Filed Pursuant to Rule 424(b)(3)
Registration No. 333- 284768
PROSPECTUS
XWELL, Inc.
30,440,060
Shares of Common Stock
(and including up to 1,140,370 Dividend Shares)
This prospectus relates to the resale by the
selling stockholders named in this prospectus from time to time of up to an aggregate of 30,440,060 shares of our common stock, par value
$0.01 per share (the “Common Stock”), issuable upon (i) the conversion of shares of our newly designated Series G convertible
preferred stock (the “Preferred Shares”), (ii) exercise of the Series A warrants (the “Series A Warrants”) to
purchase up to 2,673,797 shares of Common Stock, (iii) exercise of the Series B warrants (the “Series B Warrants” and together
with the Series A Warrants, the “Warrants”) to purchase up to 2,673,797 shares of Common Stock, and (iv) the issuance of
Common Stock as dividends to the holders of the Preferred Shares (the “Dividend Shares”). The 30,440,060 shares of Common
Stock issuable upon conversion of the Preferred Shares, exercise of the Warrants and issuance of the Dividend Shares, are comprised of
(A) shares of Common Stock underlying (i) 4,000 Preferred Shares, which are convertible into an aggregate of 23,952,096 Conversion Shares
(as defined below) at a conversion price of $0.167 (which such conversion price is equal to the Floor Price (as defined herein) and a
stated value of $1,000 per share, (ii) Series A Warrants to purchase up to 2,673,797 shares of Common Stock at an initial exercise price
of $1.496 per share, (iii) Series B Warrants to purchase up to 2,673,797 shares of Common Stock at an initial exercise price of $1.7952
per share, and (B) 1,140,370 shares of Common Stock issuable as Dividend Shares to the holders of the Preferred Shares at a rate of 8%
per annum on the stated value of the Preferred Shares, compounded each calendar quarter over a term of five years. Subject to the terms
of the Certificate of Designations (as defined herein), the issuance of the Dividend Shares may begin on July 1, 2025, and occur thereafter
on the first trading day of each calendar quarter immediately following the previous Installment Date (as defined in the Certificate
of Designations) until the maturity date (which such maturity date also constitutes an Installment Date).
The Preferred Shares were acquired by the applicable
selling stockholders under the Securities Purchase Agreement (the “Purchase Agreement”), dated January 14, 2025, by and among
the Company and the investors party thereto (the “Investors”). The Warrants were acquired by the selling stockholders under
the Purchase Agreement. The shares of Common Stock issuable upon the conversion of the Preferred Shares are herein referred to as “Conversion
Shares,” and the shares of Common Stock issuable upon the exercise of the Warrants are herein referred to as “Warrant Shares.”
The Conversion Shares and the Warrant Shares were
issued in reliance upon the exemption from the registration requirements in Section 4(a)(2) of the Securities Act of 1933, as amended
(the “Securities Act”) and Regulation D promulgated thereunder.
We are registering the resale of the Conversion
Shares and Warrant Shares covered by this prospectus as required by the Registration Rights Agreement, dated January 14, 2025, by and
among the Company and the Investors (as amended, the “Registration Rights Agreement”), as well as the Dividend Shares. The
selling stockholders will receive all of the proceeds from any sales of the shares offered hereby. We will not receive any of the proceeds,
but we will incur expenses in connection with the offering. To the extent the Warrants are exercised for cash, if at all, we will receive
the exercise price of the Warrants. We intend to use those proceeds, if any, for general corporate purposes.
The issuance of the shares of Common Stock
covered by this prospectus could cause substantial dilution to our existing stockholders. The number of shares covered by this prospectus
represents approximately 557% of the number of shares of Common Stock issued and outstanding as of the date of this prospectus. The actual
number of shares of Common Stock that we issue to the selling stockholders may be less than the aggregate number of shares covered by
this prospectus. Please refer to risk factor entitled “The issuance of the shares of Common Stock covered by this prospectus
could significantly increase the total number of shares of Common Stock issued and outstanding and thereby cause our existing stockholders
to experience substantial dilution” on page 10 of this prospectus. For additional information on the terms of the Preferred
Shares and the Warrants, including those terms which may affect the number of Conversion Shares, Dividend Shares or Warrant Shares that
will be issued to the holders of the Preferred Shares and the Warrants, you should refer to the section of this prospectus entitled “Prospectus
Summary—Private Placement of Preferred Shares and Warrants.”
Our registration of the shares of Common Stock
covered by this prospectus does not mean that the selling stockholders will offer or sell any of such shares of Common Stock. The selling
stockholders named in this prospectus, or their donees, pledgees, transferees or other successors-in-interest, may resell the shares of
Common Stock covered by this prospectus through public or private transactions at prevailing market prices, at prices related to prevailing
market prices or at privately negotiated prices. For additional information on the possible methods of sale that may be used by the selling
stockholders, you should refer to the section of this prospectus entitled “Plan of Distribution.”
Any shares of Common Stock subject to resale hereunder
will have been issued by us and acquired by the selling stockholders prior to any resale of such shares pursuant to this prospectus.
No underwriter or other person has been engaged
to facilitate the sale of the Common Stock in this offering. We will bear all costs, expenses and fees in connection with the registration
of the Common Stock. The selling stockholders will bear all commissions and discounts, if any, attributable to their respective sales
of the Common Stock.
Our Common Stock is listed on the Nasdaq Capital
Market (“Nasdaq”) under the symbol “XWEL.” On July 2, 2025, the last reported sales price for our Common Stock
was $0.97 per share.
Investment
in our Common Stock involves risk. See “Risk Factors” contained in this prospectus, in
our periodic reports filed from time to time with the Securities and Exchange Commission, which are incorporated by reference in this
prospectus and in any applicable prospectus supplement. You should carefully read this prospectus and any applicable prospectus supplement,
together with the documents we incorporate by reference, before you invest in our Common Stock.
Neither the Securities and Exchange Commission
nor any state securities commission has approved or disapproved of these securities or passed upon the adequacy or the accuracy of this
prospectus. Any representation to the contrary is a criminal offense.
The date of this prospectus is June 30, 2025.
Table
of Contents
| ABOUT THIS PROSPECTUS |
1 |
| PROSPECTUS SUMMARY |
2 |
| THE OFFERING |
9 |
| RISK FACTORS |
10 |
| SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS |
14 |
| USE OF PROCEEDS |
15 |
| SELLING STOCKHOLDERS |
16 |
| PLAN OF DISTRIBUTION |
19 |
| LEGAL MATTERS |
21 |
| EXPERTS |
21 |
| WHERE YOU CAN FIND MORE INFORMATION |
21 |
| INCORPORATION OF CERTAIN INFORMATION BY REFERENCE |
22 |
About
this Prospectus
This prospectus is part of the registration statement
that we filed with the Securities and Exchange Commission (the “SEC”) pursuant to which the selling stockholders named herein
may, from time to time, offer and sell or otherwise dispose of the shares of our Common Stock covered by this prospectus. As permitted
by the rules and regulations of the SEC, the registration statement filed by us includes additional information not contained in
this prospectus.
This prospectus and the documents incorporated
by reference into this prospectus include important information about us, the securities being offered and other information you should
know before investing in our securities. You should not assume that the information contained in this prospectus is accurate on any date
subsequent to the date set forth on the front cover of this prospectus or that any information we have incorporated by reference is correct
on any date subsequent to the date of the document incorporated by reference, even though this prospectus is delivered or shares of Common
Stock are sold or otherwise disposed of on a later date. It is important for you to read and consider all information contained in this
prospectus, including the documents incorporated by reference therein, in making your investment decision. You should also read and consider
the information in the documents to which we have referred you under “Where You Can Find More Information” and “Incorporation
of Certain Information by Reference” in this prospectus.
You should rely only on this prospectus and the
information incorporated or deemed to be incorporated by reference in this prospectus. We have not, and the selling stockholders have
not, authorized anyone to give any information or to make any representation to you other than those contained or incorporated by reference
in this prospectus. If anyone provides you with different or inconsistent information, you should not rely on it. This prospectus does
not constitute an offer to sell or the solicitation of an offer to buy securities in any jurisdiction to any person to whom it is unlawful
to make such offer or solicitation in such jurisdiction.
We further note that the representations, warranties
and covenants made by us in any agreement that is filed as an exhibit to any document that is incorporated by reference in this prospectus
were made solely for the benefit of the parties to such agreement, including, in some cases, for the purpose of allocating risk among
the parties to such agreements, and should not be deemed to be a representation, warranty or covenant to you. Moreover, such representations,
warranties or covenants were accurate only as of the date when made. Accordingly, such representations, warranties and covenants should
not be relied on as accurately representing the current state of our affairs.
Unless otherwise indicated, information contained
or incorporated by reference in this prospectus concerning our industry, including our general expectations and market opportunity, is
based on information from our own management estimates and research, as well as from industry and general publications and research, surveys
and studies conducted by third parties. Management estimates are derived from publicly available information, our knowledge of our industry
and assumptions based on such information and knowledge, which we believe to be reasonable. In addition, assumptions and estimates of
our and our industry’s future performance are necessarily uncertain due to a variety of factors, including those described in “Risk
Factors” beginning on page 10 of this prospectus. These and other factors could cause our future performance to differ materially
from our assumptions and estimates.
Prospectus
Summary
This summary provides an overview of selected
information contained elsewhere or incorporated by reference in this prospectus and does not contain all of the information you should
consider before investing in our securities. You should carefully read the prospectus, the information incorporated by reference and the
registration statement of which this prospectus is a part in their entirety before investing in our securities, including the information
discussed under “Risk Factors” in this prospectus and the documents incorporated by reference and our financial statements
and related notes that are incorporated by reference in this prospectus. In this prospectus, unless the context indicates otherwise, “XWEL,”
the “Company,” the “registrant,” “we,” “us,” “our,” or “ours”
refer to XWELL, Inc. and its consolidated subsidiaries.
Overview
XWELL is a global wellness company operating
multiple brands and focused on bringing restorative, regenerative and reinvigorating products and services to travelers. As of the date
of this Annual Report on Form 10-K, XWELL currently has four reportable operating segments: XpresSpa®, XpresTest®, Naples Wax
Center® and Treat®.
On October 25, 2022, the Company changed its
name to XWELL, Inc. from XpresSpa Group, Inc. The Company’s common stock, par value $0.01 per share, which had previously been
listed under the trading symbol “XSPA” on Nasdaq, now trades under the trading symbol “XWEL”. The Company filed
an amended and restated certificate of incorporation with the Delaware Secretary of State on October 24, 2022 (as amended, the “Amended
and Restated Certificate”) reflecting the name change. Rebranding to XWELL aligned the Company’s corporate strategy to build
a pure-play wellness services company, in both the airport and off-airport marketplaces.
XpresSpa
XWELL’s subsidiary, XpresSpa Holdings,
LLC (“XpresSpa”) has been a global airport retailer of spa services through its XpresSpa spa locations, offering travelers
premium spa services, including massage, nail and skin care, as well as spa and travel products.
As of March 31, 2025, there were 17 domestic
XpresSpa locations in total comprised of 16 Company-owned locations and one franchise. The Company also had 11 international locations
operating as of March 31, 2025, including two XpresSpa locations in the Dubai International Airport in the United Arab Emirates, one
XpresSpa location in the Zayad International Airport in Abu Dhabi, United Arab Emirates, four XpresSpa locations in the Schiphol Amsterdam
Airport in the Netherlands and four XpresSpa locations in the Istanbul Airport in Turkey.
Treat, which is operating through XWELL’s
subsidiary Treat, Inc. (“Treat”) is a wellness brand that provides access to wellness services for travelers at on-site centers.
In April 2024, the decision was made to close the location in the Salt Lake City International Airport. In the first quarter of 2025,
the decision was made to convert the final remaining Treat location at JFK International Airport in New York City to an XWELL location.
Following the conversion of the JFK Treat location, in mid-2025, we will no longer have any Treat locations.
XpresTest
The Company, in partnership with certain COVID-19
testing partners, successfully launched its XpresCheck Wellness Centers, in June of 2020, through its XpresTest, Inc. subsidiary (“XpresTest”),
which offered COVID-19 and other medical to the traveling public, as well as airline, airport and concessionaire employees, and TSA and
U.S. Customs and Border Protection agents during the pandemic. As of December 31, 2023, the Company closed all XpresCheck locations and
XpresTest no longer provides diagnostic testing services XpresTest began conducting bio surveillance monitoring with the Centers for
Disease Control and Prevention (CDC) in collaboration with Concentric by Ginkgo Bioworks Holdings, Inc. (“Ginkgo Bioworks”)
in 2021.
The program was renewed through August 2024.
The revenue to XpresTest from such one-year extension totaled approximately $7,044. In January 2024, the program funding and scope were
expanded, a revenue increase of $4,000, to an estimated $11,044 in revenue for XpresTest with new collection locations at U.S. international
airports and the roll out of multi-pathogen testing across the program. In July 2024, the contract was further amended to extend the
time period for services by two weeks (extension period August 12, 2024 to August 25, 2024). An increase of $293 in revenue for the two
week extension brought total revenue to $11,337. The program was again extended in August 2024 through February 25, 2025. The funding
was expanded with a revenue increase of $3,763, to an estimated $15,100 in revenue for XpresTest. In February 2025, the program was extended
through a three-year contract with a total base value of $22.2 million over three years, and a maximum ceiling value of $24.8 million
within the same timeframe.
Naples Wax Center
XWELL’s subsidiary Naples Wax, LLC,
d/b/a Naples Wax Centers (“Naples Wax Center” or “Naples Wax”) which was acquired on September 12, 2023, for
a purchase price of $1,624, operates a group of upscale hair removal locations with core products and service offerings from face and
body waxing to a range of skincare and cosmetic products. The acquisition of Naples Wax Center is intended to enable us to move beyond
our airport client base with a business that can be adapted to a larger wellness platform while also growing our retail footprint to
serve our long-term financial goals.
Although we recognize four segments of business,
we believe there is opportunity to leverage a segment of our products and services across our platform of brands. Additionally, we are
expanding our retail strategy, not only adding more products for sale but aligning those products more efficiently to our service offerings.
This product strategy includes, for example, adding muscle relaxation patches to a neck or back massage to continue treatment after the
delivery of the service.
We also plan to build our capability for delivering
health and wellness services outside of the airport. We believe operating outside of the airport complements our offering and represents
the fastest way to scale the XWELL family of brands.
We will be looking to further expand internationally. We believe
a strategy for international expansion further advances our ability to expand our other brands including bio surveillance outside of
the US.
Private Placement of Preferred Shares and Warrants
On January 14, 2025, we entered into the Purchase
Agreement with the Investors, pursuant to which we issued and sold on January 14, 2025 (the “Closing Date”), in a private
placement (the “Private Placement”), (i) an aggregate of 4,000 shares of the Company’s newly-designated Series G Convertible
Preferred Stock initially convertible into up to 2,673,797 Conversion Shares at a conversion price of $1.496 per share (the “Conversion
Price”), (ii) Series A warrants (the “Series A Warrants”) to acquire up to an aggregate of 2,673,797 shares of Common
Stock at an initial exercise price of $1.496 per share, and (iii) Series B warrants to acquire up to an aggregate of 2,673,797 shares
of Common Stock (the “Series B Warrants,” and collectively with the Series A Warrants, the “Warrants”) at an
initial exercise price of $1.7952 per share. Each Preferred Share and accompanying Warrants were sold together at a combined offering
price of $1,000.
The terms of the Preferred Shares are as set forth
in the Certificate of Designations of the Series G Convertible Preferred Stock of XWELL, Inc. (the “Certificate of Designations”),
which was filed and became effective with the Secretary of State of the State of Delaware on January 14, 2025. The Warrants are immediately
exercisable and expire five years from the date of issuance.
The Private Placement was exempt from the
registration requirements of the Securities Act pursuant to the exemption for transactions by an issuer not involving any public offering
under Section 4(a)(2) of the Securities Act and Rule 506 of Regulation D of the Securities Act and in reliance on similar exemptions
under applicable state laws. Each of the investors in the Private Placement has represented to us that it is an accredited investor within
the meaning of Rule 501(a) of Regulation D and that it is acquiring the securities for investment only and not with a view towards, or
for resale in connection with, the public sale or distribution thereof. The Preferred Shares and Warrants were offered without any general
solicitation by us or our representatives.
Registration Rights Agreements
In connection with the Private Placement,
we entered into the Registration Rights Agreement, pursuant to which we are obligated, among other things, to (A) file a resale registration
statement (the “Registration Statement”) with the SEC to register for resale promptly following the Closing Date, but in
no event later than 30 calendar days after the Closing Date, the sum of (i) 100% of the maximum number of Conversion Shares issuable
upon conversion of the Preferred Shares ((x) assuming for purposes hereof that the Preferred Shares are convertible at the Floor Price
(as defined herein) and (y) any such conversion shall not take into account any limitations on the conversion of the Preferred Shares
set forth in the Certificate of Designations) and (ii) 100% of the maximum number of Warrant Shares issuable upon exercise of the Warrants
(x) assuming for purposes hereof that the Warrants will be exercised at the initial exercise price as set forth in the Warrants (as defined
herein) and (y) any such exercise shall not take into account any limitations on the exercise of the Warrant Shares set forth in the
Warrants, all subject to adjustment as provided in Registration Rights Agreement, (B) have such Registration Statement declared effective
by the Effectiveness Deadline (as defined in the Registration Rights Agreement and as may be amended from time to time), and (C) maintain
the registration until the earlier of (x) the date on which the selling stockholders may sell their Conversion Shares or Warrant Shares
without restriction pursuant to Rule 144 under the Securities Act, (y) the date on which the selling stockholders no longer hold any
Conversion Shares or Warrant Shares and (z) the five year anniversary of the Closing Date. The Company will be obligated to pay certain
liquidated damages to the Investors if the Company fails to file the Registration Statement when required, fails to cause the Registration
Statement to be declared effective by the SEC when required, or fails to maintain the effectiveness of the Registration Statement pursuant
to the terms of the Registration Rights Agreement.
Preferred Shares
All shares of capital stock of the Company rank
junior to the Preferred Shares, with respect to the preferences as to dividends, distributions and payments upon the liquidation, dissolution
and winding up of the Company.
The Preferred Shares are convertible into
Common Stock at the election of the holder at any time the Conversion Price. The Conversion Price is subject to customary adjustments
for stock dividends, stock splits, reclassifications, stock combinations and the like. The Conversion Price may also be voluntarily reduced
by the Company to any amount and for any period of time deemed appropriate by the Board at any time with the prior written consent of
the holders of at least a majority of the outstanding Preferred Shares, subject to the rules and regulations of Nasdaq.
We are required to redeem the Preferred Shares
in six (6) equal quarterly installments, commencing on July 1, 2025. The amortization payments due upon such redemption are payable,
at the Company’s election, in cash at 107% of the applicable Installment Redemption Amount (as defined in the Certificate of Designations),
or subject to certain limitations, in shares of Common Stock valued at the lower of (i) the Conversion Price then in effect and (ii)
the greater of (A) 80% of the average of the three lowest closing prices of the Company’s Common Stock during the thirty consecutive
trading day period ending and including the trading day immediately prior to the date the amortization payment is due or (B) $0.167,
which was 20% of the “Minimum Price” (as defined in Nasdaq Stock Market Rule 5635) on the Stockholder Approval Date (as defined
below), such lower amount as permitted, from time to time, by Nasdaq, and subject to adjustment for stock splits, stock dividends, stock
combinations, recapitalizations or other similar events, which amortization amounts are subject to certain adjustments as set forth in
the Certificate of Designations (the “Floor Price”).
The
holders of the Preferred Shares are entitled to dividends of 8% per annum, compounded each calendar quarter, which are payable in arrears
monthly in cash or shares of Common Stock at the Company’s option, in accordance with the terms of the Certificate of Designations.
Upon the occurrence and during the continuance of a Triggering Event (as defined in the Certificate of Designations), including,
among other things, our failure to pay any amounts due to the holders of the Preferred Shares when due, the Preferred Shares accrue dividends
at the rate of 15% per annum. Upon conversion or redemption, the holders of the Preferred Shares are also entitled to receive a dividend
make-whole payment, assuming, for calculation purposes, that the stated value of such Preferred Shares remained outstanding through and
including the one-year anniversary of the applicable date of conversion.
The holders of the Preferred Shares are entitled to vote with holders
of the Common Stock on as as-converted basis, with the number of votes to which each holder of Preferred Shares is entitled to be calculated
assuming a conversion price of $1.36 per share, which was the Minimum Price (as defined in Rule 5635 of the Rules of the Nasdaq
Stock Market) applicable immediately before the execution and delivery of the Purchase Agreement, subject to certain beneficial ownership
limitations as set forth in the Certificate of Designations.
Notwithstanding the foregoing, our ability
to settle conversions and make amortization and dividend make-whole payments using shares of Common Stock is subject to certain limitations
set forth in the Certificate of Designations. Prior to receiving approval from our stockholders in accordance with the Nasdaq listing
standards, such limitations included a limit on the number of shares that may be issued until the time that our stockholders approved
the issuance of more than 19.99% of our issued and outstanding shares of Common Stock in accordance with Nasdaq listing standards (the
“Stockholder Approval”). We agreed to seek stockholder approval of these matters at a meeting to be held no later than June
1, 2025, and the Stockholder Approval was obtained on April 10, 2025 (the “Stockholder Approval Date”), at a special meeting
of stockholders. Further, the Certificate of Designations contains a certain beneficial ownership limitation after giving effect to the
issuance of shares of Common Stock issuable upon conversion of the Preferred Shares or as part of any amortization payment or dividend
make-whole payment under the Certificate of Designations.
The Certificate of Designations includes certain
Triggering Events (as defined in the Certificate of Designations), including, among other things, the suspension from trading or the
failure of our Common Stock to be trading or listed (as applicable) on an eligible market for a period of five (5) consecutive trading
days and our failure to pay any amounts due to the holders of the Preferred Shares when due. In connection with a Triggering Event, each
holder of Preferred Shares will be able to require us to redeem in cash any or all of the holder’s Preferred Shares at a premium
set forth in the Certificate of Designations.
Warrants
The Warrants are exercisable for shares of Common
Stock immediately, at an exercise price of $1.496 per share for the Series A Warrants and at an exercise price of $1.7952 per share
for the Series B Warrants and expire five years from the date of issuance. The exercise price of each Warrant is subject to customary
adjustments for stock dividends, stock splits, reclassifications, stock combinations and the like. Upon any such price-based adjustment
to the exercise price, the number of Warrant Shares issuable upon exercise of the Warrants will be increased proportionately. The exercise
price may also be voluntarily reduced by the Company to any amount and for any period of time with the prior written consent of the holders
of at least a majority of the outstanding Warrants, subject to the rules and regulations of Nasdaq. The Warrants may be exercised
for cash, provided that, if there is no effective registration statement available registering the exercise of the Warrants, the Warrants
may be exercised on a cashless basis.
Until such time as we have received the Stockholder
Approval, we cannot issue any Warrant Shares if the issuance of such Warrant Shares (taken together with the issuance of any Conversion
Shares or other shares of Common Stock issuable pursuant to the terms of the Certificate of Designations) would exceed 19.99% of our
issued and outstanding shares of Common Stock prior to the Private Placement, which amount is the aggregate number of shares of Common
Stock which we may issue under the rules or regulations of Nasdaq. We received Stockholder Approval at a special meeting of stockholders
held on April 10, 2025.
Implications of Being a Smaller Reporting Company
We are a “smaller reporting company”
and accordingly may provide less public disclosure than larger public companies. As a result, the information that we provide to our stockholders
may be different than you might receive from other public reporting companies in which you hold equity interests.
Corporate Information
We were incorporated in Delaware as a corporation
on January 9, 2006, and completed an initial public offering in June 2010. Our Common Stock which was previously listed since January
8, 2018, under the trading symbol “XSPA” on Nasdaq, has been listed under the trading symbol “XWEL” since October
25, 2022. Our principal executive offices are located at 254 West 31st Street, 11th Floor, New York, New York 10001. Our telephone number
is (212) 750-9595 and our website address is www.xwell.com. We also operate the websites www.xpresspa.com, www.xprescheck.com,
www.hyperpointe.com and www.napleswaxcenter.com. Through our website, we will make available, free of charge, our annual report on
Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and any amendments to those reports, as soon as reasonably practicable
after such material is electronically filed with, or furnished to, the SEC. Information contained on, or that can be accessed through,
our website is not and shall not be deemed to be a part of this prospectus.
The
Offering
| Common Stock to be Offered by the
Selling Stockholders |
|
Up to an aggregate of 30,440,060 shares
of Common Stock, which are issuable to such selling stockholders pursuant to the terms of the Preferred Shares and Warrants and
which includes 1,140,370 Dividend Shares.
The terms of the Registration Rights Agreement,
as amended, require us to register the number of shares of Common Stock equal to the sum of (i) 100% of the maximum number of Conversion
Shares issuable upon conversion of the Preferred Shares (assuming for purposes hereof that (x) the Preferred Shares are convertible at
the Floor Price of $0.167, which was 20% of the “Minimum Price” (as defined in Nasdaq Stock Market Rule 5635) on the Stockholder
Approval Date, and (y) any such conversion shall not take into account any limitations on the conversion of the Preferred Shares set
forth in the Certificate of Designations, and (ii) 100% of the maximum number of Warrant Shares issuable upon exercise of the Warrants
issued to the Investors (x) assuming for purposes hereof that the Warrants will be exercised at the initial exercise price as set forth
in the Warrants (as defined herein) and (y) any such exercise shall not take into account any limitations on the exercise of the Warrant
Shares set forth in the Warrants, in each case subject to the adjustments set forth in the Certificate of Designations and Warrants.
We are also registering up to 1,140,370 Dividend Shares in connection
with the payments of dividends in the form of shares of Common Stock, if any, to the holders of the Preferred Shares.
|
| |
|
|
| Use of Proceeds |
|
We will not receive
any proceeds from the sale of the Conversion Shares and Warrant Shares by the selling stockholders. However, we will receive proceeds
from the exercise of the Warrants if such Warrants are exercised for cash. We currently intend to use such proceeds, if any, for
general corporate purposes. |
| Plan of Distribution |
|
The selling stockholders named in this prospectus,
or their pledgees, donees, transferees, distributees, beneficiaries or other successors-in-interest, may offer or sell the shares of Common
Stock from time to time through public or private transactions at prevailing market prices, at prices related to prevailing market prices
or at privately negotiated prices. The selling stockholders may also resell the shares of Common Stock to or through underwriters, broker-dealers
or agents, who may receive compensation in the form of discounts, concessions or commissions.
See “Plan of Distribution” beginning
on page 17 of this prospectus for additional information on the methods of sale that may be used by the selling stockholders. |
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|
| Nasdaq Capital Market Symbol |
|
Our Common Stock is listed on the Nasdaq Capital Market under the symbol “XWEL.” |
| |
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| Risk Factors |
|
Investing in our Common
Stock involves significant risks. See “Risk Factors” beginning on page 10 of this prospectus and the documents
incorporated by reference in this prospectus. |
Risk
Factors
Investing in our securities involves a
high degree of risk. In addition to the other information contained in this prospectus and in the documents we incorporate by reference,
you should carefully consider the risks discussed below and under the heading “Risk Factors” in our Annual Report on Form
10-K, as amended, for the fiscal year ended December 31, 2024, as well as any amendment or update to our risk factors reflected in subsequent
filings with the SEC, before making a decision about investing in our securities. The risks and uncertainties discussed below and in
the documents incorporated by reference are not the only ones facing us. Additional risks and uncertainties not presently known to us,
or that we currently see as immaterial, may also harm our business. If any of these risks occur, our business, financial condition and
operating results could be harmed, the trading price of our Common Stock could decline and you could lose part or all of your investment.
Risks Related to this Offering and Our Common
Stock
Our failure to meet the continued listing
requirements of Nasdaq could result in a delisting of our Common Stock.
The continued listing standards of Nasdaq
provide, among other things, that a company may be delisted if the bid price of its stock drops below $1.00 for a period of 30 consecutive
business days or if stockholders’ equity is less than $2,500,000. On May 13, 2025, we received a letter from the Listing Qualifications
Department of the Nasdaq Stock Market indicating that, based upon the closing bid price of our Common Stock for the 30 consecutive business
days between March 31, 2025, to May 12, 2025, we did not meet the minimum bid price of $1.00 per share required for continued listing
on the Nasdaq pursuant to the Minimum Bid Price Rule. The letter also indicated that we will be provided with the Compliance Period (until
November 10, 2025), in which to regain compliance pursuant to Nasdaq Listing Rule 5810(c)(3)(A).
In order to regain compliance with Nasdaq’s
Minimum Bid Price Rule, our Common Stock must maintain a minimum closing bid price of $1.00 for at least ten consecutive business days
during the Compliance Period. In the event we do not regain compliance by the end of the Compliance Period, we may be eligible for additional
time to regain compliance. To qualify, we will be required to meet the continued listing requirement for the market value of its publicly
held shares and all other initial listing standards for Nasdaq, with the exception of the bid price requirement, and will need to provide
written notice of our intention to cure the deficiency during the second compliance period, by effecting a reverse stock split if necessary.
If we meet these requirements, we may be granted an additional 180 calendar days to regain compliance. However, if it appears to Nasdaq
that we will be unable to cure the deficiency, or if we are not otherwise eligible for the additional cure period, Nasdaq will provide
notice that our Common Stock will be subject to delisting. There can be no assurance that we will be eligible for the additional 180
calendar day compliance period, if applicable, or that the Nasdaq staff would grant our request for continued listing subsequent to any
delisting notification. In the event of such a notification, we may appeal the Nasdaq staff’s determination to delist our securities.
As of the date of this prospectus, we have not regained compliance with the Minimum Bid Price Rule.
If in the future we seek to implement a reverse
stock split to remain listed on Nasdaq, the announcement and/or implementation of a reverse stock split could significantly negatively
affect the price of our Common Stock. Additionally, if we seek to implement a reverse stock split to remain listed on Nasdaq, it cannot
be assured that such reverse stock split will result in any sustained proportionate increase in the market price of our Common Stock,
which is dependent upon many factors, including our business and financial performance, general market conditions, and prospects for
future success, which are unrelated to the number of shares of our Common Stock outstanding. It is not uncommon for the market price
of a company’s common stock to decline in the period following a reverse stock split. We may be unable to regain compliance in
the future if our stock price again falls below the minimum bid price. Additionally, if we fail to comply with any other continued listing
standards of Nasdaq, our Common Stock would also be subject to delisting. If that were to occur, our Common Stock would be subject to
rules that impose additional sales practice requirements on broker-dealers who sell our securities. The additional burdens imposed upon
broker-dealers by these requirements could discourage broker-dealers from effecting transactions in our Common Stock. This would significantly
and negatively affect the ability of investors to trade our securities and would significantly and negatively affect the value and liquidity
of our Common Stock. These factors could contribute to lower prices and larger spreads in the bid and ask prices for our Common Stock.
The delisting of our Common Stock also would likely have a negative effect on the price of our Common Stock and would impair your ability
to sell or purchase our common stock when you wish to do so. Further, if we were to be delisted from Nasdaq, our Common Stock would cease
to be recognized as covered securities, and we would be subject to regulation in each state in which we offer our securities.
Although we expect to take actions intended
to restore our compliance with the listing requirements, we can provide no assurance that any action taken by us would be successful,
that we would successfully maintain compliance with the minimum bid price requirement or any of Nasdaq’s other listing requirements
or that any such action would stabilize the market price or improve the liquidity of our Common Stock. Should a delisting occur, an investor
would likely find it significantly more difficult to dispose of, or to obtain accurate quotations as to the value of our shares, and
our ability to raise future capital through the sale of our Common Stock could be severely limited. Delisting from Nasdaq could adversely
affect our ability to raise additional financing through the public or private sale of equity securities, would significantly affect
the ability of investors to trade our securities and would negatively affect the value and liquidity of our Common Stock. Delisting could
also have other negative results, including the potential loss of confidence by employees, the loss of institutional investor interest
and fewer business development opportunities.
The issuance of the shares of Common Stock
covered by this prospectus could significantly increase the total number of shares of Common Stock issued and outstanding and thereby
cause our existing stockholders to experience substantial dilution.
The shares of Common Stock being offered pursuant
to this prospectus represent Conversion Shares issuable upon the conversion of our Preferred Shares and Warrant Shares issuable upon
the exercise of the Warrants. As of May 15, 2025, there were 5,261,024 shares of Common Stock issued and outstanding (prior to any deemed
issuance of any Conversion Shares or Warrant Shares). If we are required to issue the maximum number of Conversion Shares and Warrant
Shares that are being registered hereunder, the number of shares of Common Stock issued and outstanding after such issuance would represent
approximately 557% of the number of shares of Common Stock issued and outstanding as of the date of this prospectus. As a result, an
existing stockholder’s proportionate interest in us will be substantially diluted. The actual number of shares of Common Stock
that we issue to the selling stockholders may be less than the aggregate number of shares covered by this prospectus.
The Certificate of Designations provides
for amortization payments to be issued in the form of shares of Common Stock at a conversion price that varies with the trading price
of our Common Stock. This feature may result in a greater number of shares of Common Stock being issued upon conversions than if the conversions
were effected at the conversion price in effect as of the date of this prospectus. Sales of these shares will dilute the interests of
other security holders and may depress the price of our Common Stock and make it difficult for us to raise additional capital.
The Certificate of Designations for our Preferred
Shares provides for the payment of amortization payments to the holder of our Preferred Shares in cash or shares of Common Stock, or
a combination thereof, at the Company’s option. If the Company elects to pay any dividends in shares of Common Stock, the conversion
price used to calculate the number of shares issuable will equal to the greater of (A) 80% of the average of the three lowest closing
prices of our Common Stock during the thirty consecutive trading day period ending and including the trading day immediately prior to
the date the amortization payment is due or (B) $0.167, which was 20% of the Minimum Price on the Stockholder Approval Date or such lower
amount as permitted, from time to time, by the Nasdaq Capital Market. The potential for such additional issuances below the Conversion
Price as of the date of this prospectus may depress the price of our Common Stock regardless of our business performance. We may find
it more difficult to raise additional equity capital while any of our Preferred Shares is outstanding.
The Certificate of Designations provides
for the payment of dividends in cash or in shares of our Common Stock, or a combination thereof, and we may not be permitted to pay such
dividends in cash, which will require us to have shares of Common Stock available to pay the dividends.
Each share of the Preferred Shares is entitled
to receive cumulative dividends at the rate per share of 8% per annum of the stated value per share, compounded each calendar quarter.
The dividends are payable in cash, out of any funds legally available for such purpose, or shares of Common Stock in the case of an Installment
Conversion (as defined in the Certificate of Designations). We will not be permitted to pay the amortization in cash unless we are legally
permitted to do so under Delaware law. As such, we may rely on having available shares of Common Stock to pay such amortization, which
will result in dilution to our shareholders. If we do not have such available shares, we may not be able to satisfy our amortization obligations.
Holders of our Preferred Shares are
entitled to certain payments under the applicable Certificate of Designations that may be paid in cash, in shares of Common Stock or
in additional Preferred Shares depending on the circumstances. If we make these payments in cash, it may require the expenditure of a
substantial portion of our cash resources. If we make these payments in Common Stock, it may result in substantial dilution to the holders
of our Common Stock.
Under the Certificate of Designations, we
are required to redeem Preferred Shares in six equal quarterly installments, commencing on February 1, 2025. The amortization
payments due upon such redemption are payable, at our election, in cash at 107% of the applicable Installment Redemption Amount (as
defined in the Certificate of Designations), or subject to certain limitations, in shares of Common Stock valued at the lower of (i)
the conversion price then in effect and (ii) the greater of (A) 80% of the average of the three lowest closing prices of the our
Common Stock during the thirty consecutive trading day period ending and including the trading day immediately prior to the date the
amortization payment is due or (B) the Floor Price, and in each case subject to adjustment for stock splits, stock dividends, stock
combinations, recapitalizations or other similar events. Holders of our Preferred Shares are also entitled to receive dividends of
8% per annum, compounded each calendar quarter, which are payable in arrears monthly in cash or shares of our Common Stock, at our
option, in accordance with the terms of the Certificate of Designations.
Our ability to make payments due to the holders
of our Preferred Shares using shares of Common Stock is subject to certain limitations set forth in the applicable Certificate of Designations.
We will not be permitted to pay the amortization in cash unless we are legally permitted to do so under Delaware law. As such, we may
rely on having available shares of Common Stock to pay such amortization, which will result in dilution to our shareholders. If we do
not have such available shares, we may not be able to satisfy our amortization obligations, or we may be forced to make such payments
in cash. If we do not have sufficient cash resources to make these payments, we may need to raise additional equity or debt capital,
and we cannot provide any assurance that we will be successful in doing so. If are unable to raise sufficient capital to meet our payment
obligations, we may need to delay, reduce or eliminate certain research and development programs or other operations, sell some or all
of our assets or merge with another entity.
Our ability to make payments due to the holders
of our Preferred Shares using cash is also limited by the amount of cash we have on hand at the time such payments are due as well as
certain provisions of the Delaware General Corporation Law (the “DGCL”). Further, we intend to make the installment payments
due to holders of Preferred Shares in the form of Common Stock to the extent allowed under the applicable Certificate of Designation
and applicable law in order to preserve our cash resources. The issuance of shares of common stock to the holders of our Preferred Shares
with increase the number of shares of Common Stock outstanding and could result in substantial dilution to the existing holders of our
Common Stock.
The Preferred Shares and the Warrants
contain certain anti-dilution provisions, which may dilute the interests of our stockholders, depress the price of our Common Stock,
and make it difficult for us to raise additional capital.
Certain events, for example, a Stock Combination
Event (as defined in the Certificate of Designations) may reduce the conversion price of the Preferred Shares, which in turn may lead
to further dilution to the holders of our Common Stock. The Warrants additionally contain anti-dilution provisions applicable to the
exercise price. If in the future, while any of the Warrants are outstanding, we may be required upon the occurrence of certain events,
to adjust the exercise price of the Warrants, and simultaneously with any adjustment to the exercise price, the number of shares of Common
Stock that may be purchased upon exercise of the Warrants shall be increased or decreased proportionately, so that after such adjustment
the aggregate exercise price payable thereunder for the adjusted number of shares of common stock issuable upon exercise of the Warrants
shall be the same as the aggregate exercise price in effect immediately prior to such adjustment. Such adjustments can dilute the book
value per share of Common Stock and reduce any proceeds we may receive from the exercise of the Warrants. In addition, the perceived
risk of dilution may cause our shareholders to be more inclined to sell their Common Stock, which may in turn depress the price of common
shares regardless of our business performance. We may also find it more difficult to raise additional equity capital while any of the
Warrants and the Preferred Shares remain outstanding.
The Certificate of Designations contains
restrictive covenants and terms that may make it difficult to procure additional financing and that may affect our financial condition
and results of operations.
The Certificate of Designations contains
certain restrictive covenants including but not limited to, maintaining a Cash Minimum (as defined in the Certificate of
Designations), restrictions on incurring any indebtedness until the date on which at least 80% of the Preferred Shares have been
converted to Common Stock and/or redeemed by us, subject to certain exceptions, restrictions on directly or indirectly, redeeming,
repurchasing or declaring or paying any cash dividend or distribution on any of our capital stock (other than as required by the
Certificate of Designations), and restrictions on directly or indirectly, permitting any of our indebtedness to mature or accelerate
prior to the Maturity Date (as defined in the Certificate of Designations). Additionally, the Preferred Shares also contains certain
purchase rights (the “Purchase Rights”) permitting the holders of the Preferred Shares to acquire upon the terms
applicable to such Purchase Rights, the aggregate Purchase Rights which such holder could have acquired if such holder had held the
number of shares of Common Stock acquirable upon complete conversion of all of its Preferred Shares. These restrictive covenants may
may limit our flexibility in raising capital or incurring any indebtedness, which may have an adverse effect on our financial
condition.
The holders of the Preferred Shares are entitled
to dividends of 8% per annum, compounded each calendar quarter, which are payable in arrears monthly in cash or shares of Common Stock
at our option, in accordance with the terms of the Certificate of Designations. Upon the occurrence and during the continuance of a Triggering
Event (as defined in the Certificate of Designations), the Preferred Shares accrue dividends at the rate of 15% per annum (the “Default
Rate”). In connection with a Triggering Event, each holder of the Preferred Shares will be able to require us to redeem in cash
any or all of the holder’s Preferred Shares at a premium set forth in the Certificate of Designations. If such Triggering Event
occurs, our financial condition and results of operations could be materially affected.
Under the Purchase Agreement,
we are subject to certain restrictive covenants that may make it difficult to procure additional financing.
The Purchase Agreement contains, among others,
the following restrictive covenants: (A) until all of Preferred Shares are no longer outstanding (or until no Warrants remain outstanding
if the stockholder approval for the issuance of the shares of Common Stock upon conversion or exercise of the Preferred Shares and Warrants,
as applicable, is not obtained) we shall be prohibited from effecting or entering into an agreement to effect any subsequent placement
involving a variable rate transaction and (B) until the earlier of (i) the second anniversary of the closing date of the Private Placement,
and (ii) the date in which no Preferred Shares remain outstanding, the opportunity to participate in any subsequent securities offerings
by us.
If we require additional funding while these
restrictive covenants remain in effect, we may be unable to effect a financing transaction on terms acceptable to us, or at all, while
also remaining in compliance with the terms of the Purchase Agreement, or we may be forced to seek a waiver from the investors party
to the Purchase Agreement, which such investors are not obligated to grant to us.
Substantial future sales or other issuances
of our Common Stock could depress the market for our Common Stock.
Sales of a substantial number of shares of our
Common Stock and any future sales of a substantial number of shares of Common Stock in the public market, including the issuance of shares
or any shares issuable upon conversion of the Preferred Shares or exercise of the Warrants, or the perception by the market that those
sales could occur, could cause the market price of our Common Stock to decline or could make it more difficult for us to raise funds
through the sale of equity and equity-related securities in the future at a time and price that our management deems acceptable, or at
all. The issuance the shares of Common Stock upon conversion of the Preferred Shares and the exercise of the Warrants and the issuance
of the Dividend Shares, for example, is likely to further depress the price of our Common Stock, which could, among other factors, make
it more difficult for us to regain compliance with the Minimum Bid Price Rule and to maintain compliance with Nasdaq’s continued
listing requirements. In turn, this may also increase the likelihood that we may have to implement a reverse stock split of our Common
Stock to regain compliance with the Minimum Bid Price Rule and the announcement and/or implementation of a reverse stock split could
significantly negatively affect the price of our Common Stock. We may additionally be unable to maintain any proportionate increase in
the market price of our Common Stock following a reverse stock split. See “Risk Factors – Risks Related to this Offering
and Our Common Stock – ‘Our failure to meet the continued listing requirements of Nasdaq could result in a delisting of
our Common Stock’” above.
In addition, as opportunities present themselves,
we may enter into financing or similar arrangements in the future, including the issuance of debt securities, preferred stock or Common
Stock, which could also depress the market for our Common Stock. We cannot predict the effect, if any, that market sales of those shares
of Common Stock or the availability of those shares for sale will have on the market price of our Common Stock.
You may experience future dilution as a
result of future equity offerings and other issuances of our securities.
In order to raise additional capital, we may in
the future offer additional shares of Common Stock or other securities convertible into or exchangeable for our Common Stock prices that
may not be the same as the price per share paid by the investors in this offering. We may not be able to sell shares or other securities
in any other offering at a price per share that is equal to or greater than the price per share paid by the investors in this offering,
and investors purchasing shares or other securities in the future could have rights superior to existing stockholders. The price per share
at which we sell additional shares of Common Stock or securities convertible into shares of Common Stock in future transactions may be
higher or lower than the price per share paid to the selling stockholders. Our stockholders will incur dilution upon exercise of any outstanding
stock options, warrants or other convertible securities or upon the issuance of shares of Common Stock under our stock incentive programs.
Any additional capital raised through the sale
of equity or equity-backed securities may dilute our stockholders’ ownership percentages and could also result in a decrease in
the market value of our equity securities.
The terms of any securities issued by us in future
capital transactions may be more favorable to new investors, and may include preferences, superior voting rights and the issuance of warrants
or other derivative securities, which may have a further dilutive effect on the holders of any of our securities then outstanding.
In addition, we may incur substantial costs in
pursuing future capital financing, including investment banking fees, legal fees, accounting fees, securities law compliance fees, printing
and distribution expenses and other costs. We may also be required to recognize non-cash expenses in connection with certain securities
we issue, such as convertible notes and warrants, which may adversely impact our financial condition.
Special
Note Regarding Forward-Looking Statements
This prospectus and the information incorporated
by reference in this prospectus contain “forward-looking statements,” which include information relating to future events,
future financial performance, strategies, expectations, competitive environment and regulation. Our use of the words “may,”
“will,” “would,” “could,” “should,” “believes,” “estimates,” “projects,”
“potential,” “expects,” “plans,” “seeks,” “intends,” “evaluates,”
“pursues,” “anticipates,” “continues,” “designs,” “impacts,” “forecasts,”
“target,” “outlook,” “initiative,” “objective,” “designed,” “priorities,”
“goal” or the negative of those words or other similar expressions is intended to identify forward-looking statements that
represent our current judgment about possible future events. Forward-looking statements should not be read as a guarantee of future performance
or results and will probably not be accurate indications of when such performance or results will be achieved. All statements included
or incorporated by reference in this prospectus, and in related comments by our management, other than statements of historical facts,
including without limitation, statements about future events or financial performance, are forward-looking statements that involve certain
risks and uncertainties.
These statements are based on certain assumptions
and analyses made in light of our experience and perception of historical trends, current conditions and expected future developments
as well as other factors that we believe are appropriate in the circumstances. While these statements represent our judgment on what
the future may hold, and we believe these judgments are reasonable, these statements are not guarantees of any events or financial results.
Whether actual future results and developments will conform with our expectations and predictions is subject to a number of risks and
uncertainties, including the risks and uncertainties discussed in this prospectus, any applicable prospectus supplement and the documents
incorporated by reference under the captions “Risk Factors” and “Special Note Regarding Forward-Looking Statements”
and elsewhere in those documents.
Consequently, all of the forward-looking statements
made in this prospectus as well as all of the forward-looking statements incorporated by reference to our filings under the Securities
Exchange Act of 1934, as amended (the “Exchange Act”), are qualified by these cautionary statements and there can be no assurance
that the actual results or developments that we anticipate will be realized or, even if realized, that they will have the expected consequences
to or effects on us and our subsidiaries or our businesses or operations. We caution investors not to place undue reliance on forward-looking
statements. We undertake no obligation to update publicly or otherwise revise any forward-looking statements, whether as a result of new
information, future events, or other such factors that affect the subject of these statements, except where we are expressly required
to do so by law.
Use
of Proceeds
All shares of our Common Stock offered by this
prospectus are being registered for the accounts of the selling stockholders and we will not receive any proceeds from the sale of these
shares. However, we will receive proceeds from the exercise of the Warrants if the Warrants are exercised for cash. We intend to use those
proceeds, if any, for general corporate purposes. The holders of the Warrants are not obligated to exercise their Warrants for cash, and
we cannot predict whether holders of the Warrants will choose to exercise all or any of their Warrants for cash.
Selling
Stockholders
Unless the context otherwise requires, as used
in this prospectus, “selling stockholders” includes the selling stockholders listed below and donees, pledgees, transferees
or other successors-in-interest selling shares received after the date of this prospectus from the selling stockholders as a gift, pledge
or other non-sale related transfer.
We have prepared this prospectus to allow the
selling stockholders or their successors, assignees or other permitted transferees to sell or otherwise dispose of, from time to time,
up to 30,440,060 shares of our Common Stock, which includes up to 1,140,370 shares of Common Stock issuable as Dividend Shares.
The Common Stock being offered by the selling
stockholders are those issuable to the selling stockholders upon conversion of the Preferred Shares and exercise of the Warrants. For
additional information regarding the issuance of the Preferred Shares and the Warrants, see “Private Placement of Preferred Shares
and Warrants” above. We are registering the Conversion Shares and Warrant Shares in order to permit the selling stockholders to
offer the shares for resale from time to time. The selling stockholders may also sell, transfer or otherwise dispose of all or a portion
of their shares in transactions exempt from the registration requirements of the Securities Act, or pursuant to another effective registration
statement covering those shares.
Relationships with the Selling Stockholders
Except for the ownership of the Preferred Shares
and the Warrants issued pursuant to the Purchase Agreement and, except as disclosed in our periodic reports and current reports filed
with the SEC from time to time, the selling stockholders have not had any material relationship with us within the past three years.
Information About Selling Stockholders Offering
The
table below lists the selling stockholders and other information regarding the beneficial ownership (as determined under Section 13(d)
of the Exchange Act and the rules and regulations thereunder) of the shares of Common Stock held by each of the selling stockholders.
The second column (titled “Number of Shares of Common Stock Owned Prior to Offering”) lists the number of shares of Common
Stock beneficially owned by the selling stockholders, based on their respective ownership of shares of Common Stock, Preferred Shares
and Warrants as of May 15, 2025 , assuming conversion of the Preferred Shares
and exercise of the Warrants and any other warrants held by each such selling stockholder on that date, and taking account of any beneficial
ownership limitations on conversion and exercise set forth therein.
The third column (titled “Maximum Number
of Shares of Common Stock to be Sold Pursuant to this Prospectus”) lists the shares of Common Stock being offered by this prospectus
by the selling stockholders at the Floor Price and exercise price of the Preferred Shares and the Warrants, respectively, and does not
take in account any beneficial ownership limitations on (i) conversion of the Preferred Shares as set forth in the Certificate of Designations
or (ii) exercise of the Warrants as set forth in the Warrants.
The fourth and fifth columns (titled “Number
of Shares of Common Stock Owned After Offering” and “Percentage of Common Stock Owned After Offering”, respectively)
assume the conversion of the Preferred Shares at the Floor Price and exercise of the Warrants at the initial exercise price and the sale
of all of the shares offered by the selling stockholders pursuant to this prospectus, including the Dividend Shares apportioned to the
selling stockholders on a pro rata basis based on the number of Preferred Shares held by the selling stockholder. Because the Conversion
Price of the Preferred Shares and the exercise price of the Warrants may be adjusted, the number of shares that will actually be issued
may be more or less than the number of shares being offered by this prospectus.
The terms of the Registration Rights Agreement
require us to register the number of shares of Common Stock equal to the sum of (i) 100% of the maximum number of Conversion Shares issuable
upon conversion of the Preferred Shares (assuming for purposes hereof that (x) the Preferred Shares are convertible at the Floor Price
of $0.167, which was 20% of the “Minimum Price” (as defined in Nasdaq Stock Market Rule 5635) on the Stockholder Approval
Date, and (y) any such conversion shall not take into account any limitations on the conversion of the Preferred Shares set forth in
the Certificate of Designations, and (ii) 100% of the maximum number of Warrant Shares issuable upon exercise of the Warrants issued
to the Investors (x) assuming for purposes hereof that the Warrants will be exercised at the initial exercise price as set forth in the
Warrants (as defined herein) and (y) any such exercise shall not take into account any limitations on the exercise of the Warrant Shares
set forth in the Warrants, in each case subject to the adjustments set forth in the Certificate of Designations and Warrants.
Under the terms of the Certificate of Designations
and the Warrants, a selling stockholder, may not convert the Preferred Shares or exercise the Warrants to the extent (but only to the
extent) such selling stockholder or any of its affiliates would beneficially own a number of shares of our shares of Common Stock which
would exceed 4.99%, of the outstanding shares of the Company. The number of shares in the second column (“Number of Shares of Common
Stock Owned Prior to Offering”), reflects these limitations. The number of shares in the third column (“Maximum Number of
Shares of Common Stock to be Sold Pursuant to this Prospectus”) does not take into account any limitations on the conversion of
the Preferred Shares or the Warrants. The selling stockholders may sell all, some or none of their shares in this offering. See “Plan
of Distribution.”
| |
|
Shares
of Common Stock
Beneficially Owned Before
Offering(1) |
|
|
Maximum
Number of
Shares of
Common
Stock to be
Sold Pursuant
to this
Prospectus (2) |
|
|
Shares
of Common Stock
Beneficially Owned After
Offering |
|
| Selling Stockholders |
|
Number |
|
|
Percentage |
|
|
Offered |
|
|
Number |
|
|
Percentage |
|
| Iroquois Capital Investment Group, LLC (3) |
|
|
191,692 |
|
|
|
4.99 |
% |
|
|
21,117,793 |
(5) |
|
|
0 |
|
|
|
0.00 |
% |
| Iroquois Master Fund Ltd. (4) |
|
|
84,621 |
|
|
|
4.99 |
% |
|
|
9,322,267 |
(6) |
|
|
28,791 |
(6) |
|
|
* |
|
* Less than 1%
| (1) | This table and the information in
the notes below are based upon information available to the Company and upon 5,261,024 shares
of Common Stock issued and outstanding as of May 15, 2025 (prior to any deemed issuance of
any Conversion Shares or Warrant Shares). Except as expressly noted in the footnotes below,
beneficial ownership has been determined in accordance with Rule 13d-3 under the Exchange
Act. The amounts set forth in this column reflect the application of various limitations
on the issuance of Conversion Shares and Warrant Shares in the Certificate of Designations
and the Warrants, respectively, including certain beneficial ownership limitations and limitations
under the rules or regulations of Nasdaq. |
| (2) | Shares of Common Stock to be sold
pursuant to this prospectus represent the number of shares of Common Stock that may be issued,
in the aggregate, upon conversion or exercise (as the case may be) of any Preferred Shares
or any Warrants beneficially owned by the selling stockholder without taking
in account any limitations on beneficial limitation as related to the (i) conversion of the
Preferred Shares as set forth in the Certificate of Designations or (ii) exercise of the
Warrants as set forth in the Warrants. |
| | | |
| | | The
number of shares of Common Stock in this column additionally includes up to an aggregate
of 1,140,370 Dividend Shares issuable as dividends to the holders of the Preferred Shares,
calculated on a pro-rata basis for each selling stockholder based on the number of Preferred
Shares held by the selling stockholder prior to this offering. |
| (3) | The shares are
held directly by Iroquois Capital Investment Group, LLC, a limited liability company (“ICIG”).
Richard Abbe is the managing member of ICIG. Mr. Abbe has voting control and investment
discretion over securities held by ICIG. As such, Mr. Abbe may be deemed to be the beneficial
owner (as determined under Section 13(d) of the Exchange Act) of the securities
held by ICIG. Mr. Abbe disclaims beneficial ownership over the securities listed except
to the extent of his pecuniary interest therein. ICIG’s address is 2 Overhill Road,
Suite 400, Scarsdale, NY 10583. |
| | Shares of Common Stock to be sold pursuant to this prospectus represent the number of shares of Common
Stock that may be issued, in the aggregate, upon conversion or exercise (as the case may be) of any Preferred Shares or any Warrants beneficially
owned by the selling stockholder. Other shares of Common Stock beneficially owned prior to this offering consist of 28,791 shares of common
stock |
| (4) | The shares are
held directly by Iroquois Master Fund Ltd. (“IMF”). Iroquois Capital Management
L.L.C. is the investment manager of IMF. Iroquois Capital Management, LLC has voting control
and investment discretion over securities held by IMF. As Managing Members of Iroquois Capital
Management, LLC, Richard Abbe and Kimberly Page make voting and investment decisions
on behalf of Iroquois Capital Management, LLC in its capacity as investment manager to IMF.
As a result of the foregoing, Mr. Abbe and Mrs. Page may be deemed to have
beneficial ownership (as determined under Section 13(d) of the Exchange Act) of
the securities held by Iroquois Capital Management and IMF. Each of Iroquois Capital Management,
LLC, Mr. Abbe and Ms. Page disclaims beneficial ownership over the securities
listed except to the extent of their pecuniary interest therein. IMF’s address is 2
Overhill Road, Suite 400, Scarsdale, NY 10583. |
| (5) | Consists of
(i) 16,616,767 Conversion Shares converted at the Floor Price, (ii) 1,854,947 shares of Common
Stock issuable upon exercise of the Series A Warrants at the initial exercise price, (iii)
1,854,947 shares of Common Stock issuable upon exercise of the Series B Warrants at the initial
exercise price, and (iv) 791,132 Dividend Shares. |
| (6) | Consists of
(i) 7,335,329 Conversion Shares converted at the Floor Price, (ii) 818,850 shares of Common
Stock issuable upon exercise of the Series A Warrants at the initial exercise price, (iii)
818,850 shares of Common Stock issuable upon exercise of the Series B Warrants at the initial
exercise price, and (iv) 349,238 Dividend Shares. Does not include an aggregate of 28,791
shares of Common Stock beneficially owned by the selling stockholder prior to the offering. |
Plan
of Distribution
We are registering the shares of Common Stock
issuable upon conversion of the Preferred Shares and exercise of the Warrants to permit the resale of these shares of Common Stock by
the holders of the Preferred Shares and Warrants from time to time after the date of this prospectus. We will not receive any of the proceeds
from the sale by the selling stockholders of the shares of Common Stock, although we will receive the exercise price of any Warrants not
exercised by the selling stockholders on a cashless exercise basis. We will bear all fees and expenses incident to our obligation to register
the shares of Common Stock.
Each selling stockholder of the securities
and any of their pledgees, assignees and successors-in-interest may sell all or a portion of the shares of Common Stock held by them
and offered hereby from time to time directly or through one or more underwriters, broker-dealers or agents. If the shares of Common
Stock are sold through underwriters or broker-dealers, the selling stockholders will be responsible for underwriting discounts or commissions
or agent’s commissions. The shares of Common Stock may be sold in one or more transactions at fixed prices, at prevailing market
prices at the time of the sale, at prices related to prevailing market prices, at varying prices determined at the time of sale or at
negotiated prices. These sales may be effected in transactions, which may involve crosses or block transactions, pursuant to one or more
of the following methods:
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on any national securities exchange or quotation service on which the securities may be listed or quoted at the time of sale; |
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in the over-the-counter market; |
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in transactions otherwise than on these exchanges or systems or in the over-the-counter market; |
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through the writing or settlement of options, whether such options are listed on an options exchange or otherwise; |
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ordinary brokerage transactions and transactions in which the broker-dealer solicits purchasers; |
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block trades in which the broker-dealer will attempt to sell the securities as agent but may position and resell a portion of the block as principal to facilitate the transaction; |
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purchases by a broker-dealer as principal and resale by the broker-dealer for its account; |
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an exchange distribution in accordance with the rules of the applicable exchange; |
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privately negotiated transactions; |
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short sales made after the date the Registration Statement is declared effective by the SEC; |
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broker-dealers may agree with a selling security holder to sell a specified number of such shares at a stipulated price per share; |
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a combination of any such methods of sale; and |
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any other method permitted pursuant to applicable law |
The selling stockholders may also sell securities
under Rule 144 or any other exemption from registration under the Securities Act, if available, rather than under this prospectus.
In addition, the selling stockholders may transfer
the securities by other means not described in this prospectus. If the selling stockholders effect such transactions by selling securities
to or through underwriters, broker-dealers or agents, such underwriters, broker-dealers or agents may receive commissions in the form
of discounts, concessions or commissions from the selling stockholders or commissions from purchasers of the securities for whom they
may act as agent or to whom they may sell as principal (which discounts, concessions or commissions as to particular underwriters, broker-dealers
or agents may be in excess of those customary in the types of transactions involved). In connection with sales of the securities or otherwise,
the selling stockholders may enter into hedging transactions with broker-dealers, which may in turn engage in short sales of the securities
in the course of hedging in positions they assume. The selling stockholders may also sell securities short and deliver securities covered
by this prospectus to close out short positions and to return borrowed shares in connection with such short sales. The selling stockholders
may also loan or pledge securities to broker-dealers that in turn may sell such securities.
The selling stockholders may pledge or grant a
security interest in some or all of the securities owned by them and, if they default in the performance of their secured obligations,
the pledgees or secured parties may offer and sell the securities from time to time pursuant to this prospectus or any amendment to this
prospectus under Rule 424(b)(3) or other applicable provision of the Securities Act amending, if necessary, the list of selling
stockholders to include the pledgee, transferee or other successors in interest as selling stockholders under this prospectus. The selling
stockholders also may transfer and donate the securities in other circumstances in which case the transferees, donees, pledgees or other
successors in interest will be the selling beneficial owners for purposes of this prospectus.
To the extent required by the Securities Act and
the rules and regulations thereunder, the selling stockholders and any broker-dealer participating in the distribution of the securities
may be deemed to be “underwriters” within the meaning of the Securities Act, and any commission paid, or any discounts or
concessions allowed to, any such broker-dealer may be deemed to be underwriting commissions or discounts under the Securities Act. At
the time a particular offering of securities is made, a prospectus supplement, if required, will be distributed, which will set forth
the aggregate amount of securities being offered and the terms of the offering, including the name or names of any broker-dealers or agents,
any discounts, commissions and other terms constituting compensation from the selling stockholders and any discounts, commissions or concessions
allowed or re-allowed or paid to broker-dealers.
Under the securities laws of some states, the
securities may be sold in such states only through registered or licensed brokers or dealers. In addition, in some states the securities
may not be sold unless such shares have been registered or qualified for sale in such state or an exemption from registration or qualification
is available and is complied with.
There can be no assurance that any selling stockholder
will sell any or all of the securities registered pursuant to the registration statement of which this prospectus forms a part.
The selling stockholders and any other person
participating in such distribution will be subject to applicable provisions of the Exchange Act, and the rules and regulations thereunder,
including, without limitation, to the extent applicable, Regulation M of the Exchange Act, which may limit the timing of purchases and
sales of any of the shares of securities by the selling stockholders and any other participating person. To the extent applicable, Regulation
M may also restrict the ability of any person engaged in the distribution of the securities to engage in market-making activities with
respect to such securities. All of the foregoing may affect the marketability of the securities and the ability of any person or entity
to engage in market-making activities with respect to the securities.
We will pay all expenses of the registration
of the securities pursuant to the Registration Rights Agreements, estimated to be $49,120.98 in total, including, without limitation, SEC filing
fees and expenses of compliance with state securities or “blue sky” laws; provided, however, a selling stockholder will pay
all underwriting discounts and selling commissions, if any. We will indemnify the selling stockholders against liabilities, including
some liabilities under the Securities Act in accordance with the Registration Rights Agreements or the selling stockholders will be entitled
to contribution. We may be indemnified by the selling stockholders against civil liabilities, including liabilities under the Securities
Act that may arise from any written information furnished to us by the selling stockholder specifically for use in this prospectus, in
accordance with the related registration rights agreements or we may be entitled to contribution.
Once sold under the registration statement, of
which this prospectus forms a part, the securities will be freely tradable in the hands of persons other than our affiliates.
Legal
Matters
The validity of the securities offered by this
prospectus will be passed upon for us by Haynes and Boone, LLP, New York, New York.
Experts
The consolidated financial statements of XWELL,
Inc. and subsidiaries as of and for the years December 31, 2024 and 2023, incorporated by reference in this registration statement and
accompanying prospectus have been audited by Marcum LLP, and independent registered public accounting firm, as stated in their report
(the report on the consolidated financial statements contains an explanatory paragraph regarding the Company’s ability to continue
as a going concern). Such consolidated financial statements have been incorporated herein by reference in reliance on the report of such
firm given upon their authority as experts in accounting and auditing.
Where
You Can Find More Information
We have filed with the SEC a registration statement
on Form S-3 under the Securities Act with respect to the securities offered by this prospectus. This prospectus, filed as part of
the registration statement, does not contain all the information set forth in the registration statement and its exhibits and schedules,
portions of which have been omitted as permitted by the rules and regulations of the SEC. For further information about us, we refer
you to the registration statement and to its exhibits and schedules.
We file annual, quarterly and current reports
and other information with the SEC. The SEC maintains an internet website at www.sec.gov that contains periodic and current reports, proxy
and information statements, and other information regarding registrants that are filed electronically with the SEC.
These documents are also available, free of charge,
through the Investors section of our website, which is located at www.xwell.com. Information contained on our website is not incorporated
by reference into this prospectus and you should not consider information on our website to be part of this prospectus.
Incorporation
of Certain Information by Reference
The SEC allows us to “incorporate by reference”
the information we have filed with it, which means that we can disclose important information to you by referring you to those documents.
The information we incorporate by reference is an important part of this prospectus, and later information that we file with the SEC will
automatically update and supersede this information. We incorporate by reference the documents listed below and any future documents (excluding
information furnished pursuant to Items 2.02 and 7.01 of Form 8-K) we file with the SEC pursuant to Sections 13(a), 13(c), 14 or
15(d) of the Securities Exchange Act of 1934, as amended, subsequent to the date of this prospectus and prior to the termination
of the offering:
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our Annual Report on
Form 10-K
for the year ended December 31, 2024, filed with the SEC on April 15, 2025, as amended by our report on Form 10-K/A, filed with the
SEC on April 28, 2025; |
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our Quarterly Report on Form
10-Q for the period ended March 31, 2025, filed with the SEC on May 20, 2025; |
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our Current Reports
on Form 8-K filed with the SEC on January 7, 2025, January 15, 2025, March 5, 2025, April 11, 2025, April 21, 2025, and May 19, 2025; and |
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the description of our
common stock contained in our Form
8-A filed with the SEC on June 16, 2010, as amended by Exhibit 4.22 to our Annual Report on Form 10-K for the year ended December 31, 2019, filed with the SEC on April 20, 2020, including
any amendments thereto or reports filed for the purposes of updating this description. |
All filings filed by us pursuant to the Securities
Exchange Act of 1934, as amended, after the date of the initial filing of this registration statement and prior to the effectiveness of
such registration statement (excluding information furnished pursuant to Items 2.02 and 7.01 of Form 8-K) shall also be deemed to
be incorporated by reference into the prospectus.
You should rely only on the information incorporated
by reference or provided in this prospectus. We have not authorized anyone else to provide you with different information. Any statement
contained in a document incorporated by reference into this prospectus will be deemed to be modified or superseded for the purposes of
this prospectus to the extent that a later statement contained in this prospectus or in any other document incorporated by reference into
this prospectus modifies or supersedes the earlier statement. Any statement so modified or superseded will not be deemed, except as so
modified or superseded, to constitute a part of this prospectus. You should not assume that the information in this prospectus is accurate
as of any date other than the date of this prospectus or the date of the documents incorporated by reference in this prospectus.
We will provide without charge to each person
to whom a copy of this prospectus is delivered, upon written or oral request, a copy of any or all of the reports or documents that have
been incorporated by reference in this prospectus but not delivered with this prospectus (other than an exhibit to these filings, unless
we have specifically incorporated that exhibit by reference in this prospectus). Any such request should be addressed to us at:
XWELL, Inc.
254 West 31st Street,
11th Floor
New York, New York 10001
(212) 750-9595
You may also access the documents incorporated
by reference in this prospectus through our website at www.xwell.com. Except for the specific incorporated documents listed above, no
information available on or through our website shall be deemed to be incorporated in this prospectus or the registration statement of
which it forms a part.
30,440,060
Shares of Common Stock
(and including up to 1,140,370 Dividend Shares)
XWELL, Inc.
COMMON STOCK
PROSPECTUS
June 30, 2025
