XWELL, Inc. recently saw its stock price dramatically increase in after-hours trading, fueled by the announcement of a substantial private placement. This strategic financial maneuver is anticipated to generate approximately $31.3 million before accounting for various fees and expenses. The primary objective of these funds is to address existing financial obligations, specifically the repurchase of certain notes and preferred stock, thereby enhancing the company's fiscal health and operational flexibility.
The agreement outlines XWELL's partnership with American Ventures, LLC, a real estate investment firm based in Texas. As part of this arrangement, XWELL will issue roughly 31,333 shares of Series H Convertible Preferred Stock. Each share is valued at $1,000 and can be converted into 66.66 million common shares at an initial rate of $0.47 per share. Additionally, the placement includes warrants allowing for the purchase of up to 66.66 million shares, which become exercisable immediately at $0.345 per share and will expire three years from their issuance date. Dominari Securities played a crucial role as the exclusive placement agent in facilitating this transaction.
The financial proceeds from this private placement are strategically designated. A significant portion, specifically $5.95 million, will be utilized to repurchase outstanding notes from institutional investors. Furthermore, the company plans to redeem its Series G preferred stock and buy back warrants for up to 8.8 million common shares from institutional holders, totaling a cash outlay of $9 million. Any remaining capital will be allocated towards general corporate functions and working capital requirements, ensuring the company has sufficient resources for its ongoing operations. The closing of this placement is expected shortly.
In terms of market performance, XWELL's Relative Strength Index (RSI) is currently at 45.99. The health and wellness holding company, based in New York, has a market capitalization of $2.19 million. Over the past year, its shares have fluctuated, reaching a high of $1.42 and a low of $0.26. Despite a 66.55% decline over the last 12 months, the stock's recent closing price of $0.38, a 9.63% increase, positions it approximately 10.3% above its 52-week low. Benzinga's Edge Stock Rankings, however, indicate a negative price trend for XWELL across all timeframes, suggesting that while the recent surge is notable, broader market sentiment remains cautious.