Item 2.02. Results of Operations and Financial Condition
On January 10, 2022, XpresSpa Group, Inc. ("XpresSpa Group" or the "Company")
issued a press release (the "Selected Preliminary Results Press Release")
setting forth the Company's preliminary expectations regarding selected
financial results for the fourth quarter and full 2021 fiscal year. A copy of
the Selected Preliminary Results Press Release is being furnished as Exhibit
99.1 and incorporated herein by reference.
The financial results in the Selected Preliminary Results Press Release are
preliminary and subject to change pending the Company's filing of its Form 10-K
for fiscal year 2021, scheduled for March 2022. The preliminary financial
results presented in the Selected Preliminary Results Press Release are based
solely upon information available to the Company as of the date thereof, are not
a comprehensive statement of the Company's financial results or positions as of
or for the three months or 12 months ended December 31, 2021, and are subject to
change pending the Company's announcement of definitive financial results.
Item 3.02. Unregistered Sales of Equity Securities.
On January 9, 2022, XpresSpa Group entered into an acquisition agreement to
acquire all of the equity interests in gcg Connect, LLC, d/b/a HyperPointe, a
New Jersey limited liability company ("HyperPointe"), for an aggregate purchase
price of approximately $6.5 million, plus a potential earnout described below of
up to $7.5 million (the "Acquisition"). As a portion of the initial
consideration for the Acquisition, XpresSpa Group has agreed to issue 552,486
shares of XpresSpa Group's common stock, $0.01 par value ("Common Stock"),
valued at the closing reference price of $1.81, which is equal to the volume
weighted average trading price of the Common Stock on the Nasdaq Global Select
Market for the 30 consecutive trading day period ended December 31, 2021, to the
equityholders of HyperPointe upon consummation of the transactions contemplated
by the acquisition agreement, subject to certain closing conditions.
XpresSpa Group also agreed pursuant to an earnout provision to issue up to an
additional $7.5 million in cash or stock if certain earnout performance targets
are met during an earnout period ending on the third anniversary of the date of
the acquisition agreement. For purposes of the earnout, the Common Stock will
also be valued based on per share. The earnout payments may be satisfied in (i)
cash, (i) shares of Common Stock (also priced at $1.81, which is equal to the
volume weighted average trading price of the Common Stock on the Nasdaq Global
Select Market for the 30 consecutive trading day period ended December 31, 2021,
or (iii) any combination thereof, at the election of the equity owners of
HyperPointe, provided that in the event (and to the extent) XpresSpa Group does
not have sufficient authorized shares of Common Stock that are unissued and not
duly reserved for issuance upon options, warrants or other convertible
securities), then XpresSpa Group shall be permitted to settle any earnout
payments in cash. As a result, XpresSpa Group may issue up to an additional
4,143,647 shares of Common Stock; however, the actual number of shares that will
be issued under the earnout, if any, will depend on (i) the extent of
fulfillment of the earnout performance targets at the time of calculation of the
earnout and (ii) the elections and conditions described in the previous
sentence. The parties expect the Acquisition, which is subject to customary
closing conditions, will close in the first quarter of 2022.
Effective upon and subject to the closing of the Acquisition, the Company has
agreed to issue options to Ezra Ernst to purchase up to an aggregate of
1,000,000 shares of Common Stock, which award was granted as an employment
inducement award pursuant to NASDAQ Listing Rule 5635(c)(4) (the "Inducement
Award").
The issuance of shares of Common Stock in connection with the Acquisition, as
well as the Inducement Award and the shares of common stock issuable upon
exercise thereof, will be made in accordance with the terms and subject to the
conditions set forth in the acquisition agreement and in reliance on the private
offering exemption of Section 4(a)(2) of the Securities Act of 1933, as amended,
and/or the private offering safe harbor provision of Rule 506 of Regulation D
promulgated thereunder. The issuance and sale is not being conducted in
connection with a public offering, and no public solicitation or advertisement
will be made or relied upon in connection with the issuance of the shares.
Item 7.01. Regulation FD Disclosure.
The Company will be presenting at the 24th Annual ICR Conference on Tuesday,
January 11th, 2022 at 11:00 a.m. Eastern Time. The investor presentation is
attached hereto as Exhibit 99.2 and is incorporated herein by reference. The
presentation will be available on the Company's website
http://xpresspagroup.com. Visitors to the website should select the "Investors"
tab and navigate to the "Events" link to access the webcast.
Item 8.01. Other Events
On January 10, 2022, the Company issued a press release (the "HyperPointe Press
Release" and together with the Selected Preliminary Results Press Release, the
"Press Releases") regarding the Acquisition and announcing that Ezra Ernst, CEO
of HyperPointe, as the Chief Executive Officer of the Company's subsidiary,
XpresTest, Inc., running that subsidiary's XpresCheck business and reporting to
Doug Satzman, XpresSpa Group Chief Executive Officer. A copy of the HyperPointe
Press Release is attached hereto as Exhibit 99.3 and is incorporated herein by
reference.
On January 10, 2022, we issued a press release entitled "XpresSpa Group
Announces Inducement Grant Under Nasdaq Listing Rule 5635(c)(4)," a copy of
which is included as Exhibit 99.4 to this report.
Forward-Looking Statements
The Press Releases and the Investor Presentation include forward-looking
statements, which may be identified by words such as "believes," "expects,"
"anticipates," "estimates," "projects," "intends," "should," "seeks," "future,"
"continue," or the negative of such terms, or other comparable terminology.
Forward-looking statements are statements that are not historical facts. Such
forward-looking statements are subject to risks and uncertainties, which could
cause actual results to differ materially from the forward-looking statements
contained herein. The forward looking statements in the Press Releases and the
Investor Presentation constitute forward-looking statements within the meaning
of the Private Securities Litigation Reform Act of 1995. There are a number of
important factors that could cause actual results or events to differ materially
from those indicated by such forward-looking statements, including, but not
limited to, the risks and uncertainties and other factors discussed from time to
time in the Company's filings with the Securities and Exchange Commission
("SEC"), including the Company's Annual Report on Form 10-K for the year ended
December 31, 2020 filed on March 31, 2021, and the Company's subsequently filed
Quarterly Reports on Form 10-Q, including the Form 10-Q for the quarter ended
September 30, 2021 to be filed substantially concurrently with this Form 8-K.
The Company expressly disclaims any obligation to publicly update any
forward-looking statements contained herein, whether as a result of new
information, future events or otherwise, except as required by law.
Item 9.01. Financial Statements and Exhibits
(d) Exhibits
99.1 Selected Preliminary Results Press Release, dated January 10, 2022
99.2 Investor Presentation - January 10, 2022
99.3 HyperPointe Press Release, dated January 10, 2022
99.4 Press Release, dated January 10, 2022 entitled "XpresSpa Group
Announces Inducement Grant Under Nasdaq Listing Rule 5635(c)(4)"
104 Cover Page Interactive Data File (formatted as Inline XBRL and contained in
Exhibit 101)
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