XWELL, Inc. Q1 FY2022 earnings call

Strategic Imperatives - Organizing for growth: Aggressively identifying savings, integrating brands holistically, hiring key leaders, and investing in technology. - Increasing airport revenue: Rebuilding retail capability, testing touchless services, adding wellness services to spas, and reviewing airport locations. - Strengthening retail presence: Hiring retail growth expert, reinventing retail offering with bundled products. - Expanding out-of-airport revenue: Pursuing acquisitions outside the airport, leveraging Treat brand for B2B business, and integrating HyperPointe. ### Business Updates - XpresCheck: Reviewing portfolio of locations, optimizing costs, and continuing biosurveillance efforts with CDC. - Airport spa business: 19 spas operating domestically, with plans to have at least 23 reopened by summer, seeing improved performance and renewed interest in wellness services. - Treat brand: Opened 2 locations, with a third to open, and evaluating the model for future integration with legacy businesses. - HyperPointe: Contributed $523,000 to revenue, continuing to play a role in biosafety strategy.

Consolidated revenue for the first quarter was $24 million with adjusted EBITDA of $0.4 million and a quarter-end cash balance of $83 million with no long-term debt. XpresCheck recognized $1.4 million in revenue in Q1 2022. The existing airport spa business has 19 spas operating domestically, with plans to have at least 23 reopened by summer. The Treat brand opened 2 locations in Q1, with a third to open later in the summer and expected modest revenue contribution this year. HyperPointe contributed $523,000 to total revenue in Q1.

Anticipates revenues to be lower than originally forecasted and will not be delivering more specific guidance at this time.

Continued swift relaxation of COVID testing requirements overseas impacting revenue. COVID still poses a risk both domestically and abroad.

Q: When will you be changing the company name and ticker to something more relevant to where you are headed?

A: Scott Milford said they've kicked off work on a rebranding exercise, identified an agency, and once Pablo Henderson joins on May 31, he'll lead the exercise to finalize it.

Q: Should you be looking at acquisitions at this point in time given cash and core business deterioration?

A: Scott Milford said they believe growth through acquisition is the right path, and they'll continue cutting costs while looking for accretive acquisitions.

Q: Are you not confident enough in Treat that you need to look elsewhere for revenue?

A: Scott Milford said they think they can do both, as XpresCheck leases limit integrated services in some locations, so they'll offer additional services where possible while looking outside the airport.

Q: When do you expect to hear from the CDC on renewing the current contract?

A: Scott Milford said they expect to hear at any time, and they'll continue refining schedules and reducing flight screening to secure renewal.

Q: Are you considering a reverse stock split?

A: Scott Milford said they're focused on delivering strategies to drive long-term value and aren't specifically discussing a reverse stock split.

Q: How many XpresSpas are not currently open and plans for them?

A: Scott Milford said there are 11 spas in various stages of decision making around possible closure, with tough decisions being made to reduce exposure; they'll be opportunistic with acquisitions for better real estate or airport locations.