Greetings. Welcome to XWELL, Inc.'s Fiscal Year 2022 Results Conference Call. [Operator Instructions] As a reminder, this conference call is being recorded on April 17, 2023. I would now like to turn the conference over to Omar Haynes, Interim Chief Financial Officer for XWELL. Please go ahead, sir.

Good day, everyone. Welcome to our conference call to review XWELL's fiscal year 2022 operating results. Joining me on today's call is Scott Milford, XWELL's Chief Executive Officer. We have posted our fiscal year earnings release on the Investor Relations section of our website located at www.xwell.com. A link to the webcast of today's conference can also be found on our site. Before turning the call over to Scott for his prepared remarks, we need to advise you of the following. Comments made on today's call may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on current assumptions and opinions that involve a variety of known and unknown risks and uncertainties. Actual results may differ materially from those contained in or suggested by such forward-looking statements. Important factors that might cause such differences include those set forth from time to time in our SEC filings, including our report on Form 10-K for the year ended December 31, 2022, as well as other current and periodic reports that we file with the SEC. With that said, I'd now like to turn the call over to Scott.

Thank you, Omar, and good day, everyone. We appreciate you joining us today. I'll begin today's call by providing an update on recent business activity and how we're performing. Then Omar will provide an overview of our fiscal year 2022 results. As outlined in our December shareholder letter, I'm pleased to note that during 2022, XWELL continued to make steady progress executing against the company's operating strategy and that our focus in 2023 is to further leverage that progress to deliver a leaner, more profitable spa business, expand our biosurveillance business and grow profit through off-airport acquisition. We're seeing strong operating momentum year-over-year in our retail operation. Most of our spas are performing better compared to a year ago. And as I'll discuss in a few minutes, we're already seeing signs of strong performance from the use of our new therapeutic chairs which will replace our existing lounges. Additionally, we're beginning to execute the physical upgrade of our core locations while also advancing the use of autonomous services, all with the goal of improving the overall experience we deliver our guests while also improving unit economics in our airport business. As I referenced in my letter to shareholders in December, we made a number of difficult decisions in 2022, which included closing spas that we had determined would not meet our future growth expectations. And we expect to continue that effort as we continue to look at our existing company-owned portfolio of spas in the U.S. As I stated in our shareholder letter, my goal is to evolve our brand as a leading provider of health and wellness services for people on the go. This effort will require us to continue focusing on growth outside the airport and rightsizing our spa portfolio to a leaner and more profitable division of…

Thank you, Scott. I'm now going to provide a brief synopsis of our fiscal year 2022 results. However, for details, please refer to the 10-K that has been filed with the SEC. For fiscal year 2022, total revenue was $55.9 million compared to $73.7 million in the prior year. This $17.8 million decline is primarily driven by softening in the demand at our XpresCheck testing facilities. 2022 revenue primarily consists of approximately $15 million in revenue from XpresSpa locations as well as the Treat locations, $2 million in revenue related to our acquisition of HyperPointe earlier this year -- rather earlier in 2022, $7 million in revenue from our biosurveillance partnership and $32 million from our XpresCheck locations. Turning to expenses. Our total cost of sales increased to $43.9 million from $41.4 million in the prior year. The principal factor leading to this increase was the reopening of several spas in the U.S., the opening of 4 spas in Turkey in 2022 and the acquisition of HyperPointe, all offset by the closure of several underperforming XpresCheck locations in Q4 2022. As we've discussed on prior conference calls, the cost of testing kits and location-level labor costs remain the largest factors in our cost of sales. Switching to general and administrative expenses. These expenses totaled $31.2 million compared to $24.2 million for the year prior comparable period. As reported in the second half of 2022 10-Q, G&A expenses for the first half of 2022 were approximately $9 million higher than that for the same period during 2021. Demonstrating our cost-cutting efforts and initiatives, G&A expenses for the second half of 2022 reflects an approximate $4 million in savings when compared to the first half of 2022 and an approximate $2 million in savings when compared to the same period in 2021. We reported an operating loss for the year of approximately $31 million compared to an operating profit of approximately $4 million in the prior year. Our net loss attributable to common shareholders was approximately $33 million compared to net income of approximately $3 million in the prior year. As Scott discussed, it is important to note that we continue to strategically invest in our long-term growth initiatives. With respect to our GAAP financials, our liquidity remains strong with cash and cash equivalents totaling $19 million, $23 million in marketable securities, working capital of approximately $36.4 million and no long-term debt. Turning to our stock buyback program. During 2022, we repurchased approximately 19.5 million shares outside of blackout periods or approximately $23.8 million. All of that activity in 2022 occurred in the first 3 quarters, and there are approximately 0.8 million shares remaining in the program out of the total 25 million shares authorized by the Board in 2021 and 2022. This concludes our financial review. I'll now turn the call back to Scott to address some investor questions.

Thanks, Omar. To recap, 2022 was a transitional year for XWELL, and our financials reflect that. As we look ahead, we're moving towards improved growth, and we believe that XWELL enters 2023 in a better position to unlock the full potential of our company. For example, we're seeing meaningful traction from our retail growth initiatives, we delivered year-over-year same-store sales growth of 90% in January 2023 and 50% growth in February 2023, which is a result of the expansion in hours, increased staffing levels and of course, the incremental retail offerings. The benefits of our efforts are clearly beginning to take root, and these preliminary results demonstrate our stronger retail offering and the continuing strength of the new services we're offering. Moving forward, we see lots of opportunity to improve our overall retail performance and will continue to boost our labor consistent with the additional services we're adding. Additionally, as highlighted in December, we're working toward a clear line of sight for sustainable profitability and remain focused on investing our available capital on revenue and profit-accretive efforts. And while we recognize that our efforts in 2023 will require capital investment, we're thoughtful in our approach to how each dollar is being utilized and will not hesitate to take the necessary steps or make the tough decisions for the continued growth of our business. In short, we're making disciplined adjustments in how we operate to deliver more value to our shareholders. Before wrapping up, we've had a number of questions recently from investors regarding our M&A plans, our B2B strategy and also our stock price. Let me see if I can share where we're at with each of those.

When we rebranded to XWELL in 2022, one of our goals was to use our new brand identity to expand outside the airport. We recognized that while we could continue to generate profit from our spa business, we also acknowledge that it alone would not unlock the growth potential required to position us as a $100 million business by 2026. To that end, we began looking at revenue and EBITDA-accretive acquisitions that would not only complement our existing business and brand, but also serve as a pivotal growth platform outside the airport. Today, we have looked at a number of possible businesses that could serve our growth goals, but we were unable to advance our discussions past an initial letter of intent. Ideally, our strategic acquisition path will involve one or more businesses within the health and wellness space that enable XWELL to serve its mission of being an authority in health and wellness for people on the go. And whether that involves buying providers of health services, regenerative services or aesthetic services, we continue to apply effort to this growth strategy. I'm encouraged by our recent activity, and while I'm looking forward to updating you on our acquisition efforts in the near term, at a general level, I have to remind you that our policy is not to comment on any specific opportunities we may have identified as they may be in various preliminary discussions or diligence stages. We've also had a number of investors ask us about our B2B efforts and where we are with generating meaningful and sustainable revenue growth in this area to help offset lost revenue from XpresCheck. While we've made some inroads in developing B2B client relationships, including a partnership with the NFL Players Association and inroads into a longer-term partnership for amenity services…

And this concludes today's conference, and you may disconnect your lines at this time. Thank you for your participation.