XWELL, Inc. 2025 Annual Report: Key Highlights and Shareholder Considerations

Overview

XWELL, Inc. (formerly XpresSpa Group, Inc.) has released its Annual Report for the year ended December 31, 2025. As a global wellness organization, XWELL is dedicated to providing restorative and health-focused services to travelers. The report contains several critical disclosures that shareholders and potential investors must closely review, as they may significantly impact the company’s share price and long-term outlook.

Key Financial and Operational Highlights

• Going Concern Warning: XWELL’s consolidated financial statements have been prepared on a going concern basis. The company explicitly states it must raise additional capital to fund operations and continue as a going concern. If XWELL is unable to obtain the necessary financing, it may be forced to delay, reduce, or eliminate activities, implement cost-saving measures, or pursue strategic alternatives, any of which could materially and adversely affect the business and its stock value.
• Material Weaknesses in Internal Controls: The company has identified material weaknesses in its internal control over financial reporting, specifically concerning lease accounting, entity-level monitoring, controls over IT vendors, the revenue process, and foreign subsidiaries. Management is actively working on remediation but cannot assure investors of the effectiveness or timing of these efforts. Persistent material weaknesses could result in inaccurate financial reporting, loss of investor confidence, and potential regulatory sanctions.
• Capital Requirements and Liquidity Risks: XWELL’s operations and expansion plans are capital intensive. The company has historically relied on a mix of cash resources and external financing, but there is no guarantee that future financing will be available on acceptable terms. Failure to secure capital may force the company to slow or halt growth initiatives, which could directly impact shareholder value.
• Public Float and Share Count: As of June 30, 2025, the aggregate market value of XWELL’s public float was \$3,633,243, with 7,926,766 shares outstanding as of March 26, 2026. The company does not have any non-voting common stock.

Risks That May Affect Share Value

• Nasdaq Listing Compliance: XWELL notes the risk of not maintaining compliance with Nasdaq’s listing standards. Failure to meet these requirements could result in the delisting of its common stock, which would significantly reduce market liquidity and likely depress the share price.
• Volatility and Research Coverage: The company acknowledges the inherent volatility of its stock and the risk that a lack of analyst coverage or negative research could lead to further declines in share price.
• No Dividend Plans: XWELL has no plans to pay dividends, and investors seeking returns must rely on stock appreciation.
• Dependence on Government Contracts: Part of XWELL’s XpresTest bio-surveillance activities are funded by government contracts, which may not be renewed or replaced, introducing additional uncertainty to future revenues.
• Third-Party and IT Risks: The company relies on third-party service providers for critical business functions, particularly in its bio-surveillance segment. Any breach or failure at these vendors could materially impact operations and financial results.
• Compliance Risks: XWELL’s business is subject to complex and evolving health, privacy, and operational regulations in the US and abroad. Failure to comply could result in significant penalties, reputational harm, or operational restrictions.
• Macroeconomic Headwinds: The company highlights considerable risks from global economic and market conditions, inflation, consumer spending volatility, and geopolitical tensions (such as the conflict in Ukraine and the Middle East), all of which can directly and negatively impact its operating results.
• Tax Asset Limitations: XWELL’s ability to use its net operating loss carryforwards and other tax attributes may be limited, affecting future profitability.
• Remediation Measures: Management has initiated steps to address internal control weaknesses, including multi-currency system upgrades, engaging outside accounting experts, and contracting consulting firms for GAAP compliance. However, there is no assurance these actions will be successful or timely.

Forward-Looking Statements and Shareholder Guidance

The report contains numerous forward-looking statements regarding XWELL’s financial performance, business strategy, capital needs, regulatory risks, and market conditions. These are not guarantees of future performance and are subject to various risks and uncertainties that could cause actual results to differ materially.

Conclusion: Price-Sensitive Takeaways for Investors

• Liquidity Crisis Looms: Investors should be acutely aware of the company’s need for near-term capital. Any signs of financing difficulties or delays in raising funds could trigger a sharp share price reaction.
• Internal Controls Under Scrutiny: The ongoing internal control weaknesses present a real risk of financial misstatements or regulatory action, both of which could negatively impact investor sentiment and stock value.
• Nasdaq Delisting Risk: Continued failure to meet listing standards is a major risk factor that could severely reduce share liquidity and marketability.
• Operational Execution is Key: The company’s ability to execute its business plan, maintain compliance, and successfully remediate internal control issues will be closely watched by the market.

Disclaimer

This article is for informational purposes only and does not constitute investment advice. Investors should conduct their own due diligence and consult professional advisors before making investment decisions regarding XWELL, Inc. Forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially from those expressed or implied herein.

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