Federal regulators have signed off on iPic Entertainment’s initial public offering, giving the movie theater-restaurant chain the go-ahead to start selling stock.
The Boca Raton, Fla.-based chain wants to raise up to $40 million by selling well over 2 million shares at $18.50.
It is the latest in a string of smaller IPOs made possible under Regulation A+, known otherwise as mini IPOs, that help companies raise smaller amounts of money from investors with relaxed marketing rules.
The regulation enables companies to raise money from small, retail investors, including their own customers and fans. Restaurant chains are expected to be big users of the strategy, given their number of customers and heavy fundraising needs.
Fat Brands, the California-based owner of Fatburger and Ponderosa, went public last year through this regulation. The stock is trading at about 25% below its original, $12 offering price. The healthy fast-casual franchise Muscle Maker Grill is also planning a mini IPO.
IPic plans to use the proceeds from its offering for “general corporate purposes,” including expansion.
CEO Hamid Hashemi said the offering “will help the company execute on the significant growth opportunities ahead” for new locations.
The chain was founded in 2006, and it currently operates 16 locations with 121 screens. But the locations also feature restaurants. Well over half of its $69.4 million in revenues during the first six months of 2017 came from the sale of food and beverage.
But iPic lost $34.1 million in 2016 and was on pace to easily exceed that in the first six months of 2017, when it had a net loss of $22.4 million, according to SEC documents.
TriPoint Global Equities is acting as the lead selling agent for the iPic offering, through its online division Banq. Roth Capital Partners is the institutional placement book-running agent, and Telsey Advisory Group is the co-manager for the offering.