TLDR
- XWELL (XWEL) shares rocketed more than 250% Wednesday following the announcement of a $31.3 million private placement agreement.
- American Ventures, LLC, a real estate investment company based in Texas, is the investment partner.
- The transaction features Series H Convertible Preferred Stock that can convert to 66.67 million common shares at $0.47 each.
- Funds raised will be allocated toward debt repurchase, Series G Preferred Stock redemption, and general operational expenses.
- The stock remains approximately 65% lower than its 12-month peak and continues facing Nasdaq minimum bid price requirements.
XWELL, Inc. (XWEL) witnessed a dramatic price increase Wednesday after revealing a $31.3 million private placement transaction with American Ventures, LLC.
Shares had already climbed 158% during Tuesday’s after-hours session when the announcement first emerged, with momentum carrying into Wednesday as the stock temporarily registered gains exceeding 250%.
The transaction is scheduled to finalize around February 26, 2026, pending customary closing requirements.
According to the terms, American Ventures — a Texas real estate investment entity — will acquire roughly 31,333 shares of Series H Convertible Preferred Stock priced at $1,000 each.
These preferred securities are convertible into 66,666,669 common shares of XWEL at an opening conversion rate of $0.47 per share.
Additionally, the agreement includes warrants enabling the purchase of an additional 66,666,669 common shares, which become exercisable right away at $0.345 per share. These warrants carry a three-year expiration from their issue date.
Dominari Securities served as the sole placement agent for this transaction.
How XWELL Plans to Use the Money
XWELL has outlined a specific allocation strategy for the capital raised. The firm plans to repurchase outstanding notes totaling $5,955,583.21 from institutional note holders.
Additionally, the company will redeem its existing Series G Preferred Stock and repurchase warrants representing up to 8.8 million common shares from institutional warrant holders, requiring a combined $9 million cash payment.
Any remaining capital will support general corporate operations and working capital requirements.
Trading activity reflected extraordinary investor interest Wednesday. Approximately 26 million shares traded hands, a stark contrast to the three-month daily average of merely 80,000 shares.
Before the announcement, XWELL’s market capitalization hovered around $2.19 million, with its 52-week range spanning from $0.26 to $1.42. Tuesday’s closing price registered at $0.38.
Nasdaq Compliance Clock Is Ticking
This price surge unfolds amid challenging circumstances. XWEL shares have declined approximately 65% during the trailing twelve months and dropped roughly 18% year-to-date.
Adding to the pressure, the company faces Nasdaq compliance issues. XWEL received notification of failing to maintain the exchange’s required $1.00 minimum bid price. The company has until June 1, 2026, to satisfy this requirement — necessitating a closing price at or above $1.00 for no fewer than ten consecutive trading days during that timeframe.
The company’s levered free cash flow registered negative $15.1 million over the trailing twelve months, highlighting the financial challenges driving this capital raise.
The $0.47 per share conversion price matches InvestingPro’s Fair Value calculation for the stock, which was changing hands at $0.38 before Tuesday’s after-hours rally.
The securities involved in this placement have not undergone registration under the Securities Act of 1933. XWELL has established a registration rights agreement with American Ventures requiring the filing of a resale registration statement with the SEC for shares that may be issued through conversion and warrant exercise.
