0000950170-23-018219.txt : 20230505 0000950170-23-018219.hdr.sgml : 20230505 20230505133256 ACCESSION NUMBER: 0000950170-23-018219 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 84 CONFORMED PERIOD OF REPORT: 20230331 FILED AS OF DATE: 20230505 DATE AS OF CHANGE: 20230505 FILER: COMPANY DATA: COMPANY CONFORMED NAME: Xponential Fitness, Inc. CENTRAL INDEX KEY: 0001802156 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-MISCELLANEOUS AMUSEMENT & RECREATION [7990] IRS NUMBER: 844395129 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-40638 FILM NUMBER: 23892737 BUSINESS ADDRESS: STREET 1: 17877 VON KARMAN AVE STREET 2: SUITE 100 CITY: IRVINE STATE: CA ZIP: 92614 BUSINESS PHONE: 6507522078 MAIL ADDRESS: STREET 1: 17877 VON KARMAN AVE STREET 2: SUITE 100 CITY: IRVINE STATE: CA ZIP: 92614 10-Q 1 xpof-20230331.htm 10-Q 10-Q
One Year9 Months--12-319 MonthsOne YearfalseOne Year0001802156One YearOne YearQ1P1YOne YearOne YearOne Year9 MonthsOne YearOne YearOne YearOne Year0001802156us-gaap:NotesReceivableMember2023-03-310001802156xpof:TwoThousandTwentyThreeIncrementalTermLoanMember2023-01-090001802156xpof:EquipmentRevenueMember2022-01-012022-03-310001802156xpof:MultiTrancheTermLoanMember2022-01-012022-12-310001802156us-gaap:PrivatePlacementMemberus-gaap:ConvertiblePreferredStockMember2021-07-230001802156xpof:DeferredVideoProductionCostsMember2023-03-3100018021562028-01-01xpof:FranchiseDevelopmentFeesMember2023-03-310001802156xpof:EquipmentRevenueMember2023-01-012023-03-310001802156xpof:ProfitInterestUnitsTimeVestingMember2023-01-012023-03-3100018021562028-01-01xpof:BrandFeesMember2023-03-310001802156us-gaap:FurnitureAndFixturesMember2023-03-310001802156xpof:RumbleContingentSharesMember2023-01-012023-03-310001802156xpof:StudiosMemberus-gaap:SellingGeneralAndAdministrativeExpensesMemberus-gaap:FairValueInputsLevel3Member2022-01-012022-03-310001802156us-gaap:RetainedEarningsMember2022-01-012022-03-310001802156xpof:UnsecuredAdvancesMember2023-01-012023-03-310001802156us-gaap:CommonStockMemberus-gaap:CommonClassAMember2022-12-310001802156us-gaap:CommonClassAMember2022-12-310001802156xpof:BodyfitTrademarkMember2022-04-012022-06-300001802156us-gaap:CommonClassAMember2023-02-012023-02-280001802156xpof:ReferenceRateMemberxpof:TermLoanFacilityMember2021-04-190001802156xpof:EquipmentAndOtherMember2023-03-3100018021562022-07-310001802156us-gaap:AdditionalPaidInCapitalMember2022-12-310001802156xpof:TreasuryShareOptionsMember2023-01-012023-03-310001802156us-gaap:CommonStockMemberus-gaap:CommonClassBMember2022-12-310001802156xpof:AccruedExpensesMember2022-01-012022-03-310001802156xpof:FranchiseMarketingFundRevenueMember2022-01-012022-03-310001802156xpof:FranchiseDevelopmentFeesMember2022-12-310001802156us-gaap:RetainedEarningsMember2022-03-310001802156xpof:RumbleHoldingsLLCMember2023-03-310001802156srt:MinimumMemberxpof:LoansForEstablishmentOfNewOrTransferredFranchiseStudiosMember2023-03-310001802156xpof:RumbleHoldingsLLCMember2022-07-012022-07-310001802156us-gaap:ReceivablesFromStockholderMemberxpof:RumbleHoldingsLLCMember2021-07-230001802156xpof:FranchiseDevelopmentFeesMember2025-01-012023-03-310001802156us-gaap:LeaseholdImprovementsMember2023-03-310001802156xpof:RowHouseMember2022-01-012022-12-310001802156xpof:AccruedExpensesMemberxpof:BFTAcquisitionMember2023-03-310001802156us-gaap:CommonClassBMember2023-04-280001802156us-gaap:CommonClassAMember2023-03-310001802156us-gaap:TreasuryStockMember2023-03-310001802156us-gaap:LeaseholdImprovementsMember2022-12-310001802156us-gaap:RestrictedStockUnitsRSUMember2023-01-012023-03-310001802156xpof:RumbleHoldingsLLCMember2021-03-310001802156us-gaap:NoncontrollingInterestMember2023-03-310001802156xpof:RowHouseMember2023-03-310001802156xpof:SecondaryPublicOfferingMemberus-gaap:CommonClassBMember2023-02-012023-02-280001802156us-gaap:VehiclesMember2022-12-310001802156xpof:FranchiseDevelopmentFeesMember2023-01-012023-03-310001802156us-gaap:TreasuryStockMember2022-12-3100018021562024-01-012023-03-310001802156xpof:StudiosMember2023-01-012023-03-310001802156us-gaap:NoncontrollingInterestMember2022-01-012022-03-310001802156xpof:FranchiseAgreementsMember2023-03-310001802156xpof:XpoHoldingsMember2023-01-012023-03-310001802156us-gaap:ConstructionInProgressMember2022-12-310001802156us-gaap:RestrictedStockUnitsRSUMembersrt:MinimumMember2023-01-012023-03-310001802156us-gaap:RestrictedStockUnitsRSUMember2022-01-012022-03-310001802156us-gaap:InterestExpenseMemberxpof:TermLoanFacilityMember2023-01-012023-03-310001802156xpof:TwoThousandTwentyTwoIncrementalTermLoanMember2022-09-300001802156xpof:ThirdPartyLeasesMember2023-01-012023-03-310001802156xpof:FranchiseAndServiceRevenueMember2022-01-012022-03-310001802156xpof:FranchiseAgreementsMembersrt:MaximumMember2023-01-012023-03-310001802156xpof:FranchiseRevenueMarketingFundRevenueAndMerchandiseRevenueMember2023-03-3100018021562021-12-310001802156xpof:AntidilutiveConvertiblePreferredStockMember2022-01-012022-03-310001802156us-gaap:NoncontrollingInterestMember2021-12-310001802156xpof:UndesignatedPreferredStockMember2022-12-310001802156xpof:ComputersAndSoftwareMember2022-12-310001802156us-gaap:ServiceOtherMember2022-01-012022-03-310001802156us-gaap:RestrictedStockUnitsRSUMember2022-01-012022-03-310001802156us-gaap:CommonStockMemberus-gaap:CommonClassBMember2023-01-012023-03-310001802156us-gaap:TradeAccountsReceivableMember2023-03-310001802156us-gaap:ReceivablesFromStockholderMemberxpof:RumbleHoldingsLLCMember2021-07-230001802156xpof:RowHouseMemberxpof:AcquisitionAndTransactionExpenseMember2022-01-012022-03-310001802156us-gaap:IPOMemberus-gaap:CommonClassAMember2022-01-012022-03-310001802156xpof:DeferredVideoProductionCostsMember2023-01-012023-03-3100018021562022-01-012022-12-310001802156xpof:RumbleHoldingsLLCMember2023-01-012023-03-310001802156xpof:WebDesignAndDomainMembersrt:MinimumMember2023-01-012023-03-310001802156us-gaap:RestrictedStockUnitsRSUMember2022-12-310001802156us-gaap:CommonClassBMember2023-03-310001802156us-gaap:ParentMember2023-01-012023-03-310001802156us-gaap:FranchiseMember2022-01-012022-03-310001802156xpof:RelatedPartyLeaseMember2022-01-012022-03-310001802156xpof:ProfitInterestUnitsTimeVestingMember2022-01-012022-03-310001802156xpof:TimeBasedProfitInterestUnitsMemberus-gaap:SellingGeneralAndAdministrativeExpensesMember2022-01-012022-03-310001802156xpof:PerformanceBasedRestrictedStockUnitsMember2022-12-310001802156xpof:XPOLLCMember2023-01-012023-03-310001802156xpof:FranchiseAgreementsMember2022-12-310001802156us-gaap:RestrictedStockUnitsRSUMemberxpof:MultiTrancheTermLoanMember2022-12-310001802156us-gaap:NoncontrollingInterestMember2022-03-310001802156us-gaap:RetainedEarningsMember2023-01-012023-03-310001802156us-gaap:RestrictedStockUnitsRSUMember2023-03-310001802156us-gaap:RetainedEarningsMember2023-03-310001802156us-gaap:SubsequentEventMember2023-04-300001802156xpof:FranchiseRevenueMarketingFundRevenueAndMerchandiseRevenueMember2022-01-012022-03-310001802156xpof:RumbleHoldingsLLCMember2021-03-012021-03-310001802156xpof:RowHouseMember2022-12-310001802156xpof:BrandFeesMember2023-03-3100018021562022-03-310001802156xpof:UndesignatedPreferredStockMember2023-03-310001802156us-gaap:PerformanceSharesMember2023-01-012023-03-310001802156us-gaap:RestrictedStockUnitsRSUMember2023-01-012023-03-310001802156xpof:RumbleHoldingsLLCMember2023-01-310001802156xpof:ConversionCommonStockMember2023-01-012023-03-310001802156xpof:AntidilutiveConvertiblePreferredStockMember2023-01-012023-03-310001802156us-gaap:ConvertiblePreferredStockMember2022-12-310001802156xpof:RumbleHoldingsLLCMember2022-01-012022-03-310001802156xpof:FranchiseAndAreaDevelopmentFeesMember2023-03-310001802156us-gaap:ProductMember2023-01-012023-03-310001802156us-gaap:PrivatePlacementMemberus-gaap:ConvertiblePreferredStockMember2021-07-232021-07-2300018021562024-01-01xpof:BrandFeesMember2023-03-310001802156us-gaap:RetainedEarningsMember2022-12-310001802156us-gaap:TrademarksMember2022-12-310001802156us-gaap:CommonStockMemberus-gaap:CommonClassBMember2021-12-3100018021562022-01-012022-03-310001802156xpof:MerchandiseRevenueMember2023-01-012023-03-310001802156xpof:PostNciRebalancingMemberus-gaap:NoncontrollingInterestMember2023-01-012023-03-310001802156xpof:BrandFeesMember2023-04-012023-03-310001802156us-gaap:TrademarksMember2023-01-012023-03-310001802156us-gaap:LetterOfCreditMember2022-07-310001802156xpof:TwoThousandTwentyOneIncrementalTermLoanMember2021-10-080001802156us-gaap:CommonClassBMember2023-02-012023-02-280001802156us-gaap:NotesReceivableMember2022-12-310001802156us-gaap:OverAllotmentOptionMemberus-gaap:CommonClassAMember2023-02-152023-02-150001802156xpof:VonKarmanProductionLLCMember2022-01-012022-03-310001802156us-gaap:IPOMemberus-gaap:CommonClassAMember2021-07-232021-07-230001802156xpof:StudiosMember2022-01-012022-03-3100018021562023-04-012023-03-310001802156us-gaap:IPOMemberus-gaap:CommonClassAMember2023-01-012023-03-310001802156us-gaap:TradeAccountsReceivableMember2023-01-012023-03-310001802156xpof:FranchiseRevenueMarketingFundRevenueAndMerchandiseRevenueMember2022-12-310001802156us-gaap:RetainedEarningsMember2021-12-310001802156xpof:RumbleHoldingsLLCMember2022-12-310001802156us-gaap:CommonStockMemberus-gaap:CommonClassBMember2022-03-310001802156xpof:FranchiseAgreementsMember2023-03-310001802156xpof:PerformanceBasedRestrictedStockUnitsMember2022-01-012022-12-310001802156xpof:ThirdPartyLeasesMember2022-01-012022-03-310001802156us-gaap:CommonStockMemberus-gaap:CommonClassAMember2023-01-012023-03-310001802156xpof:RumbleHoldingsLLCMemberus-gaap:CommonClassAMember2022-11-012022-11-010001802156xpof:ReceivableFromMemberMember2023-03-310001802156xpof:BFTAcquisitionMember2021-10-130001802156xpof:FranchiseRevenueMarketingFundRevenueAndMerchandiseRevenueMember2023-01-012023-03-310001802156xpof:RumbleHoldingsLLCMember2023-03-3100018021562026-01-01xpof:BrandFeesMember2023-03-310001802156us-gaap:CommonStockMemberus-gaap:CommonClassAMember2021-12-310001802156us-gaap:AdditionalPaidInCapitalMember2023-01-012023-03-310001802156us-gaap:CommonStockMemberus-gaap:CommonClassAMember2022-01-012022-03-310001802156xpof:DeferredVideoProductionCostsMember2022-12-310001802156xpof:FranchiseDevelopmentFeesMember2027-01-012023-03-310001802156srt:MinimumMemberxpof:TermLoanFacilityMember2021-04-182021-04-190001802156srt:MaximumMemberxpof:LoansForEstablishmentOfNewOrTransferredFranchiseStudiosMember2023-03-310001802156us-gaap:CommonStockMemberus-gaap:CommonClassAMember2023-03-310001802156xpof:ReceivableFromMemberMember2023-01-012023-03-310001802156xpof:AcquisitionAndTransactionExpenseMember2023-01-012023-03-310001802156us-gaap:LondonInterbankOfferedRateLIBORMemberxpof:TermLoanFacilityMember2021-04-190001802156xpof:RumbleContingentSharesMember2022-07-012022-09-300001802156xpof:EquipmentAndOtherMember2022-12-310001802156us-gaap:FranchiseMember2023-01-012023-03-310001802156xpof:ReceivableFromMemberMember2022-12-3100018021562023-03-310001802156us-gaap:RedeemableConvertiblePreferredStockMember2022-12-310001802156xpof:TimeBasedProfitInterestUnitsMember2023-03-310001802156xpof:XPOLLCMemberxpof:NoncontrollingInterestsMember2023-01-012023-03-310001802156xpof:AccruedExpensesMember2022-12-310001802156xpof:MerchandiseRevenueMember2022-01-012022-03-310001802156us-gaap:FurnitureAndFixturesMember2022-12-310001802156xpof:VonKarmanProductionLLCMember2019-09-012019-09-300001802156xpof:FranchiseAndAreaDevelopmentFeesMember2022-12-310001802156us-gaap:AdditionalPaidInCapitalMember2023-03-310001802156xpof:FranchiseMarketingFundRevenueMember2023-01-012023-03-3100018021562023-04-01xpof:FranchiseDevelopmentFeesMember2023-03-310001802156us-gaap:NoncontrollingInterestMember2022-12-310001802156us-gaap:NotesReceivableMember2023-01-012023-03-310001802156xpof:FranchiseAndServiceRevenueMember2023-01-012023-03-310001802156us-gaap:CommonClassBMember2023-01-012023-03-310001802156xpof:RumbleHoldingsLLCMember2022-12-310001802156xpof:AcquisitionAndTransactionExpenseMember2022-01-012022-03-3100018021562024-01-01xpof:FranchiseDevelopmentFeesMember2023-03-310001802156us-gaap:SellingGeneralAndAdministrativeExpensesMember2023-01-012023-03-310001802156us-gaap:ParentMemberxpof:XPOLLCMember2023-01-012023-03-310001802156us-gaap:ConstructionInProgressMember2023-03-310001802156xpof:TwoThousandTwentyTwoIncrementalTermLoanMember2022-12-012022-12-310001802156xpof:ConversionCommonStockMember2022-01-012022-03-310001802156xpof:WebDesignAndDomainMember2023-03-310001802156xpof:WebDesignAndDomainMember2022-12-310001802156xpof:RumbleHoldingsLLCMember2021-07-230001802156us-gaap:CommonStockMemberus-gaap:CommonClassBMember2023-03-310001802156xpof:RumbleClassACommonStockMember2022-01-012022-03-310001802156xpof:ReferenceRateMemberxpof:TermLoanFacilityMember2023-03-310001802156xpof:LoansForEstablishmentOfNewOrTransferredFranchiseStudiosMember2023-01-012023-03-310001802156xpof:ReceivableFromMemberMember2022-03-310001802156srt:MinimumMemberxpof:RumbleHoldingsLLCMember2022-07-012022-07-310001802156us-gaap:CommonClassBMember2022-01-012022-03-310001802156xpof:FranchiseAgreementsMember2022-12-310001802156xpof:AccruedExpensesMemberxpof:BFTAcquisitionMember2022-12-310001802156xpof:TermLoanFacilityMember2021-04-190001802156xpof:BrandFeesMember2023-01-012023-03-310001802156xpof:BrandFeesMember2022-12-310001802156us-gaap:PerformanceSharesMember2021-06-012021-06-300001802156us-gaap:ConvertiblePreferredStockMember2023-01-092023-01-090001802156xpof:FranchiseAgreementsMembersrt:MinimumMember2023-01-012023-03-310001802156us-gaap:AdditionalPaidInCapitalMember2022-01-012022-03-310001802156us-gaap:VehiclesMember2023-03-310001802156xpof:TimeBasedProfitInterestUnitsMember2023-01-012023-03-310001802156xpof:SpartanFitnessMember2023-01-012023-03-310001802156xpof:RumbleHoldingsLLCMember2022-11-012022-11-010001802156xpof:AccruedExpensesMember2023-01-012023-03-310001802156xpof:TwoThousandTwentyThreeIncrementalTermLoanMember2023-01-092023-01-090001802156xpof:ComputersAndSoftwareMember2023-03-310001802156us-gaap:CommonClassAMember2023-02-280001802156xpof:VonKarmanProductionLLCMember2019-09-300001802156xpof:SecondaryPublicOfferingMemberus-gaap:CommonClassAMember2023-02-012023-02-2800018021562026-01-012023-03-310001802156xpof:WebDesignAndDomainMembersrt:MaximumMember2023-01-012023-03-310001802156us-gaap:CommonStockMemberus-gaap:CommonClassBMember2022-01-012022-03-310001802156us-gaap:ProductMember2022-01-012022-03-310001802156xpof:PerformanceBasedRestrictedStockUnitsMember2023-01-012023-03-310001802156us-gaap:CommonStockMemberus-gaap:CommonClassAMember2022-03-310001802156xpof:AssetPurchaseAgreementMemberxpof:BFTAcquisitionMember2021-10-132021-10-130001802156us-gaap:ConvertiblePreferredStockMember2023-03-310001802156us-gaap:NoncontrollingInterestMember2023-01-012023-03-310001802156xpof:ReceivableFromMemberMember2021-12-310001802156xpof:StudiosMemberus-gaap:SellingGeneralAndAdministrativeExpensesMemberus-gaap:FairValueInputsLevel3Member2023-01-012023-03-310001802156xpof:BrandFeesMember2027-01-012023-03-310001802156xpof:NoncontrollingInterestsMember2023-01-012023-03-3100018021562023-01-012023-03-310001802156xpof:FranchiseDevelopmentFeesMember2023-03-310001802156us-gaap:ServiceOtherMember2023-01-012023-03-310001802156us-gaap:CommonClassBMember2022-12-310001802156xpof:AccruedExpensesMember2023-03-310001802156srt:MaximumMemberxpof:TermLoanFacilityMember2021-04-182021-04-1900018021562028-01-012023-03-310001802156us-gaap:TradeAccountsReceivableMember2022-12-310001802156us-gaap:AdditionalPaidInCapitalMember2022-03-310001802156srt:MaximumMemberus-gaap:RestrictedStockUnitsRSUMember2023-01-012023-03-3100018021562026-01-01xpof:FranchiseDevelopmentFeesMember2023-03-3100018021562022-12-310001802156xpof:RowHouseMember2023-01-012023-03-310001802156xpof:PerformanceBasedRestrictedStockUnitsMember2023-03-310001802156us-gaap:RestrictedStockUnitsRSUMemberxpof:RowHouseMember2022-12-310001802156us-gaap:CommonClassAMember2023-04-280001802156us-gaap:TrademarksMember2023-03-310001802156us-gaap:RedeemableConvertiblePreferredStockMember2023-03-3100018021562027-01-012023-03-3100018021562025-01-012023-03-310001802156srt:MaximumMemberxpof:RumbleHoldingsLLCMember2022-07-012022-07-310001802156xpof:BrandFeesMember2025-01-012023-03-31iso4217:AUDxbrli:purexpof:Brandxbrli:sharesiso4217:USDxbrli:sharesxpof:Segmentiso4217:USDxpof:Studio

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

 

 

FORM 10-Q

 

 

(Mark One)

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2023

OR

 

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number: 001-40638

 

 

Xponential Fitness, Inc.

(Exact Name of Registrant as Specified in its Charter)

 

 

Delaware

84-4395129

(State or other jurisdiction of

incorporation or organization)

(I.R.S. Employer
Identification No.)

17877 Von Karman Ave., Suite 100

Irvine, CA

92614

(Address of principal executive offices)

(Zip Code)

Registrant’s telephone number, including area code: (949) 346-3000

 

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class

 

Trading

Symbol(s)

 

Name of each exchange on which registered

Class A common stock, par value $0.0001 per share

 

XPOF

 

New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer

Accelerated filer

 

 

 

 

Non-accelerated filer

Smaller reporting company

 

 

 

 

 

 

 

Emerging growth company

 

 

 

 

 

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No

As of April 28, 2023, the registrant had 32,938,771 shares of Class A common stock outstanding and 16,618,110 shares of Class B common stock outstanding.

 

 


 

Table of Contents

 

Page

PART I.

FINANCIAL INFORMATION

Item 1.

Financial Statements (Unaudited)

1

Condensed Consolidated Balance Sheets

1

Condensed Consolidated Statements of Operations

2

Condensed Consolidated Statements of Changes to Stockholder's Equity (Deficit)

3

Condensed Consolidated Statements of Cash Flows

5

Notes to Condensed Consolidated Financial Statements

7

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

27

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

39

Item 4.

Controls and Procedures

39

PART II.

OTHER INFORMATION

40

Item 1.

Legal Proceedings

40

Item 1A.

Risk Factors

40

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

41

Item 3.

Defaults Upon Senior Securities

41

Item 4.

Mine Safety Disclosures

41

Item 5.

Other Information

41

Item 6.

Exhibits

42

Signatures

43

 

 

 

 


 

PART I—FINANCIAL INFORMATION

Item 1. Financial Statements.

Xponential Fitness, Inc.

Condensed Consolidated Balance Sheets

(Unaudited)

(amounts in thousands, except per share amounts)

 

 

 

March 31,

 

 

December 31,

 

 

 

2023

 

 

2022

 

Assets

 

 

 

 

 

 

Current Assets:

 

 

 

 

 

 

Cash, cash equivalents and restricted cash

 

$

28,135

 

 

$

37,370

 

Accounts receivable, net (Note 10)

 

 

22,408

 

 

 

25,555

 

Inventories

 

 

12,962

 

 

 

10,864

 

Prepaid expenses and other current assets

 

 

9,918

 

 

 

6,294

 

Deferred costs, current portion

 

 

4,083

 

 

 

4,131

 

Notes receivable from franchisees, net

 

 

1,501

 

 

 

1,520

 

Total current assets

 

 

79,007

 

 

 

85,734

 

Property and equipment, net

 

 

19,171

 

 

 

18,524

 

Right-of-use assets

 

 

40,487

 

 

 

30,079

 

Goodwill

 

 

165,697

 

 

 

165,697

 

Intangible assets, net

 

 

134,691

 

 

 

137,175

 

Deferred costs, net of current portion

 

 

43,530

 

 

 

43,620

 

Notes receivable from franchisees, net of current portion

 

 

851

 

 

 

1,067

 

Other assets

 

 

862

 

 

 

795

 

Total assets

 

$

484,296

 

 

$

482,691

 

Liabilities, redeemable convertible preferred stock and equity (deficit)

 

 

 

 

 

 

Current Liabilities:

 

 

 

 

 

 

Accounts payable

 

$

18,741

 

 

$

16,185

 

Accrued expenses

 

 

14,328

 

 

 

12,295

 

Deferred revenue, current portion

 

 

31,276

 

 

 

31,996

 

Current portion of long-term debt

 

 

4,260

 

 

 

3,035

 

Other current liabilities

 

 

8,553

 

 

 

9,265

 

Total current liabilities

 

 

77,158

 

 

 

72,776

 

Deferred revenue, net of current portion

 

 

110,809

 

 

 

109,465

 

Contingent consideration from acquisitions (Note 16)

 

 

43,665

 

 

 

28,182

 

Long-term debt, net of current portion, discount and issuance costs

 

 

257,626

 

 

 

133,039

 

Lease liability

 

 

39,888

 

 

 

30,583

 

Other liabilities

 

 

6,611

 

 

 

8,633

 

Total liabilities

 

 

535,757

 

 

 

382,678

 

Commitments and contingencies (Note 16)

 

 

 

 

 

 

Redeemable convertible preferred stock, $0.0001 par value, 400 shares authorized, 115 and
     
200 shares issued and outstanding as of March 31, 2023 and December 31, 2022, respectively

 

 

227,290

 

 

 

308,075

 

Stockholders' equity (deficit):

 

 

 

 

 

 

Undesignated preferred stock, $0.0001 par value, 4,600 shares authorized, none issued
   and outstanding as of March 31, 2023 and December 31, 2022

 

 

 

 

 

 

Class A common stock, $0.0001 par value, 500,000 shares authorized, 32,899 and
    
27,571 shares issued and outstanding as of March 31, 2023 and December 31, 2022,
    respectively

 

 

3

 

 

 

3

 

Class B common stock, $0.0001 par value, 500,000 shares authorized, 16,731 and
    
21,647 shares issued, and 16,656 and 21,572 shares outstanding as of March 31, 2023 and
    December 31, 2022, respectively

 

 

2

 

 

 

2

 

Additional paid-in capital

 

 

438,038

 

 

 

505,186

 

Receivable from shareholder (Note 10)

 

 

(19,956

)

 

 

(16,369

)

Accumulated deficit

 

 

(639,207

)

 

 

(641,903

)

Treasury stock, at cost, 75 shares outstanding as of March 31, 2023 and December 31, 2022

 

 

(1,697

)

 

 

(1,697

)

Total stockholders' deficit attributable to Xponential Fitness, Inc.

 

 

(222,817

)

 

 

(154,778

)

Noncontrolling interests

 

 

(55,934

)

 

 

(53,284

)

Total stockholders' deficit

 

 

(278,751

)

 

 

(208,062

)

Total liabilities, redeemable convertible preferred stock and stockholders' deficit

 

$

484,296

 

 

$

482,691

 

 

See accompanying notes to condensed consolidated financial statements.

1


 

Xponential Fitness, Inc.

Condensed Consolidated Statements of Operations

(Unaudited)

(amounts in thousands, except per share amounts)

 

 

 

Three Months Ended March 31,

 

 

 

2023

 

 

2022

 

Revenue, net:

 

 

 

 

 

 

Franchise revenue

 

$

32,966

 

 

$

25,500

 

Equipment revenue

 

 

13,094

 

 

 

7,779

 

Merchandise revenue

 

 

7,164

 

 

 

6,083

 

Franchise marketing fund revenue

 

 

6,211

 

 

 

4,435

 

Other service revenue

 

 

11,255

 

 

 

6,565

 

Total revenue, net

 

 

70,690

 

 

 

50,362

 

Operating costs and expenses:

 

 

 

 

 

Costs of product revenue

 

 

14,035

 

 

 

9,592

 

Costs of franchise and service revenue

 

 

4,032

 

 

 

4,234

 

Selling, general and administrative expenses (Note 10)

 

 

34,885

 

 

 

33,919

 

Depreciation and amortization

 

 

4,197

 

 

 

3,492

 

Marketing fund expense

 

 

5,006

 

 

 

4,355

 

Acquisition and transaction expenses

 

 

15,742

 

 

 

9,544

 

Total operating costs and expenses

 

 

77,897

 

 

 

65,136

 

Operating loss

 

 

(7,207

)

 

 

(14,774

)

Other (income) expense:

 

 

 

 

 

Interest income

 

 

(636

)

 

 

(389

)

Interest expense

 

 

7,977

 

 

 

2,861

 

Other expense

 

 

554

 

 

 

 

Total other expense

 

 

7,895

 

 

 

2,472

 

Loss before income taxes

 

 

(15,102

)

 

 

(17,246

)

Income tax benefit

 

 

(123

)

 

 

(2,067

)

Net loss

 

 

(14,979

)

 

 

(15,179

)

Less: net loss attributable to noncontrolling interests

 

 

(4,996

)

 

 

(7,660

)

Net loss attributable to Xponential Fitness, Inc.

 

$

(9,983

)

 

$

(7,519

)

 

 

 

 

 

 

 

Net loss per share of Class A common stock:

 

 

 

 

 

 

Basic

 

$

(1.38

)

 

$

(1.51

)

Diluted

 

$

(1.38

)

 

$

(1.51

)

Weighted average shares of Class A common stock outstanding:

 

 

 

 

 

 

Basic

 

 

30,754

 

 

 

22,737

 

Diluted

 

 

30,754

 

 

 

22,737

 

 

See accompanying notes to condensed consolidated financial statements.

2


 

Xponential Fitness, Inc.

Condensed Consolidated Statements of Changes to Stockholders' Equity (Deficit)

(Unaudited)

(amounts in thousands)

 

 

 

Class A Common Stock

 

 

Class B Common Stock

 

 

Treasury Stock

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Shares

 

 

Amount

 

 

Shares

 

 

Amount

 

 

Shares

 

 

Amount

 

 

Additional Paid-In Capital

 

 

Receivable from
Shareholder

 

 

Accumulated
Deficit

 

 

Noncontrolling
interests

 

 

Total
Equity (Deficit)

 

Balance at December 31, 2022

 

 

27,571

 

 

$

3

 

 

 

21,647

 

 

$

2

 

 

 

75

 

 

$

(1,697

)

 

$

505,186

 

 

$

(16,369

)

 

$

(641,903

)

 

$

(53,284

)

 

$

(208,062

)

Equity-based compensation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

5,598

 

 

 

 

 

 

 

 

 

14

 

 

 

5,612

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(9,983

)

 

 

(4,996

)

 

 

(14,979

)

Conversion of Class B shares to
   Class A shares

 

 

4,926

 

 

 

 

 

 

(4,926

)

 

 

 

 

 

 

 

 

 

 

 

(2,332

)

 

 

 

 

 

 

 

 

2,332

 

 

 

 

Payment of preferred stock dividend

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(2,069

)

 

 

 

 

 

 

 

 

 

 

 

(2,069

)

Adjustment of preferred stock to
   redemption value

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(62,660

)

 

 

 

 

 

 

 

 

 

 

 

(62,660

)

Vesting of Class B Shares

 

 

 

 

 

 

 

 

10

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Vesting of restricted share units, net of shares
   withheld for taxes

 

 

402

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(7,935

)

 

 

 

 

 

 

 

 

 

 

 

(7,935

)

Deemed contribution from redemption of
   preferred stock

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

12,679

 

 

 

 

 

 

12,679

 

Liability-classified restricted stock units
   vested

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2,250

 

 

 

 

 

 

 

 

 

 

 

 

2,250

 

Loan to shareholder and accumulated interest

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(3,587

)

 

 

 

 

 

 

 

 

(3,587

)

Balance at March 31, 2023

 

 

32,899

 

 

$

3

 

 

 

16,731

 

 

$

2

 

 

 

75

 

 

$

(1,697

)

 

$

438,038

 

 

$

(19,956

)

 

$

(639,207

)

 

$

(55,934

)

 

$

(278,751

)

 

See accompanying notes to condensed consolidated financial statements.

 

3


 

Xponential Fitness, Inc.

Condensed Consolidated Statements of Changes to Stockholders' Equity (Deficit)

(Unaudited)

(amounts in thousands)

 

 

 

Class A Common Stock

 

 

Class B Common Stock

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Shares

 

 

Amount

 

 

Shares

 

 

Amount

 

 

Additional Paid-In Capital

 

 

Receivable
from Shareholder

 

 

Accumulated
Deficit

 

 

Noncontrolling
interests

 

 

Total
Equity (Deficit)

 

Balance at December 31, 2021

 

 

23,898

 

 

$

2

 

 

 

22,969

 

 

$

2

 

 

$

 

 

$

(10,600

)

 

$

(643,833

)

 

$

443,960

 

 

$

(210,469

)

Equity-based compensation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2,423

 

 

 

 

 

 

 

 

 

12,204

 

 

 

14,627

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(7,519

)

 

 

(7,660

)

 

 

(15,179

)

Conversion of Class B shares to Class A shares

 

 

351

 

 

 

 

 

 

(351

)

 

 

 

 

 

517,283

 

 

 

 

 

 

 

 

 

(517,283

)

 

 

 

Payment of preferred stock dividend

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(3,250

)

 

 

 

 

 

 

 

 

 

 

 

(3,250

)

Adjustment of preferred stock to redemption value

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(50,931

)

 

 

 

 

 

 

 

 

 

 

 

(50,931

)

Vesting of Class B Shares

 

 

 

 

 

 

 

 

1,947

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at March 31, 2022

 

 

24,249

 

 

$

2

 

 

 

24,565

 

 

$

2

 

 

$

465,525

 

 

$

(10,600

)

 

$

(651,352

)

 

$

(68,779

)

 

$

(265,202

)

 

See accompanying notes to condensed consolidated financial statements.

4


 

Xponential Fitness, Inc.

Condensed Consolidated Statements of Cash Flows

(Unaudited)

(amounts in thousands)

 

 

 

Three Months Ended March 31,

 

 

 

2023

 

 

2022

 

Cash flows from operating activities:

 

 

 

 

 

 

Net loss

 

$

(14,979

)

 

$

(15,179

)

Adjustments to reconcile net loss to net cash provided by operating activities: