft Wastewater Sample Collection \| CDC Program Options and Public Health Services
Contract with customer, liability, current						6,674
XpresSpa
Impairment of operating lease right-of-use assets			484	936
HyperPointe
Impairment loss on goodwill	$ 4,024
HyperPointe \| HyperPointe
Deferred revenue			$ 72	$ 322
Non-US \| XpresSpa
Number of airport locations \| location			11
Minimum \| XpresTest \| CDC Program Options and Public Health Services
Unrecognized revenue						$ 61,000

Pay vs Performance Disclosure - USD ($) $ in Thousands	3 Months Ended	9 Months Ended	12 Months Ended
Pay vs Performance Disclosure - USD ($) $ in Thousands	Sep. 30, 2023	Sep. 30, 2023	Dec. 31, 2023	Dec. 31, 2022
Pay vs Performance Disclosure
Net Income (Loss)	$ (11,531)	$ (22,770)	$ (27,741)	$ (32,837)

- Definition

The portion of profit or loss for the period, net of income taxes, which is attributable to the parent.

+ References

+ Details