Moving iMage Technologies, or MiT, a digital cinema firm, plans to launch its IPO this week. The company expects to raise nearly $10.5 million from the offering, which is priced at $3.00 per share.
The IPO is slated for July 8 and the shares will be listed on the NYSE under the symbol “MITQ.” Boustead Securities is the managing underwriter of the IPO. (See IPO Calendar on TipRanks)
The net proceeds from this transaction are expected to be approximately $8.232 million after the deduction of approximately $2.268 million offering-related expenses.
The company plans to use the proceeds to venture into new markets and look for better growth opportunities. Furthermore, the proceeds will aid MiT to pursue strategic “accretive” acquisitions.
With a market capitalization of $27.5 million, Moving iMage Technologies has been in operation since 2003. Since then, the company has sold over 17,000 integrated systems throughout North and South America.
The company has raised $1 million in capital from Agility Capital, a venture that provides senior finance solutions to venture capital-backed private companies in the Western United States.
More about Moving iMage Technologies
Based in California, Moving iMage Technologies is a designer and integrator of custom technology and equipment for a wide range of applications in the entertainment space. The company focuses on markets such as commercial cinema, theater construction and multi-use auditoriums.
MiT’s business activities have been severely hampered since the outbreak of the COVID-19 global pandemic. Due to the ramifications of the pandemic, the company experienced delays in product orders and also faced a few project push-outs, which led to sales and earnings figures decreasing.
Going by the numbers, sales decreased from $20.8 million in 2019 to $16.4 million in 2020. Also, pro-forma net loss increased to $902,000 in 2020 from a net loss of $394,000 in 2019, due to lower revenues.
In response to the pandemic, the company took a few key actions to conserve funds through cost cutting and the delay of some non-essential capital investments.
The company’s customers include major North American theatre chains – Cinemark (CNK), AMC Entertainment (AMC), Regal, National Amusements, and Marcus (MCS) – as well as two Mexican chains – Cinepolis and Cinemex – and many other regional chains such as Alamo Drafthouse, Harkins, and Pacific Arclight, among others.
Now, with the COVID-19 situation coming under control and leisure moving to the forefront, the cinema industry is expected to witness cyclical growth and increased capital spending. Commercial cinemas are expected to add more screens, replace first-generation digital projectors, and engage in other upgrades, in order to give a better experience to the viewers.
MiT is trying to develop a full suite of exclusive products, including new, higher-margin proprietary goods to match today’s cinema needs. MiT’s Caddy Products Division announced a number of products intended to support the reopening of theaters, ensure social distancing and sanitization, and boost customer as well as employee safety. These efforts should help the company attain industry leadership going forward.
Bottom Line
MiT aims to expand into new markets such as Asia, Europe and South America, in a bid to capitalize on the growing movies & entertainment market.
Per a report from Grand View Research, Inc., the global movies & entertainment market is estimated to reach $114.93 billion by 2025.
MiT should gain from this rising worldwide cinema market trend, given its ongoing initiatives and strong portfolio.
Furthermore, MIT’s unique translation products as well as other audio and visual goods are language-independent and could be smoothly integrated into new countries and regions, thus helping it to expand the customer base of the company.
On a more upbeat note, several larger theater chains have indicated plans to reopen, though with limited occupancy. This should help MiT to regain business and increase sales figures in the coming days.
Regardless of the above, the company still remains vulnerable to the risks associated with the global COVID-19 pandemic, which does not look to be abating anytime soon.
Therefore, it is advisable for investors to look into the fundamentals as well as the risk factors before investing in this IPO.
Disclosure: Shalu Saraf does not have a position in Moving iMage Technologies, Inc. stock.
Disclaimer: The information contained herein is for informational purposes only. Nothing in this article should be taken as a solicitation to purchase or sell securities.
