XWELL, Inc. PP&E Disclosure
Note 6. Property and Equipment
Property and equipment are comprised of three categories: leasehold improvements, furniture and fixtures, and other operating equipment as of December 31, 2023 and 2022 as follows:
December 31, |
| |||||||
| 2023 |
| 2022 |
| Useful Life | |||
Leasehold improvements | $ | 5,848 | $ | 8,692 |
| Average 5-8 years | ||
Furniture and fixtures | 821 | 1,214 |
| 3-4 years | ||||
Other operating equipment |
| 680 |
| 760 |
| Maximum 5 years | ||
| 7,349 |
| 10,666 | |||||
Accumulated depreciation |
| (4,895) |
| (7,000) |
|
| ||
Total property and equipment, net | $ | 2,454 | $ | 3,666 |
|
| ||
Depreciation is computed using the straight-line method over the estimated useful lives of the related assets. Leasehold improvements are depreciated over the shorter of remaining lease term or economic useful life (which is on average 5-8 years).
The fair values of the Company’s asset groups were determined using the income approach. The income approach incorporated the use of a discounted cash flow method in which the estimated future cash flows and terminal values for the Company were discounted to a present value using a discount rate. Cash flow projections are based on management’s estimates of economic and market conditions which drive key assumptions of revenue growth rates, operating margins, capital expenditures and working capital requirements. The discount rate in turn is based on the specific risk characteristics of the Company, the weighted average cost of capital and its underlying forecast.
The Company performed assessments of its property and equipment for impairment for the years ended December 31, 2023 and 2022 and based upon the results of the impairment tests, the Company recorded impairment expenses of approximately $1,159 and $4,559, respectively, which is included in Impairment of long-lived assets on the consolidated statements of operations and comprehensive loss. The impairment expense is primarily related to the underperformance of the Company’s Treat locations at the JFK and Salt Lake City airports.
During the years ended December 31, 2023 and 2022, the Company recorded $825 and $3,663 respectively of depreciation expense.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2023 | Apr 16, 2024 | Showing above |
| 2022 | Apr 17, 2023 | |
| 2021 | Mar 31, 2022 | |
| 2020 | Mar 31, 2021 | |
| 2019 | Apr 20, 2020 | |
| 2018 | Apr 1, 2019 | |
| 2017 | Mar 29, 2018 | |
| 2016 | Mar 30, 2017 | |
About PP&E Disclosures
The PP&E disclosure details a company's physical asset base — land, buildings, machinery, and equipment — along with the depreciation methods and useful life assumptions that determine how these costs flow through the income statement. Capitalization policy thresholds reveal management's judgment on the boundary between expense and asset, directly affecting both reported earnings and asset values.
Key signals: changes in estimated useful lives or depreciation methods can materially shift reported earnings without any operational change. Compare capital expenditures against depreciation expense — when capex consistently trails depreciation, the asset base may be aging and underinvested. Watch for large asset impairments or write-downs that signal overvalued carrying amounts. Asset retirement obligations reveal future environmental or decommissioning costs that are often underappreciated. Compare PP&E intensity (PP&E-to-revenue) against industry peers to assess capital efficiency and competitive positioning.