XpresSpa Group(US:XWEL)2025-05-20 20:34Financial Performance - Total revenue for the three months ended March 31, 2025, was $7,023, a decrease of $1,703 or 20% compared to $8,726 for the same period in 2024, primarily due to lower CDC XpresTest revenue and XpresSpa revenue [119]. - Total cost of sales for the three months ended March 31, 2025, was $5,704, a decrease of $351 or 6% from $6,055 in 2024, driven by reduced operating costs in outside labor, service supplies, and product costs [120]. - General and administrative expenses increased by approximately 3% to $4,311 for the three months ended March 31, 2025, compared to $4,173 in 2024, primarily due to higher accounting, legal, and public company costs [123]. - Other non-operating expenses decreased from $58 million in Q1 2024 to $33 million in Q1 2025, a reduction of $25 million [124]. - Interest income, net decreased by $52 million from $110 million in Q1 2024 to $58 million in Q1 2025 due to lower cash in interest-bearing accounts [126]. Assets and Liabilities - As of March 31, 2025, the company had cash and cash equivalents of $3,650 million and total current assets of $14,841 million, with current liabilities of $8,860 million [127]. - The working capital surplus decreased from $6,113 million as of December 31, 2024, to $5,981 million as of March 31, 2025 [127]. - The company used net cash of $4,178 million for operating activities during the three months ended March 31, 2025 [129]. Strategic Initiatives - The acquisition of Naples Wax Center on September 12, 2023, was for a purchase price of $1,624, aimed at expanding the company's wellness platform beyond airport clients [107]. - The company plans to expand its retail strategy by adding more products and aligning them with service offerings, such as muscle relaxation patches for massages [108]. - The company is looking to further expand internationally, believing this strategy will enhance its ability to grow other brands, including bio surveillance services outside the U.S. [109]. - The company is pursuing strategic partnerships to strengthen long-term profitability and improve its cash position [128]. Compliance and Concerns - The company received a letter from Nasdaq on May 13, 2025, indicating non-compliance with the minimum bid price requirement, with a compliance period until November 10, 2025 [110]. - The company received a letter from Nasdaq indicating non-compliance with the minimum bid price requirement of $1.00 per share, with a compliance period until November 10, 2025 [132]. - The company expressed substantial doubt about its ability to continue as a going concern due to recurring losses and insufficient liquidity [131]. - The company plans to raise additional equity or debt capital to fund future operations but cannot assure success in these efforts [130]. Revenue Contracts - XpresTest's revenue from a renewed program with the CDC totaled approximately $15,100, with a three-year contract valued at $22.2 million, extending the program through February 25, 2025 [106]. Operational Metrics - As of March 31, 2025, XWELL operated 17 domestic XpresSpa locations and 11 international locations, including key airports in Dubai, Abu Dhabi, Amsterdam, and Istanbul [101]. - The depreciation and amortization expense decreased by approximately 26% to $166 for the three months ended March 31, 2025, compared to $225 in 2024, due to fewer long-lived assets available for depreciation [121]. - The company reported a change in fair value of warrant liability amounting to $2,590 million in Q1 2025 [125].