Part I [Item 1. Business](index=6&type=section&id=Item%201.%20Business) The company operates airport spa (XpresSpa) and medical testing (XpresCheck) services, pivoting its business model due to the pandemic - The company operates two main segments: **XpresSpa** (airport spa services) and **XpresTest** (airport medical diagnostic testing), which operates XpresCheck Wellness Centers[18](index=18&type=chunk)[20](index=20&type=chunk) Revenue Breakdown (2019 vs. 2020) | Metric | 2020 | 2019 | | :--- | :--- | :--- | | **Total Revenue** | $8,385,000 | $48,515,000 | | **Revenue from Services** | 84% | 82% | | **Revenue from Retail Products** | 12% | 15% | | **Other Revenue** | 4% | 3% | - Due to the COVID-19 pandemic, all global XpresSpa locations were temporarily closed effective March 24, 2020, causing a **material adverse impact** on the business[21](index=21&type=chunk)[30](index=30&type=chunk)[31](index=31&type=chunk) - In response to the pandemic, the company launched **XpresCheck Wellness Centers** in airports to offer COVID-19 and other medical diagnostic testing services[18](index=18&type=chunk)[25](index=25&type=chunk)[34](index=34&type=chunk) - The company is developing a new, broader travel health and wellness brand integrating on-site medical services, telemedicine, and virtual wellness care[26](index=26&type=chunk)[27](index=27&type=chunk)[29](index=29&type=chunk) - Operations are subject to significant regulation, including spa licensing, public health codes, and the **Airport Concession Disadvantaged Business Enterprise (ACDBE)** program[58](index=58&type=chunk)[59](index=59&type=chunk)[61](index=61&type=chunk) [Item 1A. Risk Factors](index=17&type=section&id=Item%201A.%20Risk%20Factors) The company faces significant risks from the COVID-19 pandemic, a material weakness in financial controls, and new business uncertainties - The COVID-19 pandemic continues to pose a significant risk, causing spa closures and a **material adverse impact on cash flows and operations**[71](index=71&type=chunk)[75](index=75&type=chunk)[76](index=76&type=chunk) - A **material weakness** was identified in internal control over financial reporting for FY2020 due to an insufficient complement of experienced accounting personnel[77](index=77&type=chunk)[79](index=79&type=chunk) - The new **XpresCheck diagnostic testing business** carries substantial risks, including limited operating history, reliance on key partners, and uncertain market demand[87](index=87&type=chunk)[92](index=92&type=chunk)[95](index=95&type=chunk) - The business is subject to complex healthcare regulations, including **CLIA, FDA rules, and HIPAA**, with non-compliance risks of significant penalties[101](index=101&type=chunk)[102](index=102&type=chunk)[105](index=105&type=chunk) - The ability to use significant net operating loss carryforwards of approximately **$151 million** may be limited under Section 382 of the Internal Revenue Code[82](index=82&type=chunk) - The company's common stock (XSPA) is **highly volatile** and could be negatively affected by future stock sales and the exercise of a substantial number of warrants[183](index=183&type=chunk)[184](index=184&type=chunk)[191](index=191&type=chunk) [Item 1B. Unresolved Staff Comments](index=57&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) The company reports that there are no unresolved staff comments - Not applicable[203](index=203&type=chunk) [Item 2. Properties](index=57&type=section&id=Item%202.%20Properties) The company operates 50 leased spa and clinic locations across 25 airports globally and maintains a corporate headquarters in New York City - As of December 31, 2020, the company had **50 spa and clinic locations** in 25 airports across the U.S, Netherlands, and United Arab Emirates[204](index=204&type=chunk) - All locations are leased, with average lease terms of **5-8 years**, often with renewal options[204](index=204&type=chunk) - The company's Global Support Center is located in New York City, with a sublease expiring in **September 2023**[205](index=205&type=chunk) [Item 3. Legal Proceedings](index=57&type=section&id=Item%203.%20Legal%20Proceedings) The company is involved in several legal proceedings, with a recorded liability of approximately $2.221 million as of year-end 2020 - As of December 31, 2020, the company has recorded a liability of approximately **$2,221,000** for all outstanding legal matters[208](index=208&type=chunk) - The dispute with former ACDBE partner Cordial was settled in November 2019, with all pending litigation dismissed[219](index=219&type=chunk) - In the *In re Chen et al* wage-hour class action lawsuit, the parties entered into settlement agreements and are awaiting preliminary court approval[223](index=223&type=chunk) - Multiple lawsuits filed by former XpresSpa stockholders related to the 2016 merger have been **dismissed in the company's favor**[228](index=228&type=chunk)[229](index=229&type=chunk)[231](index=231&type=chunk) - In the *Rodger Jenkins and Gregory Jones v. XpresSpa Group, Inc* case, the court awarded the plaintiffs **$750,000 plus interest**, which the company plans to appeal[237](index=237&type=chunk) [Item 4. Mine Safety Disclosures](index=67&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) The company reports that this item is not applicable - Not applicable[242](index=242&type=chunk) Part II [Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=68&type=section&id=Item%205.%20Market%20for%20Registrant's%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) The company's common stock (XSPA) trades on Nasdaq, underwent a reverse stock split, and the company does not plan to pay dividends - The company's common stock is listed on the Nasdaq Capital Market under the trading symbol **"XSPA"**[244](index=244&type=chunk) - A **1-for-3 reverse stock split** was effected on June 11, 2020[245](index=245&type=chunk) - As of March 26, 2021, there were **105,282,382 shares** of common stock outstanding[246](index=246&type=chunk) - The company has never paid cash dividends and does not plan to in the foreseeable future[247](index=247&type=chunk) [Item 6. Selected Financial Data](index=68&type=section&id=Item%206.%20Selected%20Financial%20Data) This section is not required as the company qualifies as a smaller reporting company - Not required as the company is a smaller reporting company[250](index=250&type=chunk) [Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=69&type=section&id=Item%207.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Pandemic-driven spa closures caused an 83% revenue drop and a $92.2 million net loss, though financing activities improved working capital Key Financial Results (2020 vs. 2019) | Metric (in thousands) | 2020 | 2019 | | :--- | :--- | :--- | | **Total Revenue** | $8,385 | $48,515 | | **Loss from Operations** | $(40,104) | $(15,872) | | **Net Loss** | $(92,232) | $(20,530) | | **Adjusted EBITDA Loss** | $(18,210) | $(3,323) | - Revenue **decreased by 83%** in 2020 primarily due to the temporary closure of all global XpresSpa locations on March 24, 2020[321](index=321&type=chunk) - The company recorded **impairment charges of $15.4 million** in 2020 related to leasehold improvements, right of use assets, and the XpresSpa trademark[324](index=324&type=chunk)[41](index=41&type=chunk)[42](index=42&type=chunk) - A significant non-cash **loss of $51.1 million** was recognized in 2020 from the revaluation of warrants and debt conversion options[325](index=325&type=chunk) - The company raised approximately **$117 million in gross proceeds** through several registered direct offerings of common stock and warrants in 2020[261](index=261&type=chunk)[335](index=335&type=chunk) - Net cash used in operating activities increased to **$25.0 million** in 2020 from $0.1 million in 2019, mainly due to costs for opening new XpresCheck Wellness Centers[339](index=339&type=chunk) - Working capital improved significantly from a deficit of $12.3 million to a **surplus of $78.3 million** at year-end 2020, driven by financing activities[268](index=268&type=chunk)[336](index=336&type=chunk) [Item 7A. Quantitative and Qualitative Disclosures About Market Risk](index=92&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section is not required as the company qualifies as a smaller reporting company - Not required as the company is a smaller reporting company[366](index=366&type=chunk) [Item 8. Financial Statements and Supplementary Data](index=92&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) This section refers to the consolidated financial statements which are included in Item 15 of the report, beginning on page F-1 - The company's consolidated financial statements are located in Item 15, starting on page F-1 of the Annual Report[367](index=367&type=chunk) [Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure](index=92&type=section&id=Item%209.%20Changes%20in%20and%20Disagreements%20with%20Accountants%20on%20Accounting%20and%20Financial%20Disclosure) The company reports no changes in or disagreements with its accountants on accounting and financial disclosure - None[368](index=368&type=chunk) [Item 9A. Controls and Procedures](index=92&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management concluded disclosure controls were not effective due to a material weakness in the financial close and reporting process - Management concluded that the company's disclosure controls and procedures were **not effective** as of December 31, 2020[370](index=370&type=chunk) - A **material weakness** in internal control over financial reporting was identified, stemming from deficiencies in the financial close and reporting process[375](index=375&type=chunk)[384](index=384&type=chunk) - This material weakness, also present in 2019, resulted in audit adjustments in areas such as lease accounting, asset impairment, and accrued liabilities[376](index=376&type=chunk) - Remediation efforts include appointing a permanent CFO, restructuring accounting processes, and hiring additional experienced accounting personnel[377](index=377&type=chunk)[379](index=379&type=chunk)[382](index=382&type=chunk) [Item 9B. Other Information](index=96&type=section&id=Item%209B.%20Other%20Information) The company reports no other information for this item - None[386](index=386&type=chunk) Part III [Item 10. Directors, Executive Officers and Corporate Governance](index=96&type=section&id=Item%2010.%20Directors%2C%20Executive%20Officers%20and%20Corporate%20Governance) The information required for this item will be included in an amendment to this Annual Report on Form 10-K - Information for this item is incorporated by reference and will be filed in an amendment to the Form 10-K[387](index=387&type=chunk) [Item 11. Executive Compensation](index=96&type=section&id=Item%2011.%20Executive%20Compensation) The information required for this item will be included in an amendment to this Annual Report on Form 10-K - Information for this item is incorporated by reference and will be filed in an amendment to the Form 10-K[388](index=388&type=chunk) [Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](index=97&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Stockholder%20Matters) The information required for this item will be included in an amendment to this Annual Report on Form 10-K - Information for this item is incorporated by reference and will be filed in an amendment to the Form 10-K[389](index=389&type=chunk) [Item 13. Certain Relationships and Related Transactions, and Director Independence](index=97&type=section&id=Item%2013.%20Certain%20Relationships%20and%20Related%20Transactions%2C%20and%20Director%20Independence) The information required for this item will be included in an amendment to this Annual Report on Form 10-K - Information for this item is incorporated by reference and will be filed in an amendment to the Form 10-K[390](index=390&type=chunk) [Item 14. Principal Accountant Fees and Services](index=97&type=section&id=Item%2014.%20Principal%20Accountant%20Fees%20and%20Services) The information required for this item will be included in an amendment to this Annual Report on Form 10-K - Information for this item is incorporated by reference and will be filed in an amendment to the Form 10-K[391](index=391&type=chunk) Part IV [Item 15. Exhibits and Financial Statement Schedules](index=98&type=section&id=Item%2015.%20Exhibits%20and%20Financial%20Statement%20Schedules) This section lists the consolidated financial statements and provides an index of all exhibits filed with the report - This item contains the index to the Consolidated Financial Statements (page F-1) and a detailed list of all exhibits filed with the report[393](index=393&type=chunk)[394](index=394&type=chunk)[395](index=395&type=chunk) [Item 16. Form 10-K Summary](index=106&type=section&id=Item%2016.%20Form%2010-K%20Summary) The company reports no summary for this item - None[405](index=405&type=chunk) Financial Statements and Notes [Consolidated Financial Statements](index=113&type=section&id=Consolidated%20Financial%20Statements) Financing activities drove a shift from a stockholders' deficit to a surplus, despite a significant net loss of $92.2 million in 2020 Consolidated Balance Sheet Data (in thousands) | Account | Dec 31, 2020 | Dec 31, 2019 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $89,801 | $2,184 | | Total current assets | $91,779 | $3,933 | | Total assets | $103,133 | $28,724 | | **Liabilities & Equity** | | | | Total current liabilities | $13,477 | $16,220 | | Total liabilities | $22,762 | $31,260 | | Total stockholders' equity (deficit) | $80,371 | $(2,536) | Consolidated Statement of Operations Data (in thousands) | Account | Year Ended Dec 31, 2020 | Year Ended Dec 31, 2019 | | :--- | :--- | :--- | | Total revenue, net | $8,385 | $48,515 | | Operating loss | $(40,104) | $(15,872) | | Net loss | $(92,232) | $(20,530) | | Net loss per share (Basic & Diluted) | $(2.05) | $(12.99) | Consolidated Statement of Cash Flows Data (in thousands) | Account | Year Ended Dec 31, 2020 | Year Ended Dec 31, 2019 | | :--- | :--- | :--- | | Net cash used in operating activities | $(25,012) | $(113) | | Net cash used in investing activities | $(4,349) | $(2,275) | | Net cash provided by financing activities | $117,225 | $1,165 | [Notes to Consolidated Financial Statements](index=119&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) Notes detail the pandemic's impact, liquidity measures, significant asset impairments, and the conversion of all major debt to equity - **(Note 2)** Critical accounting policies include impairment testing for long-lived assets, fair value measurement for derivatives, and revenue recognition[452](index=452&type=chunk)[462](index=462&type=chunk)[470](index=470&type=chunk) - **(Note 6 & 8)** In 2020, the company recorded impairment expenses of approximately **$4.95 million** on property and equipment and **$3.93 million** on the XpresSpa trade name[506](index=506&type=chunk)[517](index=517&type=chunk) - **(Note 9)** Due to COVID-19, the company received rent concessions of **$2.56 million** and recorded an impairment expense of **$6.34 million** on its right-of-use lease assets[524](index=524&type=chunk)[528](index=528&type=chunk) - **(Note 10)** All major convertible debt, including the B3D Note ($7.9 million) and the Calm Note ($2.5 million), was **converted into common stock** during 2020[534](index=534&type=chunk)[547](index=547&type=chunk) - **(Note 11)** The company conducted multiple registered direct offerings in 2020, raising net proceeds of approximately **$110.6 million**[437](index=437&type=chunk)[555](index=555&type=chunk)[557](index=557&type=chunk) - **(Note 14)** Segment reporting shows the XpresSpa segment generated $8.0 million in revenue with a **$30.0 million operating loss**, while the new XpresTest segment had an operating loss of **$3.5 million**[597](index=597&type=chunk)

Financial Data and Key Metrics Changes - The company reported negligible revenue during Q3 2020 due to limited operations, resulting in an operating loss of $9.2 million compared to $1.8 million in the prior year [51] - The net loss attributable to common shareholders was $6.1 million, up from $4.6 million in the same period last year [51] - Cash and cash equivalents totaled approximately $61.9 million as of September 30, 2020, with no immediate plans to raise additional capital [53] Business Line Data and Key Metrics Changes - The XpresCheck segment did not report any revenue during Q3 2020, as the management service agreement did not meet revenue recognition criteria [22][51] - Patient volume at XpresCheck locations ranged from 30 to 50 people per day during late Q3, but increased to approximately 50 to 100 people per day in November following the rollout of rapid molecular COVID testing [19][20] - The company has opened XpresCheck locations in JFK, Newark, and Boston Logan International Airport, with plans for further expansion [31][32] Market Data and Key Metrics Changes - Passenger traffic in New York's airports remained deeply depressed, with JFK down 88%, LaGuardia down 87%, and Newark down 76% compared to the previous year [14] - The airline industry saw a two-thirds decline in paid ticket passengers compared to Q3 2019, with even greater declines in the New York area [15] Company Strategy and Development Direction - The company is transitioning to focus on long-term opportunities in travel, health, and wellness, with plans to develop a new health and wellness brand [10][44] - A new pop-up clinic prototype has been developed to facilitate faster and more cost-effective COVID-19 testing rollouts in airports [37] - The company aims to leverage its existing real estate and airport expertise to create a new niche industry in travel health and wellness [46][49] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the challenges posed by the pandemic, including low airport traffic and the impact on traditional spa services [12][13] - The company remains optimistic about the future of travel and health services, anticipating a significant opportunity for testing and wellness services as air travel resumes [39][43] - Management emphasized the importance of adapting to a post-COVID environment, suggesting that travel security protocols will change permanently [57] Other Important Information - The company has raised over $70 million in net proceeds through equity offerings, which has been transformational for its operations [52] - The management service agreement operates under a model where revenue is recognized based on the physician's practice performance, not on a per-patient basis [24][27] Q&A Session Summary Question: Why not reopen traditional spas after the vaccine rollout? - Management indicated that reopening spas is contingent on a significant increase in airport traffic and the evolving travel environment post-COVID [57] Question: What level of patient volume is needed to recognize management fees? - Management stated that averaging over 100 patients a day would be a healthy mark to recognize management fees, but it varies based on services opted by patients [60] Question: Is it possible for the management fee to be reached given limited airport traffic? - Management confirmed that the management fee threshold can be reached and that they can renegotiate fees based on business levels [64][69] Question: Why not skip COVID testing and move directly to health and wellness? - Management explained that COVID testing is currently the highest and best use of resources, providing a foundation for future health and wellness services [73][78] Question: Can you elaborate on air bridges and health passport apps? - Management described air bridges as coordinated efforts between airlines and health authorities to facilitate travel, with health apps providing convenience for travelers [81][86] Question: What gives confidence that health and wellness services will be relevant outside airports? - Management believes that the growing segments of travel and health and wellness can be integrated, creating opportunities for services both in and out of airports [94][96]

For the transition period from ___ to ___ UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ⌧ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2020 ◻ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission file number: 001-34785 Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 1 ...

XpresSpa Group, Inc. (XSPA) Q2 2020 Results Conference Call August 19, 2020 5:00 PM ET Company Participants Doug Satzman - CEO Conference Call Participants Operator Greetings, and welcome to the XpresSpa Group Second Quarter 2020 Earnings Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] Please note, this conference is being recorded. I would now like to turn the conference over to your host, ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ⌧ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2020 ◻ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ___ to ___ Commission file number: 001-34785 XpresSpa Group, Inc. (Exact Name of Registrant as Specified in its Charter) | Delaware | 20-4988129 ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ⌧ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2020 ◻ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ___ to ___ Commission file number: 001-34785 XpresSpa Group, Inc. (Exact Name of Registrant as Specified in its Charter) (State or other jurisd ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K (Mark One) x ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2019 OR ¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ___ to ___ Commission file number 001-34785 XpresSpa Group, Inc. (Exact name of registrant as specified in its charter) Delaware 20-4988129 (State or other jurisdi ...

XpresSpa Group | --- | --- | --- | --- | --- | --- | |--------------|---------------------------|------------|-------|-------|-------| | | | | | | | | a preeminent | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | pure-play | health and | | | | | | | | | | | | | wellness services company | | | | | | | | | | | | INVESTOR PRESENTATION 2020 | JANUARY ICR CONFERENCE NASDAQ: XSPA Disclaimers Safe Harbor Statement This presentation includes forward-looking statements, which may be identified ...

Start Time: 17:00 January 1, 0000 5:30 PM ET XpresSpa Group, Inc. (XSPA) Q3 2019 Earnings Conference Call November 14, 2019, 17:00 PM ET Company Participants Doug Satzman - CEO Conference Call Participants Operator Greetings, and welcome to the XpresSpa Group, Inc.'s Third Quarter 2019 Earnings Conference Call. At this time, all participants are in a listen-only mode, and a question-and-answer session will follow the formal presentation. [Operator Instructions]. As a reminder, this conference is being recor ...

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2019 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ___ to ___ Commission file number: 001-34785 XpresSpa Group, Inc. (Exact Name of Registrant as Specified in its Charter) (State or other jurisdiction of inco ...