Xwell announces director candidate nomination submitted by CPC is invalid

Xwell announced that the notice materials submitted by CPC Pain & Wellness, which purported to provide notice of CPC’s intent to nominate four candidates for election to the company’s five-member Board of Directors at the 2024 Annual Meeting of Stockholders, is invalid. CPC, a special purpose vehicle that was recently formed by two principals of private equity firm Caydan Capital, rapidly accumulated a 9.42% equity stake in XWELL last month and subsequently filed a Schedule 13D on June 17th without including specific details pertaining to its plans for the company. The company offered CPC opportunities to cure the deficiencies in its purported notice. Additionally, Xwell entered into a non-disclosure agreement with CPC to initiate discussions about a negotiated resolution. Despite the aforementioned efforts, CPC did not cure the deficiencies in its notice and opted to file litigation against Xwell in an apparent attempt to advance its own objectives. For instance, since receipt of the purported notice, Xwell claims to have reason to believe that CPC and its private equity partners are seeking to obtain control of a majority of the Board to engineer a transaction involving one of their underperforming affiliates in the pain and wellness space that has not been monetized via a reverse merger or sale. Xwell maintains that any such ‘Take-Under’ deal pursued by CPC could undervalue the company, dilute current stockholders, siphon tremendous value to CPC, as well as its affiliates, at the expense of fellow stockholders, who would be deprived of an adequate control premium. Xwell also maintains that CPC’s Schedule 13D disclosure is deficient, representing a violation of SEC rules and regulations.