LuxUrban Hotels Inc. has been granted a conditional extension for its Nasdaq listing following a hearing with the Nasdaq Hearings Panel on October 15, 2024. The real estate company, previously known as Corphousing Group Inc., faced delisting due to non-compliance with the Bid Price Rule and other listing requirements.
The extension was awarded based on the company's compliance plan presented at the hearing, which included the resolution of a filing deficiency for its June 30, 2024, 10-Q report and assurances of future timely filings. LuxUrban Hotels also proposed a reverse stock split to regain compliance with the Bid Price Rule, pending stockholder approval at a special meeting scheduled for November 12, 2024.
The Panel's conditions for continued listing include stockholder approval of the reverse stock split by November 4, 2024, and implementation of the split by November 19, 2024. The company anticipates effecting the reverse stock split around November 20, 2024, following a required notice period to Nasdaq.
Should LuxUrban Hotels regain compliance, it will be subject to a one-year Panel Monitor, during which it must promptly notify Nasdaq of significant events affecting compliance. This development is based on the company's 8-K filing with the SEC and is subject to change pending Nasdaq's final decision on the revised meeting dates.
In other recent news, LuxUrban Hotels has reported a net loss of $26.8 million for the second quarter, with revenue also decreasing to $18.2 million. The company has been grappling with compliance issues with Nasdaq due to delayed filing of its quarterly report. Amid these challenges, Jones Trading downgraded LuxUrban's stock from Buy to Hold. The company has announced plans to sell up to $5 million in senior notes due 2027 and has successfully closed a follow-on public stock offering, generating approximately $5.1 million.
LuxUrban has also partnered with London-based firm HotelRez to boost its global distribution capabilities. Additionally, the company announced the resignation of board member Patrick McNamee, who stepped down to pursue other opportunities.
InvestingPro Insights
LuxUrban Hotels Inc.'s (LUXH) recent conditional extension from Nasdaq comes amidst significant financial challenges. According to InvestingPro data, the company's market capitalization stands at a mere $5.98 million, reflecting the severe decline in its stock price. This is further evidenced by the stark year-to-date price total return of -99.34% as of the latest data.
Two relevant InvestingPro Tips highlight the company's precarious position: LUXH is "quickly burning through cash" and has "short term obligations exceed liquid assets." These factors likely contributed to the company's non-compliance with Nasdaq listing requirements and underscore the urgency of their proposed reverse stock split.
The company's financial health appears fragile, with a negative gross profit margin of -48.43% for the last twelve months as of Q2 2024. This aligns with another InvestingPro Tip indicating that LUXH "suffers from weak gross profit margins."
For investors seeking a more comprehensive analysis, InvestingPro offers 15 additional tips for LuxUrban Hotels, providing a deeper understanding of the company's financial situation and market performance.
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