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Description of Business
−Removed: We are a leading provider of technology, products, and services to movie theater operators and sports and entertainment venues.
+Added: We are a key 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.
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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.
−Removed: 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.
+Added: Examples of these products include our ADA-compliant accessibility products 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.
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Industry and Revenue Drivers
−Removed: In 2019, the movie industry reported the second highest domestic box office ever at $11.4 billion.
−Removed: In 2020, the domestic box office declined to $2.3 billion due to pandemic-related shutdowns, while 2021 was a tale of two halves.
−Removed: 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.
−Removed: In contrast, the second half began to see a recovery in the market with the easing of pandemic-related restrictions.
−Removed: 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.
−Removed: The domestic box office was $4.4 billion with significant momentum going into 2022.
−Removed: 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.
+Added: In 2021, the return to a more normalized theater environment led to a broader and more diverse slate of movie releases compared to prior year’s lower pandemic-related movie releases, more tent poles (blockbusters) from a wider range of distributors, and movie studios cutting back on or abandoning the direct-to-streaming model.
+Added: The domestic box office for 2021 finished at $4.5 billion with significant momentum going into 2022.
+Added: With studios re-focusing on exclusive theatrical releases, 2022 continued to see the domestic box office recover, reporting $7.4 billion in sales.
Convenient and Affordable Form of Out-Of-Home Entertainment .
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According to Film Journal International, (i) the first machines into the market were Series 1 projectors for Digital Light Processing (“DLP”) licensees, (ii) some 20,000 projectors of all brands were installed before Series 2 machines came on the market in mid-2010 and (iii) the assumption for a projector’s life span is 10 years.
−Removed: We estimate that approximately 3,100 Series 1 projectors will need replacement over the next four years as obsolescence sets in and upgrades become the new normal to stay competitive.
+Added: We estimate that approximately 1,500 Series 1 projectors will need replacement over the next three years as obsolescence sets in and upgrades become the new normal to stay competitive.
Laser projectors.
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However, new builds, upgrades, and refurbishments of new stadiums and arenas have not recovered as quickly as the movie theater industry..
−Removed: In addition, an influx of government grant funds is being utilized by cinemas resulting in additional MiT sales.
Products, Enterprise Software Solutions and Technical Services
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Our staff of mechanical and electrical engineers work closely with end users as well as OEM manufacturers, and can participate in every phase of the process from conceptual design and development to production on most any scale.
−Removed: MiT personnel have designed, specified and
−Removed: installed thousands of commercial cinemas, post production, screening and high-end residential rooms and have been involved in the digital cinema conversion rollouts of clients such as AMC, Cinemark, Cinepolis, Cinemex, Reading, Metropolitan, Hollywood, Regal, Syufy, Harkins, and other smaller circuits.
+Added: MiT personnel have designed, specified and installed thousands of commercial cinemas, post production, screening and high-end residential rooms and have been involved in the digital cinema conversion rollouts of clients such as AMC, Cinemark, Cinepolis, Cinemex, Reading, Metropolitan, Hollywood, Regal, Syufy, Harkins, and other smaller circuits.
New Business Initiatives
−Removed: We continue to explore new lines of business complimentary with our core business, with a focus on entertainment technologies and complimentary products and services.
−Removed: Multi-language ADA — The Americans with Disabilities Act (ADA) requires theaters to have provisions for seeing- and hearing-impaired patrons.
−Removed: Even before the 2016 requirement date, these devices have been available;
−Removed: however, in partnership with Hana Media and Epson America, we have recently productized and begun marketing a new system which combines full ADA compliance with a multi-language capability.
−Removed: This unique system uses AR (Augmented Reality) glasses to allow any language captioning to be displayed on the glasses, permitting non-native English -speaking patrons the ability to fully enjoy the cinematic experience.
+Added: We continue to explore new lines of business complementary with our core business, focusing on entertainment technologies and related products and services.
+Added: MiTranslator — beginning in 2016, the Americans with Disabilities Act (ADA) required theaters to have provisions for seeing- and hearing-impaired patrons.
+Added: In 2022, we acquired the ADA compliance product line from USL, giving MiT ownership of the leading product for theater ADA compliance.
+Added: However, in partnership with Hana Media and Epson America, we recently productized and began marketing a new system targeting a much larger audience that is not proficient in English.
+Added: The MiTranslator, which combines full ADA compliance with a multi-language capability, is a unique offering accessible through a mobile application on a user’s mobile device or through AR (Augmented Reality) glasses to allow any language captioning to be displayed on the glasses, permitting non-native English-speaking patrons the ability to enjoy the cinematic experience more fully.
This system also allows cinemas to reach out to what we believe is an underserved audience base in their communities.
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MiT is the only company that has installed and commissioned the three leading DCI Directview LED cinema systems (“Samsung ONYX Cinema”, “LG DVLED Cinema” & “SONY Crystal LED”).
−Removed: Additionally, MiT utilizing our inhouse design fabrication and manufacturing has designed and installed custom DirectView LED Screen frames for two of those installations.
−Removed: We believe that direct view LED is disruptive to the current front projection paradigm and offers several benefits to exhibitors and filmmakers which we believe will drive demand for these systems.
−Removed: While LED displays have been around for years (e.g., the giant displays in virtually every sports arena), the constant miniaturization of the technology has now made cinema exhibition possible.
+Added: Additionally, MiT utilizing our in-house design fabrication and manufacturing has designed and installed custom DirectView LED Screen frames for two of those installations.
+Added: We believe that Direct View LED is disruptive to the current front projection paradigm and offers several benefits to exhibitors and filmmakers which we believe will drive demand for these systems in the years to come.
+Added: While LED displays have been around for years (e.g., the giant displays in virtually every sports arena), the constant miniaturization of this technology has now made cinema exhibition possible.
Direct View LED screens utilize a technology that is an alternative to the century-old streaming of projector light thrown onto screens;
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These emissive displays can deliver dramatically improved contrast for a dynamic image range substantially in excess of projection capabilities.
−Removed: Also, the LED is ideal for displaying High Dynamic Range (HDR) which we believe at present is the main video aesthetic enhancement being used to boost audience experience in cinemas.
+Added: Also, LED is ideal for displaying High Dynamic Range (HDR) which we believe is the main video aesthetic enhancement used to boost audience experience in cinemas.
Since the LED consumes no power when they are switched off to ‘illuminate’ black, this saves on electricity versus the always-on energy of laser projection or xenon lamps.
−Removed: LED panels will last up to 100,000 hours or 15 years, whereas projectors have a lifespan of barely half that.
+Added: LED panels can also last up to 100,000 hours or 15 years, whereas projectors have a lifespan of barely half that.
Strategic acquisitions of complementary products and technologies.
Our first acquisition was the acquisition of Caddy Products LLC (“Caddy”) which closed effective January 1, 2019.
−Removed: Caddy products are utilized in over 270,000 facilities throughout more than 91 countries worldwide.
Their markets include cinema, sports, grocery, performing arts, worship and retail industries.
−Removed: Products include patented cup holders and trays built into luxury cinema seats, cinema step and aisle lighting, and cups, trays, and advertising displays used in large sports arenas.
+Added: Products include patented cup holders and trays built into luxury cinema seats, cinema step and aisle lighting, cups, trays, and advertising displays used in large sports arenas.
Caddy products are protected by 21 active and 6 pending patents.
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Sales and Marketing
−Removed: We market and sell directly to theater exhibitors, as well as through certain domestic and international value-added resellers.
+Added: We market and sell directly to theater exhibitors, and through certain domestic and international value-added resellers.
We have developed ongoing customer relationships with a large portion of the theater owners in the United States and a number of the major theater owners internationally.
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Trade accounts receivable from these customers represented approximately 19% and 48% of net receivables at June 30, 2023 and 2022, respectively.
−Removed: No customer accounted for more than 10% of the Company’s revenue for the year ended June 30, 2022.
−Removed: One customer accounted for 23% of the Company’s revenue for the year ended June 30, 2021.
+Added: No customer accounted for more than 10% of the Company’s revenue for the years ended June 30, 2023 and 2022.
While we believe our relationships with such customers are stable, most arrangements are made by purchase order and are terminable at will by either party.
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MiT has 28,000 square feet of office, warehouse and in-house manufacturing/assembly space in Southern California, which is home to our corporate offices, engineering, distribution, integration as well as service and support divisions.
−Removed: Our primary location is augmented by a global network of service partners and OEM manufacturers.
+Added: A global network of service partners and OEM manufacturers augments our primary location.
We develop, manufacture, design and assemble the key elements of the theatrical systems we offer.
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These proprietary parts include custom pedestals, enclosures, racks and specialized lighting and control equipment.
−Removed: Fabrication of a majority of other parts and sub-assemblies is subcontracted to a group of third-party suppliers.
+Added: Fabrication of most other parts and sub-assemblies is subcontracted to a group of third-party suppliers.
We believe our significant suppliers will continue to supply quality products in quantities sufficient to satisfy our needs.
We inspect all parts and sub-assemblies, complete the final assembly and then subject the system to comprehensive testing individually prior to shipment.
−Removed: We believe that our quality control procedures and the quality standards for the products that we distribute or service have contributed significantly to our reputation for high performance and reliability.
+Added: We believe that our quality control procedures and the quality standards for the products we distribute or service have contributed significantly to our reputation for high performance and reliability.
The inspection of incoming materials and components as well as the testing of all of our products during various stages of the sales and service cycle are key elements of this program.
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We believe our success will not be dependent upon trademark protection, but rather upon our engineering capabilities and research and production techniques.
−Removed: Our sales backlog at June 30, 2022 was approximately $10.03 million, which represented orders currently planned to be shipped substantially by December 31, 2022.
+Added: Our sales backlog at June 30, 2023 was approximately $12.02 million, which represented orders currently planned to be shipped substantially by January 31, 2024.
Backlog at June 30, 2022 was $10.03 million.
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If the agreement is terminated, once MiT and the customer are released from all their future obligations under the agreement, all or a portion of the initial fees that the customer previously made to us are recognized as revenue.
−Removed: Specifically, as a result of the effects of the COVID-19 pandemic, a significant number of our customers have temporarily ceased operations and others have cancelled or pushed back the delivery of pending product orders and/or delayed the start of scheduled theater refurbishing and construction projects.
The markets for our products are highly competitive.
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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.