Theater-restaurant company iPic Entertainment Inc. filed Monday for Chapter 11 bankruptcy protection, seeking either a sale or a restructuring of debt.
The Boca Raton, Fla.-based iPic, which has 16 theaters and 123 screens in nine states, filed its Chapter 11 petition in United States Bankruptcy Court in the District of Delaware, will continue operations during the court proceedings, the company said, adding that it expects the restructuring process to take 90 to 120 days.
“Current management will remain in place to work alongside the company's restructuring advisers, and business will continue uninterrupted,” the company said.
To continue operations, iPic has secured debtor-in-possession financing with new revolving loans of $16 million provided by the Teachers’ Retirement System of Alabama and the Employees’ Retirement System of Alabama, the company said in Securities and Exchange Commission filings.
“To ensure an exciting future for iPIC for the benefit of our guests, members, employees and other partners, we have hired top consultants and advisers to find a partner who shares our vision,” said Hamid Hashemi (left), founder and CEO of iPIC Entertainment, in a statement.
“Our brand is thriving and leads the industry in popularity, but our balance sheet needs to course correct,” Hashemi said. “Our theaters will remain open during this transition, our employees are being paid, as are our vendors and suppliers.”
In Febrtuary 2018, iPic Entertainment Inc. completed a $15 million Regulation A+ public offering, sometimes called a “mini IPO,” and announced plans to add four restaurant-theater units in the coming year.
For the quarter ended March 31, the last for which the company had reported, iPic said it had revenues of $30.2 million compared to restated revenues in the prior-year period of $38.7 million. Net loss in the quarter was $9.3 million, or $1.26 a share, compared to a loss of $6.4 million, or $1.70 a share, in the same quarter last year.
Hashemi said the Chapter 11 filing resulted from several factors.
“iPic's business plan called for building 25 locations in four to five years,” he said. “Delays in development cycle combined with the high cost of capital depleted iPic's available resources before the company was able to reach critical mass and become self-funded. Importantly, delays related to the Delray Beach [Fla.] location, resulted in unforeseen costs and a significant slowdown in circuit-wide development and new grand openings.”
For the quarter ended March 31, the last for which the company reported financial results, iPic said it had revenues of $30.2 million compared to restated revenues in the prior-year period of $38.7 million. Net loss in the quarter was $9.3 million, or $1.26 a share, compared to a loss of $6.4 million, or $1.70 a share, in the same quarter last year.
Pachulski Stang Ziehl & Jones LLP is serving as legal counsel, Aurora Management Partners is serving as financial adviser and PJ Solomon is serving as investment banker to the company.
The company was established in 2010 and has theaters in Arizona, California, Florida, Illinois, Maryland, New Jersey, New York, Texas and Washington.
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