What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2023-02-14 compared with 2022-11-14 · 145 added, 127 removed, 436 unchanged (38% of the section changed)

3 unchanged sentences

(in thousands except share and per share amounts)

September 30,

Current Assets:

Cash and cash equivalents

Marketable securities

Marketable securities–current

Accounts receivable, net

Inventories, net

Prepaid expenses and other

Total Current Assets

Long-Term Assets:

Marketable securities

Marketable securities–non–current

Right-of-use asset

Property, plant and equipment, net

Property and equipment, net

Intangibles, net

Total Long-Term Assets

Liabilities and Stockholders’ Equity

6 unchanged sentences

Total Current Liabilities

Long-Term Liabilities:

Lease liability–non-current

Deferred rent

Total Long-Term Liabilities

Total Liabilities

Stockholders’ Equity

Common stock, $ 0.00001 par value, 100,000,000 shares authorized, 10,958,398 and 10,828,398 shares issued and outstanding at September 30, 2022 and June 30, 2022, respectively

Common stock, $ 0.00001 par value, 100,000,000 shares authorized, 10,958,398 and 10,828,398 shares issued and outstanding at December 31, 2022 and June 30, 2022, respectively

Additional paid-in capital

6 unchanged sentences

(in thousands except share and per share amounts)

September 30,

Six Months Ended

Cost of goods sold

6 unchanged sentences

Other (income) expenses:

Unrealized loss on investments

Realized loss on investments

Unrealized (gain) loss on investments

Realized (gain) loss on investments

Interest and other income

1 unchanged sentence

Total other (income) expense

Net income (loss)

Weighted average shares outstanding:

basic and diluted

Net loss per common share basic and diluted

Net income (loss) per common share basic and diluted

The accompanying notes are an integral part of these condensed consolidated financial statements.

2 unchanged sentences

(in thousands except for share amounts)

Three months and six months ended December 31, 2022

Retained Earnings

2 unchanged sentences

Issuance of stock to employees

Balance as of Sep 30, 2022

Balance as of July 1, 2021

Shares of common stock issued for cash

Balance as of September 30, 2022

Balance as of December 31, 2022

Three months and six months ended December 31, 2021

Retained Earnings

Additional Paid-In

Balance as of June 30, 2021

Shares of common stock issued for cash, net of issuance costs

Cashless exercise of warrants

1 unchanged sentence

Balance as of September 30, 2021

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

Grant of options for services

Balance as of December 31, 2021

The accompanying notes are an integral part of these condensed consolidated financial statements.

MOVING IMAGE TECHNOLOGIES, INC.

1 unchanged sentence

(in thousands)

Three Months Ended

September 30,

Six Months Ended

Cash flows from operating activities:

3 unchanged sentences

Amortization expense

Unrealized loss on investments

Unrealized gain on investments

Realized loss on investments

10 unchanged sentences

Cash flows from investing activities

Sale of marketable securities

Purchases of marketable securities

Sales of marketable securities

Purchase of marketable securities

Purchases of property, plant and equipment

18 unchanged sentences

Organization:

Moving iMage Technologies, Inc.

(“Company”), a Delaware corporation, together with its wholly-owned subsidiaries unless the context indicates otherwise, was incorporated in June 2020.

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.

10 unchanged sentences

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 interests 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 shares, of the outstanding common stock of 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.

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:

1 unchanged sentence

Initial Public Offering:

On July 12, 2021, the Company closed its 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 .

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.

1 unchanged sentence

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.

MOVING IMAGE TECHNOLOGIES, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 — BUSINESS ACTIVITY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Impact of the COVID-19 Pandemic :

4 unchanged sentences

As a result, the Company implemented various cash preservation strategies, including, but not limited to, temporary personnel and salary reductions, halting non-essential operating and capital expenditures, and negotiating modified timing and/or abatement of contractual payments with landlords and other major suppliers.

Throughout Calendar 2020 and 2021 the theatres reopened as soon as local restrictions and the status of the COVID-19 pandemic would allow.

As of September 30, 2022, a large majority of domestic and international theatres were open.

MOVING IMAGE TECHNOLOGIES, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 — BUSINESS ACTIVITY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Throughout 2020 and 2021 the theatres reopened as soon as local restrictions and the status of the COVID-19 pandemic would allow.

As of December 31, 2022, a large majority of domestic and international theatres were open.

The industry’s recovery to historical levels of new film content, both in terms of the number of new films and box office performance, is still underway, as the industry also continues to adjust to evolving theatrical release windows, competition from streaming and other delivery platforms, supply chain delays, inflationary pressures, labor shortages, wage rate pressures and other economic factors.

Based on the Company’s current estimates of recovery, it believes it has, and will generate, sufficient cash to sustain operations for a period of 12 months from the issuance of these financial statements.

Based on the its current estimates of recovery, the Company believes it has, and will generate, sufficient cash to sustain operations for a period of 12 months from the issuance of these financial statements.

Nonetheless, the COVID-19 pandemic has had, and continues to have, adverse effects on the Company’s business, results of operations, cash flows and financial condition.

11 unchanged sentences

The June 30, 2022 condensed consolidated balance sheet has been derived from the audited consolidated financial statements.

Operating results for the three months ended September 30, 2022 are not necessarily indicative of the results that may be expected for any subsequent quarters or for the year ending June 30, 2023.

Operating results for the three months and six months ended December 31, 2022 are not necessarily indicative of the results that may be expected for any subsequent quarters or for the year ending June 30, 2023.

Segment Reporting:

7 unchanged sentences

Fair values are categorized into different levels in a fair value hierarchy based on the inputs used in the valuation techniques as follows:

MOVING IMAGE TECHNOLOGIES, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 — BUSINESS ACTIVITY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

quoted prices (unadjusted) in active markets for identical assets or liabilities.

2 unchanged sentences

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.

Following is the fair value leveling for investment securities that are measured at fair value on a recurring basis as of September 30, 2022 (in thousands):

September 30, 2022

MOVING IMAGE TECHNOLOGIES, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 — BUSINESS ACTIVITY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Following is the fair value leveling for investment securities that are measured at fair value on a recurring basis as of December 31, 2022 (in thousands):

December 31, 2022

Equity Securities

13 unchanged sentences

The carrying amounts of accounts receivable, accounts payable, and notes payable approximate fair value due to their short maturities.

Assets and Liabilities Not Measured - In addition to assets and liabilities that are measured at fair value on a recurring basis, we also measure certain assets and liabilities at fair value on a nonrecurring basis.

Assets and Liabilities Not Measured at Fair Value on a Recurring Basis - In addition to assets and liabilities that are measured at fair value on a recurring basis, we also measure certain assets and liabilities at fair value on a nonrecurring basis.

Our non-financial assets, including goodwill, intangible assets and property, plant and equipment, are measured at fair value when there is an indication of impairment and the carrying amount exceeds the asset’s projected undiscounted cash flows.

These assets are recorded at fair value only when an impairment charge is recognized.

There were no impairments recognized for the quarter ended September 30, 2022 or the year ended June 30, 2022.

There were no impairments recognized for the quarter ended December 31, 2022 or the year ended June 30, 2022.

Deferred Offering Costs:

The Company capitalized certain legal, accounting and other third-party fees that were directly associated with its IPO as deferred offering costs (non-current) until such financings were consummated.

The Company capitalizes certain legal, accounting and other third-party fees that were directly associated with its IPO and other financings as deferred offering costs (non-current) until such financings are 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 were recorded in the condensed consolidated statements of changes in stockholders’ equity (deficit) as a reduction of proceeds received from the offering.

MOVING IMAGE TECHNOLOGIES, INC.

1 unchanged sentence

NOTE 1 — BUSINESS ACTIVITY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

As of June 30, 2021, $ 1,116,000 of deferred offering costs were capitalized in other assets.

Use of Estimates:

13 unchanged sentences

The Company does not charge interest on past due balances or require collateral on its accounts receivable.

As of September 30, 2022 and June 30, 2022, the allowance for bad debts is approximately $ 141,000 and $ 138,000 , respectively.

As of December 31, 2022 and June 30, 2022 the allowance for bad debts is approximately $ 121,000 and $ 138,000 , respectively.

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.

2 unchanged sentences

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 September 30, 2022 and June 30, 2022, the inventory reserve was $ 401,000 and $ 434,000 , respectively, and inventory on hand was comprised primarily of finished goods ready for sale.

As of December 31, 2022 and June 30, 2022, the inventory reserve was $ 401,000 and $ 434,000 , respectively, and inventory on hand was comprised primarily of finished goods ready for sale.

Revenue Recognition:

1 unchanged sentence

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, in an amount that reflects the consideration that the Company expects to receive in exchange for those goods as per the agreement with the customer.

The Company generates all its revenue from agreements with customers.

The Company generates all its revenue under agreements with customers.

In case there are agreements with multiple performance obligations, the Company identifies each performance obligation and evaluates whether the performance obligations are distinct within the context of the agreement at the agreement’s inception.

5 unchanged sentences

If there are circumstances where the above criteria are not met, revenues recognized are presented net of cost of goods sold.

MOVING IMAGE TECHNOLOGIES, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 — BUSINESS ACTIVITY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Contract assets consist of conditional or unconditional rights to consideration.

1 unchanged sentence

The Company does not have contract assets that represent conditional rights to consideration.

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 three months ended September 30, 2022 included $ 1.589 million for revenue recognized that was included in contract liabilities as of June 30, 2022.

The change in contract liabilities (customer deposits and unearned warranty revenue) during the three months ended September 30, 2021 included $ 0.573 million for revenue recognized that was included in contract liabilities as of June 30, 2022.

The change in contract liabilities (customer deposits and unearned warranty revenue) during the six months ended December 31, 2022 included $ 2,571,000 for revenue recognized that was included in contract liability as of July 1, 2022.

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.

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.

1 unchanged sentence

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.

Management 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.

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

1 unchanged sentence

Disaggregation of Revenue (in 000’s):

September 30, 2022

September 30, 2021

December 31, 2022

December 31, 2021

December 31, 2022

December 31, 2021

Equipment upon delivery (point in time)

Installation (point in time)

Software subscription and services (over time)

Services (point in time)

Subscription and services (over time)

Total revenues

Revenue from the sale of equipment is recognized upon shipment of such equipment to customers and when performance conditions are satisfied.

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.

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.

4 unchanged sentences

Advertising Costs:

Advertising costs were approximately $ 6,700 and $ 1,000 for the three months ended September 30, 2022 and 2021, respectively.

Advertising costs were approximately $ 3,900 and $ 11,600 for the three months ended December 31, 2022 and 2021, respectively, and $ 10,600 and $ 11,700 for the six months ended December 31, 2022 and 2021, respectively.

Advertising costs are expensed as incurred within selling and marketing expenses.

3 unchanged sentences

Goodwill and Intangible Assets:

Goodwill as of September 30, 2022 and June 30, 2022 represents the excess of the purchase price over the fair value of the net identifiable assets acquired in the 2019 Caddy Acquisition.

Goodwill as of December 31, 2022 and June 30, 2022 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.

10 unchanged sentences

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 ended September 30, 2022 or 2021.

There were no intangible asset impairments recognized for the three months and six months ended December 31, 2022 or 2021.

Business Combinations:

11 unchanged sentences

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 at June 30, 2022 and September 30, 2022 (in thousands):

The following table summarizes the components of deferred tax assets and deferred tax liabilities at June 30, 2022 and December 31, 2022 (in thousands):

Assets (Liabilities)

1 unchanged sentence

Accumulated depreciation

Accumulated goodwill amortization

Accumulated intangible amortization

Unrealized loss on investments

Deferred rent

2 unchanged sentences

Net operating loss carryforward

Unrealized loss on marketable securities

Allowance for doubtful accounts

3 unchanged sentences

Accumulated depreciation

Accumulated goodwill amortization

Accumulated intangible amortization

Unrealized gain on investments

Deferred rent

2 unchanged sentences

Net operating loss carryforward

Unrealized loss on marketable securities

Capital loss carry over

Allowance for doubtful accounts

Valuation allowance

Total September 30, 2022

Total December 31, 2022

On July 1, 2022 the Company adopted ASU 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.

In accordance with ASC 842, on July 1, 2022 the Company recognized Right of Use Assets in the amount of $ 665,000 and a lease liabilities of $ 681,000 for the leases associated with its executive office and warehouse space, as described in Note 11.

In accordance with ASC 842, on July 1, 2022 the Company recognized Right of Use Assets in the amount of $ 665,000 and lease liabilities of $ 681,000 for the leases associated with its executive office and warehouse space, as described in Note 11.

Product Warranty:

1 unchanged sentence

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 September 30, 2022 and June 30, 2022, the Company has established a warranty reserve of $ 50,000 and $ 55,000 , respectively, which is included in accrued expenses in the accompanying condensed consolidated balance sheets.

The Company has the right to return defective products it buys from third-party manufacturers, for up to three years , depending on the manufacturers’ individual policies.

As of December 31, 2022 and June 30, 2022, the Company has established a warranty reserve of $ 50,000 and $ 55,000 , respectively, which is included in accrued expenses in the accompanying condensed consolidated balance sheets.

MOVING IMAGE TECHNOLOGIES, INC.

2 unchanged sentences

The changes in the Company’s aggregate warranty liabilities were as follows for the following periods (in thousands):

Quarter Ended September 30,

Quarter Ended December 31,

Year Ended June 30,

22 unchanged sentences

NOTE 2 — INVESTMENTS

The following tables show the Company’s cash, cash equivalents and marketable securities by significant investment category as of September 30, 2022 (in thousands):

The following tables show the Company’s cash, cash equivalents and marketable securities by significant investment category as of December 31, 2022 (amounts in 000’s):

Cash Equivalents

9 unchanged sentences

NOTE 2 — INVESTMENTS (continued)

The following tables show the Company’s cash, cash equivalents and marketable securities by significant investment category as of June 30, 2022 (in thousands):

The following tables show the Company’s cash, cash equivalents and marketable securities by significant investment category as of June 30, 2022 (amounts in 000’s):

Cash Equivalents

14 unchanged sentences

For the Three Months Ended

For the Six Months Ended

For the Three Months Ended

September 30,

For the Six Months Ended

Net income (loss)(in 000s's)

Weighted average common shares outstanding, basic and diluted

Loss per share

Income (Loss) per share

Basic and diluted

1 unchanged sentence

For the Three Months Ended

For the Six Months Ended

For the Three Months Ended

September 30,

For the Six Months Ended

Total potentially dilutive shares

For the three months ended September 30, 2022 and 2021, the Company had net losses, therefore all potentially dilutive securities are deemed to be anti-dilutive and are not included in the diluted loss per share computation.

NOTE 4 — PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment consist of the following (in thousands):

September 30,

For the six months ended December 31, 2022 and three and six months ended December 31, 2021, the Company had net losses.

Therefore, all potentially dilutive securities are deemed to be anti-dilutive and are not included in the diluted loss per share computation.

For the three months ended December 31, 2022 the Company had net income.

However, all potentially dilutive securities were also deemed to be anti-dilutive because their exercise price exceeded the weighted average trading price of the Company's stock for the period.

NOTE 4 — PROPERTY AND EQUIPMENT

Property and equipment consist of the following (in thousands):

Production equipment

4 unchanged sentences

Accumulated depreciation

Net property plant and equipment

Depreciation expense related to property, plant and equipment was $ 2,000 and $ 13,000 for the three months ended September 30, 2022 and 2021, respectively, of which $ 0 and $ 9,000 is included in cost of goods sold and $ 2,000 and $ 4,000 in general and administrative expense, respectively.

Net property and equipment

MOVING IMAGE TECHNOLOGIES, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 4 — PROPERTY, PLANT AND EQUIPMENT (continued)

Depreciation of property, plant and equipment is calculated using the straight-line method over their estimated useful lives as follows:

NOTE 4 - PROPERTY AND EQUIPMENT (continued)

Depreciation expense related to property and equipment was $ 1,000 and $ 0 for the three months ended December 31, 2022 and 2021, respectively, of which $ 0 and $ 0 is included in cost of goods sold and $ 1,000 and $ 0 in general and administrative expense, respectively.

Depreciation expense related to property and equipment was $ 3,000 and $ 13,000 for the six months ended December 31, 2022 and 2021, respectively, of which $ 0 and $ 9,000 is included in cost of goods sold and $ 3,000 and $ 4,000 in general and administrative expense, respectively.

Depreciation of property and equipment is calculated using the straight-line method over their estimated useful lives as follows:

Leasehold improvements

5 unchanged sentences

NOTE 5 — GOODWILL AND INTANGIBLE ASSETS

The following table summarizes the Company’s intangible assets as of September 30, 2022 (in thousands):

The following table summarizes the Company’s intangible assets as of December 31, 2022 (in thousands):

Customer relationships

1 unchanged sentence

Customer relationships

Amortization expense was $ 24,000 and $ 24,000 for the three months ended September 30, 2022 and 2021, respectively, and is included in general and administrative expense.

Estimated amortization expense related to intangible assets subject to amortization at September 30, 2022 in each of the five years subsequent to September 30, 2022, and thereafter is as follows (in thousands):

Goodwill at September 30, 2022 and June 30, 2022 was $ 287,000 .

Amortization expense was $ 24,000 and $ 24,000 for the three months ended December 31, 2022 and 2021, respectively, and was $ 48,000 and $ 48,000 for the six months ended December 31, 2022 and 2021, respectively, and is included in general and administrative expense.

MOVING IMAGE TECHNOLOGIES, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 5 — GOODWILL AND INTANGIBLE ASSETS (continued)

Estimated amortization expense related to intangible assets subject to amortization at December 31, 2022 in each of the five years subsequent to December 31, 2022, and thereafter is as follows (amounts in thousands):

Goodwill at December 31, 2022 and June 30, 2022 was $ 287,000 .

NOTE 6 — ACCRUED EXPENSES

Accrued expenses consist of the following (in thousands):

September 30,

Employee compensation

Accrued warranty

Customer refund

NOTE 7 — DEBT

10 unchanged sentences

In August 2021, all remaining amounts due on notes related to the Caddy acquisition, approximately $ 1,241,000 , were paid in full.

MOVING IMAGE TECHNOLOGIES, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 7 — DEBT (continued)

Paycheck Protection Program

3 unchanged sentences

The loans and accrued interest were forgivable as long as the borrower uses the loan proceeds for eligible purposes, including payroll, benefits, rent and utilities, and maintains its payroll levels.

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, was fully forgiven.

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.

There is no outstanding debt as of September 30 or June 30, 2022.

MOVING IMAGE TECHNOLOGIES, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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.

In April 2022, the Company received notice that on March 23, 2022, its second PPP loan in the amount oof $ 698,000 plus accrued interest has been fully forgiven and is paid in full.

There is no outstanding debt as of December 31 or June 30, 2022.

NOTE 8 — STOCKHOLDERS’ EQUITY

1 unchanged sentence

The Plan, as amended, provides for the issuance of stock-based awards to employees.

As of September 30, 2022, the Plan provides for the issuance of up to 1,500,000 stock-based awards.

There are 1,220,000 stock-based awards available to grant under the Plan at September 30, 2022.

As of December 31, 2022, the Plan provides for the issuance of up to 1,500,000 stock-based awards.

There are 1,220,000 stock-based awards available to grant under the Plan at December 31, 2022.

In July 2021, MiT Inc.

4 unchanged sentences

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 was recognized ratably over the vesting period.

These options, which were the only options granted during the three months ended September 30, 2021, had a grant-date fair value of $ 1.63 per share.

The Company recognized compensation expense for stock option awards of approximately $ 0 and $ 56,000 during the three month periods ended September 30, 2022 and 2021, respectively.

At September 30, 2022, there was no unrecognized compensation cost related to nonvested stock option awards.

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 months ended December 31, 2021, respectively The Company recognized no compensation expense for stock options during the three and six months ended December 31, 2022.

At December 31, 2022, there was no unrecognized compensation cost related to nonvested stock option awards.

The estimated fair value of each option award granted was determined on the date of grant using the Black-Scholes option valuation model.

The following weighted average assumptions were used for option grants during the three months ended September 30, 2021:

The following weighted average assumptions were used for option grants during the six months ended December 31, 2021:

Risk-free interest rate

6 unchanged sentences

NOTE 8 — STOCKHOLDERS’ EQUITY (continued)

A summary of the status of the Company’s stock options as of September 30, 2022 and changes during the three months ended September 30, 2022 are presented below.

A summary of the status of the Company’s stock options as of December 31, 2022 and changes during the six months ended December 31, 2022 are presented below.

Balance, July 1, 2022

2 unchanged sentences

Terminated/Expired during the period

Balance, September 30, 2022

A summary of the status of the Company’s stock options as of September 30, 2021 and changes during the three months ended September 30, 2021 are presented below.

Balance, December 31, 2022

A summary of the status of the Company’s stock options as of December 31, 2021 and changes during the six months ended December 31, 2021 are presented below.

Balance, July 1, 2021

2 unchanged sentences

Terminated/Expired during the period

Balance, September 30, 2021

The following table summarizes information about outstanding and exercisable stock options at September 30, 2022:

Balance, December 31, 2021

The following table summarizes information about outstanding and exercisable stock options at December 31, 2022:

Range of Exercise Price

Exercise Price

A summary of the status of the Company’s stock warrants as of September 30, 2021 and changes during the three month period ended September 30, 2021 are presented below.

A summary of the status of the Company’s stock warrants as of December 31, 2021 and changes during the six month period ended December 31, 2021 are presented below.

Balance, July 1, 2021

2 unchanged sentences

Terminated/Expired during the period

Balance, September 30, 2021

Balance, December 31, 2021

In July 2021, warrants were exercised on a cashless basis resulting in the issuance of 139,611 shares of common stock.

No warrants were outstanding, and there was no warrant activity in the three month period ended September 30, 2022.

No warrants were outstanding, and there was no warrant activity in the six month period ended December 31, 2022.

MOVING IMAGE TECHNOLOGIES, INC.

3 unchanged sentences

NOTE 10 — CUSTOMER AND VENDOR CONCENTRATIONS

One customer accounted for approximately 17 % of the Company’s sales for the three months ended September 30, 2022.

At September 30, 2022, the was no amount of outstanding receivables related to this customer.

Two customers accounted for 27 % and 13 % of the Company’s sales for the three months ended September 30, 2021.

At September 30, 2021, the amount of outstanding receivables related to these customers was approximately $ 132,000 .

Approximately 32 % and 14 % of the Company’s purchases were provided by two vendor for the three months ended September 30, 2022.

Approximately 21 % of the Company’s purchases were provided by one vendor for the three months ended September 30, 2021.

Two customer accounted for 17 % and 10 % of the Company's sales for the three months ended December 31, 2022.

One customer accounted for 17 % of the Company’s sales for the six months ended December 31, 2022.

At December 31, 2022, the amount of outstanding receivables related to the Company's largest customer was approximately $ 265,000 .

No other customer represented more than 10% of accounts receivable at December 31, 2022.

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 .

Approximately 17 % and 13 % of the Company's purchases were provided by 2 vendors for the three months ended December 31, 2022.

Approximately 21 % of the Company's purchases were provided by one vendor for the three months ended December 31, 2021.

Approximately 26 % and 13 % of the Company’s purchases were provided by two vendors for the six months ended December 31, 2022.

Approximately 33 % of the Company’s purchases were provided by one vendor for the six months ended December 31, 2021.

NOTE 11 — LEASE COMMITMENTS AND CONTINGENCIES

7 unchanged sentences

In addition to the monthly base amounts in the lease agreements, the Company is required to pay a portion of real estate taxes and common operating expenses during the lease terms.

The Company’s operating lease expense was $ 68,000 and $ 70,000 for the three months ended September 30, 2022 and 2021, respectively.

Future minimum lease payments at September 30, 2022 under these arrangements are as follows:

The Company’s operating lease expense was $ 73,000 and $ 70,000 for the three months ended December 31, 2022 and 2021, respectively.

The Company's operating lease expense was $ 141,000 and $ 141,000 for the six months ended December 31, 2022 and 2021, respectively.

MOVING IMAGE TECHNOLOGIES, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Future minimum lease payments at December 31, 2022 under these arrangements are as follows:

(in thousands)

Operating leases (FOR FISCAL YEAR ENDED JUNE 30,)

Operating leases

Total undiscounted operating lease payments

1 unchanged sentence

Present value of operating lease payments

MOVING IMAGE TECHNOLOGIES, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 11 — LEASE COMMITMENTS AND CONTINGENCIES (continued)

The following table sets forth the ROU assets and operating lease liabilities as of September 30, 2022:

The Present value of the lease payments is calculated using the incremental borrowing rate for operating and finance leases, which was determined using a portfolio approach based on the rate of interest that the Company would have to pay to borrow an amount equal to the lease payments on a collateralized basis over a similar term.

The following table sets forth the ROU assets and operating lease liabilities as of December 31, 2022:

(in thousands)

8 unchanged sentences

NOTE 12 — SUBSEQUENT EVENTS

The Company has evaluated subsequent events from September 30, 2022 through November 14, 2022, the date these financial statements were available to be issued and determined that there have been no events that have occurred that would require adjustments to our disclosures in the condensed consolidated financial statements.

Management has evaluated subsequent events from December 31, 2022 through February 14, 2023, the date these financial statements were available to be issued, and determined that there have been no events that have occurred that would require adjustments to our disclosures in the condensed consolidated financial statements.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements