LuxUrban Hotels (LUXH) - 2023 Q1 - Quarterly Report

Financial Performance - Net rental revenue for Q1 2023 was $22.81 million, a significant increase of 150.5% from $9.10 million in Q1 2022[9] - Gross profit for Q1 2023 was $5.36 million, up from $2.51 million in Q1 2022, reflecting a year-over-year growth of 113.2%[9] - The company reported a net loss of $2.78 million for Q1 2023, compared to a net income of $1.42 million in Q1 2022[9] - For the three months ended March 31, 2023, LuxUrban Hotels Inc. reported a net loss of $2,780,534 compared to a net income of $1,419,433 for the same period in 2022[13] - The company generated net cash provided by operating activities of $383,281, an increase from $275,255 in the prior year[13] - The company recognized a non-cash lease expense of $6,456,386 for the three months ended March 31, 2023, compared to $2,538,750 in the same period of 2022[13] Assets and Liabilities - Total assets increased to $197.17 million as of March 31, 2023, compared to $107.96 million at the end of 2022, representing an increase of 82.7%[7] - Total liabilities rose to $198.60 million as of March 31, 2023, compared to $111.26 million at the end of 2022, an increase of 78.2%[7] - Cash and cash equivalents increased to $2.88 million as of March 31, 2023, from $1.08 million at the end of 2022, marking a growth of 167.5%[7] - The company’s operating lease right-of-use assets increased to $169.28 million as of March 31, 2023, from $83.33 million at the end of 2022, a growth of 103.5%[7] - Accounts payable and accrued expenses rose to $7,277,439 as of March 31, 2023, compared to $6,252,492 as of December 31, 2022[33] - The company had a working capital deficit of $13,937,703 as of March 31, 2023, with $4,682,746 related to lease accounting[30] Revenue Recognition - The balance of rents received in advance increased to $5,196,743 as of March 31, 2023, compared to $2,566,504 as of December 31, 2022, indicating a growth in future revenue recognition[23] - Major sales channels accounted for over 95% of total revenue during the three months ended March 31, 2023, indicating a high dependency on third-party sales channels[57] Expenses - General and administrative expenses for Q1 2023 were $2.74 million, compared to $0.98 million in Q1 2022, reflecting an increase of 179.5%[9] - Commissions paid to third-party sales channels for the three months ended March 31, 2023, totaled $3,073,533, up from $1,297,170 for the same period in 2022[30] Financing Activities - The company issued 433,881 shares for operating expenses, resulting in a non-cash stock compensation expense of $884,816[11] - The company has future minimum principal repayments of $4,714,773 due in the twelve months ending March 31, 2024[46] - The company received three SBA Economic Injury Disaster Loans (EIDL) totaling $800,000, with an interest rate of 3.75%[40] - The company entered into a line of credit agreement with outstanding borrowings of $94,975 as of March 31, 2023, bearing interest at 11.49%[51] Stock and Warrants - The company issued 250,000 warrants with an exercise price of $4.00 per share on February 15, 2023, in conjunction with an advisory agreement[65] - The company granted options to purchase 25,000 shares of common stock at a weighted average exercise price of $1.74 during the three months ended March 31, 2023[58] - The company recognized stock option expense of $167,573 for the three months ended March 31, 2023, with unamortized option expense totaling $3,993,843[60] Tax Provisions - The Company recorded a tax provision of $122,161 for the three months ended March 31, 2023, whereas no tax provision was recorded for the same period in 2022 due to historical losses[25] - The Company has accrued income taxes of $122,161 as of March 31, 2023, with no accrued income taxes reported as of December 31, 2022[33]