Why Did XWELL Shares Surge 158% After Hours?

XWELL, Inc. (NASDAQ:XWEL) shares rose 158.10% in after-hours trading on Tuesday to $0.98, following the company's announcement of a private placement expected to generate gross proceeds of approximately $31.3 million, before deducting placement agent fees and offering expenses.

Inside the Deal

XWELL entered into a securities purchase agreement with a series of American Ventures, LLC, a Texas-based real estate investment firm, issuing approximately 31,333 shares of Series H Convertible Preferred Stock with a stated value of $1,000 per share, convertible into 66.66 million shares of common stock at an initial conversion price of $0.47 per share.

The placement also includes accompanying warrants to purchase up to 66.66 million shares, exercisable immediately at $0.345 per share, expiring three years from issuance.

Dominari Securities acted as exclusive placement agent.

Proceeds Earmarked for Debt Repurchase

XWELL said it intends to use the proceeds to repurchase $5.95 million of certain notes from institutional investors, redeem its Series G preferred stock and repurchase warrants to buy up to 8.8 million shares of common stock from institutional investors, for a total cash outlay of $9 million.

The remaining funds will be used for general corporate and working capital needs.

The placement is expected to close on or about Thursday.

Trading Metrics, Technical Analysis

XWELL has a Relative Strength Index (RSI) of 45.99.

The market capitalization of the New York-based health and wellness holding company stands at $2.19 million, with its shares reaching a 52-week high of $1.42 and a low of $0.26.

XWEL has fallen 66.55% over the past 12 months.

Price Action: According to Benzinga Pro data, XWEL closed on Tuesday at $0.38, up 9.63%.

The stock is currently positioned at approximately 10.3% above its 52-week low, indicating it is trading closer to the lower end of its annual range.

Benzinga's Edge Stock Rankings indicate that XWEL has a negative price trend across all time frames.

Photo Courtesy: m.mphoto on Shutterstock.com