LuxUrban Hotels Inc. Receives Nasdaq Listing Deficiency Notice

Rhea-AI Summary

LuxUrban Hotels Inc. (NASDAQ: LUXH) has received a Nasdaq listing deficiency notice on August 20, 2024, due to the late filing of its Form 10-Q for the period ended June 30, 2024. The company has 60 calendar days to submit a compliance plan to Nasdaq. If accepted, LuxUrban may receive up to 180 calendar days (until February 18, 2025) to regain compliance. The notice does not immediately affect the listing or trading of LUXH securities. LuxUrban is working to file the Form 10-Q as soon as possible. The company operates by securing long-term rights for entire hotels through Master Lease Agreements and rents rooms on a short-term basis to travelers.

Positive

• Company has 60 days to submit a compliance plan to Nasdaq
• Potential 180-day extension to regain compliance if plan is accepted
• No immediate impact on listing or trading of LUXH securities

Negative

• Failure to file Form 10-Q by August 14, 2024 deadline
• Received Nasdaq listing deficiency notice
• Risk of delisting if compliance is not regained
• Uncertainty about Nasdaq's acceptance of compliance plan

Insights

Financial Analyst

LuxUrban Hotels' Nasdaq listing deficiency raises concerns about the company's financial reporting practices and overall operational stability. The delay in filing the Q2 2024 10-Q could indicate internal control issues or more significant financial challenges. This situation may negatively impact investor confidence and potentially lead to increased scrutiny from regulators.

The 60-day window to submit a compliance plan and potential 180-day extension provide some breathing room, but the company needs to act swiftly to address the underlying issues. Failure to regain compliance could result in delisting, which would severely impact LuxUrban's ability to raise capital and maintain market liquidity. Investors should closely monitor the company's progress in resolving this matter and consider the potential risks to their investment.

Legal Expert

The Nasdaq listing deficiency notice for LuxUrban Hotels highlights potential regulatory compliance issues. While not uncommon, delayed financial filings can signal deeper problems, including possible Securities Exchange Act violations. The company's use of Form 12b-25 to report the delay is a standard procedure, but it doesn't mitigate the underlying compliance failure.

Investors should be aware that prolonged non-compliance could lead to legal repercussions, including SEC investigations or shareholder lawsuits. The company's ability to resolve this issue promptly will be important in maintaining investor trust and avoiding further regulatory scrutiny. It's essential to monitor LuxUrban's communications and filings closely in the coming weeks for any indications of more serious financial or operational issues.

MIAMI, Aug. 26, 2024 (GLOBE NEWSWIRE) -- LuxUrban Hotels Inc. (NASDAQ: LUXH) today announced it has received a notice (the “Notice”) from the Nasdaq Stock Market LLC (“Nasdaq”) on August 20, 2024 indicating that the Company is not currently in compliance with Nasdaq’s Listing Rules (“the Listing Rules”) due to the Company’s not timely filing its Form 10-Q for the period ended June 30, 2024 (the “Form 10-Q”) with the Securities and Exchange Commission (“SEC”). The Notice does not immediately affect the listing or trading of the Company’s securities. According to Listing Rule 5250(c)(1), the Company was required to file Form 10-Q by August 14, 2024 (the “Due Date”). The Company previously reported its inability to file Form 10-Q by the Due Date on a Form 12b-25 that the Company filed with the SEC on August 14, 2024.

Nasdaq has informed the Company that, under Nasdaq rules, the Company has 60 calendar days from receipt of the Notice to submit a plan to regain compliance with the Rule. If Nasdaq accepts the Company’s plan, then Nasdaq may grant an exception of up to 180 calendar days from the Due Date, or February 18, 2025, to regain compliance. However, there can be no assurance that Nasdaq will accept the Company’s plan to regain compliance or that the Company will be able to regain compliance within any extension period granted by Nasdaq or maintain compliance with the other Nasdaq continued listing requirements. If Nasdaq does not accept the Company’s plan, then the Company will have the opportunity to appeal that decision to a Nasdaq hearings panel.

The Company is working diligently to complete the Form 10-Q and anticipates filing the Form 10-Q as soon as possible.

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
Robert Arigo
(833) 723-7368

FAQ

Why did LuxUrban Hotels (LUXH) receive a Nasdaq listing deficiency notice?

LuxUrban Hotels (LUXH) received a Nasdaq listing deficiency notice on August 20, 2024, for not timely filing its Form 10-Q for the period ended June 30, 2024, with the SEC by the August 14, 2024 deadline.

What is the deadline for LuxUrban Hotels (LUXH) to submit a compliance plan to Nasdaq?

LuxUrban Hotels (LUXH) has 60 calendar days from the receipt of the notice on August 20, 2024, to submit a plan to regain compliance with Nasdaq's Listing Rules.

How long does LuxUrban Hotels (LUXH) have to regain compliance with Nasdaq listing requirements?

If Nasdaq accepts LuxUrban Hotels' (LUXH) compliance plan, the company may be granted up to 180 calendar days from the original due date, until February 18, 2025, to regain compliance.

Does the Nasdaq listing deficiency notice affect LuxUrban Hotels' (LUXH) current stock trading?

No, the Nasdaq listing deficiency notice does not immediately affect the listing or trading of LuxUrban Hotels' (LUXH) securities on the Nasdaq Stock Market.