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IPIC
--12-31
10-K
2018-12-31
FY
2018
Non-accelerated Filer
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As the fair value exceeded the contribution required to acquire Delray's ownership in Developer and 4th and 5th Avenue Holdings, cash totaling approximately $4,000 was paid by the 92% owners of 4th and 5th Avenue Holdings to Developer as an initial distribution upon formation of the respective entities.
The Company will be paid an annual fee for these services under the shared services agreement that equates to 50% of the fee paid to Developer under the development management agreement. The other 50% will be paid to the other 50% owner of Developer. In addition, the Company is obligated to cover certain losses or additional capital calls that may arise related to a completion guaranty on the development project. The Company has also signed an indemnification agreement, along with an affiliate of the other 50% owner of Developer, to indemnify 4th and 5th Avenue Holdings for certain conditions and to maintain a minimum aggregate net worth, on a combined basis, of $15,000 which shall include $1,650, on a combined basis, of liquid assets through the completion of the development of the project. Should the combined net worth of the Company and the affiliate of the other 50% owner in Developer fall below $15,000, the parties must provide additional collateral to 4th and 5th Avenue Holdings subject to their review and consent.
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The continuing owners of iPic-Gold Class Holdings LLC control approximately 92.68% of the combined voting power of all classes of iPic's common stock as a result of their ownership of 429,730 shares of iPic's Class A Common Stock and all of the outstanding shares of iPic's Class B Common Stock, each share of which is entitled to one vote on all matters submitted to a vote of iPic's stockholders.
Class A Common Stockholders own 1,248,159 shares of Class A Common Stock, representing approximately 11.17% of the combined voting power of our Class A and Class B Common Stock, and participate in approximately 11.17% of the economic interest in Holdings.
(i) LLC Interests, representing 88.83% of the economic interest in Holdings, and (ii) through their ownership of Class A and Class B Common Stock, approximately 92.68% of the combined voting power of our Class A and Class B Common Stock.
All of the membership interests in iPic-Gold Class were contributed by the Original iPic Equity Owners to Holdings in exchange for all of the membership interests in Holdings (the "LLC Interests"), following which iPic-Gold Class became 100% owned and controlled by Holdings
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The future lease obligation was recorded at present value and discounted at an annual rate of 13%. Sublease payments were anticipated to be received 24 months from the abandonment date. The sublease payments were estimated to be 50% less than the Company's lease payment obligation through the remainder of the lease.
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In accordance with these provisions and other terms and conditions of the LLC Agreement, two non-controlling interest holders exchanged 100% of their respective membership interests (5,602,866 membership units) in Holdings for a corresponding number of shares of iPic's Class A common stock.
Teachers' Retirement System of Alabama and Employees' Retirement System of Alabama assigned 100% of its respective membership units of Holdings to iPic in exchange for a corresponding number of shares of iPic's Class A Common Stock (2,801,433 shares, 1,876,960 shares and 924,473 shares of Class A Common Stock, respectively) (the "Exchange"). As part of the Exchange and in accordance with iPic's Amended and Restated Certificate of Incorporation, each such investor's Class B common stock were canceled.
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P7Y
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P7Y
P5Y
P2Y
Lesser of term of lease or asset life
The Company's operations are conducted on premises occupied under lease agreements with initial base terms of 15 to 25 years, with certain leases containing options to extend the leases for up to an additional 20 years.
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The exercise price, which shall be determined by the Compensation Committee at the time of grant, shall not be less than the greater of (i) the par value of the stock and (ii) 100% of the Fair Market Value (defined as the closing price at the close of the primary trading session of the shares on the date immediately prior to the date of the grant on the principal national security exchange on which the common stock is listed or quoted, as applicable) of the common stock of the Company, provided that if there is a grant of an incentive option to a recipient who owns more than ten percent (10%) of the total combined voting power of all classes of securities of the Company, the exercise price shall be at least 110% of the Fair Market Value; the term of each Option shall be fixed by the Committee, provided that such Option shall not be exercisable more than ten (10) years after the date such Option is granted, and provided further that with respect to an Incentive Option, if the recipient owns more than ten percent (10%) of the total combined voting power of the Company, the Incentive Option shall not be exercisable more than five (5) years after the date such Incentive Option is granted; subject to acceleration in the event of a Change of Control of the Company (as further described in the 2017 Equity Incentive Plan), the period during which the Options vest shall be designated by the Committee; no Option is transferable and each is exercisable only by the recipient of such Option except in the event of the death of the recipient; to the extent that the aggregate Fair Market Value of Incentive Options granted under the Plan are exercisable by a participant for the first time during any calendar year exceeds $100, such Incentive Options shall be treated as Non-Qualified Options; and with respect to Options granted to a director, the aggregate number of shares that may be issued under the Plan in any calendar year to an individual Director may not exceed that number of shares representing a Fair Market Value equal to the positive difference, if any, between $300, and the aggregate value of any annual cash retainer paid to the director.
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The Company computed net loss per share only for the period our common stock was outstanding during 2018, referred to as the "Post-IPO Period". We have defined the Post-IPO Period as February 1, 2018, the date our shares began trading on the NASDAQ, through December 31, 2018, or 334 days of activity for the reporting period ended December 31, 2018. Basic net loss per share is computed by dividing the net loss attributable to Class A Common Stockholders for the Post-IPO Period by the weighted-average number of shares of Class A Common Stock outstanding during the Post-IPO Period. The weighted average number of Restricted Stock Units to be settled in shares of Class A Common Stock became fully vested on the IPO date.
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No
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12156369
<table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif"><tr style="vertical-align: bottom"><td> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td>
<td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">December 31,<br /> 2018</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td></tr>
<tr style="vertical-align: bottom">
<td> </td><td> </td>
<td colspan="2" style="text-align: right"> </td><td> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="width: 88%; text-align: justify">LLC Interests</td><td style="width: 1%"> </td>
<td style="width: 1%; text-align: left"> </td><td style="width: 9%; text-align: right">4,323,755</td><td style="width: 1%; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: justify">Non-Qualified Options</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">1,040,424</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="text-align: justify; padding-bottom: 1.5pt">Selling Agents’ Warrants</td><td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">18,005</td><td style="padding-bottom: 1.5pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: justify; padding-bottom: 4pt">Total</td><td style="padding-bottom: 4pt"> </td>
<td style="border-bottom: Black 4pt double; text-align: left"> </td><td style="border-bottom: Black 4pt double; text-align: right">5,382,184</td></tr></table>
<p style="margin: 0pt"></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0"><b>NOTE 13 — 401(k) PLAN</b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company has a 401(k) Plan (“Plan”)
to provide retirement and incidental benefits for its employees who are 21 years of age and with one or more years of service.
Employees may contribute a percentage of their annual compensation to the Plan, limited to a maximum annual amount as set periodically
by the Internal Revenue Service. They may also make after-tax Roth deferrals to the Plan. Matching contributions are allowed under
the Plan. There were no matching contributions made in either period.</p>
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-124225000
-119221000
-124225000
-93921000
-124225000
1000
-121988000
-18757000
-140744000
21523000
-93921000
-93921000
162073000
158724000
0.0001
0.0001
100000000
25000000
7144133
4323755
7144133
4323755
-2603000
917000
Upon the closing of the IPO, the Company issued certain warrants to the selling agents (the "Selling Agents' Warrants") to purchase a number of shares of the Class A Common Stock equal to 2.2% of the total shares of the Class A Common Stock sold in the IPO. This equated to a total of 18,005 shares. The Selling Agents' Warrants are exercisable commencing approximately 13 months after the date of the applicable closing, and will be exercisable for three and a half years after such date. The Selling Agents' Warrants are not redeemable by the Company. The exercise price for the Selling Agents' Warrants is $23.125 which equals 125% of the public offering price of $18.50 per share. The fair value of the warrants of $90 was offset against the proceeds received from the IPO.
<table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif"><tr style="vertical-align: bottom"><td></td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td>
<td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2018</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td>
<td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2017</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="width: 76%; text-align: left">Minimum rentals</td><td style="width: 1%"> </td>
<td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">16,371</td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td>
<td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">15,013</td><td style="width: 1%; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left; padding-bottom: 1.5pt">Contingent rentals</td><td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">-</td><td style="padding-bottom: 1.5pt; text-align: left"> </td><td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">(41</td><td style="padding-bottom: 1.5pt; text-align: left">)</td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="padding-bottom: 4pt"> </td><td style="padding-bottom: 4pt"> </td>
<td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">16,371</td><td style="padding-bottom: 4pt; text-align: left"> </td><td style="padding-bottom: 4pt"> </td>
<td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">14,972</td><td style="padding-bottom: 4pt; text-align: left"> </td></tr></table>
1500000
The amount recognized is the largest amount of tax benefit that is greater than 50% likely of being realized on examination. For tax positions not meeting the more-likely-than-not test, no tax benefit is recorded. The Company’s tax filings are generally subject to examination for a period of three years from the filing date.
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p>
<table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<tr style="vertical-align: bottom">
<td style="font-weight: bold; border-bottom: Black 1.5pt solid">For the year ended,</td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td>
<td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">December 31, 2018</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td>
<td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">December 31, 2017</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="width: 76%; text-align: left">Current – state and local</td><td style="width: 1%"> </td>
<td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">30</td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td>
<td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">87</td><td style="width: 1%; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left">Deferred – state and local</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">-</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">-</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="padding-bottom: 4pt">Total</td><td style="padding-bottom: 4pt"> </td>
<td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">30</td><td style="padding-bottom: 4pt; text-align: left"> </td><td style="padding-bottom: 4pt"> </td>
<td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">87</td><td style="padding-bottom: 4pt; text-align: left"> </td></tr></table>
-0.0005
-0.0020
0.0035
0.0021
13841000
119221000
0.21
0.35
30000
87000
-124225000
-140744000
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>Locations</i></b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">At December 31, 2018 and 2017, the Company
operated a total of fifteen and sixteen cinemas, respectively, in the following locations throughout the United States:</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<tr style="vertical-align: bottom">
<td style="width: 50%"><font style="font: 10pt Times New Roman, Times, Serif">●    Glendale, Wisconsin<sup>1</sup></font></td>
<td style="width: 50%"><font style="font: 10pt Times New Roman, Times, Serif">●    Scottsdale, Arizona</font></td></tr>
<tr style="vertical-align: bottom">
<td><font style="font: 10pt Times New Roman, Times, Serif">●    Pasadena, California</font></td>
<td><font style="font: 10pt Times New Roman, Times, Serif">●    Bolingbrook, Illinois</font></td></tr>
<tr style="vertical-align: bottom">
<td><font style="font: 10pt Times New Roman, Times, Serif">●    Austin, Texas</font></td>
<td><font style="font: 10pt Times New Roman, Times, Serif">●    South Barrington, Illinois</font></td></tr>
<tr style="vertical-align: bottom">
<td><font style="font: 10pt Times New Roman, Times, Serif">●    Fairview, Texas</font></td>
<td><font style="font: 10pt Times New Roman, Times, Serif">●    Los Angeles, California</font></td></tr>
<tr style="vertical-align: bottom">
<td><font style="font: 10pt Times New Roman, Times, Serif">●    Boca Raton, Florida</font></td>
<td><font style="font: 10pt Times New Roman, Times, Serif">●    Houston, Texas</font></td></tr>
<tr style="vertical-align: bottom">
<td><font style="font: 10pt Times New Roman, Times, Serif">●    Bethesda, Maryland</font></td>
<td><font style="font: 10pt Times New Roman, Times, Serif">●    Fort Lee, New Jersey</font></td></tr>
<tr style="vertical-align: bottom">
<td><font style="font: 10pt Times New Roman, Times, Serif">●    North Miami, Florida</font></td>
<td><font style="font: 10pt Times New Roman, Times, Serif">●    New York, New York</font></td></tr>
<tr style="vertical-align: bottom">
<td><font style="font: 10pt Times New Roman, Times, Serif">●    Redmond, Washington</font></td>
<td><font style="font: 10pt Times New Roman, Times, Serif">●    Dobbs Ferry, New York</font></td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">  </p>
<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: top">
<td style="width: 29px; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"><sup>1</sup></font></td>
<td style="text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">Location was closed
in the first quarter of 2018. Refer to Note 4 “Property and Equipment”.</font></td></tr></table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>Fair Value of Financial Instruments</i></b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The fair value of accounts receivable
and accounts payable approximate their respective carrying values due to the short-term nature of those instruments. The Company
believes it is not practicable to determine the fair value of its debt without incurring excessive costs because interest rates
and other terms for similar debt are not readily available.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>Cash and Cash Equivalents</i></b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Company considers all highly liquid
instruments or investments with an original maturity of three months or less to be cash equivalents.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>Accounts Receivable</i></b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Accounts receivable are stated at their
estimated net realizable value. As of December 31, 2018 and 2017, the Company recorded $3,874 and $5,313, respectively, of accounts
receivable, of which $1,339 and $2,773 relate to amounts owed by Vantiv/Worldplay and American Express for credit card transactions
processed before December 31, 2018 and 2017, respectively. Such amounts were collected in early January 2019 and 2018, respectively.
Receivables are written off when they are considered uncollectible. The Company does not accrue interest on its receivables. At
December 31, 2018 and 2017, the Company determined that all receivables were fully collectible and therefore, no allowance for
doubtful accounts has been recorded.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>Revenue Recognition </i></b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Company recognizes theater revenue
at the time tickets are remitted to the theater for admission. Food and beverage revenue is recognized at the point of sale. The
proceeds from advance ticket sales and the sale of gift certificates and gift cards are deferred and recognized as revenues once
the respective admission ticket that was purchased in advance or gift certificate or gift card is received or tendered at the
theaters.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Company is required to collect certain
taxes from customers on behalf of government agencies and remit these to the applicable government agencies on a periodic basis.
These taxes are legal assessments on the customer and the Company has a legal obligation to act as a collection agent. Because
the Company does not retain these taxes, the Company does not include such amounts in revenues. The Company records a liability
when the amounts are collected and relieves the liability when payments are made to the applicable government agencies.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Company maintains a membership program,
whereby members earn and accrue points based on purchases, which are redeemable on future purchases of tickets or food and beverage.
For every dollar a member spends, the member receives one point which is equal to one cent. Points are redeemable once a member
earns 500 points or greater. The Company uses the deferred revenue model which results in the transaction price being allocated
to the products and services sold and the award credits, with revenue recognized as each element is delivered. The portion of the
theater and food and beverage revenues attributed to the rewards is deferred as a reduction of theater and food and beverage revenues,
respectively. Upon redemption, deferred rewards are recognized as revenues along with associated cost of goods. The Company charges
an annual fee for this membership program, which is recorded as deferred revenue and recognized as revenue ratably over the twelve-month
membership period. The revenue from the annual fee is included in other revenues in the accompanying consolidated statements of
operations.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Company sells gift cards to its customers
at its locations and through its website. There are no administrative fees charged nor do the gift cards have an expiration date.
Revenues from gift cards are recognized when gift cards are redeemed. In addition, the Company recognizes “breakage”
on unredeemed gift cards based upon historical redemption patterns and the time that has transpired since the card was last used.
The Company recognizes breakage proportionally to the percentage of redemptions that historically occur in each year after a gift
card is sold. Revenue from gift card breakage is included in other revenues in the accompanying consolidated statements of operations.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>Film Exhibition Costs</i></b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Film exhibition costs are accrued based
on the applicable theater receipts and estimates of the final settlement to the film licensors. Such amounts are included in cost
of theater in the accompanying consolidated statements of operations.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>Concentration of Risk</i></b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Financial instruments that potentially
subject the Company to concentrations of credit risk consist principally of cash and cash equivalents and accounts receivable.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Company places its cash with high
credit quality financial institutions. The Company has never experienced any losses related to its uninsured balances. Cash accounts
at each U.S. bank are insured by the Federal Deposit Insurance Corporation (“FDIC”) up to $250 in the aggregate and
may exceed federally insured limits. A total of approximately $6,433 was held in one financial institution, at December 31, 2018.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>Inventories</i></b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Inventories are comprised of concession
goods, which include food and beverage, and theater supplies. Inventories are stated at the lower of average cost or net realizable
value.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>Property and Equipment</i></b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Property and equipment is stated at fair
value based on assets acquired at inception of iPic-Gold Class and historical cost for subsequent acquisitions, less accumulated
depreciation and amortization. Depreciable assets are depreciated from the date of acquisition or, for constructed assets, from
the time the asset is completed and held ready for use.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Depreciation of property and equipment
is computed under the straight-line method over the expected useful lives of applicable assets. Useful lives by asset class are
as follows.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td><font style="font: 10pt Times New Roman, Times, Serif">Furniture, fixtures and office equipment</font></td>
<td style="width: 1%"> </td>
<td style="width: 30%; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">5-7 years</font></td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td><font style="font: 10pt Times New Roman, Times, Serif">Projection equipment and screens</font></td>
<td> </td>
<td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">7 years</font></td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td><font style="font: 10pt Times New Roman, Times, Serif">Computer hardware and software</font></td>
<td> </td>
<td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">2-5 years</font></td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td><font style="font: 10pt Times New Roman, Times, Serif">Leasehold improvements</font></td>
<td> </td>
<td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">Lesser of term of
lease or asset life</font></td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">When property and equipment is sold or
otherwise disposed of, the cost and related accumulated depreciation/amortization is removed from the accounts, and any resulting
gain or loss is included in earnings. The costs of normal maintenance, repairs and minor replacements are charged to expense when
incurred.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Company capitalizes interest costs
on borrowings incurred during the new construction or upgrade of qualifying assets. During the years ended December 31, 2018 and
2017, the Company incurred interest costs totaling $17,159 and $16,287, respectively, of which $81 and $196 was capitalized, respectively.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>Pre-Opening Expenses</i></b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Pre-opening expenses consist primarily
of advertising and other start-up costs incurred prior to the operation of new theaters and are expensed as incurred.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p>
<table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<tr style="vertical-align: bottom">
<td> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td>
<td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">As Previously Reported</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td>
<td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Revision</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td>
<td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">As Revised</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td></tr>
<tr style="vertical-align: bottom">
<td> </td><td> </td>
<td colspan="10" style="text-align: center">(in thousands)</td><td> </td></tr>
<tr style="vertical-align: bottom">
<td style="font-weight: bold">Consolidated Statement of Operations December 31, 2017</td><td> </td>
<td colspan="2"> </td><td> </td><td> </td>
<td colspan="2"> </td><td> </td><td> </td>
<td colspan="2"> </td><td> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="width: 64%; text-align: left">Revenue – Theater</td><td style="width: 1%"> </td>
<td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">61,968</td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td>
<td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">4,923</td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td>
<td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">66,891</td><td style="width: 1%; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left">Total revenues</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">139,419</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">4,923</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">144,342</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td>Cost of theater</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">23,878</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">4,923</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">28,801</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left">Operating expenses</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">167,770</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">4,923</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">172,693</td><td style="text-align: left"> </td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; color: #4472C4"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p>
<table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<tr style="vertical-align: bottom">
<td> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td>
<td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">As Previously Reported</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td>
<td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Revision</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td>
<td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">As Revised</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td></tr>
<tr style="vertical-align: bottom">
<td> </td><td> </td>
<td colspan="10" style="text-align: center">(in thousands)</td><td> </td></tr>
<tr style="vertical-align: bottom">
<td style="font-weight: bold">Unaudited Condensed Consolidated Statement of Operations for the three month period ended March 31, 2018</td><td> </td>
<td colspan="2"> </td><td> </td><td> </td>
<td colspan="2"> </td><td> </td><td> </td>
<td colspan="2"> </td><td> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="width: 64%; text-align: left">Revenue – Theater</td><td style="width: 1%"> </td>
<td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">16,311</td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td>
<td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">1,442</td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td>
<td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">17,753</td><td style="width: 1%; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left">Total revenues</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">37,262</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">1,442</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">38,704</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td>Cost of theater</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">6,245</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">1,442</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">7,687</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left">Operating expenses</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">54,387</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">1,442</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">55,829</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="font-weight: bold">Unaudited Condensed Consolidated Statement of Operations for the three month period ended June 30, 2018</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="text-align: left">Revenue – Theater</td><td> </td>
<td style="text-align: left">$</td><td style="text-align: right">16,462</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left">$</td><td style="text-align: right">1,607</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left">$</td><td style="text-align: right">18,069</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left">Total revenues</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">37,519</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">1,607</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">39,126</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td>Cost of theater</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">6,476</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">1,607</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">8,083</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left">Operating expenses</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">42,161</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">1,607</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">43,768</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="font-weight: bold; text-align: left">Unaudited Condensed Consolidated Statement of Operations for the six month period ended June 30, 2018</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="text-align: left">Revenue – Theater</td><td> </td>
<td style="text-align: left">$</td><td style="text-align: right">32,773</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left">$</td><td style="text-align: right">3,049</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left">$</td><td style="text-align: right">35,822</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left">Total revenues</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">74,780</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">3,049</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">77,829</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td>Cost of theater</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">12,721</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">3,049</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">15,770</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left">Operating expenses</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">96,549</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">3,049</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">99,598</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="font-weight: bold">Unaudited Condensed Consolidated Statement of Operations for the three month period ended September 30, 2018</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="text-align: left">Revenue – Theater</td><td> </td>
<td style="text-align: left">$</td><td style="text-align: right">14,160</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left">$</td><td style="text-align: right">947</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left">$</td><td style="text-align: right">15,107</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left">Total revenues</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">31,742</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">947</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">32,689</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td>Cost of theater</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">4,998</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">947</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">5,945</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left">Operating expenses</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">39,646</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">947</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">40,593</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="font-weight: bold">Unaudited Condensed Consolidated Statement of Operations for the nine month period ended September 30, 2018</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="text-align: left">Revenue – Theater</td><td> </td>
<td style="text-align: left">$</td><td style="text-align: right">46,933</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left">$</td><td style="text-align: right">3,996</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left">$</td><td style="text-align: right">50,929</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left">Total revenues</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">106,522</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">3,996</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">110,518</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td>Cost of theater</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">17,719</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">3,996</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">21,715</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left">Operating expenses</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">136,195</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">3,996</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">140,191</td><td style="text-align: left"> </td></tr></table>
<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td><font style="font: 10pt Times New Roman, Times, Serif">Furniture, fixtures and office equipment</font></td>
<td style="width: 1%"> </td>
<td style="width: 30%; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">5-7 years</font></td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td><font style="font: 10pt Times New Roman, Times, Serif">Projection equipment and screens</font></td>
<td> </td>
<td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">7 years</font></td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td><font style="font: 10pt Times New Roman, Times, Serif">Computer hardware and software</font></td>
<td> </td>
<td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">2-5 years</font></td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td><font style="font: 10pt Times New Roman, Times, Serif">Leasehold improvements</font></td>
<td> </td>
<td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">Lesser of term of
lease or asset life</font></td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>Advertising and Marketing Expenses</i></b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Company expenses advertising and marketing
costs as incurred. The Company incurred advertising and marketing expenses of $2,705 and $3,128 for the years ended December 31,
2018 and 2017, respectively. These expenses are included in other operating expenses in the accompanying consolidated statements
of operations.</p>
7776000
37414000
<table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<tr style="vertical-align: bottom">
<td> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td>
<td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">December 31,<br /> 2018</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td>
<td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">December 31,<br /> 2017</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="width: 84%; text-align: left">Leasehold improvements</td><td style="width: 0%"> </td>
<td style="width: 0; text-align: left">$</td><td style="width: 8%; text-align: right">133,743</td><td style="width: 0; text-align: left"> </td><td style="width: 0%"> </td>
<td style="width: 0; text-align: left">$</td><td style="width: 8%; text-align: right">137,675</td><td style="width: 0; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left">Furniture, fixtures and office equipment</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">59,207</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">53,888</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="text-align: left">Construction in progress (site development)</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">11,968</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">2,124</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left">Projection equipment and screens</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">11,125</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">12,330</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="text-align: left; padding-bottom: 1.5pt">Computer hardware and software</td><td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">7,157</td><td style="padding-bottom: 1.5pt; text-align: left"> </td><td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">6,983</td><td style="padding-bottom: 1.5pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">223,200</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">213,000</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="text-align: left; padding-bottom: 1.5pt">Less: accumulated depreciation and amortization</td><td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">(79,661</td><td style="padding-bottom: 1.5pt; text-align: left">)</td><td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">(71,834</td><td style="padding-bottom: 1.5pt; text-align: left">)</td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="font-weight: bold; padding-bottom: 4pt">Total</td><td style="font-weight: bold; padding-bottom: 4pt"> </td>
<td style="border-bottom: Black 4pt double; font-weight: bold; text-align: left">$</td><td style="border-bottom: Black 4pt double; font-weight: bold; text-align: right">143,539</td><td style="padding-bottom: 4pt; font-weight: bold; text-align: left"> </td><td style="font-weight: bold; padding-bottom: 4pt"> </td>
<td style="border-bottom: Black 4pt double; font-weight: bold; text-align: left">$</td><td style="border-bottom: Black 4pt double; font-weight: bold; text-align: right">141,166</td><td style="padding-bottom: 4pt; font-weight: bold; text-align: left"> </td></tr>
</table>
<table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<tr style="vertical-align: bottom">
<td> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td>
<td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">December 31,<br /> 2018</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td>
<td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">December 31,<br /> 2017</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="width: 76%; text-align: left">5.00% VR iPic Finance, LLC notes</td><td style="width: 1%"> </td>
<td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">     -</td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td>
<td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">16,125</td><td style="width: 1%; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left">5.00% VR iPic Finance, LLC demand notes</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">-</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">14,461</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="text-align: left">10.50% Village Roadshow Attractions USA, Inc. notes</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">-</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">15,000</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left">5.00% Village Roadshow Attractions USA, Inc. notes</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">-</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">1,071</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="text-align: left">5.00% iPic Holdings, LLC notes</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">-</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">547</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left; padding-bottom: 1.5pt">5.00% Regal/Atom Holdings, LLC note</td><td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">-</td><td style="padding-bottom: 1.5pt; text-align: left"> </td><td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">3,038</td><td style="padding-bottom: 1.5pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="padding-bottom: 4pt">Total</td><td style="padding-bottom: 4pt"> </td>
<td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">-</td><td style="padding-bottom: 4pt; text-align: left"> </td><td style="padding-bottom: 4pt"> </td>
<td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">50,242</td><td style="padding-bottom: 4pt; text-align: left"> </td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p>
<table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<tr style="vertical-align: bottom">
<td style="font-weight: bold; border-bottom: Black 1.5pt solid">Assumptions</td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td>
<td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">July 10,<br /> 2018</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="width: 88%; text-align: justify">Expected term (years)</td><td style="width: 1%"> </td>
<td style="width: 1%; text-align: left"> </td><td style="width: 9%; text-align: right">2.5</td><td style="width: 1%; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: justify">Stock price</td><td> </td>
<td style="text-align: left">$</td><td style="text-align: right">8.26</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="text-align: justify">Expected volatility</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">46.3</td><td style="text-align: left">%</td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: justify">Risk-free interest rate</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">2.63</td><td style="text-align: left">%</td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="text-align: justify">Dividend yield</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">0.00</td><td style="text-align: left">%</td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></p>
<table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<tr style="vertical-align: bottom">
<td style="font-weight: bold; border-bottom: Black 1.5pt solid">Assumptions</td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td>
<td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid"><p style="margin-top: 0; margin-bottom: 0">December 21,</p>
<p style="margin-top: 0; margin-bottom: 0">2017</p></td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="width: 88%; text-align: justify">Expected term (years)</td><td style="width: 1%"> </td>
<td style="width: 1%; text-align: left"> </td><td style="width: 9%; text-align: right">5.97</td><td style="width: 1%; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: justify">Stock price</td><td> </td>
<td style="text-align: left">$</td><td style="text-align: right">14.69</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="text-align: justify">Expected volatility</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">35.50</td><td style="text-align: left">%</td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: justify">Risk-free interest rate</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">2.34</td><td style="text-align: left">%</td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="text-align: justify">Discount for lack of marketability</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">19.00</td><td style="text-align: left">%</td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: justify">Dividend yield</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">0.00</td><td style="text-align: left">%</td></tr></table>
0.1900
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>NOTE 10 — NON-CONTROLLING INTERESTS</b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">As of December 31, 2018, 62.30% of Holdings’
ownership interests was held by iPic. The non-controlling interests represent the Holdings’ ownership interests not held
by iPic. The ownership is summarized as follows:</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<tr style="vertical-align: bottom">
<td> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td>
<td colspan="6" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">December 31,<br />
2018</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td></tr>
<tr style="vertical-align: bottom">
<td> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td>
<td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Units</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td>
<td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Ownership %</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="width: 76%; text-align: left">iPic’s ownership of Common Units</td><td style="width: 1%"> </td>
<td style="width: 1%; text-align: left"> </td><td style="width: 9%; text-align: right">7,144,133</td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td>
<td style="width: 1%; text-align: left"> </td><td style="width: 9%; text-align: right">62.30</td><td style="width: 1%; text-align: left">%</td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left; padding-bottom: 1.5pt">Non-controlling interest holders’ ownership of Common Units</td><td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">4,323,755</td><td style="padding-bottom: 1.5pt; text-align: left"> </td><td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">37.70</td><td style="padding-bottom: 1.5pt; text-align: left">%</td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="text-align: left; padding-bottom: 4pt">Total Common Units</td><td style="padding-bottom: 4pt"> </td>
<td style="border-bottom: Black 4pt double; text-align: left"> </td><td style="border-bottom: Black 4pt double; text-align: right">11,467,888</td><td style="padding-bottom: 4pt; text-align: left"> </td><td style="padding-bottom: 4pt"> </td>
<td style="border-bottom: Black 4pt double; text-align: left"> </td><td style="border-bottom: Black 4pt double; text-align: right">100.00</td><td style="padding-bottom: 4pt; text-align: left">%</td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Company uses the weighted-average
ownership percentages during the period to calculate the pretax income or loss attributable to iPic and the non-controlling interest
holders of Holdings.</p>
<table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<tr style="vertical-align: bottom">
<td> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td>
<td colspan="6" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">December 31,<br />
2018</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td></tr>
<tr style="vertical-align: bottom">
<td> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td>
<td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Units</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td>
<td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Ownership %</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="width: 76%; text-align: left">iPic’s ownership of Common Units</td><td style="width: 1%"> </td>
<td style="width: 1%; text-align: left"> </td><td style="width: 9%; text-align: right">7,144,133</td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td>
<td style="width: 1%; text-align: left"> </td><td style="width: 9%; text-align: right">62.30</td><td style="width: 1%; text-align: left">%</td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left; padding-bottom: 1.5pt">Non-controlling interest holders’ ownership of Common Units</td><td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">4,323,755</td><td style="padding-bottom: 1.5pt; text-align: left"> </td><td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">37.70</td><td style="padding-bottom: 1.5pt; text-align: left">%</td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="text-align: left; padding-bottom: 4pt">Total Common Units</td><td style="padding-bottom: 4pt"> </td>
<td style="border-bottom: Black 4pt double; text-align: left"> </td><td style="border-bottom: Black 4pt double; text-align: right">11,467,888</td><td style="padding-bottom: 4pt; text-align: left"> </td><td style="padding-bottom: 4pt"> </td>
<td style="border-bottom: Black 4pt double; text-align: left"> </td><td style="border-bottom: Black 4pt double; text-align: right">100.00</td><td style="padding-bottom: 4pt; text-align: left">%</td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b><i>Principles of Consolidation</i></b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">All significant intercompany balances and transactions have been eliminated in consolidation.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>Basis of Presentation and Accounting</i></b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The accompanying consolidated financial statements have been prepared in accordance with accounting principles
generally accepted in the United States (“GAAP”).</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>Income Taxes</i></b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">We account for income taxes pursuant to
the asset and liability method which requires the recognition of deferred income tax assets and liabilities related to the expected
future tax consequences arising from temporary differences between the carrying amounts and tax bases of assets and liabilities
based on enacted statutory tax rates applicable to the periods in which the temporary differences are expected to reverse. Any
effects of changes in income tax rates or laws are included in income tax expense in the period of enactment. A valuation allowance
is recognized if we determine it is more likely than not that all or a portion of a deferred tax asset will not be recognized.
The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in
which those temporary differences are deductible. In making this determination, the Company considers all available positive and
negative evidence affecting specific deferred tax assets, including past and anticipated future performance, the reversal of deferred
tax liabilities, the length of carry-back and carry-forward periods and the implementation of tax planning strategies.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Objective positive evidence is necessary to support a conclusion that a valuation allowance is not needed
for all or a portion of deferred tax assets when significant negative evidence exists. Cumulative tax losses in recent years are
the most compelling form of negative evidence considered by management in this determination. Management determined that based
on all available evidence, a full valuation allowance was required for all federal, state and local deferred tax assets due to
losses incurred for the past several years.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">A tax position is recognized as a benefit
only if it is more likely than not that the tax position would be sustained in a tax examination, with a tax examination being
presumed to occur. The amount recognized is the largest amount of tax benefit that is greater than 50% likely of being realized
on examination. For tax positions not meeting the more-likely-than-not test, no tax benefit is recorded. The Company’s tax
filings are generally subject to examination for a period of three years from the filing date. Management has not identified any
tax position taken that require income tax reserves to be established.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Company recognizes interest and penalties
related to income tax matters in income tax expense. The Company has no amounts accrued for interest or penalties at December 31,
2018 and 2017. The Company does not expect the total amount of unrecognized tax benefits to significantly change in the next 12
months.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>Equity-Based Compensation</i></b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="margin: 0pt 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">Equity-based
compensation costs for equity classified awards are measured on the grant date based on the fair value of the award at that date
and are recognized over the requisite service period. Liability classified awards are remeasured at their fair-value-based measure as
of each reporting date until settlement. In accordance with ASU No. 2016-09, <i>Improvements to Employee Share-Based Payment Accounting</i>,
the Company will account for forfeitures as they occur.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>Leases</i></b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Company’s operations are conducted
on premises occupied under lease agreements with initial base terms of 15 to 25 years, with certain leases containing options
to extend the leases for up to an additional 20 years. The Company does not believe that exercise of the renewal options in its
leases is reasonably assured at the inception of the lease agreements and, therefore, considers the initial base term to be the
lease term.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Most of the Company’s leases include escalation clauses. The Company records rent expense for its operating
leases on a straight-line basis over the base term of the lease agreements commencing with the date the Company has control and
access to the leased premises, which is generally a date prior to the lease commencement date contained in the lease agreement.
The Company views “rent holidays” as an inducement contained in the lease agreement that provides for a period of “free
rent” during the lease term. The Company records lease incentive payments received from lessors under operating lease agreements
as deferred rent, which it amortizes on a straight-line basis as reductions to rent expense over the terms of the respective leases.
If the Company concludes that it has substantially all of the construction-period risks, it records a construction asset and related
liability for the amount of total project costs incurred during the construction period.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="text-transform: uppercase"><b>Note
2 — Initial public offering</b></font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b><i>Initial Public Offering</i></b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">On February 1, 2018, iPic completed its
IPO of 818,429 shares of Class A Common Stock at a price of $18.50 per share. iPic received approximately $13,600 in proceeds,
net of underwriting discounts and commission, but before offering expenses of approximately $1,500. iPic used the proceeds to
purchase 7.32% of newly issued common units of iPic-Gold Class Holdings LLC (“Common Units”), which became the sole
managing member of iPic-Gold Class in a series of related transactions that occurred concurrently with the IPO, at a price per
Common Unit equal to the IPO price per share of Class A Common Stock, less underwriting discounts and commissions. As a result
of the IPO, the continuing owners of iPic-Gold Class Holdings LLC control approximately 92.68% of the combined voting power of
all classes of iPic’s common stock as a result of their ownership of 429,730 shares of iPic’s Class A Common Stock
and all of the outstanding shares of iPic’s Class B Common Stock, each share of which is entitled to one vote on all matters
submitted to a vote of iPic’s stockholders.  </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>Organizational Transactions</i></b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Immediately prior to or in connection
with the closing of our IPO on February 1, 2018, we and the pre-IPO owners of iPic-Gold Class (the “Original iPic Equity
Owners”) consummated the following organizational transactions (the “Organizational Transactions”):</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: top">
<td style="width: 24px"> </td>
<td style="width: 24px"><font style="font: 10pt Times New Roman, Times, Serif">●</font></td>
<td style="text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">All of the membership
interests in iPic-Gold Class were contributed by the Original iPic Equity Owners to Holdings in exchange for all of the membership
interests in Holdings (the “LLC Interests”), following which iPic-Gold Class became 100% owned and controlled
by Holdings;</font></td></tr>
<tr style="vertical-align: top">
<td> </td>
<td> </td>
<td style="text-align: justify"> </td></tr>
<tr style="vertical-align: top">
<td> </td>
<td><font style="font: 10pt Times New Roman, Times, Serif">●</font></td>
<td style="text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">We amended and restated
the limited liability company agreement of Holdings (the “Holdings LLC Agreement”), to, among other things, provide
for the organizational structure described below under “Organizational Structure Following the IPO”;</font></td></tr>
<tr style="vertical-align: top">
<td> </td>
<td> </td>
<td style="text-align: justify"> </td></tr>
<tr style="vertical-align: top">
<td> </td>
<td><font style="font: 10pt Times New Roman, Times, Serif">●</font></td>
<td style="text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">We amended and restated
the limited liability company agreement of iPic-Gold Class to appoint Holdings as the sole managing member of iPic-Gold Class
and to reflect iPic-Gold Class’s status as a wholly-owned subsidiary of Holdings;</font></td></tr>
<tr style="vertical-align: top">
<td> </td>
<td> </td>
<td style="text-align: justify"> </td></tr>
<tr style="vertical-align: top">
<td> </td>
<td><font style="font: 10pt Times New Roman, Times, Serif">●</font></td>
<td style="text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">Certain of the Original
iPic Equity Owners transferred the LLC Interests that they held in Holdings to certain direct or indirect members of such
Original iPic Equity Owners. The recipients of these LLC Interests, together with the Original iPic Equity Owners that did
not transfer any of the LLC Interests that they held in Holdings, are collectively referred to herein as the “Continuing
iPic Equity Owners”;</font></td></tr>
<tr style="vertical-align: top">
<td> </td>
<td> </td>
<td style="text-align: justify"> </td></tr>
<tr style="vertical-align: top">
<td> </td>
<td><font style="font: 10pt Times New Roman, Times, Serif">●</font></td>
<td style="text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">We amended and restated
iPic’s Certificate of Incorporation to, among other things, (i) provide for Class A Common Stock and Class B Common Stock and
(ii) issue shares of Class B Common Stock to the Continuing iPic Equity Owners, on a one-to-one basis with the number of LLC Interests
they owned, for nominal consideration;</font></td></tr>
<tr style="vertical-align: top">
<td> </td>
<td> </td>
<td style="text-align: justify"> </td></tr>
<tr style="vertical-align: top">
<td> </td>
<td><font style="font: 10pt Times New Roman, Times, Serif">●</font></td>
<td style="text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">We issued 818,429
shares of our Class A Common Stock to the purchasers in the IPO in exchange for net proceeds of approximately $13,600 at $18.50
per share, after deducting selling agents’ discounts and commissions but before offering expenses payable by us.</font></td></tr>
<tr style="vertical-align: top">
<td> </td>
<td> </td>
<td style="text-align: justify"> </td></tr>
<tr style="vertical-align: top">
<td> </td>
<td><font style="font: 10pt Times New Roman, Times, Serif">●</font></td>
<td style="text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">We used all of the
net proceeds from the IPO to purchase newly-issued LLC Interests from Holdings at a purchase price per interest equal to the
net proceeds, before expenses, to us per share of Class A Common Stock, collectively representing 7.32% of Holdings’
outstanding LLC Interests; and</font></td></tr>
<tr style="vertical-align: top">
<td> </td>
<td> </td>
<td style="text-align: justify"> </td></tr>
<tr style="vertical-align: top">
<td> </td>
<td><font style="font: 10pt Times New Roman, Times, Serif">●</font></td>
<td style="text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">We issued 429,730
shares of our Class A Common Stock to certain Continuing iPic Equity Owners in exchange for an equivalent number our Class
B Common Stock and LLC Interests they owned.</font></td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>Organizational Structure Following the IPO</b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b> </b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Immediately following the completion of
the IPO:</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b> </b></p>
<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: top">
<td> </td>
<td><font style="font: 10pt Times New Roman, Times, Serif">●</font></td>
<td style="text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">iPic is the sole
manager of Holdings, and Holdings is the sole managing member of iPic-Gold Class. iPic, therefore, directly or indirectly
controls the business and affairs of, and conducts its day-to-day business through, iPic-Gold Class and its subsidiaries;</font></td></tr>
<tr style="vertical-align: top">
<td> </td>
<td> </td>
<td style="text-align: justify"> </td></tr>
<tr style="vertical-align: top">
<td style="width: 24px"> </td>
<td style="width: 24px"><font style="font: 10pt Times New Roman, Times, Serif">●</font></td>
<td style="text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">iPic’s Amended
and Restated Certificate of Incorporation and the Holdings LLC Agreement require that (i) we at all times maintain a ratio
of one LLC Interest owned by us for each share of Class A Common Stock issued by us (subject to certain exceptions for treasury
shares and shares underlying certain convertible or exchangeable securities), and (ii) Holdings at all times maintain (x)
a one-to-one ratio between the number of shares of Class A Common Stock issued by us and the number of LLC Interests owned
by us and (y) a one-to-one ratio between the number of shares of Class B Common Stock owned by the Continuing iPic Equity
Owners and the number of LLC Interests owned by the Continuing iPic Equity Owners; </font></td></tr>
<tr style="vertical-align: top">
<td> </td>
<td> </td>
<td style="text-align: justify"> </td></tr>
<tr style="vertical-align: top">
<td> </td>
<td><font style="font: 10pt Times New Roman, Times, Serif">●</font></td>
<td style="text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">Class A Common Stockholders
own 1,248,159 shares of Class A Common Stock, representing approximately 11.17% of the combined voting power of our Class
A and Class B Common Stock, and participate in approximately 11.17% of the economic interest in Holdings; and</font></td></tr>
<tr style="vertical-align: top">
<td> </td>
<td> </td>
<td style="text-align: justify"> </td></tr>
<tr style="vertical-align: top">
<td> </td>
<td><font style="font: 10pt Times New Roman, Times, Serif">●</font></td>
<td style="text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">The Continuing iPic
Equity Owners own (i) LLC Interests, representing 88.83% of the economic interest in Holdings, and (ii) through their ownership
of Class A and Class B Common Stock, approximately 92.68% of the combined voting power of our Class A and Class B Common Stock.
Following the IPO, each LLC Interest held by the Continuing iPic Equity Owners is redeemable, at the election of such members,
for, at our option, newly-issued shares of Class A Common Stock on a one-for-one basis or a cash payment equal to a volume
weighted average market price of one share of Class A Common Stock for each LLC Interest redeemed (subject to customary adjustments,
including for stock splits, stock dividends and reclassifications). In the event of such election by a Continuing iPic Equity
Owner, we may, at our option, instead effect a direct exchange of cash or Class A Common Stock for such LLC Interests in lieu
of such a redemption. Any such redemption or exchange is required to be in accordance with the terms of the Holdings LLC Agreement.
When a Continuing iPic Equity Owner’s LLC Interests are redeemed or exchanged, we will cancel the number of shares of
Class B Common Stock held by such Continuing iPic Equity Owner equal to the number of LLC Interests of such Continuing iPic
Equity Owner that were redeemed or exchanged. The decisions made by us are made by our board of directors, which currently
includes directors who hold LLC Interests or are affiliated with holders of LLC Interests and may include additional directors
with similar affiliations in the future.</font></td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">We have the sole voting interest in, and control the
management of Holdings and, indirectly, iPic-Gold Class. As a result, we consolidated on February 1, 2018 both Holdings and iPic-Gold
Class in our consolidated financial statements and will report non-controlling interests related to the remaining LLC Interests
held by the Continuing iPic Equity Owners on our consolidated financial statements.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>Issuance of Warrants</i></b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">On February 1, 2018, upon the closing of the IPO, the Company issued certain warrants to the selling agents
(the “Selling Agents’ Warrants”) to purchase a number of shares of the Class A Common Stock equal to 2.2% of
the total shares of the Class A Common Stock sold in the IPO. This equated to a total of 18,005 shares. The Selling Agents’
Warrants are exercisable commencing approximately 13 months after the date of the applicable closing and will be exercisable for
three and a half years after such date. The Selling Agents’ Warrants are not redeemable by the Company. The exercise price
for the Selling Agents’ Warrants is $23.125 which equals 125% of the public offering price of $18.50 per share. The
fair value of the warrants of $90 was offset against the proceeds received from the IPO.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="text-transform: uppercase"><b>Note
3 — VARIABLE INTEREST ENTITIES</b></font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">In May 2017, certain members of the Company
established a limited liability company, iPic-Delray Investment, LLC (“Delray”) which has a 50% ownership in a joint
venture, Delray Beach 4th and 5th Avenue Developer, LLC (“Developer”). Developer owns 8% of a limited liability company,
Delray Beach 4th and 5th Avenue Holdings, LLC (“4th and 5th Avenue Holdings”) that is developing an area in Delray
Beach, Florida to include a theater complex, office space, retail shops and parking garages. The Company will be the lessee of
the theater and a portion of the office space, which will serve as the Company’s new headquarters. In total, the Company
will lease approximately 65% of the available property.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">In May 2017, the Company distributed construction
in progress with a cost basis of approximately $2,300, primarily consisting of pre-development costs that had been incurred to
date, to certain of its members (the owners of Delray). Those members in turn contributed those assets to Delray in exchange for
their ownership interest. Delray then contributed those assets to Developer and 4th and 5th Avenue Holdings in exchange for its
ownership interests in those entities. These capital contributions were determined to have an estimated fair value of approximately
$6,400. As the fair value exceeded the contribution required to acquire Delray’s ownership in Developer and 4th and 5th
Avenue Holdings, cash totaling approximately $4,000 was paid by the 92% owners of 4th and 5th Avenue Holdings to Developer as
an initial distribution upon formation of the respective entities. Of this amount, approximately $3,400 was distributed by Developer
to Delray, which Delray distributed to its owners. Delray’s owners then contributed this cash back to the Company. The distribution
of assets was accounted for by the Company at carryover basis with a resulting increase in equity resulting from the difference
between the cash received from its members and the cost basis of the assets distributed.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Delray is not a business and was established to participate in the development of the theater and office
space. The Company has a shared services agreement with Delray to provide Delray with employees, technical services, administrative
and support services. Under this agreement the Company agreed to assume operating responsibility for Developer under the ultimate
supervision and control of Delray pursuant to a development management agreement that Developer has with 4th and 5th Avenue Holdings
to provide these services. These agreements will end upon completion of the development of the project, which is anticipated to
occur in June 2019. The Company will be paid an annual fee for these services under the shared services agreement that equates
to 50% of the fee paid to Developer under the development management agreement. The other 50% will be paid to the other 50% owner
of Developer. In addition, the Company is obligated to cover certain losses or additional capital calls that may arise related
to a completion guaranty on the development project. The Company has also signed an indemnification agreement, along with an affiliate
of the other 50% owner of Developer, to indemnify 4th and 5th Avenue Holdings for certain conditions and to maintain a minimum
aggregate net worth, on a combined basis, of $15,000 which shall include $1,650, on a combined basis, of liquid assets through
the completion of the development of the project. Should the combined net worth of the Company and the affiliate of the other 50%
owner in Developer fall below $15,000, the parties must provide additional collateral to 4th and 5th Avenue Holdings subject to
their review and consent.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Delray was determined to be a VIE because
its total equity at risk is not sufficient to finance its activities without additional subordinated financial support from any
entities. Based on the Company’s qualitative analysis, the Company made the determination that while it has the obligation
to absorb losses of Delray that may be significant pursuant to the completion guaranty, it does not have the power to direct the
activities of Delray that most significantly impact its economic performance. Therefore, consolidation of Delray by the Company
is not required because the Company is not the primary beneficiary of Delray.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Developer and 4th and 5th Avenue Holdings
were also determined by the Company to be VIE’s because their total equity at risk is not sufficient to finance their activities
without additional subordinated financial support from any entities. The Company’s involvement with these entities consists
of assisting in the formation and financing of the entities, providing recourse and/or liquidity support if necessary, and receiving
fees for services provided under the shared services agreement through the development management agreement. Based on the Company’s
qualitative analysis, including consideration of the related party nature of the entities involved, the Company is not required
to consolidate Developer because power is shared 50/50 under the terms of the joint venture agreement. In addition, based on the
Company’s qualitative analysis, the Company is not required to consolidate 4th and 5th Avenue Holdings because the nature
of the Company’s involvement with the activities of 4th and 5th Avenue Holdings does not give it the power over decisions
that most significantly impact 4th and 5th Avenue Holdings’ economic performance.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Company’s largest exposure to
any single unconsolidated VIE is its responsibility to act under the completion guaranty whereby the Company is obligated to cover
certain losses or additional capital calls required by Delray until the completion of the development of the project related to
its ownership in Developer. Of this amount, the Company would be responsible for half with the other half being guaranteed by an
affiliate of the other 50% owner of Developer. As of December 31, 2018 and December 31, 2017, the value of this potential guarantee
was determined to be nominal, as the probability of the Company’s requirement to act under the guarantee was determined to
be remote. The Company did not hold any assets or liabilities in any of the unconsolidated VIEs as of December 31, 2018 and December
31, 2017. The Company will continue to evaluate its relationships to these VIEs on an ongoing basis.</p>
621000
976000
37157000
0.05
0.0695
0.1050
0.0695
0.0500
0.0500
0.1050
0.0500
0.0500
0.0500
1214000
1392000
15000000
3000000
225828000
186000000
15828000
148433000
24000000
102775000
15828000
24000000
The terms of the facility provide that the Company can borrow under the facility for a thirteen-year period commencing September 30, 2010 in three tranches (hereinafter, "Tranche 1", "Tranche 2", and "Tranche 3"). Proceeds of the loans were initially to be used for up to 80% of eligible construction costs. As a condition to any advance, the Company was required to provide funding for the applicable project costs in an amount equal to 25% of such advance, with the proceeds of either (x) contributions to the Company from certain shareholders (other than RSA) or (y) subordinated loans to the Company from certain shareholders (other than RSA) (the "Matching Requirement"). In addition, the remaining availability required the Company to achieve certain operating targets to continue borrowing (the "Operating Target Requirement"). On June 22, 2018 the Non-revolving Credit Facility was modified to remove the matching requirement and to permit us to borrow up to $17,923 on five planned remodeling projects.
0.0363
<table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="width: 88%; text-align: left">2019</td><td style="width: 1%"> </td>
<td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">23,118</td><td style="width: 1%; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left">2020</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">25,646</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="text-align: left">2021</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">28,423</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left">2022</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">30,108</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="text-align: left">2023</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">30,297</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="padding-bottom: 1.5pt; text-align: left">Thereafter</td><td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">361,826</td><td style="padding-bottom: 1.5pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="padding-bottom: 4pt; text-align: left"> </td><td style="padding-bottom: 4pt"> </td>
<td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">499,418</td><td style="padding-bottom: 4pt; text-align: left"> </td></tr>
</table>
23118000
25646000
28423000
30108000
30297000
361826000
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>NOTE 9 — MANAGEMENT’S PLAN REGARDING FUTURE
OPERATIONS</b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Company incurred a net loss for the
year ended December 31, 2018 of $56,765. In addition, the Company’s liabilities exceeded its assets by $119,221 and the
Company had a working capital deficit of $14,681 at December 31, 2018.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Company had cash and cash equivalents
of $6,026 at December 31, 2018 and used $16,961 in cash for operating activities for the year ended December 31, 2018.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">  </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Company’s ability to continue as a going-concern is dependent on refinancing of existing
debt or obtaining additional equity. The main sources of funding are expected to be the RSA Non-revolving Credit Facility and new
financing.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Management believes that growth into new
locations is critical to the Company’s ability to achieve profitability and generate cash from operating activities. Management
considers the continued availability of the Non-revolving Credit Facility and obtaining new financing to be significant to its
ability to satisfy its payment obligations as they become due, including but not limited to, planned remodeling of existing locations,
construction of new locations and funding operations.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">To meet our capital and operating needs,
the Company is considering multiple alternatives, including, but not limited to, equity financings, debt financings and other funding
transactions, as well as operational changes to increase revenues and contain costs. No assurance can be given that any future
financing or funding transaction will be available or, if available, that it will be on terms that are satisfactory to the Company.
Even if the Company is able to obtain additional financing, it may contain undue restrictions on operations in the case of debt
financing or cause substantial dilution for stockholders in the case of equity financing.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Additionally, we are required to comply with Securities and Exchange Commission and NASDAQ rules and requirements
when raising capital, which may make it more difficult for us to raise significant amounts of capital. If we cannot raise needed
funds, we might be forced to make substantial reductions in our operating expenses, which could adversely affect our ability to
implement our business plan and ultimately our viability as a company.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Management has determined that these conditions
and events raise substantial doubt about the Company’s ability to continue as a going concern. These consolidated 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.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>NOTE 11 — NET LOSS PER SHARE</b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Company computed net loss per share only for the period our common stock was outstanding during 2018,
referred to as the “Post-IPO Period”. We have defined the Post-IPO Period as February 1, 2018, the date our shares
began trading on the NASDAQ, through December 31, 2018, or 334 days of activity for the reporting period ended December 31, 2018.
Basic net loss per share is computed by dividing the net loss attributable to Class A Common Stockholders for the Post-IPO Period
by the weighted-average number of shares of Class A Common Stock outstanding during the Post-IPO Period. The weighted average number
of Restricted Stock Units to be settled in shares of Class A Common Stock became fully vested on the IPO date and are included
in the calculation below. Prior to the IPO, the iPic-Gold Class membership structure included membership units. The Company analyzed
the calculation of earnings per unit for periods prior to the IPO and determined that it resulted in values that would not be meaningful
to the users of these consolidated financial statements. Therefore, earnings per unit information has not been presented for periods
prior to the IPO on February 1, 2018.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Diluted net loss per share is computed
by adjusting the net loss available to Class A Common Stockholders and the weighted-average number of shares of Class A Common
Stock outstanding to give effect to potentially dilutive securities. Shares of Class B Common Stock issued do not participate
in earnings of the Company. As a result, the shares of Class B Common Stock are not considered participating securities and are
not included in the weighted-average shares outstanding for purposes of computing net loss per share. Class B Common Stockholders
have the option to exchange an equivalent number of LLC Interests of Holdings for Class A Common Stock of iPic maintaining a one-to-one
ratio. Therefore, the equivalent number of shares of Class A Common Stock could be issuable in exchange for the Class B Common
Stockholders’ LLC Interests of Holdings.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Basic and diluted loss per share/unit
for the period ended December 31, 2018:</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p>
<table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<tr style="vertical-align: bottom">
<td style="text-align: right"> </td><td style="font-weight: bold"> </td>
<td colspan="2" style="font-weight: bold; text-align: center">February 1, 2018<br />  through</td><td style="font-weight: bold"> </td></tr>
<tr style="vertical-align: bottom">
<td style="text-align: right"> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td>
<td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">December 31,<br /> 2018</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td></tr>
<tr style="vertical-align: bottom">
<td style="font-weight: bold">Numerator:</td><td> </td>
<td colspan="2" style="text-align: right"> </td><td> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="width: 88%; text-align: left; padding-bottom: 4pt">Net loss attributable to <font style="font: 10pt Times New Roman, Times, Serif">iPic
Entertainment Inc. – Actual Dollars</font></td><td style="width: 1%; padding-bottom: 4pt"> </td>
<td style="width: 1%; border-bottom: Black 4pt double; text-align: left">$</td><td style="width: 9%; border-bottom: Black 4pt double; text-align: right">(18,757,469</td><td style="width: 1%; padding-bottom: 4pt; text-align: left">)</td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="font-weight: bold">Denominator:</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="text-align: left; padding-left: 9pt">Class A Common Stock</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">4,325,202</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left; padding-bottom: 1.5pt; padding-left: 9pt">Restricted Stock Units</td><td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">304,288</td><td style="padding-bottom: 1.5pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="text-align: left; padding-bottom: 4pt">Weighted-average Class A Common Stock and Restricted Stock Units</td><td style="padding-bottom: 4pt"> </td>
<td style="border-bottom: Black 4pt double; text-align: left"> </td><td style="border-bottom: Black 4pt double; text-align: right">4,629,490</td><td style="padding-bottom: 4pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="font-weight: bold; text-align: left; padding-bottom: 4pt">Net loss per Class A common share — basic and diluted</td><td style="padding-bottom: 4pt"> </td>
<td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">(4.05</td><td style="padding-bottom: 4pt; text-align: left">)</td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Company has issued potentially dilutive
instruments in the form of our Non-Qualified Options granted to our employees and directors. In addition, warrants were issued
to selling agents upon completion of the IPO for services rendered. The Company did not include any of these instruments in its
calculation of diluted net loss per share during the period because to include them would be anti-dilutive due to the Company’s
loss from operations during the period.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The following table summarizes the types
of potentially dilutive securities outstanding as of December 31, 2018:</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<tr style="vertical-align: bottom">
<td> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td>
<td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">December 31,<br /> 2018</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td></tr>
<tr style="vertical-align: bottom">
<td> </td><td> </td>
<td colspan="2" style="text-align: right"> </td><td> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="width: 88%; text-align: justify">LLC Interests</td><td style="width: 1%"> </td>
<td style="width: 1%; text-align: left"> </td><td style="width: 9%; text-align: right">4,323,755</td><td style="width: 1%; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: justify">Non-Qualified Options</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">1,040,424</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="text-align: justify; padding-bottom: 1.5pt">Selling Agents’ Warrants</td><td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">18,005</td><td style="padding-bottom: 1.5pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: justify; padding-bottom: 4pt">Total</td><td style="padding-bottom: 4pt"> </td>
<td style="border-bottom: Black 4pt double; text-align: left"> </td><td style="border-bottom: Black 4pt double; text-align: right">5,382,184</td><td style="padding-bottom: 4pt; text-align: left"> </td></tr></table>
<p style="margin: 0pt"></p>
<table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<tr style="vertical-align: bottom">
<td style="text-align: right"> </td><td style="font-weight: bold"> </td>
<td colspan="2" style="font-weight: bold; text-align: center">February 1, 2018<br />  through</td><td style="font-weight: bold"> </td></tr>
<tr style="vertical-align: bottom">
<td style="text-align: right"> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td>
<td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">December 31,<br /> 2018</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td></tr>
<tr style="vertical-align: bottom">
<td style="font-weight: bold">Numerator:</td><td> </td>
<td colspan="2" style="text-align: right"> </td><td> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="width: 88%; text-align: left; padding-bottom: 4pt">Net loss attributable to <font style="font: 10pt Times New Roman, Times, Serif">iPic
Entertainment Inc. – Actual Dollars</font></td><td style="width: 1%; padding-bottom: 4pt"> </td>
<td style="width: 1%; border-bottom: Black 4pt double; text-align: left">$</td><td style="width: 9%; border-bottom: Black 4pt double; text-align: right">(18,757,469</td><td style="width: 1%; padding-bottom: 4pt; text-align: left">)</td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="font-weight: bold">Denominator:</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="text-align: left; padding-left: 9pt">Class A Common Stock</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">4,325,202</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left; padding-bottom: 1.5pt; padding-left: 9pt">Restricted Stock Units</td><td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">304,288</td><td style="padding-bottom: 1.5pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="text-align: left; padding-bottom: 4pt">Weighted-average Class A Common Stock and Restricted Stock Units</td><td style="padding-bottom: 4pt"> </td>
<td style="border-bottom: Black 4pt double; text-align: left"> </td><td style="border-bottom: Black 4pt double; text-align: right">4,629,490</td><td style="padding-bottom: 4pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="font-weight: bold; text-align: left; padding-bottom: 4pt">Net loss per Class A common share — basic and diluted</td><td style="padding-bottom: 4pt"> </td>
<td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">(4.05</td><td style="padding-bottom: 4pt; text-align: left">)</td></tr>
</table>
<p style="margin: 0pt"></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>NOTE 12 — UNAUDITED PRO FORMA INFORMATION FOR 2017
NET LOSS PER SHARE</b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i> </i></b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>Unaudited Pro Forma Net Loss Per
Share</i></b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Unaudited pro forma basic net loss per share was computed by dividing the net loss attributable to Class
A Common Stockholders by the weighted-average number of shares of Class A Common Stock issued in the initial public offering of
iPic Entertainment Inc., as if such shares were issued and outstanding prior to the IPO.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Unaudited pro forma diluted net loss per share was computed by adjusting the net loss available to Class
A Common Stockholders and the weighted-average number of shares of Class A Common Stock outstanding to give effect to potentially
dilutive securities. Shares of Class B Common Stock issued in the initial public offering did not participate in earnings of iPic
Entertainment Inc. As a result, the shares of Class B Common Stock are not considered participating securities and were not included
in the weighted-average shares outstanding for purposes of computing pro forma net loss per share. Class B Common Stockholders
have the option to exchange their membership interests in the Company for Class A Common Stock of iPic Entertainment Inc. maintaining
a one-to-one ratio. Therefore, the equivalent number of shares of Class A Common Stock could be issuable in exchange for the Class
B Common Stockholders’ membership interests of the Company.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Company has issued potentially dilutive instruments in the form of our Non-Qualified Options granted
to our employees and directors. The Company did not include any of these instruments in its calculation of diluted net loss per
share during the period because to include them would be anti-dilutive due to the Company’s loss from operations during the
period.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<tr style="vertical-align: bottom">
<td style="text-align: justify"> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td>
<td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">December 31,<br /> 2017</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="width: 88%; text-align: justify">Net loss (actual dollars)</td><td style="width: 1%"> </td>
<td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">(44,524,286</td><td style="width: 1%; text-align: left">)</td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: justify">Net loss attributable to Class A common shares (actual dollars)</td><td> </td>
<td style="text-align: left">$</td><td style="text-align: right">(4,973,108</td><td style="text-align: left">)</td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="text-align: justify; padding-bottom: 1.5pt">Shares used in computing net loss per Class A common share, basic and diluted</td><td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">1,248,159</td><td style="padding-bottom: 1.5pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: justify"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="text-align: left; padding-bottom: 4pt">Net loss per Class A common share</td><td style="padding-bottom: 4pt"> </td>
<td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">(3.98</td><td style="padding-bottom: 4pt; text-align: left">)</td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>Unaudited Pro Forma Income Tax Expense</i></b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Pro forma income tax expense provides for corporate income taxes at an estimated effective rate of 0.20%
for the year ended December 31, 2017, which includes a provision for U.S. federal income taxes, net of a valuation allowance of
100%, and assumes the highest statutory rates apportioned to each state and local jurisdiction.</p>
<table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<tr style="vertical-align: bottom">
<td style="text-align: justify"> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td>
<td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">December 31,<br /> 2017</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="width: 88%; text-align: justify">Net loss (actual dollars)</td><td style="width: 1%"> </td>
<td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">(44,524,286</td><td style="width: 1%; text-align: left">)</td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: justify">Net loss attributable to Class A common shares (actual dollars)</td><td> </td>
<td style="text-align: left">$</td><td style="text-align: right">(4,973,108</td><td style="text-align: left">)</td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="text-align: justify; padding-bottom: 1.5pt">Shares used in computing net loss per Class A common share, basic and diluted</td><td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">1,248,159</td><td style="padding-bottom: 1.5pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: justify"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="text-align: left; padding-bottom: 4pt">Net loss per Class A common share</td><td style="padding-bottom: 4pt"> </td>
<td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">(3.98</td><td style="padding-bottom: 4pt; text-align: left">)</td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>NOTE 14 — ACCRUED EXPENSES</b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Components of accrued expenses are summarized
as follows:</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<tr style="vertical-align: bottom">
<td> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td>
<td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">December 31,<br /> 2018</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td>
<td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">December 31,<br /> 2017</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="width: 76%; text-align: left">Accrued merchant fees</td><td style="width: 1%"> </td>
<td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">244</td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td>
<td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">291</td><td style="width: 1%; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left">Accrued film rental</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">459</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">479</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="text-align: left">Accrued utilities</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">-</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">403</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left">Accrued cost of revenue</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">137</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">453</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="text-align: left">Accrued legal settlement costs</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">1,500</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">-</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left">Accrued marketing</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">75</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">35</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="text-align: left">Accrued future lease payments-Bayshore</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">514</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">-</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left">Accrued real estate tax</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">286</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">180</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="text-align: left">Accrued personal property tax</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">322</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">216</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left">Accrued Texas franchise tax</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">73</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">98</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="text-align: left; padding-bottom: 1.5pt">Accrued expenses – other</td><td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">1,429</td><td style="padding-bottom: 1.5pt; text-align: left"> </td><td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">554</td><td style="padding-bottom: 1.5pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="padding-bottom: 4pt">Total</td><td style="padding-bottom: 4pt"> </td>
<td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">5,039</td><td style="padding-bottom: 4pt; text-align: left"> </td><td style="padding-bottom: 4pt"> </td>
<td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">2,709</td><td style="padding-bottom: 4pt; text-align: left"> </td></tr></table>
<table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<tr style="vertical-align: bottom">
<td> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td>
<td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">December 31,<br /> 2018</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td>
<td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">December 31,<br /> 2017</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="width: 76%; text-align: left">Accrued merchant fees</td><td style="width: 1%"> </td>
<td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">244</td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td>
<td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">291</td><td style="width: 1%; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left">Accrued film rental</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">459</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">479</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="text-align: left">Accrued utilities</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">-</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">403</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left">Accrued cost of revenue</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">137</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">453</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="text-align: left">Accrued legal settlement costs</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">1,500</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">-</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left">Accrued marketing</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">75</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">35</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="text-align: left">Accrued future lease payments-Bayshore</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">514</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">-</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left">Accrued real estate tax</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">286</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">180</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="text-align: left">Accrued personal property tax</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">322</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">216</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left">Accrued Texas franchise tax</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">73</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">98</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="text-align: left; padding-bottom: 1.5pt">Accrued expenses – other</td><td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">1,429</td><td style="padding-bottom: 1.5pt; text-align: left"> </td><td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">554</td><td style="padding-bottom: 1.5pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="padding-bottom: 4pt">Total</td><td style="padding-bottom: 4pt"> </td>
<td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">5,039</td><td style="padding-bottom: 4pt; text-align: left"> </td><td style="padding-bottom: 4pt"> </td>
<td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">2,709</td><td style="padding-bottom: 4pt; text-align: left"> </td></tr>
</table>
514000
180000
286000
216000
322000
98000
73000
35000
75000
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>NOTE 15 — SUBSEQUENT EVENTS</b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Company currently is a defendant in
a class action lawsuit captioned Mary Ryan and Johanna Nielson v. iPic-Gold Class Entertainment, LLC, Case # BC 688633, which was
filed in Superior Court of the State of California, County of Los Angeles, on December 29, 2017. This lawsuit asserted failure
to pay minimum wage, pay overtime wages, provide meal breaks and rest periods, and provide accurate itemized wage statements with
respect to certain workers. On February 6, 2019, the parties reached a preliminary agreement to settle the lawsuit for $1,500.
The parties are in the process of negotiating a settlement agreement for submission to the court for preliminary approval of the
settlement. The gross settlement amount will be used to satisfy all of the Company’s liabilities arising from the settlement,
including payment of employee-side taxes, interest, plaintiffs’ attorneys’ fees and costs, the incentive award for
the plaintiffs, all costs of administration, and payments to all putative class members who do not opt out of the settlement. The
preliminary agreement provides for a full release of claims by class members who do not opt out of the settlement. In the fourth
quarter, the Company has recorded the legal settlement expense in the consolidated statement of operations and recorded the liability
under the Accrual Expenses in the consolidated balance sheets.</p>
1500000
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>Use of Estimates</i></b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The preparation of the consolidated financial statements in conformity with GAAP requires management to
make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and
liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting
periods. These estimates include, breakage on gift cards, fair value of equity based compensation, realization of deferred tax
assets and uncertain tax positions and the useful life and impairment of long-lived assets. Although these estimates are based
on management’s knowledge of current events and actions it may undertake in the future, they may ultimately differ from actual
results.</p>
1500000
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="text-transform: uppercase"><b>NOTE
1 — Organization and Summary of Significant Accounting Policies</b></font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b><i>Organization</i></b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">iPic Entertainment Inc. (“iPic”)
was formed as a Delaware corporation on October 18, 2017. iPic was formed for the purpose of completing an initial public offering
(“IPO”) and related transactions in order to carry on the business of iPic-Gold Class Entertainment, LLC (“iPic-Gold
Class”) and its subsidiaries. The IPO occurred on February 1, 2018; refer to Note 2 “Initial Public Offering”
for details of the IPO and the related transactions. Additionally, iPic-Gold Class Holdings LLC (“Holdings”) was formed
as a Delaware limited liability company on December 22, 2017, to hold the equity interests in iPic-Gold Class. As of the completion
of the IPO and related transactions, iPic is the sole managing member of Holdings, and Holdings is the sole managing member of
iPic-Gold Class and its subsidiaries. iPic-Gold Class and its subsidiaries continue to conduct the business conducted by these
subsidiaries prior to the IPO and related transactions. Prior to the consummation of the IPO, iPic had no operations or activities.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Holdings is considered a variable interest entity (“VIE”) of iPic. iPic is the primary beneficiary
due to the following factors: it has an economic interest in Holdings, it is the sole managing member, and it has decision-making
authority that significantly affects the economic performance of the entity, while the non-controlling interest holders have no
substantive kick-out or participating rights. As a result, Holdings is consolidated as part of iPic. The assets and liabilities
of Holdings represent substantially all of our consolidated assets and liabilities.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">As a result of the IPO and the related transactions on February 1, 2018, iPic consolidates the financial results
of Holdings and iPic-Gold Class and its subsidiaries with its financial results and reports non-controlling interests to reflect
the interests of Common Units (as defined below in Note 2 “Initial Public Offering”) of Holdings held by parties other
than iPic. iPic-Gold Class has been determined to be the predecessor for accounting purposes and, accordingly, the consolidated
financial statements for periods prior to the IPO and Organizational Transactions (as defined below in Note 2 “Initial Public
Offering”) have been adjusted to combine the previously separate entities for presentation purposes. Amounts as of December
31, 2017, for the period from January 1, 2017 to December 31, 2017, and for the for the period from January 1, 2018 to January
31, 2018 presented in the consolidated financial statements and notes to consolidated financial statements herein represent the
financial position, results of operations and cash flows of iPic-Gold Class. The amounts as of December 31, 2018, and for the period
from February 1, 2018 through December 31, 2018 represent the financial position, results of operations and cash flows of the Company.
iPic and its subsidiaries are collectively referred to throughout the consolidated financial statements and related notes as the
“Company”, “we”, “our” or “us”.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b><i>Principles of Consolidation</i></b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">All significant intercompany balances and transactions have been eliminated in consolidation.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>Revision of Prior Period Consolidated
Financial Statements</i></b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company previously classified fees related
to enhanced services and experiences within the Theater revenue line item on the consolidated statements of operations, net of
certain costs. The Company has determined that certain costs related to these items should have been classified within the line
item of Cost of theater within the grouping of Operating Expenses for all periods presented. Consequently, the Company has revised
its consolidated financial statements in the period noted below to reflect the correction of this immaterial error. The Company
considered SEC Staff Accounting Bulletin (“SAB”) 99, <i>Materiality</i> and SAB 108, <i>Considering the Effects of
Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements,</i> in assessing materiality. The
revision had no impact on reported net loss in any of the periods impacted.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<tr style="vertical-align: bottom">
<td> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td>
<td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">As Previously Reported</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td>
<td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Revision</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td>
<td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">As Revised</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td></tr>
<tr style="vertical-align: bottom">
<td> </td><td> </td>
<td colspan="10" style="text-align: center">(in thousands)</td><td> </td></tr>
<tr style="vertical-align: bottom">
<td style="font-weight: bold">Consolidated Statement of Operations December 31, 2017</td><td> </td>
<td colspan="2"> </td><td> </td><td> </td>
<td colspan="2"> </td><td> </td><td> </td>
<td colspan="2"> </td><td> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="width: 64%; text-align: left">Revenue – Theater</td><td style="width: 1%"> </td>
<td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">61,968</td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td>
<td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">4,923</td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td>
<td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">66,891</td><td style="width: 1%; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left">Total revenues</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">139,419</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">4,923</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">144,342</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td>Cost of theater</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">23,878</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">4,923</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">28,801</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left">Operating expenses</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">167,770</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">4,923</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">172,693</td><td style="text-align: left"> </td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; color: #4472C4"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">In addition, the following tables present
expected revisions to previously filed unaudited interim condensed consolidated financial statements for the impact of this immaterial
error on the first, second and third quarter 2018 information when it is presented in future Exchange Act reports (unaudited).</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p>
<table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<tr style="vertical-align: bottom">
<td> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td>
<td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">As Previously Reported</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td>
<td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Revision</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td>
<td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">As Revised</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td></tr>
<tr style="vertical-align: bottom">
<td> </td><td> </td>
<td colspan="10" style="text-align: center">(in thousands)</td><td> </td></tr>
<tr style="vertical-align: bottom">
<td style="font-weight: bold">Unaudited Condensed Consolidated Statement of Operations for the three month period ended March 31, 2018</td><td> </td>
<td colspan="2"> </td><td> </td><td> </td>
<td colspan="2"> </td><td> </td><td> </td>
<td colspan="2"> </td><td> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="width: 64%; text-align: left">Revenue – Theater</td><td style="width: 1%"> </td>
<td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">16,311</td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td>
<td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">1,442</td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td>
<td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">17,753</td><td style="width: 1%; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left">Total revenues</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">37,262</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">1,442</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">38,704</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td>Cost of theater</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">6,245</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">1,442</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">7,687</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left">Operating expenses</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">54,387</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">1,442</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">55,829</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="font-weight: bold">Unaudited Condensed Consolidated Statement of Operations for the three month period ended June 30, 2018</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="text-align: left">Revenue – Theater</td><td> </td>
<td style="text-align: left">$</td><td style="text-align: right">16,462</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left">$</td><td style="text-align: right">1,607</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left">$</td><td style="text-align: right">18,069</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left">Total revenues</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">37,519</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">1,607</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">39,126</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td>Cost of theater</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">6,476</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">1,607</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">8,083</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left">Operating expenses</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">42,161</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">1,607</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">43,768</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="font-weight: bold; text-align: left">Unaudited Condensed Consolidated Statement of Operations for the six month period ended June 30, 2018</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="text-align: left">Revenue – Theater</td><td> </td>
<td style="text-align: left">$</td><td style="text-align: right">32,773</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left">$</td><td style="text-align: right">3,049</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left">$</td><td style="text-align: right">35,822</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left">Total revenues</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">74,780</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">3,049</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">77,829</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td>Cost of theater</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">12,721</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">3,049</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">15,770</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left">Operating expenses</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">96,549</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">3,049</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">99,598</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="font-weight: bold">Unaudited Condensed Consolidated Statement of Operations for the three month period ended September 30, 2018</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="text-align: left">Revenue – Theater</td><td> </td>
<td style="text-align: left">$</td><td style="text-align: right">14,160</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left">$</td><td style="text-align: right">947</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left">$</td><td style="text-align: right">15,107</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left">Total revenues</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">31,742</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">947</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">32,689</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td>Cost of theater</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">4,998</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">947</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">5,945</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left">Operating expenses</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">39,646</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">947</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">40,593</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="font-weight: bold">Unaudited Condensed Consolidated Statement of Operations for the nine month period ended September 30, 2018</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="text-align: left">Revenue – Theater</td><td> </td>
<td style="text-align: left">$</td><td style="text-align: right">46,933</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left">$</td><td style="text-align: right">3,996</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left">$</td><td style="text-align: right">50,929</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left">Total revenues</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">106,522</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">3,996</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">110,518</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td>Cost of theater</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">17,719</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">3,996</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">21,715</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left">Operating expenses</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">136,195</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">3,996</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">140,191</td><td style="text-align: left"> </td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>Locations</i></b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">At December 31, 2018 and 2017, the Company
operated a total of fifteen and sixteen cinemas, respectively, in the following locations throughout the United States:</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<tr style="vertical-align: bottom">
<td style="width: 50%"><font style="font: 10pt Times New Roman, Times, Serif">●    Glendale, Wisconsin<sup>1</sup></font></td>
<td style="width: 50%"><font style="font: 10pt Times New Roman, Times, Serif">●    Scottsdale, Arizona</font></td></tr>
<tr style="vertical-align: bottom">
<td><font style="font: 10pt Times New Roman, Times, Serif">●    Pasadena, California</font></td>
<td><font style="font: 10pt Times New Roman, Times, Serif">●    Bolingbrook, Illinois</font></td></tr>
<tr style="vertical-align: bottom">
<td><font style="font: 10pt Times New Roman, Times, Serif">●    Austin, Texas</font></td>
<td><font style="font: 10pt Times New Roman, Times, Serif">●    South Barrington, Illinois</font></td></tr>
<tr style="vertical-align: bottom">
<td><font style="font: 10pt Times New Roman, Times, Serif">●    Fairview, Texas</font></td>
<td><font style="font: 10pt Times New Roman, Times, Serif">●    Los Angeles, California</font></td></tr>
<tr style="vertical-align: bottom">
<td><font style="font: 10pt Times New Roman, Times, Serif">●    Boca Raton, Florida</font></td>
<td><font style="font: 10pt Times New Roman, Times, Serif">●    Houston, Texas</font></td></tr>
<tr style="vertical-align: bottom">
<td><font style="font: 10pt Times New Roman, Times, Serif">●    Bethesda, Maryland</font></td>
<td><font style="font: 10pt Times New Roman, Times, Serif">●    Fort Lee, New Jersey</font></td></tr>
<tr style="vertical-align: bottom">
<td><font style="font: 10pt Times New Roman, Times, Serif">●    North Miami, Florida</font></td>
<td><font style="font: 10pt Times New Roman, Times, Serif">●    New York, New York</font></td></tr>
<tr style="vertical-align: bottom">
<td><font style="font: 10pt Times New Roman, Times, Serif">●    Redmond, Washington</font></td>
<td><font style="font: 10pt Times New Roman, Times, Serif">●    Dobbs Ferry, New York</font></td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">  </p>
<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: top">
<td style="width: 29px; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"><sup>1</sup></font></td>
<td style="text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">Location was closed
in the first quarter of 2018. Refer to Note 4 “Property and Equipment”.</font></td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>New Accounting Pronouncements</i></b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">As an emerging growth company, the Company
has elected the option to defer the effective date for adoption of new or revised accounting guidance. This option allows the
Company to adopt new guidance on the effective date for entities that are not public business entities.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i>Interim Reporting</i></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">In August 2018, the SEC adopted amendments to certain disclosure requirements in Securities Act Release
No. 33-10532, Disclosure Update and Simplification. The amendments are effective as of November 5, 2018. Among the amendments is
the requirement for companies to present (either in a separate statement or in the notes to the consolidated financial statements)
an analysis of the changes in each line item of stockholders’ equity and non-controlling interests, presented in the balance
sheets, for interim consolidated financial statements in quarterly reports on Form 10-Q.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Company is required to present for the quarterly reports on Form 10-Q the following items:</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: top">
<td style="width: 24px"> </td>
<td style="width: 24px"><font style="font: 10pt Times New Roman, Times, Serif">●</font></td>
<td style="text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">A reconciliation
of the beginning balance to the ending balance of shareholders’/members’ equity for each period for which a statement
of operations is required to be filed, including all significant reconciling items.  Contributions from and distributions
to owners must be shown separately;</font></td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p>
<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: top">
<td style="width: 24px"> </td>
<td style="width: 24px"><font style="font: 10pt Times New Roman, Times, Serif">●</font></td>
<td style="text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">Any adjustments
to the balance at the beginning of the earliest period presented for items which were retroactively applied to periods prior
to that period;</font></td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">  </p>
<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: top">
<td style="width: 24px"> </td>
<td style="width: 24px"><font style="font: 10pt Times New Roman, Times, Serif">●</font></td>
<td style="text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">With respect to
any dividends, state the amount per share and in the aggregate dividends for each class of shares;</font></td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p>
<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: top">
<td style="width: 24px"> </td>
<td style="width: 24px"><font style="font: 10pt Times New Roman, Times, Serif">●</font></td>
<td style="text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">Any changes in the
registrant’s ownership interest in a subsidiary on the equity attributable to the registrant.</font></td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">   </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">These changes are to be adopted for interim
periods beginning after the effective date of the amendments.  Therefore, the Company will reflect the amendments to the reporting
requirements for its unaudited condensed consolidated financial statements for the first quarter of 2019.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i>Revenue Recognition</i></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">  </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">In May 2014, the Financial Accounting
Standards Board (“FASB”) issued Accounting Standards Update 2014-09, <i>Revenue from Contracts with Customers (Topic
606) (“ASU 2014-09”)</i>. The purpose of ASU 2014-09 is to clarify the principles for recognizing revenue and create
a common revenue standard for U.S. GAAP and International Financial Reporting Standards. ASU 2014-09 affects any entity that either
enters into contracts with customers to transfer goods or services or enters into contracts for the transfer of nonfinancial assets
unless those contracts are within the scope of other standards (for example, insurance contracts or lease contracts). The following
subsequent Accounting Standards Updates either clarified or revised guidance set forth in ASU 2014-09:</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: top">
<td style="width: 24px"> </td>
<td style="width: 24px"><font style="font: 10pt Times New Roman, Times, Serif">●</font></td>
<td style="text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">In August 2015, the FASB issued Accounting Standards Update 2015-14, <i>Revenue from Contracts with Customers
(Topic 606): Deferral of the Effective Date (“ASU 2015-14”)</i>. ASU 2015-14 deferred the effective date of ASU 2014-09.
The guidance in ASU 2014-09 will be effective for annual reporting periods beginning after December 15, 2017 for public business
entities and for all other entities subsequent to December 15, 2018, including interim reporting periods within that reporting
period. The Company has elected to defer the implementation to the first quarter of 2019.</font></td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">  </p>
<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: top">
<td style="width: 24px"> </td>
<td style="width: 24px"><font style="font: 10pt Times New Roman, Times, Serif">●</font></td>
<td style="text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">In March 2016, the
FASB issued Accounting Standards Update 2016-08, <i>Revenue from Contracts with Customers (Topic 606): Principal versus Agent
Considerations (Reporting Revenues Gross versus Net) (“ASU 2016-08”)</i>. The purpose of ASU 2016-08 is to clarify
the implementation of revenue recognition guidance for principal versus agent considerations.</font></td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">  </p>
<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: top">
<td style="width: 24px"> </td>
<td style="width: 24px"><font style="font: 10pt Times New Roman, Times, Serif">●</font></td>
<td style="text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">In April 2016, the
FASB issued Accounting Standards Update 2016-10, <i>Revenue from Contracts with Customers (Topic 606): Identifying Performance
Obligations and Licensing (“ASU 2016-10”)</i>. The purpose of ASU 2016-10 is to clarify certain aspects of identifying
performance obligations and licensing implementation guidance.</font></td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">  </p>
<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: top">
<td style="width: 24px"> </td>
<td style="width: 24px"><font style="font: 10pt Times New Roman, Times, Serif">●</font></td>
<td style="text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">In May 2016, the
FASB issued Accounting Standards Update 2016-12, <i>Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements
and Practical Expedients (“ASU 2016-12”).</i> The purpose of ASU 2016-12 is to address certain narrow aspects
of Accounting Standards Codification (“ASC”) Topic 606 including assessing collectability, presentation of sales
taxes, noncash considerations, contract modifications and completed contracts at transition.</font></td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">  </p>
<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: top">
<td style="width: 24px"> </td>
<td style="width: 24px"><font style="font: 10pt Times New Roman, Times, Serif">●</font></td>
<td style="text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">In December 2016,
the FASB issued Accounting Standards Update 2016-20, <i>Technical Corrections and Improvements to Topic 606, Revenue from
Contracts with Customers (“ASU 2016-20”). </i>The purpose of ASU 2016-20 is to amend certain narrow aspects of
the guidance issued in ASU 2014-09 related to the disclosure of performance obligations, as well as other amendments related
to loan guarantee fees, contract costs, refund liabilities, advertising costs and the clarification of certain examples.</font></td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">In March 2016, the FASB issued Accounting
Standards Update 2016-04, <i>Liabilities-Extinguishments of Liabilities (Subtopic 405-20)</i>. This amendment provides a narrow
scope exception to Liabilities-Extinguishment of Liabilities (Subtopic 405-20) that requires breakage for those liabilities to
be accounted for in accordance with the breakage guidance in Accounting Standards Update 2014-09, <i>Revenue from Contracts with
Customers (Topic 606)</i>. Under the new guidance, if an entity expects to be entitled to a breakage amount for a liability resulting
from the sale of a prepaid stored-value product, the entity shall derecognize the amount related to the expected breakage in proportion
to the pattern of rights expected to be exercised by the product holder only to the extent that it is probable that a significant
reversal of the recognized breakage amount will not subsequently occur. If an entity does not expect to be entitled to a breakage
amount for a prepaid stored-value product, the entity shall derecognize the amount related to the breakage when the likelihood
of the product holder exercising its remaining rights becomes remote. The Accounting Standards Update is effective for public
business entities for financial statements issued for fiscal years beginning after December 15, 2017, and interim periods within
those fiscal years. For all other entities, the amendments are effective for financial statements issued for fiscal years beginning
after December 15, 2018.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">  </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The amendments in these accounting standards
updates may be applied either using a modified retrospective transition method by means of a cumulative-effect adjustment to retained
earnings as of the beginning of the fiscal year in which the guidance is effective or retrospectively to each period presented.
Early adoption is permitted.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Company will adopt the amendments within these accounting standards updates in the first quarter of
2019 using the modified retrospective transition method. The Company has completed its analysis and concluded the adoption of ASC
606 will not materially impact the timing of revenue recognition for food and beverage revenue, theater revenue, other revenue
streams, including revenues for unredeemed gift cards and advance ticket sales.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><i>Leases </i></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">In February 2016, the FASB codified Accounting
Standards Codification (“ASC”) Topic No. 842, <i>Leases</i>, which requires companies to present substantially all
leases on their balance sheets but continue to recognize expenses on their income statements in a manner similar to today’s
accounting. The new guidance also will result in enhanced quantitative and qualitative disclosures, including significant judgments
made by management, to provide greater insight into the extent of expenses expected to be recognized from existing leases. The
new guidance requires companies to adopt its provisions by modified retrospective adoption and will be effective for public business
entities for years beginning after December 15, 2018, including interim periods within those years. Nonpublic business entities
should apply the amendments for years beginning after December 15, 2019, and interim periods within years beginning after December
15, 2020. The Company will adopt ASC Topic 842 in the first quarter of 2020 using the modified retrospective transition method
on the effective date. Early application is permitted for all entities upon issuance. In January 2018, the FASB issued ASU No.
2018-01, as an amendment to ASC Topic No. 842, <i>Leases</i>, which is a land easement practical expedient. If the Company elects
to use this practical expedient, the Company would evaluate new or modified land easements under this ASU beginning at the date
of adoption. The Company is currently evaluating the impacts this new guidance will have on its consolidated financial statements.
The Company currently expects that the majority of its operating lease commitments will be recognized as operating lease liabilities
and right-of-use assets upon adoption of the new guidance. The Company expects that adoption will result in a material increase
in the assets and liabilities presented in its consolidated balance sheets. In July 2018, the FASB issued ASU No. 2018-10, <i>Codification
Improvements to Topic 842</i> and <i>ASU No. 2018-11, Targeted Improvements to Topic 842</i>. The amendments in ASU No. 2018-10
and ASU No. 2018-11 provide additional clarification and implementation guidance on certain aspects of the previously issued ASU
No. 2016-02, <i>Leases (Topic 842)</i>, and have the same effective and transition requirements as ASU No. 2016-02.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">   </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><i>Stock Compensation</i></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">In June 2018, FASB issued ASU No.
2018-07, <i>Compensation—Stock Compensation (Topic 718)</i>, to expand the scope of ASC Topic 718 to include share-based
payment transactions for acquiring goods and services from nonemployees. ASU No. 2018-07 is effective for public business entities
for years beginning after December 15, 2018, and interim periods within those years. For all other entities, the amendments are
effective for years beginning after December 15, 2019, and interim periods within years beginning after December 15, 2020. Early
application is permitted, but the provisions of this ASU are not to be adopted before an entity adopts ASC Topic 606. The Company
is evaluating the effects of adoption of ASU No. 2018-07 will have on its consolidated financial statements.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">In May 2017, the FASB issued ASU No. 2017-09,
<i>Compensation – Stock Compensation (Topic 718),</i> to provide guidance on determining which changes to the terms or conditions
of share-based payment awards require an entity to apply modification accounting under Topic 718. This pronouncement is effective
for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2017, with early adoption permitted,
and is applied prospectively to changes in terms or conditions of awards occurring on or after the adoption date. The Company
adopted this pronouncement for the fiscal year beginning January 1, 2018. The adoption of ASU 2017-09 did not have a material
impact on the Company’s consolidated financial statements.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i>Earnings Per Share</i></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">In July 2017, the FASB issued ASU No.
2017-11, <i>Earnings Per Share (Topic 260), Distinguishing Liabilities From Equity (Topic 480) And Derivatives And Hedging (Topic
815). </i>The amendments in Part I of this ASU change the classification analysis of certain equity-linked financial instruments
(or embedded features) with down round features. When determining whether certain financial instruments should be classified as
liabilities or equity instruments, a down round feature no longer precludes equity classification when assessing whether the instrument
is indexed to an entity’s own stock. The amendments also clarify existing disclosure requirements for equity-classified
instruments. As a result, a freestanding equity-linked financial instrument (or embedded conversion option) no longer would be
accounted for as a derivative liability at fair value as a result of the existence of a down round feature. For freestanding equity
classified financial instruments, the amendments require entities that present earnings per share (EPS) in accordance with Topic
260, <i>Earnings Per Share</i>, to recognize the effect of the down round feature when it is triggered. That effect is treated
as a dividend and as a reduction of income available to common shareholders in basic EPS. Convertible instruments with embedded
conversion options that have down round features are now subject to the specialized guidance for contingent beneficial conversion
features (in Subtopic 470-20, <i>Debt-Debt with Conversion and Other Options</i>), including related EPS guidance (in Topic 260).
The amendments in Part II of ASU No. 2017-11, <i>Earnings Per Share (Topic 260), Distinguishing Liabilities From Equity (Topic
480) And Derivatives And Hedging (Topic 815) </i>recharacterize the indefinite deferral of certain provisions of Topic 480 that
now are presented as pending content in the Codification, to a scope exception. Those amendments do not have an accounting effect.
For public business entities, the amendments in Part I of this Update are effective for fiscal years, and interim periods within
those fiscal years, beginning after December 15, 2018. For all other entities, the amendments in Part I of the ASU are effective
for fiscal years beginning after December 15, 2019, and interim periods within fiscal years beginning after December 15, 2020.
Early adoption is permitted for all entities, including adoption in an interim period. If an entity early adopts the amendments
in an interim period, any adjustments should be reflected as of the beginning of the fiscal year that includes that interim period.
The Company is evaluating the impact that ASU No. 2017-11 will have on its consolidated financial statements.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i>Consolidation</i></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">In October 2018, FASB issued ASU No. 2018-17,
<i>Consolidation - Targeted Improvements to Related Party Guidance for Variable Interest Entities (Topic 810).</i> ASU No. 2018-17
guidance eliminates the requirement that entities consider indirect interests held through related parties under common control
in their entirety when assessing whether a decision-making fee is a variable interest. Instead, the reporting entity will consider
such indirect interests on a proportionate basis. This pronouncement is effective for public entities for fiscal years ending
after December 15, 2019, with early adoption permitted. The Company is evaluating the impact that ASU No. 2018-17 will have on
its consolidated financial statements.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">   </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>Basis of Presentation and Accounting</i></b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The accompanying consolidated financial statements have been prepared in accordance with accounting principles
generally accepted in the United States (“GAAP”).</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>Use of Estimates</i></b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The preparation of the consolidated financial statements in conformity with GAAP requires management to
make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and
liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting
periods. These estimates include, breakage on gift cards, fair value of equity based compensation, realization of deferred tax
assets and uncertain tax positions and the useful life and impairment of long-lived assets. Although these estimates are based
on management’s knowledge of current events and actions it may undertake in the future, they may ultimately differ from actual
results.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">  </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>Fair Value of Financial Instruments</i></b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The fair value of accounts receivable
and accounts payable approximate their respective carrying values due to the short-term nature of those instruments. The Company
believes it is not practicable to determine the fair value of its debt without incurring excessive costs because interest rates
and other terms for similar debt are not readily available.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>Variable Interest Entities</i></b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">A VIE is an entity (1) that has total equity at risk that is not sufficient to finance its activities
without additional subordinated financial support from any entities; (2) where the group of equity holders does not have the power
to direct the activities of the entity that most significantly impact the entity’s economic performance, or the obligation
to absorb the entity’s expected losses or the right to receive the entity’s expected residual returns, or both; or
(3) where the voting rights of some investors are not proportional to their obligations to absorb the expected losses of the entity,
their rights to receive the expected residual returns of the entity, or both, and substantially all of the entity’s activities
either involve or are conducted on behalf of an investor that has disproportionately few voting rights. To determine whether an
entity is considered to be a VIE, the Company first performs a qualitative analysis, which requires certain subjective decisions
regarding its assessments, including, but not limited to, the existence of a principal-agency relationship between the parties,
the design of the entity, the variability that the entity was designed to create and pass along to its interest holders, the rights
of the parties, and the purpose of the arrangement.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Company would consolidate the results
of any such entity in which it determined that it had a controlling financial interest. The Company would have a controlling financial
interest in such an entity if the Company had both the power to direct the activities that most significantly affect the VIE’s
economic performance and the obligation to absorb the losses of, or right to receive benefits from, the VIE that could be potentially
significant to the VIE. The Company reassesses regularly whether it has a controlling financial interest in any such entities
in which it has a variable interest.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p>
<p style="font: 10pt Times New Roman,serif; margin: 0pt 0; text-align: justify">See Note 3 – Variable Interest Entities
for further discussion on the structure for building our new theater location and corporate office in Delray Beach, Florida.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>Cash and Cash Equivalents</i></b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Company considers all highly liquid
instruments or investments with an original maturity of three months or less to be cash equivalents.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">   </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>Accounts Receivable</i></b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Accounts receivable are stated at their
estimated net realizable value. As of December 31, 2018 and 2017, the Company recorded $3,874 and $5,313, respectively, of accounts
receivable, of which $1,339 and $2,773 relate to amounts owed by Vantiv/Worldplay and American Express for credit card transactions
processed before December 31, 2018 and 2017, respectively. Such amounts were collected in early January 2019 and 2018, respectively.
Receivables are written off when they are considered uncollectible. The Company does not accrue interest on its receivables. At
December 31, 2018 and 2017, the Company determined that all receivables were fully collectible and therefore, no allowance for
doubtful accounts has been recorded.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>Revenue Recognition </i></b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Company recognizes theater revenue
at the time tickets are remitted to the theater for admission. Food and beverage revenue is recognized at the point of sale. The
proceeds from advance ticket sales and the sale of gift certificates and gift cards are deferred and recognized as revenues once
the respective admission ticket that was purchased in advance or gift certificate or gift card is received or tendered at the
theaters.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Company is required to collect certain
taxes from customers on behalf of government agencies and remit these to the applicable government agencies on a periodic basis.
These taxes are legal assessments on the customer and the Company has a legal obligation to act as a collection agent. Because
the Company does not retain these taxes, the Company does not include such amounts in revenues. The Company records a liability
when the amounts are collected and relieves the liability when payments are made to the applicable government agencies.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Company maintains a membership program,
whereby members earn and accrue points based on purchases, which are redeemable on future purchases of tickets or food and beverage.
For every dollar a member spends, the member receives one point which is equal to one cent. Points are redeemable once a member
earns 500 points or greater. The Company uses the deferred revenue model which results in the transaction price being allocated
to the products and services sold and the award credits, with revenue recognized as each element is delivered. The portion of the
theater and food and beverage revenues attributed to the rewards is deferred as a reduction of theater and food and beverage revenues,
respectively. Upon redemption, deferred rewards are recognized as revenues along with associated cost of goods. The Company charges
an annual fee for this membership program, which is recorded as deferred revenue and recognized as revenue ratably over the twelve-month
membership period. The revenue from the annual fee is included in other revenues in the accompanying consolidated statements of
operations.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Company sells gift cards to its customers
at its locations and through its website. There are no administrative fees charged nor do the gift cards have an expiration date.
Revenues from gift cards are recognized when gift cards are redeemed. In addition, the Company recognizes “breakage”
on unredeemed gift cards based upon historical redemption patterns and the time that has transpired since the card was last used.
The Company recognizes breakage proportionally to the percentage of redemptions that historically occur in each year after a gift
card is sold. Revenue from gift card breakage is included in other revenues in the accompanying consolidated statements of operations.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>Film Exhibition Costs</i></b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Film exhibition costs are accrued based
on the applicable theater receipts and estimates of the final settlement to the film licensors. Such amounts are included in cost
of theater in the accompanying consolidated statements of operations.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>Concentration of Risk</i></b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Financial instruments that potentially
subject the Company to concentrations of credit risk consist principally of cash and cash equivalents and accounts receivable.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Company places its cash with high
credit quality financial institutions. The Company has never experienced any losses related to its uninsured balances. Cash accounts
at each U.S. bank are insured by the Federal Deposit Insurance Corporation (“FDIC”) up to $250 in the aggregate and
may exceed federally insured limits. A total of approximately $6,433 was held in one financial institution, at December 31, 2018.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">   </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>Inventories</i></b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Inventories are comprised of concession
goods, which include food and beverage, and theater supplies. Inventories are stated at the lower of average cost or net realizable
value.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>Property and Equipment</i></b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Property and equipment is stated at fair
value based on assets acquired at inception of iPic-Gold Class and historical cost for subsequent acquisitions, less accumulated
depreciation and amortization. Depreciable assets are depreciated from the date of acquisition or, for constructed assets, from
the time the asset is completed and held ready for use.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Depreciation of property and equipment
is computed under the straight-line method over the expected useful lives of applicable assets. Useful lives by asset class are
as follows.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td><font style="font: 10pt Times New Roman, Times, Serif">Furniture, fixtures and office equipment</font></td>
<td style="width: 1%"> </td>
<td style="width: 30%; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">5-7 years</font></td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td><font style="font: 10pt Times New Roman, Times, Serif">Projection equipment and screens</font></td>
<td> </td>
<td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">7 years</font></td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td><font style="font: 10pt Times New Roman, Times, Serif">Computer hardware and software</font></td>
<td> </td>
<td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">2-5 years</font></td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td><font style="font: 10pt Times New Roman, Times, Serif">Leasehold improvements</font></td>
<td> </td>
<td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">Lesser of term of
lease or asset life</font></td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">When property and equipment is sold or
otherwise disposed of, the cost and related accumulated depreciation/amortization is removed from the accounts, and any resulting
gain or loss is included in earnings. The costs of normal maintenance, repairs and minor replacements are charged to expense when
incurred.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Company capitalizes interest costs
on borrowings incurred during the new construction or upgrade of qualifying assets. During the years ended December 31, 2018 and
2017, the Company incurred interest costs totaling $17,159 and $16,287, respectively, of which $81 and $196 was capitalized, respectively.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>Long-Lived Assets</i></b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Company reviews long-lived assets
for possible impairment using a three-step approach. Under the first step, management determines whether an indicator of impairment
is present (a “Triggering Event”). If a Triggering Event has occurred, the second step is to test for recoverability
based on a comparison of the asset’s carrying value with the sum of the undiscounted cash flows expected to result from
the use of the asset and its eventual disposition. If the sum of the future undiscounted cash flows is less than the carrying
value of the asset, the third step is to recognize an impairment loss for the excess of the asset’s carrying value over
its fair value.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p>
<p style="font: 10pt Times New Roman,serif; margin: 0pt 0; text-align: justify">During the fourth quarter of 2018, the Company
determined that our South Barrington and Scottsdale locations were impaired based on the forecasts for these locations over the
balance of their lease terms. The events giving rise to these decisions include underperformance of the Barrington location during
the last quarter of 2018 and the changing competitive landscape in the Scottsdale area. Accordingly, the Company evaluated the
value of the South Barrington and Scottsdale locations. Based on this evaluation, the Company determined that the long-lived assets
at our South Barrington and Scottsdale locations, with total carrying values of $4,205 and $3,491, respectively, were no longer
recoverable. Consequently, the assets were written down to their estimated fair values of $1,650 and $1,617, respectively. Fair
value was based on expected future cash flows using Level 3 inputs, as defined under FASB ASC Topic No. 820, Fair Value Measurements.
The cash flows are those expected to be generated by market participants, discounted at market-participant weighted average cost
of capital. Because of lower marketplace demand, it is reasonably possible that the estimate of expected future cash flows for
these locations may change in the near term resulting in the need to adjust our determination of fair value. The impairment loss
of $4,430 is included in the consolidated statements of operations.</p>
<p style="font: 10pt Times New Roman,serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman,serif; margin: 0pt 0; text-align: justify">During the second quarter of 2017, the Company
determined our Scottsdale location recognized significant decreases in revenue as compared to the second quarter of 2016. Accordingly,
the Company evaluated the value of the Scottsdale location. Based on this evaluation, the Company determined long-lived assets
(leasehold improvements), with a total carrying value of $4,967, were no longer recoverable. Consequently, the assets were written
down to their estimated fair value of $1,636. Fair value was based on expected future cash flows using Level 3 inputs, as defined
under FASB ASC Topic No. 820, Fair Value Measurements. The cash flows are those expected to be generated by market participants,
discounted at the risk-free rate of interest. Because of lower marketplace demand, it is reasonably possible that the estimate
of expected future cash flows may change in the near term resulting in the need to adjust our determination of fair value. The
impairment loss of $3,332 is included in the consolidated statements of operations.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">During the fourth quarter of 2017,
the Company determined that our Glendale location was impaired based on the forecast of the location for the next few years. During
2017, the management of the mall in which the theater operates changed hands several times. The general mismanagement of the mall,
has led to a decline in the audience at this location leading to decreased profitability. Accordingly, the Company evaluated the
value of the Glendale location (using the same methodology as describe in the previous paragraph for Scottsdale). Based on this
evaluation, the Company determined long-lived assets, with a carrying value of $428, were no longer recoverable. Consequently,
the assets were written down to $0 at December 31, 2017.</p>
<p style="font: 10pt Times New Roman,serif; margin: 0pt 0; text-align: justify">  </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>Income Taxes</i></b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">We account for income taxes pursuant to
the asset and liability method which requires the recognition of deferred income tax assets and liabilities related to the expected
future tax consequences arising from temporary differences between the carrying amounts and tax bases of assets and liabilities
based on enacted statutory tax rates applicable to the periods in which the temporary differences are expected to reverse. Any
effects of changes in income tax rates or laws are included in income tax expense in the period of enactment. A valuation allowance
is recognized if we determine it is more likely than not that all or a portion of a deferred tax asset will not be recognized.
The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in
which those temporary differences are deductible. In making this determination, the Company considers all available positive and
negative evidence affecting specific deferred tax assets, including past and anticipated future performance, the reversal of deferred
tax liabilities, the length of carry-back and carry-forward periods and the implementation of tax planning strategies.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Objective positive evidence is necessary to support a conclusion that a valuation allowance is not needed
for all or a portion of deferred tax assets when significant negative evidence exists. Cumulative tax losses in recent years are
the most compelling form of negative evidence considered by management in this determination. Management determined that based
on all available evidence, a full valuation allowance was required for all federal, state and local deferred tax assets due to
losses incurred for the past several years.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">A tax position is recognized as a benefit
only if it is more likely than not that the tax position would be sustained in a tax examination, with a tax examination being
presumed to occur. The amount recognized is the largest amount of tax benefit that is greater than 50% likely of being realized
on examination. For tax positions not meeting the more-likely-than-not test, no tax benefit is recorded. The Company’s tax
filings are generally subject to examination for a period of three years from the filing date. Management has not identified any
tax position taken that require income tax reserves to be established.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Company recognizes interest and penalties
related to income tax matters in income tax expense. The Company has no amounts accrued for interest or penalties at December 31,
2018 and 2017. The Company does not expect the total amount of unrecognized tax benefits to significantly change in the next 12
months.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i> </i></b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>Accrued Interest — Long-Term</i></b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Accrued interest — long-term includes
deferred interest recorded on the Company’s increasing-rate debt and accrued interest on related party notes that the Company
does not expect to liquidate within one year of the date of the consolidated balance sheets. Accrued interest on long-term debt
as of December 31, 2018 is also included in Accrued Interest – Long Term as it was paid in kind subsequent to the consolidated
balance sheet date.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>Equity-Based Compensation</i></b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i> </i></b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i></i></b>Equity-based
compensation costs for equity classified awards are measured on the grant date based on the fair value of the award at that date
and are recognized over the requisite service period. Liability classified awards are remeasured at their fair-value-based measure as
of each reporting date until settlement. In accordance with ASU No. 2016-09, <i>Improvements to Employee Share-Based Payment Accounting</i>,
the Company will account for forfeitures as they occur.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>Pre-Opening Expenses</i></b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Pre-opening expenses consist primarily
of advertising and other start-up costs incurred prior to the operation of new theaters and are expensed as incurred.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i> </i></b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>Advertising and Marketing Expenses</i></b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Company expenses advertising and marketing
costs as incurred. The Company incurred advertising and marketing expenses of $2,705 and $3,128 for the years ended December 31,
2018 and 2017, respectively. These expenses are included in other operating expenses in the accompanying consolidated statements
of operations.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>   </i></b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>Leases</i></b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Company’s operations are conducted
on premises occupied under lease agreements with initial base terms of 15 to 25 years, with certain leases containing options
to extend the leases for up to an additional 20 years. The Company does not believe that exercise of the renewal options in its
leases is reasonably assured at the inception of the lease agreements and, therefore, considers the initial base term to be the
lease term.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Most of the Company’s leases include escalation clauses. The Company records rent expense for its operating
leases on a straight-line basis over the base term of the lease agreements commencing with the date the Company has control and
access to the leased premises, which is generally a date prior to the lease commencement date contained in the lease agreement.
The Company views “rent holidays” as an inducement contained in the lease agreement that provides for a period of “free
rent” during the lease term. The Company records lease incentive payments received from lessors under operating lease agreements
as deferred rent, which it amortizes on a straight-line basis as reductions to rent expense over the terms of the respective leases.
If the Company concludes that it has substantially all of the construction-period risks, it records a construction asset and related
liability for the amount of total project costs incurred during the construction period.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>Accrued Interest — Long-Term</i></b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Accrued interest — long-term includes
deferred interest recorded on the Company’s increasing-rate debt and accrued interest on related party notes that the Company
does not expect to liquidate within one year of the date of the consolidated balance sheets. Accrued interest on long-term debt
as of December 31, 2018 is also included in Accrued Interest – Long Term as it was paid in kind subsequent to the consolidated
balance sheet date.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>Long-Lived Assets</i></b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Company reviews long-lived assets
for possible impairment using a three-step approach. Under the first step, management determines whether an indicator of impairment
is present (a “Triggering Event”). If a Triggering Event has occurred, the second step is to test for recoverability
based on a comparison of the asset’s carrying value with the sum of the undiscounted cash flows expected to result from
the use of the asset and its eventual disposition. If the sum of the future undiscounted cash flows is less than the carrying
value of the asset, the third step is to recognize an impairment loss for the excess of the asset’s carrying value over
its fair value.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p>
<p style="font: 10pt Times New Roman,serif; margin: 0pt 0; text-align: justify">During the fourth quarter of 2018, the Company
determined that our South Barrington and Scottsdale locations were impaired based on the forecasts for these locations over the
balance of their lease terms. The events giving rise to these decisions include underperformance of the Barrington location during
the last quarter of 2018 and the changing competitive landscape in the Scottsdale area. Accordingly, the Company evaluated the
value of the South Barrington and Scottsdale locations. Based on this evaluation, the Company determined that the long-lived assets
at our South Barrington and Scottsdale locations, with total carrying values of $4,205 and $3,491, respectively, were no longer
recoverable. Consequently, the assets were written down to their estimated fair values of $1,650 and $1,617, respectively. Fair
value was based on expected future cash flows using Level 3 inputs, as defined under FASB ASC Topic No. 820, Fair Value Measurements.
The cash flows are those expected to be generated by market participants, discounted at market-participant weighted average cost
of capital. Because of lower marketplace demand, it is reasonably possible that the estimate of expected future cash flows for
these locations may change in the near term resulting in the need to adjust our determination of fair value. The impairment loss
of $4,430 is included in the consolidated statements of operations.</p>
<p style="font: 10pt Times New Roman,serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman,serif; margin: 0pt 0; text-align: justify">During the second quarter of 2017, the Company
determined our Scottsdale location recognized significant decreases in revenue as compared to the second quarter of 2016. Accordingly,
the Company evaluated the value of the Scottsdale location. Based on this evaluation, the C<font style="font: 10pt Times New Roman, Times, Serif">ompany
determined long-lived assets (leasehold improvements), with a total carrying value of $4,967, were no longer recoverable. Consequently,
the assets were written down to their estimated fair value of $1,636. Fair value was based on expected future cash flows using
Level 3 inputs, as defined under FASB ASC Topic No. 820, Fair Value Measurements. The cash flows are those expected to be generated
by market participants, discounted at the risk-free rate of interest. Because of lower marketplace demand, it is reasonably possible
that the estimate of expected future cash flows may change in the near term resulting in the need to adjust our determination
of fair value. The impairment loss of $3,332 is included in the consolidated statements of operations.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="margin: 0pt 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">During
the fourth quarter of 2017, the Company determined that our Glendale location was impaired based on the forecast of the location
for the next few years. During 2017, the management of the mall in which the theater operates changed hands several times. The
general mismanagement of the mall, has led to a decline in the audience at this location leading to decreased profitability. Accordingly,
the Company evaluated the value of the Glendale location (using the same methodology as describe in the previous paragraph for
Scottsdale). Based on this evaluation, the Company determined long-lived assets, with a carrying value of $428, were no longer
recoverable. Consequently, the assets were written down to $0 at December 31, 2017.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>Variable Interest Entities</i></b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">A VIE is an entity (1) that has total equity at risk that is not sufficient to finance its activities
without additional subordinated financial support from any entities; (2) where the group of equity holders does not have the power
to direct the activities of the entity that most significantly impact the entity’s economic performance, or the obligation
to absorb the entity’s expected losses or the right to receive the entity’s expected residual returns, or both; or
(3) where the voting rights of some investors are not proportional to their obligations to absorb the expected losses of the entity,
their rights to receive the expected residual returns of the entity, or both, and substantially all of the entity’s activities
either involve or are conducted on behalf of an investor that has disproportionately few voting rights. To determine whether an
entity is considered to be a VIE, the Company first performs a qualitative analysis, which requires certain subjective decisions
regarding its assessments, including, but not limited to, the existence of a principal-agency relationship between the parties,
the design of the entity, the variability that the entity was designed to create and pass along to its interest holders, the rights
of the parties, and the purpose of the arrangement.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Company would consolidate the results
of any such entity in which it determined that it had a controlling financial interest. The Company would have a controlling financial
interest in such an entity if the Company had both the power to direct the activities that most significantly affect the VIE’s
economic performance and the obligation to absorb the losses of, or right to receive benefits from, the VIE that could be potentially
significant to the VIE. The Company reassesses regularly whether it has a controlling financial interest in any such entities
in which it has a variable interest.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p>
<p style="font: 10pt Times New Roman,serif; margin: 0pt 0; text-align: justify">See Note 3 – Variable Interest Entities
for further discussion on the structure for building our new theater location and corporate office in Delray Beach, Florida.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>New Accounting Pronouncements</i></b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">As an emerging growth company, the Company
has elected the option to defer the effective date for adoption of new or revised accounting guidance. This option allows the
Company to adopt new guidance on the effective date for entities that are not public business entities.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i>Interim Reporting</i></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">In August 2018, the SEC adopted amendments to certain disclosure requirements in Securities Act Release
No. 33-10532, Disclosure Update and Simplification. The amendments are effective as of November 5, 2018. Among the amendments is
the requirement for companies to present (either in a separate statement or in the notes to the consolidated financial statements)
an analysis of the changes in each line item of stockholders’ equity and non-controlling interests, presented in the balance
sheets, for interim consolidated financial statements in quarterly reports on Form 10-Q.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Company is required to present for the quarterly reports on Form 10-Q the following items:</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: top">
<td style="width: 24px"> </td>
<td style="width: 24px"><font style="font: 10pt Times New Roman, Times, Serif">●</font></td>
<td style="text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">A reconciliation
of the beginning balance to the ending balance of shareholders’/members’ equity for each period for which a statement
of operations is required to be filed, including all significant reconciling items.  Contributions from and distributions
to owners must be shown separately;</font></td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p>
<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: top">
<td style="width: 24px"> </td>
<td style="width: 24px"><font style="font: 10pt Times New Roman, Times, Serif">●</font></td>
<td style="text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">Any adjustments
to the balance at the beginning of the earliest period presented for items which were retroactively applied to periods prior
to that period;</font></td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">  </p>
<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: top">
<td style="width: 24px"> </td>
<td style="width: 24px"><font style="font: 10pt Times New Roman, Times, Serif">●</font></td>
<td style="text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">With respect to
any dividends, state the amount per share and in the aggregate dividends for each class of shares;</font></td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p>
<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: top">
<td style="width: 24px"> </td>
<td style="width: 24px"><font style="font: 10pt Times New Roman, Times, Serif">●</font></td>
<td style="text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">Any changes in the
registrant’s ownership interest in a subsidiary on the equity attributable to the registrant.</font></td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">   </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">These changes are to be adopted for interim
periods beginning after the effective date of the amendments.  Therefore, the Company will reflect the amendments to the reporting
requirements for its unaudited condensed consolidated financial statements for the first quarter of 2019.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i>Revenue Recognition</i></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">  </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">In May 2014, the Financial Accounting
Standards Board (“FASB”) issued Accounting Standards Update 2014-09, <i>Revenue from Contracts with Customers (Topic
606) (“ASU 2014-09”)</i>. The purpose of ASU 2014-09 is to clarify the principles for recognizing revenue and create
a common revenue standard for U.S. GAAP and International Financial Reporting Standards. ASU 2014-09 affects any entity that either
enters into contracts with customers to transfer goods or services or enters into contracts for the transfer of nonfinancial assets
unless those contracts are within the scope of other standards (for example, insurance contracts or lease contracts). The following
subsequent Accounting Standards Updates either clarified or revised guidance set forth in ASU 2014-09:</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: top">
<td style="width: 24px"> </td>
<td style="width: 24px"><font style="font: 10pt Times New Roman, Times, Serif">●</font></td>
<td style="text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">In August 2015, the FASB issued Accounting Standards Update 2015-14, <i>Revenue from Contracts with Customers
(Topic 606): Deferral of the Effective Date (“ASU 2015-14”)</i>. ASU 2015-14 deferred the effective date of ASU 2014-09.
The guidance in ASU 2014-09 will be effective for annual reporting periods beginning after December 15, 2017 for public business
entities and for all other entities subsequent to December 15, 2018, including interim reporting periods within that reporting
period. The Company has elected to defer the implementation to the first quarter of 2019.</font></td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">  </p>
<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: top">
<td style="width: 24px"> </td>
<td style="width: 24px"><font style="font: 10pt Times New Roman, Times, Serif">●</font></td>
<td style="text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">In March 2016, the
FASB issued Accounting Standards Update 2016-08, <i>Revenue from Contracts with Customers (Topic 606): Principal versus Agent
Considerations (Reporting Revenues Gross versus Net) (“ASU 2016-08”)</i>. The purpose of ASU 2016-08 is to clarify
the implementation of revenue recognition guidance for principal versus agent considerations.</font></td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">  </p>
<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: top">
<td style="width: 24px"> </td>
<td style="width: 24px"><font style="font: 10pt Times New Roman, Times, Serif">●</font></td>
<td style="text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">In April 2016, the
FASB issued Accounting Standards Update 2016-10, <i>Revenue from Contracts with Customers (Topic 606): Identifying Performance
Obligations and Licensing (“ASU 2016-10”)</i>. The purpose of ASU 2016-10 is to clarify certain aspects of identifying
performance obligations and licensing implementation guidance.</font></td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">  </p>
<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: top">
<td style="width: 24px"> </td>
<td style="width: 24px"><font style="font: 10pt Times New Roman, Times, Serif">●</font></td>
<td style="text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">In May 2016, the
FASB issued Accounting Standards Update 2016-12, <i>Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements
and Practical Expedients (“ASU 2016-12”).</i> The purpose of ASU 2016-12 is to address certain narrow aspects
of Accounting Standards Codification (“ASC”) Topic 606 including assessing collectability, presentation of sales
taxes, noncash considerations, contract modifications and completed contracts at transition.</font></td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">  </p>
<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: top">
<td style="width: 24px"> </td>
<td style="width: 24px"><font style="font: 10pt Times New Roman, Times, Serif">●</font></td>
<td style="text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">In December 2016,
the FASB issued Accounting Standards Update 2016-20, <i>Technical Corrections and Improvements to Topic 606, Revenue from
Contracts with Customers (“ASU 2016-20”). </i>The purpose of ASU 2016-20 is to amend certain narrow aspects of
the guidance issued in ASU 2014-09 related to the disclosure of performance obligations, as well as other amendments related
to loan guarantee fees, contract costs, refund liabilities, advertising costs and the clarification of certain examples.</font></td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">In March 2016, the FASB issued Accounting
Standards Update 2016-04, <i>Liabilities-Extinguishments of Liabilities (Subtopic 405-20)</i>. This amendment provides a narrow
scope exception to Liabilities-Extinguishment of Liabilities (Subtopic 405-20) that requires breakage for those liabilities to
be accounted for in accordance with the breakage guidance in Accounting Standards Update 2014-09, <i>Revenue from Contracts with
Customers (Topic 606)</i>. Under the new guidance, if an entity expects to be entitled to a breakage amount for a liability resulting
from the sale of a prepaid stored-value product, the entity shall derecognize the amount related to the expected breakage in proportion
to the pattern of rights expected to be exercised by the product holder only to the extent that it is probable that a significant
reversal of the recognized breakage amount will not subsequently occur. If an entity does not expect to be entitled to a breakage
amount for a prepaid stored-value product, the entity shall derecognize the amount related to the breakage when the likelihood
of the product holder exercising its remaining rights becomes remote. The Accounting Standards Update is effective for public
business entities for financial statements issued for fiscal years beginning after December 15, 2017, and interim periods within
those fiscal years. For all other entities, the amendments are effective for financial statements issued for fiscal years beginning
after December 15, 2018.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The amendments in these accounting standards
updates may be applied either using a modified retrospective transition method by means of a cumulative-effect adjustment to retained
earnings as of the beginning of the fiscal year in which the guidance is effective or retrospectively to each period presented.
Early adoption is permitted.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Company will adopt the amendments within these accounting standards updates in the first quarter of
2019 using the modified retrospective transition method. The Company has completed its analysis and concluded the adoption of ASC
606 will not materially impact the timing of revenue recognition for food and beverage revenue, theater revenue, other revenue
streams, including revenues for unredeemed gift cards and advance ticket sales.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><i>Leases </i></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">In February 2016, the FASB codified Accounting
Standards Codification (“ASC”) Topic No. 842, <i>Leases</i>, which requires companies to present substantially all
leases on their balance sheets but continue to recognize expenses on their income statements in a manner similar to today’s
accounting. The new guidance also will result in enhanced quantitative and qualitative disclosures, including significant judgments
made by management, to provide greater insight into the extent of expenses expected to be recognized from existing leases. The
new guidance requires companies to adopt its provisions by modified retrospective adoption and will be effective for public business
entities for years beginning after December 15, 2018, including interim periods within those years. Nonpublic business entities
should apply the amendments for years beginning after December 15, 2019, and interim periods within years beginning after December
15, 2020. The Company will adopt ASC Topic 842 in the first quarter of 2020 using the modified retrospective transition method
on the effective date. Early application is permitted for all entities upon issuance. In January 2018, the FASB issued ASU No.
2018-01, as an amendment to ASC Topic No. 842, <i>Leases</i>, which is a land easement practical expedient. If the Company elects
to use this practical expedient, the Company would evaluate new or modified land easements under this ASU beginning at the date
of adoption. The Company is currently evaluating the impacts this new guidance will have on its consolidated financial statements.
The Company currently expects that the majority of its operating lease commitments will be recognized as operating lease liabilities
and right-of-use assets upon adoption of the new guidance. The Company expects that adoption will result in a material increase
in the assets and liabilities presented in its consolidated balance sheets. In July 2018, the FASB issued ASU No. 2018-10, <i>Codification
Improvements to Topic 842</i> and <i>ASU No. 2018-11, Targeted Improvements to Topic 842</i>. The amendments in ASU No. 2018-10
and ASU No. 2018-11 provide additional clarification and implementation guidance on certain aspects of the previously issued ASU
No. 2016-02, <i>Leases (Topic 842)</i>, and have the same effective and transition requirements as ASU No. 2016-02.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><i>Stock Compensation</i></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="margin: 0pt 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">In June
2018, FASB issued ASU No. 2018-07, <i>Compensation—Stock Compensation (Topic 718)</i>, to expand the scope of ASC Topic
718 to include share-based payment transactions for acquiring goods and services from nonemployees. ASU No. 2018-07 is effective
for public business entities for years beginning after December 15, 2018, and interim periods within those years. For all other
entities, the amendments are effective for years beginning after December 15, 2019, and interim periods within years beginning
after December 15, 2020. Early application is permitted, but the provisions of this ASU are not to be adopted before an entity
adopts ASC Topic 606. The Company is evaluating the effects of adoption of ASU No. 2018-07 will have on its consolidated financial
statements.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">In May 2017, the FASB issued ASU No. 2017-09,
<i>Compensation – Stock Compensation (Topic 718),</i> to provide guidance on determining which changes to the terms or conditions
of share-based payment awards require an entity to apply modification accounting under Topic 718. This pronouncement is effective
for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2017, with early adoption permitted,
and is applied prospectively to changes in terms or conditions of awards occurring on or after the adoption date. The Company
adopted this pronouncement for the fiscal year beginning January 1, 2018. The adoption of ASU 2017-09 did not have a material
impact on the Company’s consolidated financial statements.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i>Earnings Per Share</i></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">In July 2017, the FASB issued ASU No.
2017-11, <i>Earnings Per Share (Topic 260), Distinguishing Liabilities From Equity (Topic 480) And Derivatives And Hedging (Topic
815). </i>The amendments in Part I of this ASU change the classification analysis of certain equity-linked financial instruments
(or embedded features) with down round features. When determining whether certain financial instruments should be classified as
liabilities or equity instruments, a down round feature no longer precludes equity classification when assessing whether the instrument
is indexed to an entity’s own stock. The amendments also clarify existing disclosure requirements for equity-classified
instruments. As a result, a freestanding equity-linked financial instrument (or embedded conversion option) no longer would be
accounted for as a derivative liability at fair value as a result of the existence of a down round feature. For freestanding equity
classified financial instruments, the amendments require entities that present earnings per share (EPS) in accordance with Topic
260, <i>Earnings Per Share</i>, to recognize the effect of the down round feature when it is triggered. That effect is treated
as a dividend and as a reduction of income available to common shareholders in basic EPS. Convertible instruments with embedded
conversion options that have down round features are now subject to the specialized guidance for contingent beneficial conversion
features (in Subtopic 470-20, <i>Debt-Debt with Conversion and Other Options</i>), including related EPS guidance (in Topic 260).
The amendments in Part II of ASU No. 2017-11, <i>Earnings Per Share (Topic 260), Distinguishing Liabilities From Equity (Topic
480) And Derivatives And Hedging (Topic 815) </i>recharacterize the indefinite deferral of certain provisions of Topic 480 that
now are presented as pending content in the Codification, to a scope exception. Those amendments do not have an accounting effect.
For public business entities, the amendments in Part I of this Update are effective for fiscal years, and interim periods within
those fiscal years, beginning after December 15, 2018. For all other entities, the amendments in Part I of the ASU are effective
for fiscal years beginning after December 15, 2019, and interim periods within fiscal years beginning after December 15, 2020.
Early adoption is permitted for all entities, including adoption in an interim period. If an entity early adopts the amendments
in an interim period, any adjustments should be reflected as of the beginning of the fiscal year that includes that interim period.
The Company is evaluating the impact that ASU No. 2017-11 will have on its consolidated financial statements.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i>Consolidation</i></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">In October 2018, FASB issued ASU No. 2018-17,
<i>Consolidation - Targeted Improvements to Related Party Guidance for Variable Interest Entities (Topic 810).</i> ASU No. 2018-17
guidance eliminates the requirement that entities consider indirect interests held through related parties under common control
in their entirety when assessing whether a decision-making fee is a variable interest. Instead, the reporting entity will consider
such indirect interests on a proportionate basis. This pronouncement is effective for public entities for fiscal years ending
after December 15, 2019, with early adoption permitted. The Company is evaluating the impact that ASU No. 2018-17 will have on
its consolidated financial statements.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="text-transform: uppercase"><b>Note
4 — Property And Equipment</b></font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Property and equipment, net consists of
the following:</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p>
<table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<tr style="vertical-align: bottom">
<td> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td>
<td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">December 31,<br /> 2018</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td>
<td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">December 31,<br /> 2017</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="width: 84%; text-align: left">Leasehold improvements</td><td style="width: 0%"> </td>
<td style="width: 0; text-align: left">$</td><td style="width: 8%; text-align: right">133,743</td><td style="width: 0; text-align: left"> </td><td style="width: 0%"> </td>
<td style="width: 0; text-align: left">$</td><td style="width: 8%; text-align: right">137,675</td><td style="width: 0; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left">Furniture, fixtures and office equipment</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">59,207</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">53,888</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="text-align: left">Construction in progress (site development)</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">11,968</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">2,124</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left">Projection equipment and screens</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">11,125</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">12,330</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="text-align: left; padding-bottom: 1.5pt">Computer hardware and software</td><td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">7,157</td><td style="padding-bottom: 1.5pt; text-align: left"> </td><td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">6,983</td><td style="padding-bottom: 1.5pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">223,200</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">213,000</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="text-align: left; padding-bottom: 1.5pt">Less: accumulated depreciation and amortization</td><td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">(79,661</td><td style="padding-bottom: 1.5pt; text-align: left">)</td><td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">(71,834</td><td style="padding-bottom: 1.5pt; text-align: left">)</td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="font-weight: bold; padding-bottom: 4pt">Total</td><td style="font-weight: bold; padding-bottom: 4pt"> </td>
<td style="border-bottom: Black 4pt double; font-weight: bold; text-align: left">$</td><td style="border-bottom: Black 4pt double; font-weight: bold; text-align: right">143,539</td><td style="padding-bottom: 4pt; font-weight: bold; text-align: left"> </td><td style="font-weight: bold; padding-bottom: 4pt"> </td>
<td style="border-bottom: Black 4pt double; font-weight: bold; text-align: left">$</td><td style="border-bottom: Black 4pt double; font-weight: bold; text-align: right">141,166</td><td style="padding-bottom: 4pt; font-weight: bold; text-align: left"> </td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">After a detailed review of all seven locations
with Generation I auditoriums, the Company decided against reinvestment at its Glendale, Wisconsin location, where the Bayshore
Mall was placed into receivership. The Company instead announced the closing of this location effective March 8, 2018. The events
giving rise to that decision include the mall entering receivership during the last quarter of 2017 and the underperformance of
the site during the first quarter of 2018. The Company evaluated the long-lived assets at its Glendale location at December 31,
2017 and determined that the long-lived assets with a carrying value of $428 were no longer recoverable. Consequently, the assets
were written down to $0. The remaining minimum lease obligation at the date of closure was approximately $4,100 over the next seven
years.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Company has established a liability
of $1,839 for the remaining lease obligation associated with the Glendale location in the accompanying consolidated balance
sheets. The current portion of the lease liability is included with “Accrued expenses” and the long-term portion is
included in “Other long-term liabilities”. As of December 31, 2018, the future lease obligation was recorded at present
value and discounted at an annual rate of 13%. Sublease payments were anticipated to be received 24 months from the abandonment
date. The sublease payments were estimated to be 50% less than the Company’s lease payment obligation through the remainder
of the lease.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>NOTE 5 — BORROWINGS</b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i> </i></b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>Notes Payable to Related Parties</i></b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p>
<p style="font: 10pt Times New Roman,serif; margin: 0pt 0; text-align: justify"></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Notes payable to related parties and their
affiliates consist of the following:</p>
<p style="font: 10pt Times New Roman,serif; margin: 0pt 0; text-align: justify"></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<tr style="vertical-align: bottom">
<td> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td>
<td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">December 31,<br /> 2018</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td>
<td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">December 31,<br /> 2017</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="width: 76%; text-align: left">5.00% VR iPic Finance, LLC notes</td><td style="width: 1%"> </td>
<td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">     -</td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td>
<td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">16,125</td><td style="width: 1%; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left">5.00% VR iPic Finance, LLC demand notes</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">-</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">14,461</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="text-align: left">10.50% Village Roadshow Attractions USA, Inc. notes</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">-</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">15,000</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left">5.00% Village Roadshow Attractions USA, Inc. notes</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">-</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">1,071</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="text-align: left">5.00% iPic Holdings, LLC notes</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">-</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">547</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left; padding-bottom: 1.5pt">5.00% Regal/Atom Holdings, LLC note</td><td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">-</td><td style="padding-bottom: 1.5pt; text-align: left"> </td><td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">3,038</td><td style="padding-bottom: 1.5pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="padding-bottom: 4pt">Total</td><td style="padding-bottom: 4pt"> </td>
<td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">-</td><td style="padding-bottom: 4pt; text-align: left"> </td><td style="padding-bottom: 4pt"> </td>
<td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">50,242</td><td style="padding-bottom: 4pt; text-align: left"> </td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">5.00% notes payable to VR iPic Finance, LLC, a joint venture between iPic Holdings, LLC and Village Roadshow
Attractions USA, Inc. — Principal and interest were only paid if iPic Holdings, LLC and Village Roadshow Attractions USA,
Inc. were due a distribution as outlined in the iPic-Gold Class Limited Liability Company Agreement (the “LLC Agreement”)
and only to the extent of amounts so distributed. On the date of the IPO these notes were converted to equity and are no longer
due.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">  </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">5.00% demand notes payable to VR iPic Finance,
LLC. — Interest was paid monthly. The notes had no stated maturity. On the date of the IPO these notes were converted to
equity and are no longer outstanding.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p>
<p style="font: 10pt Times New Roman,serif; margin: 0pt 0; text-align: justify">10.50% notes payable to Village Roadshow Attractions
USA, Inc. — The notes accrued interest on the unpaid principal amount at 10.50% per annum and were subject to minimum guaranteed
interest of $3,000 over the life of the notes. Principal and interest were only paid if Village Roadshow Attractions USA, Inc.
was due a distribution as outlined in the LLC Agreement and only to the extent of amounts such distributed. The notes had no stated
maturity. On the date of the IPO these notes were refinanced through additional borrowings under the Non-revolving Credit Facility.</p>
<p style="font: 10pt Times New Roman,serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman,serif; margin: 0pt 0; text-align: justify">5.00% note payable to Village Roadshow Attractions
USA, Inc. — Principal and interest were only paid if Village Roadshow Attractions USA, Inc. was due a distribution as outlined
in the LLC Agreement and only to the extent of amounts so distributed. The notes had no stated maturity. On the date of the IPO
these notes were converted to equity and are no longer outstanding.</p>
<p style="font: 10pt Times New Roman,serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman,serif; margin: 0pt 0; text-align: justify">5.00% note payable to iPic Holdings, LLC —
Principal and interest were only paid if iPic Holdings, LLC was due a distribution as outlined in the LLC Agreement, and to the
extent of the amount of so distributed. The notes had no stated maturity. On the date of the IPO these notes were converted to
equity and are no longer outstanding.</p>
<p style="font: 10pt Times New Roman,serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman,serif; margin: 0pt 0; text-align: justify">5.00% note payable to Regal/Atom Holdings, LLC.
— Principal and interest were only paid if Regal/Atom Holdings, LLC was due a distribution as outlined in the LLC Agreement,
and only to the extent of amounts so distributed. The notes had no stated maturity. On the date of the IPO these notes were converted
to equity and are no longer outstanding.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">On February 1, 2018, the 5% notes plus
accrued interest totaling $37,157 were converted to equity to satisfy the holders’ capital call in accordance with the iPic-Gold
Class LLC Agreement prior to the IPO.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The 10.50% Village Roadshow Attractions
USA, Inc. note for $15,000 plus the minimum interest payable of $3,000 was refinanced through additional borrowings under the Non-revolving
Credit Facility.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>Long-Term Debt — Related Party</i></b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Company has a $225,828 non-revolving
credit facility (the “Non-revolving Credit Facility”) with the Teachers’ Retirement System of Alabama (the “TRSA”)
and The Employees’ Retirement System of Alabama (the “ERSA”) (the TRSA and the ERSA are known collectively as
the “RSA”). The terms of the facility provide that the Company can borrow under the facility for a thirteen-year period
commencing September 30, 2010 in three tranches (hereinafter, “Tranche 1”, “Tranche 2”, and “Tranche
3”). Proceeds of the loans were initially to be used for up to 80% of eligible construction costs. As a condition to any
advance, the Company was required to provide funding for the applicable project costs in an amount equal to 25% of such advance,
with the proceeds of either (x) contributions to the Company from certain shareholders (other than RSA) or (y) subordinated loans
to the Company from certain shareholders (other than RSA) (the “Matching Requirement”). In addition, the remaining
availability required the Company to achieve certain operating targets to continue borrowing (the “Operating Target Requirement”).
On June 22, 2018 the Non-revolving Credit Facility was modified to remove the matching requirement and to permit us to borrow
up to $17,923 on five planned remodeling projects. An amount equal to eighty percent (80%) of the total costs to develop each
project constitutes a “Project Tranche”. Any changes to the amount of a Project Tranche (either increases or decreases)
are subject to prior written consent from the lender. On June 29, 2018 the Non-revolving Credit Facility was further modified
to permit us to borrow funds up to $8,233 for working capital expenses (including, among other things, accrued interest on the
Non-revolving Credit Facility, which may be paid in kind), in addition to the borrowing for planned 2018 remodeling projects.
On June 29, 2018 the Non-revolving Credit Facility was amended to remove the Operating Target Requirement for planned remodeling
and working capital advances. </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Tranche 1 and Tranche 2 commitment amounts
of $15,828 and $24,000 respectively, were fully borrowed against as of December 31, 2018 and December 31, 2017. Of the total commitment
amounts of $186,000 available in Tranche 3, $148,433 and $102,775 were borrowed as of December 31, 2018 and December 31, 2017,
respectively. As of December 31, 2018 $37,567 remained available to borrow from Tranche 3 for the planned remodels and new construction,
as well as, working capital requirements subject to certain limitations.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The effective interest rate on Tranche
1 and Tranche 2 borrowings is approximately 6.95% per annum. The cumulative difference between the interest computed using the
stated interest rates (8.00% at December 31, 2018 and December 31, 2017) and the effective interest rate of 6.95% is $621 and
$976 at December 31, 2018 and December 31, 2017, respectively, and is recorded in “Accrued interest - long-term” in
the accompanying consolidated balance sheets. The interest rate on Tranche 3 borrowings is fixed at 10.50% per annum.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">  </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>Short-Term Financing</i></b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Company periodically enters into short-term financing arrangements to finance the costs of its property
and casualty and Directors & Officers insurance premiums. The loans are due in equal monthly installments of principal and
interest, generally paid over a period of less than one year. Interest accrues on the unpaid principal at 3.63% per annum. At December
31, 2018 and December 31, 2017, the Company’s obligation under premium financing arrangements was $1,392 and $1,214, respectively,
and is included in accrued insurance in the accompanying consolidated balance sheets.</p>
37567000
<p style="margin: 0pt"></p>
<table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<tr style="vertical-align: bottom">
<td> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td>
<td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Options</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td>
<td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Weighted<br /> Average<br /> Grant Date<br /> Fair Value<br /> Per Option</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td>
<td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Weighted<br /> Average<br /> Exercise Price<br /> per Option</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="width: 64%; font-weight: bold">Outstanding - December 31, 2017</td><td style="width: 1%; font-weight: bold"> </td>
<td style="width: 1%; font-weight: bold; text-align: left"> </td><td style="width: 9%; font-weight: bold; text-align: right">955,300</td><td style="width: 1%; font-weight: bold; text-align: left"> </td><td style="width: 1%; font-weight: bold"> </td>
<td style="width: 1%; font-weight: bold; text-align: left">$</td><td style="width: 9%; font-weight: bold; text-align: right">4.58</td><td style="width: 1%; font-weight: bold; text-align: left"> </td><td style="width: 1%; font-weight: bold"> </td>
<td style="width: 1%; font-weight: bold; text-align: left">$</td><td style="width: 9%; font-weight: bold; text-align: right">18.13</td><td style="width: 1%; font-weight: bold; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="font-weight: bold">Exercisable - December 31, 2017</td><td style="font-weight: bold"> </td>
<td style="font-weight: bold; text-align: left"> </td><td style="font-weight: bold; text-align: right">-</td><td style="font-weight: bold; text-align: left"> </td><td style="font-weight: bold"> </td>
<td style="font-weight: bold; text-align: left">$</td><td style="font-weight: bold; text-align: right">-</td><td style="font-weight: bold; text-align: left"> </td><td style="font-weight: bold"> </td>
<td style="font-weight: bold; text-align: left">$</td><td style="font-weight: bold; text-align: right">-</td><td style="font-weight: bold; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td>Granted</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">149,120</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left">$</td><td style="text-align: right">2.56</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left">$</td><td style="text-align: right">8.26</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td>Exercised</td><td style="font-weight: bold"> </td>
<td style="font-weight: bold; text-align: left"> </td><td style="font-weight: bold; text-align: right">-</td><td style="font-weight: bold; text-align: left"> </td><td> </td>
<td style="text-align: left">$</td><td style="text-align: right">-</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left">$</td><td style="text-align: right">-</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="padding-bottom: 1.5pt">Forfeited/Cancelled</td><td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">(63,996</td><td style="padding-bottom: 1.5pt; text-align: left">)</td><td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: Black 1.5pt solid; text-align: left">$</td><td style="border-bottom: Black 1.5pt solid; text-align: right">4.28</td><td style="padding-bottom: 1.5pt; text-align: left"> </td><td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: Black 1.5pt solid; text-align: left">$</td><td style="border-bottom: Black 1.5pt solid; text-align: right">16.67</td><td style="padding-bottom: 1.5pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="font-weight: bold">Outstanding – December 31, 2018</td><td style="font-weight: bold"> </td>
<td style="font-weight: bold; text-align: left"> </td><td style="font-weight: bold; text-align: right">1,040,424</td><td style="font-weight: bold; text-align: left"> </td><td style="font-weight: bold"> </td>
<td style="font-weight: bold; text-align: left">$</td><td style="font-weight: bold; text-align: right">4.31</td><td style="font-weight: bold; text-align: left"> </td><td style="font-weight: bold"> </td>
<td style="font-weight: bold; text-align: left">$</td><td style="font-weight: bold; text-align: right">16.80</td><td style="font-weight: bold; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="font-weight: bold; padding-bottom: 4pt">Exercisable – December 31, 2018</td><td style="font-weight: bold; padding-bottom: 4pt"> </td>
<td style="border-bottom: Black 4pt double; font-weight: bold; text-align: left"> </td><td style="border-bottom: Black 4pt double; font-weight: bold; text-align: right">346,749</td><td style="padding-bottom: 4pt; font-weight: bold; text-align: left"> </td><td style="font-weight: bold; padding-bottom: 4pt"> </td>
<td style="border-bottom: Black 4pt double; font-weight: bold; text-align: left">$</td><td style="border-bottom: Black 4pt double; font-weight: bold; text-align: right">3.77</td><td style="padding-bottom: 4pt; font-weight: bold; text-align: left"> </td><td style="font-weight: bold; padding-bottom: 4pt"> </td>
<td style="border-bottom: Black 4pt double; font-weight: bold; text-align: left">$</td><td style="border-bottom: Black 4pt double; font-weight: bold; text-align: right">14.15</td><td style="padding-bottom: 4pt; font-weight: bold; text-align: left"> </td></tr>
</table>
<p style="margin: 0pt"></p>
0
0
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>NOTE 7 — COMMITMENTS AND CONTINGENCIES</b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>Operating Leases</i></b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">At December 31, 2018, future minimum payments
under non-cancelable operating leases are as follows.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="width: 88%; text-align: left">2019</td><td style="width: 1%"> </td>
<td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">23,118</td><td style="width: 1%; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left">2020</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">25,646</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="text-align: left">2021</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">28,423</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left">2022</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">30,108</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="text-align: left">2023</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">30,297</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="padding-bottom: 1.5pt; text-align: left">Thereafter</td><td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">361,826</td><td style="padding-bottom: 1.5pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="padding-bottom: 4pt; text-align: left"> </td><td style="padding-bottom: 4pt"> </td>
<td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">499,418</td><td style="padding-bottom: 4pt; text-align: left"> </td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Certain operating leases require contingent
rental payments based on a percentage of sales in excess of stipulated amounts. Rent expense during the years ended December 31
was as follows:</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p>
<table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<tr style="vertical-align: bottom">
<td> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td>
<td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2018</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td>
<td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2017</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="width: 76%; text-align: left">Minimum rentals</td><td style="width: 1%"> </td>
<td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">16,371</td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td>
<td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">15,013</td><td style="width: 1%; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left; padding-bottom: 1.5pt">Contingent rentals</td><td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">-</td><td style="padding-bottom: 1.5pt; text-align: left"> </td><td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">(41</td><td style="padding-bottom: 1.5pt; text-align: left">)</td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="padding-bottom: 4pt"> </td><td style="padding-bottom: 4pt"> </td>
<td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">16,371</td><td style="padding-bottom: 4pt; text-align: left"> </td><td style="padding-bottom: 4pt"> </td>
<td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">14,972</td><td style="padding-bottom: 4pt; text-align: left"> </td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>Litigation</i></b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Company is exposed to litigation in
the normal course of business.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">From time to time, the Company may become
involved in various lawsuits and legal proceedings which arise in the ordinary course of business. However, litigation is subject
to inherent uncertainties, and an adverse result in these or other matters may arise from time to time that may harm the Company’s
business.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Company currently is a defendant in a class action lawsuit captioned Mary Ryan and Johanna Nielson
v. iPic-Gold Class Entertainment, LLC, Case # BC 688633, which was filed in Superior Court of the State of California, County of
Los Angeles, on December 29, 2017. This lawsuit asserts failure to pay minimum wage, pay overtime wages, provide meal breaks and
rest periods, and provide accurate itemized wage statements with respect to certain workers. On February 6, 2019, the parties reached
a preliminary agreement to settle the lawsuit for $1,500. The parties are in the process of negotiating a settlement agreement
for submission to the court for preliminary approval of the settlement. For the year ended December 31, 2018 the legal settlement
expense has been recorded in the consolidated statement of operations and recorded as part of accrued expenses in the consolidated
balance sheets. See Note 15 to our consolidated financial statements for further discussion of the settlement.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Other than the lawsuit described above,
the Company is currently not aware of any legal proceedings or claims that it believes will have, individually or in the aggregate,
a material adverse effect on the business, financial condition, operating results or cash flows. However, lawsuits or any other
legal or administrative proceeding, regardless of the outcome, may result in diversion of resources, including management’s
time and attention.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>Revision of Prior Period Consolidated
Financial Statements</i></b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company previously classified fees related
to enhanced services and experiences within the Theater revenue line item on the consolidated statements of operations, net of
certain costs. The Company has determined that certain costs related to these items should have been classified within the line
item of Cost of theater within the grouping of Operating Expenses for all periods presented. Consequently, the Company has revised
its consolidated financial statements in the period noted below to reflect the correction of this immaterial error. The Company
considered SEC Staff Accounting Bulletin (“SAB”) 99, <i>Materiality</i> and SAB 108, <i>Considering the Effects of
Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements,</i> in assessing materiality. The
revision had no impact on reported net loss in any of the periods impacted.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<tr style="vertical-align: bottom">
<td> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td>
<td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">As Previously Reported</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td>
<td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Revision</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td>
<td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">As Revised</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td></tr>
<tr style="vertical-align: bottom">
<td> </td><td> </td>
<td colspan="10" style="text-align: center">(in thousands)</td><td> </td></tr>
<tr style="vertical-align: bottom">
<td style="font-weight: bold">Consolidated Statement of Operations December 31, 2017</td><td> </td>
<td colspan="2"> </td><td> </td><td> </td>
<td colspan="2"> </td><td> </td><td> </td>
<td colspan="2"> </td><td> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="width: 64%; text-align: left">Revenue – Theater</td><td style="width: 1%"> </td>
<td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">61,968</td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td>
<td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">4,923</td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td>
<td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">66,891</td><td style="width: 1%; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left">Total revenues</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">139,419</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">4,923</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">144,342</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td>Cost of theater</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">23,878</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">4,923</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">28,801</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left">Operating expenses</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">167,770</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">4,923</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">172,693</td><td style="text-align: left"> </td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; color: #4472C4"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">In addition, the following tables present
expected revisions to previously filed unaudited interim condensed consolidated financial statements for the impact of this immaterial
error on the first, second and third quarter 2018 information when it is presented in future Exchange Act reports (unaudited).</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p>
<table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<tr style="vertical-align: bottom">
<td> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td>
<td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">As Previously Reported</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td>
<td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Revision</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td>
<td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">As Revised</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td></tr>
<tr style="vertical-align: bottom">
<td> </td><td> </td>
<td colspan="10" style="text-align: center">(in thousands)</td><td> </td></tr>
<tr style="vertical-align: bottom">
<td style="font-weight: bold">Unaudited Condensed Consolidated Statement of Operations for the three month period ended March 31, 2018</td><td> </td>
<td colspan="2"> </td><td> </td><td> </td>
<td colspan="2"> </td><td> </td><td> </td>
<td colspan="2"> </td><td> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="width: 64%; text-align: left">Revenue – Theater</td><td style="width: 1%"> </td>
<td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">16,311</td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td>
<td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">1,442</td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td>
<td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">17,753</td><td style="width: 1%; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left">Total revenues</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">37,262</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">1,442</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">38,704</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td>Cost of theater</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">6,245</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">1,442</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">7,687</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left">Operating expenses</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">54,387</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">1,442</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">55,829</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="font-weight: bold">Unaudited Condensed Consolidated Statement of Operations for the three month period ended June 30, 2018</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="text-align: left">Revenue – Theater</td><td> </td>
<td style="text-align: left">$</td><td style="text-align: right">16,462</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left">$</td><td style="text-align: right">1,607</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left">$</td><td style="text-align: right">18,069</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left">Total revenues</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">37,519</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">1,607</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">39,126</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td>Cost of theater</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">6,476</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">1,607</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">8,083</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left">Operating expenses</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">42,161</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">1,607</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">43,768</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="font-weight: bold; text-align: left">Unaudited Condensed Consolidated Statement of Operations for the six month period ended June 30, 2018</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="text-align: left">Revenue – Theater</td><td> </td>
<td style="text-align: left">$</td><td style="text-align: right">32,773</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left">$</td><td style="text-align: right">3,049</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left">$</td><td style="text-align: right">35,822</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left">Total revenues</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">74,780</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">3,049</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">77,829</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td>Cost of theater</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">12,721</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">3,049</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">15,770</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left">Operating expenses</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">96,549</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">3,049</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">99,598</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="font-weight: bold">Unaudited Condensed Consolidated Statement of Operations for the three month period ended September 30, 2018</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="text-align: left">Revenue – Theater</td><td> </td>
<td style="text-align: left">$</td><td style="text-align: right">14,160</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left">$</td><td style="text-align: right">947</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left">$</td><td style="text-align: right">15,107</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left">Total revenues</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">31,742</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">947</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">32,689</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td>Cost of theater</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">4,998</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">947</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">5,945</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left">Operating expenses</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">39,646</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">947</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">40,593</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="font-weight: bold">Unaudited Condensed Consolidated Statement of Operations for the nine month period ended September 30, 2018</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="text-align: left">Revenue – Theater</td><td> </td>
<td style="text-align: left">$</td><td style="text-align: right">46,933</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left">$</td><td style="text-align: right">3,996</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left">$</td><td style="text-align: right">50,929</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left">Total revenues</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">106,522</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">3,996</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">110,518</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td>Cost of theater</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">17,719</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">3,996</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">21,715</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left">Operating expenses</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">136,195</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">3,996</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">140,191</td><td style="text-align: left"> </td></tr></table>
3332000
P2Y7M17D
0.0192
-0.0020
-0.1017
-0.3500
-0.0005
-0.0020
531
15984
-343
-126
1
50
182
2907
3331
128
5669
322
601
31
913
2
47
2331
392
10443
392
10443
139
5541
6
297
133
4775
-0.1280
10051000
2304000
2300000
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>NOTE 8 — INCOME TAXES</b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><font style="font-size: 7pt"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Company is the sole managing member
of Holdings, and Holdings is the sole managing member of iPic-Gold Class and its subsidiaries, and as a result, consolidates the
financial results of Holdings and iPic-Gold Class. Both Holdings and iPic-Gold Class are treated as pass-through entities for
U.S. federal income tax purposes and, as such, will not be subject to any entity-level U.S. federal income tax. Instead, taxable
income is allocated to holders of LLC Interests, including the Company. We are subject to U.S. federal income taxes, in addition
to state and local income taxes with respect to our allocable share of any taxable income or loss of Holdings.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-size: 7pt"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">In December 2017, the Tax Cuts and Jobs
Act of 2017 (the “TCJA”) was enacted into law. The TCJA provides for significant changes to the U.S. Internal Revenue
Code of 1986, as amended, including the reduction of the U.S. federal corporate income tax rate from 35% to 21%, among other provisions.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><font style="font-size: 7pt"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The provision for income taxes consists
of the following:</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p>
<table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<tr style="vertical-align: bottom">
<td style="font-weight: bold; text-align: left; border-bottom: Black 1.5pt solid">For the year ended,</td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td>
<td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">December 31, 2018</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td>
<td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">December 31, 2017</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="width: 76%; text-align: left">Current – state and local</td><td style="width: 1%"> </td>
<td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">30</td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td>
<td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">87</td><td style="width: 1%; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left; padding-bottom: 1.5pt">Deferred – state and local</td><td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">-  </td><td style="padding-bottom: 1.5pt; text-align: left"> </td><td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">-  </td><td style="padding-bottom: 1.5pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="text-align: left; padding-bottom: 4pt">Total</td><td style="padding-bottom: 4pt"> </td>
<td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">30</td><td style="padding-bottom: 4pt; text-align: left"> </td><td style="padding-bottom: 4pt"> </td>
<td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">87</td><td style="padding-bottom: 4pt; text-align: left"> </td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">A reconciliation of the statutory income
tax rate to the effective tax rate is as follows:</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p>
<table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<tr style="vertical-align: bottom">
<td style="font-weight: bold; text-align: left; border-bottom: Black 1.5pt solid">For the year ended,</td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td>
<td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">December 31, 2018</td><td style="padding-bottom: 1.5pt; font-weight: bold; white-space: nowrap"> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td>
<td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">December 31, 2017</td><td style="padding-bottom: 1.5pt; font-weight: bold; white-space: nowrap"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="width: 76%; text-align: left">Statutory rate</td><td style="width: 1%"> </td>
<td style="width: 1%; text-align: left"> </td><td style="width: 9%; text-align: right">21.00</td><td style="width: 1%; text-align: left; white-space: nowrap">%</td><td style="width: 1%"> </td>
<td style="width: 1%; text-align: left"> </td><td style="width: 9%; text-align: right">35.00</td><td style="width: 1%; text-align: left; white-space: nowrap">%</td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left">State and local income taxes</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">1.92</td><td style="text-align: left; white-space: nowrap">%</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">(0.20</td><td style="text-align: left; white-space: nowrap">%)</td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="text-align: left">Change in valuation allowance</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">(10.17</td><td style="text-align: left; white-space: nowrap">%)</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">-  </td><td style="text-align: left; white-space: nowrap"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left">Non-controlling interests</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">(12.80</td><td style="text-align: left; white-space: nowrap">%)</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">-  </td><td style="text-align: left; white-space: nowrap"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="text-align: left; padding-bottom: 1.5pt">LLC flow-through structure</td><td style="padding-bottom: 1.5pt"> </td>
<td style="text-align: left; padding-bottom: 1.5pt; border-bottom: Black 1.5pt solid"> </td><td style="text-align: right; border-bottom: Black 1.5pt solid">-  </td><td style="text-align: left; white-space: nowrap; padding-bottom: 1.5pt"> </td><td style="padding-bottom: 1.5pt"> </td>
<td style="text-align: left; padding-bottom: 1.5pt; border-bottom: Black 1.5pt solid"> </td><td style="text-align: right; border-bottom: Black 1.5pt solid">(35.00</td><td style="text-align: left; white-space: nowrap; padding-bottom: 1.5pt">%)</td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left; padding-bottom: 4pt; padding-left: 10pt">Effective tax rate</td><td style="padding-bottom: 4pt"> </td>
<td style="border-bottom: Black 4pt double; text-align: left"> </td><td style="border-bottom: Black 4pt double; text-align: right">(0.05</td><td style="padding-bottom: 4pt; text-align: left; white-space: nowrap">%)</td><td style="padding-bottom: 4pt"> </td>
<td style="border-bottom: Black 4pt double; text-align: left"> </td><td style="border-bottom: Black 4pt double; text-align: right">(0.20</td><td style="padding-bottom: 4pt; text-align: left; white-space: nowrap">%)</td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-size: 7pt"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Our effective income tax rates for 2018 and
2017 were (0.05)% and (0.20)%, respectively. Our effective tax rate differs from the statutory rate due to non-controlling interest,
changes in the tax valuation allowance, state income taxes and the impact of certain expenses which are not deductible for income
tax purposes.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-size: 7pt"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The components of the Company’s deferred
tax assets and liabilities are as follows:</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p>
<table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<tr style="vertical-align: bottom">
<td style="text-align: left"> </td>
<td style="padding-bottom: 1.5pt; text-align: left"> </td>
<td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b>December 31, 2018</b></font></td>
<td style="padding-bottom: 1.5pt; text-align: left"> </td>
<td style="padding-bottom: 1.5pt; text-align: left"> </td>
<td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b>December 31, 2017</b></font></td>
<td style="padding-bottom: 1.5pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">Deferred tax assets:</font></td>
<td style="text-align: left"> </td>
<td style="text-align: left"> </td>
<td style="text-align: right"> </td>
<td style="text-align: left"> </td>
<td style="text-align: left"> </td>
<td style="text-align: left"> </td>
<td style="text-align: right"> </td>
<td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="width: 76%; padding-left: 10pt; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">Deferred rent</font></td>
<td style="width: 1%; text-align: left"> </td>
<td style="width: 1%; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="width: 9%; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">2,331</font></td>
<td style="width: 1%; text-align: left"> </td>
<td style="width: 1%; text-align: left"> </td>
<td style="width: 1%; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="width: 9%; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">47</font></td>
<td style="width: 1%; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="padding-left: 10pt; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">Deferred revenue</font></td>
<td style="text-align: left"> </td>
<td style="text-align: left"> </td>
<td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">-  </font></td>
<td style="text-align: left"> </td>
<td style="text-align: left"> </td>
<td style="text-align: left"> </td>
<td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">2</font></td>
<td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="padding-left: 10pt; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">Accrued expenses</font></td>
<td style="text-align: left"> </td>
<td style="text-align: left"> </td>
<td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">913</font></td>
<td style="text-align: left"> </td>
<td style="text-align: left"> </td>
<td style="text-align: left"> </td>
<td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">31</font></td>
<td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="padding-left: 10pt; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">Net operating loss – states</font></td>
<td style="text-align: left"> </td>
<td style="text-align: left"> </td>
<td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">601</font></td>
<td style="text-align: left"> </td>
<td style="text-align: left"> </td>
<td style="text-align: left"> </td>
<td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">322</font></td>
<td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="padding-left: 10pt; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">Tenant improvement allowance</font></td>
<td style="text-align: left"> </td>
<td style="text-align: left"> </td>
<td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">5,669</font></td>
<td style="text-align: left"> </td>
<td style="text-align: left"> </td>
<td style="text-align: left"> </td>
<td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">128</font></td>
<td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="padding-left: 10pt; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">Interest deduction limitation</font></td>
<td style="text-align: left"> </td>
<td style="text-align: left"> </td>
<td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">3,331</font></td>
<td style="text-align: left"> </td>
<td style="text-align: left"> </td>
<td style="text-align: left"> </td>
<td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">-  </font></td>
<td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="padding-left: 10pt; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">Net operating loss – federal</font></td>
<td style="text-align: left"> </td>
<td style="text-align: left"> </td>
<td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">2,907</font></td>
<td style="text-align: left"> </td>
<td style="text-align: left"> </td>
<td style="text-align: left"> </td>
<td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">-  </font></td>
<td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="padding-left: 10pt; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">Equity-based compensation</font></td>
<td style="text-align: left"> </td>
<td style="text-align: left"> </td>
<td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">182</font></td>
<td style="text-align: left"> </td>
<td style="text-align: left"> </td>
<td style="text-align: left"> </td>
<td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">-  </font></td>
<td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="padding-left: 10pt; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">Other assets</font></td>
<td style="text-align: left"> </td>
<td style="text-align: left"> </td>
<td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">50</font></td>
<td style="text-align: left"> </td>
<td style="text-align: left"> </td>
<td style="text-align: left"> </td>
<td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">1</font></td>
<td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="padding-bottom: 1.5pt; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">Total deferred tax assets</font></td>
<td style="padding-bottom: 1.5pt; text-align: left"> </td>
<td style="border-bottom: black 1.5pt solid; text-align: left"> </td>
<td style="border-bottom: black 1.5pt solid; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">15,984</font></td>
<td style="padding-bottom: 1.5pt; text-align: left"> </td>
<td style="padding-bottom: 1.5pt; text-align: left"> </td>
<td style="border-bottom: black 1.5pt solid; text-align: left"> </td>
<td style="border-bottom: black 1.5pt solid; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">531</font></td>
<td style="padding-bottom: 1.5pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">Deferred tax liabilities:</font></td>
<td style="text-align: left"> </td>
<td style="text-align: left"> </td>
<td style="text-align: right"> </td>
<td style="text-align: left"> </td>
<td style="text-align: left"> </td>
<td style="text-align: left"> </td>
<td style="text-align: right"> </td>
<td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="padding-left: 10pt; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">Property and equipment</font></td>
<td style="text-align: left"> </td>
<td style="text-align: left"> </td>
<td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">(4,775</font></td>
<td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">)</font></td>
<td style="text-align: left"> </td>
<td style="text-align: left"> </td>
<td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">(133</font></td>
<td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">)</font></td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="padding-left: 10pt; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">Prepaid expenses</font></td>
<td style="text-align: left"> </td>
<td style="text-align: left"> </td>
<td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">(297</font></td>
<td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">)</font></td>
<td style="text-align: left"> </td>
<td style="text-align: left"> </td>
<td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">(6</font></td>
<td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">)</font></td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="padding-left: 10pt; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">Partnership basis amortization on February 1, 2018</font></td>
<td style="text-align: left"> </td>
<td style="text-align: left"> </td>
<td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">(126</font></td>
<td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">)</font></td>
<td style="text-align: left"> </td>
<td style="text-align: left"> </td>
<td style="text-align: right"> </td>
<td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="padding-left: 10pt; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">Partnership
basis amortization on July 12, 2018</font></td>
<td style="text-align: left"> </td>
<td style="text-align: left"> </td>
<td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">(343</font></td>
<td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">)</font></td>
<td style="text-align: left"> </td>
<td style="text-align: left"> </td>
<td style="text-align: right"> </td>
<td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="padding-bottom: 1.5pt; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">Total deferred tax liabilities</font></td>
<td style="padding-bottom: 1.5pt; text-align: left"> </td>
<td style="border-bottom: black 1.5pt solid; text-align: left"> </td>
<td style="border-bottom: black 1.5pt solid; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">(5,541</font></td>
<td style="padding-bottom: 1.5pt; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">)</font></td>
<td style="padding-bottom: 1.5pt; text-align: left"> </td>
<td style="border-bottom: black 1.5pt solid; text-align: left"> </td>
<td style="border-bottom: black 1.5pt solid; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">(139</font></td>
<td style="padding-bottom: 1.5pt; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">)</font></td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">Total net deferred tax asset before valuation allowance</font></td>
<td style="text-align: left"> </td>
<td style="text-align: left"> </td>
<td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">10,443</font></td>
<td style="text-align: left"> </td>
<td style="text-align: left"> </td>
<td style="text-align: left"> </td>
<td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">392</font></td>
<td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="padding-bottom: 1.5pt; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">Valuation allowance</font></td>
<td style="padding-bottom: 1.5pt; text-align: left"> </td>
<td style="border-bottom: black 1.5pt solid; text-align: left"> </td>
<td style="border-bottom: black 1.5pt solid; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">(10,443</font></td>
<td style="padding-bottom: 1.5pt; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">)</font></td>
<td style="padding-bottom: 1.5pt; text-align: left"> </td>
<td style="border-bottom: black 1.5pt solid; text-align: left"> </td>
<td style="border-bottom: black 1.5pt solid; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">(392</font></td>
<td style="padding-bottom: 1.5pt; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">)</font></td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="padding-bottom: 4pt; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">Net deferred tax asset</font></td>
<td style="padding-bottom: 4pt; text-align: left"> </td>
<td style="border-bottom: black 4.5pt double; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="border-bottom: black 4.5pt double; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">-  </font></td>
<td style="padding-bottom: 4pt; text-align: left"> </td>
<td style="padding-bottom: 4pt; text-align: left"> </td>
<td style="border-bottom: black 4.5pt double; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="border-bottom: black 4.5pt double; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">-  </font></td>
<td style="padding-bottom: 4pt; text-align: left"> </td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">As of December 31, 2018, our federal and
state net operating loss carryforwards for income tax purposes were $13,841. Due to the Tax Cuts and Jobs Act of 2017, the Federal
operating loss carryforwards generated in 2018 do not expire.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">We evaluate the realizability of our deferred
tax assets on a quarterly basis and establish valuation allowances when it is more likely than not that all or a portion of a deferred
tax asset may not be realized. As of December 31, 2018, we concluded, based on the weight of all available positive and negative
evidence, that all our deferred tax assets do not meet the more likely than not threshold to be realized. As such, a full valuation
allowance was recognized. The net change in valuation allowance for 2018 was an increase of $10,051.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Pursuant to our election under Section 754
of the Internal Revenue Code (the "Code"), we expect to obtain an increase in our share of the tax basis in the net
assets of Holdings when LLC Interests are redeemed or exchanged by the non-controlling interest holders and other qualifying transactions.
We intend to treat any redemptions and exchanges of LLC Interests by the non-controlling interest holders as direct purchases
of LLC Interests for U.S. federal income tax purposes. These increases in tax basis may reduce the amounts that we would otherwise
pay in the future to various tax authorities. They may also decrease gains (or increase losses) on future dispositions of certain
capital assets to the extent tax basis is allocated to those capital assets.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>NOTE 6 — DEFICIT</b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>Non-controlling Interests</i></b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-size: 8pt"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Immediately following the IPO, each LLC
Interest held by the Continuing iPic Equity Owners is redeemable, at the election of such members, for, at the option of the majority
of the Company’s Board of Directors, newly-issued shares of Class A Common Stock on a one-for-one basis or a cash payment
equal to a volume weighted average market price of one share of Class A Common Stock for each LLC Interest redeemed (subject to
customary adjustments, including for stock splits, stock dividends and reclassifications). If iPic decides to make a cash payment,
the Continuing iPic Equity Owners have the option to rescind the redemption request within a specified time period. Upon the exercise
of the redemption right, the redeeming member will surrender its LLC Interests to Holdings for cancellation. If iPic does not
make an election between share or cash settlement within a prescribed period, then it is deemed to have elected share settlement.
Holders of the Class B Common Stock are not entitled to distributions or dividends, whether cash or stock, and have no economic
interest in iPic. Holders of Class B Common Stock are entitled to cast one vote per share, with the number of shares of Class
B Common Stock held by each Continuing iPic Equity Owner equivalent to the number of LLC Interests held by such Continuing iPic
Equity Owner.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-size: 8pt"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">On July 12, 2018, in accordance with these
provisions and other terms and conditions of the LLC Agreement, two non-controlling interest holders exchanged 100% of their respective
membership interests (5,602,866 membership units) in Holdings for a corresponding number of shares of iPic’s Class A common
stock. As part of the exchange, each investor’s shares of Class B common stock in iPic were canceled. Also, on July 20,
2018, Ajay Bijli, an independent director of the Board of Directors, (the “Board”) resigned. The resignation of Mr.
Bijli left the remaining Board with four directors. Prior to the resignation, the majority of the Board was comprised of non-controlling
interest holders. Consequently, and in accordance with ASC 480-10-S99-3A, the Company was required to record the non-controlling
interest outside of permanent equity and subsequently measure the non-controlling interests at the greater of their redemption
price or carrying amount. However, upon resignation of Mr. Bijli, the criteria within ASC 480-10-S99-3A requiring classification
outside of permanent equity was no longer met and, therefore the Company reclassified all remaining non-controlling interests
to permanent equity. As of December 31, 2018, non-controlling interests were no longer considered to be redeemable, and the Company
included all non-controlling interest within permanent equity.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>Private Placement </i></b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-size: 8pt"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">On February 1, 2018, the Company closed
a private placement of $2,500 from an affiliate of one of its existing investors, Regal Cinemas, which had previously invested
$12,000 in April 2017.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-size: 8pt"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>2017 Equity Incentive Plan</i></b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-size: 8pt"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">In connection with the IPO and related transactions, the iPic-Gold Class Entertainment, LLC 2017 Equity
Incentive Plan (or the “2017 Equity Incentive Plan”), was migrated to iPic and options granted under the 2017 Equity
Incentive Plan were replaced with options to acquire Class A Common Stock of iPic. Under the plan, equity awards may be made in
respect of 1,600,000 iPic shares, and the number of authorized shares is subject to automatic increases which begin in fiscal year
2019. Under the 2017 Equity Incentive Plan, awards may be granted in the form of options, restricted stock, restricted stock units,
stock appreciation rights, performance awards, dividend equivalent rights and share awards. The migration of the 2017 Equity Incentive
Plan did not result in any changes to the terms and conditions, therefore no modification was deemed to have occurred.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-size: 8pt"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Each Incentive Option and Non-Qualified
Option (as defined by Section 422 of the Internal Revenue Code of 1986, collectively “Options”) contains the following
material terms:</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-size: 8pt"> </font></p>
<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<tr style="vertical-align: top">
<td style="width: 29px; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">(i)</font></td>
<td style="text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">the exercise price,
which shall be determined by the Compensation Committee at the time of grant, shall not be less than the greater of (i) the par
value of the stock and (ii) 100% of the Fair Market Value (defined as the closing price at the close of the primary trading session
of the shares on the date immediately prior to the date of the grant on the principal national security exchange on which the
common stock is listed or quoted, as applicable) of the common stock of the Company, <i>provided</i>  that if there
is a grant of an incentive option to a recipient who owns more than ten percent (10%) of the total combined voting power of all
classes of securities of the Company, the exercise price shall be at least 110% of the Fair Market Value;</font></td></tr>
<tr style="vertical-align: top">
<td style="text-align: justify"><font style="font-size: 8pt"> </font></td>
<td style="text-align: justify"><font style="font-size: 8pt"> </font></td></tr>
<tr style="vertical-align: top">
<td style="text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">(ii)</font></td>
<td style="text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">the term of each
Option shall be fixed by the Committee, <i>provided</i> that such Option shall not be exercisable more than ten (10) years
after the date such Option is granted, and<i>  provided further</i>  that with respect to an Incentive
Option, if the recipient owns more than ten percent (10%) of the total combined voting power of the Company, the Incentive
Option shall not be exercisable more than five (5) years after the date such Incentive Option is granted;</font></td></tr>
<tr style="vertical-align: top">
<td style="text-align: justify"><font style="font-size: 8pt"> </font></td>
<td style="text-align: justify"><font style="font-size: 8pt"> </font></td></tr>
<tr style="vertical-align: top">
<td style="text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">(iii)</font></td>
<td style="text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">subject to acceleration
in the event of a Change of Control of the Company (as further described in the 2017 Equity Incentive Plan), the period during
which the Options vest shall be designated by the Committee;</font></td></tr>
<tr style="vertical-align: top">
<td style="text-align: justify"><font style="font-size: 8pt"> </font></td>
<td style="text-align: justify"><font style="font-size: 8pt"> </font></td></tr>
<tr style="vertical-align: top">
<td style="text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">(iv)</font></td>
<td style="text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">no Option is transferable
and each is exercisable only by the recipient of such Option except in the event of the death of the recipient;</font></td></tr>
<tr style="vertical-align: top">
<td style="text-align: justify"><font style="font-size: 8pt"> </font></td>
<td style="text-align: justify"><font style="font-size: 8pt"> </font></td></tr>
<tr style="vertical-align: top">
<td style="text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">(v)</font></td>
<td style="text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">to the extent that
the aggregate Fair Market Value of Incentive Options granted under the Plan are exercisable by a participant for the first
time during any calendar year exceeds $100, such Incentive Options shall be treated as Non-Qualified Options; and</font></td></tr>
<tr style="vertical-align: top">
<td style="text-align: justify"><font style="font-size: 8pt"> </font></td>
<td style="text-align: justify"><font style="font-size: 8pt"> </font></td></tr>
<tr style="vertical-align: top">
<td style="text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">(vi)</font></td>
<td style="text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">with respect to
Options granted to a director, the aggregate number of shares that may be issued under the Plan in any calendar year to an
individual Director may not exceed that number of shares representing a Fair Market Value equal to the positive difference,
if any, between $300, and the aggregate value of any annual cash retainer paid to the director.</font></td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>Incentive stock options</i></b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The following is a summary of the Company’s Non-Qualified Options activity:</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<tr style="vertical-align: bottom">
<td> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td>
<td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Options</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td>
<td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Weighted<br /> Average<br /> Grant Date<br /> Fair Value<br /> Per Option</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td>
<td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Weighted<br /> Average<br /> Exercise Price<br /> per Option</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="width: 64%; font-weight: bold">Outstanding - December 31, 2017</td><td style="width: 1%; font-weight: bold"> </td>
<td style="width: 1%; font-weight: bold; text-align: left"> </td><td style="width: 9%; font-weight: bold; text-align: right">955,300</td><td style="width: 1%; font-weight: bold; text-align: left"> </td><td style="width: 1%; font-weight: bold"> </td>
<td style="width: 1%; font-weight: bold; text-align: left">$</td><td style="width: 9%; font-weight: bold; text-align: right">4.58</td><td style="width: 1%; font-weight: bold; text-align: left"> </td><td style="width: 1%; font-weight: bold"> </td>
<td style="width: 1%; font-weight: bold; text-align: left">$</td><td style="width: 9%; font-weight: bold; text-align: right">18.13</td><td style="width: 1%; font-weight: bold; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="font-weight: bold">Exercisable - December 31, 2017</td><td style="font-weight: bold"> </td>
<td style="font-weight: bold; text-align: left"> </td><td style="font-weight: bold; text-align: right">-</td><td style="font-weight: bold; text-align: left"> </td><td style="font-weight: bold"> </td>
<td style="font-weight: bold; text-align: left">$</td><td style="font-weight: bold; text-align: right">-</td><td style="font-weight: bold; text-align: left"> </td><td style="font-weight: bold"> </td>
<td style="font-weight: bold; text-align: left">$</td><td style="font-weight: bold; text-align: right">-</td><td style="font-weight: bold; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td>Granted</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">149,120</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left">$</td><td style="text-align: right">2.56</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left">$</td><td style="text-align: right">8.26</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td>Exercised</td><td style="font-weight: bold"> </td>
<td style="font-weight: bold; text-align: left"> </td><td style="font-weight: bold; text-align: right">-</td><td style="font-weight: bold; text-align: left"> </td><td> </td>
<td style="text-align: left">$</td><td style="text-align: right">-</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left">$</td><td style="text-align: right">-</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="padding-bottom: 1.5pt">Forfeited/Cancelled</td><td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">(63,996</td><td style="padding-bottom: 1.5pt; text-align: left">)</td><td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: Black 1.5pt solid; text-align: left">$</td><td style="border-bottom: Black 1.5pt solid; text-align: right">4.28</td><td style="padding-bottom: 1.5pt; text-align: left"> </td><td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: Black 1.5pt solid; text-align: left">$</td><td style="border-bottom: Black 1.5pt solid; text-align: right">16.67</td><td style="padding-bottom: 1.5pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="font-weight: bold">Outstanding – December 31, 2018</td><td style="font-weight: bold"> </td>
<td style="font-weight: bold; text-align: left"> </td><td style="font-weight: bold; text-align: right">1,040,424</td><td style="font-weight: bold; text-align: left"> </td><td style="font-weight: bold"> </td>
<td style="font-weight: bold; text-align: left">$</td><td style="font-weight: bold; text-align: right">4.31</td><td style="font-weight: bold; text-align: left"> </td><td style="font-weight: bold"> </td>
<td style="font-weight: bold; text-align: left">$</td><td style="font-weight: bold; text-align: right">16.80</td><td style="font-weight: bold; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="font-weight: bold; padding-bottom: 4pt">Exercisable – December 31, 2018</td><td style="font-weight: bold; padding-bottom: 4pt"> </td>
<td style="border-bottom: Black 4pt double; font-weight: bold; text-align: left"> </td><td style="border-bottom: Black 4pt double; font-weight: bold; text-align: right">346,749</td><td style="padding-bottom: 4pt; font-weight: bold; text-align: left"> </td><td style="font-weight: bold; padding-bottom: 4pt"> </td>
<td style="border-bottom: Black 4pt double; font-weight: bold; text-align: left">$</td><td style="border-bottom: Black 4pt double; font-weight: bold; text-align: right">3.77</td><td style="padding-bottom: 4pt; font-weight: bold; text-align: left"> </td><td style="font-weight: bold; padding-bottom: 4pt"> </td>
<td style="border-bottom: Black 4pt double; font-weight: bold; text-align: left">$</td><td style="border-bottom: Black 4pt double; font-weight: bold; text-align: right">14.15</td><td style="padding-bottom: 4pt; font-weight: bold; text-align: left"> </td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">On July 10, 2018, 114,119 options were
granted to certain employees related to the 2017 bonus payout in lieu of cash. The bonus awards for 2017 were settled in the form
of 75% in cash and 25% in options. The options vested immediately upon issuance and the aggregate grant-date fair value was $382.
On December 21, 2017 955,300 options were granted to certain employees. The aggregate grant-date fair value was $4,379.</p>
<p style="font: 10pt Times New Roman,serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman,serif; margin: 0pt 0; text-align: justify">At December 31, 2018, the total intrinsic value of the Options outstanding was $0. As of December 31,
2018, the weighted average remaining contractual term of Options outstanding was 9.25 years.</p>
<p style="font: 10pt Times New Roman,serif; margin: 0pt 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">At December 31, 2018, the total intrinsic value
of the Options exercisable was $0.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0"><b><i> </i></b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">A total of 145,424 Options were vested as of
December 31, 2018.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="margin: 0">The Company recognized an aggregate of $1,145 and $0 in compensation expense during the year ended December
31, 2018 and 2017, respectively, related to the Options.  At December 31, 2018, unrecognized stock-based compensation was
$3,250 for the Options, which is expected to be recognized over a weighted average remaining life of approximately 2.63 years.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The fair value of the Options issued on
July 10, 2018 and on December 21, 2017 were estimated using a Black-Scholes Options Pricing Model. The Company does not have sufficient
historical exercise data to provide a reasonable basis upon which to estimate expected term due to the limited period of time
its equity shares have been publicly traded and therefore the expected option term is calculated based on the simplified method,
which results in an expected term based on the midpoint between the vesting date and the contractual term of the option.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<tr style="vertical-align: bottom">
<td style="font-weight: bold; border-bottom: Black 1.5pt solid">Assumptions</td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td>
<td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">July 10,<br /> 2018</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="width: 88%; text-align: justify">Expected term (years)</td><td style="width: 1%"> </td>
<td style="width: 1%; text-align: left"> </td><td style="width: 9%; text-align: right">2.5</td><td style="width: 1%; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: justify">Stock price</td><td> </td>
<td style="text-align: left">$</td><td style="text-align: right">8.26</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="text-align: justify">Expected volatility</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">46.3</td><td style="text-align: left">%</td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: justify">Risk-free interest rate</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">2.63</td><td style="text-align: left">%</td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="text-align: justify">Dividend yield</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">0.00</td><td style="text-align: left">%</td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></p>
<table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<tr style="vertical-align: bottom">
<td style="font-weight: bold; border-bottom: Black 1.5pt solid">Assumptions</td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td>
<td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid"><p style="margin-top: 0; margin-bottom: 0">December 21,</p>
<p style="margin-top: 0; margin-bottom: 0">2017</p></td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="width: 88%; text-align: justify">Expected term (years)</td><td style="width: 1%"> </td>
<td style="width: 1%; text-align: left"> </td><td style="width: 9%; text-align: right">5.97</td><td style="width: 1%; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: justify">Stock price</td><td> </td>
<td style="text-align: left">$</td><td style="text-align: right">14.69</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="text-align: justify">Expected volatility</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">35.50</td><td style="text-align: left">%</td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: justify">Risk-free interest rate</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">2.34</td><td style="text-align: left">%</td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="text-align: justify">Discount for lack of marketability</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">19.00</td><td style="text-align: left">%</td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: justify">Dividend yield</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">0.00</td><td style="text-align: left">%</td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>Restricted stock units</i></b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">On December 6, 2017 iPic granted
483,864 Restricted Stock Units (“RSUs”) to our named executive officers and certain other employees. The awards
contained no future service requirement and fully vested when the IPO occurred. Therefore, on February 1, 2018, the Company
recognized compensation expense related to these RSUs of $8,235. The grant date fair value of the RSUs was $17.02 per
unit, using the IPO price adjusted for a discount for the lack of marketability valuation method. At December 31, 2018 there
were no unrecognized compensation costs related to the RSUs.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The RSUs will remain outstanding until
the issuance of Class A shares on the different settlement dates. On May 15, 2018, 247,755 of the RSUs were exchanged for Class
A shares. On June 29, 2018, 14,770 of the RSUs were exchanged for Class A shares. The remaining 221,339 RSUs will be exchanged
for Class A shares on May 15, 2019.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>Stock issuance</i></b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">In accordance with the Holdings LLC Agreement,
on July 12, 2018, each of Village Roadshow, Teachers’ Retirement System of Alabama and Employees’ Retirement System
of Alabama assigned 100% of its respective membership units of Holdings to iPic in exchange for a corresponding number of shares
of iPic’s Class A Common Stock (2,801,433 shares, 1,876,960 shares and 924,473 shares of Class A Common Stock, respectively)
(the “Exchange”). As part of the Exchange and in accordance with iPic’s Amended and Restated Certificate of
Incorporation, each such investor’s Class B common stock were canceled.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p>
<table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<tr style="vertical-align: bottom">
<td style="font-weight: bold; text-align: left; border-bottom: Black 1.5pt solid">For the year ended,</td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td>
<td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">December 31, 2018</td><td style="padding-bottom: 1.5pt; font-weight: bold; white-space: nowrap"> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td>
<td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">December 31, 2017</td><td style="padding-bottom: 1.5pt; font-weight: bold; white-space: nowrap"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="width: 76%; text-align: left">Statutory rate</td><td style="width: 1%"> </td>
<td style="width: 1%; text-align: left"> </td><td style="width: 9%; text-align: right">21.00</td><td style="width: 1%; text-align: left; white-space: nowrap">%</td><td style="width: 1%"> </td>
<td style="width: 1%; text-align: left"> </td><td style="width: 9%; text-align: right">35.00</td><td style="width: 1%; text-align: left; white-space: nowrap">%</td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left">State and local income taxes</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">1.92</td><td style="text-align: left; white-space: nowrap">%</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">(0.20</td><td style="text-align: left; white-space: nowrap">%)</td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="text-align: left">Change in valuation allowance</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">(10.17</td><td style="text-align: left; white-space: nowrap">%)</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">-  </td><td style="text-align: left; white-space: nowrap"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left">Non-controlling interests</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">(12.80</td><td style="text-align: left; white-space: nowrap">%)</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">-  </td><td style="text-align: left; white-space: nowrap"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="text-align: left; padding-bottom: 1.5pt">LLC flow-through structure</td><td style="padding-bottom: 1.5pt"> </td>
<td style="text-align: left; padding-bottom: 1.5pt; border-bottom: Black 1.5pt solid"> </td><td style="text-align: right; border-bottom: Black 1.5pt solid">-  </td><td style="text-align: left; white-space: nowrap; padding-bottom: 1.5pt"> </td><td style="padding-bottom: 1.5pt"> </td>
<td style="text-align: left; padding-bottom: 1.5pt; border-bottom: Black 1.5pt solid"> </td><td style="text-align: right; border-bottom: Black 1.5pt solid">(35.00</td><td style="text-align: left; white-space: nowrap; padding-bottom: 1.5pt">%)</td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left; padding-bottom: 4pt; padding-left: 10pt">Effective tax rate</td><td style="padding-bottom: 4pt"> </td>
<td style="border-bottom: Black 4pt double; text-align: left"> </td><td style="border-bottom: Black 4pt double; text-align: right">(0.05</td><td style="padding-bottom: 4pt; text-align: left; white-space: nowrap">%)</td><td style="padding-bottom: 4pt"> </td>
<td style="border-bottom: Black 4pt double; text-align: left"> </td><td style="border-bottom: Black 4pt double; text-align: right">(0.20</td><td style="padding-bottom: 4pt; text-align: left; white-space: nowrap">%)</td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-size: 7pt"></font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p>
<table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<tr style="vertical-align: bottom">
<td style="text-align: left"> </td>
<td style="padding-bottom: 1.5pt; text-align: left"> </td>
<td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b>December 31, 2018</b></font></td>
<td style="padding-bottom: 1.5pt; text-align: left"> </td>
<td style="padding-bottom: 1.5pt; text-align: left"> </td>
<td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b>December 31, 2017</b></font></td>
<td style="padding-bottom: 1.5pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">Deferred tax assets:</font></td>
<td style="text-align: left"> </td>
<td style="text-align: left"> </td>
<td style="text-align: right"> </td>
<td style="text-align: left"> </td>
<td style="text-align: left"> </td>
<td style="text-align: left"> </td>
<td style="text-align: right"> </td>
<td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="width: 76%; padding-left: 10pt; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">Deferred rent</font></td>
<td style="width: 1%; text-align: left"> </td>
<td style="width: 1%; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="width: 9%; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">2,331</font></td>
<td style="width: 1%; text-align: left"> </td>
<td style="width: 1%; text-align: left"> </td>
<td style="width: 1%; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="width: 9%; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">47</font></td>
<td style="width: 1%; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="padding-left: 10pt; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">Deferred revenue</font></td>
<td style="text-align: left"> </td>
<td style="text-align: left"> </td>
<td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">-  </font></td>
<td style="text-align: left"> </td>
<td style="text-align: left"> </td>
<td style="text-align: left"> </td>
<td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">2</font></td>
<td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="padding-left: 10pt; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">Accrued expenses</font></td>
<td style="text-align: left"> </td>
<td style="text-align: left"> </td>
<td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">913</font></td>
<td style="text-align: left"> </td>
<td style="text-align: left"> </td>
<td style="text-align: left"> </td>
<td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">31</font></td>
<td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="padding-left: 10pt; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">Net operating loss – states</font></td>
<td style="text-align: left"> </td>
<td style="text-align: left"> </td>
<td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">601</font></td>
<td style="text-align: left"> </td>
<td style="text-align: left"> </td>
<td style="text-align: left"> </td>
<td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">322</font></td>
<td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="padding-left: 10pt; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">Tenant improvement allowance</font></td>
<td style="text-align: left"> </td>
<td style="text-align: left"> </td>
<td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">5,669</font></td>
<td style="text-align: left"> </td>
<td style="text-align: left"> </td>
<td style="text-align: left"> </td>
<td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">128</font></td>
<td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="padding-left: 10pt; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">Interest deduction limitation</font></td>
<td style="text-align: left"> </td>
<td style="text-align: left"> </td>
<td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">3,331</font></td>
<td style="text-align: left"> </td>
<td style="text-align: left"> </td>
<td style="text-align: left"> </td>
<td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">-  </font></td>
<td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="padding-left: 10pt; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">Net operating loss – federal</font></td>
<td style="text-align: left"> </td>
<td style="text-align: left"> </td>
<td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">2,907</font></td>
<td style="text-align: left"> </td>
<td style="text-align: left"> </td>
<td style="text-align: left"> </td>
<td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">-  </font></td>
<td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="padding-left: 10pt; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">Equity-based compensation</font></td>
<td style="text-align: left"> </td>
<td style="text-align: left"> </td>
<td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">182</font></td>
<td style="text-align: left"> </td>
<td style="text-align: left"> </td>
<td style="text-align: left"> </td>
<td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">-  </font></td>
<td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="padding-left: 10pt; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">Other assets</font></td>
<td style="text-align: left"> </td>
<td style="text-align: left"> </td>
<td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">50</font></td>
<td style="text-align: left"> </td>
<td style="text-align: left"> </td>
<td style="text-align: left"> </td>
<td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">1</font></td>
<td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="padding-bottom: 1.5pt; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">Total deferred tax assets</font></td>
<td style="padding-bottom: 1.5pt; text-align: left"> </td>
<td style="border-bottom: black 1.5pt solid; text-align: left"> </td>
<td style="border-bottom: black 1.5pt solid; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">15,984</font></td>
<td style="padding-bottom: 1.5pt; text-align: left"> </td>
<td style="padding-bottom: 1.5pt; text-align: left"> </td>
<td style="border-bottom: black 1.5pt solid; text-align: left"> </td>
<td style="border-bottom: black 1.5pt solid; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">531</font></td>
<td style="padding-bottom: 1.5pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">Deferred tax liabilities:</font></td>
<td style="text-align: left"> </td>
<td style="text-align: left"> </td>
<td style="text-align: right"> </td>
<td style="text-align: left"> </td>
<td style="text-align: left"> </td>
<td style="text-align: left"> </td>
<td style="text-align: right"> </td>
<td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="padding-left: 10pt; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">Property and equipment</font></td>
<td style="text-align: left"> </td>
<td style="text-align: left"> </td>
<td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">(4,775</font></td>
<td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">)</font></td>
<td style="text-align: left"> </td>
<td style="text-align: left"> </td>
<td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">(133</font></td>
<td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">)</font></td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="padding-left: 10pt; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">Prepaid expenses</font></td>
<td style="text-align: left"> </td>
<td style="text-align: left"> </td>
<td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">(297</font></td>
<td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">)</font></td>
<td style="text-align: left"> </td>
<td style="text-align: left"> </td>
<td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">(6</font></td>
<td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">)</font></td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="padding-left: 10pt; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">Partnership basis amortization on February 1, 2018</font></td>
<td style="text-align: left"> </td>
<td style="text-align: left"> </td>
<td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">(126</font></td>
<td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">)</font></td>
<td style="text-align: left"> </td>
<td style="text-align: left"> </td>
<td style="text-align: right"> </td>
<td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="padding-left: 10pt; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">Partnership
basis amortization on July 12, 2018</font></td>
<td style="text-align: left"> </td>
<td style="text-align: left"> </td>
<td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">(343</font></td>
<td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">)</font></td>
<td style="text-align: left"> </td>
<td style="text-align: left"> </td>
<td style="text-align: right"> </td>
<td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="padding-bottom: 1.5pt; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">Total deferred tax liabilities</font></td>
<td style="padding-bottom: 1.5pt; text-align: left"> </td>
<td style="border-bottom: black 1.5pt solid; text-align: left"> </td>
<td style="border-bottom: black 1.5pt solid; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">(5,541</font></td>
<td style="padding-bottom: 1.5pt; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">)</font></td>
<td style="padding-bottom: 1.5pt; text-align: left"> </td>
<td style="border-bottom: black 1.5pt solid; text-align: left"> </td>
<td style="border-bottom: black 1.5pt solid; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">(139</font></td>
<td style="padding-bottom: 1.5pt; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">)</font></td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">Total net deferred tax asset before valuation allowance</font></td>
<td style="text-align: left"> </td>
<td style="text-align: left"> </td>
<td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">10,443</font></td>
<td style="text-align: left"> </td>
<td style="text-align: left"> </td>
<td style="text-align: left"> </td>
<td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">392</font></td>
<td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="padding-bottom: 1.5pt; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">Valuation allowance</font></td>
<td style="padding-bottom: 1.5pt; text-align: left"> </td>
<td style="border-bottom: black 1.5pt solid; text-align: left"> </td>
<td style="border-bottom: black 1.5pt solid; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">(10,443</font></td>
<td style="padding-bottom: 1.5pt; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">)</font></td>
<td style="padding-bottom: 1.5pt; text-align: left"> </td>
<td style="border-bottom: black 1.5pt solid; text-align: left"> </td>
<td style="border-bottom: black 1.5pt solid; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">(392</font></td>
<td style="padding-bottom: 1.5pt; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">)</font></td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="padding-bottom: 4pt; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">Net deferred tax asset</font></td>
<td style="padding-bottom: 4pt; text-align: left"> </td>
<td style="border-bottom: black 4.5pt double; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="border-bottom: black 4.5pt double; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">-  </font></td>
<td style="padding-bottom: 4pt; text-align: left"> </td>
<td style="padding-bottom: 4pt; text-align: left"> </td>
<td style="border-bottom: black 4.5pt double; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="border-bottom: black 4.5pt double; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">-  </font></td>
<td style="padding-bottom: 4pt; text-align: left"> </td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p>
Basic and diluted net loss per Class A common share is applicable only for periods after the Company's IPO. See Note 11 "Net Loss per Share''.