What changed in this filing

/stocks — the workspaceLOADING

Item 9A. Controls and Procedures

2023-09-27 compared with 2022-09-28 · 308 added, 253 removed, 842 unchanged (40% of the section changed)

17 unchanged sentences

and provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on our financial statements.

Under the supervision and with the participation of our management, including our Chief Executive Officer (our principal executive officer) and Chief Financial Officer (our principal financial officer and principal accounting officer), we performed an assessment of the Company’s significant processes and key controls.

assessment of the Company’s significant processes and key controls.

Based on this assessment, management concluded that our internal controls over financial reporting were not effective as of June 30, 2023 due to the material weaknesses described below.

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Prior to the completion of our IPO, we had been a private company with limited accounting personnel and other resources to address our internal control over financial reporting.

During the course of preparing our consolidated financial statements for the years ended June 30, 2022 and 2021, we determined that we had material weaknesses in our internal control over financial reporting relating to our financial reporting processes relating to (i) the design and operation of our closing and financial reporting process, (ii) the fact that we had no formal or documented accounting policies or procedures, (iii) the fact that certain segregation of duties issues existed and (iv) the fact that there was no formal review process around journal entries recorded.

During the course of preparing our consolidated financial statements for the years ended June 30, 2023 and 2022, we determined that we had material weaknesses in our internal control over financial reporting relating to (i) the design and operation of our closing and financial reporting process, (ii) the fact that we had no formal or documented accounting policies or procedures, (iii) the fact that certain segregation of duties issues existed and (iv) the fact that there was no formal review process around journal entries recorded.

Changes in Internal Control over Financial Reporting

Other than as described below, during the quarter ended June 30, 2023, there have been no changes in our internal control over financial reporting, as such term is defined in Rules 13a-15(f) and 15(d)-15(f) promulgated under the Exchange Act, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

To address identified material weaknesses, we are in the process of instituting a number of accounting processes and procedures and hired a seasoned financial executive consultant as Chief Financial Officer.

The CFO is also undertaking training of our senior and accounting personnel in the requirements of being a public company.

Management’s Plan for Remediation

To address identified material weaknesses, we have continued the process of instituting a number of accounting processes and procedures.

The Company hired a seasoned financial executive consultant as Chief Financial Officer.

The CFO has also undertook the training of our senior and accounting personnel in the requirements of being a public company.

The Company has engaged an external consulting source to assist in remediation.

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While we have implemented a plan to remediate these weaknesses, there can be no assurance that we will be able to timely remediate these weaknesses, which could impair our ability to accurately and timely report our financial position, results of operations or cash flows.

Attestation Report

As an emerging growth company, the Company is not required to include in this report a report on the effectiveness of internal control over financial reporting by the Company’s independent registered public accounting firm.

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Executive Officers and Directors :

Executive Officers and Directors:

President, Chief Executive Officer and Chairman of the Board

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Executive Vice President, Operations

Michael Sherman

William Greene

Chief Financial Officer

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Key Personnel:

Jerry Van de Rydt

Senior Vice President, FF& E Sales

David Richards

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Vice President, Technical Sales & Support

Executive Officers and Directors :

Phil Rafnson has been our Chairman of the Board since the Company’s founding in 2003 and became President and Chief Executive Officer in January 2021.

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Wright has over 34 years of experience in the cinema industry in varying positions from operations to technical services and he holds the Bachelors of Science degree in Mechanical Engineering from Arizona State University, and two patents in cinema projection technology.

Michael Sherman, C.P.A., has been our Chief Financial Officer since July 2021 and was previously our Interim Chief Financial Officer since July 2018.

A senior financial professional for over 25 years, Mr.

Sherman has held executive finance positions within a range of companies, both public and private.

Prior to joining MiT, Mr.

Sherman was a Finance and Accounting Consultant primarily providing acquisition and other transactional services to companies in the Telecom and Manufacturing industries.

At EBSCO Industries, he acted as Corporate Controller and Warehouse Director, while leading the financial integration and on-boarding of the acquisition of an online stand-up desk company in Waukegan, Illinois.

At FDH Velocitel, he was responsible for finance and accounting integration aspects of the acquisition of FDH in Raleigh, North Carolina.

At Mitsubishi Automation, as acting Corporate Controller, he was responsible for their $300 million Annual Operating Plan for North and South America, while overseeing all

finance functions.

Prior to consulting, he was Associate Vice President — Accounting for TCS Education System, where he was responsible for overall system accounting, the acquisitions of the Santa Barbara and Ventura Colleges of Law, as well as preparation and submission of the company’s IRS form 990 for 11 legal entities.

Prior to that, he held a senior management position of Global Vice President of Finance with Liquid Controls Group, an operating group of IDEX, where he was responsible for 7 entities in 5 Countries.

While there, he also led the acquisition of TopTech Systems in Florida and Faure Herman in France.

Prior to IDEX, he was Vice President Finance for KaVo Dental, a Division of Danaher, where he was responsible for all aspects of Finance and Accounting.

A former Public Accounting C.P.A.

with Coopers & Lybrand for 6 years, where he provided audit, accounting, and business advisory services to a portfolio of clients engaged in the manufacturing and distribution sectors, he holds a bachelor degree in Accountancy from Northern Illinois University.

Greene has been our Interim Chief Financial Officer since January 23, 2023 and following the passing of prior CFO Mike Sherman in November 2022.

William Greene was appointed as full-time Chief Financial Officer effective April 20, 2023.

Greene, is the founder of William Greene Consulting, established in 2001, which provides financial consulting services for private and public companies, preparing financial reports and providing comprehensive financial forecasting, CFO level strategy business planning and cash flow reviews, SEC compliance and investor relations management.

Greene's experience includes serving as the chief financial officer for AscentX Medical Inc.

from 2015 to 2017, serving as a consultant to the chief financial officer of Pepperball Technologies, Inc.

from 2009 to 2010, and serving as the chief financial officer for Surge Global Energy from 2006 to 2008.

Greene holds a Bachelor of Science degree in Business Administration with a focus on accounting from California State University Dominguez Hills.

Crothall, Ph.D .

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Prior to Aspire, Dr.

Crothall served as a Principal of Liberty Venture Partners, Inc.

Crothall served as a Principal of Liberty

Venture Partners, Inc.

from 2006 to November 2010.

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Key Personnel :

Jerry Van de Rydt has been our Senior Vice President, FF&E Sales since 2005.

Jerry has been involved in the cinema industry for over 30 years.

Previously he ran the Los Angeles office of MTS, which under his leadership became the largest cinema equipment distributor on the West Coast, outfitting over 2,000 screens for clients such as Pacific, Edwards, Mann, Harkins, & Krikorian Theaters, Deluxe Laboratories just to name a few.

In 2002, he started his own company, Rydt Entertainment Systems which MiT acquired three years later.

David Richards has been our Senior Vice President, Engineering since the Company’s founding in 2003.

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Lipiec has over 32 years of professional experience in the cinema industry.

Tom’s career began by occupying several positions at various cinema exhibitors.

Lipiec’s career began by occupying several

positions at various cinema exhibitors.

He later obtained engineering positions at Lucasfilm/THX and was the Director of the post-production division of THX Ltd.

Additionally, he was the Vice President of Business Development at Constellation 3D.

Tom’s involvement with Lucasfilm included collaborations with Skywalker Sound and ILM, etc.

Lipiec’s involvement with Lucasfilm included collaborations with Skywalker Sound and ILM, etc.

These specific technical efforts gained him 2 movie credits for Star Wars:

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He managed a team of technicians in preparation, installation and service of film and digital cinema equipment for 1000 screens in Southern California, Hawaii, Nevada and Arizona.

Frank has extensive training on 3D and standard DLP and Sony projection systems and practical experience installing them in an integrated and networked environment.

Frank also managed Regal’s technical training program and developed preventative maintenance and tracking guidelines to service systems according to their warranty.

Tees has extensive training on 3D and standard DLP and Sony projection systems and practical experience installing them in an integrated and networked environment.

Tees also managed Regal’s technical training program and developed preventative maintenance and tracking guidelines to service systems according to their warranty.

Family Relationships

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Committees of the Board of Directors

Our board of directors has established an audit committee, a compensation committee and a nominating and corporate governance committee, each of which operate pursuant to a charter adopted by our board of directors.

Our board of directors has established an audit committee, a compensation committee and a nominating and corporate governance committee, each of which operates pursuant to a charter adopted by our board of directors.

The board of directors may also establish other committees from time to time to assist our company and the board of directors.

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The reference to our website address does not constitute incorporation by reference of the information contained at or available through our website, and you should not consider it to be part of this Report.

Board Member Independence

We are listed on the NYSE American and accordingly, we have applied the listing standards of the NYSE American in determining the “independence” of the members of our Board of Directors.

Based on the listing standards of the NYSE American and after reviewing the relationships with members of our Board, our Board of Directors has determined that Katherine D.

Crothall, Ph.D., John C.

Stiska, and Scott Lloyd Anderson qualify as independent directors.

The nominating and governance committee reviews with the Board at least annually the qualifications of new and existing Board members, considering the level of independence of individual members, together with such other factors as the Board may deem appropriate, including overall skills and experience.

The nominating and governance committee also evaluates the composition of the Board as a whole and each of its committees to ensure the Company’s on-going compliance with the independence standards of the NYSE American.

Audit committee

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Copies of all filed reports are required to be furnished to us.

Further, based solely on the reports received by us and on the representations of the reporting persons, we believe each greater than ten percent holder complied with all applicable filing requirements during the fiscal year ended June 30, 2022, except for Sound Management Investors, LLC, which did not timely file a Form 3.

Based solely on the reports received by us and on the representations of the reporting persons, we believe that our directors and executive officers complied with all applicable filing requirements during the fiscal year ended June 30, 2023, except that William Greene did not timely file a Form 3 and a Form 4 reporting for one transaction and each of John C.

Stiska, Katherine D.

Crothall, Ph.D.

and Scott Lloyd Anderson did not timely file a Form 4 for one option award and one stock award.

EXECUTIVE COMPENSATION

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The following information includes the dollar value of base salaries, bonus awards, the number of stock options granted and certain other compensation, if any, whether paid or deferred.

Incentive Plan

Name and Principal Position

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Executive Vice President, Operations

Michael Sherman

Chief Financial Officer (2)

(1) In February 2021, Mr.

Rafnson was appointed President and Chief Executive Officer

Sherman was appointed Chief Financial Officer on July 12, 2021.

(3) In July 2021, the Company paid a discretionary $50,000 in relation to providing personal gaurantees for debt financing.

(1) In July 2021, the Company paid a discretionary $50,000 in relation to providing personal guarantees for debt financing.

Employment Agreements

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There were no equity awards outstanding for any named executive officer as of June 30, 2022.

The Board granted CFO William Greene 100,000 options with an exercise price of $1.10 with 25% vesting immediately and the remainder vesting at 25% per year thereafter.

2019 Incentive Stock Plan

We have adopted a 2019 Omnibus Incentive Stock Plan (the “Plan”).

On February 14, 2022, the Stockholders approved an amendment increasing the number of stock-based awards available for issuance under the Company’s Plan from 750,000 shares to 1,500,000 shares.

On February 14, 2022, our stockholders approved an amendment increasing the number of stock-based awards available for issuance under the Company’s Plan from 750,000 shares to 1,500,000 shares.

At June 30, 2023, an aggregate of 1,150,000 shares of our Common Stock are reserved for issuance and available for awards under the Plan, including incentive stock options granted under the Plan.

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The Plan administrator has the authority to determine, within the limits of the express provisions of the Plan, the individuals to whom awards will be granted, the nature, amount and terms of such awards and the objectives and conditions for earning such awards.

The Board may at any time amend or terminate the Plan, provided that no such action may be taken that adversely affects any rights or obligations with respect to any awards

previously made under the Plan without the consent of the recipient.

The Board may at any time amend or terminate the Plan, provided that no such action may be taken that adversely affects any rights or obligations with respect to any awards previously made under the Plan without the consent of the recipient.

No awards may be made under the Plan after the tenth anniversary of its effective date.

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Directors who are also our employees do not receive any additional compensation for their service on our board of directors.

The following table sets forth all compensation paid to or earned by each non-employee director of the Company during fiscal year June 30, 2022.

The following table sets forth all compensation paid to or earned by each non-employee director of the Company during the fiscal year ended June 30, 2023.

Crothall, Ph.D.

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See “Note 1 - Business Activity And Summary Of Significant Accounting Policies” to our consolidated financial statements for the year ended June 30, 2023.

On July 7, 2021, the effective date of the IPO, each of our non-management directors were granted options to purchase 50,000 shares of Common Stock at a per share exercise price of $3.00.

The options vested over a one-year period of time.

(2 ) On May 26, 2023, the Board of Directors cancelled 150,000 options consisting of 50,000 options each to John Stiska, Katherine Crothall and Scott Anderson with an exercise price of $3.00.

In its place, the Board granted 150,000 options consisting of 50,000 options each with an exercise price of $1.10 vesting immediately to John Stiska, Katherine Crothall and Scott Anderson.

(3) On May 26, 2023, the Board of Directors granted 30,000 shares consisting of 10,000 shares each to John Stiska, Katherine Crothall and Scott Anderson at a price of $1.10.

The Company recorded $33,000 in stock compensation expense.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

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Named Executive Officers and Directors

Phil Rafnson(1)

Michael Sherman

William Greene

Crothall, Ph.D.

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All executive officers, directors as a group (7 persons)

* Indicates ownership of less than 1%

(1) Represents shares held by Sound Management Investors, LLC, an entity wholly-owned and controlled by Mr.

(2) Represents shares underlying stock options.

(3) Includes option to purchase 50,000 shares of common stock.

(4) The table amounts exclude 10,000 shares of stock each for Katherine D.

Crothall, John C.

Stiska and Scott Anderson that have been granted been not yet issued.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

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See Note 9 - Debt of the Notes to the Company’s Consolidated Financial Statements.

In October 2019, the Company executed a loan 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 the Company and was personally guaranteed by Phil Rafnson, our Chairman of the Board.

Sound Management Investors, LLC, an entity controlled by Mr.

Rafnson, had pledged all shares of the Company held by it as further security for the repayment of such loan.

In July 2021, 100% of the outstanding balance, plus accrued interest, was paid off in full.

In conjunction, all security interests have been terminated.

In July 2020, Glenn Sherman, our former President, and David Richards, our Senior Vice President, Engineering and a 5% stockholder at that time, purchased 97,334 and 5,000 shares, respectively, of Acquisition Co.

at $1.50 per share.

We have agreed to indemnify, defend and hold harmless the members of Moving iMage Technologies LLC from any taxes which may at any time be asserted with respect to the Share Exchange.

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Our board of directors has adopted a written related person transaction policy setting forth the policies and procedures for the review and approval or ratification of related-person transactions.

This policy covers, with certain exceptions set forth in Item 404 of Regulation S-K under the Securities Act, any transaction, arrangement or relationship, or any series of similar transactions, arrangements or relationships in which we were or are to be a participant, where the amount involved exceeds $120,000 and a related person had or will have a direct or indirect material interest, including, without limitation, purchases of goods or services by or from the related person or entities in which the related person has a material interest, indebtedness, guarantees of indebtedness and employment by us of a related person.

This policy covers, with certain exceptions set forth in Item 404 of Regulation S-K under the Securities Act, any transaction, arrangement or relationship, or any series of similar transactions,

arrangements or relationships in which we were or are to be a participant, where the amount involved exceeds $120,000 and a related person had or will have a direct or indirect material interest, including, without limitation, purchases of goods or services by or from the related person or entities in which the related person has a material interest, indebtedness, guarantees of indebtedness and employment by us of a related person.

In reviewing and approving any such transactions, our audit committee will be tasked to consider all relevant facts and circumstances, including, but not limited to, whether the transaction is on terms comparable to those that could be obtained in an arm’s length transaction and the extent of the related person’s interest in the transaction.

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● any firm, corporation or other entity in which any of the foregoing persons is a partner or principal or in a similar position or in which such person has a 10% or greater beneficial ownership interest.

Director Independence

We are listed on the NYSE American and accordingly, we have applied the listing standards of the NYSE American in determining the “independence” of the members of our Board of Directors.

Based on the listing standards of the NYSE American and after reviewing the relationships with members of our Board, our Board of Directors has determined that Katherine D.

Crothall, Ph.D., John C.

Stiska, and Scott Lloyd Anderson qualify as independent directors.

PRINCIPAL ACCOUNTING FEES AND SERVICES

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June 30, 2023 and 2022

REPORTS OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRMS (PCAOB ID’s:

200 and 596 )

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM (PCAOB ID 200 )

CONSOLIDATED BALANCE SHEETS

CONSOLIDATED STATEMENTS OF OPERATIONS

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (DEFICIT)

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

CONSOLIDATED STATEMENTS OF CASH FLOWS

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Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheet of Moving iMage Technologies, Inc.

(the “Company”) as of June 30, 2022, the related consolidated statements of operations, stockholders’ equity (deficit), and cash flows the year then ended, and the related notes (collectively, the “consolidated financial statements”).

In our opinion, the consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Company as of June 30, 2022, and the consolidated results of its operations and its cash flows for the year then ended, in conformity with U.S.

We have audited the accompanying consolidated balance sheets of Moving iMage Technologies, Inc.

(the “Company”) as of June 30, 2023 and 2022, the related consolidated statements of operations, stockholders’ equity, and cash flows for each of the years then ended, and the related notes (collectively, the “consolidated financial statements”).

In our opinion, the consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Company as of June 30, 2023 and 2022, and the consolidated results of its operations and its cash flows for each of the years then ended, in conformity with U.S.

generally accepted accounting principles.

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These consolidated financial statements are the responsibility of the Company’s management.

Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audit.

Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audits.

We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S.

federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud.

We conducted our audits in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud.

The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.

As part of our audit, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting.

As part of our audits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting.

Accordingly, we express no such opinion.

Our audit included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements.

Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the combined financial statements.

We believe that our audit provides a reasonable basis for our opinion.

Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the combined financial statements.

We believe that our audits provide a reasonable basis for our opinion.

/s/ Haskell & White LLP

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September 27, 2023

Report of Independent Registered Public Accounting Firm

To the Board of Directors and Members

Moving iMage Technologies, LLC

Opinion on the Consolidated Financial Statements

We have audited the accompanying consolidated balance sheet of Moving iMage Technologies, LLC (the “Company”) as of June 30, 2021, and the related consolidated statements of operations, changes in members’ deficit and cash flows for year then ended, and the related notes (collectively referred to as the “consolidated financial statements”).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of June 30, 2021, and the results of its operations and its cash flows for the year then ended, in conformity with the accounting principles generally accepted in the United States of America.

Basis for Opinion

These consolidated financial statements are the responsibility of the Company’s management.

Our responsibility is to express an opinion on these consolidated financial statements based on our audit.

We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") and are required to be independent with respect to the Company in accordance with the U.S.

federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB.

The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.

As part of our audit we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting.

Accordingly, we express no such opinion.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements.

Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.

We believe that our audit provide a reasonable basis for our opinion.

/s/ CohnReznick LLP

We have served as the Company's auditor from 2018 to 2021

September 29, 2021 (except for Note 1 which describes the retroactive application of a common control merger

dated July 7, 2021, as to which the date is September 28, 2022)

MOVING IMAGE TECHNOLOGIES, INC.

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Marketable securities – long-term

Property, plant and equipment, net

Right-of-use asset

Property and equipment, net

Intangibles, net

Total Long-Term Assets

Liabilities And Stockholders’ Equity (Deficit)

Liabilities And Stockholders’ Equity

Current Liabilities:

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Customer deposits

Line of credit

Notes payable – current

Lease liability–current

Unearned warranty revenue

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Long-Term Liabilities:

Notes payable, net of current portion

Lease liability–non-current

Deferred rent

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Total Liabilities

Stockholders’ Equity (Deficit)

Stockholders’ Equity

Common stock, $ 0.00001 par value, 100,000,000 shares authorized, 10,685,778 and 10,828,398 shares issued and outstanding at June 30, 2023 and 2022, respectively

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Accumulated deficit

Total Stockholders’ Equity (Deficit)

Total Liabilities and Stockholders’ Equity (Deficit)

Total Stockholders’ Equity

Total Liabilities and Stockholders’ Equity

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

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General and administrative

Impairment of long-term assets

Total operating expenses

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Unrealized loss on marketable securities

Realized loss (gain) on marketable securities

Realized (gain)/loss on marketable securities

PPP loan forgiveness

Interest expense

Interest expense and other income, net

Total other expense (income)

Weighted average shares outstanding:

basic and diluted*

basic and diluted (Note 5)

Net loss per common share basic and diluted

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MOVING IMAGE TECHNOLOGIES, INC.

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (DEFICIT)

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

FOR THE YEARS ENDED JUNE 30, 2023 AND 2022

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Additional Paid-In

Balance as of July 1, 2020

Share exchange (see Note 1)

Balance as of July 1, 2020, as adjusted

Shares issued in private placement

Balance as of June 30, 2021

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Balance as of June 30, 2022

Issuance of stock to employees

Grant of options to officer and board members

Share buyback and cancellation

Balance as of June 30, 2023

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

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PPP loan forgiveness

(Recovery) Provision for doubtful accounts

Provision for doubtful accounts

Depreciation expense

Amortization expense

Deferred rent

Impairment expense

ROU amortization

Stock option compensation expense

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Accounts receivable

Inventories, net

Prepaid expenses and other

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Customer deposits

Net cash used in operating activities

Lease liabilities

Net cash provided by operating activities

Cash flows from investing activities

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Purchases of marketable securities

Purchases of property, plant and equipment

Net cash (used in) provided by investing activities

Purchases of property and equipment

Advances on notes receivable

Net cash provided by (used in) investing activities

Cash flows from financing activities

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Payments on line of credit

Paycheck Protection Program loan proceeds

Proceeds from private placement

Net cash provided by financing activities

Stock Buyback

Net cash provided by (used in) financing activities

Net increase in cash

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Non-cash investing and financing activities:

Deferred IPO costs

Issuance of stock to employees

Right-of-use assets from ASC842 adoption

Reclassification of IPO related costs from other assets to equity

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and MiT LLC have been eliminated.

The consolidated statements of stockholders’ equity (deficit) for the years ended June 30, 2022 and 2021 have been retroactively revised to give effect of the change in reporting entity accounting of MiT Inc.

The consolidated statements of stockholders’ equity for the years ended June 30, 2022 have been retroactively revised to give effect of the change in reporting entity accounting of MiT Inc.

Initial Public Offering:

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

Through 2020 and 2022 the theatres reopened as soon as local restrictions and the status of the COVID-19 pandemic would allow.

As of June 30, 2023, a large majority of domestic and international theatres were open.

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

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

As a result, the prior fair value and market data disclosure is no longer needed for the period ended June 30, 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:

June 30, 2022

Equity securities

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Real Estate Funds

Less Long-term

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.

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.

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 years ended June 30, 2022 and 2021.

For the year ended June 30, 2023, the Company recognized $ 0.954 million in impairments.

See the additional discussion in Note 7 below.

There were no impairments recognized for the years ended June 30, 2022.

Deferred Offering Costs:

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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 consolidated statement of stockholders’ equity (deficit) as a reduction of the proceeds received from the offering.

After completion of the IPO in July 2021, these costs were recorded in the consolidated statement of stockholders’ equity as a reduction of the proceeds received from the offering.

Use of Estimates:

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Investments in debt securities that the Company has the positive intent and ability to hold to maturity are carried at amortized cost and classified as held-to-maturity.

Investments in debt securities that are not classified as held-to-maturity are carried at fair value and classified as available-for sale.

Investments in debt securities that are not classified as held-to-maturity are carried at

MOVING IMAGE TECHNOLOGIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

fair value and classified as available-for sale.

Realized gains and losses on available-for-sale debt securities are included in net income/loss.

3 unchanged sentences

The cost of securities sold is determined using the specific identification method.

MOVING IMAGE TECHNOLOGIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

Accounts Receivable:

19 unchanged sentences

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.

Management considers the U.S.

GAAP criteria for determining whether to report revenue gross as a principal versus net as an agent.

4 unchanged sentences

Other than accounts receivable, there were no other contract assets as of June 30, 2023 or 2022.

MOVING IMAGE TECHNOLOGIES, INC.

NOTES TO 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 year ended June 30, 2022 included $ 1,279,000 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 year ended June 30, 2021 included $ .690 million for revenue recognized that was included in contract liability as of July 1, 2020.

Contract liabilities as of July 1, 2020 were $ .854 million.

Contract Liabilities

Customer deposits

Unearned Revenue

Customer refunds

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.

MOVING IMAGE TECHNOLOGIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

Deferred contract acquisition costs consist of sales commissions paid to the sales force and the related employer payroll taxes, collectively “deferred contract acquisition costs”, are considered incremental and recoverable costs of obtaining a contract with a customer.

12 unchanged sentences

Services revenues are generally recognized over time as the contracts are performed.

There were no software revenues during the years ended June 30, 2022 or 2021.

There was $ 65 K in software revenues during the years ended June 30, 2023 and none in 2022.

Returns and Allowances:

6 unchanged sentences

Goodwill as of June 30, 2023 and 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.

The Company operates as a single operating segment and as a single reporting unit for the purpose of evaluating goodwill impairment.

Goodwill is reviewed for impairment at least annually, in

MOVING IMAGE TECHNOLOGIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

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 and intangible asset 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.

6 unchanged sentences

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.

MOVING IMAGE TECHNOLOGIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

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.

In June 2023, the Company conducted its annual impairment assessment and determined that the carrying value of the Caddy goodwill and customer relationships intangible assets had declined.

Accordingly, the Company impaired $ 0.287 million in goodwill and $ 0.263 million in the customer intangible asset.

Total intangibles were $ 0.480 million as of June 30, 2023 compared to $ 0.839 million as of June 30, 2022.

Intangible assets arising from business combinations, such as customer relationships, trade names, and/or intellectual property, are initially recorded at fair value.

1 unchanged sentence

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 years ended June 30, 2022 or 2021.

For the year ended June 30, 2022.

In 2023, the Company recognized $ 263,000 in intangible asset impairments.

There were no intangible asset impairments recognized for the year ended June 30, 2022.

Business Combinations:

2 unchanged sentences

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:

9 unchanged sentences

As of June 30, 2023 and 2022, the Company has established a warranty reserve of $ 53,000 and $ 55,000 , respectively, which is included in accrued expenses in the accompanying consolidated balance sheets.

MOVING IMAGE TECHNOLOGIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

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

7 unchanged sentences

Research and development costs are charged to expense when incurred.

MOVING IMAGE TECHNOLOGIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

Share-Based Compensation:

8 unchanged sentences

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.

On July 1, 2022, the Company expects to recognize ROU assets and lease liabilities in the range of approximately $ 670,000 and no adjustment to the stockholders’ equity.

Management does not expect the adoption of the new lease standard to impact its consolidated statement of operations or its consolidated statement of cash flows.

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 liability of $ 681,000 for the leases associated with its executive office and warehouse space, as described in Note 13.

In December 2019, the FASB issued ASU No.

2 unchanged sentences

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 July 1, 2022.

Management does not expect the adoption of ASU 2019-12 to have a material impact on its financial position and results of operations upon adoption.

The new standard was adopted beginning July 1, 2022.

In January 2017, the FASB issued ASU 2017-04, “Intangibles-Goodwill and Other (Topic 350):

2 unchanged sentences

It eliminates Step 2 of the current two-step goodwill impairment test, under which a goodwill impairment loss is measured by comparing the implied fair value of a reporting unit’s goodwill with the carrying amount of that goodwill.

The Company will adopt this standard on July 1, 2022.

The impact of the new standard will be dependent on the specific facts and circumstances of future impairments, if any.

The Company adopted this standard on July 1, 2022.

In June 2016, the FASB issued ASU 2016-13, Financial Instruments—Credit Losses (Topic 326):

Measurement of Credit Losses on Financial Instruments .

The standard’s main goal is to improve financial reporting by requiring earlier recognition of credit losses on financing receivables and other financial assets in scope.

The Company shall adopt this standard beginning July 1, 2023.

Management does not expect the adoption of ASU 2016-13 to have a material impact on its financial position and results of operations upon adoption.

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

2 unchanged sentences

NOTE 2 — INVESTMENTS

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):

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

As a result, the prior fair value and market data disclosure is no longer needed as of June 30, 2023.

As of June 30, 2022, the Investments were as follows:

Cash Equivalents

6 unchanged sentences

Alternative, real estate and other

NOTE 3 — SNDBX AGREEMENTS

On April 25, 2023, the Company 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 the Company jointly designed the equipment package that will be used for that purpose.

Pursuant to the Letter Agreement, the Company agreed to lend The Five Agency $ 300,000 (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

MOVING IMAGE TECHNOLOGIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 3 — SNDBX AGREEMENTS (continued)

payable to MiT under the Loan, upon the formation of SNDBX, The Five Agency will cause SNDBX to issue the Company 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, the Company has the right to participate in any and all future capital and debt offerings by SNDBX.

Pursuant to the terms of the Loan, on April 25, 2023, and subject to the satisfaction of the conditions described in the Letter Agreement, the Company 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).

The Company 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 the Company 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 the Company granted 5 % of the common stock;

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

(iv.) The Company 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.

The Company 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 the Company 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, the Company will automatically become the sole owner of the Patents.

On June 6, 2023, the Company entered into a Convertible Note Purchase Agreement (the “Purchase Agreement”), with SNDBX, INC.

("SNDBX") pursuant to which SNDBX issued and sold an unsecured convertible promissory note (the “Note”) to the Company for the principal amount of $ 100,000 .

The Note matures on June 5, 2024, (the “Maturity Date”) and accrues simple interest at an annual rate of 5 %, payable at any time on or after the Maturity Date.

At the Company’s election the Note (including accrued interest) is convertible into stock of SNDBX having the same rights and privileges of stock owned by the founders of SNDBX (the “Founders Shares”) at any time on or after the Maturity Date at a conversion price of $ 5,000 per Founders Share, or twenty (20) SNDBX Founders Shares.

SNDBX may repurchase ten (10) of the twenty (20) Founders Shares at any time during the two ( 2 ) year period after the date of the Note’s conversion, for an aggregate repurchase price of $ 500,000 .

If SNDBX exercises such repurchase option, $ 100,000 of the repurchase price is due and payable on the date of such election, and the remaining $ 400,000 is paid in installments of $ 100,000 annually thereafter on such date.

The Purchase Agreement contains customary representations and warranties.

The following events constitute an event of default under the Note:

(i) SNDBX’s failure to pay timely any of the principal amount due under the Note on the date the same becomes due and payable or any unpaid accrued interest or other amounts due under the Note on the date the same becomes due and payable;

(ii) SNDBX files any petition or action for relief under any bankruptcy, reorganization, insolvency or moratorium law or any other law for the relief of, or relating to, debtors, now or hereafter in effect, or

MOVING IMAGE TECHNOLOGIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 3 — SNDBX AGREEMENTS (continued)

makes any assignment for the benefit of creditors or takes any corporate action in furtherance of any of the foregoing;

or (iii) an involuntary petition is filed against SNDBX (unless such petition is dismissed or discharged within 90 days under any bankruptcy statute now or hereafter in effect, or a custodian, receiver, trustee or assignee for the benefit of creditors (or other similar official) is appointed to take possession, custody or control of any property of SNDBX.

Upon an event of default, the Note will accelerate and all principal and unpaid accrued interest will become due and payable.

The Note and the Founders Shares underlying the Note have not been registered under the Securities Act of 1933, as amended, or any state securities laws, and may not be offered or sold absent registration or an applicable exemption from registration requirements.

On June 30, 2023, the Company determined the Notes Receivable balance of $ 0.400 million was unrealizable due to SNDBX delays and execution risk and fully reserved the balance.

The $ 0.400 million is included within impairment expense.

NOTE 4 - SHARE BUYBACK

On March 23, 2023 the Board of Directors 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 March 31, 2023, the Company repurchased 47,467 shares of the Company’s stock.

During the period of May 18 through May 31, 2023, the Company repurchased an additional 225,153 shares of the Company’s stock.

For the year ended June 30, 2023, the Company repurchased a combined total of 272,620 share representing 2.55 % of the 10,685,778 outstanding shares at the end of June 30, 2023 at an average price of $ 1.111 per share.

Total Number of

Dollar Value of

Shares that May

Yet Be Purchased

Average Price

Part of Publicly

Under the Plans

Announced Plans

(in thousands)

March 23, 2023 – March 31, 2023

May 18, 2023 - June 30, 2023

MOVING IMAGE TECHNOLOGIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 5 — LOSS PER SHARE

3 unchanged sentences

A reconciliation of basic and diluted loss per share is as follows:

Dollars in Thousands

For the Year Ended

8 unchanged sentences

For the years ended June 30, 2023 and 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.

NOTE 4 — PROPERTY, PLANT AND EQUIPMENT

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

NOTE 6 — 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 $ 19,000 in 2022 and $ 132,000 in 2021, with $ 9,000 and $ 120,000 included in cost of goods sold and $ 10,000 and $ 12,000 in general and administrative expense, respectively.

Net property and equipment

MOVING IMAGE TECHNOLOGIES, INC.

NOTES TO 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 6 — PROPERTY AND EQUIPMENT (continued)

Depreciation expense related to property and equipment was $ 9,000 in 2023 and $ 19,000 in 2022, with $ 0 and $ 9,000 included in cost of goods sold and $ 9,000 and $ 10,000 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

9 unchanged sentences

Customer relations

Amortization expense was $ 96,000 and $ 95,000 for the years ended June 30, 2022 and 2021, respectively, and are included in general and administrative expense.

Goodwill related to the Caddy acquisition was $ 287,000 at June 30, 2022 and 2021.

For the years ended June 30, 2023, amortization expense was $ 358,000 consisting of recurring annual $ 95,000 expense and the impairment charge of $ 263,000 – see Note 1.

For the year ended June 30, 2022, amortization expense was $ 96,000 .

Amortization expense is included in general and administrative expense.

Goodwill’s impairment was $ 287,000 and $ 0 for the years ended June 30, 2023 and 2022, respectively, and are included in general and administrative expenses.

Estimated amortization expense related to intangible assets subject to amortization at June 30, 2023 in each of the five fiscal years subsequent to June 30, 2023, and thereafter is as follows (amounts in thousands):

5 unchanged sentences

Accrued warranty

Customer refund

NOTE 9 — DEBT

11 unchanged sentences

In July 2021, the outstanding balance, and all accrued interest, was paid in full.

There was no outstanding debt as of June 30, 2022.

Long-term debt at June 30, 2021 was as follows (in thousands):

Caddy promissory note

Caddy indemnity promissory note

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.

MOVING IMAGE TECHNOLOGIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 7 — DEBT (continued)

There was no outstanding debt arrangement or debt balance as of June 30, 2023.

Paycheck Protection Program

7 unchanged sentences

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 of $ 7,000 has been fully forgiven and is paid in full.

MOVING IMAGE TECHNOLOGIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 10 — STOCKHOLDERS’ EQUITY

1 unchanged sentence

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

As of June 30, 2022, the Plan provided 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 June 30, 2022.

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.

As of June 30, 2023, the Plan provided for the issuance of up to 1,220,000 stock-based awards available to grant under the Plan at June 30, 2023.

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 will be recognized ratably over the vesting period.

On May 26, 2023, the Board of Directors cancelled 150,000 options consisting of 50,000 options each to John Stiska, Katherine Crothall and Scott Anderson with an exercise price of $ 3.00 .

In its place, the Board granted 150,000 options consisting of 50,000 options each with an exercise price of $ 1.10 vesting immediately to John Stiska, Katherine Crothall and Scott Anderson .

In addition to the director options, the Board granted CFO William Greene 100,000 options with an exercise price of $ 1.10 with 25 % vesting immediately the remainder vesting at 25 % per year thereafter.

These options, which were the only options granted during the year ended June 30, 2023, had a grant-date fair value of $ 1.10 per share.

The Company recognized compensation expense for stock option awards of approximately $ 113,000 during the year ended June 30, 2023.

None of the these potentially dilutive securities were included in the computation of diluted earnings per share as their impact would be anti-dilutive.

None of these potentially dilutive securities were included in the computation of diluted earnings per share as their impact would be anti-dilutive.

On March 6, 2023, the Board of Directors (the “Board”) of 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.

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 year ended June 30, 2022:

The following weighted average assumptions were used for the Board of Director and Officer option grants during the year ended June 30, 2023:

Risk-free interest rate

5 unchanged sentences

NOTE 10 — STOCKHOLDERS’ EQUITY (continued)

A summary of the status of the Company’s stock options as of June 30, 2022 and changes during the year then ended are presented below.

A summary of the status of the Company’s stock options as of June 30, 2023 and 2022 and changes during the years ended June 30, 2023 and 2022 are presented below.

Balance, July 1, 2021

2 unchanged sentences

Terminated/Expired during the year

Balance, July 1, 2022

Granted during the year

Exercised during the year

Cancelled during the year

Balance, June 30, 2023

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

The following table summarizes the outstanding stock options at June 30, 2023:

Range of Exercise Price

Exercise Price

MOVING IMAGE TECHNOLOGIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 10 — STOCKHOLDERS’ EQUITY (continued)

A summary of the status of the Company’s stock warrants as of June 30, 2023 and 2022 and changes during the years ended June 30, 2023 and 2022 are presented below.

10 unchanged sentences

In April 2022, underwriter warrants were exercised on a cashless basis resulting in the issuance of 192,120 shares of common stock.

MOVING IMAGE TECHNOLOGIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

There was no warrant activity during the year ended June 30, 2023.

NOTE 11 — INCOME TAXES

8 unchanged sentences

June 30, 2023

Total July 7, 2021 (see note 1)

Deferred tax assets

Deferred tax liabilities

Valuation allowance

Total MiT Inc.

June 30, 2022

MOVING IMAGE TECHNOLOGIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 11 — INCOME TAXES (continued)

The following table summarizes the components of deferred tax assets and deferred tax liabilities:

Assets (Liabilities)

Deferred Tax Assets (Liabilities)

June 30, 2023

June 30, 2022

Inventory reserve

9 unchanged sentences

Valuation allowance

Total June 30, 2022

Inventory reserve

Accumulated depreciation

Accumulated goodwill amortization

Deferred rent

Warranty reserve

Allowance for doubtful accounts

Valuation allowance

Total July 7, 2021 (see note 1)

MOVING IMAGE TECHNOLOGIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 9 — INCOME TAXES (continued)

The income tax expense differs from the amount computed by applying the statutory income tax rates to the loss before income tax.

10 unchanged sentences

At June 30, 2023 the Company has approximately $ 3,381,000 of U.S.

State and $ 2,200,000 of U.S.

Federal NOL carryforwards, which will not expire and will be available for future use to offset taxable income.

Federal and State NOL carryforwards, which will be available for future use to offset taxable income.

The Company recognized a valuation allowance of $ 1,555,000 and $ 892,000 as of June 30, 2023 and 2022, respectively, as all U.S.

4 unchanged sentences

See Note 7 - Debt.

Approximately $ 32,000 of the Company's net sales in the year ended June 30, 2022 was to companies deemed to be related parties.

Accounts receivable from related parties were zero as of June 30, 2022 and 2021.

MOVING IMAGE TECHNOLOGIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 13 — CUSTOMER AND VENDOR CONCENTRATIONS

No customer accounted for more than 10% of the Company’s revenue for the year ended June 30, 2023.

One customer accounted for 23 % of the Company’s revenue for the year ended June 30, 2021.

No customer accounted for more than 10% of the Company’s revenue for the year ended June 30, 2022.

One customers accounted for 14 % of accounts receivable at June 30, 2023.

Three customers accounted for 18 %, 16 % and 10 % of accounts receivable at June 30, 2022.

No customers accounted for more than 10% of accounts receivable at June 30, 2021.

For the year ended June 30, 2023, the two largest vendors provided 20 % and 15 %, respectively, of the Company’s purchases.

For the year ended June 30, 2022, the two largest vendors provided 18 % and 13 %, respectively, of the Company’s purchases.

At June 30, 2021, the two largest vendors accounted for 28 % and 13 % of the accounts payable balance.

One vendor accounted for 39 % of accounts payable at June 30, 2022.

MOVING IMAGE TECHNOLOGIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

On June 30, 2023, one vendor accounted for 20 % of accounts payable at June 30, 2023.

At June 30, 2022, the one vendor accounted for 39 % of accounts payable balance.

NOTE 14 — COMMITMENTS AND CONTINGENCIES

1 unchanged sentence

The Company occupies an executive office and warehouse space in Fountain Valley, CA, pursuant to separate lease agreements.

The aggregate rent expense was $ 281,000 in 2022 and $ 281,000 in 2021.

Under ASC 842, at contract inception the Company determined whether the contract is or contains a lease and whether the lease should be classified as on operating or a financing lease.

Operating leases are included in ROU (right-of-use) assets and operating lease liabilities in our condensed consolidated balance sheet.

The Company’s executive office and warehouse lease agreements are classified as operating leases.

The lease agreements, as amended, expire on January 31, 2025 and do not include any renewal options.

The agreements provide for initial monthly base amounts plus annual escalations through the term of the leases.

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 aggregate rent expense was $ 287,000 and $ 281,000 for the year ended June 30, 2023 and 2022, respectively.

In September 2018, the Company reached an agreement to extend the executive office lease effective February 1, 2019 by an additional five years .

6 unchanged sentences

In addition, the term of the lease was extended for one year from the anniversary date, through January 2025.

MOVING IMAGE TECHNOLOGIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 14 — COMMITMENTS AND CONTINGENCIES (continued)

Future minimum lease payments at June 30, 2023 under these arrangements are as follows:

2 unchanged sentences

Total future minimum lease payments

Less imputed interest (at 8 % )

Present value of operating lease payments

The following table sets forth the ROU assets and operating lease liabilities as of June 30, 2023:

(in thousands)

ROU assets-net

Current operating lease liabilities

Long-term operating lease liabilities

Total ROU liabilities

Legal Matters:

2 unchanged sentences

NOTE 15 — SUBSEQUENT EVENTS

On July 21, 2022, the Company granted 130,000 shares of common stock, with a fair market value of approximately $ 169,000 , to employees as compensation for previously provided services and was accrued as of June 30, 2022.

On August 12, 2022, the Company filed a Form S-8 with the SEC registering an additional 750,000 Shares for stock-based awards available for issuance under the Company’s 2019 Omnibus Incentive Plan.

The Company has evaluated events from June 30, 2023 through September 27 2023, the date these consolidated financial statements were available to be issued.

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Fountain Valley, State of California, on September 28, 2022.

Moving iMage Technologies, Inc.

/s/ Phil Rafnson

President and Chief Executive Officer

POWER OF ATTORNEY

KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Phil Rafnson and Michael Sherman, jointly and severally, his or her attorney-in-fact, each with the full power of substitution, for such person, in any and all capacities, to sign any and all amendments to this Annual Report on Form 10-K, and to file the same, with all exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorney-in-fact and agent full power and authority to do and perform each and every act and thing requisite and necessary to be done in connection therewith, as fully to all intents and purposes as he or she might do or could do in person hereby ratifying and confirming all that each of said attorneys-in-fact and agents, or his or her substitute, may do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities indicated and on the dates indicated.

Name and Signature

/s/ Phil Rafnson

President, Chief Executive Officer and Chairman of the Board

September 28, 2022

(Principal Executive Officer)

/s/ Michael Sherman

Chief Financial Officer

September 28, 2022

Michael Sherman

(Principal Financial and Accounting Officer)

/s/ Katherine D.

Crothall, Ph.D.

September 28, 2022

Crothall, Ph.D.

September 28, 2022

/s/ Scott Anderson

September 28, 2022

Scott Anderson

EXHIBIT INDEX

3 unchanged sentences

Certificate of Incorporation, as amended

Amendment No.

1 to the Amended and Restated Bylaws

Form of Common Stock Certificate

Management Services Agreement dated October 3, 2018 between the Company and Caddy Products, Inc.

Description of Securities

Form of Indemnity Agreement between the Company and its directors and officers

5 unchanged sentences

Form of Restricted Stock Unit Agreement

Loan Agreement dated as of October 24, 2019 by and between Agility Capital III, LLC Moving iMage Technologies, LLC and MiT Acquisition Co.

Exchange Agreement dated July 7, 2021 among the Company, and the Members of Moving iMage Technologies, LLC

Asset Purchase Agreement dated April 21, 2022 between Moving iMage Technologies, Inc.

Interim CFO Engagement Agreement, dated January 19, 2023, between the Company and William Greene

Letter Agreement between Moving iMage Technologies, Inc.

and The Five Agency dated April 25, 2023

Convertible Note Purchase Agreement dated June 6, 2023

List of Subsidiaries

Consent of Haskell & White LLP

Consent of CohnReznick LLP

Power of Attorney (included on signature page)

6 unchanged sentences

Cover Page Interactive Data File (Embedded within the Inline XBRL document and included in Exhibit 101).

Compensatory plan or arrangement

Indicates a management contract or compensatory plan or arrangement.

Moving iMage Technologies, Inc.

/s/ Phil Rafnson

President and Chief Executive Officer

POWER OF ATTORNEY

KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Phil Rafnson and William Greene, jointly and severally, his or her attorney-in-fact, each with the full power of substitution, for such person, in any and all capacities, to sign any and all amendments to this Annual Report on Form 10-K, and to file the same, with all exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorney-in-fact and agent full power and authority to do and perform each and every act and thing requisite and necessary to be done in connection therewith, as fully to all intents and purposes as he or she might do or could do in person hereby ratifying and confirming all that each of said attorneys-in-fact and agents, or his or her substitute, may do or cause to be done by virtue hereof.

Name and Signature

/s/ Phil Rafnson

President, Chief Executive Officer and Chairman of the Board

September 27, 2023

(Principal Executive Officer)

/s/ William Greene

Chief Financial Officer

September 27, 2023

William Greene

(Principal Financial and Accounting Officer)

/s/ Katherine D.

Crothall, Ph.D.

September 27, 2023

Crothall, Ph.D.

September 27, 2023

/s/ Scott Anderson

September 27, 2023

Scott Anderson

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-K

Item 9A. Controls and Procedures