UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2024

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from __________ to __________

Commission File Number: 001-41473

LUXURBAN HOTELS INC.

(Exact name of registrant as specified in its charter)

Delaware		82-3334945
(State or other jurisdiction of incorporation or organization)		(IRS Employer Identification Number)

2125 Biscayne Blvd Suite 253 Miami, Florida 33137		33137
(Address of principal executive offices)		(Zip code)

(833)-723-7368
(Registrant’s telephone number including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading symbol(s)	Name of each exchange on which registered
Common stock, $0.00001 par value per share	LUXH	Nasdaq Stock Market LLC
13.00% Series A Cumulative Redeemable Preferred Stock, $0.00001 par value per share	LUXHP	Nasdaq Stock Market LLC

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act:

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☒
		Emerging growth company	☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of September 25, 2024, the registrant had 136,854,165 shares of common stock, $.00001 par value, outstanding.

Table of Contents

Part I - Financial Information		1

Item 1 - Financial Statements		1

LUXURBAN HOTELS INC. CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)		1

LUXURBAN HOTELS INC. CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS (UNAUDITED)		2

LUXURBAN HOTELS INC. CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS’ DEFICIT (UNAUDITED)		3

LUXURBAN HOTELS INC. CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE SIX MONTHS ENDED JUNE 30, 2024 AND JUNE 30, 2023 (UNAUDITED)		4

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS LUXURBAN HOTELS INC. JUNE 30, 2024		5

Item 2 - MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS		23

Item 3 - Quantitative and Qualitative Disclosures About Market Risk		46

Item 4 - Controls and Procedures		46

Part II - Other Information		48

Item 1 - Legal Proceedings		48

Item 2 - Unregistered Sales of Equity Securities and Use of Proceeds		49

Item 3 - Defaults Upon Senior Securities		51

Item 4 - Mine Safety Disclosures		51

Item 5 - Other Information		51

Item 6 - Exhibits		53

SIGNATURES		58

Part I - Financial Information

Item 1 - Financial Statements.

LUXURBAN HOTELS INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(UNAUDITED)


	June 30, 2024			December 31, 2023
ASSETS
Current Assets
Cash and Cash Equivalents	$	61		$	752,848
Accounts Receivable, Net		-			329,887
Channel Retained Funds, Net		-			1,500,000
Processor Retained Funds, Net		826,000			2,633,926
Receivables from On-Line Travel Agencies, Net		-			6,936,254
Receivables from City of New York and Landlords, Net		1,480,000			4,585,370
Prepaid Expenses and Other Current Assets		668,533			1,959,022
Prepaid Guarantee Trust - Related Party		341,250			1,023,750
Total Current Assets		3,315,844			19,721,057
Other Assets
Furniture, Equipment and Leasehold Improvements, Net		665,161			691,235
Security Deposits		17,714,123			20,307,413
Prepaid Expenses and Other Noncurrent Assets		419,631			960,729
Operating Lease Right-Of-Use Assets, Net		202,372,371			241,613,588
Total Other Assets		221,171,286			263,572,965
Total Assets	$	224,487,130		$	283,294,022

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current Liabilities
Accounts Payable and Accrued Expenses	$	46,869,829		$	23,182,305
Bookings Received in Advance		11,264,558			4,404,216
Short Term Business Financing, Net		2,805,189			1,115,120
Loans Payable - Current		2,513,852			1,654,589
Initial Direct Costs Leases - Current		300,000			486,390
Operating Lease Liabilities - Current		2,152,452			1,982,281
Development Incentive Advances - Current		-			300,840
Total Current Liabilities		65,905,880			33,125,741
Long-Term Liabilities
Loans Payable		3,185,750			1,459,172
Development Incentive Advances - Noncurrent		-			5,667,857
Initial Direct Costs Leases - Noncurrent		3,950,000			4,050,000
Operating Lease Liabilities - Noncurrent		205,799,977			242,488,610
Total Long-Term Liabilities		212,935,727			253,665,639
Total Liabilities		278,841,607			286,791,380

Mezzanine equity
13% Redeemable Preferred Stock; Liquidation Preference $25 per Share; 10,000,000 Shares Authorized; 294,144 shares issued and outstanding as of June 30, 2024 and December 31, 2023, respectively		5,775,596			5,775,596

Commitments and Contingencies
Stockholders’ Deficit
Common Stock (shares authorized, issued, outstanding - 73,434,504, and 39,462,440, respectively)		734			394
Additional Paid In Capital		113,627,547			90,437,155
Accumulated Deficit		(168,933,017	)		(99,710,503	)
Stockholders’ Equity before Treasury Stock		(55,304,736	)		(9,272,954	)
Treasury stock, at cost		(4,825,337	)		-
Total Stockholders’ Deficit		(60,130,073	)		(9,272,954	)
Total Liabilities and Stockholders’ Deficit	$	224,487,130		$	283,294,022

See accompanying notes to condensed consolidated financial statements.

LUXURBAN HOTELS INC.

CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS

(UNAUDITED)


	For The						For The
	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2024			2023			2024			2023
Net Rental Revenue	$	18,186,223		$	31,861,098		$	32,143,584		$	54,675,273
Rent Expense		7,218,175			4,844,114			15,562,182			10,265,981
Non-Cash Rent Expense Amortization		1,670,885			2,583,272			3,764,552			4,234,941
Surrender of Deposits		2,701,628			-			3,451,628			-
Other Expenses		28,828,024			14,254,698			53,178,647			24,633,463
Total Cost of Revenue		40,418,712			21,682,084			75,957,009			39,134,385
Gross (Loss) Profit		(22,232,489	)		10,179,014			(43,813,425	)		15,540,888

General and Administrative Expenses		2,486,593			4,417,237			14,629,898			7,159,823
Termination of Franchise Agreement		636,043			-			3,315,512			-
Non-Cash Issuance of Common Stock for Operating Expenses		74,011			784,314			378,936			1,669,130
Non-Cash Stock Compensation Expense		823,725			-			1,548,239			429,996
Non-Cash Stock Option Expense		146,743			204,814			299,082			372,387
Total Operating Expenses		4,167,115			5,406,365			20,171,667			9,631,336
(Loss) Income from Operations		(26,399,604	)		4,772,649			(63,985,092	)		5,909,552
Other Income (Expense)
Other Income		876,904			58,370			1,086,980			98,248
Cash Interest and Financing Costs		(615,756	)		(1,189,901	)		(3,075,556	)		(3,320,506	)
Non-Cash Financing Costs		(446,593	)		(28,522,740	)		(2,770,863	)		(30,227,289	)
Total Other Expense		(185,445	)		(29,654,271	)		(4,759,439	)		(33,449,547	)
Loss Before Provision for Income Taxes		(26,585,049	)		(24,881,622	)		(68,744,531	)		(27,539,995	)
Provision for Income Taxes		-			1,893,039			-			2,015,200
Net Loss		(26,585,049	)		(26,774,661	)		(68,744,531	)		(29,555,195	)
Preferred Stock Dividend		(238,991	)		-			(477,983	)		-
Net Loss Attributable to Common Stockholders	$	(26,824,040	)	$	(26,774,661	)	$	(69,222,514	)	$	(29,555,195	)
Basic Loss Per Common Share	$	(0.41	)	$	(0.78	)	$	(1.20	)	$	(0.94	)
Diluted Loss Per Common Share	$	(0.41	)	$	(0.78	)	$	(1.20	)	$	(0.94	)
Basic and Diluted Weighted Average Number of Common Shares Outstanding		65,888,241			34,291,045			57,555,923			31,490,759

See accompanying notes to condensed consolidated financial statements.

LUXURBAN HOTELS INC.
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS’ DEFICIT
(UNAUDTIED)


	Common Stock						Additional Paid in Capital			Accumulated Deficit			Treasury Stock			Stockholders’ Equity (Deficit)
*Balance* - December 31, 2023		39,462,440		$	394		$	90,437,155		$	(99,710,503	)	$	-		$	(9,272,954	)
Net Loss		-			-			-			(42,159,482	)		-			(42,159,482	)
Non-Cash Stock Compensation Expense		222,800			2			633,074						-			633,076
Non-Cash Option Compensation Expense		-			-			152,339			-			-			152,339
Issuance of Shares for Operating Expenses		69,863			1			304,925			-			-			304,926
Modification of Warrants		-			-			2,036,200			-			-			2,036,200
Warrant Exercise		1,450,000			15			4,799,985			-			-			4,800,000
Issuance of Shares to Satisfy Loans		20,008			-			91,435			-			-			91,435
Issuance of Shares for Revenue Share Agreements		614,250			6			(6	)		-			-			-
Preferred Dividends		-			-			-			(238,992	)		-			(238,992	)
*Balance* - March 31, 2024		41,839,361			418			98,455,107			(142,108,977	)		-			(43,653,452	)
Net Loss											(26,585,049	)					(26,585,049	)
Issuance of Shares for Revenue Share Agreements		6,740,000			67			(67	)								-
Non-Cash Stock Compensation Expense		980,628			10			823,718									823,728
Non-Cash Option Compensation Expense								146,743									146,743
Issuance of Shares to Satisfy Loans		67,500			1			47,924									47,925
Issuance of Shares for Operating Expenses		36,887			-			26,085									26,085
Public Offering, Net of Issuance Fees		35,075,000			351			7,026,087									7,026,438
Private Offering, Net of Issuance Fees		8,000,000			80			1,833,920									1,834,000
Modification of Warrants								442,500									442,500
Purchase of Treasury Stock		(19,304,872	)		(193	)		4,825,530						(4,825,337	)		-
Preferred Dividends											(238,991	)					(238,991	)
*Balance* - June 30, 2024		73,434,504		$	734		$	113,627,547		$	(168,933,017	)	$	(4,825,337	)	$	(60,130,073	)

*Balance* - December 31, 2022		27,691,918		$	276		$	17,726,592		$	(21,018,992	)	$	-		$	(3,292,124	)
Net Loss		-			-			-			(2,780,534	)		-			(2,780,534	)
Non-Cash Stock Compensation Expense		166,665			2			429,994			-						429,996
Non-Cash Stock Option Expense		-			-			167,573			-						167,573
Issuance of Shares for Operating Expenses		433,881			4			884,812			-						884,816
Conversion of Loans		900,000			9			2,699,991			-						2,700,000
Warrant Exercise		200,000			2			399,998			-						400,000
Loss on Debt Extinguishment		-			-			58,579			-						58,579
*Balance* - March 31, 2023		29,392,464			293			22,367,539			(23,799,526	)		-			(1,431,694	)
Net Loss		-			-			-			(26,774,661	)		-			(26,774,661	)
Non-Cash Stock Option Expense		-			-			204,814			-						204,814
Conversion of Loans		2,278,975			23			4,989,607			-						4,989,630
Issuance of Shares for Operating Expenses		276,525			2			784,311			-						784,313
Warrant Expense		2,356,251			24			4,912,478			-						4,912,502
Issuance of Shares to Satisfy Loans		58,088			1			157,999			-						158,000
Issuance of Shares for Deferred Compensation		160,036			2			467,214			-						467,216
Issuance of Shares for Revenue Share Agreements		614,252			6			1,704,543			-						1,704,549
Termination of Revenue Share Agreement Adjustment		-			-			28,174,148			-						28,174,148
Modification of Warrants		-			-			259,075			-						259,075
Balance - June 30, 2023		35,136,591		$	351		$	64,021,728		$	(50,574,187	)	$	-		$	13,447,892

See accompanying notes to condensed consolidated financial statements.

LUXURBAN HOTELS INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE SIX MONTHS ENDED JUNE 30, 2024 AND JUNE 30, 2023

(UNAUDITED)


	June 30,
	2024			2023
Cash Flows from Operating Activities
Net Loss	$	(68,744,531	)	$	(29,555,195	)
Adjustments to reconcile net loss to net cash used in operating activities:
Writeoff of bad debts		6,217,506			-
Writeoff of channel retained funds security deposit		1,500,000			-
Writeoff of security deposits		3,643,290			-
Writeoff of prepaids and other noncurrent assets		5,211,098			-
Writeoff of amounts due from City of New York and Landlords		1,374,483			-
Gain on lease exit		(1,046,640	)		-
Non-cash forgiveness of Development Incentive Advances		(75,210	)		-
Non-cash stock compensation expense

SEC Form 10-Q filed by LuxUrban Hotels Inc.