NEW YORK - XWELL Inc. (NASDAQ:XWEL), a company specializing in wellness solutions, has declared that the recent actions by CPC Pain & Wellness SPV, LLC (CPC) to nominate four candidates for XWELL's Board of Directors are invalid. XWELL alleges that CPC, which holds a 9.42% equity stake in the company, has not complied with the SEC's filing requirements and the company's bylaws.
CPC, formed by principals of Caydan Capital Partners, LLC, did not provide specifics in its Schedule 13D filed on June 17th regarding its plans for XWELL. Despite opportunities to rectify its filing deficiencies, CPC chose to initiate litigation against XWELL. The company suspects CPC's intent to orchestrate a 'Take-Under' deal with an underperforming affiliate, which could result in the undervaluation of XWELL and significant dilution of current stockholders' shares.
XWELL insists that CPC's notice lacks reference to its plans and violates the company's bylaws. Furthermore, XWELL contends that CPC's Schedule 13D disclosure falls short of the SEC's standards, urging CPC to update its filing promptly to provide transparent information to stockholders and the investment public.
Stockholders of XWELL have been advised that no action is required from them at this time but to remain vigilant regarding communications from CPC. XWELL, which operates multiple brands including XpresSpa, Treat, Naples Wax Center, XpresCheck, and HyperPointe, plans to challenge CPC's actions and has encouraged stockholders to review future proxy statements and documents filed with the SEC for more information on the annual meeting.
This ongoing dispute between XWELL and CPC is a critical development for stockholders, as the outcome could significantly influence the company's governance and strategic direction.
The information for this article is based on a press release statement.
InvestingPro Insights
In light of the current dispute between XWELL Inc. and CPC Pain & Wellness SPV, LLC, it is crucial for investors to understand the financial health and performance metrics of XWELL. According to InvestingPro data, XWELL has a market capitalization of 7.28 million USD, which may be a factor in the ongoing tussle for control. Despite a challenging period, XWELL has shown a strong return over the last three months, with a 31.11% price total return, indicating some positive investor sentiment amidst the turmoil.
InvestingPro Tips suggest that XWELL holds more cash than debt on its balance sheet, which could be a strategic advantage in its current standoff with CPC. Additionally, the company's shareholder yield is high, rewarding its investors despite the recent challenges. It is worth noting, however, that XWELL is not profitable over the last twelve months and has been quickly burning through cash, which may be of concern to both current and potential shareholders.
Investors can find additional insights and metrics on XWELL by visiting InvestingPro, where there are 15 more InvestingPro Tips available. For those considering a deeper dive into XWELL's financials and forecasts, use the coupon code PRONEWS24 to get up to 10% off a yearly Pro and a yearly or biyearly Pro+ subscription.
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