LuxUrban Hotels Inc. (NASDAQ:LUXH), a real estate company specializing in hotel operations, received a notification from the Nasdaq Stock Market indicating non-compliance with the exchange's continued listing standards. The notice, dated Monday, August 20, 2024, specifically points to the company's failure to file its quarterly report for the period ending September 30, 2024, on time.
The Nasdaq's Listing Rule 5250(c)(1) requires timely filing of financial reports as a condition for continued listing. LuxUrban Hotels must now submit a plan to regain compliance by Monday, October 21, 2024. If the plan is accepted, the Nasdaq may grant up to 180 calendar days from the report's original due date, or until February 18, 2025, for the company to file the overdue report and any subsequent reports due within this period.
Further complicating the situation, on Friday, August 23, 2024, LuxUrban Hotels received a determination letter from Nasdaq stating that due to a bid price deficiency previously reported on June 17, 2024, and the company's stock closing at a bid price of $0.10 or less for ten consecutive trading days, it is now subject to potential delisting under the Low Priced Stocks Rule.
The company has been given until Friday, August 30, 2024, to appeal this determination. If an appeal is not filed, trading of LuxUrban Hotels' common and preferred stock will be suspended at the opening of business on Tuesday, September 4, 2024, followed by a formal delisting.
LuxUrban Hotels intends to appeal the decision and is currently preparing a plan to present to the Nasdaq hearings panel. The appeal will temporarily stay the suspension and delisting process, with hearings typically scheduled within 30-45 days from the request date.
While the company's securities remain listed on Nasdaq for now, there is no guarantee that LuxUrban Hotels will succeed in its appeal or regain compliance with Nasdaq's listing standards. This development is based on the latest SEC filing by the company.
In other recent news, LuxUrban Hotels Inc. has made several significant moves in its financial strategy. The company announced its intention to sell up to $5 million in senior notes due 2027, aiming to raise capital for general corporate purposes. The net proceeds from this sale are estimated to be approximately $4.425 million.
LuxUrban also announced a follow-on public stock offering, managed by Alexander Capital, L.P., which resulted in gross proceeds of approximately $5.1 million.
Furthermore, LuxUrban has partnered with London-based firm HotelRez to enhance its global distribution capabilities. This collaboration is expected to extend LuxUrban's reach to over 500,000 travel agencies worldwide.
In terms of leadership, LuxUrban appointed Robert Arigo as CEO and Mike James as Chief Financial Officer. However, following the termination of its franchise agreement with Wyndham, Jones Trading downgraded LuxUrban's stock from Buy to Hold.
Lastly, LuxUrban has implemented a cost reduction program expected to save around $2 million annually and has streamlined its property portfolio. These recent developments are part of LuxUrban's ongoing strategy to adapt to market dynamics and enhance shareholder value.
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