MIAMI - LuxUrban Hotels Inc. (NASDAQ:LUXH), a company specializing in the long-term leasing of hotels and offering room rentals to travelers, announced today its plans for a follow-on public offering of common stock. This move comes after the company's registration statement was declared effective by the Securities and Exchange Commission (SEC) on May 8, 2024.
The public offering is contingent on market conditions, and the company has not guaranteed the completion timing, size, or terms. Notably, certain company insiders and significant stockholders may participate in the offering.
Roth Capital Partners is the sole book-running manager, with Alexander Capital, L.P. acting as co-manager. LuxUrban intends to allocate the offering's proceeds towards working capital and general corporate purposes.
The offering leverages a shelf registration statement, a provision allowing the issuance of new stock. This strategy reflects LuxUrban's approach to capitalizing on real estate market dislocations and the debt maturity challenges faced by hotel owners. The company's Master Lease Agreements (MLA) enable hotel owners to maintain asset equity while LuxUrban manages the hotel operations and cash flows.
This announcement follows LuxUrban's forward-looking statements on its operational and financial strategies, including de-platforming properties from its former franchise partner and enhancing its balance sheet. These statements are inherently uncertain and subject to risks and assumptions that might cause actual results to differ.
Potential investors are advised to thoroughly review the preliminary prospectus supplement, the prospectus, and other relevant SEC filings, which provide detailed information about LuxUrban and the offering.
The information in this article is based on a press release statement from LuxUrban Hotels Inc.
InvestingPro Insights
In light of LuxUrban Hotels Inc.'s (NASDAQ:LUXH) recent announcement regarding its public offering of common stock, a deeper dive into the company's financials and market performance may offer potential investors additional context. According to InvestingPro data, LuxUrban Hotels Inc. has a market capitalization of approximately $20.85 million USD, reflecting its valuation in the market.
The company's revenue growth has been notably robust, with the last twelve months as of Q1 2024 showing an impressive 108.0% increase. This suggests that despite the risks associated with its operational strategies, LuxUrban has been successful in expanding its revenue streams. Still, this growth is juxtaposed against a challenging financial backdrop, as indicated by a significant gross profit margin of just 2.24% in the same period.
InvestingPro Tips highlight several factors that potential investors should consider. LuxUrban operates with a significant debt burden and may have trouble making interest payments on its debt. This is a critical point of consideration, especially as the company seeks to raise capital in the public market. Moreover, while analysts anticipate sales growth in the current year, the company's stock has experienced considerable volatility, with a price total return of -41.66% over the last month.
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