TLDR
- XWELL (XWEL) shares jumped 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 placement partner.
- The agreement involves Series H Convertible Preferred Stock that converts into 66.67 million shares of common stock at $0.47 each.
- Funds will be allocated to debt repurchase, Series G Preferred Stock redemption, and general corporate operations.
- Even with the rally, XWEL remains approximately 65% lower year-over-year and is working to meet Nasdaq listing requirements.
XWELL, Inc. (XWEL) skyrocketed Wednesday following the company’s announcement of a $31.3 million private placement agreement with American Ventures, LLC.
Shares had already climbed 158% during after-hours trading Tuesday evening when the announcement first emerged, before extending gains into Wednesday’s regular session with increases temporarily exceeding 250%.
The transaction is expected to finalize on or around February 26, 2026, pending satisfaction of 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 shares are convertible into 66,666,669 common shares at an initial conversion rate of $0.47 per share.
Additionally, the placement includes warrants for purchasing another 66,666,669 common shares, which become exercisable immediately at $0.345 each. These warrants carry a three-year expiration period from the date of issuance.
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 company plans to repurchase outstanding notes totaling $5,955,583.21 from institutional note holders.
Additionally, the company will redeem its Series G Preferred Stock and repurchase warrants representing up to 8.8 million common shares from institutional investors, with a total cash payment of $9 million.
The balance of the proceeds will support general corporate purposes and working capital requirements.
Wednesday’s trading activity reflected extraordinary investor interest. Approximately 26 million shares traded hands, a dramatic increase from the three-month average daily volume of merely 80,000 shares.
Prior to the announcement, XWELL’s market capitalization was approximately $2.19 million, with shares having reached a 52-week peak of $1.42 and a trough of $0.26. The stock finished Tuesday’s session at $0.38.
Nasdaq Compliance Clock Is Ticking
This dramatic price movement occurs amid challenging circumstances. XWEL shares remain down approximately 65% over the trailing twelve months and have declined roughly 18% year-to-date.
The company also faces regulatory pressure from Nasdaq. XWELL has received notification of non-compliance regarding the exchange’s minimum bid price requirement of $1.00. The company has until June 1, 2026, to regain compliance — requiring the stock to maintain a closing price at or above $1.00 for a minimum of ten consecutive trading days within that timeframe.
The company’s levered free cash flow registered a negative $15.1 million over the past twelve months, highlighting the financial challenges motivating this capital raise.
The $0.47 per share conversion price corresponds with InvestingPro’s Fair Value assessment for the stock, which was trading at $0.38 before Tuesday’s after-hours movement.
The securities involved in this placement remain unregistered under the Securities Act of 1933. XWELL has executed a registration rights agreement with American Ventures committing to file a resale registration statement with the SEC for shares that may be issued upon conversion and warrant exercise.
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