Moving iMage Technologies, Inc. (MITQ) Earnings Call Transcript & Summary

Greetings, and welcome to the Moving iMage Technologies and Sandbox Investor Call.[Operator Instructions] As a reminder, this conference is being recorded. I would now like to turn the call over to your host, Brian Siegel. Thank you. You may begin.

Thank you. And we apologize for the delay. We had some technical difficulties with the slide deck, but everything should be up and running now. Thank you for joining us with the recent announcement of our expanded strategic partnership with Sandbox for the sports market. We thought this would be a good time to give investors a little bit of a deeper look into that partnership and help them understand the market and Sandbox's business model and strategy as well. Just going to the second slide here is our safe harbor, as most of you are used to seeing for earnings calls. So basically, what it says is, don't believe anything we say on here and refer to our filings. With me today are Jose Delgado, Executive Vice President of Sales and Marketing from Moving iMage Technologies; and Rick Starr, the Founder and Chairman and CEO of the Five Agency and Sandbox. Sandbox is currently a division of the Five Agency and will soon be spun off into its own separate company. So now I'm going to turn the call over to Joe, who will take it from here. Joe, go ahead.

Thanks a lot. Thank you all so much for your patience. We appreciate that. We believe this will absolutely be worth your while, and we look forward to taking any questions after the presentation. Let's take a look at our partnership here at a glance, starting with us moving into technologies. We are a leading provider of technology products and services for out-of-home entertainment. Our focus is on cinema and venues, sports venues, and other types of out-of-home entertainment venues. And of course, the reason that we're gathering here today is to delve a little bit deeper into our evolving association of partnership with our friends over at Sandbox. And we're very excited about the opportunity that we've had working together. And as we evolve, Rick is going to tell you a little bit about just how the eSports play in the cinema is a very organic and natural fit. He has basically developed what we call the little of eSports by bringing amateur eSports, not pros, but the amateurs, into the local cinemas. And as we like to say, the modern cinema auditorium is basically an eSports arena waiting to happen, and that's what Rick has been incredibly successful in gathering all the components, starting from technology all the way through the business and the value proposition. If you can go to that next slide, Brian, if you would, please. This will give you an idea of the spaces that we're in, i.e., Cinema. Just a brief overview. There's roughly 42,000 screenings in North America. The box office, hopefully, you guys have known that it is very much on the way to normalization to pre-COVID. Just quickly coming off of CinemaCon, which is our biggest convention of the year, 2 weeks ago, the outlook and the optimism and enthusiasm for our industry going forward is tremendous. Our box office has come back almost to levels pre-COVID. And with that, there is a tremendous opportunity for technology refresh as digital projectors are now evolving and almost going exclusively to laser light technology which allows the exhibitor to not only have that better, brighter, crisper picture but there will be efficiencies in energy savings as well going forward. Along with that, we have some disruptive and proprietary SaaS and services in development that we're very excited about. Also in the other sports venues, that's your large professional league, NFL, NBA, MLB, NHL, where CADE, which is our brand in spite of the post-pandemic very slow thaw, we still remain a market leader. In that, we have, in the future, some announcements with respect to the opportunities there with some proprietary, disruptive products, both SaaS and hardware. And that leads us into the eSports play. And again, as I mentioned, we're very excited about the way eSports fits into a commercial cinema environment. Rick and Sandbox have done a tremendous job of fitting the business proposition or the value-add proposition very neatly into the way a commercial cinema operates. And of course, you'll be getting into that in more detail. But if I could go to the next slide, just tell you a little bit about our partnership. MIT and Sandbox have agreed to a multiyear multimillion-dollar minimum purchase exclusive for our move eSports, ambulatory cart, gaming systems, and production systems. We have become a minority or we will become a minority shareholder when Sandbox spins off from its parent, the Five Agency. And we will have a seat at the Sandbox Advisory Board for a minimum of 3 years. We will also be providing a 3-year loan to Sandbox, and we will co-own IP-related to equipment and technologies. So I think with that, let's turn it over to Rick. Rick? Take it away, sir.

Thanks, Joe. Thanks, Brian. Hi, everyone. Nice to be here with you all today, and I appreciate everyone coming on to hear about the partnership with MIT and also to a little bit about Sandbox. So if we can go to Slide 5, I'll just get right into it with the intro to Sandbox. My name is Rick Starr, I'm the CEO and Founder of the 5 Agency in Sandbox. Sandbox is, as Joe mentioned, a little leak for eSports. That's on Slide 6. We say that because it's probably the easiest way for people to put it together in their heads. But essentially, we convert a movie theater screen into an eSports experience by putting 6 gaming stations up in front of the screen. All of those signals are sent through a production unit up onto the screen, and I think we have some images and some video, potentially video, later in this deck for you to see as to what the experience is like. But it creates that fun engaging experience around gaming that kids get when they play any other traditional sport like baseball or Poker, football, or soccer. So it creates that environment, but it creates it inside the 4 walls of any auditorium in any theater. If we can go to Slide 7, Brian, I think that -- I'm not sure if that's the video or if that's still from the video. Yes. Unfortunately, it's not playing. Okay. No worries. Can we send a link out to the video so that they can all see this. I don't know the time. They don't have to look at it now. I can explain it. So that's the MIT movie sports system that we codesigned specifically with [ Frank Tesrom ] MIT with the help of the rest of the group over there. But Frank and I have worked many, many, many, many hours perfecting the system on both sides. Our teams have been involved, but getting this so that it is an easy integration into theaters. So for anybody that's technical, we run this with 2 Cat-6 cables going into the projection booth and 120-volt plug, just a standard plug up by the screen. So we've made it extremely easy to implement in any auditorium. And 1 of the 2 Cat 6 drives the video signal up to the projector. The other one brings the Internet back down from the booth so that they can play online. And all of these, we grow the 2 sides, you'll see 3 screens on the left, double screen in the middle and 3 screens on the right. Those are 2 teams of 3 that compete against each other in organized leagues, eSport is traditionally known for tournament play and not so much for leagues. There are a couple of [ Proisports ] that operate league systems, more strategic league systems. But for the amateur level, it's traditionally only been tournaments. Play-in tournaments. And we are creating a league system that doesn't exist for amateur sports. So we can move on to -- my video started when I did it, but all right. So we can move on to Slide 8, Brian. So esports as an industry has a ton of attention around it. Before the pandemic, it was wildly popular. Since the pandemic, it has become even more popular because, if you remember, in the early stages of the pandemic, there was really nothing to watch on TV. Everybody kind of ran through their Netflix accounts and had seen everything that they could possibly see on there, and networks were looking for content. And some of the content that they picked up was e-sports. So all of a sudden, you had ESPN and CBS recently, and NBC, were running eSports tournaments on broadcast TV. So that helps from an adoption standpoint publicly because we used to have to explain what eSports was. And for those of you that make Pulmot know, it's simply competitive video game play in its simplest terms. And it could be played on lots of games, not every game can be played as an eSport but many video games can be. So literally generates about 2.6 million players per year. Esports currently only has about 4,600 total in its entire U.S. ecosystem. That is because there's really no infrastructure built from an amateur level. There's no place for these kids to go out and play. And the dirty fast explanation of that is eSports was built as a marketing engine from the game publishers. So you take a game like a very popular game in esports like League of Legends. It's probably the most popular eSport and the publishers wanted to create a pro league so that they had an aspirational value or something for kids to look forward to trying to become a pro, and they used it for marketing to drive more players to the game. They didn't really care about anything underneath it. They just grabbed good players from tournaments like play-in tournaments, turned them into pros, and said, "All right, you can play on these organized teams," and then they sold franchises to these teams. So eSports was built top-down as opposed to most traditional sports, which were always built bottom-up where a bunch of kids started playing in a field, then all of a sudden, you have Sandlot baseball, then you have regional baseball and then eventually, it turned into a professional game as it grew in popularity. eSports is the opposite thing. It was built because the game was popular, and so they built a Pro system to support the game and to create future players in the game, but they didn't build any infrastructure underneath it. So if we move to Slide 9, almost 40% of everybody on the planet plays video games. That includes people that don't have access to power or technology. So when you filter those numbers out, it's a much higher percentage of people that actually have access to the Internet and to tech that are playing video games. And that includes all age ranges, like babies play video games. Grandmas play, my mom plays Candy Crush for 2 hours a night on her phone while she's watching TV. But anybody from a casual fan to an avid fan of esports now understands the video game play market. And really, it's almost everybody. If you break these numbers down and you look at kids in the U.S. between 8 and 18 years old, it's 98% of kids in that age range in the United States play video games regularly, not once a year, not once a month, not once a week, regularly, almost daily. So it's almost every kid in the U.S. plays video games. Now globally, that equates to about 3.1 billion gamers. Of that, the esports fan-based for the Pro system is about $557 million. And so I'm going to tell you that we don't target esport stands specifically, we target the bigger market of gamers for Sandbox. And that's a huge piece of why we've been successful where so many others have failed in trying to get into the space and trying to make this work for movie theaters. Because that broader audience brings in -- again, I like equating this to Little League, you want the kid that's hitting home runs at 6 years old, and you also want the kids that's out there picking his nose in the outfield, right? So we get the nose pickers as well as the home run hitters. And that's the biggest difference in driving traffic to the theaters, and that's why we've also had such success in getting features to adopt this program.

[indiscernible] we appreciate your inclusion.

Yes, yes. It's highly inclusive as well. I don't -- typically, when we're blowing through these presentations as quickly as we can to get everybody involved or get everybody in understanding we don't talk about the inclusion piece. But eSports is one of those things where gender doesn't matter. Age, a lot of times doesn't matter. Ability doesn't matter, physical ability doesn't really matter. It's cognitive ability and reaction types. And so that specifically includes groups like kids with a pension deficit disorder who focus on video games really well. My niece has Asperger, and she is a phenomenal video game player, right? So there's groups that don't traditionally participate in team sports that can participate in this, and parents that don't traditionally want their kids or the kids don't want to participate or the parents don't want them to participate in traditional team sports. Now they have this because this speaks to their kids. And it's also the popular kids, right? Like if you look at ProSports, almost every pro player is a video game player. And sometimes they're playing even competitively at the pro level in esports as well. There are several examples of that. But it's a massive market, $98 billion. It's much bigger than the film industry, certainly much bigger than most industries, bigger than film, bigger than music. It's bigger than anything from a popularity standpoint. And even in the U.S., where you wouldn't -- in Asia, esports is like massive. But even in the U.S., eSports is the second most watched sport next to the NFL, which seems crazy, but it's an actual true statistic. This is from statistics in this infographic. So we can move on to the next one, Brian. Like I said, leading in from the last slide, the market is huge. There's 59.5 million kids between the ages of 6 and 17 in the U.S., and we've established that in that each group, it's almost 100% of those kids are addressable when it comes to this because they're all playing video games other than about 2% of them. There's just under 5,500 indoor theaters in the U.S. and Canada that we can use. I'm a cinema owner as well. So my family, we own 4 movie theaters, which is how we had some insight into designing the program to make it work for theaters. But we understand the model enough to know that -- and we've done enough testing to know that not all theaters are going to do this. There's art houses where they just don't draw this audience or don't want this audience. They don't want kids in the building. So not all of those screens or not all of those locations are available to us, but most are. And to date, we've got about 2,500 on the waiting list in the U.S., Canada, and Mexico, and even a growing number internationally as well. So there's a huge interest in this from the theater side. And we're thrilled that there is because we want to get to them to get this program going and get it out there as fast as we can. Our potential gross league revenue alone is over $1 billion. And that's just from the league. That doesn't include sponsorships and all sorts of other revenue targets that are part of the program. But just from league registrations and camp registrations, a lot of the revenue comes from running camps as well. In the times we're not running leagues, this is just a massive opportunity for theaters. If they could put another film studio and that was going to produce $1 billion a year in revenue for them, they all sign up and take their films. That's what we're seeing here. They're all signing up to take this program. This infographic came from the ESA, which is the gaming, the entertainment software, I forget what the A stands for, but I think association, similar to the NATO, which is the National Association of Theater Owners, but the ESA puts out these stats every year, 66% of Americans play video games at least weekly. Again, if you go to that, from 8 to 18, it's like 98%. But of all Americans, 2/3 of all Americans are playing video games every week. I mean that's a massive adoption rate. If we had 2/3 of Americans going to the movie theater on a weekly basis, everybody went on a movie theater because we'd all be rich. So I think that's, again, some of the stats that I think people find interesting. It doesn't really matter to us, but it plays into the perception of the industry is 48% of the players are female and 52% are male. So it's close to a 50-50 split. And I think most people would always think that gaming is male dominated, but it's not. It's pretty evenly split. 70% of men and boys play video games, 62% of women and girls play video games. So it's again, just restating the obvious here, but it's a massive opportunity for theaters to get involved in video games. All right. Brian, we can move on. Some of the things that helped us accelerate where there was a company called Super League, and they are publicly traded as well. Super League came out pre-pandemic in around 2016, I think they IPO-ed in 2019, pre-pandemic, and they were trying to accomplish a similar model. They have partnered with Cinemark and they were trying to run esports in theaters. They were the first group I reached out to when I wanted to put esports into my own theaters. I saw their plans, saw how they were going to execute, and realized it wasn't going to work. And I think that's what a lot of theaters found. I think their timing was a little early. And I think on top of that, they didn't really have internally anybody that operates at theaters to understand what would make this work for theaters. They were mainly esports and from other industries, and they wanted an experience that didn't fit the theater model. So one of the things that happened during the pandemic was they went away. They stopped doing live events entirely and went to an online consecration model, opening the floodgates for us to come in and actually do this the right way. Some of the other things that happened during the pandemic were all the challenges that the theaters faced. The theaters faced shorter release windows. We went from 90 days down to about -- right now, it's at about 45 days for quite a while, it was about 17 to 30 days, but it's creeping back up to about 45 days. But those shorter release models mean if you get 100 good films a year, and you used to play them for 90 days, and now you're playing them for half that time. Really, you've got the equivalent of about 50 releases because you only have them for half as long as you used to have them. And they only play for half as long as they used to. So even though those later weeks aren't as big in gross production, revenue production, or any of the rest, if you had a building that has 8 or more streams in it, now all of a sudden, you've got this drought of there's just not enough content to fill all your screens. So we have utilized that challenge for theaters in taking care of some of the excess capacity that they now have due to COVID and utilizing that for esports. We don't expect that the release calendar or the release window is going to change much beyond 45 days. There will be certain films, maybe 2 or 3 a year that extend well beyond that like an Avatar because it's just one of those major tent-pole films that goes forever, top-gun major tent-pole film, ran forever. But there's not going to be like we had back in the '90s, and it's not going to be a Titanic that runs for 12 months in theaters before it goes to video. We just aren't going to see that again. Audiences won't allow it. studios won't allow it, and it's just there's a probably a top of 120 days total that I think you'll ever see a film staying at a movie theater. So now all of a sudden, all of the theaters that have 8 or more screens all have all of this at that space. nothing to put in there, and they're looking for more content and more options. This is where we come in. So our offering to the theaters on the next slide is Slide 12. We do all the marketing for the theaters. We know one thing from operating theaters in that they don't have marketing departments traditionally. Now you see a little bit more with some of the dine-in theaters that have become better marketers. Some of these theaters have family entertainment centers built in, where they have arcades and bowling and other attributes that they have to drive traffic to that the studio films don't drive traffic in. They've got some marketing. But for the most part, theaters don't know how to market. So we do all the marketing for them to get people in the building, and they certainly don't know how to market to this audience because they've not ever had to market to an esports audience. And then we operate the leads, again, from owning theaters and testing us in my own theaters, I realized very quickly that the second a popcorn popper goes down or the projector goes down in Auditorium 1, and you're in Auditorium 6. It's all hands on deck, so they come and pull everybody they can from running gaming into these other problems that are going on in the building. And all of a sudden, you've got nobody in the auditorium with about 30 kids that are trying to play video games and nobody running that operation. So we staff all of the leagues that we operate. We staff all the camps that way we can do all the compliance checks and make sure that all of the staff is certified to work with kids and has had all the appropriate background checks, which theaters typically also don't do because they're not technically working directly with kids, they're working around kids, but not with them. So we have a much more extensive process in vetting the employees and making sure that the kids and the parents and the families that come in are all safe with our people, but also we make sure that this fits into a current operating model for a theater where, again, they don't know how to market. They really don't know how to run esports leagues. So we're taking all of those pain points away and managing that on our side. And then the tech solution, like I mentioned before, Frank and I spent -- I can't even count how many hours we spent developing the system, trying to refine it so that it worked for theaters. And you'll see if you can see in this picture, it's a little bit small. But at the bottom of each of those carts is casters, they're wheels. They're all on wheels. These things roll in and roll out of the theater. The chairs are all on wheels. They all roll in and roll out of the theater. So if you want to run [ Matneyt ] at 4:00 p.m., run esports at 7:00 p.m., and then run a late show at 9:00 p.m., you can do it in this format because we can wheel these things in and wheel them out, they plug into 3 cords that get plugged in, and you plugged the systems together, and you're off and running. It is almost as simple as it could possibly be to get it in there, get it out of the way when you need to. All right. Next slide, please. Right. So the value proposition for the theaters, I've talked a lot about how simple this is for the theaters to say yes. We've taken away most of their issues and concerns. But here's some simple number or here's some economics for them to think about when they're looking at this. We do about 30 kids per lead. We'll sign up -- the top line is 30. We do anywhere from around 20 to 30 kids per league. We will run around 5 weeks or 5 leagues per week. We run leagues 40 weeks out of the year. We don't run them every week, but we do run them about 40 weeks a year. So there's 4 seasons of 10-week leagues and 4 seasons a year. So that works out to about 6,000 kids a year that are signed up and playing video games in these theaters. Now I want you to think about this again, like Little League, where it's not just those kids, right? So that's the number of people we're putting into the seats, but they're bringing their parents, they're bringing their siblings. Sometimes they're bringing friends, uncles, grandma, grandpa, whoever. So these theaters are getting filled in these off-peak times because we run in mostly off-peak times for theaters. So we don't run Friday or Saturday night crimes, we don't get in the way of their traditional business operating model. We try and stay into the times where we know they're not busy and where they need to fill these extra seats, all these empty seats. Other things, again, we take care of the staffing, the marketing. We do community development. So our people are operating leagues maybe 15 hours a week, and then the other 5 hours, we pay them. There's a couple of part-timers in the market in each theater. We pay them 5 hours a week for community development. That means they're going out to the schools. They're doing outreach with community groups, they're meeting with moms groups, PTAs, et cetera, to drive awareness to the program and to drive more kids into leagues because we don't want to stay at 5 leagues per week. We'd love the more leads we run, the more profitable it is for us and for the theaters. There's no opportunity cost because we're taking dead time anyway. There's no rental cost because the theaters buy the equipment, so they can use it whenever they want whenever we're not around. That means they can run Karaoke. They can run -- I don't really care. There's all sorts of things you can do with the equipment. That's not just gaming and esports. You can do business presentations. You can do streaming events. You could do all sorts of stuff. And there's no infrastructure cost, as we mentioned in the theater. We were in a couple of low voltage Cat tick lines from the booth down to the floor, and we use existing power that's on the floor. And that's it. There's nothing else that they need to run in order to make this work in an auditorium. All right. Next slide, please, Brian. So the financial returns, this is how it looks for the theaters. On average, the theater is going to do about $150,000 a year in revenue. They keep 40% of that number, not atypical from a blockbuster split that they would see, and certainly better than other competing alternative content. I don't know that I'm allowed to discuss other splits because I'm a theater owner, but it's definitely more competitive than most alternative content that you see from other providers like Fab. They're paying an upfront equipment cost of about $43,000. Their ROI is about 8 months on the equipment. So the theaters are very happy with this. And because the equipment cost is about $43,000, if you think about it for any theater that has an arcade in it, that's not dissimilar to one of the super cool new video games that they would put in their Arcade. Okay. Next slide, please, which is 15. This is kind of how it all works. This is how we do it for theaters. This is sort of the calendar view of how this works for them. So they send us an e-mail, and we schedule a call. From that call, we do a data analysis on each theater. We do a real deep dive, things we look at that are the most important to us are how many other theaters are around them and how many schools are there and how many kids in those schools? Once we have those numbers, there's other things that are important to us from a marketing standpoint but don't really matter to us from a market standpoint. So we do a whole bunch of other deep-dive things into what comparable businesses are around what other partnerships could there possibly be in the area, look for potential sponsors for the longer term. Anything else that could denote an opportunity in the market, we look at. Then we book a live demonstration. Most of that imagery that you've seen is from live demos that we've run. We run about 45 of them, and we'll get into that in a minute. But that demo, we take about 3 weeks to market the event, so from the demo to when we actually run the events about 3 weeks to a month, depending on how long it takes us to get the marketing set up, but we do run the marketing for about 3 weeks to drive traffic to the theaters. There's some metrics coming up as well about the 5 theaters that we're running for, Melco right now and what their numbers are. as far as registrations go to these free events, these demos. We bring our own team. We bring our own set of equipment. We go in. We set up the theater. We run a demo day. We start signing up. So this is in steps 5 and 6, this is almost simultaneous step 5 and 6. We run the demo day, and we get league sign-ups in the room. So we're signing kids up for leagues or camps while they're there at the demo trying this thing out, we were signing the parents up. We don't really sign kids up, but we signed the parents up. We signed their kids up. And we're taking payments in the room. They're registering their kids. They're paying us. And then that triggers basically the next day once we hit a certain metric, which we've not missed of registered players that trigger an equipment order to MIT. So this is where MIT's piece comes back in. So then MIT gets working on the equipment. They ship it 6 weeks later, and we start early. And then from then, once we start our league, that's when we put employees in the market, we've got people there on the ground that are doing community outreach and other things. That whole process in an ideal situation, would take about 95 days. In reality, it's probably closer to 120 days, but still from day 1 from reaching out to us today to month 4, you can have your theater up and running with esports. So it's not an overly long process as well. Okay. Next slide. So here are some of the demo day metrics and some of the rollout goals just so that we have some numbers for everybody to see. These 5 locations that we're running for Melco right now, there's 2 in Tennessee, there's 2 in Arkansas, and one in Mississippi. We've registered in 10 days, over 3,500 people to show up to these events. It's over 700 locations that I looked at the numbers this morning. We're nearing 800 a location on average for these events. So we're registering tons of people to come into the theaters to test out this gaming thing. And when we get them in the room, about 50% of those people will show up. So if we register 800 people, about 400 of them show up, and then we get close to 20% of them will sign up for leads. So that's about 80 people. We really need about 90 to make it profitable for Sandbox. So we spend the next couple of weeks while we're waiting on the equipment to show up, doing remarketing, retargeting and getting additional sign-ups to get to that 90 number. Our 12-month goal is that we get to around 100 locations. That takes a little bit of capital, and we're about to enter into our next round of fundraising, which is exciting for us, but we're very much looking forward to getting that rollout to about 100 locations within 12 months. Again, I had already talked about this, but there's about 2,500 North American locations on our waitlist and these are locations, not screens. Joe mentioned theater screens before. This is locations, not auditoriums. Auditorium count is much higher, obviously. And about 500 international locations, not including North America. So North America, we consider just Mexico, Canada, U.S. and Puerto Rico and some of the U.S. territories. But yes, it's just massive numbers of theaters that are waiting to get involved. So going to 100 locations for us is a great goal to reach, but it doesn't come anywhere near close to what the demand is. So we're hoping to accelerate that number pretty aggressively so that we can get out to more locations and take care of more of these theaters. All right. Last slide, Brian. It's back to you. So thank you, everybody.

Thanks, Rick. Thanks, Joe. Operator, can you queue the dial-in for questions? And then we've got some of the webcast as well.

[Operator Instructions] Our first question on the phone comes from the line of [ Neil Fegans ], Private Investor.

So yes, first of all, I'd like to say that was incredibly informative. I have no knowledge of the gaming industry. So to me, this has always been kind of a black box. But let me ask you just a few questions here. And I think they're all relatively quick-answer-type questions. But you talked about some earlier companies that went into the space that you're in, Rick, and they failed. Today, is this essentially your market? Or do you have one or more viable competitors that you're running into week in, week out?

No. In the theater space, there's really no one and outside of the theater space. Well, I say there's no one, but Cinemark is actively trying to make this work. Cinemark has signed up a company called Mission Control to run the league operations, the structural part of the league operations. Mission Control is a brilliant company. They do a fantastic job. But what they don't do is what we do, which is staffing or marketing. So the Cinemark theaters are still left to their own devices to try and figure this out on their own, and Cinemark is a big company. So it's very, very challenging. You need the right managers. You need all sorts of stuff. For us, we've got so many independent -- we started with independent theaters in the U.S. And so we have so many of them signed up and ready to go that we're going to create a network where this truly becomes a little league situation, right? We don't want theaters technically competing against each other for leagues or grosses. The other beautiful part about esports and gaming is that, again, there's so many games to play, right? So it could be that this theater is across the street from this theater. They're both doing sandbox esports, but one of them is playing 2 different games than the other one is playing -- so there's some separation and some difference between the 2 locations. That way, they both play together, play nicely and everyone wins because really when the kids win, moms win, and that's who we care about. I don't really care about anybody other than mom winning in the situation because when mom's happy, then everybody is happy. The theaters are happy, the kids are happy, husbands are happy. Significant others are happy, doesn't really matter. But whenever a mom is happy, it works for everyone. So that's who our target is. We really target moms.

Okay. So basically, my takeaway is you really don't have a strong competitor other than Cinemark trying to maybe develop something internally. So it's kind of a land grab for you right now.

Yes. Yes. Speed to market is the most important basis.

So when you say you have 2,500 U.S. locations on your waitlist, does this mean that they are fully qualified, that they have gone through the due diligence, and that they are, if not contractually, they are waiting on you that they are ready to go as soon as you can get to them?

It means all sorts of things. So depending on the exhibitor, it could mean anything from we have contracts in the works to we've talked about it, we've discussed it. They say they want it, and they're just waiting for me to call them to tell them it's ready to get to that next stage . So it's interesting, and that's North American locations. So that includes Canada and Mexico, those numbers. It's not just U.S.-based. But most of our focus initially is on the U.S.-based stuff because we really want to structure it here, build it here and make it function here.

So Rick, if even 1/3 of the 2,500 are fully ready and waiting, that's a huge number relative to your goal of having 100 in 12 months. I mean, at that rate, it would take you 7 or 8 years to service the 800 or 900 on the wait list that are actually 100% just waiting on you. You mentioned you're going to raise capital. You're trying to accelerate this. But I mean, by the end of the year, do you think it's realistic for us to be talking about a 12-month goal from January 1 of 24 to the end of '24? I mean are you going to get to where you can turn up for lack of a better word, 200, 300, 500 a year? Or what's realistic if right now you're hoping to get to 100?