LuxUrban Hotels Eliminates All Debt Obligations with Senior Lenders
20 Junho 2023 - 9:00AM
Business Wire
LuxUrban Hotels Inc. (Nasdaq: LUXH) (or “the Company”),
which utilizes an asset-light business model to lease entire hotels
on a long-term basis and rent out hotel rooms in these properties
in key major metropolitan cities, announced today that on June 19,
2023 it entered into an agreement (“the Agreement”) with Greenle
Partners LLC Series Alpha P.S. (“Greenle Alpha”) and Greenle
Partners LLC Series Beta P.S. (“Greenle Beta” and, together with
Greenle Alpha, “Greenle”), the holders of its’ senior secured
convertible notes (“Convertible Notes”), that eliminates the
approximately $2.6 million of remaining debt owed by the Company to
Greenle associated with financing agreements entered into prior to
the Company’s initial public offering.
Inclusive of this Agreement, during 2023 the Company has retired
all of its approximately $9.8 million of senior secured debt with
Greenle.
Under the terms of the Agreement, Greenle will convert the final
$2.6 million of Convertible Notes it owns into 1.3 million shares
of Common Stock of the Company and, in exchange, the Company will
register the previously issued and last remaining warrants owned by
Greenle Alpha and Greenle Beta to purchase 1,000,000 shares of the
Company’s Common Stock and 250,000 shares of the Company’s Common
Stock, respectively, and reduce the exercise price of such warrants
to $2.50 per share of Common Stock. Pursuant to the Agreement, the
Company agreed to register the re-sales of common stock underlying
such warrants.
“The Agreement eliminates all senior debt obligations and brings
to an end the issuance and registration of shares associated with
the elimination of our pre-IPO debt,” said Brian Ferdinand,
Chairman and Chief Executive Officer. “We believe that the actions
we have taken over the last several months to eliminate our pre-IPO
debt are in the best long-term interest of our shareholders by
removing a drag on our financial results, increasing our access to
growth capital, and providing financial flexibility. With this
matter now behind us, we are committed to maintaining a capital
structure that will limit dilution while supporting our anticipated
growth.”
LuxUrban Hotels Inc.
LuxUrban Hotels Inc. utilizes an asset light business model to
lease entire hotels on a long-term basis and rent out hotel rooms
in the properties it leases to business and vacation travelers
through the company’s online portal and third-party sales and
distribution channels. The company currently manages a portfolio of
hotel rooms in New York, Washington D.C., Miami Beach, New Orleans
and Los Angeles. As of March 31, 2023, the company has 1,034 hotel
rooms available for rent and seeks to rapidly build its portfolio
on favorable economics through the acquisition of additional
accommodations that were dislocated or are underutilized as a
result of the pandemic and current economic conditions. In late
2021, the company commenced the process of winding down its legacy
business of leasing and re-leasing multifamily residential units,
as it pivoted toward its new strategy of leasing hotels. This
transition has been substantially completed.
Forward Looking
Statements
This press release contains forward-looking statements,
including with respect to the anticipated success of the
transactions contemplated by this press release, and the ability of
the Company to commercialize efficiently and profitably the
properties it leases and will lease in the future. These
forward-looking statements are subject to a number of risks,
uncertainties and assumptions, including those set forth under the
caption “Risk Factors” in our public filings with the SEC,
including in Item 1A of our 10-K for the year ended December 31,
2022. Generally, such forward-looking information or
forward-looking statements can be identified by the use of
forward-looking terminology such as "plans", "expects" or "does not
expect", "is expected", "budget", "scheduled", "estimates",
"forecasts", "intends", "anticipates" or "does not anticipate", or
"believes", or variations of such words and phrases or may contain
statements that certain actions, events or results "may", "could",
"would", "might" or "will be taken", "will continue", "will occur"
or "will be achieved". Forward-looking information may relate to
anticipated events or results including, but not limited to
business strategy, leasing terms, high-level occupancy rates, and
sales and growth plans. The financial projections provided herein
are based on certain assumptions and existing and anticipated
market, travel and public health conditions, all of which may
change. The forward-looking information and forward-looking
statements contained in this press release are made as of the date
of this press release, and the Company does not undertake to update
any forward-looking information and/or forward-looking statements
that are contained or referenced herein, except in accordance with
applicable securities laws.
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version on businesswire.com: https://www.businesswire.com/news/home/20230620680463/en/
LuxUrban Hotels Inc. Shanoop Kothari President & Chief
Financial Officer shanoop@luxurbanhotels.com
The Equity Group Inc. Devin Sullivan, Managing Director
dsullivan@equityny.com
LuxUrban Hotels (NASDAQ:LUXH)
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