Dive Brief:
- Nasdaq issued a listing deficiency notice to LuxUrban Hotels Inc., the company shared Monday.
- According to the notice, issued Aug. 20, the company is not currently in compliance with Nasdaq’s listing rules because it did not file Form 10-Q with the Securities and Exchange Commission for the period ending on June 30 in a timely manner. On Aug. 14, the company alerted the SEC that it would not be able to file its form by the due date.
- A deficiency notice can be the first step in Nasdaq’s delisting process. The looming threat of delisting is the latest trouble for LuxUrban, which has faced a number of legal and financial issues this year.
Dive Insight:
LuxUrban — which operates hotels and short-term rentals in properties it has taken out long-term leases on — is “working diligently” to complete its Form 10-Q and anticipates filing it “as soon as possible,” according to the release.
LuxUrban has 60 days following its receipt of Nasdaq’s notice to file a plan to regain compliance. If Nasdaq accepts the company’s plan, it could grant LuxUrban up to 180 days to submit its 10-Q. If it does not, the company could appeal Nasdaq’s decision to a hearings panel.
If LuxUrban does not reply with a plan to regain compliance — or Nasdaq doesn’t accept the plan — Nasdaq would issue the company a delisting letter. If the company were not to appeal, its stock would be halted, then delisted after seven days, according to Nasdaq’s delisting procedures.
LuxUrban has been subject to multiple lawsuits this year. In January, New York City sued the company for $1.2 million for operating “illegal transient occupancies” in “apartments that can only legally be advertised and used as permanent residences.”
And in the spring, multiple class action lawsuits were opened on behalf of the company’s investors, according to reports. Apple Hospitality REIT followed suit in June with another lawsuit claiming “squatting” at LuxUrban’s Hotel 57, according to The Real Deal.
That same month, LuxUrban underwent a handful of leadership shakeups in a bid to reassure its shareholders. The company appointed Robert Agiro CEO and created a special committee to increase shareholder value.
In a June statement, Agiro acknowledged that LuxUrban had “much work to do,” but said he was still “convinced that we operate a unique business model that holds great promise.”
LuxUrban, which is based in Miami, did not immediately respond to a Hotel Dive request for comment.
