Greetings. Welcome to XWELL's Second Quarter 2023 Earnings Conference Call. As a reminder, this conference is being recorded on August 14, 2023. I would now like to turn the conference over to Suzanne Scrabis, Chief Financial Officer for XWELL. Please go ahead.

Good day, everyone. Welcome to XWELL's conference call to review our second quarter 2023 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 call 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.

Hello, everyone, and thank you for joining our second quarter 2023 earnings conference call. We had a productive second quarter and continue with our efforts towards profitability by improving revenue growth in our spa business, reducing expenses and honing in on EBITDA-accretive acquisitions that will help drive our future. As I've said before, there is still much work to do, but I'm encouraged by the progress we're making. The business delivered sequential revenue growth of approximately 15.7% and a sequential reduction in operating expenses of approximately 13%. Our net loss for the second quarter of 2023 on a GAAP basis was approximately $5.7 million, representing a reduction of approximately $2.2 million or 28% compared to the same period in 2022. The changes we're making are beginning to take hold, and I believe we're on the right path to improve performance and profitability. As you may know, given our international operations, fluctuations in the U.S. dollar exchange rates can impact reported results. For example, a portion of XWELL's business is conducted in Turkish lira. While never converted into dollars, it's translated into dollars for U.S. GAAP reporting purposes, which results in a foreign currency impact to earnings. I point this out as our Q2 earnings reflect the unfavorable impact of converting Turkish lira generated from our new spas in Turkey to U.S. dollars, which increased our second quarter 2023 net loss by approximately $1.1 million. Excluding this adjustment, our net loss would have been approximately $4.5 million on a currency-neutral non-GAAP basis, which would represent a 43% reduction over Q2 of last year. Our spas are performing better compared to a year ago, driven by increases in staffing and the introduction of new products and services that leverage technology and take advantage of growing wellness trends. Our spa business delivered sales growth of approximately 64% when compared to the same 6-month period last year. We also delivered a total product margin of 58% at our spa locations and our Treat segments. Our international airport spas remain an area of strong performance, delivering net sales growth of approximately 30% compared to the same 6-month period last year. This was driven by the addition of our Istanbul spa locations and increased passenger traffic at our Amsterdam and Dubai locations. On the innovation front, we continue to expand our relationships with autonomous service providers, enabling us to deliver a more efficient experience at a lower labor cost. We recently expanded our pilot with Clockwork and successfully launched autonomous manicures in our Miami location with our sights set on launching in Orlando and Atlanta after that. Our autonomous massage chairs are also performing very well and have reduced the payback for these machines from 7 weeks to 5 weeks since launching late last year. These new technologies, coupled with the continued growth of our retail business, further strengthen the viability of the spa business in this space and enable us to take a modified concept of our spa with a lower labor cost to other transportation hubs, both here and abroad. Turning to our Express Test business. We continue to help the country in its effort to monitor and hopefully reduce the threat of pathogen transmission to its first-ever national biosurveillance program. Our 8 passenger screening centers continue to test incoming travelers in 6 of the nation's busiest airports. Biosurveillance continues to be a critical and profitable part of our business, delivering sequential revenue growth of 35% or $2.3 million in the second quarter. Further, we're pleased to continue our partnership with the CDC. The CDC has renewed the traveler-based SARS-CoV-2 genomic surveillance programs to a new 1-year contract awarded on August 12, 2023. The partnership will support public health and biosecurity services with a contract valued at approximately $15.9 million. As I've said on prior calls, our primary goal is to improve our profitability, and we continue to make strides in achieving that, as I've outlined earlier. Ultimately, however, our long-term strategic goal is to transform XWELL into a leading provider of wellness and lifestyle services for anyone on the go. And to do that, we must first build a sustainable and profitable foundation, which we're working towards now, and also smartly drive the growth of our brand. Even with our continued focus on expense management, we have made calculated decisions to grow our existing spa portfolio with the addition of a new spa at Philadelphia Airport and the opening of our 11th international location in Abu Dhabi. Further, we've created a model that we can now take into other transportation hubs that I believe leverages technology and retail expertise with a smaller footprint and a lower cost of labor. As we identify locations that we can bring this model to market, both domestically and internationally, I expect to share more details in the coming months. Next, we have made considerable strides in advancing our out-of-airport acquisition strategy. And while I'm unable to comment on any specific discussions we're having to potentially expand XWELL's health and wellness product offering, I'm confident we have the right team in place to execute our acquisition strategy. And I want to reiterate that we're pursuing opportunities on multiple fronts and that our path forward will potentially involve one or more businesses. We're committed to delivering improved results, which requires operational execution and a deep focus on balancing growth and profitability. To help us achieve this, I'd like to take a moment to formally welcome Suzanne Scrabis to our team. Suzanne joined XWELL as our new Chief Financial Officer in early July, bringing more than 25 years of deep financial and operating experience, including CFO at MAVERICK Technologies. She has an impressive track record of efficiently operating companies at scale, seamlessly integrating acquisitions and driving profitable growth. You'll hear from Suzanne again in a moment, but we believe our strategic value-oriented mindset makes her an invaluable asset to our leadership team. And we intend to fully leverage her unique combination of operations and financial expertise to help XWELL accelerate efforts to remove costs diligently and thoughtfully from our business, while also advancing our plans to build long-term profitability through continued innovation and acquisition.

Awesome. Thank you, Scott. It's great to be here, and I look forward to working with you and the team across XWELL as we continue to drive value for all of our stakeholders. In my first few weeks at XWELL, I've had the opportunity to learn about the company from the inside, visiting spa locations and spending time with our customers and our employees. I've also been meeting with the executive team to understand in detail our operational footprint and plans for the remainder of the year. As I reflect on my experiences so far, I want to highlight a few things. First, I'm quickly learning as much as possible about our health and wellness brands, our customers, and the opportunities before us. These opportunities include investing in high-growth areas that will further capitalize on our strengths and our connection with our consumers but also opportunities to improve efficiencies. Second, I want to reiterate Scott's remarks regarding operational excellence and execution. It is my firm belief that continued improvements in execution, including prudent cost management and enhanced operational processes are keys to unlocking sustainable value and profitability. Further, putting all of this into better balance will strengthen our ability to execute against the appropriate external and organic growth strategies that will position XWELL for success today and in the long term. We're focused and moving forward towards a compelling business transformation, and I look forward to speaking with you all again in the months ahead. Thanks again for joining our call. I'll now turn it back to Scott.

Thank you, Suzanne. As I close our second quarter earnings call, I want to reiterate that I firmly believe there is ongoing opportunity for XWELL to drive growth and unlock shareholder value. We're excited about our plans to build upon our continued momentum in the second half of 2023 and beyond. As I reflect on my time as CEO, in 2022, we committed to optimizing our cost structure, rebuilding our retail strategy, growing internationally, and expanding our business outside of our airport spa locations. I'm pleased we have met 3 of our 4 goals, but I share your disappointment that we have not closed an acquisition. My commitment remains strong around this key driver of long-term growth. And I look forward to sharing further news about our progress soon. In the meantime, we're focused on smart expansion, both domestically and internationally. We're leveraging new retail products and technologies, and we're making considerable progress managing efficiencies. And further, to provide XWELL additional financial flexibility down the road and as a measure of good corporate governance, we filed a new shelf registration with the SEC earlier this month. Before I conclude today's earnings call, I would like to highlight a few near-term activities on our investor calendar. XWELL's Annual Shareholder Meeting is scheduled for Tuesday, August 22, at 11 a.m. Eastern Time. Some proposals on the ballot include a proposed reverse split, selection of our public accounting firm, and election of our Board members. Also, as detailed in the proxy statement we filed with the SEC, the proposed reverse stock split is intended to increase the per-share trading price of our common stock to satisfy the $1 minimum bid price requirement for continued listing on the NASDAQ stock market. As outlined in our proxy statement, the Board believes that if we're delisted, it could adversely affect the market for our stock, resulting in decreased liquidity for the stock as well as potentially lower prices and larger spreads in the bid and ask prices for our common stock. Additionally, as outlined in our proxy statement, the company and the Board believes that maintaining our listing on NASDAQ is important in maintaining our ability to raise additional necessary capital to equity or debt financing and may provide a broader market for our common stock. Next, further communicate our strategy and the attractiveness of an investment in XWELL, we plan to get out on the road in the months ahead, and we'll be looking to host virtual investor roadshows and attend investor conferences. It's our intention that these meetings will provide a better opportunity to tell our story and will be useful to investors in understanding how we're moving forward as a company. Further, it's our hope that engaging in meaningful dialogue with potential investors will have a positive impact on expanding our investor base. At the same time, we plan to slightly modify the frequency of our earnings conference calls to twice a year. While we'll continue our regular cadence of issuing detailed earnings releases quarterly in conjunction with our 10-Qs and 10-Ks, we'll plan to host year-end earnings calls in March 2024, followed by a second-quarter midyear update in August 2024. We believe this approach when combined with face-to-face and virtual investor presentations will allow for more frequent updates and broader discussions regarding our goals, objectives, and achieved progress. In summary, we're very excited about our future, and we look forward to spending time with investors in the coming months, discussing XWELL and its growth opportunities. I'll now turn the call back over to the operator.