What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2023-05-15 compared with 2023-02-14 · 189 added, 180 removed, 401 unchanged (48% of the section changed)

10 unchanged sentences

Total Current Assets

Long-Term Assets:

Marketable securities – non–current

2 unchanged sentences

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 December 31, 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;

10,910,931 and 10,828,398 outstanding at March 31, 2022 and June 30, 2022, respectively

Additional paid-in capital

6 unchanged sentences

(in thousands except share and per share amounts)

Six Months Ended

Nine Months Ended

Cost of goods sold

4 unchanged sentences

Total operating expenses

Operating income (loss)

Operating loss

Other (income) expenses:

Realized (gain) on investments

Unrealized (gain)/loss on investments

Realized (gain) loss on investments

PPP loan and interest forgiveness

Interest and other income

Interest expense

Other Non-operating Expenses

Total other (income) expense

2 unchanged sentences

basic and diluted

Net income (loss) per common share basic and diluted

Net 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

Three and nine months ended March 31, 2023

Retained Earnings

4 unchanged sentences

Balance as of December 31, 2022

Three months and six months ended December 31, 2021

Share buyback and cancellation– see Note 11

Balance as of March 31, 2023

Three and nine months ended March 31, 2022

Retained Earnings

Additional Paid-in

Balance as of June 30, 2021

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

Balance as of July 1, 2021

Share of common stock issued, net of issuance costs

Cashless exercise of warrants

3 unchanged sentences

Balance as of December 31, 2021

Grant of options for services

Balance as of March 31, 2022

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

2 unchanged sentences

(in thousands)

Six Months Ended

Nine Months Ended

Cash flows from operating activities:

3 unchanged sentences

Amortization expense

Unrealized gain on investments

Realized loss on investments

Cash expended in excess of rent expense

Realized loss (gain) on investments

Stock compensation expense

Deferred rent

PPP loan forgiveness

Changes in operating assets and liabilities

7 unchanged sentences

Cash flows from investing activities

Sales of marketable securities

Proceeds from the sales of marketable securities

Purchase of marketable securities

Purchases of property, plant and equipment

Net cash used in investing activities

Purchases of property and equipment

Net cash provided by (used in) investing activities

Cash flows from financing activities

2 unchanged sentences

Payments on notes payable

Net cash provided by financing activities

Net increase (decrease) in cash and cash equivalents

Stock Buyback

Net cash (used in) provided by financing activities

Net increase in cash and cash equivalents

Cash and cash equivalents, beginning of the period

3 unchanged sentences

Accrued expenses settled by issuance of common stock

Right-of-use asset recorded upon adoption of ASC 842

Right-of-use asset and liability recorded upon adoption of ASC 842

Cash paid during the period:

25 unchanged sentences

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.

On July 12, 2021, the Company closed its initial public offering 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, 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.

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.

As of March 31, 2023, 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 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.

Based on the Company’s current estimates of recovery, it believes it 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 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:

An operating segment, in part, is a component of an enterprise whose operating results are regularly reviewed by the chief operating decision maker (the “CODM”) to make decisions about resources to be allocated to the segment and assess its performance.

Operating segments may be aggregated only to a limited extent.

The Company’s CODM reviews financial information presented on a consolidated basis, accompanied by disaggregated information about revenues for purposes of making operating decisions and assessing financial performance.

The Company has determined that it has a single operating and reportable segment.

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:

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

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).

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.

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

MOVING IMAGE TECHNOLOGIES, INC.

1 unchanged sentence

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

State and Municipal Debt Securities

Fixed Income Funds

Alternative Funds

Real Estate Funds

Less Long-term

Marketable Securities:

In March 2023, the Company sold all its marketable securities with the proceeds deposited to the Company’s cash account.

As a result, the prior fair value and market data disclosure are no longer needed for the period ended March 31, 2023.

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

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

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.

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.

Our non-financial assets, including goodwill, intangible assets and property 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 December 31, 2022 or the year ended June 30, 2022.

Deferred Offering Costs:

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.

There were no impairments recognized for the period ended March 31, 2023 or the year ended June 30, 2022.

MOVING IMAGE TECHNOLOGIES, INC.

1 unchanged sentence

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

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.

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

Use of Estimates:

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

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

As of March 31, 2023 and June 30, 2022 the allowance for bad debts is approximately $ 143,000 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 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.

As of March 31, 2023 and June 30, 2022, the inventory reserve was $ 514,000 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 under agreements with customers.

The Company generates all its revenue from 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.

1 unchanged sentence

The Company allocates the transaction price to each distinct performance obligation proportionately based on the estimated standalone selling price for each performance obligation and then evaluates how the services are transferred to the customer to determine the timing of revenue recognition.

MOVING IMAGE TECHNOLOGIES, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

The Company considers the U.S.

5 unchanged sentences

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 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.

The change in contract liabilities (customer deposits and unearned warranty revenue) during the nine months ended March 31, 2023 included $ 2,697,000 for revenue recognized that was included in contract liability as of July 1, 2022.

$in Thousands

March 31, 2023

June 30, 2022

Customer deposits

Unearned warranty revenue

Total contract liabilities

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.

3 unchanged sentences

For the Three

Disaggregation of Revenue (in 000’s):

December 31, 2022

December 31, 2021

December 31, 2022

December 31, 2021

March 31, 2023

March 31, 2022

March 31, 2023

March 31, 2022

Equipment upon delivery (point in time)

Services (point in time)

Subscription and services (over time)

Installation (point in time)

Software subscription and services (over time)

Total revenues

1 unchanged sentence

Revenue from installation is recognized upon completion of the installation project and when the performance obligation is complete.

Subscription revenue for remote monitoring services is recognized on a straight-line basis over the term of the contract, usually one year.

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.

MOVING IMAGE TECHNOLOGIES, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

Returns and Allowances:

2 unchanged sentences

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 $ 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.

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, 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 March 31, 2023 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.

9 unchanged sentences

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, 2022 or 2021.

Management 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 nine months ended March 31, 2023 or 2022.

Business Combinations:

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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 December 31, 2022 (in thousands):

Assets (Liabilities)

The following table summarizes the components of deferred tax assets and deferred tax liabilities at June 30, 2022 and March 31, 2023 (in thousands):

Deferred Tax Assets (Liabilities)

June 30, 2022

March 31, 2023

Inventory reserve

9 unchanged sentences

Valuation allowance

Total June 30, 2022

Inventory reserve

Accumulated depreciation

Accumulated goodwill amortization

Accumulated intangible amortization

Unrealized gain on investments

Deferred rent

Warranty reserve

Stock compensation

Net operating loss carryforward

Capital loss carry over

Allowance for doubtful accounts

Valuation allowance

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 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 a lease liability 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 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.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

The Company has the right to return defective products for up to three years , depending on the manufacturers’ individual policies.

As of March 31, 2023 and June 30, 2022, the Company has established a warranty reserve of $ 52,000 and $ 55,000 , 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):

Quarter Ended December 31,

Quarter Ended March 31,

Year Ended June 30,

6 unchanged sentences

Research and development costs are charged to expense when incurred.

MOVING IMAGE TECHNOLOGIES, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

Recently Issued Accounting Pronouncements:

7 unchanged sentences

Therefore, entities must also measure expected credit losses on assets that have a low risk of loss.

For instance, trade receivables that are either current or not yet due may not require an allowance reserve under currently generally accepted accounting principles, but under the new standard, the Company will have to estimate an allowance for expected credit losses on trade receivables.

ASU 2016-13 is effective for annual periods, including interim periods within those annual periods, beginning after December 15, 2022 for smaller reporting companies, and as such the Company will adopt this standard on July 1, 2023.

The Company is currently assessing the impact ASU 2016-13 will have on its consolidated financial statements.

For instance, trade receivables that are either current or not yet due may not require an allowance reserve under currently generally accepted accounting principles, but under the new standard, Management will have to estimate an allowance for expected credit losses on trade receivables.

ASU 2016-13 is effective for annual periods, including interim periods within those annual periods, beginning after March 15, 2022 for smaller reporting companies, and as such the Company will adopt this standard on July 1, 2023.

Management is currently assessing the impact ASU 2016-13 will have on its consolidated financial statements.

Other pronouncements issued by FASB with future effective dates are either not applicable or not significant to the consolidated financial statements of the Company.

MOVING IMAGE TECHNOLOGIES, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 2 — INVESTMENTS

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):

In March 2023, the Company sold all its marketable securities with the proceeds deposited to the Company’s cash account.

The table below shows the marketable securities activity during the three months ended March 31, 2023.

The $ 4.886 million ending balance was transferred the Company’s cash accounts in March 2023.

Cash Equivalents

Communication

Consumer Discretionary

Consumer Staples

Information Technology

State & Municipal Bonds

Fixed income funds

Alternative, real estate and other

MOVING IMAGE TECHNOLOGIES, INC.

18 unchanged sentences

For the Three Months Ended

For the Six Months Ended

For the Nine Months Ended

For the Three Months Ended

For the Six Months Ended

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

For the Nine Months Ended

Net income (loss in 000’s)

Weighted average common shares outstanding, basic and diluted

3 unchanged sentences

For the Three Months Ended

For the Six Months Ended

For the Nine Months Ended

For the Three Months Ended

For the Six Months Ended

For the Nine Months Ended

Total potentially dilutive shares

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.

For the nine months ended March 31, 2023 and the nine months ended March 31, 2022, 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 March 31, 2023 the Company had net losses and the three months ended March 31, 2022 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.

MOVING IMAGE TECHNOLOGIES, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 4 — PROPERTY AND EQUIPMENT

7 unchanged sentences

Net property and equipment

MOVING IMAGE TECHNOLOGIES, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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 expense related to property and equipment was $ 2,000 and $ 3,000 for the three months ended March 31, 2023 and 2022, respectively, of which $ 0 and $ 0 is included in cost of goods sold and $ 3,000 and $ 3,000 in general and administrative expense, respectively.

Depreciation expense related to property and equipment was $ 6,000 and $ 15,000 for the nine months ended March 31, 2023 and 2022, respectively, of which $ 0 and $ 9,000 is included in cost of goods sold and $ 7,000 and $ 6,000 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:

6 unchanged sentences

NOTE 5 — GOODWILL AND INTANGIBLE ASSETS

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

Customer relationships

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

The following table summarizes the Company’s intangible assets as of March 31, 2023 (in thousands):

Customer relationships

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.

1 unchanged sentence

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 .

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

Customer relationships

Amortization expense was $ 24,000 and $ 24,000 for the three months ended March 31, 2023 and 2022, respectively, and was $ 72,000 and $ 72,000 for the nine months ended March 31, 2023 and 2022, respectively, and is included in general and administrative expense.

Estimated amortization expense related to intangible assets subject to amortization at March 31, 2023 in each of the five years subsequent to March 31, 2023, and thereafter is as follows (amounts in thousands):

2023 (remaining quarter of 2023)

NOTE 6 — ACCRUED EXPENSES

3 unchanged sentences

Customer refund

MOVING IMAGE TECHNOLOGIES, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

4 unchanged sentences

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.

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 March 31, 2023 or June 30, 2022.

MOVING IMAGE TECHNOLOGIES, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 8 — STOCKHOLDERS’ EQUITY

1 unchanged sentence

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

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.

As of March 31, 2023, 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 March 31, 2023.

In July 2021, MiT Inc.

3 unchanged sentences

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 was 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 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 six months ended December 31, 2021:

Risk-free interest rate

Expected volatility

Dividend yield

Expected option term in years

These options, which were the only options granted during the nine months ended March 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 nine months ended March 31, 2021, respectively.

The Company recognized no compensation expense for stock options during the three and nine months ended March 31, 2023.

On March 6, 2023, the Board of Directors (the “Board”) of Moving iMage Technologies, Inc.

(the “Company”) approved an amendment (the “Amendment”) to the Company’s Amended and Restated Bylaws that amends the quorum for a stockholders’ meeting or action to be at least 33 1/3% of all shares of stock issued and outstanding and entitled to vote thereat, present in person or represented by proxy.

At March 31, 2023, there was no unrecognized compensation cost related to nonvested stock option awards.

On March 23, 2023 the Board of Directors re-authorized a stock repurchase program.

Under the stock repurchase program, the Company may repurchase up to $ 1 million of its outstanding common stock over the next 12 months.

During the period of March 24 through 31, 2023, the Company repurchased 47,467 of the Company’s stock representing 0.44 % of the 10,828,398 outstanding shares at the end of June 30, 2022 at an average price of $ 1.025 per share.

$ in Thousands, except shares and dollar per share amounts

Total Number of

Dollar Value of

Shares that May

Total Number of

Part of Publicly

Yet Be Purchased

Average Price

Announced Plans

Under the Plans

Paid per Share

March 23, 2023 – March 31, 2023

On July 12, 2022, the Company granted 130,000 shares of common stock, with a fair market value of approximately $ 153,000 , to employees as compensation for previously provided service, which was accrued as of June 30, 2022.

2 unchanged sentences

NOTE 8 — STOCKHOLDERS’ EQUITY (continued)

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.

A summary of the status of the Company’s stock options as of March 31, 2023 and changes during the nine months ended March 31, 2023 are presented below.

Balance, July 1, 2022

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Terminated/Expired during the period

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, March 31, 2023

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

Balance, July 1, 2021

2 unchanged sentences

Terminated/Expired during the period

Balance, December 31, 2021

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

Balance, March 31, 2022

The following table summarizes information about outstanding and exercisable stock options at March 31, 2023:

Range of Exercise Price

Exercise Price

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.

A summary of the status of the Company’s stock warrants as of March 31, 2023 and changes during the nine month period ended March 31, 2023 are presented below.

Balance, July 1, 2021

2 unchanged sentences

Terminated/Expired during the period

Balance, December 31, 2021

Balance, March 31, 2023

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 six month period ended December 31, 2022.

There was no warrant activity in the nine month period ended March 31, 2023.

MOVING IMAGE TECHNOLOGIES, INC.

3 unchanged sentences

NOTE 10 — CUSTOMER AND VENDOR CONCENTRATIONS

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.

One customer accounted for 12 % of the Company’s sales for the three months ended March 31, 2023.

One customer accounted for 12 % of the Company’s sales for the nine months ended March 31, 2023.

At March 31, 2023, the amount of outstanding receivables related to the two customers was approximately $ 225,000 .

Two customers accounted for approximately 11 % and 10 % of the Company’s sales for the three months ended March 31, 2022.

One customer accounted for approximately 32 % of the Company’s sales for the nine months ended March 31, 2022.

At March 31, 2022, the amount of outstanding receivables related to these customers was approximately $ 120,000 .

Approximately 12 % and 11 % of the Company’s purchases were provided by 2 vendors for the three months ended March 31, 2023.

Approximately 14 % and 13 % of the Company’s purchases were provided by two vendors for the three months ended March 31, 2022.

Approximately 22 % and 13 % of the Company’s purchases were provided by two vendors for the nine months ended March 31, 2023.

Approximately 10 % of the Company’s purchases were provided by one vendor for the nine months ended March 31, 2022.

NOTE 11 — LEASE COMMITMENTS AND CONTINGENCIES

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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 $ 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.

The Company’s operating lease expense was $ 73,000 and $ 70,000 for the three months ended March 31, 2023 and 2022, respectively.

The Company’s operating lease expense was $ 214,000 and $ 141,000 for the nine months ended March 31, 2023 and 2022, 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:

NOTE 11 — LEASE COMMITMENTS AND CONTINGENCIES (Continued)

Future minimum lease payments at March 31, 2023 under these arrangements are as follows:

(in thousands)

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Present value of operating lease payments

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:

The following table sets forth the ROU assets and operating lease liabilities as of March 31, 2023:

(in thousands)

8 unchanged sentences

NOTE 12 — SUBSEQUENT EVENTS

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.

The Company held its annual meeting of stockholders (“Annual Meeting”) on April 20, 2023.

For more information about the proposals set forth below, please see the Company’s definitive Proxy Statement filed with the SEC on March 21, 2023.

As of the record date, March 16, 2023, there were 10,913,510 shares of common stock outstanding and entitled to be voted at the Annual

On April 20, 2023, William Greene was appointed Chief Financial Officer effective April 20, 2023.

Greene has been the Interim Chief Financial Officer of the Company since January 2023.

On April 25, 2023, Moving iMage Technologies, Inc.

(the “Company” or “MiT”) entered into a Letter Agreement, subject to definitive agreements, with The Five Agency, LLC (“The Five Agency”).

The Five Agency operates gaming leagues at various theaters, cinemas, movie theaters, entertainment complexes and auditoriums, and provides league structures, hosts, management, supervision, coordination with game publishers, marketing and marketing assets for leagues and events under the brand SNDBX.

The Five Agency and MiT jointly designed the equipment package that will be used for that purpose.

Pursuant to the Letter Agreement, MiT agreed to lend The Five Agency $ 300,000.00 (the “Loan”), which will be provided in two equal installments as further described below, and The Five Agency will form a separate Florida corporation, SNDBX, INC (“SNDBX”), to conduct that business.

As a portion of the consideration payable to MiT under the Loan, upon the formation of SNDBX, The Five Agency will cause SNDBX to issue MiT 5 % of the equity of SNDBX, which will be issued to MiT regardless of whether the second $ 150,000 advance conditions described below are satisfied by The Five Agency or SNDBX.

Plus, MiT has the right to participate in any and all future capital and debt offerings by SNDBX.

MOVING IMAGE TECHNOLOGIES, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 12 — SUBSEQUENT EVENTS (continued)

Pursuant to the terms of the Loan, on April 25, 2023, and subject to the satisfaction of the conditions described in the Letter Agreement, MiT extended an initial loan of $ 150,000 to The Five Agency with interest at 10 % per annum payable each year commencing on May 1, 2024 with principal due on May 1, 2026.

The Loan is secured by the Patents (as defined below).

MiT also agreed to advance an additional $ 150,000 upon the request of The Five Agency upon satisfying certain customary conditions, such as execution of definitive agreements and board and other approvals, and completing the following conditions by May 31, 2023:

(i) The parties have entered into an exclusive supply and marketing agreement requiring The Five Agency or SNDBX to purchase greater than $ 3 million of equipment systems from MiT by April 30, 2026 (the “Supply Agreement”).

After satisfying the requirement to purchase $ 3.0 million, the Supply Agreement will be non-exclusive;

(ii) SNDBX will be formed with The Five Agency granted 95 % of the common stock and MiT granted 5 % of the common stock;

(iii) The initial $ 150,000 loan will be disbursed pursuant to an agreed upon budget;

(iv) MiT has the right to appoint an advisory board member, who will be approved by The Five Agency, and will have board observation rights for any formal board meetings of The Five Agency and SNDBX until April 30, 2026 or until the Loan is paid in full, whichever comes later.

MiT and either The Five Agency or SNDBX will be co-owners of the equipment patents (the “Patents”) and will share the costs.

The Five Agency will apply for Patents on or before April 30, 2024 and after expiration of the Supply Agreement in three years , either party may sell equipment to others with MiT entitled to a reasonable royalty rate equal to a percentage the net sales.

In the event of a transfer of the co-owned Patent rights, MiT will automatically become the sole owner of the Patents.

The Company has evaluated subsequent events from March 31, 2023 through May 15, 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