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'A Necessary Positive Step Forward': XpresSpa Unveils Initiatives To Improve Liquidity, Capital Structure

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'A Necessary Positive Step Forward': XpresSpa Unveils Initiatives To Improve Liquidity, Capital Structure

XpresSpa Group (NASDAQ: XSPA), which owns airport spas, said Monday that it has improved its capital structure and strengthened its financial condition through a series of debt and equity transactions.

This new round of funding will provide the company with working capital to build five new spas by the end of 2019, according to XpresSpa. 

The company: 

  • Eliminated more than $2.3 million in secured convertible notes and converted them into 942,432 shares of common stock at a conversion price of $2.48 per share.
  • Reached an agreement with its senior secured lender B3D, LLC to extend a $6.5 million senior secured note's maturity by 17 months to May 31, 2021 while increasing the principal amount by $500,000 and lowering the interest rate from 11.24% to 9%. The company has an option to convert the entire principal amount into common stock at $2 per share. 
  • Received $2.5 million in capital from Calm.com, Inc. in the form of 5% unsecured convertible notes due May 31, 2022. 
  • On Monday, the majority of Series D preferred stock holders agreed to convert about $24 million of Series D 9% convertible preferred stock into common stock at $2 per share.
  • Amended its May 2018 securities purchase agreement. 

“While these series of transactions dilute existing common shareholders in the short-term, we are removing the liquidation preference of the Series D preferred shareholders, which is a necessary positive step forward for XpresSpa,” CEO Doug Satzman said in a statement.

“We have now substantially improved our balance sheet through the restructuring and reduction of outstanding secured debt and conversion of preferred shares to common, subject to shareholders’ approval." 

XpresSpa Group shares were up 9.68% at $1.69 at the time of publication Monday. 

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