iPic Entertainment Inc., a luxury movie theater and dining chain headquartered in Boca Raton, Florida, announced Monday that it had filed for bankruptcy in Delaware.
Shares of the company tanked on the news, falling nearly 65% to $0.59 per share Monday.
Through the Chapter 11 restructuring process, the company will…
“seek approval of either a sale or a reorganization plan and emerge with a healthy balance sheet and new capital structure,” the company said in a press release.
The filing comes after a tough year for the company. It went public in February 2018 in an IPO, with shares falling 15% on the first day of trading. In little over a year, the company’s market value has declined to $11.93 million from its IPO market value of $216 million.
In the same time frame, shares have lost more than 96%. The company lost about $57 million in 2018, according to court filings. Increased competition contributed to the bankruptcy, according to Bloomberg, as rival movie theaters offer reclining seats at lower prices than iPic.
High construction costs to update some of iPic’s 16 luxury theaters also hurt the company.
“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,” said Hamid Hashemi, the founder and CEO of IPIC, in a press release.
In addition, delays in building a Delray Beach location resulted in unexpected costs that slowed down other development and openings for the company, Hashemi said. Current management will stay in place to work with the company’s restructuring advisors and continue business uninterrupted, the company said.
The company had warned investors last week that it might file for bankruptcy after it missed an interest payment to the Employees Retirement System of Alabama and the Teachers’ Retirement System of Alabama totalling $10.1 million, according to a company filing.
iPic is trying to sell itself, according to court documents. Before filing for bankruptcy, iPic…
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