XWELL, Inc. (NASDAQ:XWEL) announced it has entered into a securities purchase agreement with American Ventures, LLC for a private placement expected to generate approximately $31.3 million in gross proceeds before fees and expenses. The financing comes as the company navigates ongoing cash flow pressures, including levered free cash flow of negative $15.1 million over the past twelve months.
The transaction includes the issuance of roughly 31,333 shares of Series H Convertible Preferred Stock, each with a stated value of $1,000. These shares are convertible into 66,666,669 shares of common stock at an initial conversion price of $0.47 per share. The deal also features warrants allowing the purchase of up to 66,666,669 additional common shares, exercisable immediately at $0.345 per share and expiring three years after issuance. The conversion price aligns with InvestingPro’s Fair Value estimate of $0.47, suggesting the shares may be undervalued relative to the current trading price of $0.38, which is down nearly 70% over the past year.
The company expects the transaction to close on or around February 26, 2026, subject to customary closing conditions, according to a press release.
XWELL plans to allocate the net proceeds toward repurchasing $5,955,583.21 in aggregate principal of certain notes held by institutional investors, redeeming its Series G Preferred Stock, and buying back certain outstanding warrants covering up to 8,800,000 shares of common stock for a total cash payment of $9 million. Remaining funds will be used for general corporate purposes and working capital requirements.
Dominari Securities acted as the exclusive placement agent for the offering.
The securities issued in the private placement have not been registered under the Securities Act of 1933 and may not be offered or sold in the United States without SEC registration or a valid exemption. XWELL has entered into a registration rights agreement requiring the filing of a registration statement with the SEC covering resale of shares issuable upon conversion of the Series H preferred stock and exercise of the associated warrants.
XWELL operates several wellness-focused brands, including XpresSpa, Naples Wax Center, and XpresCheck, serving customers across travel hubs, retail environments and clinical settings.
In related developments, the company disclosed results from its 2025 Annual Meeting of Stockholders, where shareholders reelected directors Ezra Ernst, Bruce Bernstein, Robert Weinstein, Gaëlle Wizenberg and Michael Lebowitz to serve until the 2026 annual meeting.
Separately, XWELL received a notice from Nasdaq stating it is not in compliance with the exchange’s minimum bid price requirement of $1.00 per share after trading below the threshold for 30 consecutive business days. The company has been granted a 180-day compliance period ending June 1, 2026, during which it must achieve a closing bid price of at least $1.00 for a minimum of ten consecutive business days to regain compliance.