LuxUrban Hotels Announces Pricing of Public Offering of Securities
LuxUrban Hotels has announced the pricing of a public offering for its common stock. The offering includes 30,000,000 shares priced at $0.17 per share, with an option for underwriters to purchase an additional 4,500,000 shares.
The gross proceeds are expected to be $5.1 million, or $5.865 million if the over-allotment is exercised. The offering is set to close around July 15, 2024, contingent on standard closing conditions. Alexander Capital, L.P. is the sole manager of the offering.
LuxUrban plans to use the proceeds for working capital and general corporate purposes. The offering is under a shelf registration statement declared effective on May 8, 2024. Documents related to the offering are available through the SEC's website.
- Expected gross proceeds of $5.1 million to $5.865 million.
- Funds to be used for working capital and general corporate purposes.
- Share dilution from issuing 30,000,000 new shares.
- Low pricing at $0.17 per share.
Insights
The pricing of LuxUrban Hotels' public offering at
Such fundraising efforts can be both beneficial and risky. Short-term benefits include immediate liquidity to support working capital and general corporate purposes. However, long-term implications include potential dilution of existing shares, which could affect stock value negatively. Retail investors should consider the
The use of proceeds for working capital suggests a focus on operational sustainability rather than expansion. Investors should also be aware of the potential volatility tied to underwriters' over-allotment options, which could further affect share value.
LuxUrban Hotels operates in a dynamic sector where strategic moves like this public offering can significantly affect market perception. The company's business model, utilizing Master Lease Agreements (MLA), gives it a unique advantage during periods of commercial real estate dislocation. By securing long-term operating rights rather than outright ownership, LuxUrban minimizes capital expenditures while leveraging operational control for cash flow generation.
The influx of capital from this offering could be a strategic play to strengthen their position in destination cities, potentially leading to stabilized operations and enhanced revenue streams. However, the reliance on MLAs could be a double-edged sword; while innovative, it exposes the company to risks associated with prolonged market downturns in the hospitality sector.
Retail investors should consider these dynamics when evaluating LuxUrban’s stock, especially considering macroeconomic factors that influence travel and accommodation demand.
MIAMI, July 11, 2024 (GLOBE NEWSWIRE) -- LuxUrban Hotels Inc. (“LuxUrban” or the “Company”) (Nasdaq: LUXH), which secures long-term operating rights for entire hotels through Master Lease Agreements (MLA) under which it manages the hotel and rents out, on a short-term basis, rooms to business and vacation travelers, today announced the pricing of its previously announced public offering of 30,000,000 shares of common stock at a price of
Alexander Capital, L.P. is acting as sole book-running manager for the offering. The offering is expected to close on or about July 15, 2024, subject to the satisfaction of customary closing conditions.
The gross proceeds from the offering, before deducting the underwriters’ fees and other offering expenses payable by the Company, are expected to be
All of the shares of common stock were offered by the Company pursuant to a shelf registration statement on Form S-3 (No. 333-278883) (the “Registration Statement”) filed with the Securities and Exchange Commission (“SEC”) and declared effective on May 8, 2024 and which is available through the SEC's website at www.sec.gov.
This press release shall not constitute an offer to sell or a solicitation of an offer to buy any of these securities, nor shall there be any sale of these securities in any state or jurisdiction in which such an offer, solicitation or sale would be unlawful prior to registration or qualification under the applicable securities laws of such state or jurisdiction.
A preliminary prospectus supplement has been filed, and a final prospectus supplement will be filed, with the SEC and, when available, copies of the preliminary and final prospectus supplement and accompanying base prospectus may be obtained from Alexander Capital, L.P., 10 Drs James Parker Boulevard #202,Red Bank, New Jersey 07701 Attention: Equity Capital Markets, Phone: (212) 687-5650, Email: info@alexandercapitallp.com or by accessing the SEC's website, www.sec.gov.
LuxUrban Hotels Inc.
LuxUrban Hotels Inc. secures long-term operating rights for entire hotels through Master Lease Agreements (MLA) and rents out, on a short-term basis, hotel rooms to business and vacation travelers. The Company is strategically building a portfolio of hotel properties in destination cities by capitalizing on the dislocation in commercial real estate markets and the large amount of debt maturity obligations on those assets coming due with a lack of available options for owners of those assets. LuxUrban’s MLA allows owners to hold onto their assets and retain their equity value while LuxUrban operates and owns the cash flows of the operating business for the life of the MLA.
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 the Company’s ability to successfully de-platform its properties from its former franchise partner and operate independently, its ability to improve its working capital and cash flow profiles, enhance its balance sheet and deliver organic revenue growth, 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 Annual Report on Form 10-K for the year ended December 31, 2023 filed with the SEC on April 15, 2024, 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 base prospectus comprising part of the Registration Statement and when filed, the prospectus supplement filed with respect thereto. 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.
Contact
Devin Sullivan
Managing Director
The Equity Group Inc.
dsullivan@equityny.com
Conor Rodriguez, Analyst
crodriguez@equityny.com
FAQ
What is the price of LuxUrban's public offering?
How many shares is LuxUrban offering?
When is LuxUrban's public offering expected to close?
What will LuxUrban use the proceeds from the offering for?
Who is managing LuxUrban's public offering?
How much are the expected gross proceeds from LuxUrban's offering?
