LUXH LuxUrban Hotels Inc

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

FORM 8-K

 

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

 

Date of Report (Date of earliest event reported): November 8, 2023

 

LuxUrban Hotels Inc.

(Exact Name of Registrant as Specified in Charter)

 

Delaware		001-41473		82-3334945
(State or Other Jurisdiction of Incorporation)		(Commission File Number)		(IRS Employer Identification No.)

 

2125 Biscayne Blvd, Suite 253, Miami, Florida		33137
(Address of Principal Executive Offices)		(Zip Code)

 

Registrant’s telephone number, including area code: (833) -723-7368

 

N/A

(Former Name or Former Address, if Changed Since Last Report)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the Registrant under any of the following provisions (see General Instruction A.2. below):

 

☐

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

☐

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

☐

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

☐

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e 4(c))

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

 

Emerging growth company ☒

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class		Ticker symbol(s)		Name of each exchange on which registered
Common Stock, par value $0.00001 per share		LUXH		The Nasdaq Stock Market LLC
Series A Cumulative Redeemable Preferred Stock, par value $0.00001 per share		LUXHP		The Nasdaq Stock Market LLC

 

 

 

Item 2.02. Results of Operations and Financial Condition.

 

On November 8, 2023, LuxUrban Hotels Inc. (the “Company”) issued a press release setting forth its financial results for the third quarter ended September 30, 2023. A copy of the press release is attached hereto as Exhibit 99.1. The Company also made available an investor presentation, which is attached hereto as Exhibit 99.2.

 

The information contained in this Item 2.02 and Exhibits 99.1 and 99.2, attached hereto, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended and shall not be deemed incorporated by reference in any filing with the Securities and Exchange Commission under the Securities Exchange Act of 1934, as amended or the Securities Act of 1933, as amended whether made before or after the date hereof and irrespective of any general incorporation language in such filings.

 

Item 9.01. Financial Statements and Exhibits.

 

(d)

Exhibits:

 

Exhibit Number		Description
99.1		Press Release issued on November 8, 2023
99.2		Investor Presentation
104		Cover Page Interactive Data File (Embedded within the Inline XBRL document and included in Exhibit)

 

 

SIGNATURE

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

Dated: November 9, 2023	LUXURBAN HOTELS INC.
	By:	/s/ Brian Ferdinand
		Name:	Brian Ferdinand
		Title:	Chairman and Co-Chief Executive Officer

 

 

Exhibit 99.1

 

 

LuxUrban Hotels Inc. Announces Record 2023 Third Quarter Financial Results

 

Net Rental Revenue Increased to $31.2 Million from $11.6 Million

 

Net Income Improved to a Quarterly Record $4.9 Million, or $0.11 Per Share, from a

Net Loss of $(3.2) Million, or $(0.13) Per Share

 

EBITDA Rose to $8.4 Million from $2.4 Million

 

Increases Net Rental Revenue and EBITDA Guidance for 2023 and 2024

 

MIAMI, FL, November 8, 2023 — LuxUrban Hotels Inc. (or the “Company”) (Nasdaq: LUXH, LUXHP), 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, today announced financial results for the third quarter (“Q3 2023”) and nine months ended September 30, 2023. Reported results include cash net income and EBITDA, which are non-GAAP measures and are accompanied by reconciliation tables in this release.

 

“We delivered a very strong third quarter, highlighted by significant increases in net rental revenue and EBITDA, our first-ever quarter of GAAP net income, and an expanded hotel property portfolio,” said Brian Ferdinand, Chairman and Co-Chief Executive Officer of LuxUrban Hotels. “Our collaboration with Wyndham Hotels & Resorts (“Wyndham”) has placed us on an accelerated glidepath for growth by allowing us to target and acquire the operating rights to a wider variety of hotels, including larger properties, and generating efficiencies that enhance profitability. We have successfully onboarded the 17 initial properties under the Wyndham agreement and are in the process of integrating additional hotels to the Wyndham brand family and operating platform. We ended the quarter with 1,466 units available for rent. As of November 8, 2023, we had 1,599 units available for rent and 2,032 units under long-term Master Lease Agreements but not yet available for rent. Many of the new rooms being added to our portfolio are part of the 1,600 units associated with the previously announced addition of seven new 3-star and 4-star properties. Most of these new rooms are expected to begin welcoming guests by the end of the year with the balance expected to come online by early 2024. We expect further significant increases in our room portfolio to occur throughout 2024.”

 

Q3 2023 Financial Results Overview

 

All comparisons are to the third quarter ended September 30, 2022 (“Q3 2022”) unless otherwise stated.

 

●

Net rental revenue rose 170% to $31.2 million from $11.6 million, driven by an increase in average units available to rent to 1,423 from 571, as well as improved revenue per available room, or RevPAR, during this period.

 

●

Total cost of revenue rose to $23.4 million from $6.7 million, due to an increased number of units, higher property related costs (utilities, labor, cable/WiFi), and costs related to the increase in revenue including credit card processing fees and commissions.

 

●

Gross profit rose to $7.8 million, or 25% of net rental revenue, from $4.9 million, or 42.2% of net rental revenue. The decline in gross profit as a percentage of revenue was due primarily to the shift in certain expenses to cost of revenue from general & administrative associated with the Company’s late 2022 exit from the apartment rental business.

 

●

General & administrative expenses declined to $2.0 million, or 6.4% of net rental revenue, from $5.0 million, or 42.8% of net rental revenue, reflecting one-time charges incurred in Q3 2022 primarily related to the Company’s exit from the apartment rental business.

 

●

Income from operations improved to $5.1 million from an operating loss of $(0.4) million.

 

●

Income before provision for income taxes improved to $2.9 million from a loss of $(4.0) million.

 

●

Net income improved to $4.9 million, or $0.11 per share, from a net loss of $(3.2) million, or $(0.13) per share.

 

●

Cash net income rose to $5.7 million compared to $0.9 million.

 

●

EBITDA increased to $8.4 million from $2.4 million.

 

 

Operational Highlights

 

●

RevPAR for the 2023 nine-month period rose to $274 from $149 in the same period in 2022, and from $247 as of the year ended December 31, 2022.

 

●

As of September 30, 2023, the Company:

 

○

leased 16 properties with 1,466 units available for rent

 

●

As of November 8, 2023, the Company:

 

○

leased 18 properties with 1,599 units available for rent

 

○

leased 21 properties with 2,032 units, including properties under lease but not yet available for rent

 

Financial Condition at September 30, 2023 Compared to December 31, 2022

 

●

Cash and cash equivalents were $4.8 million compared to $1.1 million.

 

●

Restricted cash was unchanged at $1.1 million.

 

●

Total debt declined to $5.2 million from total debt of $14.0 million.

 

●

Net debt declined to $0.4 million from net debt of $12.9 million.

 

●

Working capital increased to $6.6 million from a working capital deficit of $(13.9) million.

 

●

Shareholders’ Equity improved to $21.5 million from a deficit of $(3.3) million.

 

Financial condition at September 30, 2023 did not include net proceeds from the October 26, 2023 closing of an underwritten public offering of the Company’s 13.00% Series A Cumulative Redeemable Preferred Stock (“Series A Preferred Stock”) that generated gross proceeds of $7.0 million.

 

“Our balance sheet is the strongest in our history, reflecting the steps we have taken over the course of the year to optimize our business, reduce debt, and build cash,” said Shanoop Kothari, Co-Chief Executive Officer and Chief Financial Officer. “We are very pleased to have consummated the non-dilutive offering of our Series A Preferred Stock, which we believe reflects the strength of our financial position, our profitable operations, and promising outlook. Together with Wyndham’s financial and operating support, we believe that we are well-positioned to scale into our growth opportunity in a sustainable and thoughtful manner.”

 

2023 and 2024 Guidance

 

For the year ending December 31, 2023, the Company’s guidance is as follows:

 

●

Net rental revenue of $120 million to $125 million, up from previous guidance of $115 million to $120 million

 

●

EBITDA is expected to be in the range of $27 million to $32 million, up from previous guidance of $25 million to $30 million

 

●

Total hotel rooms under long-term Master Lease Agreements (“MLA”) are expected to approximate 2,500-3,000 units

 

 

For the year ending December 31, 2024, the Company’s guidance is as follows:

 

●

Net rental revenue of $265 million to $270 million, up from previous guidance of $220 million to $240 million

 

●

EBITDA is expected to be in the range of $60 million to $70 million, up from previous guidance of $48 million to $60 million

 

●

Total hotel rooms under long-term MLA are expected to range between 9,000 and 12,000, with approximately 6,000 under MLA by June 30, 2024.

 

This financial and operations guidance is based on, among other factors, the Company’s beliefs and expectations regarding current business, economic, and public health conditions; the status of the Company’s acquisition pipeline and its ability to enter into these potential leases; and its current view of forward-looking unit operating metrics.

 

Shanoop Kothari Named Co-Chief Executive Officer

 

On November 8, 2023, the Board of Directors of the Company (the “Board”) appointed Shanoop Kothari as Co-Chief Executive Officer of the Company. Mr. Kothari will continue as the Company’s Chief Financial Officer and share Co-Chief Executive Officer responsibilities with Brian Ferdinand, who remains Chairman of the Board.

 

“We have grown significantly over the last year and are optimistic about our prospects for continuing growth in 2024 and beyond,” said Mr. Ferdinand. “We believe that these shared responsibilities will allow us to continue to build and scale the business in a responsible and structured manner. With Shanoop and his team focusing on finance and operations, I will be able to devote more time to M&A and associated growth initiatives. We view this as a natural next step in our evolution as a company, and one that will support our focus on delivering long-term shareholder value.”

 

Conference Call

 

The Company will host a conference call on Thursday, November 9, 2023 at 10:00 am Eastern Time to discuss the results. Investors interested in participating in the live call can dial:

 

●

(877) 407-9753 - U.S.

 

●

(201) 493-6739 - International

 

A simultaneous webcast of the call may be accessed online from the Events & Presentations section of the Investor Relations page of the Company’s website at www.luxurbanhotels.com.

 

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 November 8, 2023 the Company had 2,032 hotel rooms under lease, including properties not yet 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 certain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 (set forth in Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended). The statements contained in this release that are not purely historical are forward-looking statements. Forward-looking statements include, but are not limited to, statements regarding expectations, hopes, beliefs, intentions or strategies regarding the future. In addition, any statements that refer to projections, forecasts or other characterizations of future events or circumstances, including any underlying assumptions, are forward-looking statements. Generally, the words “anticipates,” “believes,” “continues,” “could,” “estimates,” “expects,” “intends,” “may,” “might,” “plans,” “possible,” “potential,” “predicts,” “projects,” “should,” “would” and similar expressions may identify forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking. Forward-looking statements in this release may include, for example, statements with respect to financial and operational guidance, the success of the Company’s collaboration with Wyndham Hotels & Resorts, scheduled property openings, expected closing of noted lease transactions, the Company’s ability to continue closing on additional leases for properties in the Company’s pipeline, as well the Company’s anticipated ability to commercialize efficiently and profitably the properties it leases and will lease in the future. The forward-looking statements contained in this release are based on current expectations and belief concerning future developments and their potential effect on the Company. There can be no assurance that future developments will be those that have been anticipated. These forward-looking statements are subject to a number of risks, uncertainties (some of which are beyond our control) or other assumptions that may cause actual results of performance to be materially different from those expressed or implied by these forward-looking statements, 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, and any updates to those factors as set forth in subsequent Quarterly Reports on Form 10-Q or other public filings with the SEC. 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.

 

Non-GAAP Information

 

The Company defines cash net income as net income (loss) before non-cash financing costs, non-cash stock compensation expense, non-cash stock option expense, non-cash rent amortization expense, accrued taxes, non-cash issuance of common stock for operating expenses, and depreciation. The Company believes that cash net income is useful to investors as a measure of a company’s operating performance, without regard to generally non-recurring items and non-cash activity. The Company seeks to achieve profitable, long-term growth by monitoring and analyzing key operating metrics, including EBITDA. The Company defines EBITDA as net income (loss) before interest, taxes, financing costs, depreciation and amortization, stock compensation expense and stock option expense, and incremental costs associated with its exit from SoBeNY. The Company defines net debt as current and long-term loans payable and short-term financing costs (together, total debt) less cash and cash equivalents. The Company’s management uses these non-GAAP financial metrics and related computations to evaluate and manage the business and to plan and make near and long-term operating and strategic decisions. The management team believes these non-GAAP financial metrics are useful to investors to provide supplemental information in addition to the GAAP financial results. Management reviews the use of its primary key operating metrics from time-to-time. EBITDA, net debt and cash net income are not intended to be a substitute for any GAAP financial measure and as calculated, may not be comparable to similarly titled measures of performance of other companies in other industries or within the same industry. The Company’s management team believes it is useful to provide investors with the same financial information that it uses internally to make comparisons of historical operating results, identify trends in underlying operating results, and evaluate its business. For purposes of the guidance provided herein for the years ended December 31, 2023 and December 31, 2024, however, estimating such GAAP measures with the required precision necessary to provide a meaningful reconciliation could not be accomplished without unreasonable effort. Non-GAAP measures for future periods, which cannot be reconciled to the most comparable GAAP financial measures are calculated in a manner which is consistent with the accounting policies applied in the Company’s consolidated financial statements. A reconciliation of net income (loss) to EBITDA and net income (loss) to cash net income is included in the financial tables included with this press release.

 

 

CONTACT

 

LuxUrban Hotels Inc.

The Equity Group Inc.

Shanoop Kothari

Devin Sullivan, Managing Director

President & Chief Financial Officer		dsullivan@equityny.com
shanoop@luxurbanhotels.com
		Conor Rodriguez, Analyst
		crodriguez@equityny.com

 

 

Condensed Consolidated Statements of Operations

(unaudited)

 

		For The Three Months Ended September 30,								For The Nine Months Ended September 30,
		2023				2022				2023				2022
Net Rental Revenue		$	31,208,248			$	11,575,325			$	85,883,521			$	30,876,088
Rent Expense			7,802,847				2,786,458				18,068,828				7,371,055
Non-Cash Rent Expense Amortization			1,952,599				(11,471	)			6,187,540				1,191,431
Other Expenses			13,640,517				3,911,386				38,273,980				12,054,769
Total Cost of Revenue			23,395,963				6,686,373				62,530,348				20,617,255
Gross Profit			7,812,285				4,888,952				23,353,173				10,258,833
General and Administrative Expenses			1,981,774				4,952,740				9,297,097				6,817,967
Non-Cash Issuance of Common Stock for Operating Expenses			334,081				-				1,847,711				-
Non-Cash Stock Compensation Expense			260,846				151,741				690,842				151,741
Non-Cash Stock Option Expense			146,707				206,545				519,094				206,545
Total Operating Expenses			2,723,408				5,311,026				12,354,744				7,176,253
Income from Operations			5,088,877				(422,074	)			10,998,429				3,082,580
Other Income (Expense)
Other Income			31,627				606,090				129,875				1,193,157
Cash Interest and Financing Costs			(2,185,202	)			(79,500	)			(5,505,708	)			(1,239,379	)
Non-Cash Financing Costs			-				(4,072,078	)			(30,227,289	)			(4,072,078	)
Total Other Expense			(2,153,575	)			(3,545,488	)			(35,603,122	)			(4,118,300	)
Income (Loss) Before Provision for Income Taxes			2,935,302				(3,967,562	)			(24,604,693	)			(1,035,720	)
Provision for Income Taxes			(1,999,498	)			(750,000	)			15,702				-
Net Income (Loss)		$	4,934,800			$	(3,217,562	)		$	(24,620,395	)		$	(1,035,720	)
Basic Earnings (Loss) Per Common Share		$	0.11			$	(0.13	)		$	(0.69	)		$	(0.05	)
Diluted Earnings (Loss) Per Common Share		$	0.11				(0.13	)			(0.69	)			(0.05	)
Basic Weighted Average Number of Common Shares Outstanding			44,562,243				24,092,231				35,895,801				22,251,412
Diluted Weighted Average Number of Common Shares Outstanding			45,433,166				24,092,231				35,895,801				22,251,412

 

 

Condensed Consolidated Balance Sheets

(unaudited)

 

		September 30,				December 31,
		2023				2022
ASSETS
Current Assets
Cash and Cash Equivalents		$	4,798,580			$	1,076,402
Treasury Bills			-				2,661,382
Processor Retained Funds			5,929,229				6,734,220
Channel Retained Funds and Receivables from On-Line Travel Agents (“OTAs”)			12,868,602				-
Prepaid Expenses and Other Current Assets			4,420,412				963,300
Security Deposits - Current			112,290				112,290
Total Current Assets			28,129,113				11,547,594
Other Assets
Furniture, Equipment and Leasehold Improvements, Net			1,059,468				197,129
Restricted Cash			1,100,000				1,100,000
Security Deposits - Noncurrent			20,636,169				11,233,385
Prepaid Expenses and Other Noncurrent Assets			908,314				559,838
Operating Lease Right-Of-Use Assets, Net			230,432,166				83,325,075
Total Other Assets			254,136,117				96,415,427
Total Assets		$	282,265,230			$	107,963,021
LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)
Current Liabilities
Accounts Payable and Accrued Expenses		$	7,677,799			$	6,252,491
Rents Received in Advance			3,549,450				2,566,504
Short Term Business Financing			2,312,198				2,003,015
Loans Payable - Current			1,490,734				10,324,519
Operating Lease Liabilities - Current			6,434,704				4,293,085
Development Incentive Advances - Current			81,057				-
Accrued Income Taxes			15,702				-
Total Current Liabilities			21,561,644				25,439,614
Long-Term Liabilities
Loans Payable - Noncurrent			1,409,844				1,689,193
Development Incentive Advances - Noncurrent			1,513,500				-
Security Deposit Letter of Credit			3,500,000				2,500,000
Operating Lease Liabilities - Noncurrent			232,801,915				81,626,338
Total Long-Term Liabilities			239,225,259				85,815,531
Total Liabilities			260,786,903				111,255,145
Commitments and Contingencies
Stockholders’ Equity (Deficit)
Common Stock (shares authorized, issued and outstanding - 36,816,190 and 27,691,918, respectively)			368				276
Additional Paid In Capital			67,117,346				17,726,592
Accumulated Deficit			(45,639,387	)			(21,018,992	)
Total Stockholders’ Equity (Deficit)			21,478,327				(3,292,124	)
Total Liabilities and Stockholders’ Equity (Deficit)		$	282,265,230			$	107,963,021

 

 

Non-GAAP Financial Measures

 

To supplement the condensed consolidated financial statements, which are prepared in accordance with GAAP, we use EBITDA and cash net income as non-GAAP financial measures. We define EBITDA and cash net income above in the paragraph entitled “Non-GAAP Information.”

 

The following table provides reconciliation of net income (loss) to EBITDA and cash net income:

 

		For The Three Months Ended								For The Nine Months Ended
		September 30,								September 30,
		2023				2022				2023				2022
Net Income (Loss)		$	4,934,800			$	(3,217,562	)		$	(24,620,395	)		$	(1,035,720	)
Provision for Income Taxes and Other Taxes			(1,999,498	)			(750,000	)			15,702				-
Interest and Financing Costs			2,185,202				79,500				5,505,708				1,239,379
Non-Cash Compensation Expense			260,846				151,741				690,842				151,741
Non-Cash Issuance of Common Stock for Operating Expenses			334,081				-				2,003,211				-
Non-Cash Stock Option Expense			146,707				206,545				519,094				206,545
Non-Cash Rent Expense Amortization			1,952,599				(11,471	)			6,187,540				1,191,431
Depreciation Expense			27,228				2,464				70,106				5,020
Non-Cash Financing Costs			-				4,072,078				30,227,289				4,072,078
Exit SoBeNY Costs			-				1,835,571				-				1,835,571
Employee and Other Settlements			576,788				-				-				-
EBITDA		$	8,418,754			$	2,368,866			$	20,599,098			$	7,666,045
Net Income (Loss)		$	4,934,800			$	(3,217,562	)		$	(24,620,395	)		$	(1,035,720	)
Non-Cash Compensation Expense			260,846				-				690,842				-
Non-Cash Issuance of Common Stock for Operating Expenses			334,081				-				2,003,211				-
Non-Cash Stock Option Expense			146,707				-				519,094				-
Non-Cash Rent Expense Amortization			1,952,599				(11,471	)			6,187,540				1,191,431
Accrued Taxes			(1,999,498	)			-				15,702				-
Depreciation Expense			27,228				2,464				70,106				5,020
Non-Cash Financing Costs			-				4,072,078				30,227,289				4,072,078
Cash Net Income		$	5,656,764			$	845,509			$	15,093,390			$	4,232,809

 

 

Exhibit 99.2

 

 

1 Nasdaq: LUXH, LUXHP

 

 

2 DISCLAIMER Forward Looking Statements This presentation contains certain “forward - looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 (set forth in Section 27 A of the Securities Act of 1933 , as amended, and Section 21 E of the Securities Exchange Act of 1934 , as amended) . The statements contained in this presentation that are not purely historical are forward - looking statements . Forward - looking statements include, but are not limited to, statements regarding expectations, hopes, beliefs, intentions or strategies regarding the future . In addition, any statements that refer to projections, forecasts or other characterizations of future events or circumstances, including any underlying assumptions, are forward - looking statements . Generally, the words “anticipates,” “believes,” “continues,” “could,” “estimates,” “expects,” “intends,” “may,” “might,” “plans,” “possible,” “potential,” “predicts,” “projects,” “should,” “would” and similar expressions may identify forward - looking statements, but the absence of these words does not mean that a statement is not forward - looking . Forward - looking statements in this presentation may include, for example, statements with respect to financial and operational guidance, the success of the Company’s collaboration with Wyndham Hotels & Resorts, scheduled property openings, expected closing of noted lease transactions, the Company’s ability to continue closing on additional leases for properties in the Company’s pipeline, as well the Company’s anticipated ability to commercialize efficiently and profitably the properties it leases and will lease in the future . The forward - looking statements contained in this presentation are based on current expectations and belief concerning future developments and their potential effect on the Company . There can be no assurance that future developments will be those that have been anticipated . These forward - looking statements are subject to a number of risks, uncertainties (some of which are beyond our control) or other assumptions that may cause actual results of performance to be materially different from those expressed or implied by these forward - looking statements, including those set forth under the caption “Risk Factors” in our public filings with the SEC, including in Item 1 A of our 10 - K for the year ended December 31 , 2022 , and any updates to those factors as set forth in subsequent Quarterly Reports on Form 10 - Q or other public filings with the SEC . The forward - looking information and forward - looking statements contained in this presentation are made as of the date of this presentation, 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 . Non - GAAP Information The Company defines cash net income as net income (loss) before non - cash financing costs, non - cash stock compensation expense, non - cash stock option expense, non - cash rent amortization expense, accrued taxes, non - cash issuance of common stock for operating expenses, and depreciation . The Company believes that cash net income is useful to investors as a measure of a company's operating performance, without regard to generally non - recurring items and non - cash activity . The Company seeks to achieve profitable, long - term growth by monitoring and analyzing key operating metrics, including EBITDA . The Company defines EBITDA as net income (loss) before interest, taxes, financing costs, depreciation and amortization, stock compensation expense and stock option expense, and incremental costs associated with its exit from SoBeNY . The Company defines net debt as current and long - term loans payable and short - term financing costs (together, total debt) less cash and cash equivalents . The Company’s management uses these non - GAAP financial metrics and related computations to evaluate and manage the business and to plan and make near and long - term operating and strategic decisions . The management team believes these non - GAAP financial metrics are useful to investors to provide supplemental information in addition to the GAAP financial results . Management reviews the use of its primary key operating metrics from time - to - time . EBITDA, net debt and cash net income are not intended to be a substitute for any GAAP financial measure and as calculated, may not be comparable to similarly titled measures of performance of other companies in other industries or within the same industry . The Company’s management team believes it is useful to provide investors with the same financial information that it uses internally to make comparisons of historical operating results, identify trends in underlying operating results, and evaluate its business . For purposes of the guidance provided herein for the years ended December 31 , 2023 and December 31 , 2024 , however, estimating such GAAP measures with the required precision necessary to provide a meaningful reconciliation could not be accomplished without unreasonable effort . Non - GAAP measures for future periods, which cannot be reconciled to the most comparable GAAP financial measures are calculated in a manner which is consistent with the accounting policies applied in the Company’s consolidated financial statements . A reconciliation of net income (loss) to EBITDA and net income (loss) to cash net income is included in the financial tables included with this presentation .

 

 

3 Capitalizing on historic opportunity to lease dislocated and underutilized hotels in destination cities at favorable economics Rent out rooms in leased properties to vacation and business travelers Asset light business model: 25+ year operating leases / minimal capital requirements / outsized ROE opportunity 2023 & 2024: Estimating significant growth in net rental revenue, EBITDA, and rooms available for rent Eliminated long - term debt Focus on growth via non - dilutive funding Partnership with Wyndham Hotels & Resorts (NYSE: WH) expected to accelerate growth - WH to fund ~ 50% or more of LUXH acquisition costs - WH sales / distribution / technology platform will help drive RevPAR, expand margins, improve customer experience WHO WE ARE

 

 

4 AT A GLANCE SERVICE Net Rental Revenue $85.9 $120 - $125 $265 - $270 9 Mo. 9/30/23 2023 (E) 2024 (E) $43.8 2022 $20.6 $27 - $32 $60 - $70 9 Mo. 9/30/23 2023 (E) 2024 (E) $8.3 2022 EBITDA $15.1 9 Mo. 9/30/23 $(0.4) 2022 Cash Net Income Net Rental Revenue CAGR 2022 - 2024 (E)* EBITDA CAGR 2022 - 2024 (E)* Averge Lease Life (Years) on Current Portfolio at September 30, 2023 Members in Wyndham Guest Rewards Program Rooms Under Long - Term Master Lease Agreement at 12/31/2023 (E)* 147% 181% 100+M 2,750 2023 Financial Targets Gross Margin SG&A** EBITDA 30% - 40% 10% - 12% 20% - 25% *measured at midpoint of estimate; **includes lease extension options, at LuxUrban’s option **excluding non - cash items Rooms Available for Rent November 8, 2023 1,559 17.8

 

 

5 ASSET LIGHT GROWTH STRATEGY SERVICE Streamline operations Lease hotel using refundable security deposit or L etter of Credit Maximize occupancy rates and increase cash flow Identify low - cost, long - term (target 25 - 35 years) Triple Net Lease lease opportunities at dislocated hotel properties Adhere to strict deal terms and operating controls Apply proprietary alogorithms to determine profit and cash flow potential Build geographic density, target new cities Leverage financial, brand and operating advantages of Wyndham relationship to increase RevPAR, drive margin expansion, and g enerate increased cash flow Astor Hotel Miami Beach, FL

 

 

6 PROPERTY OVERVIEW SERVICE 680 1,446 June 30, 2024 (E) Q4 2022 9 Mo. 2023 2023 (E) 2024 (E) New Orleans Washington, DC Los Angeles Miami Beach New York 1 1 1 5 8 September 30, 2023 16 properties operational 1,446 units available for rent November 2023 21 properties under lease** 2 ,032 units* New Orleans Washington, DC Los Angeles Miami Beach New York 1 1 2 5 12 987 Units 252 Units 68 Units 79 Units 60 Units 1,394 Units 252 Units 247 Units 79 Units 60 Units ** including those under lease but not yet available for rent 2,500 - 3,000* 6,000* 9,000 – 12,000* * Under Master Lease Agreement

 

 

7 UNIT ECONOMICS RevPAR defined as: revenue per available unit (net revenue / avg. units available during the period) 2019 2020 2021 2022 9 Mo. 2023 (E) 2023 2019 2020 2021 2022 9 Mo. 2023 RevPAR ($) Occupancy (%) 84% 61% 72% 77% 81% $103 $157 $122 $247 $250 - $280 $150 - $160/night RevPAR property level break - even rate We Bel ie ve We Have One of the Lowest Per - Night Property Level Breakeven Costs in the Markets We Serve Townhouse Hotel Miami Beach, FL $274

 

 

8 WYNDHAM COLLABORATION OVERVIEW 95+ Countries ~9,100 Hotels 24 Global Brands 852,000 Rooms Initial 17 LuxUrban Hotels onboarded to Wyndham platform Opportunity to introduce additi o nal properties into the brand throughout course of relationship Term of 15 - 20 years, with LuxUrban maintaining operational control Wyndham to provide financial, sales and operational support, including growth & working capital

 

 

9 WYNDHAM COLLABORATION BENEFITS Margin Capitalize on Wyndham’s world class operating infrastructure to realize significant primary and secondary costs savings RevPAR Wyndham brand power, sales / distribution platform, and customer reach expected to drive revenue at each acquired property Financing Committed, non - dilutive capital to help fund continued growth Wyndham provides ~50% or more of all acquistion capital If LUXH deploys $100 M of MLA security deposits made by LUXH, then Wyndham reimburses $50+ M of capital to LUXH for additi o nal growth & working capital Property Improvement Plan (PIP) capital capped at 50% of Wyndham reimbursement, with LUXH eligible to retain unused portion PIP investments expected to drive RevPAR, elevate customer experience, and preserve / enhance asset value for LUXH and property owner Access to 100+ M member Wyndham Rewards Program, whi ch accounts for one out of every two U.S. bookings Onboarding to Wyndham’s booking channels expected to reduce OTA costs by up to 33% from prior costs incurred by LUXH Secondary benefits related to staffing and operations also expected to materialize beginning in 2024

 

 

10 WYNDHAM COLLABORATION OVERVIEW Individuality , backed by the world’s largest hotel company 1 102% RevPAR index outperforms its upper midscale competition 2 62% total U.S. central reservations contribution with 35% of total stays contributed by WR members 96% of hotels with 3.5+ on TripAdvisor gives guests confidence to book 3 50% franchised growth since 2019 4 Win - win solution for owners of distressed properties via collaboration with LuxUrban Zermatt Utah Resort & Spa Midway, UT

 

 

11 POTENTIAL VALUATION LUXH equity upside is significant based on current market 2024E EBITDA multiples Significant potential equity appreciation opportunity over the coming months

 

 

12 Avg. acquisition cost / unit $13,465 2023 YTD RevPar $274 YTD EBITDA Margin 24% Payback period* 6 months PROPERTY ACQUISITION MATH Six - month payback period on acquisition capital deployed. * Payback period: $13,465 avg. acquisition cost / [($274 RevPar * 365 days * 24% EBITDA margin) / 12 months]

 

 

13 WYNDHAM “KEY MONEY” MATH ($ in thousands) Capital Invested 7,500$ 10,000$ 12,500$ 3,750$ 5,000$ 6,250$ 1,875$ 2,500$ 3,125$ 938$ 1,250$ 1,563$ 469$ 625$ 781$ 234$ 313$ 391$ 117$ 156$ 195$ 59$ 78$ 98$ 29$ 39$ 49$ 15$ 20$ 24$ 7$ 10$ 12$ Total 14,993$ 19,990$ 24,988$ Illustrative Wyndham Math The O Hotel Los Angeles, CA This analysis excludes EBITDA from investments, i.e. initial $10 M invested would provide $48 M of EBITDA over the period outlined below (assuming 10 quarters)* Wyndham key money recycled into new deals creates a perpetual ongoing cycle of new capital coming into the business for working capital and growth. * $10 M invested / $13,554 per unit = 738 units @ $291 YTD RevPar x 25% YTD EBITDA margin x 10 quarters presented (assuming a ”recycle” a quarter) = ~$48 M Key money recycle DOUBLES our investment into new units EXCLUDING RECYCLED EBITDA

 

 

14 APPENDIX The Bogart Hotel Brooklyn, NY

 

 

15 THE ADDRESSABLE MARKET Historic Timing Opportunity and Growing Pipeline Volume of Maturing Commercial Property Loans by Lender Type Front - loaded maturity wall Source: https://nypost.com/2023/04/10/default - risk - grows - on - 1 - 5 - trillion - in - commercial - real - estate - debt - analysts/ Source: https://www.msci.com/www/quick - take/cmbs - dominates - first - wave - of/03740236548 $ 900 BN of U.S. commercial - property loans set to mature in 2023 and 2024 Loans are coming due in an increasingly risk - averse environment created by higher borrowing costs and falling asset prices This is creating challenges for owners / operators to refinance these properties L uxUrban’s pipeline opportunity extends out to 2027 when the largest amount of annual CRE of $500 BN of debt matures This provides LuxUrban with over 1,860 hotels in the 5 current markets it serves, with maturing obligations out to 2027 encompassing 297,000 hotel rooms

 

 

16 Q3 2023 FINANCIAL OVERVIEW ($ in Ms ) SERVICE Record net rental revenue and EBITDA First ever quarterly GAAP net income 1,446 units available for rent Net Rental Revenue Cash and equivalents T otal Debt Shareholders’ Equity Net Income EBITDA $31.2 $11.6 $4.9 $ (3.2) $8.4 $2.4 Q3 2023 v. Q3 2022 September 30, 2023 v. December 31, 2022 $4.8 $1.1 $5.2 $14.0 $21.5 $ (3.3) Cash position increased 4x Total debt* and net debt** declined Shareholders’ Equity improved by ~$25 M * Total Debt is comprised of short - term business financing, current loans payable and non - current loans payable ** Net Debt is comprised of Total Debt minus Cash & Cash Equivalents

 

 

17 FINANCIAL RESULTS OVERVIEW ($ in 000s; unaudited) 9 Mo. 2022 9 Mo. 2023 Q3 2022 Q3 2023 Condensed Consolidated Statements of Operations $ 30,876 $ 85,884 $ 11,575 $ 31,208 Net Rental Revenue $ 10,259 $ 23,353 $ 4,889 $ 7,812 Gross Profit $ 6,818 $ 9,297 $ 4,953 $ 1,982 General and Administrative Expenses $ 7,176 $ 12,355 $ 5,311 $ 2,723 Total Operating Expenses $ 3,083 $ 10,998 $ (422) $ 5,089 Income from Operations $ (4,072) $ (30,227) $ (4,072) -- Non - Cash Financing Costs $ (1,036) $ (24,620) $ (3,218) $ 4,935 Net Income (Loss) $ 7,666 $ 20,559 $ 2,369 $ 8,419 EBITDA $ 4,233 $ 15,093 $ 846 $ 5,657 Cash Net Income December 31, 2022 September 30, 2023 Balance Sheet Summary $ 1,076 $ 4,799 Cash & Cash Equivalents $ 11,548 $ 28,129 Current Assets $ 107,963 $ 282,265 Total Assets $ 111,255 $ 260,787 Total Liabilities $ (3,292) $ 21,478 Stockholders’ Equity (Deficit)

 

 

18 RECONCILIATION TABLES Net Loss to EBITDA and Cash Net Income

 

 

19 RECONCILIATION TABLES Net Loss to EBITDA and Cash Net Income

v3.23.3

Cover	Nov. 08, 2023
Document Type	8-K
Amendment Flag	false
Document Period End Date	Nov. 08, 2023
Entity File Number	001-41473
Entity Registrant Name	LuxUrban Hotels Inc.
Entity Central Index Key	0001893311
Entity Tax Identification Number	82-3334945
Entity Incorporation, State or Country Code	DE
Entity Address, Address Line One	2125 Biscayne Blvd
Entity Address, Address Line Two	Suite 253
Entity Address, City or Town	Miami
Entity Address, State or Province	FL
Entity Address, Postal Zip Code	33137
City Area Code	(833)
Local Phone Number	723-7368
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Entity Emerging Growth Company	true
Elected Not To Use the Extended Transition Period	false
Common Stock Par Value 0. 00001 Per Share [Member]
Title of 12(b) Security	Common Stock, par value $0.00001 per share
Trading Symbol	LUXH
Security Exchange Name	NASDAQ
Series A Cumulative Redeemable Preferred [Member]
Title of 12(b) Security	Series A Cumulative Redeemable Preferred Stock, par value $0.00001 per share
Trading Symbol	LUXHP
Security Exchange Name	NASDAQ

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