Leases

6 Months Ended

Jun. 30, 2025

Note 8. Leases

XWELL is contingently liable to a surety company under certain general indemnity agreements required by various airports relating to its lease agreements. XWELL agrees to indemnify the surety for any payments made on contracts of suretyship, guaranty, or indemnity. The Company believes that all contingent liabilities will be satisfied by its performance under the specified lease agreements.

As of June 30, 2025, there was an increase to the lease term for the XpresSpa Las Vegas Airport lease, which has been accounted for as a lease modification. The operating lease right-of-use asset and liability were remeasured at the modification date, resulting in an increase to both balances of $0.08 million.

The following is a summary of the activity in the Company’s current and long-term operating lease liabilities for the six months ended June 30, 2025 and 2024:


	Six months ended June 30,
	2025		2024
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	(1,328)	$	(1,687)
Leased assets obtained in exchange for new and modified operating lease liabilities	$	79	$	-

As of June 30, 2025, operating leases contain the following future minimum commitments:


Calendar Years ending December 31,	Amount
Remaining 2025	$	1,568
2026		2,260
2027		2,137
2028		1,701
2029		1,403
Thereafter		2,858
Total future lease payments		11,927
Less: interest expense at incremental borrowing rate		(1,942)
Net present value of lease liabilities	$	9,985

Other assumptions and pertinent information related to the Company’s accounting for operating leases are:


Weighted average remaining lease term:	5.54	years
Weighted average discount rate used to determine present value of operating lease liability:	6.74	%

Cash paid for minimum annual rental obligations during the three and six months ended June 30, 2025, was $624 and $1,240, respectively. Cash paid for minimum annual rental obligations during the three and six months ended June 30, 2024, was $319 and $769, respectively.

Variable lease payments calculated monthly as a percentage of product and services revenue, were $344 and $341 for the three months ended June 30, 2025, and 2024, respectively, and $664 and $700 for the six months ended June 30, 2025, and 2024, respectively.