Form 10-Q - Quarterly report [Sections 13 or 15(d)]

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 September 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 November 19, 2024, the registrant had 158,204,018 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 STATEMENTS OF OPERATIONS FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2024 AND SEPTEMBER 30, 2023 (UNAUDITED)		2

LUXURBAN HOTELS INC. CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS’ DEFICIT FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2024 AND SEPTEMBER 30, 2023 (UNAUDITED)		3

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

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS LUXURBAN HOTELS INC. SEPTEMBER 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		45

Item 4 - Controls and Procedures		46

Part II - Other Information		47

Item 1 - Legal Proceedings		47

Item 2 - Unregistered Sales of Equity Securities and Use of Proceeds		48

Item 3 - Defaults Upon Senior Securities		50

Item 4 - Mine Safety Disclosures		50

Item 5 - Other Information		50

Item 6 - Exhibits		52

SIGNATURES		57

Part I - Financial Information

Item 1 - Financial Statements.

LUXURBAN HOTELS INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(UNAUDITED)


	September 30, 2024			December 31, 2023
ASSETS
Current Assets
Cash and Cash Equivalents	$	198,868		$	752,848
Accounts Receivable, Net		-			329,887
Channel Retained Funds, Net		-			1,500,000
Processor Retained Funds, Net		446,809			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		262,955			1,959,022
Prepaid Guarantee Trust - Related Party		341,250			1,023,750
Total Current Assets		2,729,882			19,721,057
Other Assets
Furniture, Equipment and Leasehold Improvements, Net		652,763			691,235
Security Deposits - Noncurrent		17,014,123			20,307,413
Prepaid Expenses and Other Noncurrent Assets		419,631			960,729
Operating Lease Right-Of-Use Assets, Net		185,797,690			241,613,588
Total Other Assets		203,884,207			263,572,965
Total Assets	$	206,614,089		$	283,294,022

LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)
Current Liabilities
Accounts Payable and Accrued Expenses	$	64,170,241		$	23,182,305
Bookings Received in Advance		6,354,952			4,404,216
Short Term Business Financing, Net		3,922,103			1,115,120
Loans Payable - Current		6,472,183			1,654,589
Initial Direct Costs Leases - Current		300,000			486,390
Operating Lease Liabilities - Current		2,347,039			1,982,281
Development Incentive Advances - Current		-			300,840
Total Current Liabilities		83,566,518			33,125,741
Long-Term Liabilities
Loans Payable		5,565,733			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		189,458,967			242,488,610
Total Long-Term Liabilities		198,974,700			253,665,639
Total Liabilities		282,541,218			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 September 30, 2024 and December 31, 2023, respectively		5,775,596			5,775,596

Commitments and Contingencies
Stockholders’ Deficit
Common Stock (200,000,000 shares authorized, issued, outstanding - 142,754,165, and 39,462,440, respectively)		1,428			394
Additional Paid In Capital		123,995,898			90,437,155
Accumulated Deficit		(199,901,381	)		(99,710,503	)
Stockholders’ Equity before Treasury Stock		(75,904,055	)		(9,272,954	)
Treasury stock		(5,798,670	)		-
Total Stockholders’ Deficit		(81,702,725	)		(9,272,954	)
Total Liabilities and Stockholders’ Deficit	$	206,614,089		$	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						Nine Months Ended
	September 30,						September 30,
	2024			2023			2024			2023
Net Rental Revenue	$	13,133,103		$	31,208,248		$	45,276,687		$	85,883,521
Rent Expense		6,824,940			7,802,847			22,387,122			18,068,828
Non-Cash Rent Expense Amortization		1,684,546			1,952,599			5,449,098			6,187,540
Surrender of Deposits		700,000			-			4,151,628			-
Other Expenses		20,740,915			13,640,517			73,919,562			38,273,980
Total Cost of Revenue		29,950,401			23,395,963			105,907,410			62,530,348
Gross (Loss) Profit		(16,817,298	)		7,812,285			(60,630,723	)		23,353,173
General and Administrative Expenses		11,697,043			1,981,774			26,326,941			9,297,097
Termination of Franchise Agreement		310,356			-			3,625,868			-
Non-Cash Issuance of Common Stock for Operating Expenses		111,000			334,081			489,936			1,847,711
Non-Cash Stock Compensation and Option Expense		25,302			407,553			1,872,623			1,209,936
Total Operating Expenses		12,143,701			2,723,408			32,315,368			12,354,744
(Loss) Income from Operations		(28,960,999	)		5,088,877			(92,946,091	)		10,998,429
Other Income (Expense)
Other Income		1,331,423			31,627			2,418,403			129,875
Cash Interest and Financing Costs		(984,792	)		(2,185,202	)		(4,060,348	)		(5,505,708	)
Non-Cash Financing Costs		(2,115,004	)		-			(4,885,867	)		(30,227,289	)
*Total Other Expense*		(1,768,373	)		(2,153,575	)		(6,527,812	)		(35,603,122	)
Income (Loss) Before Provision for Income Taxes		(30,729,372	)		2,935,302			(99,473,903	)		(24,604,693	)
Provision for Income Taxes		-			(1,999,498	)		-			15,702
Net Income (Loss)		(30,729,372	)		4,934,800			(99,473,903	)		(24,620,395	)
Preferred Stock Dividend		(238,992	)		-			(716,975	)		-
Net Income (Loss) Attributable to Common Stockholders	$	(30,968,364	)	$	4,934,800		$	(100,190,878	)	$	(24,620,395	)
Basic Income (Loss) Per Common Share	$	(0.24	)	$	0.11		$	(1.22	)	$	0.69
Diluted Income (Loss) Per Common Share	$	(0.24	)	$	0.11		$	(1.22	)	$	0.69
Basic and Diluted Weighted Average Number of Common Shares Outstanding		131,175,404			44,562,243			82,274,873			35,895,801

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	)
Net Loss											(30,729,372	)					(30,729,372	)
Issuance of Shares for Operating Expenses		600,000			6			110,994									111,000
Public Offering, Net of Issuance Fees		46,073,333			461			6,801,140									6,801,601
Issuance of Shares for Dilution Share Agreements		19,533,333			196			(196	)								-
Warrant Exercise		11,893,119			119			(119	)								-
Modification of Warrants								115,200									115,200
Debt discount								4,342,609									4,342,609
Equity converted into debt		(13,333,333	)		(134	)		(1,026,533	)					(973,333	)		(2,000,000	)
Non-Cash Stock Compensation Expense		4,553,209			46			327,785									327,831
Non-Cash Option Compensation Expense		-			-			(302,529	)								(302,529	)
Preferred Dividends											(238,992	)					(238,992	)
*Balance* -September 30, 2024		142,754,165		$	1,428		$	123,995,898		$	(199,901,381	)	$	(5,798,670	)	$	(81,702,725	)

*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
Net Income											4,934,800			-			4,934,800
Non-Cash Stock Option Expense								146,707									146,707
Issuance of Shares for Operating Expenses and Settlements		113,824			1			334,080									334,081
Issuance of Shares for Director Compensation		91,525			1			260,845									260,846
Warrant Exercise		860,000			9			2,353,992									2,354,001
Issuance of Shares for Revenue Share Agreements		614,250			6			(6	)								-
Balance - September 30, 2023		36,816,190		$	368		$	67,117,346		$	(45,639,387	)	$	-		$	21,478,327

See accompanying notes to condensed consolidated financial statements.

LUXURBAN HOTELS INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2024 AND SEPTEMBER 30, 2023

(UNAUDITED)


	September 30,
	2024			2023
Cash Flows from Operating Activities
Net (Loss)	$	(99,473,903	)	$	(24,620,395	)
Adjustments to reconcile net (loss) income to net cash provided by operating activities:
Writeoff of bad debts		6,217,506			-
Writeoff of channel retained funds security deposit		1,500,000			-
Writeoff of security deposits		4,343,290			-
Non-cash stock compensation expense		55,500			1,158,058
Non-cash stock director and option expense		1,725,688			519,094
Amortization of debt discount		197,675			-
Depreciation expense		38,472			59,075
Shares issued for operating expenses		489,934			2,003,210
Modification of Warrants		2,593,900			259,075
Non-cash lease expense		27,527,121			23,695,139
Gain on lease exit		(2,164,593	)		-
Non-cash forgiveness of Development Incentive Advances		(75,210	)		-
Gain on sale of Treasury Bills		-			(31,014	)
Issuance of Shares for Revenue Share Agreement		-			1,704,549
Termination of Revenue Share Agreement		-			28,174,148
Non-cash Financing Charges Associated with Short Term Business Financing		289,087			325,290
Writeoff of amounts due from NYC & LL		1,374,483			-
Loss on Debt Extinguishment		-			58,579
Changes in operating assets and liabilities:
(Increase) Decrease in:
Accounts Receivable, Net		325,260			-
Processor retained funds		(446,809	)		804,991
Channel retained funds and receivables from OTA’s		2,711,468			(12,868,602	)
Receivables from City of New York and Landlords, Net		549,563			-
Prepaid expense and other assets		2,237,165			(3,791,886	)
Prepaid Guarantee Trust - Related Party		682,500			-
Security deposits		(1,050,000	)		(9,402,784	)
(Decrease) Increase in:
Accounts payable and accrued expenses		33,921,106			1,425,308
Operating lease liabilities		(22,211,514	)		(17,485,034	)
Rents received in advance		1,950,736			982,946
Accrued Income Taxes		-			15,702
Net cash used by operating activities		(36,691,573	)		(7,014,551	)

Cash Flows from Investing Activities
Purchase of Furniture and Equipment		-			(921,414	)
Proceeds from the sale of Treasury Bills		-			2,692,396
Net cash provided by investing activities		-			1,770,982

Cash Flows from Financing Activities
Deferred offering costs - net		-			(13,702	)
Proceeds from (Repayments of) short term business financing - net		2,517,896			(16,107	)
Proceeds from public and private sales of common stock		15,662,038			-
Warrant Exercises		4,800,000			7,666,503
Proceeds from Letter of Credit guarantors		2,824,886
Proceeds from Development Incentive Advances		3,000,500			1,594,557
Proceeds from (Repayments of) loans payable - net		8,244,203			-
Repayments of loans payable - net		(194,955	)		(265,504	)
Preferred shareholder dividends paid		(716,975	)		-
Net cash provided by financing activities		36,137,594			8,965,747

Net Increase in Cash and Cash Equivalents and Restricted Cash		(553,980	)		3,722,178
Cash and Cash Equivalents and Restricted Cash - beginning of the period		752,848			2,176,402
Cash and Cash Equivalents and Restricted Cash - end of the period		198,868			5,898,580

Cash and Cash Equivalents		198,868			4,798,580
Restricted Cash		-			1,100,000
Total Cash and Cash Equivalents and Restricted Cash	$	198,868		$	5,898,580

Supplemental Disclosures of Cash Flow Information
Cash paid for Interest	$	2,522,989		$	5,179,748
Noncash operating activities:
Acquisition of New Operating Lease Right-of-Use Assets	$	-		$	155,045,761
Net settlement of receivables and payables to City of New York	$	1,827,157		$	-
Noncash financing activities:
Conversion of debt to common stock and additional paid-in capital	$	-		$	7,847,630
Accrued deferred offering costs	$	-		$	350,000
Issuance of Warrants to purchase Treasury Stock	$	5,798,670		$	-
Equity converted to debt	$	2,000,000		$	-
Issuance of shares to satisfy loans	$	91,435		$	-
Debt discount	$	4,342,609		$	-

See accompanying notes to condensed consolidated financial statements.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
LUXURBAN HOTELS INC.
September 30, 2024

1 - DESCRIPTION OF BUSINESS AND PRINCIPLES OF CONSOLIDATION

LuxUrban Hotels Inc. (LUXH) (“LuxUrban” or the “Company”) leases entire existing hotels on a long-term basis and rents out hotel rooms in the properties it leases. It currently has a portfolio of nine hotel rooms in New York and New Orleans through long-term lease agreements and manages these hotels directly. Its revenues are generated through the rental of rooms to guests and through ancillary services such as cancellable room rate fees, resort fees, late and early check-in and check-out fees, baggage fees, parking fees, grab and go food service fees, and upgrade fees.

In late 2021, the Company commenced the process of winding down its legacy business of leasing and re-leasing multifamily residential units, as it pivoted toward its new strategy of leasing hotels. This wind-down was substantially completed by the end of 2022 and as of the date of this Report the Company operates no residential units. This legacy business was conducted under the names SoBeNY Partners LLC (“SoBeNY”) and CorpHousing Group Inc. (“CorpHousing”).

The consolidated financial statements presented herein include the accounts of the Company and its wholly owned subsidiary SoBeNY. On November 2, 2022, CorpHousing changed its name to LuxUrban Hotels Inc. In June 2021, the members of SoBeNY exchanged all of their membership interests for additional membership interests in Corphousing LLC, with SoBeNY becoming a wholly owned subsidiary of Corphousing LLC. Both entities were under common control at the time of the transaction. Since there was no change in control over the net assets, there is no change in basis in the net assets.

In January 2022, Corphousing LLC and its wholly owned subsidiary, SoBeNY, converted into C corporations, with the then current members of Corphousing LLC becoming the stockholders of the newly formed C corporation, CorpHousing Group Inc. The conversion has no effect on our business or operations and was undertaken to convert the forms of these legal entities into corporations for purposes of operating as a public company. All properties, rights, businesses, operations, duties, obligations and liabilities of the predecessor limited liability companies remain those of CorpHousing Group Inc. and SoBeNY Partners Inc.

In August 2023, the Company entered into franchise agreements with Wyndham Hotels & Resorts, Inc. pursuant to which the hotels operated by the Company were to become part of the Trademark Collection^® by Wyndham and Travelodge by Wyndham brands while staying under the operational control of the Company. In May 2024, in light of discussions between our Company and Wyndham on the initial and projected future performance of our properties within the franchise relationships, we commenced the return of all property listings to our control, terminating our franchise relationship with Wyndham. In connection with the foregoing, the Company de-platformed these properties from Wyndham’s systems and moved each hotel listing back under the Company’s control.

All significant intercompany accounts and transactions have been eliminated in consolidation.

2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation — The accompanying condensed consolidated financial statements are prepared on the accrual basis of accounting in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”).

Revenue Recognition — The Company’s revenue is derived primarily from the rental of units to its guests. The Company accounts for revenue in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 606. The Company recognizes revenue when obligations under the terms of a contract are satisfied and control over the promised goods and services is transferred to the guest. For the majority of revenue, this occurs when the guest occupies the unit for the agreed upon length of time and receives any services that may be included with their stay. Revenue is measured as the amount of consideration it expects to receive in exchange for the promised goods and services. The Company recognizes any refunds and allowances as a reduction of rental income in the consolidated statements of operations.

Payment received for the future use of a rental unit is recognized as a liability and reported as rents received in advance on the balance sheets. Rents received in advance are recognized as revenue after the rental unit is occupied by the customer for the agreed upon length of time. The rents received in advance balance as of September 30, 2024, and December 31, 2023, was $6,354,952 and $4,404,216, respectively and is expected to be recognized as revenue within a one-year period.

Use of Estimates — The preparation of financial statements in accordance with accounting principles generally accepted in the United States (“GAAP”) requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements. Actual results could differ from those estimates.

Going Concern — The accompanying condensed consolidated financial statements have been prepared in conformity with U.S. GAAP, which contemplates continuation as a going concern. As reflected in the accompanying statement of operations, the nine-months ended September 30, 2024 and for the year ended December 31, 2023, the Company had a net loss of $99,473,903 and $78,523,377, respectively. In addition, the Company sustained significant losses in prior years. The Company’s working capital as of September 30, 2024, was a deficit of $80,836,636. The Company had negative cash flows from operations of $36,691,573 and $7,014,551 for the nine months ended September 30, 2024 and September 30, 2023. These factors, among others, raise substantial doubt about the Company’s ability to continue as a going concern. Management has evaluated the significance of the conditions in relation to the Company’s ability to meet its obligations and believes that its current cash balance along with its currently projected cash flows from operations will not provide sufficient capital to continue as a going concern. In an effort to achieve liquidity that would be sufficient to meet all of our commitments, we have undertaken a number of actions, including raising capital through the sale of equity and the sale of debt, and evaluation of potential strategic initiatives. The Company’s ability to continue as a going concern is dependent upon improving operating margins and raising additional capital through debt and/or equity financing or in connection with joint ventures or other strategic relationships. Without additional capital, we may not have sufficient capital to continue operations. These financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or amounts and classification of liabilities that might result from this uncertainty.

Cash and Cash Equivalents — The Company considers all highly liquid investments with original maturities of three months or less when purchased to be cash equivalents. As of September 30, 2024, the Company had cash and cash equivalents of $198,868. The Company had $752,848 of cash and cash equivalents as of December 31, 2023.

Accounts Receivable, Channel Retained Funds, Processor Retained Funds, Receivables from City of New York, Landlords and On-Line Travel Agencies — The Company’s receivables consist of amounts due from landlords, amounts due from the City of New York, and receivables from channel retained funds, Online Travel Agents (“OTAs”), processor retained funds and other sales channels. The amounts due from landlords are related to common area expenses we incur for the benefit of all tenants and ultimately can be netted to amounts owed to the landlord, not requiring an allowance as the amounts owed to the landlord are far greater than amounts owed to us. Regarding the receivable with the City of New York, we have cancelled our contract with the City of New York and do not expect the need for an allowance of credit losses on the remaining balanced owed to us. During the nine months ended September 30, 2024, the Company wrote off $1,500,000 of channel retained funds, $2,600,000 of processor retained funds, and $984,000 due to the Company from the Housing Authority of New York City (“HAONYC”). HAONYC was to pay the Company for use of one of our portfolio hotels to house homeless individuals, but has not made such payment to date as a result of dispute a between our company and the hotel landlord over whether our company or the landlord was entitled to receipt of such funds. The landlord has agreed to settle the dispute with our company through certain payments from time to time to our company. Finally, the Company has made reserve for credit losses with respect to receivables from OTAs, in the amount of $0 and $529,000 as of September 30, 2024 and December 31, 2023, respectively. Processor retained funds on the balance sheet are net of any requested and allowed chargebacks and funds released to use during the period.

Fair Value of Financial Instruments — The carrying amount of cash and cash equivalents, processor retained funds, security deposits, accounts payable and accrued expenses, rents received in advance, receivables from OTAs, development incentive advances, and short-term business financing advances approximate their fair values as of September 30, 2024 and December 31, 2023 because of their short term natures.

Commissions — The Company pays commissions to third-party sales channels to handle the marketing, reservations, collections, and other rental processes for most of the Company’s units. For the three and nine months ended September 30, 2024, commissions were $3,527,877 and $15,494,567, respectively, as compared to $2,020,080 and $6,576,221, respectively, for the three and nine months ended September 30, 2023. These expenses are included in cost of revenue in the accompanying consolidated statement of operations.

Income Taxes — In accordance with GAAP, the Company follows the guidance in FASB ASC Topic 740, Accounting for Uncertainty in Income Taxes, which clarifies the accounting for uncertainty in income taxes recognized in the Company’s financial statements and prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. It also provides guidance on derecognition and measurement of a tax position taken or expected to be taken in a tax return.

The Company is subject to income taxes in the jurisdictions in which it operates. The Company accounts for income taxes under the asset and liability method, whereby deferred tax assets and liabilities are recognized based on the future tax consequences attributable to temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases, and attributable to operating loss and tax credit carry-forwards. A valuation allowance is recorded for deferred tax assets if it is more likely than not that the deferred tax assets will not be realized. The Company has recorded a full valuation allowance against all deferred tax assets and liabilities at September 30, 2024 and December 31, 2023.

For the three and nine months ended September 30, 2024, the Company did not record a tax provision for income taxes as a result of net losses for the period. For the three and nine months ended September 30, 2023, the Company recorded a tax provision of $1,999,498 and $15,702.

Sales Tax — The majority of sales tax is collected from customers by our third-party sales channels and remitted to governmental authorities by these third-party sales channels. For any sales tax that is the Company’s responsibility to remit, the Company records the amounts collected as accrued expenses and relieves such liability upon remittance to the taxing authority. Rental income is presented net of any sales tax collected. As of September 30, 2024 and December 31, 2023, the Company accrued sales tax payable of $4,660,545 and $3,266,302, respectively, and it is included in accounts payable and accrued expenses in the consolidated balance sheet.

Paycheck Protection Program Loan (“PPP”) — As disclosed in Note 3, the Company has chosen to account for the loan under FASB ASC 470, Debt. Repayment amounts due within one year are recorded as current liabilities, and the remaining amounts due in more than one year, if any, as long-term liabilities. In accordance with ASC 835, Interest, no imputed interest is recorded as the below market interest rate applied to this loan is governmentally prescribed.

Earnings Per Share (“EPS”) — Basic net loss per share is the same as diluted net loss per share for the three and nine months ended September 30, 2024 because the inclusion of potentially issuable shares of common stock would have been anti-dilutive for the periods presented. For the three and nine months ended September 30, 2023, basic net loss per share is the same as diluted net loss per share because the inclusion of potentially issuable shares of common stock would have been anti-dilutive for the periods presented.

Preferred Stock — The Company accounts for its preferred stock in accordance with ASC Topic 480, Distinguishing Liabilities from Equity. Conditionally redeemable preferred stock is classified as mezzanine equity within the Company’s consolidated balance sheet.

New Accounting Pronouncements — In November 2023, the Financial Accounting Standards Board (FASB) issued ASU No. 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures (ASU 2023-07), which requires an enhanced disclosure of significant segment expenses on an annual and interim basis. This guidance is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. Early adoption is permitted. Upon adoption, the guidance should be applied retrospectively to all prior periods presented in the financial statements. We do not expect the adoption of this guidance to have a material impact on our condensed consolidated financial statements. The Company did not adopt any new accounting pronouncements during the nine months ended September 30, 2024.

3 - LEASES

Under ASC 842, the Company applies a dual approach to all leases whereby the Company is a lessee and classifies leases as either finance or operating leases based on the principle of whether or not the lease is effectively a financed purchase by the Company. Lease classification is evaluated at the inception of the lease agreement. Regardless of classification, the Company records a right-of-use asset and a lease liability for all leases with a term greater than 12 months. Operating lease expense is recognized on a straight-line basis over the term of the lease.

Operating right of use (“ROU”) assets and operating lease liabilities are recognized at the lease commencement date. Operating lease liabilities represent the present value of lease payments not yet paid. Operating right of use assets represent our right to use an underlying asset and is based upon the operating lease liabilities adjusted for prepayments or accrued lease payments, initial direct costs, lease incentives, and impairment of operating lease assets. To determine the present value of lease payments not yet paid, we estimate incremental secured borrowing rates corresponding to the maturities of the leases.

At September 30, 2024 and December 31, 2023, supplemental balance sheet information related to leases were as follows:


	September 30, 2024		December 31, 2023
Operating lease right of use assets, net	$	185,797,690	$	241,613,588
Operating lease liabilities, current portion	$	2,347,039	$	1,982,281
Operating lease liabilities, net of current portion	$	189,458,967	$	242,488,610

At September 30, 2024, future minimum lease payments under the non-cancellable operating leases are as follows:

Schedule of future minimum lease payments under the non-cancellable operating leases


Twelve Months Ending September 30,
2025	$	25,519,527
2026		26,223,627
2027		27,080,476
2028		28,094,634
2029		28,872,080
Thereafter (through 2048)		291,581,735
Total lease payment	$	427,373,079
Less interest		(235,567,073	)
Present value obligation		191,806,006
Short-term liability		2,347,039
Long-term liability	$	189,458,967

The following summarizes other supplemental information about the Company’s operating leases:


	September 30, 2024			December 31, 2023
Weighted average discount rate		12.03	%		10.5	%
Weighted average remaining lease term (years)		12.6 years			16.6 years

	Three Months Ended September 30,						Nine Months Ended September 30,
	2024		2023				2024		2023
Operating lease cost	$	8,386,290		$	9,942,873		$	23,951,472	$	23,695,139
Short-term lease cost	$	133,197		$	(187,427	)	$	3,897,749	$	561,229
Total lease cost	$	8,522,487		$	9,755,446		$	27,849,221	$	24,256,368

4 - ACCOUNTS RECEIVABLES, PROCESSOR AND CHANNEL RETAINED FUNDS

As of September 30, 2024, we had $0 of channel retained funds, $0 of processor retained funds, and $446,809 of receivables from OTAs, $1,480,000 in receivables from the City of New York and landlords, and other receivables of $0. As of December 31, 2023, we had $1,500,000 of channel retained funds, $2,633,926 of processor retained funds, (net of allowances for credit losses of $393,412), $6,936,254 of receivables from OTAs (net of allowances for credit losses of $529,000), $4,585,370 in receivables from the City of New York and landlords, and other receivables of $329,987 (net of allowances for credit losses of $486,708).

5 - ACCOUNTS PAYABLE AND ACCRUED EXPENSES

Accounts payable and accrued expenses as of September 30, 2024 and December 31, 2023, were as follows:


	September 30,		December 31,
	2024		2023
Accrued payroll and related liabilities	$	876,000	$	2,024,000
Bank and service fees payable		415,000		288,223
Board of director fees payable		239,000		231,000
Cleaning expense payable		373,000		-
Commissions payable		876,000		632,000
Insurance expense payable		821,000		194,000
Interest expense		1,202,000		-
Legal exposure		26,386,000		8,400,000
License and public relations payable		178,000		94,000
Linens, sundries and supplies payable		701,000		420,000
Other payables		652,241		292,082
Printing expense payable		226,000		263,000
Processing fees payable		-		52,000
Professional fees payable		723,000		590,000
Rent expense payable		3,265,000		1,737,000
Repairs, maintenance and improvements payable		1,059,000		719,000
Sales and other taxes		11,619,000		3,910,000
Telephone and cable payable		395,000		71,000
Union liabilities		8,448,000		-
Utilities payable		5,716,000		3,265,000
	$	64,170,241	$	23,182,305

Of the legal exposure amounts accrued and noted above, the company believes the accrual best estimates the most likely outcomes of these matters, however the range of outcomes could be between $5 million and $26.4 million.

6 - LOANS PAYABLE – SBA – PPP LOAN

On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) was enacted to provide emergency assistance for individuals, families, and organizations affected by the coronavirus pandemic. The PPP, created through the CARES Act, provides qualified organizations with loans of up to $10,000,000.

In April and May 2020, SoBeNY and CorpHousing obtained funding of $516,225 and $298,958, respectively, from a bank established by the Small Business Administration (“SBA”). The loans have an initial deferment period wherein no payments are due until the application of forgiveness is submitted, not to exceed ten months from the covered period. Interest will continue to accrue during this deferment period. The April loan was written off by the bank in the September 2022 quarter and subsequently taken to other income. After the deferment period ends, the May loan is payable in equal monthly installments of $15,932, including principal and interest at a fixed rate of 1.00%. No collateral or personal guarantees were required to obtain the PPP loans. The Company does not intend to apply for forgiveness of these loans and expects to repay the loans in accordance with the terms of the agreements.

Accrued interest at September 30, 2024 and December 31, 2023, was $7,702 and $5,571, respectively, and is included in accounts payable and accrued expenses in the consolidated balance sheets.

Future minimum principal repayments of the SBA - PPP loans payable are as follows:


For the Twelve Months Ending September 30,
2025	$	276,658

7 - LOANS PAYABLE – SBA – EIDL LOAN

During 2020, the Company received three SBA Economic Injury Disaster Loans (“EIDL”) in response to the COVID-19 pandemic. These are 30-year loans under the EIDL program, which is administered through the SBA. Under the guidelines of the EIDL, the maximum term is 30 years; however, terms are determined on a case-by-case basis based on each borrower’s ability to repay and carry an interest rate of 3.75%. The EIDL loan may be prepaid by the Company at any time prior to maturity with no prepayment penalties. The proceeds from this loan must be used solely as working capital to alleviate economic injury caused by the COVID-19 pandemic.

On April 21, 2020, SoBeNY received an EIDL loan in the amount of $500,000. The loan bears interest at 3.75% and requires monthly payments of principal and interest of $2,437 beginning April 21, 2022, and is personally guaranteed by a major stockholder. On June 18, 2020, Corphousing received an EIDL loan in the amount of $150,000. The loan bears interest at 3.75% and requires monthly payments of principal and interest of $731 beginning June 18, 2022. On July 25, 2020, SoBeNY received an EIDL loan in the amount of $150,000. The loan bears interest at 3.75% and requires monthly payments of principal and interest of $731 beginning July 25, 2022. Any remaining principal and accrued interest is payable thirty years from the date of the EIDL loan.

The outstanding balance at September 30, 2024 and December 31, 2023, was $782,105 and $786,950, respectively.

Accrued interest at September 30, 2024 and December 31, 2023 was $22,262 and $27,644, respectively, and is included in accounts payable and accrued expenses in the consolidated balance sheets.

Future minimum principal repayments of the SBA - EIDL loans payable are as follows:

Schedule of future minimum principal repayments of the SBA and EIDL loans payable


For the 12 Months Ending September 30,
2025	$	21,314
2026		15,682
2027		16,281
2028		16,902
2029		17,546
Thereafter		694,380
Total	$	782,105

8 - SHORT-TERM BUSINESS FINANCING

The Company has from time to time entered into short-term factoring agreements related to future credit card receipts to fund operations. The Company is required to repay these financings in fixed daily payments until the balances are repaid. Fees associated with this financing have been recognized in interest expense in the accompanying consolidated statement of operations. As of September 30, 2024 and December 31, 2023, the outstanding balance on these merchant cash advances net of unamortized costs was $2,367,103 and $1,115,120, respectively, which are expected to be repaid within twelve months.

In September 2024, the Company has entered into a Factoring and Security Agreement with a factor, in which the Company may receive up to $1,800,000 cash advance in exchange for the sale of eligible accounts receivable with recourse. The Company’s obligations to the factor are collateralized by substantially all of the Company’s assets. The advances for factored receivables are made pursuant to the pricing and terms of the Factoring and Security Agreement. The Company draws down advances against the facility up to 80% of eligible accounts receivables. The Company is required to repay these financings as the receivables are collected. As of September 30, 2024 and December 31, 2023, the outstanding balance was $1,555,000 and 0 zero, respectively, which are expected to be repaid within twelve months.

9 - LOANS PAYABLE

Loans payable consist of the following as of:

Schedule of loans payable
	September 30, 2024			December 31, 2023
Senior Secured Convertible Notes which requires twenty-four equal monthly payments beginning one year after issuance bearing annual interest at a rate of 18%	$	8,946,886		$	-
Note payable to a related party of the current payroll processor due upon demand		2,476,234			-
Original payable of $151,096 with additional net borrowings of $252,954, requires monthly payments of $1,500 until total payments of $404,050 have been made		-			356,012
Original payable of $553,175 with additional net borrowings of $72,237, requires monthly payments of $25,000 until total payments of $625,412 have been made		400,000			400,000
Original payable of $492,180 with additional net borrowings of $620,804 requires monthly payments of $25,000 until total payments of $1,112,984 have been made		865,618			865,618
Original borrowings of $60,000, bears interest at 1% requires no payments until maturity in January 2024		-			60,000
Original amounts due of $195,000, related to services provided by a vendor, requires monthly payments of $10,000 through May 2022, then monthly payments of $25,000 through August 2022 at which time any remaining balance is due		20,000			20,000
Other borrowing		345,373			36,768
Debt discount		(2,144,934	)		-
Less: Current maturities		5,455,252			1,196,916
	$	5,453,925		$	541,482

Future minimum principal repayments of the loans payable are as follows:


For the Twelve Months Ending September 30,
2025	$	5,455,252
2026		3,080,761
2027		2,371,193
2028		1,971
Loans payable	$	10,909,177

10 - LINE OF CREDIT

In February 2019, the Company entered into a line of credit agreement in the amount of $95,000. The line bears interest at prime, which was 8.25% as of September 30, 2024, plus 3.49%, totaling 11.74%. The line matures in February 2029. Outstanding borrowings were $69,975 as of each of September 30, 2024 and December 31, 2023.

11 - RELATED PARTY TRANSACTIONS

On December 20, 2022, the Company, and our former Chairman and Chief Executive Officer, Brian Ferdinand (“Ferdinand”), entered into a note extension and conversion agreement (“December 2022 Extension Agreement”) with Greenle Partners LLC Series Alpha PS (“Greenle Alpha”) and Greenle Partners LLC Series Beta P.S., a Delaware limited liability company (“Greenle Beta” and, together with Greenle Alpha, “Greenle”). Greenle was the purchaser of 15% OID senior secured notes (the “June 2022 Notes”) and warrants to purchase our common stock (“June 2022 Warrants”) under certain securities purchase agreements and loan agreements between us and Greenle, including the Securities Purchase Agreement dated as of June 30 2022, as amended by the letter agreement dated October 20, 2022, and the Loan Agreement dated as of November 23, 2022.

Under the December 2022 Extension Agreement, Greenle agreed to convert from time to time up to $3,000,000 aggregate principal amount of the June 2022 Notes into up to 1,000,000 shares of the Company’s common stock (the “Conversion Shares”) at the conversion price of $3.00 per share prescribed by the June 2022 Notes. Additionally, Greenle agreed that the payment date of certain of the June 2022 Notes in the aggregate principal amount of $1,250,000, maturing on January 30, 2023, would be extended to March 1, 2023. On the date of any such conversion, the Company would be obligated to issue to Greenle a number of credits under our existing revenue share agreements with them equal to fifteen percent (15%) of the principal amount of the June 2022 Notes so converted. As of December 31, 2022, $300,000 of these notes was converted and the entire $3,000,000 of these notes was converted in January 2023. As part of this conversion, Ferdinand contributed to the Company 874,474 shares of common stock owned by him and his affiliates, which in turn, were used by the Company to fund the issuance of the Conversion Shares to Greenle in exchange for the conversion of the debt under the notes, which was maturing within a few months of this contribution. At the time of such contribution by Ferdinand, the market value of the shares of common stock so contributed was approximated $1.5 million.

In April 2024, we secured from Greenle a waiver on the restrictions contained in its financing agreements with our company that prohibit our sale of shares of common stock prior to November 2024 at per-share prices below $5.00 (as may be adjusted for stock splits and similar transactions, the “Trigger Price”). The restriction on sales of our common stock by our company below the Trigger Price terminated on November 6. 2024. This waiver permitted us to sell up to an aggregate of 15 million shares prior to November 2024 at prices below the Trigger Price. In consideration of this waiver, Greenle is entitled to be issued up to an aggregate of 2.8 million shares of our common stock (“Initial Greenle Waiver Shares”) from time to time upon written notice to our company. This waiver was amended in May 2024 to increase number of shares permitted to be sold by our company at prices under the Trigger Price prior to November 2024 to the greater of (i) 30 million shares and (ii) $30 million (based on the gross sale prices of such shares). In consideration of this waiver modification, Greenle is entitled to demand from time to time that we issue an amount of additional shares (the “Additional Greenle Waiver Shares” and collectively with the Initial Greenle Shares and the Greenle Revenue Participation Shares, the “Greenle Shares”) equal to 0.22 shares of common stock for each share of common stock sold by our company through November 6, 2024 in excess of 15 million shares at prices below the Trigger Price. To date, we have been required to issue the Greenle an aggregate of 23,628,324 shares of common stock in connection the foregoing rights and obligations as a result of private placements and underwritten public offerings of our common stock.

On November 17, 2023, the Company entered into a financing agreement with THA Holdings LLC (“THA”), an entity controlled and operated by Ferdinand, pursuant to which the Company agreed to issue to THA an unsecured, advancing term promissory note (the “November 2023 Note”). Under the November 2023 Note, the Company would have been able to borrow up to an aggregate principal amount of $10,000,000 to be funded in increments of $1,000,000 upon the Company’s request by the sale, from time to time, of shares of the Company’s common stock, owned by THA. On December 3, 2023, the Company and THA mutually agreed to cancel the November 2023 Note as a result of the Company’s desire to engage in the Wyndham relationship and its related financing resources. The amount of proceeds, less taxes, resulting from sales of common stock prior to the cancelation in the amount of $311,234 was contributed 100% to the Company by THA. This was recorded as a contribution by the founder in the accompanying consolidated statement of changes in equity.

During the nine months ended September 30, 2024 and year ended December of 2023, we amortized $351,000 and paid $1,350,000, respectively to Ferdinand under the terms of the previously disclosed Guarantee Trust agreement as part of his personal guarantees on the Wyndham agreements and related advances to our company thereunder and other leases. At September 30, 2024 and December 31, 2023, $341,250 and $1,023,750, respectively, of this payment was classified as prepaid. During the three and nine months ended September 30, 2024, $341,250 and $692,250, respectively, was expensed.

In April 2024, the Company and Ferdinand entered into a consulting agreement pursuant to which Ferdinand agreed, among other things, to oversee the day-to-day management of our company’s acquisition and long-term lease acquisition activities and to assist our then newly appointed chief executive officer in his assumption of that role. In consideration for the services provided by Ferdinand, we agreed to pay Ferdinand a monthly consulting fee of $50,000. Pursuant to a subsequent modification of the consulting agreement in May 2024, it was agreed that all amounts payable to Ferdinand under such consulting agreement through its term (approximately $1.8 million) would be satisfied through the issuance of 5,692,600 shares of common stock upon the increase in the number of shares of common stock issuable under our 2022 equity incentive plan to 15,000,000 shares.

In May 2024, in order to provide for available authorized shares to consummate a public offering of shares of common stock, we entered into an exchange agreement (the “May 2024 Exchange Agreement”) with Ferdinand, pursuant to which he relinquished 7,500,000 shares of common stock that he beneficially owned through THA (the “May 2024 Exchange Agreement Shares”) in exchange for a warrant to acquire 7,500,000 shares of our common stock with an exercise price of $0.01 per share (the “May 2024 Exchange Agreement Warrant”). In June 2024, in order to provide for available authorized shares to consummate a private placement in June 2024, we entered into an exchange agreement (the “June 2024 Exchange Agreement”) with Ferdinand, pursuant to which Ferdinand relinquished an aggregate of 11,804,872 shares of common stock that he beneficially owned individually or through THA (the “June 2024 Exchange Agreement Shares”) in exchange for warrants to acquire an aggregate of 11,804,872 shares of our common stock with an exercise price of $0.01 per share (the “June 2024 Exchange Agreement Warrants” and collectively with the May 2024 Exchange Warrants, the “Exchange Warrants”)).

In July 2024, the Company entered into amended and restated promissory notes with THA Family II LLC and other parties affiliated with Ferdinand, which replaced existing promissory notes evidencing amounts loaned to our company to support letters of credit with respect to certain of our hotels. These notes extend the maturity dates by 24 months of up to an aggregate of $3.1 million principal amount currently owed by our company and bear interest at 14% interest, with interest being payable monthly commencing August 1, 2024, and monthly payments evolving into payments of principal and interest in accordance with an amortization schedule commencing seven months from the July 2024 date of the notes. These notes were subsequently converted in the notes sold to investors in our debt and warrant private placement consummated August 2024.

In May 2024, the company sold common stock in an underwritten public offering at $0.25 per share. Elan Blutinger, nonexecutive chairman of the board purchased 400,000 common shares in the offering.

In July 2024, the company sold stock in an underwritten public offering at $0.17 per share. Mr. Blutinger, purchased 294,116 common shares, Patrick McNamee, a former director of our company, purchased 735,294 common shares, Kimberly Schaefer, a director of our company, purchased 117,647 common shares, Leonard Toboroff, a director of our company purchased 147,058 common shares, Robert Arigo, our chief executive officer, purchased 176,470 common shares and Michael James, our chief financial officer, purchased 352,941 common shares in the offering.

In August 2024, the Company issued in a private placement (the “August 2024 Note and Warrants Debt Offering”) 18% senior secured convertible notes (“August 2024 Notes”) and common stock purchase warrants (“August 2024 Warrants”). Mr. Blutinger purchased $100,000 of these securities, Mr. McNamee, purchased $100,000 of these securities, and Mr. James, purchased $20,000 of these securities. The August 2024 Note and Warrants Debt Offering was extended in October 2024 as discussed in Note 19, below.

12 - RISKS AND UNCERTAINTIES

The Company’s financial instruments that are exposed to concentrations of credit risk consist primarily of cash. The Company places its cash with high quality credit institutions. At times, balances may be in excess of the Federal Deposit Insurance Corporation (“FDIC”) insurance limits. All accounts at an insured depository institution are insured by the FDIC up to the standard maximum deposit insurance of $250,000 per institution.

13 - MAJOR SALES CHANNELS

The Company uses third-party sales channels to handle the reservations, collections, and other rental processes for most of the units. These sales channels represented over 85% of total revenue during the nine months ended each of September 30, 2024 and September 30, 2023. The loss of business from one or a combination of the Company’s significant sales channels, or an unexpected deterioration in their financial condition, could adversely affect the Company’s operations.

14 - STOCK OPTIONS, RESTRICTED STOCK UNITS, RIGHTS AND WARRANTS

Options

During the nine months ended September 30, 2024, the Company did not grant any options to purchase shares of common stock under the Company’s 2022 performance equity plan.

The following table summarizes stock option activity for the nine months ended September 30, 2024:

Schedule of stock option activity
	Number of Shares			Weighted Average Exercise Price		Weighted Average Remaining Contractual Life (Years)		Aggregate Intrinsic Value
Outstanding at December 31, 2023		1,746,885		$	2.86		9.0	$	5,427,118
Granted		-			-
Exercised		-			-
Expired		-			-
Forfeited		(1,162,914	)		2.80
Outstanding at September 30, 2024		583,971		$	2.99		8.5	$	-
Exercisable at September 30, 2024		300,980		$	3.34		8.5	$	-

The Company is expensing these stock option awards on a straight-line basis over the requisite service period. The Company recognized stock option expense of $63,613 and $362,695 for the three and nine months ended September 30, 2024. The Company recognized stock option expense of $146,707 and $519,094 for the three and nine months ended September 30, 2023, respectively. Unamortized option expense as of September 30, 2024, for all options outstanding amounted to $477,058. These costs are expected to be recognized over a weighted average period of 1.0 years.

	Number of Shares			Weighted Average Exercise Price		Weighted Average Remaining Contractual Life (Years)		Aggregate Intrinsic Value
Outstanding at December 31, 2022		1,910,484		$	2.55		9.8	$	-
Granted		25,000			1.74
Exercised		-			-
Expired		-			-
Forfeited		(285,721	)		2.03
Outstanding at September 30, 2023		1,649,763		$	2.63		9.1	$	3,347,983
Exercisable at September 30, 2023		458,254		$	2.87		9.0	$	819,994

The Company is expensing these stock option awards on a straight-line basis over the requisite service period. The Company recognized stock option expense of $146,707 and $519,094 for the three and nine months ended September 30, 2023. Unamortized option expense as of September 30, 2023, for all options outstanding amounted to $1,230,597. These costs are expected to be recognized over a weighted average period of 1.8 years.

A summary of the status of the Company’s nonvested options as of September 30, 2024, is presented below:


	Number of Nonvested Options			Weighted Average Grant Date Fair Value
Nonvested options at December 31, 2023		1,257,590		$	2.93
Granted		-			-
Forfeited		(843,276	)		2.93
Vested		(131,323	)	$	3.57
Nonvested options at September 30, 2024		282,991		$	2.60

Restricted Stock

In March 2024, the Company granted 100,000 restricted shares to certain employees under the Company’s 2022 performance equity plan. The restricted shares were vested either immediately or over 3.00 years. The aggregated grant date fair value of all these restricted shares was $220,000.

During the three months ended September 2024, we entered into agreements to issue an aggregate of up to 3,072,000 restricted shares with certain officers and directors as set forth in the table immediately below, with the issuances of such shares having been subject to an increase in our authorized capital stock and shares available under our 2022 equity incentive plan, which were effected in July 8, 2024, and the shares thereafter issued.


Directors and Officers	Number of shares
Elan Blutinger		1,000,000
Patrick McNamee		400,000
Robert Arigo		500,000
Michael James		1,172,000
Total		3,072,000

As of September 30, 2024, there was $166,500 of unrecognized compensation cost related to unvested restricted shares.

Rights and Warrants

On February 16, 2024, the Company entered into a letter agreement with Greenle Alpha and Greenle Beta as holders of certain warrants to purchase the Company’s common stock (“Warrants”), which were issued in private placements from time to time as previously reported by the Company. Under the terms of the letter agreement, in consideration of the agreement of Greenle to exercise 50% of the Warrants originally issued by the Company on November 6, 2023 (the “November Warrants”) within three (3) business days of the date of the letter agreement and 50% of the November Warrants on or prior to February 23, 2024, the exercise price of the November Warrants has been reduced from $4.00 to $2.00 and the exercise price of all of the other Warrants held by Greenle has been reduced from $5.00 and $5.50, as applicable, to $2.50. Except as described above, the Warrants remain unchanged.

On May 23, 2024, the exercise price of the Warrants held by Greenle have been reduced from $2.50 to $0.25. Except as described above, the Warrants remain unchanged.

On May 23, 2024, the Company issued warrants to purchase up to 2,104,500 shares of the Company’s common stock to the underwriter of the public offering, Roth LLC (“Roth”), with an exercise price of $0.275. These warrants are exercisable for five years and expire in May 2029.

On June 27, 2024, in connection with a private placement of common stock, the Company issued rights to purchase up to 8,000,000 shares of the Company’s common stock with an exercise price of $0.25. These rights are exercisable subject to downward price adjustments for certain issuance by the Company below $0.25 during the period commencing nine months after the closing and ending on the 18-month anniversary of the closing. The Purchaser was granted customary registration rights. All of these rights were subsequently terminated as part of the holder’s election to convert the purchase price-value of the shares purchased by it into notes and warrants in our August 2024 Note and Warrant Debt Placement.

On June 27, 2024, the Company issued warrants to purchase up to 480,000 shares of the Company’s common stock to the agent for the private placement offering, Alexander Capital, L.P. (“Alexander”), with an exercise price of $0.275. These warrants are exercisable for five years and expire in June 2029.

On July 15, 2024, the Company issued warrants to purchase up to 1,800,000 shares of the Company’s common stock to the underwriter of the public offering, Alexander, with an exercise price of $0.204. These warrants are exercisable for five years and expire in July 2029.

On July 17, 2024, the Company issued warrants to purchase up to 270,000 shares of the Company’s common stock to the underwriter of the exercise of the overallotment from the July 15, 2024 public offering, Alexander, with an exercise price of $0.204. These warrants are exercisable for five years and expire in July 2029.

On July 30, 2024, the Company issued warrants to purchase up to 694,400 shares of the Company’s common stock to the underwriter of the public offering, Alexander, with an exercise price of $0.18. These warrants are exercisable for five years and expire in July 2029.

On August 30, 2024, the Company issued warrants to purchase up to 2,942,884 shares of the Company’s common stock to the agent for the August debt offering, Alexander, with an exercise price of $0.1008. These warrants are exercisable for five years and expire in August 2029.

The following tables summarizes warrant and right activity for the nine months ended September 30, 2024 and September 30, 2023:


	Number of Shares			Weighted Average Exercise Price		Weighted Average Remaining Contractual Life (Years)		Aggregate Intrinsic Value
Outstanding at December 31, 2023		5,442,000		$	4.68		4.7	$	7,038,940
Granted		147,389,841			0.09
Exercised		(13,343,119	)		0.37
Expired		-			-
Forfeited		(13,333,333	)		0.15
Outstanding at September 30, 2024		126,155,389		$	0.12		4.9	$	548,470
Exercisable at September 30, 2024		126,155,389		$	0.01		4.9	$	548,470

During the nine months ended September 30, 2024, 13,343,119 shares were issued from the exercise of warrants.

	Number of Shares			Weighted Average Exercise Price		Weighted Average Remaining Contractual Life (Years)		Aggregate Intrinsic Value
Outstanding at December 31, 2022		3,018,250		$	2.64		4.8	$	-
Granted		1,500,000			2.75
Exercised		(3,416,250	)		2.24
Expired		-			-
Forfeited		-			-
Outstanding at September 30, 2023		1,102,000		$	4.02		4.1	$	710,520
Exercisable at September 30, 2023		1,102,000		$	4.02		4.1	$	710,520

During the nine months ended September 30, 2023, 3,416,250 shares were issued from the exercise of warrants.

15 - Revenue Share Exchange

Under the terms of agreements entered into with Greenle, we were obligated to make quarterly payments (each a “Revenue Share”) to Greenle based on certain percentages of the revenues generated by certain of our leased properties during the term of the applicable leases (including any extensions thereof).

As previously reported, on February 13, 2023, the Company and Greenle entered into an agreement pursuant to which certain Revenue Share payments for 2023 were converted into an obligation to issue shares of our common stock to Greenle in the amounts prescribed therein (the “February 2023 Revenue Share Agreement”), with all future Revenue Share obligations accruing on and after January 1, 2024 remaining in place.

On May 21, 2023, we entered into a further agreement with Greenle (the “May 2023 Revenue Share Exchange Agreement”) pursuant to which the right to receive any and all Revenue Share with respect to any property or operations of the Company has been terminated in its entirety for 2024 and forever thereafter, and Greenle shall not be entitled to receive any payment therefor (other than the remaining periodic share issuances and cash payments under the February 2023 Revenue Share Agreement, all of which shall be completed by January 1, 2024).

In consideration for the termination of the Revenue Share for 2024 and thereafter, we agreed to issue to Greenle, from time to time, in each case, at Greenle’s election upon 61 days’ prior written notice delivered to us on and after September 1, 2023 and before August 31, 2028, up to an aggregate of 6,740,000 shares of our common stock (the “Agreement Shares”). As a result of this transaction, we recorded interest expense of $28,174,148 in the second quarter of 2023.

On February 12, 2024, the Company issued 36,179 shares of the Company’s common stock and 578,071 shares of the Company’s common stock to Greenle Beta and Greenle Alpha, respectively, in connection with the February 2023 Revenue Share Agreement.

In May and June 2024, Greenle elected to receive 6,740,000 shares from the May 2023 Revenue Share Exchange Agreement.

In September 2024, Greenle elected to receive 300,000 shares from the August 2023 Revenue Share Exchange Agreement.

In September 2024, Greenle elected to receive 13,900,000 shares from the May 2024 Revenue Share Exchange Agreement.

16 - WYNDHAM AGREEMENTS

The Franchise Agreements had initial terms of 15 to 20 years and required Wyndham to provide financial, sales and operational-related support with respect to the Initial Properties. The Franchise Agreements contained customary representations, warranties, covenants, indemnification, liquidated damages and other terms for transactions of a similar nature, including customary membership and marketing fees and if applicable, booking fees.

Pursuant to the Franchise Agreements, Wyndham was to provide capital through development advance notes (“Development Incentive Advances”) to the Company. Consistent with market practice, such Development Incentive Advances were to be evidenced by certain promissory notes with customary amortization and repayment terms. The Development Incentive Advances were not repayable if the terms of the agreement were met, including but not limited to the length of the agreement. In conjunction with the Company’s entry into the Franchise Agreements, the Company also paid a one-time, initial, nonrefundable franchise fee to Wyndham.

In May 2024, in light of discussions between our Company and Wyndham on the initial and projected future performance of our properties within the franchise relationships, we commenced the return of all property listings to our control, terminating our franchise relationship with Wyndham. The Company de-platformed these properties from Wyndham’s systems and moved each hotel listing back under the Company’s control. As part of the Company’s previously announced imitative to add industry depth and breadth to its board of directors and management to help evolve operations, the Company’s enhanced board and executive teams have reviewed all existing operational relationships. Given the Company’s operating model, it was concluded that over the long term the Company would be better served operationally and financially by operating the hotels as an independent operator.

As of September 30, 2024, we recorded the Development Incentive Advances made to us by Wyndham as a current liability on our Condensed Consolidated Balance Sheets and recorded an additional charge of $2.6 million for all of the costs and potential additional liabilities related to this transition in our Condensed Consolidated Statement of Operations for the nine months ended September 30, 2024.

In May 2024, Wyndham filed a complaint against the Company in the Superior Court of New Jersey Law Division: Morris County for damages in the principal sum of $18,330,471 due and owing together with interest, attorneys’ fees and cost of suit. We are defending this suit and will raise all available defenses and counterclaims available to the Company.

17 - REDEEMABLE PREFERRED STOCK

On October 26, 2023, the Company issued 280,000 shares of 13% Series A Cumulative Redeemable Preferred Stock (“Series A Preferred Stock”) at a stated value of $25 per share. Subsequently as part of the underwriters’ overallotment option, an additional 14,144 shares were sold on December 5, 2023. The Company realized aggregate net proceeds of $5,775,596 in connection with the issuances of these shares.

As part of the terms of the Series A Preferred Stock offering, if a change of control or delisting event occurs prior to October 26, 2024, the Company will be required to redeem the Series A Preferred Stock plus an amount equal to any accrued and unpaid interest. Under FASB Topic D-98, this redemption provision requires the classification of this security outside of permanent equity. The Company has classified this security as Mezzanine Equity on its September 30, 2024 Balance Sheet and expects to do so until October 26, 2024.

During the three and nine months ended September 30, 2024, the Company paid $238,992 and $477,984 in aggregate dividends on its outstanding Series A Preferred Stock.

18 - EQUITY TRANSACTIONS

The tables below outline equity issuances not related to the conversion from an LLC to C Corp, the initial public offering the exercise of Options or Warrants, the conversion of debt into equity or the issuance of shares pursuant to revenue share agreements.

For the nine months ended September 30, 2024

Schedule of equity transactions
Description	General Ledger Account	Date	Shares		Price		Value
Non-employee loan payment	Loan payable	1/25/2024		20,008	$	4.57	$	91,437
Non-employee commission expense	Commission Expense	1/25/2024		10,079	$	4.57	$	46,061
Non-employee investor relations expense	Investor Relations Expense	1/30/2024		59,784	$	4.33	$	258,865
Non-employee director compensation	Non-Cash Issuance of Common Stock for Director Compensation Expenses	2/8/2024		197,800	$	2.92	$	577,576
Employee Compensation	Non-Cash Issuance of Common Stock for Compensation Expenses	3/15/2024		25,000	$	2.22	$	55,500
Non-employee director compensation	Non-Cash Issuance of Common Stock for Director Compensation Expenses	5/3/2024		980,628	$	0.84	$	823,728
Non-employee commission expense	Commission Expense	5/9/2024		36,887	$	0.71	$	26,085
Non-employee investor relations expense	Investor Relations Expense	7/8/2024		600,000	$	0.185	$	111,000
Non-employee director Compensation	Non-Cash Issuance of Common Stock for Director Compensation Expense	9/16/2024		3,067,705	$	0.072	$	220,875
Employee Compensation	Non-Cash Issuance of Common Stock for Compensation Expenses	9/16/2024		1,485,504	$	0.072	$	106,956
Subtotal				6,483,395			$	2,318,083

For the nine months ended September 30, 2023

Description	General Ledger Account	Date	Shares		Price		Value
Non-employee Board members pursuant to related comp. policy	Non-Cash Stock Compensation Expense	3/1/2023		166,665	$	2.58	$	429,996
In connection with certain property finders’ fee arrangements	Non-Cash Issuance of Common Stock for Operating Expenses	3/17/2023		136,887	$	2.45	$	335,373
In connection with a consulting agreement	Non-Cash Issuance of Common Stock for Operating Expenses	2/10/2023		196,994	$	1.85	$	364,439
In connection with a marketing agreement	Non-Cash Issuance of Common Stock for Operating Expenses	2/10/2023		100,000	$	1.85	$	185,000
Non-employee Board members pursuant to related comp policy	Non-Cash Stock Compensation Expenses	8/16/2023		91,525	$	2.85	$	260,846
In connection with certain property finders’ fee arrangements	Non-Cash Issuance of Common Stock for Operating Expenses	8/21/2023		45,833	$	2.77	$	126,957
Advisory and legal services	Non-Cash Issuance of Common Stock for Operating Expenses	8/21/2023		9,250	$	2.85	$	26,363
Acorn Management Partners in connection with advisory services	Non-Cash Issuance of Common Stock for Operating Expenses	8/28/2023		8,741	$	2.89	$	25,261
Elizabeth Brown in connection with her termination of employment	Non-Cash Issuance of Common Stock for Operating Expenses	8/28/2023		50,000	$	3.11	$	155,500
Subtotal				805,895			$	1,909,735

19 - SUBSEQUENT EVENTS

Capital Raises and Default Cures

In October 20204, the Noteholders extended the private placement (the “August 2024 Note and Warrants Debt Offering”) 18% senior secured convertible notes (“August 2024 Notes”) and common stock purchase warrants (“August 2024 Warrants”) raising in October and November 2024, gross proceeds of $1,500,000, after fees the Company netted approximately $1,350,000.

The August 2024 Notes bear interest at 18%, are secured by substantially all of the assets of the Company under the terms of a guarantee and security agreement dated as of August 13, 2024 (“Security Agreement”), and were sold to certain accredited investors in a private offering exempt from registration under the Securities Act of 1933, as amended (the “Securities Act”). The principal of the Augst 2024 Notes shall be repaid in twenty-four (24) equal monthly installments commencing on August 13, 2025 and continuing on the same day of each month thereafter until the principal amount is paid in full, with all principal and interest due thereon to be paid on or prior to August 13, 2027, unless the Notes are previously converted into common stock or preferred stock as described below. The August 2024 Notes are senior debt of the Company, and subject to the terms and conditions of the Notes, the Company shall not issue any debt senior to the August 204 Notes while any August 2024 Notes remain outstanding without the consent of a majority of the then outstanding principal amount of the Notes. The August 2024 Notes were convertible initially into that number of shares of common stock determined by dividing the principal amount of the Note purchased by the purchaser by 110% of the average VWAP of the common stock for the three consecutive trading days immediately following the date the Company filed its Quarterly Report on Form 10-Q for the six months ended June 30, 2024, not to exceed $0.15 (“Three-Day VWAP”). The Three-Day VWAP was set at $0.08404. As a result of opening the offering, and curing of any existing defaults under the August 2024 Notes, the conversion price of the August 2024 Notes were reset to $0.06;provided, that in the event the VWAP of the common stock for the three trading days immediately following the date of our pending reverse stock split is implemented (and thereafter the effectiveness of the registration statement to be filed to register the resale of the shares of common stock underlying the August 2024 Notes and August 2024 Warrants) is lower than the then-current split-adjusted conversion price, the conversion price shall be reset to such three-day VWAP; provided, that such exercise price (the “VWAP Adjusted Conversion Price”) shall not be less than $0.05 (as adjusted for the Reverse Stock Split). For example, if a 1-for-70 split is effected, the per-share conversion price shall not be adjusted to less than $3.50.

The August 2024 Warrants have a five-year term from the date of the initial closing of the Debt Placement and shall become exercisable commencing on the date of the earliest to occur of (a) shareholder approval of the Reverse Split (as defined below) and the Nasdaq Compliance Waiver (as defined below) and (b) the 91^st day after the initial closing of the Debt Placement. The August 2024 Warrants initially entitled the purchaser to purchase up to that number of shares of common stock determined by dividing the principal amount of the Note purchased by the purchaser by 110% of the average VWAP of the common stock for the three consecutive trading days immediately following the date the Company filed its Quarterly Report on Form 10-Q for the six months ended June 30, 2024, not to exceed $0.15 (“Three-Day VWAP”). The Three-Day VWAP was set at $0.08404. As a result of opening the offering, and curing of any existing defaults under the August 2024 Notes, the exercise price of the warrants were reset at $0.06;provided, that in the event the VWAP of the common stock for the three trading days immediately following the date of our pending reverse stock split is implemented (and thereafter the effectiveness of the registration statement to be filed to register the resale of the shares of common stock underlying the August 2024 Notes and August 2024 Warrants) is lower than the then-current split-adjusted exercise price, the exercise price shall be reset to such three-day VWAP; provided, that such exercise price (the “VWAP Adjusted Exercise Price”) shall not be less than $0.05 (as adjusted for the Reverse Stock Split). For example, if a 1-for-70 split is effected, the per-share exercise price shall not be adjusted to less than $3.50.

Nasdaq Meeting regarding Notice of Delisting or Failure to Satisfy a Continued Listing Rule or Standard; Transfer of Listing.

On October 15, 2025 the Company had a hearing with The Nasdaq Stock Market LLC (“Nasdaq”) panel, regarding the delisting notifications. On November 4, 2024 (as amended on November 6, 2024), the Panel granted the Company’s request for continued listing on the Exchange, subject to the following: On or before November 12, 2024, the Company shall obtain shareholder approval for a reverse split at a ration that will allow the Company to maintain long-term compliance with the Bid Price Rule; 2. On or before November 21, 2024, the Company shall demonstrate compliance with Listing Rule 5550(a)(2). It is a requirement during the exception period that the Company provide prompt notification of any significant events that occur during this time that may affect the Company’s compliance with Nasdaq requirements. Stockholder approval of the reverse stock split was obtained on November 12, 2024 at a duly called and held special meeting of stockholders and the reverse stock split will be effected on November 20, 2024.

Preferred Stock

On October 26, 2024 the Company achieved the terms required for the Preferred Stock to be classified as permanent equity under FASB Topic D-98: Classification and Measurement of Redeemable Securities.

Reverse Stock Split

On November 12, 2024, LuxUrban Hotels Inc. (the “Company”) held a special meeting of stockholders (the “Special Meeting”). At the Special Meeting, the Company’s stockholders considered two proposals: (i) a proposal (the “Reverse Stock Split Proposal”) to amend the Company’s Amended and Restated Certificate of Incorporation (the “Charter”) to effect a reverse stock split (the “Reverse Stock Split”) of the Company’s outstanding common stock by a ratio of not less than one-for-thirty and not more than one-for-seventy, with the exact number to be set at a whole number within this range to be determined by the Company’s board of directors, in consultation with the Company’s investment banking advisors, in its sole discretion and to authorize our board of directors to implement the reverse stock split by filing an amendment to the Charter; and (ii) a proposal (the “Nasdaq Compliance Proposal”) to approve, for purposes of complying with Nasdaq Stock Market LLC Listing Rule 5635, the issuance of shares of the Company’s common stock upon conversion of certain outstanding Company convertible promissory notes and exercise of certain outstanding Company warrants in excess of the 19.99% share limitation contained in such securities. Both proposals were approved. Unless otherwise indicated, the information and data presented in this Report does not give effect to the reverse stock split, which shall be effected on November 20, 2024.

Proposed Joint Venture

We have entered into a non-binding letter of intent with Lockwood Development Partners LLC, a company engaged in real estate development, management, and finance, and The Bright Hospitality Management, LLC, a hospitality management company and provider of technology-based hotel management platforms, proposing to establish a joint venture (“JV”) focused on hotel services and operations. If consummated, we believe that this strategic initiative would provide our company with the opportunity to broaden market impact and deliver an elevated guest experience. If consummated, the joint venture would initially focus on two LuxUrban properties, with the parties to consider expansion of the relationship to include additional LuxUrban hotels based on success of the pilot initiative. The collaboration would leverage Lockwood’s established presence in hotel development and Bright’s innovative hospitality technology to create a unique guest experience and optimize operational efficiencies. It is proposed that in connection with the pilot JV, Lockwood would initially invest approximately $7 million to address certain obligations in arrears with respect to, and enhance facilities in, the two JV pilot hotels, with potential additional investments of up to $35 million if all existing LuxUrban hotels are later added to the JV structure. The JV would focus on rejuvenating the initial two JV properties, incorporating advanced technologies and amenities designed to improve operational performance and guest satisfaction using Bright’s platform. This platform features AI-driven management tools intended to enhance guest satisfaction and streamline hotel operations. The JV, if launched, will introduce Lockwood’s Vitality brand to the New York City market, enhancing customer engagement through a loyalty program and cohesive branding strategy. The nonbinding letter of intent contemplates that the definitive agreements will outline a pathway for expanding the JV to include additional LuxUrban properties, contingent upon achieving initial success and obtaining necessary consents and approvals, including the approval of our stockholders and noteholders of LuxUrban and the landlords for any additional properties.

The initial pilot JV will require approval of the landlords for the pilot hotels, approval of certain of LuxUrban’s debt holders (which has been obtained), and the negotiation and execution of by the parties of definitive agreements governing the JV. While the companies have undertaken to work closely together to secure all consents and approvals and finalize the definitive agreements, there can be no certainty that these will be obtained and executed. There are numerous risks and factors that could result in the terms of the JV being modified or not being consummated or commercially launched at all. We will disclose final terms of the definitive agreements if and when same are executed.

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

When we refer to “we,” “us,” “our,” “LUXH,” or “the Company,” we mean LuxUrban Hotels Inc. and its consolidated subsidiaries. You should read the following discussion and analysis of our financial condition and results of operations in conjunction with our consolidated financial statements and the related notes included elsewhere in this quarterly report on Form 10-Q (“Quarterly Report”). Some of the comments we make in this section are forward-looking statements within the meaning of the federal securities laws. For a complete discussion of forward-looking statements, see the section below entitled “Special Note Regarding Forward-Looking Statements.” Certain factors that could cause actual results or events to differ materially from those the Company anticipates or projects are described in “Item 1A. Risk Factors” of the Company’s Annual Report on Form 10-K for the year ended December 31, 2023 (“Annual Report”).

On August 20, 2024, the Company filed a Form 10-Q/A for the period ended March 31, 2024, with the Securities and Exchange Commission that restated the Form 10-Q for the same period previously filed on May 13, 2024. The financial information set forth herein gives effect to this restatement. The stockholders of the Company approved a 1-for-70 reverse stock split that will be effected on November 20, 2024. The information and data presented in this Report does not give effect to the reverse stock split.

Special Note Regarding Forward-Looking Statements

This Quarterly Report contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 (set forth in Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). The statements contained in this Quarterly Report that are not purely historical are forward-looking statements. Forward-looking statements include, but are not limited to, statements regarding expectations, hopes, beliefs, intentions or strategies regarding the future. In addition, any statements that refer to projections, forecasts or other characterizations of future events or circumstances, including any underlying assumptions, are forward-looking statements. The words “anticipates,” “believes,” “continues,” “could,” “estimates,” “expects,” “intends,” “may,” “might,” “plans,” “possible,” “potential,” “predicts,” “projects,” “should,” “would” and similar expressions may identify forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking. Forward-looking statements in this Quarterly Report may include, for example, statements about:

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our ability to secure equity or debt capital resources as needed to stabilize our business and continue our expansion;

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the potential effects on our business from pandemics, such as those experienced during the COVID-19;

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the potential effects of a challenging economy, for example, on the demand for vacation travel accommodations such as ours;

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the ability of our short-stay accommodation offerings to achieve and sustain market acceptance across multiple cities throughout the United States and internationally;

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the impact of increased competition;

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the need to geographically centralize principal operations.

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our efforts to identify, recruit and retain qualified officers, key employees, and directors possessing experience in the hotel and online travel services industries;

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our ability to service our existing indebtedness and Series A Preferred Stock dividend and to obtain additional financing, including through the issuance of equity and debt, when and as needed on commercially reasonable terms;

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our ability to protect our intellectual property;

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our ability to complete strategic acquisitions, including joint ventures;

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the need to obtain uninterrupted service from the third-party service providers we rely on for material aspects of our operations, including payment processing, data collection and security, online reservations, and booking and other technology services;

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the effects of employment, labor union, and customer related litigations and disputes that may arise from time to time in the course of our operations and our efforts to minimize and resolve same;

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the liquidity and trading of our securities;

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regulatory and operational risks;

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our estimates regarding expenses, future revenue, capital requirements and needs for additional financing; and

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the time during which we will be an Emerging Growth Company (“EGC”) under the Jumpstart Our Business Startups Act of 2012, or JOBS Act.

The forward-looking statements contained in this Quarterly Report are based on current expectations and beliefs concerning future developments and their potential effects on us. There can be no assurance that future developments will be those that have been anticipated. These forward-looking statements involve a number of risks, uncertainties (some of which are beyond our control) or other assumptions that may cause actual results or performance to be materially different from those expressed or implied by these forward-looking statements. These risks and uncertainties include, but are not limited to, those risk factors described in “Item 1A. Risk Factors” of our Annual Report, elsewhere in this Form 10-Q and any updates to those factors as set forth in this and subsequent Quarterly Reports on Form 10-Q or other public filings with the SEC. Should one or more of these risks or uncertainties materialize, or should any of our assumptions prove incorrect, actual results may vary in material respects from those projected in these forward-looking statements.

See Item 1A. “Risk Factors” within our Annual Report for further discussion of these risks, as well as additional risks and uncertainties that could cause actual results or events to differ materially from those described in the Company’s forward-looking statements. Given these risks and uncertainties, readers are cautioned not to place undue reliance on such statements, which speak only as of the date of this Quarterly Report. The Company undertakes no obligation to publicly release any revisions to these forward-looking statements that may be made to reflect events or circumstances after the date of this Quarterly Report.

Overview

We lease entire existing hotels on a long-term basis and rent out hotel rooms in the properties we lease. During 2024, we have engaged in a sweeping program to improve our company’s management and operations, which we call “LuxUrban 2.0.” These efforts have included adding hotel and financing veterans throughout our management team and board of directors, the elimination from our operations of non-performing hotels properties, and initiatives to reduce operating overhead. Although continued material effort is required, as our company operates in the third quarter and enters the fourth quarter of 2024, we believe LuxUrban 2.0 is beginning to produce the intended benefits. We also continue to explore capital raising transactions, as well as strategic initiatives to improve the company, including potential joint ventures and other transactions, although there can be no certainty that any such transactions will occur.

We currently have a portfolio of nine hotel rooms in New York, through long-term lease agreements and manage these hotels directly. Our revenues are generated through the rental of rooms to guests and through ancillary services such as cancellable room rate fees, resort fees, late and early check-in and check-out fees, baggage fees, parking fees, grab and go food service fees, and upgrade fees. As of the date of this Report, we have 996 hotel rooms available for rent through our portfolio. We have been reducing our domestic operations and U.S.-based portfolio of available hotel rooms over the past nine months, focusing only on properties that we believe can generate on positive cash flow.

We strive to improve operational efficiencies by leveraging proprietary technology to identify, lease, manage, and market globally the hotel space we lease to business and vacation travelers through our online portal and third-party sales and distribution channels. Our top three sales channels represented more than 85% of revenue during the nine months ended September 30, 2024 and more than 85% of revenue during the nine months ended September 30, 2023.

Our company has been engaged in a dedicated effort to enhance our management and operations teams through the recruitment of talented directors and officers who have meaningful and broad experience in the hotel and online travel services industries, as well as business development expertise. These efforts have included the recently announced additions of Elan Blutinger and Kim Schaefer, hotel and travel technology veterans, to our board of directors. Robert Arigo was appointed as chief executive officer, bringing to us extensive experience from the hotel industry. Michael James was appointed as chief financial officer, bringing to us extensive financial experience. We are continuing the efforts to deepen management and operational experience across all areas of our company through active recruitment of new personnel and the assignment of existing management personnel to areas in which their expertise can be focused.

General

We have been actively refining our portfolio of hotels that provide short-term accommodations for guests at average nightly and occupancy rates that will exceed unit operating costs. We target business and vacation travelers under our consumer brand LuxUrban and we market our hotel properties primarily through numerous third-party online travel agency (“OTA”) channels and our own listing platforms. See Note 13 to our Financial Statements included in this Report.

Many of the hotels that we lease are hotels that were shuttered or underutilized as a result of the global pandemic. Other properties that we lease were either poorly managed prior to our acquisition, which caused landlords to seek a more stable tenant, or became attainable when LuxUrban provided landlords with more desirable long-term lease terms and prospects than other potential tenants.

During 2024 we have been modifying our portfolio of hotels towards the goal of achieving positive cash flow from our properties. To this end, the Company has recently exited several hotels that had a history of negative cash flow. Our main focus is currently on the New York hotel market.

In prior quarters, including the third quarter of 2024, we did not generate sufficient cash to pay our operating expenses. As a result, we were required to go to the capital markets in May, June, July and August 2024 to raise capital through the sale of equity and debt in order to continue operations. At the same time, we experienced significant decline in our stock price, making these capital raises relatively more expensive and dilutive. Legacy operations and results have resulted in the accumulation of significant liabilities. While we believe we are close to achieving positive cash flow on a monthly basis from going forward operations, legacy liabilities will continue to place significant strains on our company and will require us to secure additional capital funding, continue to engage in material cost cutting efforts, and continue to take measures to focus and improve our operational efficiencies. If we are unable to continue improvements to our business and operations while also securing additional financings, our ability to continue as a going concern is in doubt. Potential financings could continue to include materially dilutive equity financings and debt financings. There can be no assurance then necessary capital financings will be available to us on commercially reasonable terms or at all.

The Company anticipates that the fourth quarter will have a positive impact on the Company’s overall operating results and conditions, as the New York hotel market is historically strongest during the fourth quarter and the Company anticipates being able to generate revenues at higher daily room rates.

Property Summary

We enter into triple net leases in which we are responsible for all of the costs on the property outside of exterior structural maintenance. As of September 30, 2024, we leased eight (8) properties with 996 units available for rent. In March 2024 through September of 2024, we surrendered three of these hotels, based on our evaluation that such properties (a) had relatively poor performance, (b) presented suboptimal size and scale, and (c) are of general quality that over time could present risks to our company. Although we have been able to negotiate terms for the surrender of certain of our units, the surrender of these properties have and could continue to expose the Company to potential claims by landlords.

Our portfolio of properties as of September 30, 2024 (as adjusted for the surrender of certain properties mentioned above) was as follows:

Property

# of Units

Property Type

Lease Term

Lease
Remaining at 9/30/24
(years)

Extension
Option
(remaining at 9/30/24)

Annual
Escalation

Date
Commenced

Blakely: 136 W 55th St, New York, NY 10105

117

Licensed hotel

15-year

12.3

10-year

11/1/2021

Herald: 71 W 35th St, New York, NY 10001

168

Licensed hotel

15-year

12.9

None

6/2/2022

Tuscany: 120 E 39^thSt., New York, NY 10016

125

Licensed hotel

15-year

13.5

10-year

1/1/2023

Hotel 57: 2869 130 E 57^thSt., New York, NY 10022

216

Licensed hotel

15-year

14.0

10-year

7/1/2023

Condor: 56 Franklin Ave, Brooklyn, NY 11205

Licensed hotel

15-year

14.2

10-year

9/1/2023

BeHome: 56 765 8^thAve, New York, NY 10036

Licensed hotel

25-year

24.0

None

7/1/2023

Hotel 27: 62 Madison Ave, New York, NY 10016

Licensed hotel

15-year

14.3

10-year

11/1/2023

Washington: 8 Albany Street, New York, NY 10006

217

Licensed hotel

15.2-year

13.4

None

9/20/2022

Weighted Avg.

Operating Units as of 9/30/2024⁽¹⁾

996

15.5

13.7

5.7

2.7%

Due to the triple-net structure of our leases, we are typically responsible for the interior maintenance of our properties, and the landlord is responsible for the exterior maintenance and roof.

As a matter of course, from time to time we become, and are currently, involved in disputes with landlords for certain hotel properties. The complexity of each lease for each of our hotels requires us to be diligent with respect to the terms of each lease, including deposit requirements, deliverables, and management and maintenance terms, among other terms and covenants. A dispute under a lease can range from minor issues to issues that could give rise to claims of default by us or the landlord under the lease. Currently, we have defaults across certain properties totaling 719 keys, all of which we believe are in the process of being cured. In the event we are unable to cure our default under a lease, an event of default could ultimately be declared by the landlord thereunder, with the landlord then having remedies that include the right to terminate the lease. Where landlords have breached and have not cured, we may be required to litigate to protect our rights under one or more leases, which could divert management attention from our regular operations and could be costly to our company without any guarantee of success in the action.

Our Business Strategy

When we lease properties, we typically do so with either a refundable security deposit, refundable letter of credit, or both. In most cases, we get a period of “free rent” in which we “make ready” the property. Our make-ready efforts include, but are not limited to, minor repairs or property updates, hiring appropriate property-level staff, installation of utility, Wi-Fi, Internet and cable services, and listing the property on the OTA channels we utilize. We anticipate that in the near future, we will also utilize surety bonds for the funding of lease deposit requirements.

We lease entire properties, which could include food service, gyms, or store fronts. We currently, and in the future plan to, in most cases, sublease food services and hotel-based store fronts to generate additional income. We believe these items are noncore to our operations.

Our average deposits (including letters of credit) by city as of September 30, 2024, as adjusted for the surrender of certain properties in the nine months ended September 30, 2024 (as discussed above), were as follows:

Location	Miami Beach		New York		Total
Units		0		996		996
Deposit	$	550,000	$	16,464,123	$	17,014,123
Per Unit	$	0	$	16,530	$	17,082

Revenue Management

We use third-party data science and algorithms to manage revenue and create dynamic pricing for our accommodation units. Pricing changes can occur multiple times a day based on revenue momentum or lack thereof. We utilize the technology to both maximize occupancy rates through attractive pricing and increase cash flow in advance of potential guest stays.

Property Operations

When we lease a new property, we typically streamline operations from the manner in which the property was managed by the prior operator by taking numerous measures, including but not limited to:

●

Reduction of staffing. Legacy properties we lease often have staffing at levels higher than we typically operate our properties. In addition to paring staff to ensure efficient operation, we eliminate staffing for areas we do not plan to operate initially or at all, including in hotel-based restaurants, bars, and workout facilities.

●

Hiring quality general manager (or GM). We believe that our operational success is partially related to empowering our employees to make decisions and solve guest concerns. This begins with a quality and experienced GM with a background in hospitality.

●

Continual cost-benefit analysis. Our lead operational staff have been trained to continuously calculate cost benefit in our operations. Specifically, we are constantly reviewing the return on requested investment capital and the related payback. We do this both at the corporate level as well as the operational level. For example, during lower periods of occupancy, we may delay certain maintenance items as during these periods we can remove these units from inventory for a more prolonged period without experiencing any impact to revenues or the guest experience.

Unit Economics

We estimate that the property-level break-even rate for total revenue per available room (or TRevPAR) for our portfolio as of September 30, 2024, was between $160 to $180 a night. We define TRevPAR as total revenue received by our company inclusive of room rental rates, ancillary fees (which include but are not limited to resort fees, late/early check-in, baggage fees, parking fees paid to us, and upgrade fees), cancellation fees, taxes (including other pass-through expenses) and other miscellaneous income received by us, divided by the average available rooms for rent during a given period.

The following table shows historical occupancy and TRevPAR at our leased properties:

Year	Occupancy			TRevPAR
2018		86	%	$	160
2019		84	%	$	157
2020		61	%	$	103
2021		72	%	$	122
2022		77	%	$	247
2023		79	%	$	249
2024 YTD		81	%	$	158

During the fourth quarter of 2023, our business was significantly impacted by our transition of our property rental listings to a third-party platform because such properties were taken off our prior OTAs and unavailable for rent during such transition. From January through May 2024, the Company sold guaranteed reservation rooms at substantial discounts to market in order to generate cash as necessary to operate the business. This resulted in substantially lower TRevPar during the period and will negatively affect TRevPar during the remainder of 2024. The revenue generated from the sale of these rooms could not be recognized as earned revenues for the periods during which the rooms were sold, but will be recognized by the Company in future periods as guests utilized the rooms.

Our early historic operations involved the leasing of units within multifamily properties. In late 2021, we began to transition our business to focus on leasing hotel properties in commercially-zoned areas, and we have completed this transition. As a result, we believe that our historical financial and operating results (in particular for the years 2018 through 2021), including operating metrics such as occupancy rate and TRevPAR, are not indicative of our current and future operations. We do believe, however, that the above table is useful in illustrating the higher TRevPAR and improved results that we can achieve as a result of our hotel-centric business strategy.

Seasonality

Operations at hotel properties in general have historically been seasonal in nature, reflecting lower revenues and occupancy rates during the first quarter of each year when compared to the remaining three quarters. In 2023 and 2024 we experienced such seasonality with respect to our properties. While the foregoing is based on only limited historical data with respect to the seasonality of our business, we expect that this seasonality may continue to cause fluctuations in our quarterly operating revenues, profitability, and cash flow.

Competition

The U.S. hotel industry is highly competitive. Our hotels compete with other hotels for guests in each of their markets on the basis of several factors, including, among others, location, quality of accommodations, convenience, brand affiliation, room rates, service levels and amenities, and level of customer service. In addition to traditional hotels, our properties also compete with non-traditional accommodations for travelers such as online room sharing services. Competition is often specific to the individual markets in which our hotels are located and includes competition from existing and new hotels.

Our competition also includes online and offline travel companies that target leisure and corporate travelers, including travel agencies, tour operators, travel supplier direct websites and their call centers, consolidators and wholesalers of travel products and services, large online portals and search websites, certain travel metasearch websites, mobile travel applications, social media websites, as well as traditional consumer ecommerce and group buying websites. We face these competitors in local, regional, national and/or international markets. We also face competition for customer traffic on internet search engines and metasearch websites, which impacts our customer acquisition and marketing costs.

However, while we expect new competitors may arise, we expect that we will continue to enjoy a competitive advantage over new competitors. We believe this to be the case because of:

●

Our ability to identify hotel properties available for lease on terms that work within our operating plan, the speed at which we can close on leases for new properties and thereafter commencing the marketing and renting of rooms therein;

●

our experience and track record of quickly opening, listing, and marketing properties,

●

the existing and growing operational skillset and experienced brought by our management terms and day-to-day property managers, and

●

our reputation within the industry.

Human Capital

As of September 30, 2024, we had a total of 357 full-time employees, 328 of which are unionized. We believe that our corporate culture and employee relationships are healthy and productive.

Our operations are overseen directly by a management team that encourages our employees to take a long-term approach to our business. We may expand our current management to retain other skilled employees with experience relevant to our business. Our management’s relationships will provide the foundation through which we expect to grow our business in the future.

Our future success is dependent in part on our continued ability to attract, hire and retain qualified personnel. Therefore, investing, developing and maintaining human capital is critical to our success. The Company strives to provide its employees with a safe and healthy workplace. We have recently accelerated initiatives to recruit and retain directors and officers that bring additional hotel and online travel industry expertise to our management and day to day operations.

We are an equal opportunity employer and it is our company’s policy to recruit, hire, train and promote personnel in all job classifications, without regard to race, religion, color, national origin, sex or age. We are committed to inclusivity and diversity across our entire operation and to fostering a culture where everyone feels empowered to do their best work. Cultivating a diverse and inclusive workplace helps us embrace different perspectives, talents and experiences. We believe achieving a culture of integrity and transparency starts with leadership and encourages every employee to work in support of our company’s goals. Continuous employee engagement helps us understand our employees’ perspectives and identify areas for additional focus.

The majority of our employees are currently represented by labor unions and/or covered by collective bargaining agreements. We may in the future acquire additional portfolios of units in other hotels or other building serviced by organized or unionized labor. In addition, union, worker council, or other organized labor activity may occur at other locations we already lease. Under the applicable agreements with labor unions or collective bargaining agreements, we are obligated to provide enhanced severance benefits that, in certain circumstances, may have to be paid upon termination of employment of hotel employees who are members of a union. We cannot predict the outcome of any labor-related proposal or other organized labor activity. Increased unionization of our workforce or other collective labor action, new labor legislation or changes in regulations could be costly, reduce our staffing flexibility or otherwise disrupt our operations, and reduce our profitability. While we have not experienced work stoppages to date, from time to time, hospitality operations may be disrupted because of strikes, lockouts, public demonstrations or other negative actions and publicity involving employees and third-party contractors. We may also incur increased legal costs and indirect labor costs because of disputes involving our workforce. Additionally, from time to time we are subject to arbitration conducted under applicable union regulations and cold be subject to various arbitration rulings. We are subject to various union agreements and among other obligations are required to provide the applicable unions with data on the size and scope of our operations and the number of employees at each applicable property and to post a bond covering at least three months of employee wages for each property. As part of our legacy issues, we are also subject to a payment schedule with NYHTC with respect to accrued pension, health, and union employee related obligations aggregating approximately $3 million as of the date of this Report that were not remitted on our behalf during the last part of 2023 (during a gap period resulting from our company’s switch to a new payroll service provider), through which we are obligated to make monthly payments until the accrued amount is fully paid down.

Regulation

We must ensure regulatory compliance in our operations across numerous jurisdictions.

Property and Accommodations Regulation

Our business is subject to U.S. federal, state and local and foreign laws and regulations that vary widely by city, country and property type. Hospitality accommodations operations are also subject to compliance with the U.S. Americans with Disabilities Act and other laws and regulations relating to accessibility, and to laws, regulations and standards in other areas such as zoning and land use, licensing, permitting and registrations, fire and life safety, environmental and other property condition matters, staffing and employee training, cleaning protocols and other COVID-19 requirements, and property “star” ratings where required. Additionally, our real estate owners are also typically responsible for their own compliance with laws, including with respect to their employees, property maintenance and operations, environmental laws and other matters.

When signing leases in a new market, we engage local legal counsel to help identify relevant regulatory requirements. The efforts of local counsel include analysis on licensing and zoning, building code, accessibility and operations requirements, fire and life safety regulations, tax compliance, and local employment laws. Every leased property has unique characteristics, requiring further due diligence and regulatory analysis before each new lease signing.

We monitor regulatory changes in each existing market on an ongoing basis. To facilitate our growth and compliance work in each city, we attempt to establish relationships with local regulatory agencies, elected officials, business and community groups to build trust and improve understanding of our business model.

Our growing portfolio of accommodation units are comprised of units in entire hotels we lease on a long-term basis. Our hotel units are located in commercially zoned areas. Hotel units enjoy the benefits of commercial zoning, allowing for short-stay rentals of any length, even as a short as one day. As commercially zoned buildings are not typically subject to local short-stay length regulation, we are able to offer the vast majority of our accommodation portfolio with maximum flexibility in terms of stay length.

Privacy and Data Protection Regulation

In processing travel transactions and information about guests and their stays, we receive and store a large volume of personally identifiable data. The collection, storage, processing, transfer, use, disclosure and protection of this information are increasingly subject to legislation and regulations in numerous jurisdictions around the world, such as the European Union’s General Data Protection Regulation (“GDPR”) and variations and implementations of that regulation in the member states of the European Union, as well as privacy and data protection laws and regulations in various U.S. States and other jurisdictions, such as the California Consumer Privacy Act (as amended by the California Privacy Rights Act), the Canadian Personal Information Protection and Electronic Documents Act (“PIPEDA”), and the UK General Data Protection Regulation and UK Data Protection Act. We have implemented a variety of technical and organizational security measures and other procedures and protocols to protect data, including data pertaining to guests and employees, and we are engaged in an ongoing process of evaluating and considering additional steps to comply with the California Consumer Privacy Act, GDPR, PIPEDA, the UK General Data Protection Regulation, and UK Data Protection Act.

Employment

We are also subject to laws governing our relationship with employees, including laws governing wages and hours, benefits, immigration, workplace safety and health, and hotel-specific ordinances.

Other Regulation

Our business is subject to various other laws and regulations, involving matters such as income tax and other taxes, consumer protection, online messaging, advertising and marketing, the U.S. Foreign Corrupt Practices Act and other laws governing bribery and other corrupt business activities, and regulations aimed at preventing money laundering or prohibiting business activities with specified countries or persons. As we expand into additional markets, we will be subject to additional laws and regulations.

The regulatory environment in each market is often complex and evolving, and can be subject to significant change. Some relevant laws and regulations are inconsistent and ambiguous, and could be interpreted by regulators and courts in ways that could adversely affect our business, results of operations, and financial condition. Moreover, certain laws and regulations have not historically been applied to businesses such as ours, which often makes their application to our business uncertain.

Non-Hotel Properties

In 2021 we commenced efforts to transition our operations away from the renting of rooms in residential multifamily buildings. These units are subject to short-term rental regulations, which can be difficult to ascertain, accurately interpret, and apply. We substantially completed this transition by the end of 2022 and our current operations focus solely on hotel-based room rental units.

Corporate Information

The Company began as Corphousing LLC (“Corphousing LLC”), which was formed on October 24, 2017, as a Delaware limited liability company.

In January 2022, Corphousing LLC converted into a C corporation, with the members of Corphousing LLC becoming the stockholders of CorpHousing. The conversion had no effect on our business or operations and was undertaken to convert the form of the legal entity into a corporation for purposes of operating as a public company. All properties, rights, businesses, operations, duties, obligations, and liabilities of the predecessor limited liability company remained those of CorpHousing Group Inc.

On November 1, 2022, we filed an amendment to our certificate of incorporation with the Secretary of State of the State of Delaware, changing the name of our company from “CorpHousing Group Inc.” to “LuxUrban Hotels Inc.”

On December 30, 2022, we dissolved SoBeNY, which was a wholly-owned subsidiary of ours and the entity that covered our legacy apartment rental business. We substantially exited the residential-based rental business prior to year-end 2022.

Results of Operations

	For The Three Months Ended September 30,
	2024			2023			% ∆
Net Rental Revenue	$	13,133,103		$	31,208,248			(58	)%
Rent Expense		8,509,487			7,802,847
Non-Cash Rent Expense Amortization		1,684,546			1,952,599
Surrender of Deposits		700,000			-
Other Expenses		20,740,915			13,640,517
Total Cost of Revenue		29,950,401			23,395,963			28	%
Gross (Loss) Profit		(16,817,298	)		7,812,285			(315	)%
General and Administrative Expenses		11,697,043			1,981,774
Termination of Franchise Agreement		310,356			-
Non-Cash Issuance of Common Stock for Operating Expenses		111,000			334,081
Non-Cash Stock Compensation and Option Expense		25,302			407,553
Total Operating Expenses		12,143,701			2,723,408			346	%
Income (Loss) from Operations		(28,960,999	)		5,088,877			(669	)%
Other Income (Expense)
Other Income		1,331,423			31,627
Cash Interest and Financing Costs		(984,792	)		(2,185,202	)
Non-Cash Financing Costs		(2,115,004	)		-
Total Other Expense		(1,768,373	)		(2,153,575	)		18	%
Loss Before Benefit from for Income Taxes		(30,729,372	)		2,935,302			(1147	)%
Provision for Income Taxes		-			(1,999,498	)
Net Income (Loss)		(30,729,372	)		4,934,800			(723	)%
Preferred Stock Dividend		(238,992	)		-
Net Income (Loss) Attributable to Common Stockholders	$	(30,968,364	)	$	4,934,800			(728	)%

Three Months Ended September 30, 2024, as compared to Three Months Ended September 30, 2023

Net Rental Revenue

Net rental revenue for the three months ended September 30, 2024 was $13.1 million, as compared to $31.2 million for the three months ended September 30, 2023, a decrease of 58%. This decrease predominantly resulted from the decrease in average units available to rent from 1,625 for the three months ended September 30, 2023 to 996 for the three months ended September 30, 2024. This decrease in net rental revenues was exacerbated by bookings of guaranteed reservations at relatively lower rates for the three months ended September 30, 2024 as compared to the same period during the prior year. The TRevPAR, or revenue per available room, decreased from $257 for the three months ended September 30, 2023 to $172 for the three months ended September 30, 2024. The lower TrevPar in the current quarter is attributable to the impact from preselling of the rooms at lower rates versus the same period last year. TRevPAR includes both average daily rate (“ADR”) and occupancy.

Cost of Revenue

Cost of revenue increased from $30.0 million in the three months ended September 30, 2023 to $23.4 million for the three months ended September 30, 2024, an increase of 28%, primarily as a result of the Company expensing the unamortized lease acquisition costs and security deposits surrendered for the properties that were exited during the period, as well as increases in costs related to utilities, labor, cable/WIFI, credit card processing fees and commissions, and costs related to the relocation of guests from our terminated properties to alternative properties.

Gross Profit

Gross Profit decreased to ($16.8) million in the three months ended September 30, 2024 from $7.8 million in the three months ended September 30, 2023, a net decrease of $24.6 million or 315%. This decrease is primarily as a result of the Company expensing the unamortized lease acquisition costs and security deposits surrendered for the properties that were exited during the period, as well as deposit surrenders and commission costs to relocate guests from our terminated properties to alternative properties.

Total Operating Expenses

Total operating expenses incurred for the three months ended September 30, 2024, increased by approximately $9.4 million from the three months ended September 30, 2023. Of this increase, $9.7 million was for costs related to the increase in the reserve for litigation with landlords included in general and administrative expenses increased by $0.3 million by the exit of our partnership with Wyndham.

Other Income (Expense)

Total other expense for the three months ended September 30, 2024 was ($1.8) million as compared to ($2.12) million for the three months ended September 30, 2023. This decrease is primarily due to gain on exiting leases, and higher cash interest and financing costs during the three months ended September 30, 2024 as compared with three months ended September 30, 2023 as a result of materially reducing use during the period of merchant cash advances, partially offset by greater non-cash financing costs from the Greenle exchange.

Results of Operations

	For The Nine Months Ended September 30,
	2024			2023			% ∆
Net Rental Revenue	$	45,276,687		$	85,883,521			(47	)%
Rent Expense		22,387,122			18,068,828
Non-Cash Rent Expense Amortization		5,449,098			6,187,540
Surrender of Deposits		4,151,628			-
Other Expenses		73,919,562			38,273,980
Total Cost of Revenue		105,907,410			62,530,348			69	%
Gross (Loss) Profit		(60,630,723	)		23,353,173			(360	)%
General and Administrative Expenses		26,326,941			9,297,097
Termination of Franchise Agreement		3,625,868			-
Non-Cash Issuance of Common Stock for Operating Expenses		489,936			1,847,711
Non-Cash Stock Compensation and Option Expense		1,872,623			1,209,936
Total Operating Expenses		32,315,368			12,354,744			102	%
Income (Loss) from Operations		(92,946,091	)		10,998,429			(945	)%
Other Income (Expense)
Other Income		2,418,403			129,875
Cash Interest and Financing Costs		(4,060,348	)		(5,505,708	)
Non-Cash Financing Costs		(4,885,867	)		(30,227,289	)
Total Other Expense		(6,527,812	)		(35,603,122	)		(82	)%
Loss Before Benefit from for Income Taxes		(99,473,903	)		(24,604,693	)		304	%
Provision for Income Taxes		-			15,702
Net Loss		(99,473,903	)		(24,620,395
Preferred Stock Dividend		(716,975	)		-
Net Loss	$	(100,190,878	)	$	(24,620,395	)		307	%

Nine Months Ended September 30, 2024, as compared to Nine Months Ended September 30, 2023

Net Rental Revenue

Net rental revenue for the nine months ended September 30, 2024 was $45.3 million, as compared to $85.9 million for the nine months ended September 30, 2023, a decrease of 47%. This decrease predominantly resulted from the decrease in average units available to rent from 1,625 for the nine months ended September 30, 2023 to 996 for the nine months ended September 30, 2024. This decrease in net rental revenues was exacerbated by bookings of guaranteed reservations at relatively lower rates for the nine months ended September 30, 2024 as compared to the same period during the prior year. The TRevPAR, or revenue per available room, decreased from $291 for the nine months ended September 30, 2023 to $158 for the nine months ended September 30, 2024. The lower TrevPar in the current quarter is attributable to the impact from preselling of the rooms at lower rates versus the same period last year. TRevPAR includes both average daily rate (“ADR”) and occupancy.

Cost of Revenue

Cost of revenue increased from $62.5 million in the nine months ended September 30, 2023 to $105.9 million for the nine months ended September 30, 2024, an increase of 69%, primarily as a result of the Company expensing the unamortized lease acquisition costs and security deposits surrendered for the properties that were exited during the period, as well as increases in costs related to utilities, labor, cable/WIFI, credit card processing fees and commissions, and costs related to the relocation of guests from our terminated properties to alternative properties.

Gross Profit

Gross Profit decreased to ($60.6) million in the nine months ended September 30, 2024 from $23.4 million in the nine months ended September 30, 2023, a net decrease of $84.0 million or 360%. This decrease is primarily as a result of the Company expensing the unamortized lease acquisition costs and security deposits surrendered for the properties that were exited during the period, as well as deposit surrenders and commission costs to relocate guests from our terminated properties to alternative properties.

Total Operating Expenses

Total operating expenses incurred for the nine months ended September 30, 2024, increased by approximately $20.0 million from the nine months ended September 30, 2023. Of this increase, $3.6 million were for costs related to the exit of our partnership with Wyndham in the nine months ended September 30, 2024. The company wrote off receivables to bad debt expense in the amount of $7.8 million during the nine months ended September 30, 2024. The Company increased its reserve for the litigation with landlords.

Other Income (Expense)

Total other expense for the nine months ended September 30, 2024 was $6.5 million as compared to $35.6 million for the nine months ended September 30, 2023. This decrease is primarily due to gain on exiting $2.4 million, lower cash interest and financing costs during the nine months ended September 30, 2024 as compared with nine months ended September 30, 2023 as a result of materially reducing use during the period of merchant cash advances, partially offset by greater non-cash financing costs from the Greenle exchange.

Liquidity and Capital Resources

The following table provides information about our liquidity and capital resources as of September 30, 2024 and December 31, 2023:

	As of September 30, 2024			As of December 31, 2023
Cash and Cash Equivalents	$	198,868		$	752,848
Other Current Assets	$	2,531,013		$	18,968,209
Total Current Assets	$	2,729,881		$	19,721,057
Total Current Liabilities	$	83,566,518		$	33,125,741
Working Capital (Deficit)	$	(80,836,636	)	$	(13,404,684	)

As of September 30, 2024, our cash and cash equivalents balance was $198,868 as compared to $752,848 at December 31, 2023, and total current assets were $2,729,881 at September 30, 2024, as compared to $19,721,057 at December 31, 2023.

As of September 30, 2024, our company had total current liabilities of $83,566,518 as compared to $33,125,741 at December 31, 2023. Total current liabilities at September 30, 2024 consisted of: accounts payable and accrued expenses of $64,170,241 as compared to $23,182,305 at December 31, 2023; rents received in advance of $6,354,952 at September 30, 2024, as compared to $4,404,216 at December 31, 2023; short-term business loans of $3,922,103 at September 30, 2024, as compared to $1,115,120 at December 31, 2023; loans payable of $6,472,183 at September 30, 2024, as compared to $1,654,589 at December 31, 2023; indirect lease cost of $300,000 at September 30, 2024, as compared to $486,390 at December 31, 2023; operating lease liability of $2,347,039 at September 30, 2024, as compared to $1,982,281 at December 31, 2023; and development incentive advances of $0 at September 30, 2024 as compared to $300,840 at December 31, 2023.

As of September 30, 2024, our company had a working capital deficit of $80,836,636 as compared to a deficit of $13,404,684 at December 31, 2023.

Over the past few months, management has undertaken a strategic streamlining of the properties under operation. We are confident that current operations will generate positive cash flow at the property level. However, due to significant legacy liabilities—including outstanding payments to landlords, union dues and fringe benefits, sales and occupancy taxes, utility costs, lawsuits, and obligations to various vendors—the aggregate cash flow from these operations will not be sufficient to fully meet these obligations. Management remains committed to operating the existing properties while actively pursuing settlements for these legacy liabilities.

We have obtained funding through the Small Business Administration (“SBA”) Paycheck Protection Program (“PPP”) and Economic Injury Disaster Loans (“EIDL”) totaling $814,244 and $800,000, respectively. We have used these funds for our ongoing operations. We have received forgiveness of $516,225 of the PPP loans, and for the balance of these funds we intend to repay them in accordance with the terms of the respective loan agreements or seek forgiveness, as permitted.

We record cash collected prior to stays as “bookings received in advance” on our balance sheet as a liability. These collections are then recognized as revenue when guests stay at our properties. In the event that there is a refund in accordance with our refund policy, revenue is not recognized.

Our current liquidity position raises substantial doubt about our ability to continue as a going concern. If we are unable to improve our liquidity position we may not be able to continue as a going concern. Our ability to raise the capital needed to improve our financial condition may be hindered or limited by provisions contained in our existing financing agreements or other agreements. The accompanying consolidated financial statements do not include any adjustments that might result if we are unable to continue as a going concern and, therefore, be required to realize our assets and discharge our liabilities other than in the normal course of business which could cause investors to suffer the loss of all or a substantial portion of their investment.

Our company is still in the relatively early stages of development, the resources needed for the management and operation of our portfolio of hotels is relatively similar to larger, long-standing and well-capitalized companies, such as Marriot, Hyatt, and Hilton. To operate our existing portfolio of hotels and continue our expansion of our portfolio of hotels in major cities will require substantial capital resources and will require us to utilize our cash flows, and will likely require us to engage in equity or debt transactions to fund required expenditures if we choose to continue expansion at our historic or an accelerated pace.

The operation of many of our properties involves unionized labor. Unionized labor provides us with skilled employees that are trained, vetted by their unions, and subject to the performance and conduct codes established by their unions. It also provides us with formal channels to resolve various labor issues. At the same time, with respect to properties utilizing unionized labor, we are subject to labor agreements and requirements applicable to companies of our size and capital profile, including requirements that require us to post deposits or bonds with respect to three-month union employee wages for each such hotel. The funding of these deposits and bonds require substantial capital. Many of the obligations due to the landlords, unions, utility providers and sales and other taxes have been accrued for by prior management but were not paid. The current management is working with the unions and other creditors to arrive at payment terms over time.

Inflation

Historically, inflation has not had a material effect on our results of operations. However, significant increases in inflation, particularly those related to wages and increases in interest rates could have an adverse impact on our business, financial condition and results of operations.

Proposed Joint Venture

We have entered into a non-binding letter of intent with Lockwood Development Partners LLC, a company engaged in real estate development, management, and finance, and The Bright Hospitality Management, LLC, a hospitality management company and provider of technology-based hotel management platforms, proposing to establish a joint venture (“JV”) focused on hotel services and operations. If consummated, we believe that this strategic initiative would provide our company with the opportunity to broaden market impact and deliver an elevated guest experience. If consummated, the joint venture would initially focus on two LuxUrban properties, with the parties to consider expansion of the relationship to include additional LuxUrban hotels based on success of the pilot initiative. The collaboration would leverage Lockwood’s established presence in hotel development and Bright’s innovative hospitality technology to create a unique guest experience and optimize operational efficiencies. It is proposed that in connection with the pilot JV, Lockwood would initially invest approximately $7 million to address certain obligations in arrears with respect to, and enhance facilities in, the two JV pilot hotels, with potential additional investments of up to $35 million if all existing LuxUrban hotels are later added to the JV structure. The JV would focus on rejuvenating the initial two JV properties, incorporating advanced technologies and amenities designed to improve operational performance and guest satisfaction using Bright’s platform. This platform features AI-driven management tools designed to enhance guest satisfaction and streamline hotel operations. The JV, if launched, will introduce Lockwood’s Vitality brand to the New York City market, enhancing customer engagement through a loyalty program and cohesive branding strategy. The nonbinding letter of intent contemplates that the definitive agreements will outline a pathway for expanding the JV to include additional LuxUrban properties, contingent upon achieving initial success and obtaining necessary consents and approvals, including the approval of our stockholders and noteholders of LuxUrban and the landlords for any additional properties.

Going Concern

Financing Activities

Since formation we have funded our operations and growth through capital contributions and loans from affiliates of our company, third-party investor financings, and our initial public offering. At September 30, 2024, we had short-term business financing indebtedness of $3,922,103, short-term loans payable of $6,472,183, and long-term loans payable of $5,565,733. The proceeds from these financings have been or will be used to fund security deposits for our newly leased properties.

Financings

Cash generated from operations during the nine months ended September 30, 2024 was not sufficient to support cost of operations and servicing of the Company’s obligations. While the Company believes that the LuxUrban 2.0 efforts to eliminate poorly performing hotels and minimize other operating costs, while improving management and operating efficiencies, will allow the Company to operate hotels on a cash flow positive basis, the Company has material legacy liabilities and obligations and litigation exposures that will require it to secure additional capital resources in the relatively near term. There can be no assurance such capital resources, including equity or debt or strategic joint venture related financing or other financings will be available to the Company on commercially reasonable terms, or at all. Since inception, the Company has engaged in various financings, including during 2004 as described below.

On December 20, 2022, the Company, and our former chairman and chief executive officer, Brian Ferdinand (“Ferdinand”), entered into a note extension and conversion agreement (“December 2022 Agreement”) with Greenle Partners LLC Series Alpha PS (“Greenle Alpha”) and Greenle Partners LLC Series Beta P.S., a Delaware limited liability company (“Greenle Beta” and, together with Greenle Alpha, “Greenle”). Greenle was the purchaser of 15% OID senior secured notes (the “June 2022 Notes”) and warrants to purchase our common stock (“June 2022 Warrants”) under certain securities purchase agreements and loan agreements between us and Greenle, including the Securities Purchase Agreement dated as of June 30 2022, as amended by the letter agreement dated October 20, 2022, and the Loan Agreement dated as of November 23, 2022.

Under the terms of the December 2022 Agreement, Greenle agreed to convert from time to time up to $3,000,000 aggregate principal amount of the Notes into up to 1,000,000 shares of the Company’s common stock (the “Conversion Shares”) at the conversion price of $3.00 per share prescribed by the Notes. Additionally, Greenle agreed that the payment date of certain of the Notes in the aggregate principal amount of $1,250,000, maturing on January 30, 2023, would be extended to March 1, 2023. On the date of any such conversion, the Company would be obligated to issue to Greenle a number of credits under our existing revenue share agreements with them equal to fifteen percent (15%) of the principal amount of the Notes so converted. As of December 31, 2022, $300,000 of this note was converted and the entire $3,000,000 was converted in January 2023. As part of this conversion, Ferdinand contributed to the Company 874,474 shares of common stock owned by him and his affiliates, which in turn, were used by the Company to fund the issuance of the Conversion Shares to Greenle in exchange for the conversion of the debt under the notes, which was maturing within a few months of this contribution. At the time of such contribution by Ferdinand, the market value of the shares of common stock so contributed was approximated $1.5 million.

In April 2024, we secured from Greenle a waiver on the restrictions contained in its financing agreements with our company that prohibit our sale of shares of common stock prior to November 2024 at per-share prices below $5.00 (as may be adjusted for stock splits and similar transactions, the “Trigger Price”). The restriction on sales of our common stock by our company below the Trigger Price terminates in November 2024. This waiver permitted us to sell up to an aggregate of 15 million shares prior to November 2024 at prices below the Trigger Price. In consideration of this waiver, Greenle is entitled to be issued up to an aggregate of 2.8 million shares of our common stock (“Initial Greenle Waiver Shares”) from time to time upon written notice to our company. This waiver was amended in May 2024 to increase number of shares permitted to be sold by our company at prices under the Trigger Price prior to November 2024 to the greater of (i) 30 million shares and (ii) $30 million (based on the gross sale prices of such shares). In consideration of this waiver modification, Greenle is entitled to demand from time to time that we issue an amount of additional shares (the “Additional Greenle Waiver Shares” and collectively with the Initial Greenle Shares and the Greenle Revenue Participation Shares, the “Greenle Shares”) equal to 0.22 shares of common stock for each share of common stock sold by our company through November 6, 2024 in excess of 15 million shares at prices below the Trigger Price. To date, we have been required to issue the Greenle an aggregate of 23,628,324 shares of common stock in connection the foregoing rights and obligations as a result of private placements and underwritten public offerings of our common stock.

During the nine months ended September 30, 2024 and year ended December of 2023, we amortized $1,038,375 and paid $1,350,000, respectively to Ferdinand under the terms of the Guarantee Trust agreement as part of his personal guarantees on the Wyndham agreements and related advances to our company thereunder. At December 31, 2023 and September 30, 2024, $1,023,750 and $341,250, respectively, of this payment was classified as prepaid. During the three and nine months ended September 30, 2024, $341,250 and $1,038,375, respectively, was expensed.

In May 2024, the company sold common stock in an underwritten public offering at $0.25 per share. Elan Blutinger, nonexecutive chairman of the board purchased 400,000 common shares in the offering.

In July 2024, the company sold stock in an underwritten public offering at $0.17 per share. Mr. Blutinger, purchased 294,116 common shares, Patrick McNamee, a director of our company, purchased 735,294 common shares, Kimberly Schaefer, a director of our company, purchased 117,647 common shares, Leonard Toboroff, a director of our company purchased 147,058 common shares, Robert Arigo, our chief executive officer, purchased 176,470 common shares and Michael James, our chief financial officer, purchased 352,941 common shares in the offering.

In August 2024, the Company issued in a private placement (the “August 2024 Note and Warrants Debt Offering”) 18% senior secured convertible notes (“August 2024 Notes”) and common stock purchase warrants (“August 2024 Warrants”). Mr. Blutinger purchased $100,000 of these securities, Mr. McNamee, a former director, purchased $100,000 of these securities, and Mr. James, purchased $20,000 of these securities.

On July 15, 2024, the Company issued in an underwritten public offering 30,000,000 common shares of the Company’s common stock at $0.17 raising gross proceeds of $5,100,000, after fees the Company netted $4,567,000. On July 15, 2024, the Company issued warrants to purchase up to 306,000 shares of the Company’s common stock to the underwriter of the public offering, Alexander Capital, L.P. (“Alexander”), with an exercise price of $0.187. These warrants are exercisable for five years and expire in July 2029. On July 18,2024, Alexander exercised the over-allotment to acquire an additional 4,500,000 common shares of the Company’s common stock at $0.17 raising gross proceeds of $765,000, after fees the Company netted $703,800. On July 18, 2024 the Company issued warrants to purchase up to 270,000 shares of the Company’s common stock to the underwriter of the public offering, Alexander, with an exercise price of $0.187. These warrants are exercisable for five years and expire in July 2029.

On July 30, 2024, the Company issued in another underwritten public offering 11,573,333 common shares of the Company’s common stock at $0.15 raising gross proceeds of $1,736,000, after fees the Company netted $1,530,800. On July 30, 2024, the Company issued warrants to purchase up to 694,400 shares of the Company’s common stock to the underwriter of the public offering, Alexander, with an exercise price of $0.165. These warrants are exercisable for five years and expire in July 2029.

In August 2024, the Company issued in a private placement (the “August 2024 Note and Warrants Debt Offering”) 18% senior secured convertible notes (“August 2024 Notes”) and common stock purchase warrants (“August 2024 Warrants”) raising gross proceeds of $4,122,000, after fees the Company netted approximately $3,836,000.

Under the terms of the August 2024 Note and Warrants Debt Offering, certain equity investors and holders of promissory notes evidencing existing borrowed money obligations of the Company, including THA and the investor in our June 2024 private placement, were entitled to convert such equity and debt into the August 2024 Note and Warrant Debt offering. As a result of these conversions, the Company issued an additional aggregate of $4.8 million principal amount of August 2024 Notes and August 2024 Warrants.

The Noteholders extended the private placement (the “August 2024 Note and Warrants Debt Offering”) 18% senior secured convertible notes (“August 2024 Notes”) and common stock purchase warrants (“August 2024 Warrants”) raising gross proceeds of $1,500,000, after fees the Company netted approximately $1,350,000.

The August 2024 Notes bear interest at 18%, are secured by substantially all of the assets of the Company under the terms of a guarantee and security agreement dated as of August 13, 2024 (“Security Agreement”), and were sold to certain accredited investors in a private offering exempt from registration under the Securities Act of 1933, as amended (the “Securities Act”). The principal of the Augst 2024 Notes shall be repaid in twenty-four (24) equal monthly installments commencing on August 13, 2025 and continuing on the same day of each month thereafter until the principal amount is paid in full, with all principal and interest due thereon to be paid on or prior to August 13, 2027, unless the Notes are previously converted into common stock or preferred stock as described below. The August 2024 Notes are senior debt of the Company, and subject to the terms and conditions of the Notes, the Company shall not issue any debt senior to the August 2024 Notes while any August 2024 Notes remain outstanding without the consent of a majority of the then outstanding principal amount of the Notes. The August 2024 Notes were convertible initially into that number of shares of common stock determined by dividing the principal amount of the Note purchased by the purchaser by 110% of the average VWAP of the common stock for the three consecutive trading days immediately following the date the Company filed its Quarterly Report on Form 10-Q for the six months ended June 30, 2024, not to exceed $0.15 (“Three-Day VWAP”). The Three-Day VWAP was set at $0.08404. As a result of opening the offering, and curing of any existing defaults under the August 2024 Notes, the conversion price of the August 2024 Notes were reset to $0.06;provided, that in the event the VWAP of the common stock for the three trading days immediately following the date of our pending reverse stock split is implemented (and thereafter the effectiveness of the registration statement to be filed to register the resale of the shares of common stock underlying the August 2024 Notes and August 2024 Warrants) is lower than the then-current split-adjusted conversion price, the conversion price shall be reset to such three-day VWAP; provided, that such exercise price (the “VWAP Adjusted Conversion Price”) shall not be less than $0.05 (as adjusted for the Reverse Stock Split). For example, if a 1-for-70 split is effected, the per-share conversion price shall not be adjusted to less than $3.50.

Under the terms of the August 2024 Note and Warrant Debt Placement, the Company was obligated to file a proxy statement for purposes of calling a special meeting of the Company’s shareholders to seek approval of certain prescribed proposals. These proposals included an amendment to the Company’s certificate of incorporation to effect a reverse stock split (“Reverse Split”) of the Company’s outstanding common stock in the range of one share-for-30 shares to one share-for-70 shares. The specific split ratio was set at 1-for-70 by the board in November 2024. In connection with the Reverse Split, the number of authorized shares of the Company’s common stock will be maintained at 200,000,000 shares, preferred stock will be maintained at 20,000,0000 shares, and the shares authorized under the Company’s existing 2022 incentive plan will remain at 8,000,000 shares. The proposals also included approval of the transactions comprising the August 2024 Note and Warrant Debt Offering (“Nasdaq Compliance Waiver”) with respect to issuances or deemed issuances of common stock (including upon exercise of the Note Warrants or conversion of the Notes) in aggregate excess of 19.99% of the outstanding common stock at less than the Minimum Price (as defined in applicable Nasdaq regulations) as required to comply with Nasdaq regulations. The special meeting of stockholders was held on November 12, 2024 and all proposals were approved at the meeting. The reverse stock split will be effected on November 20, 2024.

Under the terms of the August 2024 Note and Warrant Debt Placement, as modified by the Modification Agreement,, promptly following the reverse stock split, the Company will use commercially reasonable efforts to file and have declared effective a resale registration statement under the Securities Act of 1933, as amended, covering the shares of common stock issuable up on conversation and exercise of the August 2024 Notes and August 2024 Warrants.

From the date hereof until the date that is the later of (a) the date on which no August 2024 Notes are outstanding and (b) the 18-month anniversary of the initial closing of the Debt Placement, upon any issuance by the Company or any of its subsidiaries of (1) common stock or common stock equivalents, (2) indebtedness or (3) a combination of units thereof, in each case for cash and not as part of any ordinary course of business operations or as part of any underwritten public offering or other exempt issuance (a “Subsequent Private Financing”), each Purchaser shall have the right to participate in such Subsequent Private Financing in an amount up to an amount equal to the principal of the Notes purchased by such Purchaser in the Debt Placement or if the amount of the Subsequent Private Financing is less than the aggregate principal amounts of all Notes purchased in the Debt Placement by all purchasers, such purchaser’s pro rata portion based on such purchaser’s principal amount of the Notes originally purchased in the Debt Placement as compared to the principal amount of all Notes purchased in the Debt Placement by all purchasers, on the same terms, conditions and price provided for in the Subsequent Private Financing.

Cash Flows from Operating Activities

During the nine months ended September 30, 2024, we used $37,408,972 of cash in operating activities that was primarily related to a non-cash writeoff of bad debts of $7,848,083, a non-cash writeoff of channel retained security deposit of $1,500,000, a non-cash writeoff of security deposits of $4,343,290, non-cash stock director expense of $1,729,135, modification of warrants of $2,593900, non-cash lease expense of $5,150,849, increase in security deposits of $1,050,000, offset by non-cash amount of prepaid expenses of $2,237,165, prepaid guarantee trust of $682,500, and accounts payable and accrued expense of $24,297,608 and rents received in advance of $1,950,736.

During the nine months ended September 30, 2023, we used $4,200,924 of cash in operating activities that was primarily related to an increase in security deposits of $8,132,745 an increase in channel retained funds and receivables from OTAs of $5,863,561 and an increase in operating lease liabilities of $9,494,760 offset by net non-cash amount of lease expense of $13,752,266, stock compensation expense of $897,212, stock option expense of $372,387, changes in accounts payable and accrued expenses of $329,254, accrued income taxes of $2,015,200, and shares used for operating expense of $1,669,130.

Cash Flow from Investing Activities

During the nine months ended September 30, 2024, no cash used for investing activities versus cash generated of $2,692,396 during the nine months ended September 30, 2023 primarily from the proceeds from the sale of Treasury Bills.

Cash Flow from Financing Activities

During the nine months ended September 30, 2024, net cash provided by financing activities of $36,854,992 included proceeds from short-term financing of $2,806,983, proceeds from public and private sales of common stock of $15,662,038, warrant exercises of $4,800,000, proceeds from loans payable of $8,577,560 and proceeds from development incentive advances of $3,000,500. During the nine months ended September 30, 2023, net cash used by financing activities was $4,608,575 included warrant exercises of $5,312,52 offset by net repayments of short-term business loans and debt totaling $703,927.

Third-Party Payment Processors

We utilize third-party payment processors to process guest transactions via credit card. Over 85% of our reservations are processed through credit card transactions in which we pay a processing fee. As noted in our financial statements, we maintain cash under “Processor retained funds” on our balance sheet as of September 30, 2024. These reserved funds are cash reserves held back by our processors to offset chargebacks and refunds due to guests. These reserves are intended to provide protection for both our guests and credit card processor with respect to cancellations and refunds. As part of our growth strategy, the large majority of our accommodation units are now rented on a nonrefundable basis, in order to minimize cancellation and refund exposures.

Advisory Shares

For the nine months ended September 30, 2024

Description	General Ledger Account	Date	Shares		Price		Value
Non-employee loan payment	Loan payable	1/25/2024		20,008	$	4.57	$	91,437
Non-employee commission expense	Commission Expense	1/25/2024		10,079	$	4.57	$	46,061
Non-employee investor relations expense	Investor Relations Expense	1/30/2024		59,784	$	4.33	$	258,865
Non-employee director compensation	Non-Cash Issuance of Common Stock for Director Compensation Expenses	2/8/2024		197,800	$	2.92	$	577,576
Employee Compensation	Non-Cash Issuance of Common Stock for Compensation Expenses	3/15/2024		25,000	$	2.22	$	55,500
Non-employee director compensation	Non-Cash Issuance of Common Stock for Director Compensation Expenses	5/3/2024		980,628	$	0.84	$	823,728
Non-employee commission expense	Commission Expense	5/9/2024		36,887	$	0.71	$	26,085
Non-employee investor relations expense	Investor Relations Expense	7/8/2024		600,000	$	0.185	$	111,000
Non-employee director Compensation	Non-Cash Issuance of Common Stock for Director Compensation Expense	9/16/2024		3,067,705	$	0.072	$	220,875
Employee Compensation	Non-Cash Issuance of Common Stock for Compensation Expenses	9/16/2024		1,485,504	$	0.072	$	106,956
Subtotal				6,483,395			$	2,318,083

For the nine months ended September 30, 2023

Description	General Ledger Account	Date	Shares		Price		Value
Non-employee Board members pursuant to related comp. policy	Non-Cash Stock Compensation Expense	3/1/2023		166,665	$	2.58	$	429,996
In connection with certain property finders’ fee arrangements	Non-Cash Issuance of Common Stock for Operating Expenses	3/17/2023		136,887	$	2.45	$	335,373
In connection with a consulting agreement	Non-Cash Issuance of Common Stock for Operating Expenses	2/10/2023		196,994	$	1.85	$	364,439
In connection with a marketing agreement	Non-Cash Issuance of Common Stock for Operating Expenses	2/10/2023		100,000	$	1.85	$	185,000
Non-employee Board members pursuant to related comp policy	Non-Cash Stock Compensation Expenses	8/16/2023		91,525	$	2.85	$	260,846
In connection with certain property finders’ fee arrangements	Non-Cash Issuance of Common Stock for Operating Expenses	8/21/2023		45,833	$	2.77	$	126,957
Advisory and legal services	Non-Cash Issuance of Common Stock for Operating Expenses	8/21/2023		9,250	$	2.85	$	26,363
Acorn Management Partners in connection with advisory services	Non-Cash Issuance of Common Stock for Operating Expenses	8/28/2023		8,741	$	2.89	$	25,261
Elizabeth Brown in connection with her termination of employment	Non-Cash Issuance of Common Stock for Operating Expenses	8/28/2023		50,000	$	3.11	$	155,500
Subtotal				805,895			$	1,909,735

Off-Balance Sheet Arrangements

We do not currently have any off-balance sheet arrangements.

Material Cash Requirements

There have been no material changes to the information in our material cash requirements related to commitments or contractual obligations from those reported in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023, as filed with the SEC on April 15, 2024.

Critical Accounting Policies and Estimates

This discussion and analysis of our financial condition and results of operations is based on our financial statements, which have been prepared in accordance with generally accepted accounting principles in the United States, or GAAP. The preparation of these financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements, as well as the reported expenses incurred during the reporting periods. Our estimates are based on our historical experience and on various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. While our significant accounting policies are described in more detail in the notes to our financial statements included elsewhere in this Quarterly Report, we believe that the following accounting policies are critical to understanding our historical and future performance, as these policies relate to the more significant areas involving management’s judgments and estimates.

Revenue Recognition

Our revenue is derived primarily from the rental of units to our guests. We recognize revenue when obligations under the terms of a contract are satisfied and control over the promised services is transferred to the guest. For the majority of sales, this occurs when the guest occupies the unit for the agreed upon length of time and receives any services that may be included with their stay. Revenue is measured as the amount of consideration we expect to receive in exchange for the promised goods and services.

Current and future reservations for most of our accommodation units require prepayment upfront. A majority of our reservations require full prepayment at the time the reservation is placed, with the remaining charged at check-in. Payments are processed through third-party credit card processors and marketing and reservation channels. We typically offer both a refundable and nonrefundable rates on each accommodation unit, with more than 50% of bookings, on average, choosing the nonrefundable rate. As we are required to only reserve a small or no portion of prepayments under our third-party processor agreements, nonrefundable booking prepayments provide us with operating cash flow. Any advanced reservation, irrespective of when charged, is taken as revenue in the period in which the stay happens, if in a future period is reflected in deferred revenue, and if cancelled is not ultimately realized as revenue.

Refunds are treated as a reduction of our net revenue and are taken in the period during which the cancelation or refund occurred. We have multiple refund policies in place across different sales channels, which vary by price. Some require a deposit at the time of booking, which would be forfeited in part or whole in the event of cancelation through varying periods of time prior to check-in. Some of our policies require full prepayment at time of booking (but allow for a full refund if booking is cancelled within required parameters). Some of our bookings are on nonrefundable basis, in which cancellations result in forfeiture of entire amount. In connection with some of our bookings, the third-party sales channel handles payments, cancelations, and the refunds to guests.

With respect to bookings for our accommodation units made through third-party booking platforms, in the event a refund is required to be made to a customer, under the terms of our agreements with such third-party platforms, we are required to make the refund to the customer (to the extent we have received the proceeds through the platform). If we fail to make any required refund, the customer’s recourse is against the third-party booking platform, and in turn, we are required to reimburse the booking platform. Within this structure, the (a) customer is protected, and (b) the booking party bears the credit risk with respect to the customer.

We account for revenue in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 606 which was adopted at the beginning of fiscal year 2018 using the modified retrospective method. We did not recognize any cumulative-effect adjustment to retained earnings upon adoption as the effect was immaterial.

Payment received for the future use of a rental unit is recognized as a liability and reported as bookings received in advance on the balance sheets. Bookings received in advance are recognized as revenue after the rental unit is occupied by the customer for the agreed upon length of time. The bookings received in advance balance as of September 30, 2024 and December 31, 2023, was $6,354,952 and $4,404,216, respectively, and is expected to be recognized as revenue within a one-year period.

Use of Estimates

The preparation of financial statements in accordance with accounting principles generally accepted in the United States (“GAAP”) requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements. Actual results could differ from those estimates.

Cash and Cash Equivalents

We consider all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents.

Fair Value of Financial Instruments

The carrying amount of cash, prepaid expenses and other assets, accounts payable and accrued expenses, and bookings received in advance approximate their fair values as of the respective balance sheet dates because of their short-term natures.

Advertising

Advertising and marketing costs are expensed as incurred and are included in General and Administrative Expenses in the accompanying consolidated statements of operations.

Commissions

We pay commissions to third-party sales channels to handle the marketing, reservations, collections, and other rental processes for most of our units and are included in cost of sales on the consolidated statement of operations.

Lease

The Company accounts for leases in accordance with ASC Topic 842, Leases (“Topic 842”). Under Topic 842, the Company applied a dual approach to all leases whereby the Company is a “lessee” and classifies leases as either finance or operating leases based on the principle of whether or not the lease is effectively a financed purchase by the Company. Lease classification is evaluated at the inception of the lease agreement. Regardless of classification, the Company records a right-of-use asset and a lease liability for all leases with a term greater than 12 months. Operating lease expense is recognized on a straight-line basis over the term of the lease.

Income Taxes

In accordance with GAAP, we follow the guidance in FASB ASC Topic 740, Accounting for Uncertainty in Income Taxes, which clarifies the accounting for uncertainty in income taxes recognized in our financial statements and prescribe a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. It also provides guidance on derecognition and measurement of a tax position taken or expected to be taken in a tax return.

We did not have unrecognized tax benefits as of December 31, 2021 and do not expect this to change significantly over the next 12 months. We will recognize interest and penalties accrued on any unrecognized tax benefits as a component of provision for income taxes.

In January 2022, our company converted into a C corporation. As we have realized a net loss for the years ended December 31, 2023, and December 31, 2022, and the nine months ended September 30, 2024, we have not made a provision for income taxes in our financial statements for these periods.

Sales Tax

The majority of sales tax is collected from customers by our third-party sales channels and remitted to governmental authorities by these third-party sales channels. For any sales tax that is our responsibility to remit, we record the amounts collected as a current liability and relieves such liability upon remittance to the taxing authority.

Paycheck Protection Program Loan (“PPP”)

As disclosed in the Notes to our financial statements, we have chosen to account for the loan under FASB ASC 470, Debt. Repayment amounts due within one year are recorded as current liabilities, and the remaining amounts due in more than one year, if any, as long-term liabilities. In accordance with ASC 835, Interest, no imputed interest is recorded as the below market interest rate applied to this loan is governmentally prescribed. If we are successful in receiving forgiveness for those portions of the loan used for qualifying expenses, those amounts will be recorded as a gain upon extinguishment as noted in ASC 405, Liabilities.

Income Taxes

We are subject to income taxes in the jurisdictions in which we operate. We account for income taxes under the asset and liability method, whereby deferred tax assets and liabilities are recognized based on the future tax consequences attributable to temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases, and attributable to operating loss and tax credit carry-forwards. A valuation allowance is recorded for deferred tax assets if it is more likely than not that the deferred tax assets will not be realized.

Stock-Based Compensation

Stock-based compensation expense attributable to equity awards granted to employees will be measured at the grant date based on the fair value of the award.

The expense is recognized on a straight-line basis over the requisite service period for awards that vest, which is generally the period from the grant date to the end of the vesting period.

With regard to the issuance of warrants of common stock, these items are measured at the grant date based on the fair value of the award. The expense is recognized on the date of the grant as there is no vesting period.

We estimate the fair value of stock option awards granted and warrants using the Black-Scholes-Merton option pricing model. The value of stock issued is based on the market value on the date of the issuance.

This Black-Scholes-Merton model requires various significant judgmental assumptions in order to derive a fair value determination for each type of award, including the fair value of our common stock, the expected term, expected volatility, expected dividend yield, and risk-free interest rate.

These assumptions used in the Black-Scholes-Merton option-pricing model are as follows:

●

Expected term. We estimate the expected term based on the simplified method, which defines the expected term as the average of the contractual term and the vesting period.

●

Risk-free interest rate. The risk-free interest rate is based on the yield curve of a zero-coupon U.S. Treasury bond on the date the stock option award was granted with a maturity equal to the expected term of the stock option award.

●

Expected volatility. We estimate the volatility of its common stock on the date of grant based on the average historical stock price volatility of comparable publicly-traded companies due to the lack of sufficient historical data for our common stock price.

●

Expected dividend yield. Expected dividend yield is zero, as we have not paid and do not anticipate paying dividends on its common stock.

All grants of stock options will have an exercise price equal to or greater than the fair value of our common stock on the date of grant. We will account for forfeitures as they occur.

Accounting Pronouncements

Management does not believe that any other recently issued, but not yet effective, accounting pronouncements, if adopted, would have a material effect on the accompanying financial statements.

Item 3 - Quantitative and Qualitative Disclosures About Market Risk

We are a smaller reporting company as defined in Rule 12b-2 under the Securities Exchange Act of 1934. As a result, pursuant to Item 305(e) of Regulation S-K, we are not required to provide the information required by this Item.

Item 4 - Controls and Procedures

Management’s Evaluation of our Disclosure Controls and Procedures

Our management, with the participation of our principal executive officer and our principal financial officer, has evaluated the effectiveness of our disclosure controls and procedures as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, prior to filing this Quarterly Report on Form 10-Q. Based on this evaluation, our principal executive officer and principal financial officer concluded that, as of the end of the period covered by this Quarterly Report, our disclosure controls and procedures were not effective at the reasonable assurance level.

As a public company, we are required to maintain internal control over financial reporting and to report any material weaknesses in those internal controls. With respect to the year ended December 31, 2023, we identified material weaknesses in our internal controls over financial reporting with respect to our periodic and annual financial close processes. As historically constituted, our human resources, processes and systems did not enable us to produce accurate financial statements on a timely basis.

While we deem this type of material weakness typical in a closely held, private company, in preparation of becoming a public company, we commenced a remediation plan which included the hiring of additional, qualified financial and accounting personnel, and engagement of specialized external resources, including the outsourcing of a portion of our accounting department functions to a qualified accounting firm. We also formed an audit committee of independent directors. As part of our remediation plan, we also implemented entity-level controls, and continue to do so. Our auditors have identified need to further and properly segregate duties among appropriate personnel, education and training of applicable management and financial personnel, and improvements in the process and system used to monitor and track the effectiveness of underlying business process controls. Full implementation of this plan will require additional time and the devotion of material resources.

Management’s Report on Internal Control Over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rule 13a-15(f). Under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, we conducted an evaluation of the effectiveness of our internal control over financial reporting based on the framework in “Internal Control - Integrated Framework (2013)” issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on this assessment, our management concluded that our internal control over financial reporting was ineffective as of September 30, 2024 as a result of the material weakness described above.

Changes in Internal Control Over Financial Reporting

We continue to execute on our plan to remedy the material weakness, as described above, including (i) initiating a full internal review and evaluation of key processes, procedures and documentation and related control procedures, and the subsequent testing of those controls and (ii) implementing policies and procedures focusing on enhancing the review and approval of all relevant data to support our assumptions and judgments in non-routine and complex transactions appropriately and timely and documenting such review and approval. We will continue this process of remediation during 2024. We have also made organizational changes and trained our employees in order to strengthen and improve our internal controls over financial reporting.

Management believes that these measures will remediate the identified material weakness. While we have completed our initial testing of these new controls and have concluded they are in place and operating as designed, we are monitoring their ongoing effectiveness, and will consider the material weakness remediated after the applicable remedial controls operate effectively for an additional period of time.

Except as otherwise stated above, there was no change in our internal control over financial reporting that occurred during the period covered by this report that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

Part II - Other Information

Item 1 - Legal Proceedings

In the course of our operations, we become party to litigations, disputes, and regulatory compliance issues from time to time. We are currently, and expect to be in the future, party to various actions that require us to spend time and resources that could otherwise be applied to the management of our operations.

In addition to our litigation with Wyndham described elsewhere in this Report, we are currently party to other litigations, including:

	●	Certain litigations to which we are a party that stem from our legacy apartment rental business, in which we are no longer engaged. As disclosed in our prior Quarterly Reports on Form 10-Q and Annual Reports on Form 10-K, our company wound down the commercial operation of approximately 1,000 residential apartments across 11 cities towards the end of 2021 and continued winding down our residential-based operations in 2022 to focus our operations exclusively on leasing entire hotel properties. This process gave rise to certain litigations, the vast majority of which have been resolved. With respect to any remaining claims relating to our legacy operations, we are either engaged in settlement discussions or have determined to defend and in some cases, counterclaim, such actions.

	●	In connection with our wind down of these legacy operations, we voluntarily initiated discussion with the City of New York with respect to any violations resulting from our legacy business under applicable City of New York short-stay rental prohibitions and related regulations. We entered into a settlement with the City of New York with respect to the foregoing in March 2024, as further described in our Annual Report on Form 10-K for the year ended December 31, 2023, which is incorporated by reference herein, under “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations – Regulations Governing Short-Term Rentals.”

	●	On July 19, 2024, we became aware of a post-judgment writ of garnishment issued against our company in the amount of approximately $621,000 with respect to a judgment rendered against our company in September 2023 in favor of Dimension Seattle. We had previously reserved for this obligation on our balance sheet.

●

As a public company, we could be subject from time to time to class action or other litigations brought by or on behalf of stockholders of our company. As of the date of this prospectus supplement, we are a party to a class action brought in the United States District Court Southern District of New York entitled Janice Pack, Individually and on Behalf of All Others Similarly Situated, as Plaintiff, vs. LuxUrban Hotels Inc., Ferdinand and Shanoop Kothari, as Defendants, alleging, among other causes of action, securities violations in connection with our disclosure of the opening of a hotel for which a definitive lease had not then been executed and delivered. The parties to that proposed hotel opening had begun working toward a transaction in early fall 2023. We believed based on correspondence received, that the material terms of the transaction had been agreed to. In addition, there was a commitment by a qualified banking institution to fund the letter of credit required under the proposed lease in a form agreeable by the landlord; however, a complete set of definitive agreements relating to the lease were not entered into by the parties. The non-completion of this proposed lease transaction did not and will not have a material adverse effect on our operations or financial results. However, based on the complexity and multi-step process of closing long-term leases on hotel properties (and the related letter of credit and similar requirements), in 2024 and going forward, we will only announce acquisitions when they are opened for hosting guests and the entire lease execution and letter of credit process has been completed.

Our business has grown in size and complexity as we have shifted our business focus to hotel operations. Hotel operations require the implementation and management of a wide array of resources, services and processes, including employment management policies and systems, insurance coverages, booking and guest management infrastructure, property tax management and payment systems, and security and fire safety infrastructure and processes. The management of our operations involves relationships with a multitude of third parties, including unionized and nonunion labor, hotel guests, outside hotel management and services providers, booking services providers, credit card processing companies, and hotel maintenance and service companies. While the company continually refines operations, the complexity presents an environment where claims are likely to arise from time to time in the course of operations. Current litigations also include claims related to our hotel-focused operations, including claims related to building maintenance fees, lease payment obligations, brokerage fees and third-party service provider payments. With respect to any current claims relating to our hotel operations, we are either engaged in settlement discussions or have determined to defend and in some cases, counterclaim, such actions.

We currently employ approximately 372 employees across our operations and book thousands of guests annually in our properties. As of the date of this prospectus supplement, we have litigations and arbitrations with certain of our former officers involving claims by them for back pay and other compensation, in which we intend to raise available defenses and counterclaims. Other than these, we currently have no current material litigation involving our employees or guests. However, it is possible that we could be subject to litigation brought by employees or guests from time to time in the course of our operations. Such matters could include slip in fall cases, discrimination cases, building maintenance, insurance claims, employee claims, and others. In connection with the termination of former executive officers, we could be subject to litigation from time to time or elect to bring affirmative litigation if circumstances warrant.

As of September 30, 2024, we had accrued an aggregate of $19.2 million for all anticipated liabilities associated with our current litigation and regulatory actions. Management believes that the counterclaims the company has in connection with these actions could offset all or a portion of such anticipated liabilities, although there can be no assurance that any counterclaims will be successful. Assuming the most adverse outcomes, we expect aggregate liabilities from current litigations to comprise less than 2% of our anticipated revenues for 2024.

Item 1A - Risk Factors

As of September 30, 2024, there have been no material changes in our risk factors from those set forth under the heading “Part I, Item 1A. Risk Factors” in our Annual Report for the year ended December 31, 2023. Those risks include risks, among others, relating to our ability to continue as a going concern, litigation exposures faced by our Company, and the need to raise substantial additional capital, all of which remain material risks to our Company. The risks described in the Annual Report are not the only risks facing the Company. Additional risks and uncertainties not currently known to the Company or that the Company currently deems to be immaterial also may materially adversely affect the Company.

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

Unregistered Sales of Equity Securities

Employment and Management Related Issuance Obligations

During the nine months ended September 30, 2024, we issued an aggregate of 6,463,387 shares on an unregistered basis comprised of 46,966 shares issued as commission on real estate lease transactions, 659,784 for services in lieu of cash payment, 4,246,133 issued to our independent board members under our independent director compensation policy, and 1,510,5040 shares as part of employee compensation.

We did not generate any cash proceeds from the sales of the above-described shares.

Private Placements

August 2024 Note and Warrant Debt Placement

June 2024 Private Placement

On June 26, 2024, we entered into a securities purchase agreement (the “June 2024 Purchase Agreement”) with a private investment fund (the “June 2024 Purchaser”), pursuant to which the Company sold 8,000,000 shares of the Company’s common stock (the “Common Stock”) at a purchase price of $0.25 per share (the “Private Placement”). The Purchaser is an existing shareholder of the Company. The gross proceeds of the June 2024 Private Placement were $2.0 million, with placement agent fees of approximately $140,000, resulting in net proceeds to the Company of approximately $1,860,000. The June 2024 Purchase Agreement contained customary representations, warranties and covenants. The June 2024 Purchaser was afforded various rights in connection with the purchase, including but not limited to, certain anti-dilution rights, and the right to purchase up to an additional 8,000,000 shares at $0.25 per share (subject to downward price adjustments for certain issuance by the Company below $0.25) during the period commencing nine months after the closing and ending on the 18-month anniversary of the closing. The June 2024 Purchaser was granted customary registration rights. All of these securities were converted, and all rights terminated, in connection with the June 2024 Purchaser’s election to convert same into the August 2024 Notes and August 2024 Warrants as part of the August 2024 Note and Warrant Debt Placement.

We utilized the proceeds from these private placements for working capital and general corporate purposes.

Exemptions from Registration

The offer, sale, and issuance of the shares of common stock described in the preceding paragraphs were deemed to be exempt from registration under the Securities Act in reliance on Section 4(a)(2) of the Securities Act or Rule 506 of Regulation D promulgated thereunder, as a transaction by an issuer not involving a public offering. The recipients of securities in each of these transactions acquired the securities for investment only and not with a view to or for sale in connection with any distribution thereof, and appropriate legends were affixed to the securities issued in these transactions. Each of the recipients of securities in these transactions was either an accredited investor within the meaning of Rule 501 of Regulation D under the Securities Act or had adequate access, through employment, business, or other relationships, to information about the Company.

Item 3 - Defaults Upon Senior Securities

None.

Item 4 - Mine Safety Disclosures

Not applicable.

Item 5 - Other Information

Management Transitions

The Company has been engaged in a dedicated effort to enhance its management and operations teams through the recruitment of talented directors and officers who possess meaningful and broad experience in the hotel and online travel services industries, as well as business development expertise. As part of these efforts, effective April 22, 2024, the Company implemented the following:

	●	Elan Blutinger, a hotel and travel technology veteran and a member of the Company’s board of directors, was named its Nonexecutive Chairman of the Board;

	●	Shanoop Kothari, the Company’s Co-Chief Executive Officer and acting Chief Financial Officer, was named its sole Chief Executive Officer. Mr. Kothari resigned from company in June 2024;

	●	Brian Ferdinand, the Company’s founder, stepped down as Chairman of the Board and Co-Chief Executive Officer and became a consultant to the Company, in which role he will oversee the management and expansion of the Company’s hotel properties portfolio; and

	●	Andrew Schwartz, a respected financial industry veteran and credit, debt and equity financing expert, was elected as a member of the Company’s board of directors. Andrew resigned from the board in June 2024.

As part of the foregoing transitions, the Company entered into a Nonexecutive Chairman of the Board Agreement with Mr. Blutinger for a term of three years and will pay him an annual fee of $100,000 cash and issue him an annual grant of 250,000 shares of our common stock (each such grant vesting in three equal annual installments).

In April 2024, the Company and Mr. Ferdinand entered into a consulting agreement pursuant to which Ferdinand agreed, among other things, to oversee the day-to-day management of our company’s acquisition and long-term lease acquisition activities and to assist our then newly appointed chief executive officer in his assumption of that role. In consideration for the services provided by Ferdinand, we agreed to pay Ferdinand a monthly consulting fee of $50,000. Pursuant to a subsequent modification of the consulting agreement in May 2024, it was agreed that all amounts payable to Ferdinand under such consulting agreement through its term (approximately $1.8 million) would be satisfied through the issuance of 5,692,600 shares of common stock upon the increase in the number of shares of common stock issuable under our 2022 equity incentive plan to 15,000,000 shares.

As part of the foregoing transitions, in June 2024, the Company entered into an Employment Agreement with Mr. Robert Arigo as the Chief Executive Officer. Mr. Arigo brings years of experience from the hotel industry.

As part of the foregoing transitions, in June 2024, the Company entered into an Employment Agreement with Mr. Michael James as the Chief Financial Officer. Mr. James brings years of financial experience.

Amended and Restated Claw Back Policy

In November 2023, the Company adopted a claw back policy that provides for the recovery, or “claw back”, of erroneously awarded incentive-based executive compensation, as required by Rule 10D-1 under the Securities Exchange Act of 1934 (“Rule 10D-1”) and the Nasdaq listing requirements. In April 2024, the Company adopted a restated and amended version of that policy to add immaterial but clarifying provisions.

Sale Restriction Waiver

In April 2024, the Company secured from Greenle a waiver on the restrictions contained in its financing agreements with the Company that prohibits the Company’s sales of shares of common stock prior to November 2024 at per-share prices below $5.00 (as may be adjusted for stock splits and similar transactions, the “Trigger Price”). The restriction on sales of common stock by the Company below the Trigger Price terminates in November 2024. This waiver permitted the Company to sell up to an aggregate of 15 million shares prior to November 2024 at prices below the Trigger Price. In consideration of this waiver, Greenle is entitled to be issued up to an aggregate of 2.8 million shares of our common stock (“Initial Greenle Waiver Shares”) from time to time upon written notice to our company. This waiver was amended in May 2024 to increase number of shares permitted to be sold by the Company at prices under the Trigger Price prior to November 2024 to the greater of (i) 30 million shares and (ii) $30 million (based on the gross sale prices of such shares). In consideration of this waiver modification, Greenle is entitled to demand from time to time that the Company issue an amount of additional shares (the “Additional Greenle Waiver Shares” and collectively with the Initial Greenle Shares and the Greenle Revenue Participation Shares, the “Greenle Shares”) equal to 0.22 shares of common stock for each share of common stock sold by the Company through November 6, 2024 in excess of 15 million shares at prices below the Trigger Price. To date, we have been required to issue the Greenle an aggregate of 23,628,324 shares of common stock in connection the foregoing rights and obligations as a result of private placements and underwritten public offerings of our common stock.

Item 6 – Exhibits

Exhibit No.		Description
3.1		Certificate of Incorporation (incorporated by reference to Exhibit 3.1 to the Company’s Registration Statement on Form S-1 (File No. 333-262114) filed with the SEC on January 12, 2022).
3.1.1		Certificate of Amendment to Certificate of Incorporation (incorporated by reference to Exhibit 3.1.1 to the Company’s Registration Statement on Form S-1/A (File No. 333-262114) filed with the SEC on April 15, 2022).
3.1.2		Certificate of Amendment to Certificate of Incorporation (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed with the SEC on November 2, 2022).
3.1.3		Certificate of Amendment to the Certificate of Incorporation of the Company, filed with the Secretary of State of the State of Delaware on July 8, 2024 (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed with the SEC July 9, 2024).
3.2		Bylaws (incorporated by reference to Exhibit 3.2 to the Company’s Registration Statement on Form S-1 (File No. 333-262114) filed with the SEC on January 12, 2022).
3.3		Certificate of Conversion from LLC to “C” corporation (incorporated by reference to Exhibit 3.3 to the Company’s Registration Statement on Form S-1 (File No. 333-262114) filed with the SEC on January 12, 2022).
3.4		Certificate of Designations, Rights and Preferences for 13.00% Series A Cumulative Redeemable Preferred Stock (incorporated by reference to Exhibit 3.6 of our Form 8-A filed with the SEC on October 26, 2023).
4.1		Description of Registrant’s Securities (incorporated by the reference to Exhibit 4.1 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2023 filed with the SEC on April 15, 2024).
4.2		Specimen Common Stock Certificate (incorporated by reference to Exhibit 4.1 to the Company’s Registration Statement on Form S-1/A (File No. 333-262114) filed with the SEC on January 31, 2022).
4.3		Specimen Preferred Stock Certificate representing the shares of 13.00% Series A Cumulative Redeemable Preferred Stock (incorporated by reference to Exhibit 4.1 of the Company’s Form 8-A filed with the SEC on October 26, 2023).
4.4		Form of October 2021 Warrant (incorporated by reference to Exhibit 4.2 to the Company’s Registration Statement on Form S-1/A (File No. 333-262114) filed with the SEC on April 15, 2022).
4.4.1		Addendum, dated December 28, 2021, to the THA Contingent Warrants (incorporated by reference to Exhibit 4.2.1 to the Company’s Registration Statement on Form S-1/A (File No. 333-262114) filed with the SEC on April 15, 2022).
4.5		Form of November 2021 Warrant (incorporated by reference to Exhibit 4.3 to the Company’s Registration Statement on Form S-1/A (File No. 333-262114) filed with the SEC on April 15, 2022).
4.5.1		Addendum to the EBOL Contingent Warrants, dated December 28, 2021 (incorporated by reference to Exhibit 4.3.1 to the Company’s Registration Statement on Form S-1/A (File No. 333-262114) filed with the SEC on April 15, 2022).
4.6		Form of Underwriter’s Warrant (incorporated by reference to Exhibit 4.4 to the Company’s Registration Statement on Form S-1/A (File No. 333-262114) filed with the SEC on January 31, 2022).
4.7		Form of Warrant Agency Agreement (incorporated by reference to Exhibit 10.10 to the Company’s Registration Statement on Form S-1/A (File No. 333-262114) filed with the SEC on January 31, 2022).
4.8		Form of May/June 2022 Note (incorporated by reference to Exhibit 10.16 to the Company’s Registration Statement on Form S-1/A (File No. 333-262114) filed with the SEC on July 11, 2022).
4.9		Form of May/June 2022 Warrant (incorporated by reference to Exhibit 4.5 to the Company’s Registration Statement on Form S-1/A (File No. 333-262114) filed with the SEC on July 11, 2022).
4.10		Form of 2022 Investor Warrant (incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K filed with the SEC on September 22, 2022).

4.11		Representative’s Warrant, dated August 16, 2022 (incorporated by reference to Exhibit 4.4 to the Company’s Current Report on Form 8-K filed with the SEC on August 16, 2022).
4.12		Form of September 2022 Investor Note (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the SEC on September 30, 2022).
4.13		Form of September 2022 Investor Warrant, initial exercise date September 30, 2022 (incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K filed with the SEC on September 30, 2022).
4.14		Form of November 2022 Investor Note (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the SEC on November 28, 2022).^†
4.15		Form of Warrant issued pursuant to Exchange Agreement dated May 17, 2024 (incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K filed with the SEC May 22, 2024).
4.16		Form of Underwriter’s Warrant, issued May 23, 2024 (incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K filed with the SEC May 22, 2024).
4.17		Amended & Restated Promissory Note (THA Family II LLC), dated July 11, 2024 (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the SEC July 12, 2024).
4.18		Amended & Restated Promissory Note (Elana Fiore), dated July 11, 2024 (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed with the SEC July 12, 2024).
4.19		Underwriter’s Warrant, issued July 15, 2024 (incorporated by reference to Exhibit 4.2 to the Company’s Current Report on Form 8-K filed with the SEC July 12, 2024).
4.20		Underwriter’s Warrant, issued July 30, 2024 (incorporated by reference to Exhibit 4.2 to the Company’s Current Report on Form 8-K filed with the SEC July 29, 2024).
4.21		Form of Senior Secured Convertible Note issued pursuant to Securities Purchase Agreement dated as of August 13, 2024 (incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K filed with the SEC August 14, 2024).
4.22		Form of Warrant issued pursuant to Securities Purchase Agreement dated as of August 13, 2024 (incorporated by reference to Exhibit 4.2 to the Company’s Current Report on Form 8-K filed with the SEC August 14, 2024).
10.1		2022 Performance Equity Plan (incorporated by reference to Exhibit 10.1 to the Company’s Registration Statement on Form S-1 (File No. 333-262114) filed with the SEC on January 12, 2022).
10.2		Form of Directors and Officers Indemnification Agreement (incorporated by reference to Exhibit 10.10 to the Company’s Registration Statement on Form S-1/A (File No. 333-262114) filed with the SEC on January 31, 2022).
10.3		Amendment No. 1, dated June 30, 2022, between the Company and Greenle Partners LLC Series Alpha P.S., to Securities Purchase Agreement, dated May 27, 2022, between the Company and Evergreen Capital Partners LLC (incorporated by reference to Exhibit 10.14 to the Company’s Registration Statement on Form S-1/A (File No. 333-262114) filed with the SEC on July 11, 2022).
10.4		Securities Purchase Agreement, dated June 30, 2022, between the Company and Greenle Partners LLC Series Alpha P.S. (incorporated by reference to Exhibit 10.15 to the Company’s Registration Statement on Form S-1/A (File No. 333-262114) filed with the SEC on July 11, 2022).
10.5		Form of Security and Guaranty Agreement, dated as of September 30, 2022, between the Company and Greenle Partners LLC Series Alpha P.S. (incorporated by reference to Exhibit 10.17 to the Company’s Registration Statement on Form S-1/A (File No. 333-262114) filed with the SEC on July 11, 2022).
10.6		Amended and Restated Registration Rights Agreement, dated as of June 30, 2022, between the Company and Greenle Partners LLC Series Alpha P.S. (incorporated by reference to Exhibit 10.18 to the Company’s Registration Statement on Form S-1/A (File No. 333-262114) filed with the SEC on July 11, 2022).
10.7		Form of September 2022 Investor Purchase Agreement, dated as of September 30, 2022, between the Company and Greenle Partners LLC Series Alpha P.S. (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed with the SEC on September 30, 2022).

10.8		Amended and Restated Security and Guaranty Agreement, dated as of September 30, 2022, between the Company and Greenle Partners LLC Series Alpha P.S. (incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K filed with the SEC on September 30, 2022).
10.9		Amended and Restated Registration Rights Agreement, dated as of September 30, 2022, between the Company and Greenle Partners LLC Series Alpha P.S. (incorporated by reference to Exhibit 10.4 to the Company’s Current Report on Form 8-K filed with the SEC on September 30, 2022).
10.10		Addendum, dated as of September 30, 2022, to September 30, 2022 Investor Purchase Agreement between the Company and Greenle Partners LLC Series Alpha P.S. (incorporated by reference to Exhibit 10.5 of the Company’s Current Report on Form 8-K/A filed with the SEC on October 20, 2022).
10.11		Form of Hotel Management Agreement (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the SEC on November 8, 2022).
10.12		Loan Agreement, dated November 23, 2022, between the Company, Greenle Partners LLC Series Alpha P.S. and Greenle Partners LLC Series Beta P.S. (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed with the SEC on November 28, 2022).^†
10.13		Revenue Share Agreement, dated November 23, 2022, between the Company and Greenle Partners LLC Series Alpha P.S. (incorporated by reference to Exhibit 10.4 to the Company’s Current Report on Form 8-K filed with the SEC on November 28, 2022).^†
10.14		Transition Services Agreement, dated November 29, 2022, between the Company and David Gurfein (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the SEC on December 2, 2022).
10.15		Note Extension and Conversion Agreement, dated December 20, 2022, between the Company, Greenle Partners LLC Series Alpha P.S., and Greenle Partners LLC Series Beta P.S. (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the SEC on December 20, 2022).
10.16		Revenue Share Agreement, dated February 13, 2023, between the Company, Greenle Partners LLC Series Alpha P.S., and Greenle Partners LLC Series Beta P.S. (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the SEC on February 14, 2023).^†
10.17		February 2023 Letter Agreement, dated February 17, 2023, between the Company and Greenle Partners LLC Series Beta P.S. (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the SEC on February 21, 2023).
10.18		Amendment No. 1 to the Amended and Restated Security and Guaranty Agreement, dated as of February 17, 2023, between the Company, certain subsidiaries of the Company, and Greenle Partners LLC Series Alpha P.S. (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed with the SEC on February 21, 2023).
10.19		Revenue Share Exchange Agreement, dated May 21, 2023, between the Company, Greenle Partners LLC Series Alpha P.S., and Greenle Partners LLC Series Beta P.S. (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the SEC on May 23, 2023).
10.20		June 2023 Letter Agreement, dated June 19, 2023, between the Company, Greenle Partners LLC Series Alpha P.S., and Greenle Partners LLC Series Beta P.S. (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the SEC on June 20, 2023).
10.21		Registration Rights Amendment and Warrant Letter Agreement, dated August 31, 2023, between the Company, Greenle Partners LLC Series Alpha P.S., and Greenle Partners LLC Series Beta P.S. (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the SEC on September 1, 2023).

10.22		November 2023 Letter Agreement dated November 6, 2023, between the Company, Greenle Partners LLC Series Alpha P.S., and Greenle Partners LLC Series Beta P.S. (incorporated by reference to Exhibit 10.6 to the Company’s Quarterly Report for the Nine Months Ended September 30, 2023 filed with the SEC on November 8, 2023).
10.23		December 2023 Letter Agreement, dated December 17, 2023, between the Company, Greenle Partners LLC Series Alpha P.S., and Greenle Partners LLC Series Beta P.S. (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the SEC on December 18, 2023).
10.24		Second December 2023 Letter Agreement, dated December 27, 2023, between the Company, Greenle Partners LLC Series Alpha P.S., and Greenle Partners LLC Series Beta P.S. (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the SEC on December 29, 2023).
10.25		April 2024 Letter Agreement, dated April 12, 2024, between the Company, Greenle Partners LLC Series Alpha P.S., and Greenle Partners LLC Series Beta P.S. (incorporated by reference to Exhibit 10.36 to the Company’s Annual Report on Form 10-K filed with the SEC on April 15, 2024).
10.26		Reservation Termination Modification, dated April 12, 2024 to the April 2024 Letter Agreement, between the Company, Greenle Partners LLC Series Alpha P.S., and Greenle Partners LLC Series Beta P.S. (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the SEC May 22, 2024).
10.27		Consulting Agreement, dated April 22, 2024, between the Company and Brian Ferdinand (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed with the SEC on April 23, 2024).
10.28		Amendment, dated June 7, 2024, to the Consulting Agreement between the Company and Brian Ferdinand, dated April 22, 2024 (Incorporated by reference to the Company’s Current Report on Form 8-K filed with the SEC on June 11, 2024).
10.29		Nonexecutive Chairman Agreement, dated April 22, 2024, between the Company and Elan Blutinger (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the SEC April 23, 2024).
10.30		Exchange Agreement, dated May 17, 2024, between the Company and Brian Ferdinand (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed with the SEC on May 22, 2024).
10.31		Employment Agreement, effective June 4, 2024, between the Company and Robert Arigo, (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the SEC on June 6, 2024).
10.32		Employment Agreement, dated June 10, 2024, between the Company and Michael James, (incorporated by reference to Exhibit 10.4 to the Company’s Current Report on Form 8-K filed with the SEC on June 11, 2024)
10.33		Exchange Agreement, dated June 26, 2024, between the Company, THA Holdings LLC, THA Family II LLC, SuperLuxMia LLC, and Brian Ferdinand (incorporated by reference to Exhibit 10.2 to the Mr. Ferdinand’s Schedule 13D/A filed with the SEC on June 28, 2024).
10.34		Securities Purchase Agreement, dated June 26, 2024, between the Company and Goudy Park Capital, LP (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the SEC June 28, 2024).
10.35		Form of Securities Purchase Agreement, dated August 13, 2024, between the Company and the Purchasers (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the SEC August 14, 2024).
10.35.1		Form of Securities Purchase Agreement for October/November 2024 Extension of August 2024 Note and Warrant Debt Offering (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the SEC October 21, 2024).
10.36		Form of Guaranty and Security Agreement, dated August 13, 2024, between the Company, certain subsidiaries of the Company, the Collateral Agent and Purchasers (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed with the SEC August 14, 2024).
10.37		Form of Modification Agreement (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed with the SEC October 21, 2024).
21.1		List of Subsidiaries of the Registrant (incorporated by reference to Exhibit 10.36 to the Company’s Annual Report on Form 10-K filed with the SEC on April 15, 2024).

31.1		Certificate of Principal Executive Officer, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.⁽¹⁾
31.2		Certificate of Principal Financial Officer, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.⁽¹⁾
32.1		Certificate of Principal Executive Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.⁽¹⁾
32.2		Certificate of Principal Financial Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.⁽¹⁾
Exhibit 101.INS		Inline XBRL Instance Document
Exhibit 101.SCH		Inline XBRL Taxonomy Extension Schema Document
Exhibit 101.CAL		Inline XBRL Taxonomy Extension Calculation Linkbase Document
Exhibit 101.DEF		Inline XBRL Taxonomy Definition Linkbase Document
Exhibit 101.LAB		Inline XBRL Taxonomy Extension Label Linkbase Document
Exhibit 101.PRE		Inline XBRL Taxonomy Extension Presentation Linkbase Document
Exhibit 104		Cover Page Interactive Data File (embedded within the Inline XBRL document)

	(1)	Filed herewith.
	†	Certain of the exhibits and schedules to this agreement have been omitted in accordance with Regulation S-K Item 601(a)(5). The Company agrees to furnish a copy of all omitted exhibits and schedules to the SEC upon request.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	LUXURBAN HOTELS INC.

Dated: November 19, 2024	By:	/s/ Michael James
		Michael James
		Chief Financial Officer
		(Principal Financial Officer)

Exhibit 31.1

CERTIFICATION BY PRINCIPAL EXECUTIVE OFFICER

I, Robert Arigo, certify that:

1 I have reviewed this Quarterly Report on Form 10-Q of LuxUrban Hotels Inc. and Subsidiaries;

2 Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3 Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4 The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5 The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

November 19, 2024

	/s/ Robert Arigo
	Chief Executive Officer

Exhibit 31.2

CERTIFICATION BY PRINCIPAL FINANCIAL OFFICER

I, Michael James, certify that:

1 I have reviewed this Quarterly Report on Form 10-Q of LuxUrban Hotels Inc. and Subsidiaries;

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

November 19, 2024

	/s/ Michael James
	Chief Financial Officer
	(Principal Financial Officer)

Exhibit 32.1

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report on Form 10-Q of LuxUrban Hotels Inc. and Subsidiaries (the “Company”) for the quarter ended September 30, 2024 as filed with the Securities and Exchange Commission on the date hereof(the “Report”), the undersigned, Robert Arigo, Chief Executive Officer of the Company, hereby certifies, pursuant to 18 U.S.C. Section 1350, that to his knowledge:

(1)	the Report fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934; and

(2)	the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

November 19, 2024

	/s/ Robert Arigo
	Chief Executive Officer

Exhibit 32.2

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report on Form 10-Q of LuxUrban Hotels Inc. and Subsidiaries (the “Company”) for the quarter ended September 30, 2024 as filed with the Securities and Exchange Commission on the date hereof(the “Report”), the undersigned, Michael James, Chief Financial Officer of the Company, hereby certifies, pursuant to 18 U.S.C. Section 1350, that to his knowledge:

(1)	the Report fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934; and

(2)	the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

November 19, 2024

	/s/ Michael James
	Chief Financial Officer

Cover - shares	9 Months Ended
Cover - shares	Sep. 30, 2024	Nov. 19, 2024
Document Type	10-Q
Amendment Flag	false
Document Quarterly Report	true
Document Transition Report	false
Document Period End Date	Sep. 30, 2024
Document Fiscal Period Focus	Q3
Document Fiscal Year Focus	2024
Current Fiscal Year End Date	--12-31
Entity File Number	001-41473
Entity Registrant Name	LUXURBAN HOTELS INC.
Entity Central Index Key	0001893311
Entity Tax Identification Number	82-3334945
Entity Incorporation, State or Country Code	DE
Entity Address, Address Line One	2125 Biscayne Blvd
Entity Address, Address Line Two	Suite 253
Entity Address, City or Town	Miami
Entity Address, State or Province	FL
Entity Address, Postal Zip Code	33137
City Area Code	833
Local Phone Number	723-7368
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	true
Elected Not To Use the Extended Transition Period	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		158,204,018
Common stock, $0.00001 par value per share
Title of 12(b) Security	Common stock, $0.00001 par value per share
Trading Symbol	LUXH
Security Exchange Name	NASDAQ
13.00% Series A Cumulative Redeemable Preferred Stock, $0.00001 par value per share
Title of 12(b) Security	13.00% Series A Cumulative Redeemable Preferred Stock, $0.00001 par value per share
Trading Symbol	LUXHP
Security Exchange Name	NASDAQ

CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) - USD ($)	Sep. 30, 2024	Dec. 31, 2023
Current Assets
Cash and Cash Equivalents	$ 198,868	$ 752,848
Accounts Receivable, Net		329,887
Channel Retained Funds, Net		1,500,000
Processor Retained Funds, Net	446,809	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	262,955	1,959,022
Prepaid Guarantee Trust - Related Party	341,250	1,023,750
Total Current Assets	2,729,882	19,721,057
Other Assets
Furniture, Equipment and Leasehold Improvements, Net	652,763	691,235
Security Deposits - Noncurrent	17,014,123	20,307,413
Prepaid Expenses and Other Noncurrent Assets	419,631	960,729
Operating Lease Right-Of-Use Assets, Net	185,797,690	241,613,588
Total Other Assets	203,884,207	263,572,965
Total Assets	206,614,089	283,294,022
Current Liabilities
Accounts Payable and Accrued Expenses	64,170,241	23,182,305
Bookings Received in Advance	6,354,952	4,404,216
Short Term Business Financing, Net	3,922,103	1,115,120
Loans Payable - Current	6,472,183	1,654,589
Initial Direct Costs Leases - Current	300,000	486,390
Operating Lease Liabilities - Current	2,347,039	1,982,281
Development Incentive Advances - Current		300,840
Total Current Liabilities	83,566,518	33,125,741
Long-Term Liabilities
Loans Payable	5,565,733	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	189,458,967	242,488,610
Total Long-Term Liabilities	198,974,700	253,665,639
Total Liabilities	282,541,218	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 September 30, 2024 and December 31, 2023, respectively	5,775,596	5,775,596
Stockholders’ Deficit
Common Stock (200,000,000 shares authorized, issued, outstanding - 142,754,165, and 39,462,440, respectively)	1,428	394
Additional Paid In Capital	123,995,898	90,437,155
Accumulated Deficit	(199,901,381)	(99,710,503)
Stockholders’ Equity before Treasury Stock	(75,904,055)	(9,272,954)
Treasury stock	(5,798,670)
Total Stockholders’ Deficit	(81,702,725)	(9,272,954)
Total Liabilities and Stockholders’ Deficit	$ 206,614,089	$ 283,294,022

CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) (Parenthetical) - $ / shares	Sep. 30, 2024	Dec. 31, 2023
Statement of Financial Position [Abstract]
Preferred stock per shares	$ 25	$ 25
Preferred stock, shares authorized	10,000,000	10,000,000
Preferred stock, shares issued	294,144	294,144
Preferred stock, shares outstanding	294,144	294,144
Common stock, shares authorized	200,000,000	200,000,000
Common stock, shares issued	142,754,165	39,462,440
Common stock, shares outstanding	142,754,165	39,462,440

CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS (UNAUDITED) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023
Income Statement [Abstract]
Net Rental Revenue	$ 13,133,103	$ 31,208,248	$ 45,276,687	$ 85,883,521
Rent Expense	6,824,940	7,802,847	22,387,122	18,068,828
Non-Cash Rent Expense Amortization	1,684,546	1,952,599	5,449,098	6,187,540
Surrender of Deposits	700,000		4,151,628
Other Expenses	20,740,915	13,640,517	73,919,562	38,273,980
Total Cost of Revenue	29,950,401	23,395,963	105,907,410	62,530,348
Gross (Loss) Profit	(16,817,298)	7,812,285	(60,630,723)	23,353,173
General and Administrative Expenses	11,697,043	1,981,774	26,326,941	9,297,097
Termination of Franchise Agreement	310,356		3,625,868
Non-Cash Issuance of Common Stock for Operating Expenses	111,000	334,081	489,936	1,847,711
Non-Cash Stock Compensation and Option Expense	25,302	407,553	1,872,623	1,209,936
Total Operating Expenses	12,143,701	2,723,408	32,315,368	12,354,744
(Loss) Income from Operations	(28,960,999)	5,088,877	(92,946,091)	10,998,429
Other Income (Expense)
Other Income	1,331,423	31,627	2,418,403	129,875
Cash Interest and Financing Costs	(984,792)	(2,185,202)	(4,060,348)	(5,505,708)
Non-Cash Financing Costs	(2,115,004)		(4,885,867)	(30,227,289)
Total Other Expense	(1,768,373)	(2,153,575)	(6,527,812)	(35,603,122)
Income (Loss) Before Provision for Income Taxes	(30,729,372)	2,935,302	(99,473,903)	(24,604,693)
Provision for Income Taxes	(0)	(1,999,498)	(0)	15,702
Net Income (Loss)	(30,729,372)	4,934,800	(99,473,903)	(24,620,395)
Preferred Stock Dividend	(238,992)		(716,975)
Net Income (Loss) Attributable to Common Stockholders	$ (30,968,364)	$ 4,934,800	$ (100,190,878)	$ (24,620,395)
Basic Income (Loss) Per Common Share	$ (0.24)	$ 0.11	$ (1.22)	$ 0.69
Diluted Income (Loss) Per Common Share	$ (0.24)	$ 0.11	$ (1.22)	$ 0.69
Basic Weighted Average Number of Common Shares Outstanding	131,175,404	44,562,243	82,274,873	35,895,801
Diluted Weighted Average Number of Common Shares Outstanding	131,175,404	44,562,243	82,274,873	35,895,801

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' DEFICIT (UNAUDTIED) - USD ($)	Common Stock [Member]	Additional Paid-in Capital [Member]	Retained Earnings [Member]	Treasury Stocks [Member]	Total
Balance - June 30, 2023 at Dec. 31, 2022	$ 276	$ 17,726,592	$ (21,018,992)		$ (3,292,124)
Beginning balance, shares at Dec. 31, 2022	27,691,918
Net Income			(2,780,534)		(2,780,534)
Non-Cash Stock Compensation Expense	$ 2	429,994			429,996
Non-Cash Stock Compensation Expense, Shares	166,665
Non-Cash Stock Option Expense		167,573			167,573
Issuance of Shares for Operating Expenses	$ 4	884,812			884,816
Issuance of Shares for Operating Expenses, shares	433,881
Warrant Exercise	$ 2	399,998			400,000
Warrant Exercise, shares	200,000
Conversion of Loans	$ 9	2,699,991			2,700,000
Conversion of Loans, shares	900,000
Loss on Debt Extinguishment		58,579			58,579
Balance - September 30, 2023 at Mar. 31, 2023	$ 293	22,367,539	(23,799,526)		(1,431,694)
Ending balance, shares at Mar. 31, 2023	29,392,464
Net Income			(26,774,661)		(26,774,661)
Non-Cash Stock Option Expense		204,814			204,814
Issuance of Shares for Operating Expenses	$ 2	784,311			784,313
Issuance of Shares for Operating Expenses, shares	276,525
Modification of Warrants		259,075			259,075
Issuance of Shares to Satisfy Loans	$ 1	157,999			158,000
Issuance of Shares to Satisfy Loans, shares	58,088
Issuance of Shares for Revenue Share Agreements	$ (6)	(1,704,543)			(1,704,549)
Issuance of Shares for Revenue Share Agreements, shares	614,252
Conversion of Loans	$ 23	4,989,607			4,989,630
Conversion of Loans, shares	2,278,975
Warrant Expense	$ 24	4,912,478			4,912,502
Warrant Expense, shares	2,356,251
Issuance of Shares for Deferred Compensation	$ 2	467,214			467,216
Issuance of Shares for Deferred Compensatios, shares	160,036
Termination of Revenue Share Agreement Adjustment		28,174,148			28,174,148
Balance - September 30, 2023 at Jun. 30, 2023	$ 351	64,021,728	(50,574,187)		13,447,892
Ending balance, shares at Jun. 30, 2023	35,136,591
Net Income			4,934,800		4,934,800
Non-Cash Stock Option Expense		146,707			146,707
Warrant Exercise	$ 9	2,353,992			2,354,001
Warrant Exercise, shares	860,000
Issuance of Shares for Revenue Share Agreements	$ (6)	6
Issuance of Shares for Revenue Share Agreements, shares	614,250
Issuance of Shares for Operating Expenses and Settlements	$ 1	334,080			334,081
Issuance of Shares for Operating Expenses and Settlements, shares	113,824
Issuance of Shares for Director Compensation	$ 1	260,845			260,846
Issuance of Shares for Director Compensation, shares	91,525
Balance - September 30, 2023 at Sep. 30, 2023	$ 368	67,117,346	(45,639,387)		21,478,327
Ending balance, shares at Sep. 30, 2023	36,816,190
Balance - June 30, 2023 at Dec. 31, 2023	$ 394	90,437,155	(99,710,503)		(9,272,954)
Beginning balance, shares at Dec. 31, 2023	39,462,440
Net Income			(42,159,482)		(42,159,482)
Non-Cash Stock Compensation Expense	$ 2	633,074			633,076
Non-Cash Stock Compensation Expense, Shares	222,800
Non-Cash Stock Option Expense		152,339			152,339
Issuance of Shares for Operating Expenses	$ 1	304,925			304,926
Issuance of Shares for Operating Expenses, shares	69,863
Modification of Warrants		2,036,200			2,036,200
Warrant Exercise	$ 15	4,799,985			4,800,000
Warrant Exercise, shares	1,450,000
Issuance of Shares to Satisfy Loans		91,435			91,435
Issuance of Shares to Satisfy Loans, shares	20,008
Issuance of Shares for Revenue Share Agreements	$ (6)	6
Issuance of Shares for Revenue Share Agreements, shares	614,250
Preferred Dividends			(238,992)		(238,992)
Balance - September 30, 2023 at Mar. 31, 2024	$ 418	98,455,107	(142,108,977)		(43,653,452)
Ending balance, shares at Mar. 31, 2024	41,839,361
Net Income			(26,585,049)		(26,585,049)
Non-Cash Stock Compensation Expense	$ 10	823,718			823,728
Non-Cash Stock Compensation Expense, Shares	980,628
Non-Cash Stock Option Expense		146,743			146,743
Issuance of Shares for Operating Expenses		26,085			26,085
Issuance of Shares for Operating Expenses, shares	36,887
Modification of Warrants		442,500			442,500
Issuance of Shares to Satisfy Loans	$ 1	47,924			47,925
Issuance of Shares to Satisfy Loans, shares	67,500
Issuance of Shares for Revenue Share Agreements	$ (67)	67
Issuance of Shares for Revenue Share Agreements, shares	6,740,000
Preferred Dividends			(238,991)		(238,991)
Public Offering, Net of Issuance Fees	$ 351	7,026,087			7,026,438
Public Offering, Net of Issuance Fees, Shares, shares	35,075,000
Private Offering, Net of Issuance Fees	$ 80	1,833,920			1,834,000
Private Offering, Net of Issuance Fees, Shares	8,000,000
Purchase of Treasury Stock	$ (193)	4,825,530		(4,825,337)
Purchase of Treasury Stock, Shares	(19,304,872)
Balance - September 30, 2023 at Jun. 30, 2024	$ 734	113,627,547	(168,933,017)	(4,825,337)	(60,130,073)
Ending balance, shares at Jun. 30, 2024	73,434,504
Net Income			(30,729,372)		(30,729,372)
Non-Cash Stock Compensation Expense	$ 46	327,785			327,831
Non-Cash Stock Compensation Expense, Shares	4,553,209
Non-Cash Stock Option Expense		(302,529)			(302,529)
Issuance of Shares for Operating Expenses	$ 6	110,994			111,000
Issuance of Shares for Operating Expenses, shares	600,000
Modification of Warrants		115,200			115,200
Warrant Exercise	$ 119	(119)
Warrant Exercise, shares	11,893,119
Preferred Dividends			(238,992)		(238,992)
Public Offering, Net of Issuance Fees	$ 461	6,801,140			6,801,601
Public Offering, Net of Issuance Fees, Shares, shares	46,073,333
Issuance of Shares for Dilution Share Agreements	$ 196	(196)
Issuance of Shares for Dilution Share Agreeemnts, shares	19,533,333
Debt discount		4,342,609			4,342,609
Equity converted into debt	$ (134)	(1,026,533)		(973,333)	(2,000,000)
Equity converted into debt, shares	(13,333,333)
Balance - September 30, 2023 at Sep. 30, 2024	$ 1,428	$ 123,995,898	$ (199,901,381)	$ (5,798,670)	$ (81,702,725)
Ending balance, shares at Sep. 30, 2024	142,754,165

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) - USD ($)	9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023
Cash Flows from Operating Activities
Net (Loss)	$ (99,473,903)	$ (24,620,395)
Adjustments to reconcile net (loss) income to net cash provided by operating activities:
Writeoff of bad debts	6,217,506
Writeoff of channel retained funds security deposit	1,500,000
Writeoff of security deposits	4,343,290
Non-cash stock compensation expense	55,500	1,158,058
Non-cash stock director and option expense	1,725,688	519,094
Amortization of debt discount	197,675
Depreciation expense	38,472	59,075
Shares issued for operating expenses	489,934	2,003,210
Modification of Warrants	2,593,900	259,075
Non-cash lease expense	27,527,121	23,695,139
Gain on lease exit	(2,164,593)
Non-cash forgiveness of Development Incentive Advances	75,210
Gain on sale of Treasury Bills		(31,014)
Issuance of Shares for Revenue Share Agreement		1,704,549
Termination of Revenue Share Agreement		28,174,148
Non-cash Financing Charges Associated with Short Term Business Financing	289,087	325,290
Writeoff of amounts due from NYC & LL	1,374,483
Loss on Debt Extinguishment		58,579
(Increase) Decrease in:
Accounts Receivable, Net	325,260
Processor retained funds	(446,809)	804,991
Channel retained funds and receivables from OTA’s	2,711,468	(12,868,602)
Receivables from City of New York and Landlords, Net	549,563
Prepaid expense and other assets	2,237,165	(3,791,886)
Prepaid Guarantee Trust - Related Party	682,500
Security deposits	(1,050,000)	(9,402,784)
(Decrease) Increase in:
Accounts payable and accrued expenses	33,921,106	1,425,308
Operating lease liabilities	(22,211,514)	(17,485,034)
Rents received in advance	1,950,736	982,946
Accrued Income Taxes		15,702
Net cash used by operating activities	(36,691,573)	(7,014,551)
Cash Flows from Investing Activities
Purchase of Furniture and Equipment		(921,414)
Proceeds from the sale of Treasury Bills		2,692,396
Net cash provided by investing activities		1,770,982
Cash Flows from Financing Activities
Deferred offering costs - net		(13,702)
Proceeds from (Repayments of) short term business financing - net	2,517,896	(16,107)
Proceeds from public and private sales of common stock	15,662,038
Warrant Exercises	4,800,000	7,666,503
Proceeds from Letter of Credit guarantors	2,824,886
Proceeds from Development Incentive Advances	3,000,500	1,594,557
Proceeds from (Repayments of) loans payable - net	8,244,203
Repayments of loans payable - net	(194,955)	(265,504)
Preferred shareholder dividends paid	(716,975)
Net cash provided by financing activities	36,137,594	8,965,747
Net Increase in Cash and Cash Equivalents and Restricted Cash	(553,980)	3,722,178
Cash and Cash Equivalents and Restricted Cash - beginning of the period	752,848	2,176,402
Total Cash and Cash Equivalents and Restricted Cash	198,868	5,898,580
Cash and Cash Equivalents	198,868	4,798,580
Restricted Cash		1,100,000
Supplemental Disclosures of Cash Flow Information
Cash paid for Interest	2,522,989	5,179,748
Noncash operating activities:
Acquisition of New Operating Lease Right-of-Use Assets		155,045,761
Net settlement of receivables and payables to City of New York	1,827,157
Noncash financing activities:
Conversion of debt to common stock and additional paid-in capital		7,847,630
Accrued deferred offering costs		350,000
Issuance of Warrants to purchase Treasury Stock	5,798,670
Equity converted to debt	2,000,000
Issuance of shares to satisfy loans	91,435
Debt discount	$ 4,342,609

Pay vs Performance Disclosure - USD ($)	3 Months Ended		9 Months Ended		12 Months Ended
Pay vs Performance Disclosure - USD ($)	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023	Dec. 31, 2023
Pay vs Performance Disclosure [Table]
Net Income (Loss)	$ (30,729,372)	$ 4,934,800	$ (99,473,903)	$ (24,620,395)	$ (78,523,377)

Insider Trading Arrangements	9 Months Ended
Insider Trading Arrangements	Sep. 30, 2024
Insider Trading Arrangements [Line Items]
Rule 10b5-1 Arrangement Adopted	false
Non-Rule 10b5-1 Arrangement Adopted	false
Rule 10b5-1 Arrangement Terminated	false
Non-Rule 10b5-1 Arrangement Terminated	false

DESCRIPTION OF BUSINESS AND PRINCIPLES OF CONSOLIDATION

9 Months Ended

Sep. 30, 2024

Organization, Consolidation and Presentation of Financial Statements [Abstract]

DESCRIPTION OF BUSINESS AND PRINCIPLES OF CONSOLIDATION

1 - DESCRIPTION OF BUSINESS AND PRINCIPLES OF CONSOLIDATION

All significant intercompany accounts and transactions have been eliminated in consolidation.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

9 Months Ended

Sep. 30, 2024

Accounting Policies [Abstract]

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

LEASES

9 Months Ended

Sep. 30, 2024

Leases

LEASES

3 - LEASES

At September 30, 2024 and December 31, 2023, supplemental balance sheet information related to leases were as follows:


	September 30, 2024		December 31, 2023
Operating lease right of use assets, net	$	185,797,690	$	241,613,588
Operating lease liabilities, current portion	$	2,347,039	$	1,982,281
Operating lease liabilities, net of current portion	$	189,458,967	$	242,488,610

At September 30, 2024, future minimum lease payments under the non-cancellable operating leases are as follows:

Schedule of future minimum lease payments under the non-cancellable operating leases


Twelve Months Ending September 30,
2025	$	25,519,527
2026		26,223,627
2027		27,080,476
2028		28,094,634
2029		28,872,080
Thereafter (through 2048)		291,581,735
Total lease payment	$	427,373,079
Less interest		(235,567,073	)
Present value obligation		191,806,006
Short-term liability		2,347,039
Long-term liability	$	189,458,967

The following summarizes other supplemental information about the Company’s operating leases:


	September 30, 2024			December 31, 2023
Weighted average discount rate		12.03	%		10.5	%
Weighted average remaining lease term (years)		12.6 years			16.6 years

	Three Months Ended September 30,						Nine Months Ended September 30,
	2024		2023				2024		2023
Operating lease cost	$	8,386,290		$	9,942,873		$	23,951,472	$	23,695,139
Short-term lease cost	$	133,197		$	(187,427	)	$	3,897,749	$	561,229
Total lease cost	$	8,522,487		$	9,755,446		$	27,849,221	$	24,256,368

ACCOUNTS RECEIVABLES, PROCESSOR AND CHANNEL RETAINED FUNDS

9 Months Ended

Sep. 30, 2024

Credit Loss [Abstract]

ACCOUNTS RECEIVABLES, PROCESSOR AND CHANNEL RETAINED FUNDS

4 - ACCOUNTS RECEIVABLES, PROCESSOR AND CHANNEL RETAINED FUNDS

ACCOUNTS PAYABLE AND ACCRUED EXPENSES

9 Months Ended

Sep. 30, 2024

Payables and Accruals [Abstract]

ACCOUNTS PAYABLE AND ACCRUED EXPENSES

5 - ACCOUNTS PAYABLE AND ACCRUED EXPENSES

Accounts payable and accrued expenses as of September 30, 2024 and December 31, 2023, were as follows:


	September 30,		December 31,
	2024		2023
Accrued payroll and related liabilities	$	876,000	$	2,024,000
Bank and service fees payable		415,000		288,223
Board of director fees payable		239,000		231,000
Cleaning expense payable		373,000		-
Commissions payable		876,000		632,000
Insurance expense payable		821,000		194,000
Interest expense		1,202,000		-
Legal exposure		26,386,000		8,400,000
License and public relations payable		178,000		94,000
Linens, sundries and supplies payable		701,000		420,000
Other payables		652,241		292,082
Printing expense payable		226,000		263,000
Processing fees payable		-		52,000
Professional fees payable		723,000		590,000
Rent expense payable		3,265,000		1,737,000
Repairs, maintenance and improvements payable		1,059,000		719,000
Sales and other taxes		11,619,000		3,910,000
Telephone and cable payable		395,000		71,000
Union liabilities		8,448,000		-
Utilities payable		5,716,000		3,265,000
	$	64,170,241	$	23,182,305

LOANS PAYABLE – SBA – PPP LOAN

9 Months Ended

Sep. 30, 2024

Loans Payable Sba Ppp Loan

LOANS PAYABLE – SBA – PPP LOAN

6 - LOANS PAYABLE – SBA – PPP LOAN

Accrued interest at September 30, 2024 and December 31, 2023, was $7,702 and $5,571, respectively, and is included in accounts payable and accrued expenses in the consolidated balance sheets.

Future minimum principal repayments of the SBA - PPP loans payable are as follows:


For the Twelve Months Ending September 30,
2025	$	276,658

LOANS PAYABLE – SBA – EIDL LOAN

9 Months Ended

Sep. 30, 2024

Loans Payable Sba Eidl Loan

LOANS PAYABLE – SBA – EIDL LOAN

7 - LOANS PAYABLE – SBA – EIDL LOAN

The outstanding balance at September 30, 2024 and December 31, 2023, was $782,105 and $786,950, respectively.

Accrued interest at September 30, 2024 and December 31, 2023 was $22,262 and $27,644, respectively, and is included in accounts payable and accrued expenses in the consolidated balance sheets.

Future minimum principal repayments of the SBA - EIDL loans payable are as follows:

Schedule of future minimum principal repayments of the SBA and EIDL loans payable


For the 12 Months Ending September 30,
2025	$	21,314
2026		15,682
2027		16,281
2028		16,902
2029		17,546
Thereafter		694,380
Total	$	782,105

SHORT-TERM BUSINESS FINANCING

9 Months Ended

Sep. 30, 2024

Short-term Business Financing

SHORT-TERM BUSINESS FINANCING

8 - SHORT-TERM BUSINESS FINANCING

LOANS PAYABLE

9 Months Ended

Sep. 30, 2024

Disclosure Loans Payable Abstract

LOANS PAYABLE

9 - LOANS PAYABLE

Loans payable consist of the following as of:

Schedule of loans payable
	September 30, 2024			December 31, 2023
Senior Secured Convertible Notes which requires twenty-four equal monthly payments beginning one year after issuance bearing annual interest at a rate of 18%	$	8,946,886		$	-
Note payable to a related party of the current payroll processor due upon demand		2,476,234			-
Original payable of $151,096 with additional net borrowings of $252,954, requires monthly payments of $1,500 until total payments of $404,050 have been made		-			356,012
Original payable of $553,175 with additional net borrowings of $72,237, requires monthly payments of $25,000 until total payments of $625,412 have been made		400,000			400,000
Original payable of $492,180 with additional net borrowings of $620,804 requires monthly payments of $25,000 until total payments of $1,112,984 have been made		865,618			865,618
Original borrowings of $60,000, bears interest at 1% requires no payments until maturity in January 2024		-			60,000
Original amounts due of $195,000, related to services provided by a vendor, requires monthly payments of $10,000 through May 2022, then monthly payments of $25,000 through August 2022 at which time any remaining balance is due		20,000			20,000
Other borrowing		345,373			36,768
Debt discount		(2,144,934	)		-
Less: Current maturities		5,455,252			1,196,916
	$	5,453,925		$	541,482

Future minimum principal repayments of the loans payable are as follows:


For the Twelve Months Ending September 30,
2025	$	5,455,252
2026		3,080,761
2027		2,371,193
2028		1,971
Loans payable	$	10,909,177

LINE OF CREDIT

9 Months Ended

Sep. 30, 2024

Line Of Credit

LINE OF CREDIT

10 - LINE OF CREDIT

RELATED PARTY TRANSACTIONS

9 Months Ended

Sep. 30, 2024

RELATED PARTY TRANSACTIONS

11 - RELATED PARTY TRANSACTIONS

In May 2024, the company sold common stock in an underwritten public offering at $0.25 per share. Elan Blutinger, nonexecutive chairman of the board purchased 400,000 common shares in the offering.

RISKS AND UNCERTAINTIES

9 Months Ended

Sep. 30, 2024

Risks and Uncertainties [Abstract]

RISKS AND UNCERTAINTIES

12 - RISKS AND UNCERTAINTIES

MAJOR SALES CHANNELS

9 Months Ended

Sep. 30, 2024

Major Sales Channels

MAJOR SALES CHANNELS

13 - MAJOR SALES CHANNELS

STOCK OPTIONS, RESTRICTED STOCK UNITS, RIGHTS AND WARRANTS

9 Months Ended

Sep. 30, 2024

Equity [Abstract]

STOCK OPTIONS, RESTRICTED STOCK UNITS, RIGHTS AND WARRANTS

14 - STOCK OPTIONS, RESTRICTED STOCK UNITS, RIGHTS AND WARRANTS

Options

During the nine months ended September 30, 2024, the Company did not grant any options to purchase shares of common stock under the Company’s 2022 performance equity plan.

The following table summarizes stock option activity for the nine months ended September 30, 2024:

Schedule of stock option activity
	Number of Shares			Weighted Average Exercise Price		Weighted Average Remaining Contractual Life (Years)		Aggregate Intrinsic Value
Outstanding at December 31, 2023		1,746,885		$	2.86		9.0	$	5,427,118
Granted		-			-
Exercised		-			-
Expired		-			-
Forfeited		(1,162,914	)		2.80
Outstanding at September 30, 2024		583,971		$	2.99		8.5	$	-
Exercisable at September 30, 2024		300,980		$	3.34		8.5	$	-

	Number of Shares			Weighted Average Exercise Price		Weighted Average Remaining Contractual Life (Years)		Aggregate Intrinsic Value
Outstanding at December 31, 2022		1,910,484		$	2.55		9.8	$	-
Granted		25,000			1.74
Exercised		-			-
Expired		-			-
Forfeited		(285,721	)		2.03
Outstanding at September 30, 2023		1,649,763		$	2.63		9.1	$	3,347,983
Exercisable at September 30, 2023		458,254		$	2.87		9.0	$	819,994

A summary of the status of the Company’s nonvested options as of September 30, 2024, is presented below:


	Number of Nonvested Options			Weighted Average Grant Date Fair Value
Nonvested options at December 31, 2023		1,257,590		$	2.93
Granted		-			-
Forfeited		(843,276	)		2.93
Vested		(131,323	)	$	3.57
Nonvested options at September 30, 2024		282,991		$	2.60

Restricted Stock


Directors and Officers	Number of shares
Elan Blutinger		1,000,000
Patrick McNamee		400,000
Robert Arigo		500,000
Michael James		1,172,000
Total		3,072,000

As of September 30, 2024, there was $166,500 of unrecognized compensation cost related to unvested restricted shares.

Rights and Warrants

On May 23, 2024, the exercise price of the Warrants held by Greenle have been reduced from $2.50 to $0.25. Except as described above, the Warrants remain unchanged.

The following tables summarizes warrant and right activity for the nine months ended September 30, 2024 and September 30, 2023:


	Number of Shares			Weighted Average Exercise Price		Weighted Average Remaining Contractual Life (Years)		Aggregate Intrinsic Value
Outstanding at December 31, 2023		5,442,000		$	4.68		4.7	$	7,038,940
Granted		147,389,841			0.09
Exercised		(13,343,119	)		0.37
Expired		-			-
Forfeited		(13,333,333	)		0.15
Outstanding at September 30, 2024		126,155,389		$	0.12		4.9	$	548,470
Exercisable at September 30, 2024		126,155,389		$	0.01		4.9	$	548,470

During the nine months ended September 30, 2024, 13,343,119 shares were issued from the exercise of warrants.

	Number of Shares			Weighted Average Exercise Price		Weighted Average Remaining Contractual Life (Years)		Aggregate Intrinsic Value
Outstanding at December 31, 2022		3,018,250		$	2.64		4.8	$	-
Granted		1,500,000			2.75
Exercised		(3,416,250	)		2.24
Expired		-			-
Forfeited		-			-
Outstanding at September 30, 2023		1,102,000		$	4.02		4.1	$	710,520
Exercisable at September 30, 2023		1,102,000		$	4.02		4.1	$	710,520

During the nine months ended September 30, 2023, 3,416,250 shares were issued from the exercise of warrants.

Revenue Share Exchange

9 Months Ended

Sep. 30, 2024

Revenue Share Exchange

Revenue Share Exchange

15 - Revenue Share Exchange

In May and June 2024, Greenle elected to receive 6,740,000 shares from the May 2023 Revenue Share Exchange Agreement.

In September 2024, Greenle elected to receive 300,000 shares from the August 2023 Revenue Share Exchange Agreement.

In September 2024, Greenle elected to receive 13,900,000 shares from the May 2024 Revenue Share Exchange Agreement.

WYNDHAM AGREEMENTS

9 Months Ended

Sep. 30, 2024

Wyndham Agreements

WYNDHAM AGREEMENTS

16 - WYNDHAM AGREEMENTS

REDEEMABLE PREFERRED STOCK

9 Months Ended

Sep. 30, 2024

Redeemable Preferred Stock

REDEEMABLE PREFERRED STOCK

17 - REDEEMABLE PREFERRED STOCK

During the three and nine months ended September 30, 2024, the Company paid $238,992 and $477,984 in aggregate dividends on its outstanding Series A Preferred Stock.

EQUITY TRANSACTIONS

9 Months Ended

Sep. 30, 2024

Equity Transactions

EQUITY TRANSACTIONS

18 - EQUITY TRANSACTIONS

For the nine months ended September 30, 2024

Schedule of equity transactions
Description	General Ledger Account	Date	Shares		Price		Value
Non-employee loan payment	Loan payable	1/25/2024		20,008	$	4.57	$	91,437
Non-employee commission expense	Commission Expense	1/25/2024		10,079	$	4.57	$	46,061
Non-employee investor relations expense	Investor Relations Expense	1/30/2024		59,784	$	4.33	$	258,865
Non-employee director compensation	Non-Cash Issuance of Common Stock for Director Compensation Expenses	2/8/2024		197,800	$	2.92	$	577,576
Employee Compensation	Non-Cash Issuance of Common Stock for Compensation Expenses	3/15/2024		25,000	$	2.22	$	55,500
Non-employee director compensation	Non-Cash Issuance of Common Stock for Director Compensation Expenses	5/3/2024		980,628	$	0.84	$	823,728
Non-employee commission expense	Commission Expense	5/9/2024		36,887	$	0.71	$	26,085
Non-employee investor relations expense	Investor Relations Expense	7/8/2024		600,000	$	0.185	$	111,000
Non-employee director Compensation	Non-Cash Issuance of Common Stock for Director Compensation Expense	9/16/2024		3,067,705	$	0.072	$	220,875
Employee Compensation	Non-Cash Issuance of Common Stock for Compensation Expenses	9/16/2024		1,485,504	$	0.072	$	106,956
Subtotal				6,483,395			$	2,318,083

For the nine months ended September 30, 2023

Description	General Ledger Account	Date	Shares		Price		Value
Non-employee Board members pursuant to related comp. policy	Non-Cash Stock Compensation Expense	3/1/2023		166,665	$	2.58	$	429,996
In connection with certain property finders’ fee arrangements	Non-Cash Issuance of Common Stock for Operating Expenses	3/17/2023		136,887	$	2.45	$	335,373
In connection with a consulting agreement	Non-Cash Issuance of Common Stock for Operating Expenses	2/10/2023		196,994	$	1.85	$	364,439
In connection with a marketing agreement	Non-Cash Issuance of Common Stock for Operating Expenses	2/10/2023		100,000	$	1.85	$	185,000
Non-employee Board members pursuant to related comp policy	Non-Cash Stock Compensation Expenses	8/16/2023		91,525	$	2.85	$	260,846
In connection with certain property finders’ fee arrangements	Non-Cash Issuance of Common Stock for Operating Expenses	8/21/2023		45,833	$	2.77	$	126,957
Advisory and legal services	Non-Cash Issuance of Common Stock for Operating Expenses	8/21/2023		9,250	$	2.85	$	26,363
Acorn Management Partners in connection with advisory services	Non-Cash Issuance of Common Stock for Operating Expenses	8/28/2023		8,741	$	2.89	$	25,261
Elizabeth Brown in connection with her termination of employment	Non-Cash Issuance of Common Stock for Operating Expenses	8/28/2023		50,000	$	3.11	$	155,500
Subtotal				805,895			$	1,909,735

SUBSEQUENT EVENTS

9 Months Ended

Sep. 30, 2024

Subsequent Events [Abstract]

SUBSEQUENT EVENTS

19 - SUBSEQUENT EVENTS

Capital Raises and Default Cures

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)

9 Months Ended

Sep. 30, 2024

Accounting Policies [Abstract]

Basis of Presentation

Revenue Recognition

Use of Estimates

Going Concern

Cash and Cash Equivalents

Accounts Receivable, Channel Retained Funds, Processor Retained Funds, Receivables from City of New York, Landlords and On-Line Travel Agencies

Fair Value of Financial Instruments

Commissions

Income Taxes

Sales Tax

Paycheck Protection Program Loan (“PPP”)

Earnings Per Share (“EPS”)

Preferred Stock

New Accounting Pronouncements

LEASES (Tables)

9 Months Ended

Sep. 30, 2024

Leases

Schedule of supplemental balance sheet information related to leases


	September 30, 2024		December 31, 2023
Operating lease right of use assets, net	$	185,797,690	$	241,613,588
Operating lease liabilities, current portion	$	2,347,039	$	1,982,281
Operating lease liabilities, net of current portion	$	189,458,967	$	242,488,610

Schedule of future minimum lease payments under the non-cancelable operating leases


Twelve Months Ending September 30,
2025	$	25,519,527
2026		26,223,627
2027		27,080,476
2028		28,094,634
2029		28,872,080
Thereafter (through 2048)		291,581,735
Total lease payment	$	427,373,079
Less interest		(235,567,073	)
Present value obligation		191,806,006
Short-term liability		2,347,039
Long-term liability	$	189,458,967

Schedule of other supplemental information related to operating lease


	September 30, 2024			December 31, 2023
Weighted average discount rate		12.03	%		10.5	%
Weighted average remaining lease term (years)		12.6 years			16.6 years

	Three Months Ended September 30,						Nine Months Ended September 30,
	2024		2023				2024		2023
Operating lease cost	$	8,386,290		$	9,942,873		$	23,951,472	$	23,695,139
Short-term lease cost	$	133,197		$	(187,427	)	$	3,897,749	$	561,229
Total lease cost	$	8,522,487		$	9,755,446		$	27,849,221	$	24,256,368

ACCOUNTS PAYABLE AND ACCRUED EXPENSES (Tables)

9 Months Ended

Sep. 30, 2024

Payables and Accruals [Abstract]

Schedule of accounts payable and accrued expenses


	September 30,		December 31,
	2024		2023
Accrued payroll and related liabilities	$	876,000	$	2,024,000
Bank and service fees payable		415,000		288,223
Board of director fees payable		239,000		231,000
Cleaning expense payable		373,000		-
Commissions payable		876,000		632,000
Insurance expense payable		821,000		194,000
Interest expense		1,202,000		-
Legal exposure		26,386,000		8,400,000
License and public relations payable		178,000		94,000
Linens, sundries and supplies payable		701,000		420,000
Other payables		652,241		292,082
Printing expense payable		226,000		263,000
Processing fees payable		-		52,000
Professional fees payable		723,000		590,000
Rent expense payable		3,265,000		1,737,000
Repairs, maintenance and improvements payable		1,059,000		719,000
Sales and other taxes		11,619,000		3,910,000
Telephone and cable payable		395,000		71,000
Union liabilities		8,448,000		-
Utilities payable		5,716,000		3,265,000
	$	64,170,241	$	23,182,305

LOANS PAYABLE – SBA – PPP LOAN (Tables)

9 Months Ended

Sep. 30, 2024

Loans Payable Sba Ppp Loan

Schedule of future minimum principal repayments of the SBA,PPP loans payable


For the Twelve Months Ending September 30,
2025	$	276,658

LOANS PAYABLE – SBA – EIDL LOAN (Tables)

9 Months Ended

Sep. 30, 2024

Loans Payable Sba Eidl Loan

Schedule of future minimum principal repayments of the SBA,EIDL loans payable


For the 12 Months Ending September 30,
2025	$	21,314
2026		15,682
2027		16,281
2028		16,902
2029		17,546
Thereafter		694,380
Total	$	782,105

LOANS PAYABLE (Tables)

9 Months Ended

Sep. 30, 2024

Disclosure Loans Payable Abstract

Schedule of loans payable

Schedule of loans payable
	September 30, 2024			December 31, 2023
Senior Secured Convertible Notes which requires twenty-four equal monthly payments beginning one year after issuance bearing annual interest at a rate of 18%	$	8,946,886		$	-
Note payable to a related party of the current payroll processor due upon demand		2,476,234			-
Original payable of $151,096 with additional net borrowings of $252,954, requires monthly payments of $1,500 until total payments of $404,050 have been made		-			356,012
Original payable of $553,175 with additional net borrowings of $72,237, requires monthly payments of $25,000 until total payments of $625,412 have been made		400,000			400,000
Original payable of $492,180 with additional net borrowings of $620,804 requires monthly payments of $25,000 until total payments of $1,112,984 have been made		865,618			865,618
Original borrowings of $60,000, bears interest at 1% requires no payments until maturity in January 2024		-			60,000
Original amounts due of $195,000, related to services provided by a vendor, requires monthly payments of $10,000 through May 2022, then monthly payments of $25,000 through August 2022 at which time any remaining balance is due		20,000			20,000
Other borrowing		345,373			36,768
Debt discount		(2,144,934	)		-
Less: Current maturities		5,455,252			1,196,916
	$	5,453,925		$	541,482

Schedule of future minimum principal repayments of the loans payable


For the Twelve Months Ending September 30,
2025	$	5,455,252
2026		3,080,761
2027		2,371,193
2028		1,971
Loans payable	$	10,909,177

STOCK OPTIONS, RESTRICTED STOCK UNITS, RIGHTS AND WARRANTS (Tables)

9 Months Ended

Sep. 30, 2024

Equity [Abstract]

Schedule of stock option activity

Schedule of stock option activity
	Number of Shares			Weighted Average Exercise Price		Weighted Average Remaining Contractual Life (Years)		Aggregate Intrinsic Value
Outstanding at December 31, 2023		1,746,885		$	2.86		9.0	$	5,427,118
Granted		-			-
Exercised		-			-
Expired		-			-
Forfeited		(1,162,914	)		2.80
Outstanding at September 30, 2024		583,971		$	2.99		8.5	$	-
Exercisable at September 30, 2024		300,980		$	3.34		8.5	$	-

	Number of Shares			Weighted Average Exercise Price		Weighted Average Remaining Contractual Life (Years)		Aggregate Intrinsic Value
Outstanding at December 31, 2022		1,910,484		$	2.55		9.8	$	-
Granted		25,000			1.74
Exercised		-			-
Expired		-			-
Forfeited		(285,721	)		2.03
Outstanding at September 30, 2023		1,649,763		$	2.63		9.1	$	3,347,983
Exercisable at September 30, 2023		458,254		$	2.87		9.0	$	819,994

Schedule of status of non-vested options


	Number of Nonvested Options			Weighted Average Grant Date Fair Value
Nonvested options at December 31, 2023		1,257,590		$	2.93
Granted		-			-
Forfeited		(843,276	)		2.93
Vested		(131,323	)	$	3.57
Nonvested options at September 30, 2024		282,991		$	2.60

Schedule of restricted stock unit, activity


Directors and Officers	Number of shares
Elan Blutinger		1,000,000
Patrick McNamee		400,000
Robert Arigo		500,000
Michael James		1,172,000
Total		3,072,000

Schedule of warrant and right activity


	Number of Shares			Weighted Average Exercise Price		Weighted Average Remaining Contractual Life (Years)		Aggregate Intrinsic Value
Outstanding at December 31, 2023		5,442,000		$	4.68		4.7	$	7,038,940
Granted		147,389,841			0.09
Exercised		(13,343,119	)		0.37
Expired		-			-
Forfeited		(13,333,333	)		0.15
Outstanding at September 30, 2024		126,155,389		$	0.12		4.9	$	548,470
Exercisable at September 30, 2024		126,155,389		$	0.01		4.9	$	548,470

During the nine months ended September 30, 2024, 13,343,119 shares were issued from the exercise of warrants.

	Number of Shares			Weighted Average Exercise Price		Weighted Average Remaining Contractual Life (Years)		Aggregate Intrinsic Value
Outstanding at December 31, 2022		3,018,250		$	2.64		4.8	$	-
Granted		1,500,000			2.75
Exercised		(3,416,250	)		2.24
Expired		-			-
Forfeited		-			-
Outstanding at September 30, 2023		1,102,000		$	4.02		4.1	$	710,520
Exercisable at September 30, 2023		1,102,000		$	4.02		4.1	$	710,520

EQUITY TRANSACTIONS (Tables)

9 Months Ended

Sep. 30, 2024

Equity Transactions

Schedule of equity transactions

Schedule of equity transactions
Description	General Ledger Account	Date	Shares		Price		Value
Non-employee loan payment	Loan payable	1/25/2024		20,008	$	4.57	$	91,437
Non-employee commission expense	Commission Expense	1/25/2024		10,079	$	4.57	$	46,061
Non-employee investor relations expense	Investor Relations Expense	1/30/2024		59,784	$	4.33	$	258,865
Non-employee director compensation	Non-Cash Issuance of Common Stock for Director Compensation Expenses	2/8/2024		197,800	$	2.92	$	577,576
Employee Compensation	Non-Cash Issuance of Common Stock for Compensation Expenses	3/15/2024		25,000	$	2.22	$	55,500
Non-employee director compensation	Non-Cash Issuance of Common Stock for Director Compensation Expenses	5/3/2024		980,628	$	0.84	$	823,728
Non-employee commission expense	Commission Expense	5/9/2024		36,887	$	0.71	$	26,085
Non-employee investor relations expense	Investor Relations Expense	7/8/2024		600,000	$	0.185	$	111,000
Non-employee director Compensation	Non-Cash Issuance of Common Stock for Director Compensation Expense	9/16/2024		3,067,705	$	0.072	$	220,875
Employee Compensation	Non-Cash Issuance of Common Stock for Compensation Expenses	9/16/2024		1,485,504	$	0.072	$	106,956
Subtotal				6,483,395			$	2,318,083

For the nine months ended September 30, 2023

Description	General Ledger Account	Date	Shares		Price		Value
Non-employee Board members pursuant to related comp. policy	Non-Cash Stock Compensation Expense	3/1/2023		166,665	$	2.58	$	429,996
In connection with certain property finders’ fee arrangements	Non-Cash Issuance of Common Stock for Operating Expenses	3/17/2023		136,887	$	2.45	$	335,373
In connection with a consulting agreement	Non-Cash Issuance of Common Stock for Operating Expenses	2/10/2023		196,994	$	1.85	$	364,439
In connection with a marketing agreement	Non-Cash Issuance of Common Stock for Operating Expenses	2/10/2023		100,000	$	1.85	$	185,000
Non-employee Board members pursuant to related comp policy	Non-Cash Stock Compensation Expenses	8/16/2023		91,525	$	2.85	$	260,846
In connection with certain property finders’ fee arrangements	Non-Cash Issuance of Common Stock for Operating Expenses	8/21/2023		45,833	$	2.77	$	126,957
Advisory and legal services	Non-Cash Issuance of Common Stock for Operating Expenses	8/21/2023		9,250	$	2.85	$	26,363
Acorn Management Partners in connection with advisory services	Non-Cash Issuance of Common Stock for Operating Expenses	8/28/2023		8,741	$	2.89	$	25,261
Elizabeth Brown in connection with her termination of employment	Non-Cash Issuance of Common Stock for Operating Expenses	8/28/2023		50,000	$	3.11	$	155,500
Subtotal				805,895			$	1,909,735

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($)	3 Months Ended		9 Months Ended		12 Months Ended
	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023	Dec. 31, 2023
Accounting Policies [Abstract]
Rents received in advance	$ 6,354,952		$ 6,354,952		$ 4,404,216
Net loss	30,729,372	$ (4,934,800)	99,473,903	$ 24,620,395	78,523,377
Working capital deficit	80,836,636		80,836,636
Net cash used in operating activities			36,691,573	7,014,551
Cash and cash equivalents	198,868		$ 198,868		752,848
Write off description			During the nine months ended September 30, 2024, the Company wrote off $1,500,000 of channel retained funds, $2,600,000 of processor retained funds, and $984,000 due to the Company from the Housing Authority of New York City (“HAONYC”).
Reserve for credit losses	0		$ 0		529,000
Pays commissions to third-party	3,527,877	2,020,080	15,494,567	6,576,221
Tax provision	(0)	$ (1,999,498)	(0)	$ 15,702
Accrued sales tax payable	$ 4,660,545		$ 4,660,545		$ 3,266,302

LEASES (Details) - USD ($)	Sep. 30, 2024	Dec. 31, 2023
Leases
Operating lease right of use assets, net	$ 185,797,690	$ 241,613,588
Operating lease liabilities, current portion	2,347,039	1,982,281
Operating lease liabilities, net of current portion	$ 189,458,967	$ 242,488,610

LEASES (Details 1) - USD ($)	Sep. 30, 2024	Dec. 31, 2023
Leases
2025	$ 25,519,527
2026	26,223,627
2027	27,080,476
2028	28,094,634
2029	28,872,080
Thereafter (through 2048)	291,581,735
Total lease payment	427,373,079
Less interest	(235,567,073)
Present value obligation	191,806,006
Short-term liability	(2,347,039)	$ (1,982,281)
Long-term liability	$ 189,458,967	$ 242,488,610

LEASES (Details 2) - USD ($)	3 Months Ended		9 Months Ended
LEASES (Details 2) - USD ($)	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023	Dec. 31, 2023
Leases
Weighted average discount rate	12.03%		12.03%		10.50%
Weighted average remaining lease term (years)	12 years 7 months 6 days		12 years 7 months 6 days		16 years 7 months 6 days
Operating lease cost	$ 8,386,290	$ 9,942,873	$ 23,951,472	$ 23,695,139
Short-term lease cost	133,197	(187,427)	3,897,749	561,229
Operating lease cost	$ 8,522,487	$ 9,755,446	$ 27,849,221	$ 24,256,368

ACCOUNTS RECEIVABLES, PROCESSOR AND CHANNEL RETAINED FUNDS (Details Narrative) - USD ($)	Sep. 30, 2024	Dec. 31, 2023
Defined Benefit Plan Disclosure [Line Items]
Channel retained funds	$ 0	$ 1,500,000
Processor retained funds	0	2,633,926
Other receivables	0	329,987
Allowances for credit losses		393,412
Other allowances for credit losses		486,708
OTA [Member]
Defined Benefit Plan Disclosure [Line Items]
Receivables from related party	446,809	6,936,254
Allowances for credit losses		529,000
City of New York and landlords [Member]
Defined Benefit Plan Disclosure [Line Items]
Receivables from related party	$ 1,480,000	$ 4,585,370

ACCOUNTS PAYABLE AND ACCRUED EXPENSES (Details) - USD ($)	Sep. 30, 2024	Dec. 31, 2023
Payables and Accruals [Abstract]
Accrued payroll and related liabilities	$ 876,000	$ 2,024,000
Bank and service fees payable	415,000	288,223
Board of director fees payable	239,000	231,000
Cleaning expense payable	373,000
Commissions payable	876,000	632,000
Insurance expense payable	821,000	194,000
Interest expense	1,202,000
Legal exposure	26,386,000	8,400,000
License and public relations payable	178,000	94,000
Linens, sundries and supplies payable	701,000	420,000
Other payables	652,241	292,082
Printing expense payable	226,000	263,000
Processing fees payable		52,000
Professional fees payable	723,000	590,000
Rent expense payable	$ 3,265,000	$ 1,737,000
Repairs, maintenance and improvements payable	1,059,000	719,000
Sales and other taxes	$ 11,619,000	$ 3,910,000
Telephone and cable payable	395,000	71,000
Union liabilities	8,448,000
Utilities payable	5,716,000	3,265,000
Accounts Payable and Accrued Expenses	$ 64,170,241	$ 23,182,305

LOANS PAYABLE - SBA - PPP LOAN (Details)	Sep. 30, 2024 USD ($)
Loans Payable Sba Ppp Loan
2025	$ 276,658

LOANS PAYABLE – SBA – PPP LOAN (Details Narrative) - USD ($)	Sep. 30, 2024	Dec. 31, 2023	Jan. 30, 2023	Dec. 20, 2022	May 31, 2020	Apr. 30, 2020	Mar. 27, 2020
Short-Term Debt [Line Items]
Original amount of loans payable			$ 1,250,000	$ 3,000,000
PPP Loan [Member]
Short-Term Debt [Line Items]
Original amount of loans payable					$ 298,958	$ 516,225	$ 10,000,000
Accrued interest	$ 7,702	$ 5,571

LOANS PAYABLE - SBA - EIDL LOAN (Details) - SBA and EIDL Loan Payable [Member]	Sep. 30, 2024 USD ($)
Debt Instrument [Line Items]
2025	$ 21,314
2026	15,682
2027	16,281
2028	16,902
2029	17,546
Thereafter	694,380
Total	$ 782,105

LOANS PAYABLE – SBA – EIDL LOAN (Details Narrative) - USD ($)	1 Months Ended			12 Months Ended
	Jul. 25, 2022	Jun. 18, 2022	Apr. 21, 2022	Dec. 31, 2020	Sep. 30, 2024	Dec. 31, 2023	Jan. 30, 2023	Dec. 20, 2022	Dec. 31, 2021	Jul. 25, 2020	Jun. 18, 2020	Apr. 21, 2020
Short-Term Debt [Line Items]
Original amount of loans payable							$ 1,250,000	$ 3,000,000
EIDL [Member]
Short-Term Debt [Line Items]
Debt Instrument, Term				30 years
Interest rate of loans payable									3.75%	3.75%	3.75%	3.75%
Original amount of loans payable										$ 150,000	$ 150,000	$ 500,000
Monthly payments of principal and interest	$ 731	$ 731	$ 2,437
Loans payable - SBA - EIDL Loan					$ 782,105	$ 786,950
Accrued interest					$ 22,262	$ 27,644

SHORT-TERM BUSINESS FINANCING (Details Narrative) - USD ($)	Sep. 30, 2024	Dec. 31, 2023
Short Term Factoring Agreements [Member]
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Merchant cash advances net of unamortized fees	$ 2,367,103	$ 1,115,120
Factoring And Security Agreement [Member]
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Merchant cash advances net of unamortized fees	$ 1,555,000	$ 0

LOANS PAYABLE (Details) - USD ($)	2 Months Ended	9 Months Ended
LOANS PAYABLE (Details) - USD ($)	Nov. 30, 2024	Sep. 30, 2024	Sep. 30, 2023	Dec. 31, 2023	Jan. 30, 2023	Dec. 20, 2022
Short-Term Debt [Line Items]
Interest rate	18.00%
Loans payable		$ 10,909,177
Original amount of loans payable					$ 1,250,000	$ 3,000,000
Other borrowing		345,373		$ 36,768
Debt discount		(2,144,934)
Less: Current maturities		5,455,252		1,196,916
Loans payable non current		$ 5,453,925		541,482
Loans Payable [Member]
Short-Term Debt [Line Items]
Interest rate		18.00%
Loans payable		$ 8,946,886
Loans Payable One [Member]
Short-Term Debt [Line Items]
Loans payable		2,476,234
Original borrowings of $250,000, bears interest at 1%, requires no payments until maturity in January 2024 [Member]
Short-Term Debt [Line Items]
Loans payable				356,012
Original amount of loans payable		151,096		151,096
Additional borrowings		252,954		252,954
Monthly payment of loans payable		1,500	$ 1,500
Total payments made		404,050		404,050
Original payable of $151,096 with additional net borrowings of $89,154, requires monthly payments of $1,500 until total payments of $240,250 have been made [Member]
Short-Term Debt [Line Items]
Loans payable		400,000		400,000
Original amount of loans payable		553,175		553,175
Additional borrowings		72,237		72,237
Monthly payment of loans payable		25,000	25,000
Total payments made		625,412		625,412
Original payable of $553,175 with additional net borrowings of $125,412, requires monthly payments of $25,000 until total payments of $678,587 have been made [Member]
Short-Term Debt [Line Items]
Loans payable		865,618		865,618
Original amount of loans payable		492,180		492,180
Additional borrowings		620,804		620,804
Monthly payment of loans payable		25,000	25,000
Total payments made		$ 1,112,984		1,112,984
Loans Payable Five [Member]
Short-Term Debt [Line Items]
Interest rate		1.00%
Loans payable				60,000
Original borrowings of $60,000, bears interest at 1%, requires no payments until maturity in January 2024 [Member]
Short-Term Debt [Line Items]
Loans payable		20,000		20,000
Original amount of loans payable		195,000		195,000
Additional borrowings		10,000		$ 10,000
Monthly payment of loans payable		$ 25,000	$ 25,000

LOANS PAYABLE (Details 1)	Sep. 30, 2024 USD ($)
Disclosure Loans Payable Abstract
2025	$ 5,455,252
2026	3,080,761
2027	2,371,193
2028	1,971
Loans payable	$ 10,909,177

LINE OF CREDIT (Details Narrative) - USD ($)	9 Months Ended
LINE OF CREDIT (Details Narrative) - USD ($)	Sep. 30, 2024	Dec. 31, 2023	Feb. 28, 2019
Line of Credit Facility [Line Items]
Interest rate description	prime, which was 8.25% as of September 30, 2024, plus 3.49%, totaling 11.74%.
Line of Credit	$ 69,975	$ 69,975
Line of Credit [Member]
Line of Credit Facility [Line Items]
Line of Credit Facility, Maximum Borrowing Capacity			$ 95,000

RELATED PARTY TRANSACTIONS (Details Narrative) - USD ($)	1 Months Ended						3 Months Ended	9 Months Ended
	Aug. 31, 2024	Jul. 31, 2024	May 31, 2024	Dec. 31, 2023	Dec. 31, 2022	Dec. 20, 2022	Sep. 30, 2024	Sep. 30, 2024	Jan. 31, 2023	Jan. 30, 2023
Related Party Transaction [Line Items]
Aggregate principal amount						$ 3,000,000				$ 1,250,000
Conversion of common stock shares						1,000,000
Conversion price						$ 3.00
Debt amount converted					$ 300,000
Entired converted amount									$ 3,000,000
Provided conversion shares									874,474
Share price		$ 0.17
Mr. Ferdinand [Member]
Related Party Transaction [Line Items]
Repayment of debt								$ 1,500,000
Ferdinand [Member]
Related Party Transaction [Line Items]
Payment to related party				$ 1,350,000				351,000
Other prepaid expense current				$ 1,023,750			$ 341,250	341,250
Related party expenses							$ 341,250	$ 692,250
Elan Blutinger [Member]
Related Party Transaction [Line Items]
Share price			$ 0.25
Number of common share sold during the period	100,000	294,116	400,000
Patrick Mc Namee [Member]
Related Party Transaction [Line Items]
Number of common share sold during the period	100,000	735,294
Kimberly Schaefer [Member]
Related Party Transaction [Line Items]
Number of common share sold during the period		117,647
Leonard Toboroff [Member]
Related Party Transaction [Line Items]
Number of common share sold during the period		147,058
Robert Arigo [Member]
Related Party Transaction [Line Items]
Number of common share sold during the period		176,470
Michael James [Member]
Related Party Transaction [Line Items]
Number of common share sold during the period	20,000	352,941

RISKS AND UNCERTAINTIES (Details Narrative)	Sep. 30, 2024 USD ($)
Revenue Benchmark [Member] \| Customer Concentration Risk [Member] \| Three Sales Channels [Member]
Concentration Risk [Line Items]
FDIC insured amount	$ 250,000

MAJOR SALES CHANNELS (Details Narrative)	9 Months Ended
MAJOR SALES CHANNELS (Details Narrative)	Sep. 30, 2024	Sep. 30, 2023
Revenue Benchmark [Member] \| Customer Concentration Risk [Member] \| Third Party Sales Channels [Member]
Product Information [Line Items]
Total rental revenue, percentage	85.00%	85.00%

STOCK OPTIONS, RESTRICTED STOCK UNITS, RIGHTS AND WARRANTS (Details) - USD ($)	9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023
Equity [Abstract]
Outstanding at the beginning (in shares)	1,746,885	1,910,484
Outstanding at the beginning (in dollars per shares)	$ 2.86	$ 2.55
Weighted Average Remaining Contractual Life (years)	9 years	9 years 9 months 18 days
Aggregate intrinsic value, outstanding at the beginning	$ 5,427,118
Granted (in shares)		25,000
Granted (in dollars per shares)		$ 1.74
Exercised (in shares)
Exercised (in dollars per shares)
Expired (in shares)
Expired (in dollars per shares)
Forfeited (in shares)	(1,162,914)	(285,721)
Forfeited (in dollars per shares)	$ 2.80	$ 2.03
Outstanding at the end (in shares)	583,971	1,649,763
Outstanding at the end (in dollars per shares)	$ 2.99	$ 2.63
Weighted Average Remaining Contractual Life (years)	8 years 6 months	9 years 1 month 6 days
Aggregate intrinsic value, outstanding at the end		$ 3,347,983
Number of share exercisable	300,980	458,254
Weighted Average Exercise Price exercisable	$ 3.34	$ 2.87
Weighted Average Remaining Contractual Life (years)	8 years 6 months	9 years
Aggregate Intrinsic Value exercisable		$ 819,994

STOCK OPTIONS, RESTRICTED STOCK UNITS, RIGHTS AND WARRANTS (Details 1)	9 Months Ended
	Sep. 30, 2024 $ / shares shares
Equity [Abstract]
Nonvested options at the beginning \| shares	1,257,590
Nonvested options at the beginning (in dollars per share) \| $ / shares	$ 2.93
Granted \| shares
Granted (in dollars per share) \| $ / shares
Forfeited \| shares	(843,276)
Forfeited (in dollars per share) \| $ / shares	$ 2.93
Vested \| shares	(131,323)
Vested (in dollars per share) \| $ / shares	$ 3.57
Nonvested options at the end \| shares	282,991
Nonvested options at the end (in dollars per share) \| $ / shares	$ 2.60

STOCK OPTIONS, RESTRICTED STOCK UNITS, RIGHTS AND WARRANTS (Details 2)	9 Months Ended
	Sep. 30, 2024 shares
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Number of restricted shares issued	3,072,000
Elan Blutinger [Member]
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Number of restricted shares issued	1,000,000
Patrick Mc Namee [Member]
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Number of restricted shares issued	400,000
Robert Arigo [Member]
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Number of restricted shares issued	500,000
Michael James [Member]
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Number of restricted shares issued	1,172,000

STOCK OPTIONS, RESTRICTED STOCK UNITS, RIGHTS AND WARRANTS (Details 3) - USD ($)	9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023
Equity [Abstract]
Outstanding at the beginning	5,442,000	3,018,250
Outstanding at the beginning (in dollars per share)	$ 4.68	$ 2.64
Outstanding at the beginning (in years)	4 years 8 months 12 days	4 years 9 months 18 days
Aggregate Intrinsic Value at the beginning	$ 7,038,940
Granted	147,389,841	1,500,000
Granted (in dollars per share)	$ 0.09	$ 2.75
Exercised	(13,343,119)	(3,416,250)
Exercised (in dollars per share)	$ 0.37	$ 2.24
Expired
Expired (in dollars per share)
Forfeited	(13,333,333)
Forfeited (in dollars per share)	$ 0.15
Outstanding at the end	126,155,389	1,102,000
Outstanding at the end (in dollars per share)	$ 0.12	$ 4.02
Outstanding at the end (in years)	4 years 10 months 24 days	4 years 1 month 6 days
Aggregate Intrinsic Value at the end	$ 548,470	$ 710,520
Exercisable	126,155,389	1,102,000
Exercisable (in dollars per share)	$ 0.01	$ 4.02
Exercisable (in years)	4 years 10 months 24 days	4 years 1 month 6 days
Aggregate intrinsic value exercisable	$ 548,470	$ 710,520

STOCK OPTIONS, RESTRICTED STOCK UNITS, RIGHTS AND WARRANTS (Details Narrative) - USD ($)		1 Months Ended						3 Months Ended		9 Months Ended
	Jul. 15, 2024	Aug. 30, 2024	Jul. 30, 2024	Jul. 17, 2024	Jun. 27, 2024	May 23, 2024	Mar. 31, 2024	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023	Dec. 31, 2023	Dec. 31, 2022
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Stock option expense								$ 63,613	$ 146,707	$ 362,695	$ 519,094
Unamortized option expense								$ 477,058	$ 1,230,597	$ 477,058	$ 1,230,597
Unamortized option expense expected to be recognized over a weighted average period										1 year	1 year 9 months 18 days
Number of aggregate shares granted							100,000	3,072,000
Fair value of all restricted shares							$ 220,000
Number of warrants issued										147,389,841	1,500,000
Weighted average exercise price								$ 0.12	$ 4.02	$ 0.12	$ 4.02	$ 4.68	$ 2.64
Number of warrants exercised										13,343,119	3,416,250
Underwriter [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Number of warrants issued						2,104,500
Weighted average exercise price						$ 0.275
Warrant Holders [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Number of warrants issued					8,000,000
Weighted average exercise price					$ 0.25
Alexander [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Number of warrants issued	1,800,000	2,942,884	694,400	270,000	480,000
Weighted average exercise price	$ 0.204	$ 0.1008	$ 0.18	$ 0.204	$ 0.275
Unvested Restricted Shares [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Unrecognized compensation cost								$ 166,500		$ 166,500

Revenue Share Exchange (Details Narrative) - USD ($)		1 Months Ended	2 Months Ended	3 Months Ended
Revenue Share Exchange (Details Narrative) - USD ($)	Feb. 12, 2024	Sep. 30, 2024	Jun. 30, 2024	Jun. 30, 2023
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Interest Expenses				$ 28,174,148
February 2023 Revenue Share Agreement [Member] \| Greenle Beta [Member]
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Shares issued	36,179
February 2023 Revenue Share Agreement [Member] \| Greenle Alpha [Member]
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Shares issued	578,071
May 2023 Revenue Share Exchange Agreement [Member] \| Greenle [Member]
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Number of shares received			6,740,000
August 2023 Revenue Share Exchange Agreement [Member] \| Greenle [Member]
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Number of shares received		300,000
May 2024 Revenue Share Exchange Agreement [Member] \| Greenle [Member]
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Number of shares received		13,900,000

WYNDHAM AGREEMENTS (Details Narrative) - USD ($)	Aug. 02, 2023	Sep. 30, 2024
Development incentive advances		$ 2,600,000
Minimum [Member]
Agreements terms	15 years
Maximum [Member]
Agreements terms	20 years

REDEEMABLE PREFERRED STOCK (Details Narrative) - USD ($)		1 Months Ended	2 Months Ended	3 Months Ended	9 Months Ended
	Dec. 05, 2023	Oct. 26, 2023	Nov. 30, 2024	Sep. 30, 2024	Sep. 30, 2024	Sep. 30, 2023	Dec. 31, 2023
Interest rate			18.00%
Preferred stock stated value				$ 25	$ 25		$ 25
Number of share sold					6,483,395	805,895
Series A Preferred Stock [Member]
Number of share issued		280,000
Interest rate		13.00%
Preferred stock stated value		$ 25
Dividends outstanding				$ 238,992	$ 477,984
Series A Preferred Stock [Member] \| Over-Allotment Option [Member]
Number of share sold	14,144
Number of share sold net proceeds	$ 5,775,596

EQUITY TRANSACTIONS (Details) - USD ($)	9 Months Ended
EQUITY TRANSACTIONS (Details) - USD ($)	Sep. 30, 2024	Sep. 30, 2023	Jul. 31, 2024
Shares	6,483,395	805,895
Price			$ 0.17
Value	$ 2,318,083	$ 1,909,735
Non Employee Loan Payment [Member]
Shares	20,008
Price	$ 4.57
Value	$ 91,437
Non Employee Commission Expense [Member]
Shares	10,079
Price	$ 4.57
Value	$ 46,061
Non Employee Investor Relations Expense [Member]
Shares	59,784
Price	$ 4.33
Value	$ 258,865
Non Employee Director Compensation [Member]
Shares	197,800
Price	$ 2.92
Value	$ 577,576
Employee Compensation [Member]
Shares	25,000
Price	$ 2.22
Value	$ 55,500
Non Employee Director Compensation 2 [Member]
Shares	980,628
Price	$ 0.84
Value	$ 823,728
Non Employee Commission Expenses [Member]
Shares	36,887
Price	$ 0.71
Value	$ 26,085
Non Employee Iinvestor Relations Expense [Member]
Shares	600,000
Price	$ 0.185
Value	$ 111,000
Non Employee Director Compensation 3 [Member]
Shares	3,067,705
Price	$ 0.072
Value	$ 220,875
Employee Commission Expense 2 [Member]
Shares	1,485,504
Price	$ 0.072
Value	$ 106,956
Non Employee Board Members Pursuant To Related Comp Policy [Member]
Shares		166,665
Price		$ 2.58
Value		$ 429,996
In Connection With Certain Property Finders Fee Arrangements [Member]
Shares		136,887
Price		$ 2.45
Value		$ 335,373
In Connection With A Consulting Agreement [Member]
Shares		196,994
Price		$ 1.85
Value		$ 364,439
In Connection With A Marketing Agreement [Member]
Shares		100,000
Price		$ 1.85
Value		$ 185,000
Non Employee Board Members Pursuant To Related Comp Policy 2 [Member]
Shares		91,525
Price		$ 2.85
Value		$ 260,846
In Connection With Certain Property Finders Fee Arrangements 2 [Member]
Shares		45,833
Price		$ 2.77
Value		$ 126,957
Advisory And Legal Services [Member]
Shares		9,250
Price		$ 2.85
Value		$ 26,363
Acorn Management Partners In Connection With Advisory Services [Member]
Shares		8,741
Price		$ 2.89
Value		$ 25,261
Elizabeth Brown In Connection With Her Termination Of Employment [Member]
Shares		50,000
Price		$ 3.11
Value		$ 155,500

SUBSEQUENT EVENTS (Details Narrative)	2 Months Ended
SUBSEQUENT EVENTS (Details Narrative)	Nov. 30, 2024 USD ($)
Subsequent Events [Abstract]
Interest rate	18.00%
Proceeds from convertible debt	$ 1,500,000
Fees	$ 1,350,000
Stock Split	1-for-70 split

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