LuxUrban Hotels Inc. Increases Growth Capital by $5 Million via Amended Revenue Share Agreement
February 13 2023 - 7:30AM
Business Wire
New Growth Capital Earmarked for Specific
New Property Launches to Drive Further Growth of LuxUrban’s Asset
Light Business Model
Company Increases 2023 Net Rental Revenue
and EBITDA Guidance
LuxUrban Hotels Inc. (Nasdaq: LUXH) (or “the Company”),
which utilizes a long-term lease, asset-light business model to
acquire and manage a growing portfolio of short-term rental
properties in major metropolitan cities, announced today that it
has entered into an amended Revenue Share Agreement (“RSA”) with
its lenders that will immediately increase the Company’s growth
capital by $5 million through the elimination and conversion of
certain payment obligations. As a result, the Company is increasing
2023 EBITDA projections by $5 million.
Among the terms included in the amended RSA, in exchange for the
termination of an aggregate $5 million in cash payments that the
Company had been obligated to pay Greenle Partners LLC Series Alpha
P.S and Greenle Partners LLC Series Beta P.S (collectively,
“Greenle”) for the last quarter of 2022 and all quarters in 2023 in
connection with the Revenue Share rights granted to Greenle by the
Company with respect to certain of the Company’s properties, the
Company shall issue to Greenle an aggregate 2,457,002 shares of
unregistered common stock at specified dates and amounts ending
January 1, 2024. The common stock will be issued to Greenle at an
effective price of $2.035 per share, which is equal to 110% the
last sale market price reported by Nasdaq on February 10, 2023, and
119% of the average last sale market prices of the Company’s common
stock for the ten consecutive trading day period through and
including such date.
“We appreciate Greenle’s willingness to amend the terms of the
RSA and are grateful for their continued support,” said Brian
Ferdinand, Chairman and CEO of LuxUrban Hotels. “We believe that
the restructuring of these cash payment obligations into equity by
these sophisticated lenders demonstrates their faith in our ability
to deliver long-term value for all shareholders, while validating
our growth and vision for the future. The Revenue Share model
applied only to our unaffiliated pre-IPO investors on a limited
number of our current properties and is accounted for within our
revised EBITDA projections. We are now able to deploy up to $5
million of this newly available capital towards specific new
property launches to drive further growth via our asset light
business model. We currently have 18 short-term stay hotel
properties under long-term lease in five cities across the United
States and are pursuing a robust pipeline of inventory. We are
confident that this transaction, the previously announced debt to
equity conversions, and the current trajectory of our business will
allow us to utilize projected cash flows to substantially reduce or
potentially eliminate our debt in 2023, while still meeting our
projected growth targets. We continue to look forward to our future
with confidence.”
Additional terms and details regarding the amended RSA shall be
available in a Form 8-K to be filed by the Company with the
Securities and Exchange Commission on or about February 13,
2023.
Increases 2023 Net Revenue and EBITDA
Guidance
For the year ending December 31, 2023, the Company is increasing
its guidance for net rental revenue to a range of $115 to $120
million, and EBIDTA to a range of $21 to $25 million, an increase
from the Company’s prior guidance for net rental revenue in a range
of $100 to $110 million, and EBITDA in a range of $16 to $20
million.
The Company also reiterated its previously issued guidance for
the year ended December 31, 2022 for net rental revenue in a range
of $42 to $46 million and EBITDA in a range of $7 to $9
million.
This guidance is based on, among other factors, the Company’s
current business, economic, and public health conditions; the
status of its acquisition pipeline and its ability to close on
these potential acquisitions; and its current view of
forward-looking unit operating metrics.
LuxUrban Hotels Inc.
LuxUrban Hotels Inc. utilizes a long-term lease, asset-light
business model to acquire and manage a growing portfolio of
short-term rental properties in major metropolitan cities. The
Company’s future growth focuses primarily on seeking to create
“win-win” opportunities for owners of dislocated hotels, including
those impacted by COVID-19 travel restrictions, while providing
LuxUrban Hotels favorable operating margins. LuxUrban Hotels
operates these properties in a cost-effective manner by leveraging
technology to identify, acquire, manage, and market them globally
to business and vacation travelers through dozens of third-party
sales and distribution channels, and the Company’s own online
portal. Guests at the LuxUrban Hotels properties are provided high
quality service under the Company’s consumer brand, LuxUrbanTM.
Forward Looking Statements
This press release contains forward-looking statements,
including with respect to financial guidance, scheduled property
openings, expected closing of noted lease transactions, and
continued 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. These forward-looking statements are
subject to a number of risks, uncertainties and assumptions,
including those set forth under the caption “Risk Factors” in the
prospectus forming part of the Company’s effective Registration
Statement on Form S-1 (File No. 333-267821). 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/20230212005015/en/
LuxUrban Hotels Inc. Shanoop Kothari Chief Financial Officer
shanoop@luxurbanhotels.com
The Equity Group Inc. Devin Sullivan Managing Director (212)
836-9608 dsullivan@equityny.com
David Shayne, Analyst The Equity Group Inc. (212) 836-9628
dshayne@equityny.com
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