MOVING iMAGE TECHNOLOGIES INC. 10-Q

ITEM 1. FINANCIAL STATEMENTS MOVING IMAGE TECHNOLOGIES, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (in thousands except share and per share amounts) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ June 30, ​ 2021 2021 ​ ​ (unaudited) ​ (Note 1) Assets ​ ​ ​ ​ Current Assets: ​ ​ ​ ​ Cash and cash equivalents ​ $ 8,952 $ 1,270 Accounts receivable, net ​ ​ 658 ​ 454 Inventories ​ ​ 3,498 ​ 1,534 Prepaid expenses and other ​ ​ 751 ​ 95 Total Current Assets ​ ​ 13,859 ​ 3,353 Long-Term Assets: ​ ​ ​ ​ ​ Property, plant and equipment, net ​ ​ 9 ​ 21 Intangibles, net ​ ​ 887 ​ 935 Goodwill ​ ​ 287 ​ 287 Other assets ​ ​ 16 ​ 1,133 Total Long-Term Assets ​ ​ 1,199 ​ 2,376 Total Assets ​ $ 15,058 $ 5,729 ​ ​ ​ ​ ​ ​ Liabilities and Stockholders’ Equity (Deficit) ​ ​ ​ ​ ​ Current Liabilities: ​ ​ ​ ​ ​ Accounts payable ​ $ 1,208 $ 1,911 Accrued expenses ​ ​ 319 ​ 620 Customer deposits ​ ​ 3,364 ​ 1,339 Line of credit ​ ​ — ​ 590 Notes payable – current ​ ​ 147 ​ 237 Unearned warranty revenue ​ ​ 32 ​ 34 Total Current Liabilities ​ ​ 5,070 ​ 4,731 ​ ​ ​ ​ ​ ​ Long-Term Liabilities: ​ ​ ​ ​ ​ Notes payable, net of current portion ​ ​ 551 ​ 1,702 Deferred rent ​ ​ 25 ​ 25 Total Long-Term Liabilities ​ ​ 576 ​ 1,727 Total Liabilities ​ ​ 5,646 ​ 6,458 Stockholders’ Equity (Deficit) ​ ​ ​ ​ ​ Common stock, $ 0.00001 par value, 100,000,000 shares authorized, 10,636,278 and 5,666,667 shares issued and outstanding at December 31, 2021 and June 30, 2021, respectively ​ ​ — ​ ​ — Additional paid-in capital ​ ​ 12,373 ​ ​ 1,011 Accumulated deficit ​ ​ ( 2,961 ) ​ ( 1,740 ) Total Stockholders’ Equity (Deficit) ​ ​ 9,412 ​ ​ ( 729 ) Total Liabilities and Stockholders’ Equity (Deficit) ​ $ 15,058 $ 5,729 ​ The accompanying notes are an integral part of these condensed consolidated financial statements. ​ F-3 Table of Contents MOVING IMAGE TECHNOLOGIES, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands except share and per share amounts) (unaudited) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months ​ Three Months ​ ​ ​ ​ ​ ​ ​ ​ Ended ​ Ended ​ Six Months Ended ​ Six Months Ended ​ ​ December 31, ​ December 31, ​ December 31, ​ December 31, ​ 2021 2020 2021 2020 Net sales ​ $ 3,419 ​ $ 1,609 ​ $ 6,893 ​ $ 3,366 Cost of goods sold ​ ​ 2,523 ​ ​ 1,188 ​ 5,275 ​ 2,492 Gross profit ​ ​ 896 ​ ​ 421 ​ 1,618 ​ 874 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Operating expenses: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Research and development ​ ​ 65 ​ ​ 34 ​ 119 ​ 61 Selling and marketing ​ ​ 571 ​ ​ 374 ​ 1,115 ​ 657 General and administrative ​ ​ 902 ​ ​ 369 ​ 1,565 ​ 819 Total operating expenses ​ ​ 1,538 ​ ​ 777 ​ 2,799 ​ 1,537 Operating loss ​ ​ ( 642 ) ​ ​ ( 356 ) ​ ​ ( 1,181 ) ​ ​ ( 663 ) Other (income) expenses: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Unrealized gain ​ ​ — ​ ​ ( 254 ) ​ — ​ ( 274 ) Interest expense ​ ​ 2 ​ ​ 55 ​ 40 ​ 138 Total other (income) expense ​ ​ 2 ​ ​ ( 199 ) ​ 40 ​ ( 136 ) Net loss ​ $ ( 644 ) ​ $ ( 157 ) ​ $ ( 1,221 ) ​ $ ( 527 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted average shares outstanding: basic and diluted ​ ​ 10,636,278 ​ ​ 5,666,667 ​ ​ 10,445,482 ​ ​ 5,624,910 Net loss per common share basic and diluted ​ $ ( 0.06 ) ​ $ ( 0.03 ) ​ $ ( 0.12 ) ​ $ ( 0.09 ) ​ The accompanying notes are an integral part of these condensed consolidated financial statements. ​ ​ F-4 Table of Contents MOVING IMAGE TECHNOLOGIES, INC. CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (DEFICIT) (unaudited) (in thousands except for share amounts) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Retained Earnings ​ ​ ​ Three months ended September 30, 2020 and December 31, 2021: ​ Common Stock ​ Additional Paid-In ​ (Accumulated ​ ​ ​ ​ Shares Amount Capital Deficit) Total ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Balance as of July 1, 2020 2,650,000 ​ $ — ​ $ 101 ​ $ — ​ $ 101 Share Exchange (see Note 1) ​ 2,350,000 ​ ​ — ​ ​ 126 ​ ​ ( 1,095 ) ​ ​ ( 969 ) Balance as of July 1, 2020, as adjusted ​ 5,000,000 ​ ​ — ​ ​ 237 ​ ​ ( 1,095 ) ​ ​ ( 868 ) Shares issued in private placement ​ 666,667 ​ ​ ​ ​ ​ 784 ​ ​ — ​ ​ 784 Net loss ​ — ​ ​ — ​ ​ — ​ ​ ( 370 ) ​ ​ ( 370 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Balance as of September 30, 2020 ​ 5,666,667 ​ ​ — ​ ​ 1,011 ​ ​ ( 1,465 ) ​ ​ ( 454 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net loss ​ — ​ ​ — ​ ​ — ​ ​ ( 157 ) ​ ​ ( 157 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Balance as of December 30, 2020 ​ 5,666,667 ​ $ — ​ $ 1,011 ​ $ ( 1,622 ) ​ $ ( 611 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Six months ended December 31, 2020: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Balance as of July 1, 2020 ​ 2,650,000 ​ $ — ​ $ 101 ​ $ — ​ $ 101 Share Exchange (see Note 1) ​ 2,350,000 ​ ​ — ​ ​ 126 ​ ​ ( 1,095 ) ​ ​ ( 969 ) Balance as of July 1, 2020, as adjusted ​ 5,000,000 ​ ​ — ​ ​ 237 ​ ​ ( 1,095 ) ​ ​ ( 868 ) Shares issued in private placement ​ 666,667 ​ ​ — ​ ​ 784 ​ ​ — ​ ​ 784 Net loss ​ — ​ ​ — ​ ​ — ​ ​ ( 527 ) ​ ​ ( 527 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Balance as of December 31, 2020 ​ 5,666,667 ​ $ — ​ $ 1,011 ​ $ ( 1,622 ) ​ $ ( 611 ) ​ The accompanying notes are an integral part of these condensed consolidated financial statements. ​ F-5 Table of Contents MOVING IMAGE TECHNOLOGIES, INC. CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (DEFICIT) (unaudited) (in thousands except for share amounts) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Retained Earnings ​ ​ ​ Three months ended September 30, 2021and December 31, 2021 ​ Common Stock ​ Additional Paid-In ​ (Accumulated ​ ​ ​ ​ ​ Shares ​ Amount ​ Capital ​ Deficit) ​ Total ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Balance as of July 1, 2021 5,666,667 $ — $ 1,011 $ ( 1,740 ) $ ( 729 ) Shares of common stock issued for cash, net of issuance costs 4,830,000 ​ — ​ 11,244 ​ — ​ 11,244 Cashless exercise of warrants 139,611 ​ — ​ — ​ — ​ — Grant of options for services — ​ — ​ 56 ​ — ​ 56 Net Loss — ​ — ​ — ​ ( 577 ) ​ ( 577 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Balance as of September 30, 2021 10,636,278 ​ — ​ 12,311 ​ ( 2,317 ) ​ 9,994 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Grant of options for services — ​ — ​ 62 ​ — ​ 62 Net Loss — ​ — ​ — ​ ( 644 ) ​ ( 644 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Balance as of December 31, 2021 10,636,278 ​ $ — ​ $ 12,373 ​ $ ( 2,961 ) ​ $ 9,412 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Six months ended December 31, 2021: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Balance as of July 1, 2021 5,666,667 ​ $ — ​ $ 1,011 ​ $ ( 1,740 ) ​ $ ( 729 ) Shares of common stock issued for cash, net of issuance costs 4,830,000 ​ — ​ 11,244 ​ — ​ 11,244 Cashless exercise of warrants 139,611 ​ — ​ — ​ — ​ — Grant of options for services — ​ — ​ 118 ​ — ​ 118 Net Loss — ​ — ​ — ​ ( 1,221 ) ​ ( 1,221 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Balance as of December 31, 2021 10,636,278 ​ $ — ​ $ 12,373 ​ $ ( 2,961 ) ​ $ 9,412 ​ ​ ​ F-6 Table of Contents ​ MOVING IMAGE TECHNOLOGIES, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands) (unaudited) ​ ​ ​ ​ ​ ​ ​ ​ ​ Six Months Ended Six Months Ended ​ ​ December 31, ​ December 31, ​ ​ 2021 ​ 2020 Cash flows from operating activities: ​ ​ ​ ​ ​ ​ ​ ​ ​ Net loss ​ $ ( 1,221 ) ​ $ ( 527 ) Adjustments to reconcile net loss to net cash used in operating activities: ​ ​ Provision for (reversal of) doubtful accounts ​ ( 40 ) ​ 114 Depreciation expense ​ 13 ​ 67 Amortization expense ​ 48 ​ 47 Unrealized Gain on investments ​ ​ — ​ ​ ( 274 ) Deferred rent ​ — ​ 4 Stock option compensation expense ​ ​ 118 ​ ​ — ​ ​ ​ ​ ​ ​ ​ Changes in operating assets and liabilities ​ ​ Accounts receivable ​ ( 164 ) ​ 146 Inventories ​ ( 1,964 ) ​ 197 Prepaid expenses and other ​ ( 653 ) ​ ( 75 ) Accounts payable ​ ( 703 ) ​ ( 299 ) Accrued expenses ​ ( 302 ) ​ ( 69 ) Unearned warranty revenue ​ ( 2 ) ​ ( 17 ) Customer deposits ​ 2,025 ​ ( 673 ) Net cash used in operating activities ​ ( 2,845 ) ​ ( 1,359 ) Cash flows from investing activities ​ ​ Purchases of property, plant and equipment ​ ( 2 ) ​ — Net cash used in investing activities ​ ( 2 ) ​ — Cash flows from financing activities ​ ​ Net Proceeds from initial public offering ​ 12,360 ​ — Payments on line of credit ​ ( 590 ) ​ ( 60 ) Proceeds from private placement ​ — ​ 784 Payments on notes payable ​ ​ ( 1,241 ) ​ ​ ( 33 ) Net cash provided by financing activities ​ 10,529 ​ 691 Net increase (decrease) in cash and cash equivalents ​ 7,682 ​ ( 668 ) Cash and cash equivalents, beginning of the period ​ 1,270 ​ 1,059 Cash and cash equivalents, end of the period ​ $ 8,952 ​ $ 391 Non-cash investing and financing activities: ​ ​ Deferred IPO costs ​ $ — ​ $ 139 Reclassification of IPO related costs from other assets to equity ​ $ 1,116 ​ $ — Cash paid during the period: ​ ​ ​ Interest ​ $ 38 ​ $ 108 ​ The accompanying notes are an integral part of these condensed consolidated financial statements. ​ ​ F-7 Table of Contents MOVING IMAGE TECHNOLOGIES, INC. ​ NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS NOTE 1 — BUSINESS ACTIVITY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Organization: Moving iMage Technologies, Inc., a Delaware corporation, together with its wholly-owned subsidiaries unless the context indicates otherwise, the (“Company”) was incorporated in June 2020. The Company, through its wholly-owned subsidiary, Moving iMage Technologies, LLC (“MiT LLC”) and MiT LLC's wholly-owned subsidiary, Moving iMage Acquisition Co., (DBA Caddy Products), designs, integrates, installs and distributes proprietary and custom designed equipment as well as off the shelf cinema products needed for contemporary cinema requirements. The Company also offers single source solutions for cinema design, procurement, installation and service to the creative and production communities for screening, digital intermediate and other critical viewing rooms. Additionally, the Company offers a wide range of technical, design and consulting services such as custom engineering, systems design, integration and installation, and digital technology, as well as software solutions for operations enhancement and theatre management. The Company also provides turnkey furniture, fixture and equipment services to commercial cinema exhibitors for new construction and remodels including design, consulting, installation and project management as well as procurement of seats, lighting, acoustical treatments, screens, projection and sound. Moving iMage Acquisition Co. (DBA “Caddy Products”) designs, develops and manufactures innovative products for the entertainment, cinema, grocery, worship, restaurant, sports and restroom industries. Share Exchange: In June 2020, MiT LLC members created Moving iMage Technologies, Inc. (“MIT Inc.”) to facilitate the Company’s initial public offering offering (“IPO”). Upon formation of MiT, Inc., 2,000,000 shares of MiT, Inc. common stock were issued to members of MiT LLC. On July 7, 2021, MiT LLC and MiT Inc. entered into an exchange agreement (“Exchange Agreement”) whereby the members of MiT LLC exchanged their membership interest for 2,350,000 shares of common stock in MiT Inc. As a result of the Exchange Agreement, the members of MiT LLC owned approximately 79 % or 4,452,334 of the outstanding common stock of MiT Inc. As a result, MiT LLC (the entity where the Company conducts its business) became a wholly-owned subsidiary of MiT Inc. (the SEC registrant). The transaction was accounted for as a merger of entities under common ownership in accordance with generally accepted accounting principles in the United States of America (“GAAP”). This determination was primarily based on the facts that, immediately before and after the transaction: (i) MiT LLC owners owned a substantial majority of the voting rights in the combined company, (ii) MiT LLC designated a majority of the members of the initial board of directors of the combined company, and (iii) MiT LLC’s senior management holds all key positions in the senior management of the combined company. As a result, the historical financial statements of MiT LLC and MiT Inc. for the three months ended September 30, 2020 and for the six months ended December 31, 2020 have been retroactively revised to reflect the consolidation of MiT, Inc. and MiT LLC in a manner similar to pooling of interest. All inter-company transactions and balances between MiT Inc. and MiT, LLC have been eliminated. The condensed consolidated statements of stockholders’ equity (deficit) for the periods ended December 31, 2021 and 2020 have been retroactively revised to give effect of the change in reporting entity (as-if-pooling) accounting of MiT Inc. and MiT LLC. ​ F-8 Table of Contents MOVING IMAGE TECHNOLOGIES, INC. ​ NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS NOTE 1 — BUSINESS ACTIVITY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) Initial Public Offering: On July 12, 2021, the Company closed its initial public offering (“IPO”) and issued 4,830,000 shares of its common stock at a price of $ 3.00 per share for net proceeds of approximately $ 12,360,000 after deducting underwriting discounts, commissions, and other expenses of approximately $ 2,130,000 . Upon the completion of its IPO, the Company reclassified deferred IPO related costs of approximately $ 1,116,000 from other assets to additional paid-in capital. In connection with the Company’s IPO, the underwriters received warrants to acquire 241,500 shares of the Company’s common stock at $ 3.75 per share. None of the potentially dilutive securities were included in the computation of diluted earnings per share as their impact would be anti-dilutive. On July 12, 2021, in connection with the IPO, warrants to purchase 139,611 shares of the Company’s common stock were exercised on a cashless basis. COVID-19 Impact and Liquidity : In December 2019, COVID-19 was initially reported, and in March 2020, the World Health Organization characterized COVID-19 as a pandemic. COVID-19 has had a widespread and detrimental effect on the global economy as a result of the continued increase in the number of cases and affected countries and actions by public health and governmental authorities, businesses, other organizations and individuals to address the outbreak, including travel bans and restrictions, quarantines, shelter in place, stay at home or total lock-down orders and business limitations and shutdowns. The repercussions of the COVID-19 global pandemic resulted in a significant impact to our customers, specifically those in the entertainment and cinema industries. Cinemas have been shuttered since March 2020 in an effort to stem the spread of COVID-19 and studios, for the most part, have rescheduled their film releases until cinemas can reopen. Specifically, the pandemic has had a material adverse effect on our business. 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. In addition, we have experienced increased challenges in, or cost of, acquiring new customers and increased risk in collectability of accounts receivable. As a result of the aforementioned factors, our financial and operating results for the three and six months ended December 31, 2021 and 2020, have been adversely affected. Additionally, our projected financial and operating results for the remainder of fiscal 2022 are expected to be materially adversely affected. The ultimate impact of the COVID-19 pandemic on our business and results of operations in fiscal 2022 and beyond is unknown and will depend on future developments, which are highly uncertain and cannot be predicted with confidence, including the duration and severity of the COVID-19 pandemic and any additional preventative and protective actions that governments, or we, or our customers, may direct, which may result in an extended period of continued business disruption and reduced operations. We expect that our results of operations, including revenues, in future periods will continue to be adversely impacted by the COVID-19 pandemic and its negative effects on global economic conditions, which include the possibility of a global recession. During the second half of the 2021 calendar year, several larger theater chains have reopened in many parts of the United States. The ability of these chains to reopen was predicated in large part on decisions by state and local officials to allow, limit or prohibit the reopening of establishments such as cinemas in response to regionally specific COVID-19 outbreaks. Such reopening has been done on a gradual basis with limited occupancy and specific procedures, products, and technologies required to be implemented to protect the safety and health of returning patrons and employees. In response to uncertainties associated with the COVID-19 pandemic, we have taken, and are continuing to take, significant steps to preserve cash and remain in a strong competitive position when the current crisis subsides by eliminating non-essential costs, reducing employee hours and deferring all non-essential capital expenditures to minimum levels. ​ F-9 Table of Contents MOVING IMAGE TECHNOLOGIES, INC. ​ NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS NOTE 1 — BUSINESS ACTIVITY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) We have also implemented remote work policies for many employees, and the resources available to such employees may not enable them to maintain the same level of productivity and efficiency, and these and other employees may face additional demands on their time, such as increased responsibilities resulting from school closures or illness of family members. Our increased reliance on remote access to our information systems also increases our exposures to potential cybersecurity breaches. As of the date these Condensed Consolidated Financial Statements were issued, with the actions taken above, existing cash, including the cash raised from our initial public offering (see Initial Public Offering), the Company will have sufficient liquidity to fund operations and essential capital expenditures for the 12 months from the date these condensed consolidated financial statements were available to be issued. Principles of Consolidation : The condensed consolidated financial statements include the accounts of MiT Inc., its wholly-owned subsidiary, Moving iMage Technologies, LLC (“MiT LLC”), and MiT LLC’s wholly-owned subsidiary, Moving iMage Acquisition Co., (DBA Caddy Products). All significant intercompany transactions and balances have been eliminated in consolidation. Basis of Presentation: The Company’s financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). Unaudited Interim Condensed Consolidated Financial Statements: The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with U.S. GAAP for interim financial information. Accordingly, they do not include all of the information and notes required by U.S. GAAP. However, in the opinion of the management of the Company, all adjustments of a normal recurring nature necessary for a fair presentation of the financial position and operating results have been included in these statements. These condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements included in its Annual Report on Form 10-K for the fiscal year ended June 30, 2021, and with the disclosures and risk factors presented therein. The June 30, 2021 condensed consolidated balance sheet has been derived from the audited consolidated financial statements and updated to reflect the effects of the exchange agreement between MiT LLC and MiT Inc. Operating results for the three months and six months ended December 31, 2021 are not necessarily indicative of the results that may be expected for any subsequent quarters or for the year ending June 30, 2022. Measurement of Fair Values : The Company’s accounting policies and disclosures require the measurement of fair values for both financial and non-financial assets and liabilities on either a recurring or nonrecurring basis. When measuring the fair value of an asset or a liability, the Company uses observable market data to the extent such information is available. Fair values are categorized into different levels in a fair value hierarchy based on the inputs used in the valuation techniques as follows: — Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities. — Level 2: inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly (i.e., as prices) or indirectly (i.e., derived from prices). — Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs). If the inputs used to measure the fair value of an asset or a liability fall into different levels of the fair value hierarchy, then the fair value measurement is categorized in its entirety in the same level of the fair value hierarchy as the lowest level input that is significant to the entire measurement. Deferred Offering Costs: The Company capitalized certain legal, accounting and other third-party fees that are directly associated with its recent IPO as deferred offering costs (non-current) until such financings were consummated. As of June 30, 2021, $ 1,116,000 of deferred offering costs were capitalized in other assets. After completion of the IPO in July 2021, these costs have been recorded in the condensed consolidated statements of changes in stockholders’ equity (deficit) as a reduction of proceeds received from the offering. ​ F-10 Table of Contents MOVING IMAGE TECHNOLOGIES, INC. ​ NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS NOTE 1 — BUSINESS ACTIVITY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) Use of Estimates: The preparation of condensed consolidated financial statements in conformity with U.S. GAAP requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities (including sales returns, bad debts, inventory reserves, warranty reserves, purchase price allocation and asset impairments), disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ significantly from those estimates. Concentration of Cash: The Company maintains its cash and cash equivalents in bank accounts which, at times, may exceed federally insured limits. The Company has not experienced any losses in such accounts. Management believes the Company is not exposed to any significant credit risk on its cash balances. Accounts Receivable: Accounts receivable are carried at original invoice amount less allowance for bad debts. Management determines the allowance for bad debts by identifying troubled accounts and by using historical experience applied to an aging of accounts. Accounts receivable are written off when deemed uncollectible. Recoveries of receivables previously written off are recorded when received. Accounts receivable are considered to be past due if any portion of the receivable balance is outstanding for more than 90 days past the customer’s granted terms. The Company does not charge interest on past due balances or require collateral on its accounts receivable. As of June 30, 2021 and December 31, 2021 the allowance for bad debts is approximately $ 356,000 and $ 316,000 , respectively. Inventories: Inventories are stated at the lower of cost or net realizable value, with cost being determined on the first-in, first-out cost method of accounting. The Company purchases finished goods and materials to assemble kits in quantities that it anticipates will be fully used in the near term. Changes in operating strategy, customer demand, and fluctuations in market values can limit the Company’s ability to effectively utilize all products purchased and can result in finished goods with above-market carrying costs which may cause losses on sales to customers. The Company’s policy is to closely monitor inventory levels, obsolescence and lower market values compared to costs and, when necessary, reduce the carrying amount of its inventory to its net realizable value. As of June 30, 2021 and December 31, 2021, inventory on hand was comprised primarily of finished goods ready for sale. Revenue Recognition: The Company follows Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 606, Revenue from Contracts with Customers (“ASC 606”). Revenue is recognized when control of the promised goods is transferred at the point of shipment to a customer and when performance conditions are satisfied as per the agreement, in an amount that reflects the consideration that we expect to receive in exchange for those goods as per the agreement with the customer. We generate all our revenue from agreements with customers. In case there are agreements with multiple performance obligations, we identify each performance obligation and evaluate whether the performance obligations are distinct within the context of the agreement at the agreement’s inception. Performance obligations that are not distinct at agreement inception are combined. We allocate the transaction price to each distinct performance obligation proportionately based on the estimated standalone selling price for each performance obligation and then evaluate how the services are transferred to the customer to determine the timing of revenue recognition. The Company considers the U.S. GAAP criteria for determining whether to report revenue gross as a principal versus net as an agent. Factors considered include whether the Company is the primary obligor, has risks and rewards of ownership, and bears the risk that a customer may not pay for the products provided or services performed. If there are circumstances where the above criteria are not met, revenues recognized are presented net of cost of goods sold. Contract assets consist of conditional or unconditional rights to consideration. Accounts receivable represent amounts billed to customers where the Company has an enforceable right to payment for performance completed to date (i.e., unconditional rights to consideration). Accounts receivable balance as of July 1, 2020 was $ 809,000 . The Company does not have contract assets that represent conditional rights to consideration. ​ F-11 Table of Contents MOVING IMAGE TECHNOLOGIES, INC. ​ NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS NOTE 1 — BUSINESS ACTIVITY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) Contract liabilities consist of refund and warranty liabilities, as well as deposits received in advance on sales to certain customers. Such deposits are reflected as customer deposits and recognized in revenue when control of the products is transferred or when performance conditions are satisfied per the agreement. The change in contract liabilities (customer deposits and unearned warranty revenue) during the six months ended December 31, 2021 included $ 790,000 for revenue recognized that was included in contract liability as of July 1, 2021. Contract liabilities as of July 1, 2020 were $ 854,000 . Cost of goods sold includes cost of inventory sold during the period, net of vendor discounts and allowances, and shipping and handling costs, and sales taxes. Taxes collected from customers are included in accounts payable on a net basis (excluded from revenues) until remitted to the government. Deferred contract acquisition costs consist of sales commissions paid to the sales force, and the related employer payroll taxes, and are considered incremental and recoverable costs of obtaining a contract with a customer. The Company has determined that sales commissions paid are an immaterial component of obtaining a customer’s contract and has elected to expense sales commissions when earned. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Three For the Three ​ For the Six ​ For the Six ​ ​ Months Ended ​ Months Ended ​ Months Ended ​ Months Ended Disaggregation of Revenue (in 000’s): ​ December 31, 2021 ​ December 31, 2020 December 31, 2021 December 31, 2020 Equipment upon delivery (point in time) ​ $ 3,355 ​ $ 1,581 ​ $ 6,788 ​ $ 3,303 Installation (point in time) ​ 64 ​ 28 ​ 105 ​ 63 Total revenues ​ $ 3,419 ​ $ 1,609 ​ $ 6,893 ​ $ 3,366 ​ Revenue from the sale of equipment is recognized upon delivery of such equipment to customers and when performance conditions are satisfied. Revenue from installation is recognized upon completion of the installation project and when the performance obligation is complete. Software subscription revenue for remote monitoring services is recognized on a straight-line basis over the term of the contract, usually one year. Services revenues are generally recognized over time as the contracts are performed. There were no software revenues during the three or six months ended December 31, 2021 or 2020. Returns and Allowances: The Company records allowances for discounts and product returns at the time of sale as a reduction of revenue as such allowances can be reliably estimated based on historical experience and known trends. Shipping and Handling Costs: Shipping and handling costs are included in cost of goods sold and are recognized as a period expense during the period in which they are incurred. Advertising Costs: Advertising costs were approximately $ 11,600 and $ 2,200 for the three months ended December 31, 2021 and 2020, respectively, and $ 11,700 and $ 5,100 for the six months ended December 31, 2021 and 2020, respectively. Advertising costs are expensed as incurred within selling and marketing expenses. ​ F-12 Table of Contents MOVING IMAGE TECHNOLOGIES, INC. ​ NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS NOTE 1 — BUSINESS ACTIVITY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) Goodwill and Intangible Assets: Goodwill as of December 31, 2021 and June 30, 2021 represents the excess of the purchase price over the fair value of the net identifiable assets acquired in the 2019 Caddy Acquisition. Goodwill is reviewed for impairment at least annually, in June, or more frequently if a triggering event occurs between impairment testing dates. The Company operates as a single operating segment and as a single reporting unit for the purpose of evaluating goodwill impairment. The Company’s impairment assessment begins with a qualitative assessment to determine whether it’s more likely than not that fair value of the reporting unit is less than its carrying value. The qualitative assessment includes comparing the overall financial performance of the Company against the planned results used in the last quantitative goodwill impairment test. Additionally, the Company’s fair value is assessed in light of certain events and circumstances, including macroeconomic conditions, industry and market considerations, cost factors, and other relevant entity and Company specific events. The selection and assessment of qualitative factors used to determine whether it is more likely than not that the fair value of a reporting unit exceeds the carrying value involves significant judgment and estimates. If it is determined under the qualitative assessment that it is more likely than not that the fair value of a reporting unit is less than its carrying value, then a quantitative impairment test is performed. Under the quantitative impairment test, the estimated fair value of the reporting unit would be compared with its carrying value (including goodwill). If the fair value of the reporting unit exceeds its carrying value, then no impairment exists. If the estimated fair value of the reporting unit is less than its carrying value, an impairment loss would be recognized for the excess of the carrying value of the reporting unit over the fair value, not to exceed the carrying amount of goodwill. The Company tested goodwill impairment in relation to the COVID-19 pandemic and no impairments were identified for the three and six months ended December 31, 2021 or 2020. Goodwill is at risk of future impairment in the event of significant unexpected changes in the Company’s forecasted future results and cash flows, or if there is a negative change in the long-term outlook for the business or in other factors such as the discount rate, or if there is a decline in the stock price. Intangible assets arising from business combinations, such as customer relationships, trade names, and/or intellectual property, are initially recorded at fair value. The Company amortizes these intangible assets over the determined useful life which generally ranges from 11 to 20 years . The Company reviews its intangible assets for impairment whenever events or circumstances indicate that the carrying amount of an asset may not be fully recoverable. There were no intangible asset impairments recognized for the three months and six months ended December 31, 2021 or 2020. Business Combinations: The Company includes the results of operations of the businesses that it acquires commencing on the respective dates of acquisition. The Company allocates the fair value of the purchase price of its acquisitions to the assets acquired and liabilities assumed based on their estimated fair values. The excess of the fair value of the purchase price over the fair values of these identifiable assets and liabilities is recorded as goodwill. The transaction resulted in the transferring of an entity under common control. Income Taxes: The Company utilizes an asset and liability approach for financial accounting and reporting for income taxes. The provision for income taxes is based upon income or loss after adjustment for those permanent items that are not considered in the determination of taxable income. Deferred income taxes represent the tax effects of differences between the financial reporting and tax basis of the Company’s assets and liabilities at the enacted tax rates in effect for the years in which the differences are expected to reverse. ​ F-13 Table of Contents MOVING IMAGE TECHNOLOGIES, INC. ​ NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS NOTE 1 — BUSINESS ACTIVITY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) The Company evaluates the recoverability of deferred tax assets and establishes a valuation allowance when it is more likely than not that some portion or all the deferred tax assets will not be realized. Because the Company has had recurring losses from operations, at December 31, 2021 it has taken a full valuation allowance against all potential deferred tax assets. Prior to July 7, 2021, MiT LLC was a limited liability company treated as a partnership for federal and state income tax purposes with all income tax liabilities and/or benefits (losses) of the Company being passed through to the members. As such, there is no recognition of federal or state income taxes in the financial statements prior to July 7, 2021. Any uncertain tax position taken by the members is not an uncertain position of the Company. The Company evaluate the recoverability of deferred tax assets and establishes a valuation allowance when it is more likely than not that some portion or all of the deferred tax assets will not be realized. The Company evaluated the realizability of deferred tax Assets (“DTA”) at June 30, 2021 (most recent year end, presented as comparative in 10Q balance sheet), July 7, 2021(date of exchange agreement), September 30, 2021 (Q1 reporting period) and December 31, 2021 (Q2 reporting period). Because the Company has had recurring losses from operations at June 30, 2021, and further loses for the period ended September 30, 2021 and December 31, 2021, which will generate NOL’s and it has taken a full valuation allowance against all potential deferred tax assets. Goodwill recognized in connection with acquisitions represents the residual amount of the purchase price over separately identifiable intangible assets and pursuant to 26 U.S. Code section 197 is deductible for tax purposes. The following table summarizes deferred tax assets and liabilities as of the date of the Exchange Agreement and quarterly through December 31, 2021: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Deferred ​ ​ ​ Existing valuation allowance ​ ​ ​ ​ Tax Assets Deferred Tax Liabilities Prior to business combination Net Position MiT Inc. ​ $ — ​ $ — ​ $ — ​ $ — MiT LLC ​ 248 ​ ( 13 ) ​ ( 235 ) ​ — Total July 7, 2021 ​ $ 248 ​ $ ( 13 ) ​ $ ( 235 ) ​ $ — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Deferred tax assets ​ $ 589 ​ $ — ​ $ — ​ $ 589 Deferred tax liabilities ​ ​ — ​ ​ ( 12 ) ​ ​ — ​ ​ ( 12 ) Valuation allowance ​ ​ — ​ ​ — ​ ​ ( 577 ) ​ ​ ( 577 ) Total MiT Inc. December 31, 2021 ​ $ 589 ​ $ ( 12 ) ​ $ ( 577 ) ​ $ — ​ F-14 Table of Contents MOVING IMAGE TECHNOLOGIES, INC. ​ NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS NOTE 1 — BUSINESS ACTIVITY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) The following table summarizes the components of deferred tax assets and deferred tax liabilities quarterly through December 31, 2021: ​ ​ ​ ​ ​ Deferred Tax ​ ​ Assets (Liabilities) Inventory reserve ​ $ 133 Accumulated depreciation ​ ( 7 ) Accumulated goodwill amortization ​ ( 6 ) Deferred rent ​ 7 Warranty reserve ​ 8 Allowance for doubtful accounts ​ 100 Net ​ ​ 235 Valuation allowance ​ ( 235 ) Total July 1, 2021 ​ $ — ​ ​ ​ ​ Inventory reserve ​ $ 133 Accumulated depreciation ​ ( 2 ) Accumulated goodwill amortization ​ ( 10 ) Deferred rent ​ 7 Warranty reserve ​ 9 Stock compensation ​ 33 Net operating loss carryforward ​ 319 Allowance for doubtful accounts ​ 88 Net ​ ​ 577 Valuation allowance ​ ( 577 ) Total December 31, 2021 ​ $ — ​ ​ F-15 Table of Contents MOVING IMAGE TECHNOLOGIES, INC. ​ NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS NOTE 1 — BUSINESS ACTIVITY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) Product Warranty: The Company’s digital equipment products are sold under various limited warranty arrangements ranging from one year to three years . Company policy is to establish reserves for estimated product warranty costs in the period when the related revenue is recognized. The Company has the right to return defective products for up to three years , depending on the manufacturers’ individual policies. As of June 30, 2021 and December 31, 2021, the Company has established a warranty reserve of $ 29,000 and $ 32,000 , respectively, which is included in accrued expenses in the accompanying condensed consolidated balance sheets. The changes in the Company’s aggregate warranty liabilities were as follows for the following periods (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, June 30, ​ ​ 2021 ​ 2021 Product warranty liability, beginning of period ​ $ 29 ​ $ 65 Accruals for warranties issued ​ 12 ​ 29 Change in estimates ​ — ​ ( 37 ) Settlements made ​ ( 9 ) ​ ( 28 ) Product warranty liability, end of period ​ $ 32 ​ $ 29 ​ Research and Development: The Company incurs costs to develop new products, as well as improve the appeal and functionality of its existing products. Research and development costs are charged to expense when incurred. Recently Issued Accounting Pronouncements: In February 2016, FASB issued Accounting Standards Update (“ASU”) No. 2016-02, Leases (Topic 842 ), which requires lessees to recognize assets and liabilities for the rights and obligations created by most leases on their balance sheet. The guidance is effective for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years. Early application is permitted. ASU 2016-02 requires modified retrospective adoption for all leases existing at, or entered into after, the date of initial application, with an option to use certain transition relief. The Company is in the process of evaluating the impact of this standard. In December 2019, FASB issued ASU No. 2019-12, Income Taxes (Topic 740) : Simplifying the Accounting for Income Taxes (“ASU 2019-12”), which is intended to simplify the accounting for income taxes. ASU 2019-12 removes certain exceptions to the general principles in Topic 740 and also clarifies and amends existing guidance to improve consistent application. The new standard will be effective beginning January 1, 2022. The Company does not expect the adoption of ASU 2019-12 to have a material impact on its financial position and results of operations upon adoption. Other pronouncements issued by FASB with future effective dates are either not applicable or not significant to the consolidated financial statements of the Company. ​ F-16 Table of Contents MOVING IMAGE TECHNOLOGIES, INC. ​ NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS NOTE 2 — LOSS PER SHARE ​ Basic loss per share data for each period presented is computed using the weighted average number of shares of common stock outstanding during each such period. Diluted loss per share data is computed using the weighted average number of common and potentially dilutive securities outstanding during each period. Potentially dilutive securities consist of shares that would be issued upon the exercise of stock options and warrants, computed using the treasury stock method. A reconciliation of basic and diluted loss per share is as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Three Months Ended For the Six Months Ended For the Three Months Ended For the Six Months Ended ​ ​ December 31, ​ December 31, December 31, ​ December 31, ​ ​ 2021 ​ 2021 2020 ​ 2020 Numerator: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net (loss) ​ ​ ( 644 ) ​ ​ ( 1,221 ) ​ $ ( 157 ) ​ $ ( 527 ) Denominator: ​ ​ ​ ​ Weighted average common shares outstanding, basic and diluted ​ 10,636,278 ​ 10,445,482 ​ 5,666,667 ​ 5,624,910 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Loss per share ​ ​ ​ ​ Basic and diluted ​ ​ ( 0.06 ) ​ ​ ( 0.12 ) ​ $ ( 0.03 ) ​ $ ( 0.09 ) ​ The following securities were excluded from the calculation of diluted loss per share in each period because their inclusion would have been anti-dilutive: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Three Months Ended ​ For the Six Months Ended ​ For the Three Months Ended ​ For the Six Months Ended ​ ​ December 31, ​ December 31, ​ December 31, ​ December 31, ​ 2021 2021 2020 2020 Options ​ 150,000 ​ 150,000 ​ — ​ — Warrants 241,500 ​ 241,500 ​ 236,667 236,667 Total potentially dilutive shares 391,500 ​ 391,500 ​ 236,667 236,667 ​ ​ NOTE 3 — PROPERTY, PLANT AND EQUIPMENT Property, plant and equipment consist of the following (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, June 30, ​ ​ 2021 ​ 2021 Production equipment ​ $ 307 ​ $ 307 Leasehold improvements ​ 202 ​ 202 Furniture and fixtures ​ 45 ​ 45 Computer equipment ​ 45 ​ 44 Other equipment ​ 114 ​ 114 ​ ​ 713 ​ 712 Accumulated depreciation ​ ( 704 ) ​ ( 691 ) Net property plant and equipment ​ $ 9 ​ $ 21 ​ Depreciation expense related to property, plant and equipment was $ 0 and $ 33,000 for the three months ended December 31, 2021 and 2020, respectively, of which $ 0 and $ 30,000 is included in cost of goods sold and $ 0 and $ 3,000 in general and administrative expense, respectively. ​ F-17 Table of Contents MOVING IMAGE TECHNOLOGIES, INC. ​ NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS NOTE 3 — PROPERTY, PLANT AND EQUIPMENT (continued) Depreciation expense related to property, plant and equipment was $ 13,000 and $ 67,000 for the six months ended December 31, 2021 and 2020, respectively, of which $ 9,000 and $ 60,000 is included in cost of goods sold and $ 4,000 and $ 7,000 in general and administrative expense, respectively. ​ Depreciation of property, plant and equipment is calculated using the straight-line method over their estimated useful lives as follows: ​ ​ ​ ​ ​ Useful Lives Leasehold improvements 5 years or remaining lease term Furniture and fixtures 5 years Production equipment 3 – 7 years Computer equipment 3 years Other equipment 3 – 7 years ​ ​ NOTE 4 —INTANGIBLE ASSETS The following table summarizes the Company’s intangible assets as of December 31, 2021 (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Amortization Gross Asset Accumulated Net Book ​ ​ Period ​ Cost ​ Amortization ​ Value Customer relationships 11 years ​ $ 970 ​ $ 213 ​ $ 757 Patents 20 years ​ 70 ​ 9 ​ 61 Trademark 20 years ​ 78 ​ 9 ​ 69 ​ ​ ​ ​ $ 1,118 ​ $ 231 ​ $ 887 ​ The following table summarizes the Company’s intangible assets as of June 30, 2021 (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Amortization Gross Asset Accumulated Net Book ​ ​ Period ​ Cost ​ Amortization ​ Value Customer relationships 11 years ​ $ 970 ​ $ 169 ​ $ 801 Patents 20 years ​ 70 ​ 7 ​ 63 Trademark 20 years ​ 78 ​ 7 ​ 71 ​ ​ ​ ​ $ 1,118 ​ $ 183 ​ $ 935 ​ Amortization expense was $ 24,000 and $ 24,000 for the three months ended December 31, 2021 and 2020, respectively, and was $ 48,000 and $ 48,000 for the six months ended December 31, 2021 and 2020, respectively, and is included in general and administrative expense. ​ Estimated amortization expense related to intangible assets subject to amortization at December 31, 2021 in each of the five years subsequent to December 31, 2021, and thereafter is as follows (amounts in thousands): ​ ​ ​ ​ ​ 2022 $ 96 2023 ​ 96 2024 ​ 96 2025 ​ 96 2026 ​ 96 Thereafter ​ 407 Total ​ $ 887 ​ ​ F-18 Table of Contents MOVING IMAGE TECHNOLOGIES, INC. ​ NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS NOTE 5 — ACCRUED EXPENSES Accrued expenses consist of the following (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, June 30, ​ ​ 2021 ​ 2021 Employee compensation ​ $ 193 ​ $ 485 Others ​ 126 ​ 135 Total ​ $ 319 ​ $ 620 ​ ​ NOTE 6 — DEBT Line of Credit In October 2019, MiT LLC executed a line of credit agreement with an unaffiliated lender to provide a $ 1.0 million asset-based bridge loan to be used for working capital purposes. Funds borrowed bore interest at 13 % per annum and were due and payable one year from the origination date of the loan. The loan was secured by all assets of MiT LLC and was personally guaranteed by Phil Rafnson, our CEO and Chairman of the Board. Sound Management Investors, LLC, an entity controlled by Mr. Rafnson, pledged all membership units of MiT LLC held by it as further security for the repayment of such loan. In connection with this borrowing, the lender was issued warrants to acquire shares of the Company's common stock upon completion of its IPO. On the effective date of the IPO, the lender exercised these warrants to acquire 94,723 shares of the common stock on a cashless basis. Approximately $ 400,000 of the proceeds from this loan were used to pay amounts owed to Caddy in connection with the Caddy acquisition. No further borrowings are available under this agreement from March 31, 2020. As of June 30, 2021, the outstanding balance of this line of credit was $ 590,000 . In July 2021, the outstanding balance, and all accrued interest, was paid in full. Long-term debt at December 31, 2021 was as follows (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2021 ​ Balance Current Long Term PPP loan ​ $ 698 ​ $ 147 ​ $ 551 Total ​ $ 698 ​ $ 147 ​ $ 551 ​ Long-term debt at June 30, 2021 was as follows (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ June 30, 2021 ​ Balance Current Long Term Caddy promissory note ​ $ 1,059 ​ $ 142 ​ $ 917 PPP loan ​ 698 ​ 73 ​ 625 Caddy indemnity promissory note ​ 182 ​ 22 ​ 160 Total ​ $ 1,939 ​ $ 237 ​ $ 1,702 ​ The Caddy Promissory note was payable in monthly installments through August 2024 at an interest rate of Prime plus 2.75 %. The Caddy Indemnity note was payable in monthly installments due July 2024 at an interest rate of Prime plus 2.75 %. On January 1, 2020, the interest rate margin increased to 3.75 % on both notes. All of the notes were collateralized by Caddy assets. In addition, the notes were guaranteed by Phil Rafnson, the Company’s majority shareholder. In August 2021, all related Caddy notes and balances were paid in full ​ F-19 Table of Contents MOVING IMAGE TECHNOLOGIES, INC. ​ NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS NOTE 6 — DEBT (continued) Paycheck Protection Program On May 6, 2020, the Company received loan proceeds in the amount of approximately $ 694,000 under the Paycheck Protection Program (“PPP”). On March 13, 2021, the Company received proceeds in the amount of approximately $ 698,000 from a second PPP loan. The PPP, established as part of the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”), provides for loans to qualifying businesses for amounts up to 2.5 times of the average monthly payroll expenses of the qualifying business. The loans and accrued interest are forgivable as long as the borrower uses the loan proceeds for eligible purposes, including payroll, benefits, rent and utilities, and maintains its payroll levels. The amount of loan forgiveness will be reduced if the borrower terminates employees or reduces salaries during the eight-week period. In May 2021, the Company received notification from the Small Business Administration that the first loan in the amount of $ 694,000 , including accrued interest, has been fully forgiven. As of December 31, 2021, the outstanding balance of the second PPP loan was $ 698,000 , of which $ 147,000 is included in notes payable current in the condensed consolidated balance sheets. Any unforgiven portion of a PPP loan is payable over two years at an interest rate of 1 %, with a deferral of payments for the first six months. The Company used the proceeds for purposes consistent with the PPP. In April 2022, the Company received notice that on March 23, 2022, its second PPP loan in the amount of $ 698,000 plus accrued interest has been fully forgiven and is paid in full. ​ NOTE 7 — STOCKHOLDERS’ EQUITY In 2019, the Company adopted the 2019 Omnibus Incentive Plan (the “Plan”). The Plan, as amended, provides for the issuance of stock-based awards to employees. As of December 31, 2021, the Plan provides for the issuance of up to 750,000 stock-based awards. There are 600,000 stock-based awards available to grant under the Plan at December 31, 2021. In July 2020, the Company, through a Private Placement, issued 666,667 shares of stock for total gross proceeds of $ 887,000 . Net proceeds of $ 784,000 were received after deducting offering costs of $ 103,000 . In conjunction with the private placement, warrants for 50,000 shares were issued to Boustead Securities, LLC. In July 2021, MiT Inc. entered into an Exchange Agreement with MiT LLC pursuant to which MiT Inc. agreed to exchange membership units for 2,350,000 shares of Common Stock representing 41.4 % of the equity as of such date on a fully diluted basis for no consideration. The shares were exchanged as part of the Exchange Agreement with the Company as described in Note 1. In July 2021, the Company granted options to non-employee directors to purchase an aggregate of 150,000 shares of its common stock at an exercise price of $ 3.00 per share. The options vest one year from the date of grant, expire ten years from the date of grant and had an aggregate grant date fair value of $ 244,200 , which will be recognized ratably over the vesting period. These options, which were the only options granted during the six months ended December 31, 2021, had a grant-date fair value of $ 1.63 per share. The Company recognized compensation expense for stock option awards of approximately $ 62,000 and $ 118,000 during the three- and six-month periods ended December 31, 2021, respectively. None of the these potentially dilutive securities were included in the computation of diluted earnings per share as their impact would be anti-dilutive. At December 31, 2021, there was $ 126,000 of total unrecognized compensation cost related to nonvested stock option awards that is expected to be recognized over a weighted average period of six months . During the six months ended December 31, 2021, warrant holders exercised 139,611 warrants on a cashless basis. ​ NOTE 8 — RELATED PARTY TRANSACTIONS In July 2021, the Company provided a discretionary $ 50,000 payment to the Company’s CEO and Chairman of the Board of Directors for personal guarantees provided in conjunction with financing Company debt. See Note 6. F-20 Table of Contents MOVING IMAGE TECHNOLOGIES, INC. ​ NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS ​ NOTE 9 — CUSTOMER AND VENDOR CONCENTRATIONS Customers : Two customers accounted for approximately 20 % and 18 % of the Company’s sales for the three months ended December 31, 2021. Three customers accounted for approximately 23 %, 10 % and 10 % of the Company's sales for the six months ended December 31, 2021. At December 31, 2021, the amount of outstanding receivables related to these customers was approximately $ 240,000 . One customer accounted for 48 % of the Company’s sales for the three months ended December 31, 2020. One customer accounted for 49 % of the Company's sales for the six months ended December 31, 2020. At December 31, 2020, the amount of outstanding receivables related to this customer was approximately $ 153,000 . Vendors: Approximately 21 % of the Company’s purchases were provided by one vendor for the three months ended December 31, 2021. Approximately 14 % and 10 % of the Company’s purchases were provided by two vendors for the three months ended December 31, 2020. Approximately 33 % of the Company’s purchases were provided by one vendor for the six months ended December 31, 2021. Approximately 16 % of the Company’s purchases were provided by one vendor for the six months ended December 31, 2020. NOTE 10 — COMMITMENTS AND CONTINGENCIES Operating Leases: The Company occupies an executive office and warehouse space in Fountain Valley, CA, pursuant to separate lease agreements. Rent expense was $ 70,000 for both of the three months ended December 31, 2021 and 2020. Rent expense was $ 141,000 for both of the six months ended December 31, 2021 and 2020. Future minimum lease payments at December 31, 2021 under these arrangements are as follows: ​ ​ ​ ​ ​ ​ (in thousands) ​ ​ Total Operating leases ​ Payments 2022 ​ $ 289 2023 ​ 298 2024 ​ 306 2025 ​ 26 Total future minimum lease payments ​ $ 919 ​ Legal Matters: From time to time, the Company is involved in routine litigation that arises in the ordinary course of business. There are no pending significant legal proceedings to which the Company is a party for which management believes the ultimate outcome would have a material adverse effect on the Company’s financial position. ​ NOTE 11 — SUBSEQUENT EVENTS The Company has evaluated subsequent events through the filing of this Quarterly Report on Form 10-Q, and determined that there have been no events that have occurred that would require adjustments to our disclosures in the condensed consolidated financial statements except for the transaction described below. On February 23, 2022, the Company received a notice from NYSE Regulation stating that the Company was not in compliance with the NYSE American LLC’s continued listing standards under the timely filing criteria included in Section 1007 of the NYSE F-21 Table of Contents MOVING IMAGE TECHNOLOGIES, INC. ​ NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS American Company Guide because the Company failed to timely file with the Securities and Exchange Commission its Quarterly Report on Form 10-Q for the period ended December 31, 2021. In April 2022, the Company received notice that on March 23, 2022, its second PPP loan in the amount of $ 698,000 plus accrued interest has been fully forgiven and is paid in full. ​ ​ ​ F-22 Table of Contents