XpresSpa Group Provides Business Update
July 06 2020 - 4:18PM
XpresSpa Group, Inc. (Nasdaq: XSPA), a health and wellness company,
today provided a business update and announced that it has filed
financial results on SEC Form 10-Q for the first quarter ending
March 31, 2020.
Doug Satzman, XpresSpa Group CEO, stated, “The
approximately $48 million in gross proceeds that we have raised
since January, through a series of registered direct equity
offerings have been truly transformational for XpresSpa and we
appreciate the investment community’s confidence in us as we work
to reimagine our health and wellness service offerings. These
series of transactions have substantially strengthened our
financial condition and enhanced our flexibility by significantly
increasing our cash position. Our near-term objective with these
proceeds is to explore emerging health and wellness opportunities
that we can rollout to our portfolio as well as consider additional
COVID-19 testing sites through our XpresCheck brand. In addition,
we saw the Company’s balance sheet further strengthened by
investors converting all preferred stock into common shares, and
elimination by conversions of a substantial majority of its
outstanding debt.”
Mr. Satzman added, “We are thrilled that our
pilot COVID-19 testing has launched at JFK International Airport in
our new modular constructed testing facility in the Arrivals Hall
at Terminal 4. We also remain in active discussions with other U.S.
airports regarding the potential roll out of this concept.”
Balance Sheet UpdateAs of March
31, 2020, the Company had cash and cash equivalents, excluding
restricted cash, of $3.9 million. Subsequent to March 31, 2020 the
Company raised approximately $43 million of gross proceeds in a
series of registered direct equity offerings. In addition, the
Company’s indebtedness was reduced by $9.1 million as a result of a
series of transactions including (i) the conversion of $5.7 million
of the B3D Note to Common Stock, (ii) the conversion of the entire
$2.5 million Calm Note to Common Stock, and (iii) the repayment in
full of the $910,000 owed to Credit Cash, net of a discount of
approximately $91,000.
As of June 19, 2020, the Company has
approximately 56.5 million shares of common stock outstanding
and warrants to purchase up to an aggregate of 7.71 million shares
of common stock that are immediately exercisable at an average
price of approximately $5.25 per share.
Business Update
- On March 24, 2020, the Company temporarily closed all of its
global spa locations, largely due to the categorization of such spa
locations by local jurisdictions as “non-essential services” in
connection with COVID-19. The Company intends to reopen its spa
locations and resume operations once restrictions are lifted and
airport traffic returns to sufficient levels to support
operations.
- On March 25, 2020, the Company announced that it was in
advanced conversations with certain COVID-19 testing partners to
develop a model for testing in U.S. airports. The Company
subsequently launched the XpresCheck™ brand, under the Company’s
newly-formed XpresTest, Inc. subsidiary, to provide COVID-19
testing in U.S. airports.
- On June 5, 2020, the Company announced a partnership with
HyperPointe™ to design a workflow with the capability to
potentially test thousands of people each week as well as collect
and organize confidential patient data that can be used to study
and help better understand the impact of the COVID-19 virus.
HyperPointe’s creatives have produced comprehensive promotional,
educational and digital solutions to facilitate a successful
rollout. In addition, their technology team has integrated the
XpresCheck workflow with AdvancedMD’s Practice Management and
Electronic Medical Records (EMR) solution for online appointment
scheduling, patient intake, lab integration, medical billing and
reporting analytics
- On June 22, 2020, the Company launched an XpresCheck™ pilot
program at JFK International Airport in the Arrivals Hall of
Terminal 4.
- The new modular constructed testing facility hosts nine
separate testing rooms with a capacity to administer over 500
COVID-19 tests per day.
- XpresCheck is using the latest testing protocols, polymerase
chain reaction (PCR) testing, also known as a nasal swab test, and
blood antibody testing, which looks for markers in the blood (IgG,
IgM) that suggests a person might have had the virus. The tests are
sent to outside laboratories. All insurance plans are accepted
outside of network and all information will remain private and
HIPAA compliant.
- XpresCheck is currently offering testing for airline employees,
contractors and workers, airport concessionaires and their
employees, TSA officers, and U.S. Customs and Border Protection
agents and intends to expand testing to travelers in the future.
Patients can either register for an appointment at XpresCheck.com
or stop by for a walk-in.
- The Company is in active discussions with multiple U.S.
airports to open new testing centers or convert existing spas, to
XpresCheck facilities. However, the likelihood and timing of these
possible openings has not been determined and no assurance can be
given that the Company will expand its XpresCheck brand beyond the
current facility at JFK.
First Quarter 2020
Highlights
- Total revenue was $7.7 million compared to $12.2 million in the
prior year first quarter. This decrease was primarily due to the
negative impact COVID-19 has had on our revenue and results of
operations. The Company’s revenue began to decrease significantly
in February 2020 as COVID-19 began to spread throughout the world
and as rates of infection began to increase. Effective March 24,
2020, all spas were temporarily closed. Comparable store sales
decreased 26.5% for the first quarter 2020.
- Store margin was $550,000 or 7.1% of revenue compared to $3.1
million or 25.6% of revenue in the prior year first quarter.
- General and administrative expenses decreased 10.2% to $3.2
million in 2020 compared to $3.6 million in the prior year first
quarter. The decrease was a result of realized benefits of cost
cutting and control initiatives instituted in 2019, primarily in
salaries, occupancy and professional fees.
- Operating loss from continuing operations increased to $10.7
million compared to $2.8 million in the prior year first
quarter.
- Net loss of $10.7 million compared to net loss of $2.8 million
in the first quarter 2019.
Please refer to the Quarterly Report on Form on
10-Q filed July 6, 2020 for more financial information related to
the first quarter ending March 31, 2020. It can be accessed at
https://investors.xpresspa.com/sec-filings or at
https://www.sec.gov/
About XpresSpa Group, Inc.
XpresSpa Group, Inc. (Nasdaq: XSPA) is a leading global health and
wellness holding company. XpresSpa Group’s core asset, XpresSpa, is
a leading airport retailer of spa services and related health and
wellness products, with 50 locations in 25 airports globally.
Through its XpresTest, Inc. subsidiary, the Company also provides
COVID-19 screening and testing under its XpresCheck™ brand at JFK
International Airport. To learn more about XpresSpa Group, visit:
www.XpresSpaGroup.com. To learn more about XpresSpa, visit
www.XpresSpa.com. To learn more about XpresCheck, visit
www.XpresCheck.com.
Forward-Looking Statements
This press release contains "forward-looking"
statements within the meaning of Section 27A of the Securities Act
of 1933, and Section 21E of the Securities Exchange Act of 1934.
These include statements preceded by, followed by or that otherwise
include the words "believes," "expects," "anticipates,"
"estimates," "projects," "intends," "should," "seeks," "future,"
"continue," or the negative of such terms, or other comparable
terminology. Forward-looking statements relating to expectations
about future results or events are based upon information available
to XpresSpa Group as of today's date, and are not guarantees of the
future performance of the company, and actual results may vary
materially from the results and expectations discussed. Additional
information concerning these and other risks is contained in
XpresSpa Group’s most recently filed Annual Report on Form 10-K,
Quarterly Report on Form 10-Q, recent Current Reports on Form 8-K
and other SEC filings. All subsequent written and oral
forward-looking statements concerning XpresSpa Group, or other
matters and attributable to XpresSpa Group or any person acting on
its behalf are expressly qualified in their entirety by the
cautionary statements above. XpresSpa Group does not undertake any
obligation to publicly update any of these forward-looking
statements to reflect events or circumstances that may arise after
the date hereof.
Investor Relations:ICRRaphael
Gross(203) 682-8253
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