Unless the context otherwise requires, we use the terms “MiT”, “Company”, “we”, “us” and “our” in this Annual Report on Form 10-K (“Report”) to refer to Moving iMage Technologies, Inc., a Delaware corporation, and its wholly-owned subsidiaries, Moving iMage Technologies LLC and MiT Acquisition Co, LLC dba Caddy Products.
PART I
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This Annual Report on Form 10-K contains forward-looking statements that are based on our beliefs and assumptions and on information currently available to us. The forward-looking statements are contained principally in “Business,” “Risk Factors,” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” Forward-looking statements include information concerning our possible or assumed future results of operations and expenses, business strategies and plans, competitive position, business environment, and potential growth opportunities. Forward-looking statements include all statements that are not historical facts. In some cases, forward-looking statements can be identified by terms such as “anticipates,” “believes,” “could,” “estimates,” “expects,” “intends,” “may,” “plans,” “potential,” “predicts,” “projects,” “seeks,” “should,” “will,” “would,” or similar expressions and the negatives of those terms.
Forward-looking statements involve known and unknown risks, uncertainties, and other factors that may cause our actual results, performance, or achievements to be materially different from any future results, performance, or achievements expressed or implied by the forward-looking statements. Those risks include those described in “Risk Factors” and elsewhere in this Report. Given these uncertainties, you should not place undue reliance on any forward-looking statements in this Report. Also, forward-looking statements represent our beliefs and assumptions only as of the date of this Report. You should read this Annual Report on Form 10-K and the documents that we have filed as exhibits, completely and with the understanding that our actual future results may be materially different from what we expect.
Any forward-looking statement made by us in this Annual Report on Form 10-K speaks only as of the date on which it is made. Except as required by law, we disclaim any obligation to update these forward-looking statements publicly, or to update the reasons actual results could differ materially from those anticipated in these forward- looking statements, even if new information becomes available in the future. All forward-looking statements are expressly qualified in their entirety by the foregoing cautionary statements.
ITEM 1.BUSINESS
Corporate Overview
The Company was incorporated in June 2020 initially named MiT Acquisition Corporation, which was changed to Moving iMage Technologies, Inc. in September 2020. In connection with our initial public offering, in July 2021, the holders of Moving iMage Technologies, LLC exchanged their interests for shares of the Company resulting in Moving iMage Technologies, LLC to become the Company’s wholly-owned subsidiary. Moving iMage Technologies, LLC, commenced operations in September 2003, and its wholly-owned subsidiary, MiT Acquisition Co., LLC, acquired all of the assets of Caddy Products in July 2019.
The Company’s Annual Report on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K, and amendments thereto, are filed electronically with the Securities and Exchange Commission (“SEC”). The SEC maintains an internet site that contains these reports at: www.sec.gov. You can also access these reports through links from our website at: www.movingimagetech.com. The Company includes the website link solely as a textual reference. The information contained on our website is not incorporated by reference into this Report. Copies of these reports are also available, without charge, by contacting Moving iMage Technologies, Inc. located at 17760 Newhope Street, Fountain Valley, CA 92708. Our telephone number is (714) 751-7998.
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Description of Business
We are a leading provider of technology, products, and services to movie theater operators and sports and entertainment venues.
| 1) | We provide a set of valuable services to movie theater operators and other critical screening and viewing rooms. These services include overall project management, which can encompass a wide range of design, integration, installation, and procurement services for new auditorium builds, refurbishments, or upgrades to existing facilities. |
| 2) | We design and manufacture a set of proprietary products that are sold either as part of our project management services or a la carte. Examples of these products include our ADA-compliant accessibility products and our Caddy brand, a leading provider of proprietary cup holders, trays, and other products sold into our strategic markets of motion picture exhibition, entertainment, and sports venues as well as other non-strategic markets. We also resell third-party technologies, including but not limited to items such as screens, projectors, and servers. |
| 3) | We resell third-party products as part of our project management services or a la carte. These include technology products such as screens, projectors, servers, and FF&E (furniture, fixtures, and equipment). |
| 4) | Finally, we have a set of recently introduced products that we believe have the potential to be disruptive to the movie theater, entertainment and sports venue industries. For example, our operations enhancement and theater management solution includes a software-as-a-service (SaaS) platform combined with other technologies that allow theater operators to improve their quality control. We have also developed a translator product and service that will enable moviegoers to watch a movie in any language that the film is available in, all in the same auditorium through a set of augmented reality glasses. Another example is a proprietary mobile cart we’ve developed to enable eSports and gaming in movie-theater auditoriums. |
Industry and Revenue Drivers
Our Industry
Trends
In 2019, the movie industry reported the second highest domestic box office ever at $11.4 billion. In 2020, the domestic box office declined to $2.3 billion due to pandemic-related shutdowns, while 2021 was a tale of two halves. The first half maintained the slow level of domestic box office sales, with movie studios unsuccessfully experimenting with direct-to-streaming movies through their proprietary streaming services. In contrast, the second half began to see a recovery in the market with the easing of pandemic-related restrictions. This return to a more normalized environment led to a broader and more diverse slate of movie releases, more tentpoles (blockbusters) from a wider range of distributors, and movie studios cutting back on or abandoning the direct-to-streaming model. The domestic box office was $4.4 billion with significant momentum going into 2022. Through July 31, 2022, the domestic box office has continued to expand, estimating $7.0 billion with several tentpoles due to be released during the second half of the year.
Convenient and Affordable Form of Out-Of-Home Entertainment. Movie-going continues to be one of the most affordable forms of out-of-home entertainment, with an estimated average ticket price in the U.S. of $9.57 in 2021. Movie theaters continue to draw more people than all theme parks and major U.S. sports combined according to the Motion Picture Association of America.
Increased Importance and Growth of International Markets. According to the Motion Picture Association of America, international markets continue to be an increasingly important component of the overall box office revenues generated by Hollywood films, accounting for approximately 73% of 2019 total worldwide box office revenues.
Introduction of New Platforms and Product Offerings that Enhance the Movie-Going Experience. The motion picture exhibition industry continues to develop new movie theater platforms and concepts to respond to varying and changing consumer preferences. In addition to changing the overall style of, and amenities offered in, some theaters, concession product offerings have continued to expand beyond more than just traditional popcorn and candy items. Many locations now offer a full dining and entertainment experience that includes appetizers, entrees, desserts, alcohol beverages and/or healthier snack options for guests.
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