TLDR
- Shares of XWELL (XWEL) jumped more than 250% Wednesday following news of a $31.3 million private placement agreement.
- American Ventures, LLC, a real estate investment company based in Texas, is the investment partner.
- The agreement features Series H Convertible Preferred Stock that converts to 66.67 million common shares at $0.47 each.
- Funds will be allocated toward debt repurchase, Series G Preferred Stock redemption, and operational capital requirements.
- XWEL shares remain down approximately 65% year-over-year and the company confronts a Nasdaq compliance challenge.
Shares of XWELL, Inc. (XWEL) rocketed higher Wednesday after the company revealed a $31.3 million private placement agreement with American Ventures, LLC.
The stock had already posted impressive gains of 158% during after-hours trading Tuesday evening when the announcement first emerged, then maintained upward momentum through Wednesday’s regular session, momentarily achieving gains 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-headquartered real estate investment company — will acquire roughly 31,333 shares of Series H Convertible Preferred Stock priced at $1,000 each.
These preferred shares carry conversion rights into 66,666,669 shares of XWEL common stock with an initial conversion rate of $0.47 per share.
Additionally, the placement package includes warrants enabling the purchase of an additional 66,666,669 common shares, which become immediately exercisable at $0.345 per share. These warrants carry a three-year expiration period from their issue date.
Dominari Securities served as the sole placement agent for this transaction.
Capital Allocation Strategy for XWELL
XWELL has outlined a specific allocation strategy for the incoming capital. The company plans to repurchase outstanding notes totaling $5,955,583.21 from institutional note holders.
Additionally, the company will redeem its outstanding 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.
The balance of funds will support general corporate operations and working capital needs.
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 carried a market capitalization of approximately $2.19 million, with its 52-week trading range spanning from $0.26 to $1.42. Tuesday’s closing price registered at $0.38.
Nasdaq Compliance Deadline Looms
This dramatic price movement unfolds against a challenging financial landscape. XWEL shares have declined roughly 65% over the trailing twelve months and are down about 18% for the current year.
The company also faces regulatory pressure from Nasdaq. XWELL received notification of non-compliance regarding the exchange’s minimum bid price requirement of $1.00. The company has until June 1, 2026, to satisfy this requirement — necessitating a closing price at or above $1.00 for a minimum of ten consecutive trading days within that timeframe.
Financial metrics reveal the company’s levered free cash flow registered negative $15.1 million over the trailing twelve months, highlighting the financial pressures 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 have not undergone registration 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 covering shares that may be issued through conversion and warrant exercise.
