XWEL Seeks Reverse Split, Board Reclassification, and Major Equity Issuance

TL;DR

**XWEL is making a desperate play to stay listed and raise capital, brace for dilution and volatility.**

AI Summary

XWELL, Inc. (XWEL) is holding its Annual Meeting on December 18, 2025, to address critical corporate governance and financial matters. Key proposals include the re-election of five directors, ratification of CBIZ CPAs P.C. as the independent auditor for fiscal year 2025, and advisory votes on executive compensation. Significantly, the company seeks stockholder approval for a Board Classification Amendment to stagger director terms into two classes for two-year periods, and a Reverse Stock Split Amendment allowing the Board discretion to implement a reverse stock split at a ratio between 1-for-2 and 1-for-20 within one year. Furthermore, XWEL is requesting approval under Nasdaq Listing Rule 5635(d) for the issuance of common stock underlying Series G Convertible Preferred Stock, Amended and Restated Series A and B Warrants, and Senior Secured Convertible Notes, which could exceed 19.99% of outstanding common stock and be at conversion/exercise prices lower than previously approved. These actions are crucial for XWEL's strategic financial restructuring and compliance with Nasdaq listing requirements.

Why It Matters

This DEF 14A filing reveals XWELL's urgent need to address its capital structure and potentially its stock price, as evidenced by the proposed reverse stock split. For investors, this could signal efforts to maintain Nasdaq listing compliance, but also dilution risk from the significant equity issuance. Employees and customers might see this as a move to stabilize the company, while the broader market will watch how these changes impact XWEL's competitive position in its sector, especially given the potential for substantial new shares at lower prices.

Risk Assessment

Risk Level: high — The proposal to issue common stock exceeding 19.99% of outstanding shares, underlying Series G Preferred Stock, Warrants, and Senior Secured Convertible Notes, at conversion/exercise prices lower than previously approved, presents a high risk of significant stockholder dilution. Additionally, the proposed reverse stock split, while potentially aiding Nasdaq compliance, often signals underlying financial distress and can lead to further stock price volatility.

Analyst Insight

Investors should carefully evaluate the potential for significant dilution from the proposed equity issuances and the implications of a reverse stock split. Consider voting against the Issuance Proposal and Reverse Stock Split Proposal if you are concerned about immediate dilution and lack of clear value creation, or if you believe the terms are overly unfavorable to existing common stockholders.

Key Numbers

• 19.99% — Threshold for Common Stock Issuance (Issuance of common stock underlying Series G Preferred Stock, Warrants, and Notes could exceed this percentage of outstanding common stock, triggering Nasdaq Listing Rule 5635(d) approval.)
• 1-for-2 to 1-for-20 — Reverse Stock Split Ratio Range (The Board has discretion to implement a reverse stock split within this range to potentially boost share price and maintain Nasdaq listing.)
• December 18, 2025 — Annual Meeting Date (Date when stockholders will vote on key proposals including director elections, auditor ratification, executive compensation, board classification, reverse stock split, and equity issuance.)
• November 6, 2025 — Record Date (Date by which stockholders must hold shares to be eligible to vote at the Annual Meeting.)
• $0.01 — Par Value per Share (Par value for both Common Stock and Series G Preferred Stock.)
• November 3, 2025 — Exchange Agreement Date (Date of the Securities Exchange and Amendment Agreement related to the issuance of Series G Preferred Stock, Warrants, and Senior Secured Convertible Notes.)

Key Players & Entities

• XWELL, Inc. (company) — Registrant
• Ezra T. Ernst (person) — President and Chief Executive Officer, Nominee for Board of Directors
• Bruce T. Bernstein (person) — Nominee for Board of Directors
• Robert Weinstein (person) — Nominee for Board of Directors
• Galle Wizenberg (person) — Nominee for Board of Directors
• Michael Lebowitz (person) — Nominee for Board of Directors
• CBIZ CPAs P.C. (company) — Independent registered public accounting firm
• Nasdaq (regulator) — Listing Rule 5635(d) compliance
• Alliance Advisors, LLC (company) — Proxy solicitor
• Lauren Deutsch (person) — General Counsel

FAQ

Risk Factors

• Nasdaq Listing Rule Compliance [high — regulatory]: The company seeks approval under Nasdaq Listing Rule 5635(d) for the issuance of common stock underlying Series G Convertible Preferred Stock, Warrants, and Senior Secured Convertible Notes. This issuance could exceed 19.99% of outstanding common stock, requiring stockholder approval to maintain compliance.
• Reverse Stock Split Discretion [high — financial]: The Board is seeking approval for a reverse stock split at a ratio between 1-for-2 and 1-for-20, to be implemented at the Board's discretion within one year. This action is intended to boost the share price and potentially aid in maintaining Nasdaq listing requirements.
• Board Classification Amendment [medium — operational]: A proposal to classify the Board into two classes with staggered two-year terms is being presented. This structural change aims to provide long-term stability and governance continuity.
• Equity Issuance Below Previous Approval Prices [high — financial]: The proposed issuance of common stock underlying Series G Preferred Stock and Warrants may occur at conversion or exercise prices lower than previously approved by stockholders. This could lead to significant dilution if not managed carefully.

Industry Context

XWELL, Inc. operates in a dynamic and competitive healthcare and wellness sector. The industry is characterized by rapid innovation, evolving consumer preferences, and increasing regulatory scrutiny. Companies in this space often face challenges related to market access, reimbursement policies, and the need for continuous investment in research and development to stay competitive.

Regulatory Implications

The company faces significant regulatory hurdles, particularly concerning Nasdaq listing requirements. The proposed equity issuances and potential reverse stock split are directly tied to maintaining compliance with these rules. Failure to secure stockholder approval for these proposals could lead to delisting from the Nasdaq exchange.

What Investors Should Do

1. Vote FOR the Director Election Proposal to support the proposed slate of directors.
2. Vote FOR the Auditor Ratification Proposal to approve CBIZ CPAs P.C. as the independent auditor.
3. Vote FOR the Say-on-Pay Proposal to provide advisory approval of executive compensation.
4. Vote 'EVERY THREE YEARS' for the Say-on-Frequency Proposal to indicate preference for future advisory votes on executive compensation.
5. Vote FOR the Board Classification Proposal to approve the staggered director terms.
6. Vote FOR the Reverse Stock Split Proposal to grant the Board discretion to implement a reverse stock split.
7. Vote FOR the Issuance Proposal to approve the potential issuance of common stock exceeding 19.99% of outstanding shares, crucial for compliance and financial restructuring.
8. Vote FOR the Adjournment Proposal to allow flexibility in soliciting votes if needed.

Key Dates

• 2025-12-18: Annual Meeting of Stockholders — Stockholders will vote on critical proposals including director elections, auditor ratification, executive compensation, board classification, reverse stock split, and equity issuance.
• 2025-11-06: Record Date — Establishes the list of stockholders eligible to vote at the Annual Meeting.
• 2025-11-17: Proxy Statement and Proxy Card Distribution — Commencement of the period for stockholders to review proposals and submit their votes.
• 2025-11-03: Securities Exchange and Amendment Agreement — Date of the agreement governing the issuance of Series G Preferred Stock, Warrants, and Senior Secured Convertible Notes, which are subject to stockholder approval.
• 2025-12-15: Deadline for Virtual Meeting Pre-registration — Stockholders must pre-register by this date to receive a meeting invitation and participate in the virtual Annual Meeting.

Glossary

DEF 14A

A filing with the SEC that provides detailed information about a company's annual meeting, including proposals to be voted on by shareholders. (This document outlines the critical proposals XWELL, Inc. is asking its stockholders to approve at the upcoming annual meeting.)

Board Classification Amendment

A proposed change to the company's charter to divide the Board of Directors into two classes with staggered two-year terms. (This proposal aims to alter the governance structure of XWELL, Inc. for long-term stability.)

Reverse Stock Split

A corporate action where a company reduces the total number of its outstanding shares by consolidating them, typically to increase the share price. (XWELL, Inc. is seeking authorization for a reverse stock split to potentially improve its stock price and meet Nasdaq requirements.)

Nasdaq Listing Rule 5635(d)

A Nasdaq rule requiring stockholder approval for the issuance of securities that could result in a substantial dilution of existing stockholders' equity, typically exceeding 19.99%. (XWELL, Inc. needs stockholder approval under this rule due to potential significant equity issuance related to convertible securities and warrants.)

Series G Convertible Preferred Stock

A class of preferred stock that can be converted into shares of common stock under certain conditions. (The issuance of this stock, and its underlying common stock, is a key item requiring stockholder approval due to potential dilution.)

Amended and Restated Warrants

Options that have been modified and reissued, giving the holder the right to purchase shares of common stock at a specified price. (These warrants, along with the Series G Preferred Stock and Notes, are part of the equity issuance that requires stockholder approval.)

Senior Secured Convertible Notes

Debt instruments that can be converted into shares of common stock, secured by company assets. (The conversion of these notes into common stock is subject to stockholder approval under Nasdaq rules.)

Say-on-Pay Proposal

A non-binding shareholder vote on the compensation of the company's named executive officers. (Stockholders will have an advisory vote on the executive compensation practices of XWELL, Inc.)

Year-Over-Year Comparison

This DEF 14A filing indicates a significant shift in strategy compared to previous periods, focusing on financial restructuring and compliance. Key proposals include a potential reverse stock split and a large equity issuance, suggesting a need to bolster the balance sheet or meet listing requirements. The absence of detailed financial performance metrics in this proxy statement implies that a separate 10-K or 10-Q filing would be necessary for a direct year-over-year comparison of revenue, margins, and profitability.

Key Financial Figures

• $0.01 — ) the shares of common stock, par value $0.01 per share (the "Common Stock") and (ii)

Filing Documents

• tm2530401d3_def14a.htm (DEF 14A) — 623KB
• tm2530401d1_pre14aimg001.jpg (GRAPHIC) — 4KB
• tm2530401d1_pre14aimg002.jpg (GRAPHIC) — 95KB
• tm2530401d1_pre14aimg003.jpg (GRAPHIC) — 133KB
• tm2530401d1_pre14aimg006.jpg (GRAPHIC) — 195KB
• tm2530401d1_pre14aimg007.jpg (GRAPHIC) — 185KB
• 0001104659-25-113176.txt ( ) — 2732KB
• xwel-20241231.xsd (EX-101.SCH) — 10KB
• xwel-20241231_def.xml (EX-101.DEF) — 3KB
• xwel-20241231_lab.xml (EX-101.LAB) — 35KB
• xwel-20241231_pre.xml (EX-101.PRE) — 6KB
• tm2530401d3_def14a_htm.xml (XML) — 28KB

SECURITY OWNERSHIP OF CERTAIN

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT 45 REPORT OF AUDIT COMMITTEE 48 CERTAIN RELATIONSHIPS AND RELATED PERSON TRANSACTIONS 49 OTHER MATTERS 50 WHERE YOU CAN FIND MORE INFORMATION 50 DELIVERY OF DOCUMENTS TO STOCKHOLDERS SHARING AN ADDRESS 50 STOCKHOLDER COMMUNICATIONS 50 SUBMISSION OF STOCKHOLDER PROPOSALS AND DIRECTOR NOMINATIONS AT THE 2026 ANNUAL MEETING 50 ANNEX A – FORM OF BOARD CLASSIFICATION AMENDMENT A-1 ANNEX B – FORM OF BYLAWS AMENDMENT B-1 ANNEX C – FORM OF REVERSE STOCK SPLIT AMENDMENT C-1 XWELL, INC. 254 West 31st Street, 11th Floor New York, New York 10001 PROXY STATEMENT ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON DECEMBER 18, 2025 This Proxy Statement, along with the accompanying Notice of the Annual Meeting of Stockholders, contains information about the 2025 annual meeting of stockholders (including any adjournment, postponement or rescheduling thereof, the "Annual Meeting") of XWELL, Inc. ("XWELL," the "Company," "we," or "us"). The Annual Meeting will be held at 10:00 a.m. Eastern Time on Thursday, December 18, 2025. The Annual Meeting will be held in a virtual meeting format only, via live audio webcast on the Internet. Stockholders will not be able to attend the Annual Meeting in person. Stockholders will be able to attend the Annual Meeting by first pre-registering at https://web.viewproxy.com/XWELL/2025 by 11:59 p.m. Eastern Time on December 15, 2025. You will receive a meeting invitation by email with your unique link, along with a password, prior to the meeting date. Only stockholders of record of our (i) common stock, par value $0.01 per share (the "Common Stock") and (ii) Series G Preferred Stock, par value $0.01 per share (the "Series G Preferred Stock"), at the close of business on November 6, 2025 (the "Record Date"), are entitled to notice of the Annual Meeting and to vote at the Annual Meeting. The Proxy Statement and the Proxy Card are first being made availabl

View Full Filing

View this DEF 14A filing on SEC EDGAR