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LuxUrban Hotels Inc. (OTC:LUXH), a company specializing in real estate currently facing significant financial challenges with an EBITDA of -$111.44M and a concerning debt-to-equity ratio of -2.54, announced on Monday that their Chief Operating Officer, Robert Arigo, has mutually agreed to leave the company. According to InvestingPro data, the company has been struggling with cash management, showing a weak overall financial health score of 0.54. The departure, effective April 11, 2025, comes with a severance package totaling $50,000, to be paid in weekly installments, and the repayment of a $67,847.78 promissory note by April 18, 2025.
Arigo will also assist LuxUrban as an independent contractor in auditing certain company vendors. Should this audit lead to any financial recovery, he is set to receive half of the net proceeds.
In a separate move aimed at reducing operating expenses, Brian Ferdinand, the Interim CEO and Chairman, informed the board on Wednesday that he will voluntarily give up his future salary and company benefits starting April 15, 2025.
These changes come as LuxUrban Hotels continues to adapt its management and financial strategies. The company expressed gratitude to Arigo for his contributions during his tenure and outlined the terms of his departure in a mutual termination and settlement agreement. This agreement includes standard clauses such as a general release of claims by both parties, ongoing indemnification for Arigo’s actions during his employment, and confidentiality terms.
The information is based on a press release statement filed with the SEC. LuxUrban Hotels, previously known as Corphousing Group Inc., is incorporated in Delaware and has its principal executive offices in New York, NY.
In other recent news, LuxUrban Hotels Inc. has resolved its litigation with Apple (NASDAQ:AAPL) Eight Hospitality Ownership, Inc., concerning the Hotel 57 property in New York. This settlement will see LuxUrban vacate the premises, with Apple Eight waiving approximately $14 million in claims against the company. The agreement is expected to eliminate significant liabilities from LuxUrban’s balance sheet and reduce annualized GAAP losses by around $5 million. Additionally, LuxUrban Hotels has secured up to $10 million in new funding through an agreement involving Senior Secured Original Issue Discount Notes and common stock purchase warrants. The notes bear a 12% annual interest rate and are intended for working capital and general corporate purposes. This funding follows an extension of their 2024 Debt Placement, initially aimed at raising $10 million, later increased by $5 million. These strategic financial maneuvers are part of LuxUrban Hotels’ ongoing efforts to enhance its financial stability and operational capabilities. The developments reflect LuxUrban’s commitment to improving its financial health and reallocating resources towards higher-performing assets.
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