LuxUrban Hotels Inc has announced active late-stage discussions with partner Wyndham Hotels & Resorts Inc, focusing on development incentive advances to expedite and increase funding for new property acquisitions.
The anticipated positive development has led to significant changes within the company, including the cancellation of a promissory note dated 17 November 2023 and a halt to further sales of common stock by chairman Brian Ferdinand.
Mr Ferdinand will cease further sales of common stock intended to fund amounts borrowable under the promissory note.
Proceeds of $500,000 from recent stock sales by Mr Ferdinand will be gifted to the company.
Key money model and industry expansion
LuxUrban Hotels aims to bolster its industry presence by onboarding 27 hotels to the Wyndham brand and operating platform.
The company's president, co-chief executive officer and chief financial officer, Shanoop Kothari, expressed optimism about the proposed key money model, emphasising its potential to accelerate financing for new lease transactions. Kothari highlighted the company's commitment to growth through non-dilutive financing options and expressed gratitude for Wyndham’s collaboration and support of their shared vision.
“We appreciate Wyndham’s continuing collaboration and support of our shared vision. We reiterate all previous financial and unit guidance under this updated financing plan,” Kothari said.
Proceeds from series A preferred stock offering
In connection with LuxUrban Hotels' closed, underwritten public offering of its 13% series A cumulative redeemable preferred stock, the company granted the underwriter a 45-day option for additional purchases.
On 1 December 2023, the underwriter partially exercised this option. Further exercises may occur until 8 December. Any net proceeds will be directed towards leasing additional accommodation units and general corporate purposes.
LuxUrban Hotels continues to navigate strategic partnerships and financial decisions in pursuit of its expansion goals within the hospitality industry.
