NEW YORK - XWELL, Inc. (NASDAQ:XWEL), a company known for its wellness solutions, has announced a registered direct offering of 652,705 shares at $2.18 each, aiming to raise approximately $1.4 million. The closing of the stock sale is anticipated for Thursday, subject to customary closing conditions.
The offering is priced at a premium to the current market, indicating investor confidence in the company. The proceeds are earmarked for working capital and general corporate purposes, as stated by the company.
XWELL, operating well-known brands such as XpresSpa, Treat, Naples Wax Center, XpresCheck, and HyperPointe, has a diverse portfolio in the wellness and healthcare sectors. XpresSpa serves as a retailer of wellness services, while Naples Wax Center focuses on upscale skincare.
The shares are being offered through a shelf registration statement filed with the Securities and Exchange Commission (SEC) on August 4, 2023, and declared effective on September 29, 2023. The offering is made solely by means of a prospectus, including a prospectus supplement, which is part of the registration statement.
The company's forward-looking statements, including those regarding the offering's timing and completion, are based on information available as of today and are subject to market conditions and other factors that could affect the outcome.
XWELL Inc. is currently embroiled in a legal dispute with shareholder CPC Pain & Wellness SPV, LLC (CPC). CPC, which holds 9.42% of XWELL's shares, has initiated legal action against XWELL's board of directors, accusing them of breaching fiduciary duties and blocking alternative director nominations.
These recent developments come amid a significant decline in shareholder value for XWELL and substantial net operating losses totaling $207.3 million from 2018 through 2023. The current board members, under Chairman Bruce Bernstein's leadership, have been criticized for awarding themselves significant compensation packages despite the company's financial downturn.
CPC's proposed directors aim to refocus on cost efficiencies and profitability, suggesting a strategy to use the company's remaining cash to acquire profitable businesses in the health and wellness sector.
InvestingPro Insights
In light of XWELL, Inc.'s recent announcement of a registered direct offering, investors are closely monitoring the company's financial health and market position. According to InvestingPro data, XWELL has a market capitalization of $7.78 million, reflecting its size within the industry. Despite a challenging period with a revenue decline of 18.44% in the last twelve months as of Q1 2024, the company demonstrated a quarterly revenue growth of 23.55% in Q1 2024, indicating potential signs of recovery or seasonal strength.
InvestingPro Tips suggest that XWELL holds more cash than debt on its balance sheet, which may provide some financial stability in the short term. Moreover, the company is recognized for high shareholder yield, which could appeal to investors seeking returns. However, it's important to note that analysts do not anticipate the company will be profitable this year, and the stock has experienced significant volatility recently, with a price drop of 9.71% in the last week alone.
For investors considering XWELL, it's worth noting that the company does not pay a dividend, which may influence the investment strategy of income-focused shareholders. For those seeking a more in-depth analysis, InvestingPro offers a wealth of additional tips—16 in total for XWELL—which can be found at https://www.investing.com/pro/XWEL. These tips provide a comprehensive look at the company's financial health, market performance, and potential investment risks and opportunities.
As XWELL navigates through its capital raising efforts and continues to operate in the wellness and healthcare sectors, these InvestingPro insights may serve as valuable tools for investors making informed decisions regarding the company's stock.
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