XpresSpa Group(XWEL) - 2019 Q4 - Annual Report

Financial Performance - XpresSpa generated $48.5 million in revenue for 2019, a decrease from $50.1 million in 2018, with approximately 82% of revenue from services[19] - Approximately 82% of XpresSpa's total revenue in both 2019 and 2018 was derived from services, primarily massage and nail care[19] - XpresSpa's stockholders' equity was in a deficit position as of December 31, 2019, raising compliance concerns with Nasdaq listing standards[45] - The company secured financing totaling approximately $9,440,000 in 2020 through cash advances, loans, and stock offerings to support operations during the COVID-19 crisis[30] Operational Impact of COVID-19 - Due to COVID-19, all global spa locations were temporarily closed starting March 24, 2020, significantly impacting cash flows and leading to a liquidity crisis[27] - The company temporarily closed all global locations on March 24, 2020, due to COVID-19, categorizing its services as "non-essential"[48] - XpresSpa temporarily closed all global spa locations on March 24, 2020, due to COVID-19, which has materially adversely impacted its operations and cash flows[27][29] - The company is exploring partnerships for COVID-19 testing in U.S. airports while awaiting the lifting of restrictions to resume normal operations[28][40] Location and Market Presence - The company operated 51 locations as of December 31, 2019, including 46 domestic and 5 international locations, providing about one million services and products annually[24] - XpresSpa operated 51 locations across 25 airports in three countries as of December 31, 2019, with a dominant market share in the U.S. and nearly three times the number of domestic locations as its closest competitor[24] - The largest domestic competitor operates only 15 locations, highlighting XpresSpa's significant market presence[34] Strategic Initiatives - Management plans to close nine underperforming spas, representing about 20% of the spa portfolio, to focus on profitable locations and expansion[32] - XpresSpa has strategic partnerships with Calm, Inc. and Persona™ to enhance product offerings in its locations[20][21] - The company has a flexible retail format, allowing it to adapt to various airport sizes and operate multiple stores within a single airport[38] - XpresSpa's business model allows for adaptation to space-constrained airports, enhancing its ability to secure new locations[38] Employee and Operational Plans - As of March 15, 2020, XpresSpa employed approximately 507 full-time and 221 part-time employees, with plans to reinstate furloughed employees once restrictions are lifted[47][48] - As of March 15, 2020, XpresSpa had approximately 507 full-time and 221 part-time employees, with many furloughed due to the pandemic[47][48] Company Background - The company rebranded from FORM Holdings Corp. to XpresSpa Group, Inc. on January 5, 2018, aligning its strategy with health and wellness services[49] - The company's common stock is traded under the symbol "XSPA" on the Nasdaq Capital Market since January 8, 2018[49] - The principal executive offices are located at 254 West 31 Street, 11 Floor, New York, New York 10001[49] - The company provides access to its filings with the SEC, including annual reports on Form 10-K and quarterly reports on Form 10-Q, available free of charge on its website[49] - The public can access SEC filings at the SEC's Public Reference Room and obtain information by calling the SEC[50]