Item 9A. Controls and Procedures
ITEM 9A. CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures
We maintain disclosure controls and procedures designed to ensure that the information we are required to disclose in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified under the rules and forms of the SEC. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that such information is accumulated and communicated to our management, including our Chief Executive Officer and our Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosures. As required by paragraph (b) of Rules 13a-15 and 15d-15 under the Exchange Act, our Chief Executive Officer (our principal executive) and Chief Financial Officer (our principal financial officer and principal accounting officer) carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures as of June 30, 2023. Based on this evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures (as defined in paragraph (e) of Rules 13a-15 and 15d-15 under the Exchange Act) were not effective at June 30, 2023 due to material weaknesses in our internal control over financial reporting as described below.
Limitations on Internal Control over Financial Reporting
An internal control system over financial reporting has inherent limitations and may not prevent or detect misstatements. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. However, these inherent limitations are known features of the financial reporting process. Therefore, it is possible to design into the process safeguards to reduce, though not eliminate, this risk.
Management’s Annual Report on Internal Control over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as defined in Exchange Act Rule 13a-15(f) and 15d-15(f). Internal control over financial reporting is a process used to provide reasonable assurance regarding the reliability of our financial reporting and the preparation of our financial statements for external purposes in accordance with generally accepted accounting principles in the United States. Internal control over financial reporting includes policies and procedures that pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of our assets; provide reasonable assurance that transactions are recorded as necessary to permit preparation of our financial statements in accordance with generally accepted accounting principles in the United States, and that our receipts and expenditures are being made only in accordance with the authorization of our board of directors and management; 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
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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.
A material weakness is defined within the Public Company Accounting Oversight Board’s Auditing Standard No. 5 as a deficiency or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the Company’s annual or interim financial statements will not be prevented or detected on a timely basis. We determined that our internal control over financial reporting had the following material weaknesses:
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, 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.
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.
The actions we have taken are subject to continued review, supported by confirmation and testing by management. 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.
ITEM 9B. OTHER INFORMATION
None.
ITEM 9C DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS
Not applicable.
PART III
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
The following table sets forth the names, ages and titles of our directors, executive officers and key personnel:
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Executive Officers and Directors :
Name
Age
Title
Executive Officers and Directors:
Phil Rafnson
76
President, Chief Executive Officer and Chairman of the Board
Jose Delgado
60
Executive Vice President, Sales and Marketing
Bevan Wright
54
Executive Vice President, Operations
William Greene
67
Chief Financial Officer
Katherine D. Crothall, Ph.D.
74
Director
John C. Stiska
81
Director
Scott Anderson
69
Director
Key Personnel:
David Richards
67
Senior Vice President, Engineering
Thomas Lipiec
60
Senior Vice President, Sales and Customer Service
Frank Tees
49
Vice President, Technical Sales & Support
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. Mr. Rafnson has been a major participant in the cinema equipment business for over 30 years going from a sound engineer for RCA Service Co. to National Sales Manager for Xetron Inc., to President and owner of Media Technology Source (MTS), one of the largest global cinema equipment distribution companies until he sold MTS in 1999. He has served as Board member of the International Theatre Equipment Association for 12 years and Officer and President of that association for more than 4 years. Mr. Rafnson’s experience in the cinema equipment industry qualifies him to serve on our board of directors.
Jose Delgado has been our Executive Vice President, Sales and Marketing since the Company’s founding in 2003. Prior to joining MiT, Mr. Delgado spent fifteen years at Christie Digital Systems in increasing positions of responsibility, as National Sales Manager, Director of Sales, and Vice President of Sales. During his tenure he increased by 10-fold the cinema presentation product sales of Christie, helping the company become a major force in the cinema industry. Previously he held various positions at JVC, including Sales Representative for video products for the Los Angeles and Las Vegas markets.
Bevan Wright is a Company founding partner and has been our Executive Vice President, Operations since the Company’s founding in 2003. In the industry since 1985, Bevan spent ten years as Cinema Systems Product and Engineering Manager at Christie Digital Systems, directing product development and engineering support for all cinema product lines, managing the product lines to develop and bring to market fully-integrated solutions for cinema exhibitors. The previous nine years he held engineering and operations positions at Christie, United Artists, and with other cinema exhibitors. Mr. 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.
William F. 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. Mr. 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. Mr. 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. Mr. Greene holds a Bachelor of Science degree in Business Administration with a focus on accounting from California State University Dominguez Hills.
Katherine D. Crothall, Ph.D . became a Director in July 2021. Ms. Crothall has been the Chairman, Chief Executive Officer and President of Aspire Bariatrics, Inc. (“Aspire”) since November 2010. Prior to Aspire, Dr. Crothall served as a Principal of Liberty
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Venture Partners, Inc. from 2006 to November 2010. Prior to Liberty, she founded Animas Corporation in 1996 and served as its Chairman, President, Chief Executive Officer, led its $69 million IPO in 2004, and sold it to Johnson and Johnson in 2006. From October 1988 to September 1993, Dr. Crothall served as President and Chief Executive Officer of Luxar Corporation, which she founded in 1988, sold and manufactured CO2 lasers for cosmetic, oral, surgical, dental, dermatological and surgical applications. Dr. Crothall founded Laakmann Electro-Optics, which manufactured and marketed CO2 lasers and was sold to Johnson & Johnson in 1981. She was employed as an engineer at Hughes Aircraft from 1971 to 1978. She has been an Independent Director of Valeritas Holdings, Inc. since October 10, 2016. Dr. Crothall is a director of Adhezion BioMedical and a former Director of Xanitos, Inc. She served as a former Director of Othera Pharmaceuticals Inc., Intact Vascular, Inc., and Lungpacer, Inc. Dr. Crothall served as a Director of Animas Corp. since 1996 until its sale to J&J in 2006. She holds over 20 patents and is the recipient of several awards including the Ernst & Young Entrepreneur of the Year Award in 2003 and the Greater Philadelphia Raymond Rafferty Entrepreneurial Excellence Award in 2004. She has authored numerous technical papers and has given numerous papers at scientific/medical symposiums. Dr. Crothall holds a B.S. in Electrical Engineering from the University of Pennsylvania and Master of Science and a Ph.D. in Electrical Engineering from the University of Southern California. Dr. Crothall’s extensive experience in public company finance and acquisition experience qualifies her to serve on our board of directors.
John C. Stiska became a Director in July 2021. Since 2005, Mr. Stiska has been the principal of Regent Partners, a merchant banking firm, and was a Senior Advisor to Agility Capital, LLC, a venture lending fund from 2007 to 2013; prior to that he was Chairman of Commercial Bridge Capital, LLC, also a venture lending fund. Over the past two decades, John Stiska has served as a CEO, Chairman, Director and investor in more than thirty private and public companies. Underlying his extensive, twenty-year business leadership and development experience, and service on numerous Boards of Directors, John was a practicing Corporate and Securities partner at Brobeck, Phleger & Harrison, and of Counsel at Latham & Watkins. He also taught Securities Regulation as an Adjunct Professor of Law at the University of San Diego School of Law. He started his career and became a partner at Luce, Forward, Hamilton & Scripps, before being one of the founding partners of Aylward, Kintz, Stiska, Wassenaar and Shannahan, which merged into and became the San Diego Office of the Brobeck Firm, shortly after which time he joined Intermark, Inc. as President, and subsequently took Intermark, Inc. and its majority owned company Triton Group Ltd through an extensive Chapter 7 reorganization and refinancing, emerging as a successfully restructured public company, Triton Group Ltd. Mr. Stiska received a B.A. in Accounting, BBA, in 1965 and a J.D. from the University of Wisconsin in 1970. Mr. Stiska’s extensive experience in public company finance and related corporate matters qualifies him to serve on our board of directors.
Scott Lloyd Anderson, J.D., CPA became a Director in July 2021. Mr. Anderson practiced with KPMG as a tax CPA in the early 1980s and since 1983 has practiced as an attorney representing businesses and their respective owners. Mr. Anderson is a shareholder at the law firm of Fabyanske, Westra, Hart & Thomson, P.A., which he joined in 1985. Mr. Anderson was on the board of directors of the firm from 1988 through 2014 and was elected president of the firm over four different time frames. Over the last 30 years, Mr. Anderson has structured, negotiated and closed over 200 merger and acquisition transactions of privately held companies ranging in transaction value from a few million to over a billion dollars. Mr. Anderson has been on the board of directors of various construction companies and is a principal owner, director and officer of a safety engineering company, a small investment company and a small oil and gas company. Mr. Anderson also assisted with the initial organization of the Company in 2003. Mr. Anderson has a B.A. in Business Administration from Augsburg University located in Minneapolis, Minnesota and a J.D. from William Mitchell College of Law located in St. Paul, Minnesota. Mr. Anderson also taught accounting and business law at Augsburg University. Mr. Anderson’s extensive experience in finance and acquisition transactions and prior accounting experience qualifies him to serve on our board of directors.
Key Personnel :
David Richards has been our Senior Vice President, Engineering since the Company’s founding in 2003. Mr. Richards has nineteen years of experience in the cinema industry. He spent five years in engineering and engineering management positions at Christie. He has been active in SMPTE for the past eighteen years, and presently serves on several of the SMPTE DC28 digital cinema committees as well as the Film Technology committee and Projection Technology committee. Mr. Richards is past chair of the SMPTE Hollywood section (‘96 – ’97), and was Program Chair for the first and second SMPTE Film Conferences, held in 1997 and 1998. He is the author of several SMPTE papers and articles for various trade publications. He has a background in mechanical, electronic and electrical engineering design.
Thomas Lipiec has been our Senior Vice President, Sales & Customer Service since shortly after the Company’s founding in 2003. Mr. Lipiec has over 32 years of professional experience in the cinema industry. Mr. Lipiec’s career began by occupying several
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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. Mr. 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: Episode I and Star Wars: Episode II (D.C. & DVD).
Frank Tees has been our Vice President, Technical Sales & Support since 2011. Mr. Tees started his cinema career in 1989, serving in most aspects of theater exhibition with Krikorian Premiere Theaters. He spent the past 15 years with the world’s largest exhibitor, Regal Entertainment Group, and since 2002 has been Director of Technical Services for the Southwest Region. 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. Mr. Tees has extensive training on 3D and standard DLP and Sony projection systems and practical experience installing them in an integrated and networked environment. Mr. Tees also managed Regal’s technical training program and developed preventative maintenance and tracking guidelines to service systems according to their warranty.
Family Relationships
There are no family relationships among any of our executive officers or directors.
Board Leadership Structure
Our board of directors does not have a policy on whether or not the role of the Chief Executive Officer and Chairman should be separate or, if it is to be separate, whether the Chairman should be selected from the non-employee directors or be an employee. Currently, we operate with Mr. Rafnson serving as our Chairman and our Chief Executive Officer. We currently believe that Mr. Rafnson serving in both capacities best serves the Company and suits the talents, expertise and experience that Mr. Rafnson brings to the Company.
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 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. The composition and functioning of all of our committees comply with all applicable requirements of the Sarbanes-Oxley Act of 2002, NYSE American and SEC rules and regulations, as applicable. Each committee’s charter is available on our website at www.movingimagetech.com. 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.
Audit committee
John C. Stiska, Katherine D. Crothall, Ph.D. and Scott Lloyd Anderson serve on the audit committee, which is chaired by John C. Stiska. Our board of directors has determined that each are “independent” for audit committee purposes as that term is defined by the rules of the SEC and NYSE, and that each has sufficient knowledge in financial and auditing matters to serve on the audit committee. Our board of directors has designated John C. Stiska as an “audit committee financial expert,” as defined under the applicable rules of the SEC. The audit committee’s responsibilities include:
● appointing, approving the compensation of, and assessing the independence of our independent registered public accounting firm;
● pre-approving auditing and permissible non-audit services, and the terms of such services, to be provided by our independent registered public accounting firm;
● reviewing the overall audit plan with our independent registered public accounting firm and members of management responsible for preparing our financial statements;
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● reviewing and discussing with management and our independent registered public accounting firm our annual and quarterly financial statements and related disclosures as well as critical accounting policies and practices used by us;
● coordinating the oversight and reviewing the adequacy of our internal control over financial reporting;
● establishing policies and procedures for the receipt and retention of accounting-related complaints and concerns;
● recommending, based upon the audit committee’s review and discussions with management and our independent registered public accounting firm, whether our audited financial statements shall be included in our Annual Report on Form 10-K;
● monitoring the integrity of our financial statements and our compliance with legal and regulatory requirements as they relate to our financial statements and accounting matters;
● preparing the audit committee report required by SEC rules to be included in our annual proxy statement;
● reviewing all related person transactions for potential conflict of interest situations and approving all such transactions; and
● reviewing quarterly earnings releases.
Compensation committee
John C. Stiska, Katherine D. Crothall, Ph.D. and Scott Lloyd Anderson serve on the compensation committee, which is chaired by Katherine D. Crothall, Ph.D. Our board of directors has determined that each member of the compensation is “independent” as defined in the applicable NYSE American rules. The compensation committee’s responsibilities include:
● annually reviewing and recommending to the board of directors the corporate goals and objectives relevant to the compensation of our Chief Executive Officer;
● evaluating the performance of our Chief Executive Officer in light of such corporate goals and objectives and based on such evaluation: (i) recommending to the board of directors the cash compensation of our Chief Executive Officer, and (ii) reviewing and approving grants and awards to our Chief Executive Officer under equity-based plans;
● reviewing and recommending to the board of directors the cash compensation of our other executive officers;
● reviewing and establishing our overall management compensation, philosophy and policy;
● overseeing and administering our compensation and similar plans;
● reviewing and approving the retention or termination of any consulting firm or outside advisor to assist in the evaluation of compensation matters and evaluating and assessing potential and current compensation advisors in accordance with the independence standards identified in the applicable NYSE American rules;
● retaining and approving the compensation of any compensation advisors;
● reviewing and approving our policies and procedures for the grant of equity-based awards;
● reviewing and recommending to the board of directors the compensation of our directors; and
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● preparing the compensation committee report required by SEC rules, if and when required, to be included in our annual proxy statement.
None of the members of our compensation committee has at any time during the prior three years been one of our officers or employees. None of our executive officers currently serves, or in the past fiscal year has served, as a member of the board of directors or compensation committee of any entity that has one or more executive officers serving on our board of directors or compensation committee.
Nominating and corporate governance committee
John C. Stiska, Katherine D. Crothall, Ph.D. and Scott Lloyd Anderson serve on the nominating and corporate governance committee, which is chaired by Scott Lloyd Anderson. Our board of directors has determined that each member of the nominating and corporate governance committee is “independent” as defined in the applicable NYSE American rules. The nominating and corporate governance committee’s responsibilities include:
● developing and recommending to the board of directors’ criteria for board and committee membership;
● establishing procedures for identifying and evaluating board of director candidates, including nominees recommended by stockholders;
● reviewing the composition of the board of directors to ensure that it is composed of members containing the appropriate skills and expertise to advise us;
● identifying individuals qualified to become members of the board of directors;
● recommending to the board of directors the persons to be nominated for election as directors and to each of the board’s committees;
● reviewing and recommending to the board of directors’ appropriate corporate governance guidelines; and
● overseeing the evaluation of our board of directors.
Code of business conduct and ethics
We have adopted a written code of business conduct and ethics that applies to our directors, officers, and employees, including our principal executive officer, principal financial officer, principal accounting officer, or controller, or persons performing similar functions. A current copy of this code is posted on the Corporate Governance section of our website, which is located at www.movingimagetech.com. The information on our website is deemed not to be incorporated in this Report or to be a part of this Report. If we make any substantive amendments to, or grant any waivers from, the code of business conduct and ethics for any officer or director, we will disclose the nature of such amendment or waiver on our website or in a current report on Form 8-K.
Delinquent Section 16(a) Reports
Section 16(a) of the Exchange Act requires our directors, executive officers, and the persons who beneficially own more than ten percent of our Common Stock, to file reports of ownership and changes in ownership with the Securities and Exchange Commission. Copies of all filed reports are required to be furnished to us. 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.
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, 2023.
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ITEM 11. EXECUTIVE COMPENSATION
Compensation of Named Executive Officers
The summary compensation table below shows certain compensation information for services rendered in all capacities for the fiscal years ended June 30, 2023 and 2022. Other than as set forth herein, no executive officer’s salary and bonus exceeded $100,000 in any of the applicable years. The following information includes the dollar value of base salaries, bonus awards, the number of stock options granted and certain other compensation, if any, whether paid or deferred.
All Other
Fiscal
Compensation
Name and Principal Position
Year
Salary ($)
Bonus ($)
($)
Total ($)
Philip Rafnson(1)
2023
$
176,600
$
—
$
—
$
176,600
President and Chief Executive Officer
2022
$
156,000
$
—
$
50,000
(1)
$
206,000
Jose Delgado
2023
$
233,730
$
23,373
—
$
257,103
Executive Vice President, Sales and Marketing
2022
$
235,392
$
30,000
—
$
265,392
Bevan Wright
2023
$
233,730
$
23,373
—
$
257,103
Executive Vice President, Operations
2022
$
235,392
$
30,000
—
$
265,392
(1) In July 2021, the Company paid a discretionary $50,000 in relation to providing personal guarantees for debt financing.
Employment Agreements
We currently do not maintain any employment, severance or change in control agreements with our named executive officers. In addition, our named executive officers are not entitled to any payments or other benefits in connection with a termination of employment or a change in control.
Outstanding Equity Awards at Fiscal Year-End
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, 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. The Plan administrator may grant awards to any employee, director, consultant or other person providing services to us or our affiliates.
The Plan is administered by the Compensation Committee of the Board. 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. No awards may be made under the Plan after the tenth anniversary of its effective date.
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Awards under the Plan may include incentive stock options, nonqualified stock options, stock appreciation rights (“SARs”), restricted shares of common stock, restricted stock Units, performance share or Unit awards, other stock-based awards and cash-based incentive awards.
Stock Options . The Plan administrator may grant to a participant options to purchase our Common Stock that qualify as incentive stock options for purposes of Section 422 of the Internal Revenue Code (“incentive stock options”), options that do not qualify as incentive stock options (“non-qualified stock options”) or a combination thereof. The terms and conditions of stock option grants, including the quantity, price, vesting periods, and other conditions on exercise will be determined by the Plan administrator. The exercise price for stock options will be determined by the Plan administrator in its discretion, but non-qualified stock options and incentive stock options may not be less than 100% of the fair market value of one share of our company’s Common Stock on the date when the stock option is granted. Additionally, in the case of incentive stock options granted to a holder of more than 10% of the total combined voting power of all classes of our stock on the date of grant, the exercise price may not be less than 110% of the fair market value of one share of Common Stock on the date the stock option is granted. Stock options must be exercised within a period fixed by the Plan administrator that may not exceed ten years from the date of grant, except that in the case of incentive stock options granted to a holder of more than 10% of the total combined voting power of all classes of our stock on the date of grant, the exercise period may not exceed five years. At the Plan administrator’s discretion, payment for shares of Common Stock on the exercise of stock options may be made in cash, shares of our Common Stock held by the participant or in any other form of consideration acceptable to the Plan administrator (including one or more forms of “cashless” or “net” exercise).
Stock Appreciation Rights. The Plan administrator may grant to a participant an award of SARs, which entitles the participant to receive, upon its exercise, a payment equal to (i) the excess of the fair market value of a share of Common Stock on the exercise date over the SAR exercise price, times (ii) the number of shares of common stock with respect to which the SAR is exercised. The exercise price for a SAR will be determined by the Plan administrator in its discretion; provided, however, that in no event shall the exercise price be less than the fair market value of our common stock on the date of grant.
Restricted Shares and Restricted Units. The Plan administrator may award to a participant shares of Common Stock subject to specified restrictions (“restricted shares”). Restricted shares are subject to forfeiture if the participant does not meet certain conditions such as continued employment over a specified forfeiture period and/or the attainment of specified performance targets over the forfeiture period. The Plan administrator also may award to a participant Units representing the right to receive shares of Common Stock in the future subject to the achievement of one or more goals relating to the completion of service by the participant and/or the achievement of performance or other objectives (“restricted Units”). The terms and conditions of restricted share and restricted Unit awards are determined by the Plan administrator.
Performance Awards. The Plan administrator may grant performance awards to participants under such terms and conditions as the Plan administrator deems appropriate. A performance award entitles a participant to receive a payment from us, the amount of which is based upon the attainment of predetermined performance targets over a specified award period. Performance awards may be paid in cash, shares of Common Stock or a combination thereof, as determined by the Plan administrator.
Other Stock-Based Awards. The Plan administrator may grant equity-based or equity-related awards, referred to as “other stock-based awards,” other than options, SARs, restricted shares, restricted Units, or performance awards. The terms and conditions of each other stock-based award will be determined by the Plan administrator. Payment under any other stock-based awards will be made in Common Stock or cash, as determined by the Plan administrator.
Cash-Based Awards. The Plan administrator may grant cash-based incentive compensation awards, which would include performance-based annual cash incentive compensation to be paid to covered employees subject to Section 162(m) of the Code. The terms and conditions of each cash-based award will be determined by the Plan administrator.
Compensation of Directors
Our board of directors believes that a significant portion of the total compensation package for our non-employee directors should be equity-based to align the interest of these directors with our stockholders. Directors who are also our employees do not receive any additional compensation for their service on our board of directors.
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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.
Fees
Earned
or Paid
Option
Stock
in Cash
Awards
Awards
Total
Name
($)
($) (1)(2)
($) (3)
($)
Katherine D. Crothall, Ph.D.
$
8,400
$
55,000
$
11,000
$
74,400
John C. Stiska
$
30,800
$
55,000
$
11,000
$
96,800
Scott Anderson
$
79,376
$
55,000
$
11,000
$
145,376
(1) The amounts disclosed above reflect the full grant date fair values in accordance with FASB ASC Topic 718. See “Note 1 - Business Activity And Summary Of Significant Accounting Policies” to our consolidated financial statements for the year ended June 30, 2023.
(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.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
The following table sets forth information regarding beneficial ownership of our capital stock by:
● each person, or group of affiliated persons, known by us to beneficially own more than 5% of our Common Stock;
● each of our named executive officers;
● each of our directors; and
● all of our current executive officers and directors a group.
Applicable percentage ownership is based on 10,685,778 shares of Common Stock outstanding at September 22, 2023.
The information presented below regarding beneficial ownership of our voting securities has been presented in accordance with the rules of the Commission and is not necessarily indicative of ownership for any other purpose. Under these rules, a person is deemed to be a “beneficial owner” of a security if that person has or shares the power to vote or direct the voting of the security or the power to dispose or direct the disposition of the security. A person is deemed to own beneficially any security as to which such person has the right to acquire sole or shared voting or investment power within sixty (60) days through the conversion or exercise of any convertible security, warrant, option, or other right. More than one (1) person may be deemed to be a beneficial owner of the same securities. The percentage of beneficial ownership by any person as of a particular date is calculated by dividing the number of shares beneficially owned by such person, which includes the number of shares as to which such person has the right to acquire voting or investment power within sixty (60) days, by the sum of the number of shares outstanding as of such date. Consequently, the denominator used for calculating such percentage may be different for each beneficial owner. Except as otherwise indicated below and under applicable community property laws, we believe that the beneficial owners of our Common Stock listed below have sole voting and investment power with respect to the shares shown.
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Unless otherwise noted below, the address of each person listed on the table is c/o Moving iMage Technologies, Inc., 17760 Newhope Street, Fountain Valley, CA 92708.
Shares Beneficially Owned
Name of Beneficial Owner
Shares
%
Named Executive Officers and Directors
Phil Rafnson
2,074,828
(1)
19.4%
%
Bevan Wright
600,630
5.6
Jose Delgado
511,503
4.8
William Greene
100,000
(2)
*
Katherine D. Crothall, Ph.D.
66,667
(3)
*
John C. Stiska
50,000
(2)
*
Scott Anderson
50,000
(2)
*
All executive officers, directors as a group (7 persons)
3,453,628
31.6
%
* Indicates ownership of less than 1%
(1) Represents shares held by Sound Management Investors, LLC, an entity wholly-owned and controlled by Mr. Rafnson.
(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.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
All amounts due to Caddy by the Company further to the acquisition of Caddy were personally guaranteed by Phil Rafnson, our Chairman of the Board. In July 2021, the Company provided a discretionary $50,000 payment to the Company’s CEO and Chairman of the Board of Directors in relation to these personal guarantees provided in conjunction with financing Company debt. See Note 9 - Debt of the Notes to the Company’s Consolidated Financial Statements.
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.
Director and Officer Indemnification and Insurance
We have entered into indemnification agreements with each of our directors and executive officers. These agreements, among other things, require us or will require us to indemnify each director (and in certain cases their related venture capital funds) and executive officer to the fullest extent permitted by Delaware law, including indemnification of expenses such as attorneys’ fees, judgments, fines and settlement amounts incurred by the director or executive officer in any action or proceeding, including any action or proceeding by or in right of us, arising out of the person’s services as a director or executive officer.
Our amended and restated certificate of incorporation and our amended and restated bylaws provide that we will indemnify each of our directors and officers to the fullest extent permitted by the DGCL. We also have purchased a policy of directors’ and officers’ liability insurance that will insure our directors and officers against the cost of defense, settlement or payment of a judgment under certain circumstances.
Policies and Procedures Regarding Related Party Transactions
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,
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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. All of the transactions described in this section occurred prior to the adoption of any related party transactions policy.
A “related person” means:
● any person who is, or at any time during the applicable period was, one of our executive officers or one of our directors;
● any person who is known by us to be the beneficial owner of more than 5% of our Common Stock;
● any immediate family member of any of the foregoing persons, which means any child, stepchild, parent, stepparent, spouse, sibling, mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law or sister-in-law of a director, executive officer or a beneficial owner of more than 5% of our Common Stock, and any person (other than a tenant or employee) sharing the household of such director, executive officer or beneficial owner of more than 5% of our Common Stock; or
● 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. 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.
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ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES
CohnReznick LLP (“CohnReznick”) served as our independent registered public accounting firm from 2018 until April 12, 2022. CohnReznick’ s last completed review of the Company’s consolidated financial statements was for the quarter ended December 31, 2021. On April 21, 2022, the Company engaged Haskell & White LLP (“H&W”) as our independent registered public accounting firm to review the Company’s consolidated financial statements for the quarter ended March 31, 2022 and to audit the Company’s financial statements for the year ended June 30, 2023. H&W’s address is 300 Spectrum Center Drive, Suite 300, Irvine, CA 92618 and its PCAOB firm ID number is 200.
The following table provides information regarding the fees billed to us by CohnReznick and H&W in the fiscal years ended June 30, 2023 and 2022. All fees described below were approved by the Audit Committee:
For the fiscal years ended June 30
2023
2022
Audit Fees - CohnReznick (1)
$
39,375
$
301,943
Audit Fees – H&W (1)
200,645
35,000
Audit Related Fees
—
—
Tax Fees
—
—
All Other Fees
—
—
Total Fees:
$
240,020
$
336,943
(1) Audit fees includes fees associated with the annual audits of our financial statements, quarterly reviews of our financial statements, and services that are normally provided by the independent registered public accounting firm in connection with statutory and regulatory filings or engagements.
PART IV
ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES
(a)(1) Financial Statements
The financial statements have been included in Item 8 above and are set forth following Item 16 of this Report.
(a)(2) Financial Statement Schedules
Schedules have been omitted because they are not applicable, not material or because the information is included in the consolidated financial statements or the notes thereto.
(a)(3) Exhibits
The exhibits are incorporated by reference from the Exhibit Index attached hereto.
ITEM 16. FORM 10-K SUMMARY
None.
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MOVING IMAGE TECHNOLOGIES, INC.
FINANCIAL STATEMENTS
June 30, 2023 and 2022
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM (PCAOB ID 200 )
F-2
CONSOLIDATED BALANCE SHEETS
F-3
CONSOLIDATED STATEMENTS OF OPERATIONS
F-4
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY
F-5
CONSOLIDATED STATEMENTS OF CASH FLOWS
F-6
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
F-8
F-1
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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Stockholders and Board of Directors
Moving iMage Technologies, Inc.
Opinion on the Financial Statements
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.
Basis for Opinion
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 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 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 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 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 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
HASKELL & WHITE LLP
We have served as the Company’s auditor since 2022.
Irvine, California
September 27, 2023
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MOVING IMAGE TECHNOLOGIES, INC.
CONSOLIDATED BALANCE SHEETS
(in thousands)
June 30,
2023
2022
Assets
Current Assets:
Cash
$
6,616
$
2,340
Marketable securities - current
—
4,363
Accounts receivable, net
905
1,762
Inventories, net
4,419
4,033
Prepaid expenses and other
451
864
Total Current Assets
12,391
13,362
Long-Term Assets:
Marketable securities – long-term
—
325
Right-of-use asset
415
—
Property and equipment, net
28
22
Intangibles, net
480
839
Goodwill
—
287
Other assets
16
16
Total Long-Term Assets
939
1,489
Total Assets
$
13,330
$
14,851
Liabilities And Stockholders’ Equity
Current Liabilities:
Accounts payable
$
1,507
$
1,583
Accrued expenses
618
655
Customer deposits
3,169
3,158
Lease liability–current
280
—
Unearned warranty revenue
26
18
Total Current Liabilities
5,600
5,414
Long-Term Liabilities:
Lease liability–non-current
151
—
Deferred rent
—
22
Total Long-Term Liabilities
151
22
Total Liabilities
5,751
5,436
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
—
—
Additional paid-in capital
12,462
12,500
Accumulated deficit
( 4,883 )
( 3,085 )
Total Stockholders’ Equity
7,579
9,415
Total Liabilities and Stockholders’ Equity
$
13,330
$
14,851
The accompanying notes are an integral part of these consolidated financial statements.
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MOVING IMAGE TECHNOLOGIES, INC.
CONSOLIDATED
STATEMENTS OF OPERATIONS
(in thousands except share and per share amounts)
Year Ended
Year Ended
June 30,
June 30,
2023
2022
Net sales
$
20,207
$
18,351
Cost of goods sold
14,897
13,890
Gross profit
5,310
4,461
Operating expenses:
Research and development
261
238
Selling and marketing
2,630
2,389
General and administrative
3,440
3,596
Impairment of long-term assets
954
—
Total operating expenses
7,285
6,223
Operating loss
( 1,975 )
( 1,762 )
Other expenses (income)
Unrealized loss on marketable securities
—
242
Realized (gain)/loss on marketable securities
( 38 )
6
PPP loan forgiveness
—
( 705 )
Interest expense and other income, net
( 139 )
40
Total other expense (income)
( 177 )
( 417 )
Net loss
$
( 1,798 )
$
( 1,345 )
Weighted average shares outstanding: basic and diluted (Note 5)
10,922,710
10,577,994
Net loss per common share basic and diluted
$
( 0.16 )
$
( 0.13 )
*See Note 3
The accompanying notes are an integral part of these consolidated financial statements
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MOVING IMAGE TECHNOLOGIES, INC.
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY
FOR THE YEARS ENDED JUNE 30, 2023 AND 2022
(in thousands except share amounts)
Common Stock
Additional Paid-In
Accumulated
Shares
Amount
Capital
Deficit
Total
Balance as of June 30, 2021
5,666,667
$
—
$
1,011
$
( 1,740 )
$
( 729 )
Shares of common stock issued for cash in IPO, net of issuance costs
4,830,000
—
11,244
—
11,244
Cashless exercise of warrants
139,611
—
—
—
—
Cashless exercise of underwriter warrants
192,120
—
—
—
—
Grant of options for services
—
—
245
—
245
Net loss
—
—
—
( 1,345 )
( 1,345 )
Balance as of June 30, 2022
10,828,398
$
—
$
12,500
$
( 3,085 )
$
9,415
Issuance of stock to employees
130,000
—
153
—
153
Grant of options to officer and board members
—
—
113
—
113
Share buyback and cancellation
( 272,620 )
—
( 304 )
—
( 304 )
Net loss
—
—
—
( 1,799 )
( 1,799 )
Balance as of June 30, 2023
10,685,778
$
—
$
12,462
$
( 4,883 )
$
7,579
The accompanying notes are an integral part of these consolidated financial statements.
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MOVING IMAGE TECHNOLOGIES, INC.
CONSOLIDATED
STATEMENTS OF CASH FLOWS
(in thousands)
Year Ended
Year Ended
June 30,
June 30,
2023
2022
Cash flows from operating activities:
Net loss
$
( 1,798 )
$
( 1,345 )
Adjustments to reconcile net loss to net cash used in operating activities:
PPP loan forgiveness
—
( 705 )
Provision for doubtful accounts
389
( 218 )
Depreciation expense
9
19
Amortization expense
96
96
Impairment expense
550
—
ROU amortization
244
( 3 )
Stock option compensation expense
146
245
Unrealized loss on investments
—
242
Realized (gain) loss on investments
( 38 )
6
Changes in operating assets and liabilities
Accounts receivable
868
( 1,090 )
Inventories, net
( 386 )
( 2,499 )
Prepaid expenses and other
413
348
Accounts payable
( 76 )
( 328 )
Accrued expenses
83
42
Unearned warranty revenue
8
( 16 )
Customer deposits
11
1,819
Lease liabilities
( 250 )
—
Net cash provided by operating activities
269
( 3,387 )
Cash flows from investing activities
Sales of marketable securities
12,395
641
Purchases of marketable securities
( 7,669 )
( 5,577 )
Purchases of property and equipment
( 15 )
( 20 )
Advances on notes receivable
( 400 )
—
Net cash provided by (used in) investing activities
4,311
( 4,956 )
Cash flows from financing activities
Net proceeds from initial public offering
—
11,244
Payments on notes payable
—
( 1,241 )
Payments on line of credit
—
( 590 )
Stock Buyback
( 304 )
—
Net cash provided by (used in) financing activities
( 304 )
9,413
Net increase in cash
4,276
1,070
Cash, beginning of the year
2,340
1,270
Cash, end of the year
$
6,616
$
2,340
Non-cash investing and financing activities:
Issuance of stock to employees
$
( 153 )
$
—
Right-of-use assets from ASC842 adoption
$
681
$
—
Reclassification of IPO related costs from other assets to equity
$
—
$
1,116
Cash paid during the period:
Interest
$
—
$
40
The accompanying notes are an integral part of these consolidated financial statements.
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MOVING IMAGE TECHNOLOGIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1 — BUSINESS ACTIVITY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Organization: Moving iMage Technologies, Inc., a Delaware corporation, together with its wholly-owned subsidiaries unless the context indicates otherwise, the (“Company”) was incorporated in June 2020. The Company, through its wholly owned subsidiary, Moving iMage Technologies, LLC (“MiT LLC”) and MiT LLC’s wholly-owned subsidiary, Moving iMage Acquisition Co., (DBA “Caddy Products”), designs, integrates, installs and distributes proprietary and custom designed equipment as well as off the shelf cinema products needed for contemporary cinema requirements. The Company also offers single source solutions for cinema design, procurement, installation and service to the creative and production communities for screening, digital intermediate and other critical viewing rooms. Additionally, the Company offers a wide range of technical, design and consulting services such as custom engineering, systems design, integration and installation, and digital technology, as well as software solutions for operations enhancement and theatre management. The Company also provides turnkey furniture, fixture and equipment services to commercial cinema exhibitors for new construction and remodels including design, consulting, installation and project management as well as procurement of seats, lighting, acoustical treatments, screens, projection and sound.
Moving iMage Acquisition Co. (DBA “Caddy Products”) designs, develops and manufactures innovative products for the entertainment, cinema, grocery, worship, restaurant, sports and restroom industries.
Share Exchange: In June 2020, MiT LLC members created Moving iMage Technologies, Inc. (“MiT Inc.”) to facilitate the Company’s initial public offering (“IPO”). Upon formation of MiT Inc., 2,000,000 shares of MiT Inc. common stock were issued to members of MiT LLC. On July 7, 2021, MiT LLC and MiT Inc. entered into an exchange agreement (“Exchange Agreement”) whereby the members of MiT LLC exchanged their membership interest for 2,350,000 shares of common stock in MiT Inc. As a result of the Exchange Agreement, the members of MiT LLC owned approximately 79 % or 4,452,334 of the outstanding common stock of MiT Inc. As a result, MiT LLC (the entity where the Company conducts its business) became a wholly-owned subsidiary of MiT Inc. (the SEC registrant).
The transaction was accounted for as a merger of entities under common ownership in accordance with generally accepted accounting principles in the United States of America. This determination was primarily based on the facts that, immediately before and after the transaction: (i) MiT LLC owners owned a substantial majority of the voting rights in the combined company, (ii) MiT LLC designated a majority of the members of the initial board of directors of the combined company, and (iii) MiT LLC’s senior management holds all key positions in the senior management of the combined company. As a result, the historical financial statements of MiT LLC and MiT Inc. for the year ended June 30, 2022 have been retroactively revised to reflect the consolidation of MiT Inc. and MiT LLC. All inter-company transactions and balances between MiT Inc. and MiT LLC have been eliminated.
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. and MiT LLC.
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, in connection with the IPO, warrants to purchase 139,611 shares of the Company’s common stock were exercised on a cashless basis.
In April 2022, underwriter warrants were exercised on a cashless basis resulting in the issuance of 192,120 shares of common stock.
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MOVING IMAGE TECHNOLOGIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1 — BUSINESS ACTIVITY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Impact of the COVID-19 Pandemic: The COVID-19 pandemic has had an unprecedented impact on the world and the movie exhibition industry. The social and economic effects have been widespread. At various points during the pandemic, authorities around the world imposed measures intended to control the spread of COVID-19, including stay-at-home orders and restrictions on large public gatherings, which caused movie theaters in countries around the world to temporarily close. The repercussions of the COVID-19 global pandemic resulted in a significant impact to our customers, specifically those in the entertainment and cinema industries. 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.
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. The industry’s recovery to historical levels of new film content, both in terms of the number of new films and box office performance, is still underway, as the industry also continues to adjust to evolving theatrical release windows, competition from streaming and other delivery platforms, supply chain delays, inflationary pressures, labor shortages, wage rate pressures and other economic factors.
Based on the Company’s current estimates of recovery, it believes it has, and will generate, sufficient cash to sustain operations for a period of 12 months from the issuance of these financial statements. 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.
Principles of Consolidation: The consolidated financial statements include the accounts of MiT Inc., its wholly-owned subsidiary, Moving iMage Technologies, LLC (“MiT LLC”), and MiT LLC’s wholly-owned subsidiary, Moving iMage Acquisition Co., (DBA Caddy Products). All significant intercompany transactions and balances have been eliminated in consolidation.
Basis of Presentation: The Company’s financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”).
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:
— Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities.
— Level 2: inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly (i.e., as prices) or indirectly (i.e., derived from prices).
— Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs). If the inputs used to measure the fair value of an asset or a liability fall into different levels of the fair value hierarchy, then the fair value measurement is categorized in its entirety in the same level of the fair value hierarchy as the lowest level input that is significant to the entire measurement.
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MOVING IMAGE TECHNOLOGIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
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
Level 1
Level 2
Level 3
Total
Equity securities
$
764
$
—
$
—
$
764
State and Municipal Debt Securities
889
—
—
889
Fixed Income Funds
2,687
—
—
2,687
Alternative Funds
—
300
—
300
Real Estate Funds
—
48
—
48
Subtotal
4,688
Less Long-term
( 325 )
Net Current
$
4,363
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 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. 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: 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. 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: The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities (including sales returns, bad debts, inventory reserves, warranty reserves, purchase price allocation and asset impairments), disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ significantly from those estimates.
Concentration of Cash: The Company maintains its cash in bank accounts which, at times, may exceed federally insured limits. The Company has not experienced any losses in such accounts. Management believes the Company is not exposed to any significant credit risk on its cash balances.
Cash Equivalents and Marketable Securities: All highly liquid investments with maturities of three months or less at the date of purchase are classified as cash equivalents. The Company’s investments in marketable debt securities are carried at either amortized cost or fair value. 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
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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. Unrealized gains and losses, net of tax, on available-for-sale debt securities are recognized in other comprehensive gain/(loss). The Company’s investments in marketable equity securities are classified based on the nature of the securities and their availability for use in current operations. The Company’s marketable equity securities are measured at fair value with gains and losses recognized in other income/(expense), net. The cost of securities sold is determined using the specific identification method.
Accounts Receivable: Accounts receivable are carried at original invoice amount less allowance for bad debts. Management determines the allowance for bad debts by identifying troubled accounts and by using historical experience applied to an aging of accounts. Accounts receivable are written off when deemed uncollectible. Recoveries of receivables previously written off are recorded when received. Accounts receivable are considered to be past due if any portion of the receivable balance is outstanding for more than 90 days past the customer’s granted terms. The Company does not charge interest on past due balances or require collateral on its accounts receivable. As of June 30, 2023 and 2022, the allowance for bad debts is approximately $ 127,000 and $ 138,000 , respectively.
Inventories: Inventories are stated at the lower of cost or net realizable value, with cost being determined on the first-in first-out cost method of accounting. The Company purchases finished goods and materials to assemble kits in quantities that it anticipates will be fully used in the near term. Changes in operating strategy, customer demand, and fluctuations in market values can limit the Company’s ability to effectively utilize all products purchased and can result in finished goods with above-market carrying costs which may cause losses on sales to customers. The Company’s policy is to closely monitor inventory levels, obsolescence and lower market values compared to costs and, when necessary, reduce the carrying amount of its inventory to its net realizable value. As of June 30, 2023 and 2022, inventory on hand was comprised primarily of finished goods ready for sale. As of June 30, 2023 and 2022, the inventory reserve was $ 584,000 and $ 434,000 , respectively.
Revenue Recognition: The Company follows Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 606, Revenue from Contracts with Customers (“ASC 606”).
Revenue is recognized when control of the promised goods is transferred at the point of shipment to a customer and when performance conditions are satisfied as per the agreement, in an amount that reflects the consideration that we expect to receive in exchange for those goods as per the agreement with the customer. We generate all our revenue from agreements with customers. In case there are agreements with multiple performance obligations, we identify each performance obligation and evaluate whether the performance obligations are distinct within the context of the agreement at the agreement’s inception. Performance obligations that are not distinct at agreement inception are combined. We allocate the transaction price to each distinct performance obligation proportionately based on the estimated standalone selling price for each performance obligation and then evaluate how the services are transferred to the customer to determine the timing of revenue recognition.
Management considers the U.S. GAAP criteria for determining whether to report revenue gross as a principal versus net as an agent. Factors considered include whether the Company is the primary obligor, has risks and rewards of ownership, and bears the risk that a customer may not pay for the products provided or services performed. If there are circumstances where the above criteria are not met, revenues recognized are presented net of cost of goods sold.
Contract assets consist of conditional or unconditional rights to consideration. Accounts receivable represent amounts billed to customers where the Company has an enforceable right to payment for performance completed to date (i.e., unconditional rights to consideration). Other than accounts receivable, there were no other contract assets as of June 30, 2023 or 2022.
F-11
Table of Contents
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.
June 30,
Contract Liabilities
2023
2022
Customer deposits
$
3,169,460
$
3,157,578
Unearned Revenue
25,589
18,263
Customer refunds
138,645
20,193
Total
$
3,333,694
$
3,196,034
Cost of goods sold includes cost of inventory sold during the period, net of vendor discounts and allowances, and shipping and handling costs, and sales taxes. Taxes collected from customers are included in Accounts Payable on a net basis (excluded from revenues) until remitted to the government.
Deferred contract acquisition costs consist of sales commissions paid to the sales force and the related employer payroll taxes, collectively “deferred contract acquisition costs”, are considered incremental and recoverable costs of obtaining a contract with a customer. Management has determined that sales commissions paid are an immaterial component of obtaining a customer’s contract and has elected to expense sales commissions when earned.
For the years ended
Disaggregation of Revenue (in 000’s):
June 30, 2023
June 30, 2022
Equipment upon delivery (point in time)
$
19,730
$
18,063
Installation (point in time)
412
288
Software and services (over time)
65
—
Total revenues
$
20,207
$
18,351
Revenue from the sale of equipment is recognized upon shipment of such equipment to customers and performance conditions are satisfied.
Revenue from installation is recognized upon completion of installation project and performance obligation is complete.
Software subscription revenue for remote monitoring services is recognized on a straight-line basis over the term of the contract, usually one year . Services revenues are generally recognized over time as the contracts are performed. There was $ 65 K in software revenues during the years ended June 30, 2023 and none in 2022.
Returns and Allowances: The Company records allowances for discounts and product returns at the time of sale as a reduction of revenue as such allowances can be reliably estimated based on historical experience and known trends.
Shipping and Handling Costs: Shipping and handling costs are included in cost of goods sold and are recognized as a period expense during the period in which they are incurred.
Advertising Costs: Advertising costs of approximately $ 24,000 in 2023 and $ 18,000 for 2022 are expensed as incurred within selling and marketing expenses.
Goodwill and Intangible Assets: 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
F-12
Table of Contents
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. The qualitative assessment includes comparing the overall financial performance of the Company against the planned results used in the last quantitative goodwill impairment test. Additionally, the Company’s fair value is assessed in light of certain events and circumstances, including macroeconomic conditions, industry and market considerations, cost factors, and other relevant entity and Company specific events. The selection and assessment of qualitative factors used to determine whether it is more likely than not that the fair value of a reporting unit exceeds the carrying value involves significant judgment and estimates. If it is determined under the qualitative assessment that it is more likely than not that the fair value of a reporting unit is less than its carrying value, then a quantitative impairment test is performed. Under the quantitative impairment test, the estimated fair value of the reporting unit would be compared with its carrying value (including goodwill). If the fair value of the reporting unit exceeds its carrying value, then no impairment exists. If the estimated fair value of the reporting unit is less than its carrying value, an impairment loss would be recognized for the excess of the carrying value of the reporting unit over the fair value, not to exceed the carrying amount of goodwill.
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.
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 or other impairment triggers. Intangible assets arising from business combinations, such as customer relationships, trade names, and/or intellectual property, are initially recorded at fair value. The Company amortizes these intangible assets over the determined useful life which generally ranges from 11 to 20 years . The Company reviews its intangible assets for impairment whenever events or circumstances indicate that the carrying amount of an asset may not be fully recoverable. 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: The Company includes the results of operations of the businesses that it acquires commencing on the respective dates of acquisition. The Company allocates the fair value of the purchase price of its acquisitions to the assets acquired and liabilities assumed based on their estimated fair values. The excess of the fair value of the purchase price over the fair values of these identifiable assets and liabilities is recorded as goodwill.
Income Taxes: The Company utilizes an asset and liability approach for financial accounting and reporting for income taxes. The provision for income taxes is based upon income or loss after adjustment for those permanent items that are not considered in the determination of taxable income. Deferred income taxes represent the tax effects of differences between the financial reporting and tax basis of the Company’s assets and liabilities at the enacted tax rates in effect for the years in which the differences are expected to reverse. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the period that includes the enactment date. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized.
Product Warranty: The Company’s digital equipment products are sold under various limited warranty arrangements ranging from one year to three years . Company policy is to establish reserves for estimated product warranty costs in the period when the related revenue is recognized. The Company has the right to return defective products for up to three years , depending on the manufacturers’ individual policies. As of June 30, 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.
F-13
Table of Contents
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):
June 30,
2023
2022
Product warranty liability beginning of period
$
55
$
29
Accruals for warranties issued
162
60
Change in estimates
—
—
Settlements made
( 164 )
( 34 )
Product warranty liability end of the period
$
53
$
55
Research and Development: The Company incurs costs to develop new products, as well as improve the appeal and functionality of its existing products. Research and development costs are charged to expense when incurred.
Share-Based Compensation: The Company accounts for share-based payments in accordance with ASC 718, Compensation-Stock Compensation . Accordingly, the Company expenses the fair value of awards made under its share-based compensation plans. That cost is recognized in the consolidated financial statements over the requisite service period of the grants.
Recently Issued Accounting Pronouncements: In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842 ), which requires lessees to recognize assets and liabilities for the rights and obligations created by most leases on their balance sheet. The guidance is effective for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years. Early application is permitted. ASU 2016-02 requires modified retrospective adoption for all leases existing at, or entered into after, the date of initial application, with an option to use certain transition relief. 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. 2019-12, Income Taxes (Topic 740) : Simplifying the Accounting for Income Taxes ("ASU 2019-12"), which is intended to simplify the accounting for income taxes. ASU 2019-12 removes certain exceptions to the general principles in Topic 740 and also clarifies and amends existing guidance to improve consistent application. The new standard was adopted beginning July 1, 2022.
In January 2017, the FASB issued ASU 2017-04, “Intangibles-Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment,” effective for fiscal years beginning after December 15, 2021, with an election to adopt early. The ASU requires only a one-step qualitative impairment test, whereby a goodwill impairment loss will be measured as the excess of a reporting unit’s carrying amount over its fair value. 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 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.
F-14
Table of Contents
MOVING IMAGE TECHNOLOGIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 2 — INVESTMENTS
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:
Current
Non-current
Adjusted
Unrealized
Unrealized
Fair
Cash and
Marketable
Marketable
Cost
Gains
Losses
Value
Cash Equivalents
Securities
Securities
Cash
$
2,340
$
—
$
—
$
2,340
$
2,340
$
—
$
—
Equities
Communication
50
—
( 11 )
39
—
39
—
Consumer Discretionary
69
—
( 15 )
54
—
54
—
Consumer Staples
19
—
—
19
—
19
—
Energy
9
—
( 1 )
8
—
8
—
Financials
44
—
( 8 )
36
—
36
—
Health Care
40
—
—
40
—
40
—
Industrials
27
—
( 7 )
20
—
20
—
Information Technology
133
—
( 25 )
108
—
108
—
Materials
10
—
( 2 )
8
—
8
—
Real Estate
10
—
( 2 )
8
—
8
—
Utilities
6
—
---
6
—
6
—
Mutual Funds
482
—
( 64 )
418
—
418
—
Subtotal
899
—
( 135 )
764
—
764
—
Fixed Income
State & Municipal Bonds
906
—
( 17 )
889
—
564
325
Fixed income funds
2,759
—
( 72 )
2,687
—
2,687
—
Subtotal
3,665
—
( 89 )
3,576
—
3,251
325
Alternative, real estate and other
366
—
( 18 )
348
—
348
—
Total
$
7,270
$
—
$
( 242 )
$
7,028
$
2,340
$
4,363
$
325
NO
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
F-15
Table of Contents
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; and
(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
F-16
Table of Contents
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
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
Shares that May
Purchased as
Yet Be Purchased
Total Number
Average Price
Part of Publicly
Under the Plans
of Shares
Paid per
Announced Plans
or Programs
Period
Purchased
Share
or Programs
(in thousands)
March 23, 2023 – March 31, 2023
47,467
$
1.025
47,467
$
951
May 18, 2023 - June 30, 2023
225,153
1.130
225,153
697
Total
272,620
$
1.111
272,620
$
697
F-17
Table of Contents
MOVING IMAGE TECHNOLOGIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 5 — LOSS PER SHARE
Basic loss per share data for each year presented is computed using the weighted average number of shares of common stock outstanding during each such year. Diluted loss per share data is computed using the weighted average number of common and potentially dilutive securities outstanding during each year. Potentially dilutive securities consist of shares that would be issued upon the exercise of stock options and warrants, computed using the treasury stock method. A reconciliation of basic and diluted loss per share is as follows:
Dollars in Thousands
For the Year Ended
For the Year Ended
June 30,
June 30,
2023
2022
Numerator:
Net loss
$
( 1,798 )
$
( 1,345 )
Denominator:
Weighted average common shares outstanding, basic and diluted
10,922,710
10,577,994
Loss per share
Basic and diluted
$
( 0.16 )
$
( 0.13 )
The following securities were excluded from the calculation of diluted loss per share in each year because their inclusion would have been anti-dilutive:
For the Year Ended
For the Year Ended
June 30,
June 30,
2023
2022
Options
250,000
150,000
Warrants
—
—
Total potentially dilutive shares
250,000
150,000
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 6 — PROPERTY AND EQUIPMENT
Property and equipment consist of the following (in thousands):
June 30,
June 30,
2023
2022
Production equipment
$
308
$
307
Leasehold improvements
213
213
Furniture and fixtures
45
45
Computer equipment
60
47
Other equipment
120
120
Total
746
732
Accumulated depreciation
( 718 )
( 710 )
Net property and equipment
$
28
$
22
F-18
Table of Contents
MOVING IMAGE TECHNOLOGIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
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:
Useful Lives
Leasehold improvements
5 years or remaining lease term
Furniture and fixtures
5 years
Production equipment
3 – 7 years
Computer equipment
3 years
Other equipment
3 – 7 years
NOTE 7 — GOODWILL AND INTANGIBLE ASSETS
The following table summarizes the Company’s intangible assets as of June 30, 2023 (in thousands):
Amortization
Gross Asset
Accumulated
Net Book
Period
Cost
Amortization
Value
Customer relations
11 years
$
970
$
609
$
361
Patents
20 years
70
14
56
Trademark
20 years
78
15
63
$
1,118
$
638
$
480
The following table summarizes the Company’s intangible assets as of June 30, 2022 (in thousands):
Amortization
Gross Asset
Accumulated
Net Book
Period
Cost
Amortization
Value
Customer relations
11 years
$
970
$
257
$
713
Patents
20 years
70
10
60
Trademark
20 years
78
12
66
$
1,118
$
279
$
839
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):
2024
$
59
2025
59
2026
59
2027
59
Thereafter
244
Total
$
480
F-19
Table of Contents
MOVING IMAGE TECHNOLOGIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 8 — ACCRUED EXPENSES
Accrued expenses consist of the following (in thousands):
June 30,
2023
2022
Employee compensation
$
180
$
519
Accrued warranty
53
55
Customer refund
139
—
Legal fees
56
—
Freight
29
—
Sales tax
27
—
Others
134
81
Total
$
618
$
655
NOTE 9 — DEBT
Line of Credit
In October 2019, MiT LLC executed a line of credit agreement with an unaffiliated lender to provide a $ 1.0 million asset-based bridge loan to be used for working capital purposes. Funds borrowed bore interest at 13 % per annum and were due and payable one year from the origination date of the loan. The loan was secured by all assets of MiT LLC and was personally guaranteed by Phil Rafnson, our CEO and Chairman of the Board. Sound Management Investors, LLC, an entity controlled by Mr. Rafnson, pledged all membership units of MiT LLC held by it as further security for the repayment of such loan. In connection with this borrowing, the lender was issued warrants to acquire shares of the Company’s common stock upon completion of its IPO. On the effective date of the IPO, the lender exercised these warrants to acquire 94,723 shares of the common stock on a cashless basis.
Approximately $ 400,000 of the proceeds from this loan were used to pay amounts owed to Caddy in connection with the Caddy acquisition.
No further borrowings are available under this agreement from March 31, 2020. As of June 30, 2021, the outstanding balance of this line of credit was $ 590,000 . In July 2021, the outstanding balance, and all accrued interest, was paid in full.
There was no outstanding debt arrangement or debt balance as of June 30, 2023.
Paycheck Protection Program
On May 6, 2020, the Company received loan proceeds in the amount of approximately $ 694,000 under the Paycheck Protection Program (“PPP”). On March 13, 2021, the Company received proceeds in the amount of approximately $ 698,000 from a second PPP loan. The PPP, established as part of the Coronavirus Aid, Relief, and Economic Security Act, provides for loans to qualifying businesses for amounts up to 2.5 times of the average monthly payroll expenses of the qualifying business. The loans and accrued interest are forgivable as long as the borrower uses the loan proceeds for eligible purposes, including payroll, benefits, rent and utilities, and maintains its payroll levels. The amount of loan forgiveness will be reduced if the borrower terminates employees or reduces salaries during the eight-week period. In May 2021, the Company received notification from the Small Business Administration that the first loan in the amount of $ 694,000 , including accrued interest, has been fully forgiven.
The Company used the proceeds for purposes consistent with the PPP. In April 2022, the Company received notice that on March 23, 2022, its second PPP loan in the amount of $ 698,000 plus accrued interest of $ 7,000 has been fully forgiven and is paid in full.
F-20
Table of Contents
MOVING IMAGE TECHNOLOGIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 10 — STOCKHOLDERS’ EQUITY
In 2019, the Company adopted the 2019 Omnibus Incentive Plan (the “Plan”). The Plan, as amended, provides for the issuance of stock-based awards to employees. As of 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. entered into an Exchange Agreement with MiT LLC pursuant to which MiT Inc. agreed to exchange membership units for 2,350,000 shares of Common Stock representing 41.4 % of the equity as of such date on a fully diluted basis for no consideration. The shares were exchanged as part of the Exchange Agreement with the Company as described in Note 1.
In July 2021, the Company granted options to non-employee directors to purchase an aggregate of 150,000 shares of its common stock at an exercise price of $ 3.00 per share. The options vest one year from the date of grant, expire ten years from the date of grant and had an aggregate grant date fair value of $ 244,200 , which will be recognized ratably over the vesting period. 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 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 the Board of Director and Officer option grants during the year ended June 30, 2023:
Director
Officer
Options
Options
Risk-free interest rate
3.92
%
3.86
%
Expected volatility
82.0
%
82.0
%
Dividend yield
—
%
—
%
Expected option term in years
5
7
F-21
Table of Contents
MOVING IMAGE TECHNOLOGIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 10 — STOCKHOLDERS’ EQUITY (continued)
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.
Wtd. Avg.
Exercise
Options
Price
Balance, July 1, 2021
—
$
—
Granted during the year
150,000
3.00
Exercised during the year
—
—
Terminated/Expired during the year
—
—
Balance, July 1, 2022
150,000
$
3.00
Granted during the year
250,000
1.10
Exercised during the year
—
—
Cancelled during the year
( 150,000 )
( 3.00 )
Balance, June 30, 2023
250,000
$
1.10
The following table summarizes the outstanding stock options at June 30, 2023:
Number
Wtd. Avg.
Range of Exercise Price
Outstanding
Wtd. Avg, Life
Exercise Price
$ 1.10
250,000
9.0 years
$ 1.10
F-22
Table of Contents
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.
Wtd. Avg.
Exercise
Warrants
Price
Balance, July 1, 2021
236,667
$
2.76
Granted during the year
241,500
3.75
Exercised during the year
( 331,731 )
3.28
Terminated/Expired during the year
( 146,436 )
3.21
Balance, June 30, 2022
—
$
—
Granted during the year
—
—
Exercised during the year
—
—
Terminated/Expired during the year
—
—
Balance, June 30, 2023
—
$
—
In July 2021, warrants were exercised on a cashless basis resulting in the issuance of 139,611 shares of common stock.
In April 2022, underwriter warrants were exercised on a cashless basis resulting in the issuance of 192,120 shares of common stock.
There was no warrant activity during the year ended June 30, 2023.
NOTE 11 — INCOME TAXES
The following table summarizes deferred tax assets and liabilities as of the date of the Exchange Agreement and through June 30, 2023:
Deferred
Existing valuation allowance
Tax Assets
Deferred Tax Liabilities
Prior to business combination
Net Position
Deferred tax assets
$
1,443
$
—
$
—
$
1,443
Deferred tax liabilities
—
112
—
112
Valuation allowance
—
—
( 1,555 )
( 1,555 )
Total MiT Inc. June 30, 2023
$
1,443
$
112
$
( 1,555 )
$
—
Deferred tax assets
$
910
$
—
$
—
$
910
Deferred tax liabilities
—
( 18 )
—
( 18 )
Valuation allowance
—
—
( 892 )
( 892 )
Total MiT Inc. June 30, 2022
$
910
$
( 18 )
$
( 892 )
$
—
F-23
Table of Contents
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:
Deferred Tax Assets (Liabilities)
June 30, 2023
June 30, 2022
Inventory reserve
$
163
$
122
Accumulated depreciation
( 5 )
( 6 )
Accumulated goodwill amortization
( 13 )
( 12 )
Accumulated intangible amortization
130
8
Unrealized loss on investments
68
68
Deferred rent
4
6
Warranty reserve
7
5
Stock compensation
68
68
Net operating loss carryforward
1,097
594
Allowance for doubtful accounts
36
39
Net
1,555
892
Valuation allowance
( 1,555 )
( 892 )
Total
$
—
$
—
The income tax expense differs from the amount computed by applying the statutory income tax rates to the loss before income tax. The following table shows the reasons for these differences:
2023
2022
Net loss before tax
$
( 1,798 )
$
( 1,345 )
United States corporate tax rate
21
%
21
%
Tax Benefit at statutory rate
378
282
Differences due to:
State taxes
156
119
PPP Loan Forgiveness
—
210
Other, permanent differences
( 235 )
46
Change in valuation allowance
( 299 )
( 657 )
Income Tax (Benefit) Expense
$
—
$
—
Effective Tax Rate
( 0 )
%
( 0 )
%
At June 30, 2023 the Company has approximately $ 3,381,000 of U.S. 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. Federal and state deferred tax assets have been determined to be not more likely than not realizable. Management does not believe that it had any significant uncertain tax positions at June 30, 2023 and 2022, nor is this expected to change within the next twelve months due to the settlement and expiration of statutes of limitation.
NOTE 12 — RELATED PARTY TRANSACTIONS
In July 2021, the Company provided a discretionary $ 50,000 payment to the Company’s CEO and Chairman of the Board of Directors for personal guarantees provided in conjunction with financing company debt. See Note 7 - Debt.
F-24
Table of Contents
MOVING IMAGE TECHNOLOGIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 13 — CUSTOMER AND VENDOR CONCENTRATIONS
Customers : No customer accounted for more than 10% of the Company’s revenue for the year ended June 30, 2023. 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.
Vendors: 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.
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
Operating Leases: The Company occupies an executive office and warehouse space in Fountain Valley, CA, pursuant to separate lease agreements. . 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 . The monthly rent payable for the first year of the extended term was $ 120,620 and increases by 3 % on each anniversary date. In April 2020, the Company reached an agreement whereby April, May and June 2020 monthly rent payments related to this lease in the amount of $ 19,500 were deferred but payable in six monthly installments of $ 3,250 commencing on the first day of July 2020. In addition, the term of the lease was extended for one year from the anniversary date, through January 2025.
Also, in September 2018, the Company reached an agreement to extend the warehouse lease effective February 1, 2019 by an additional five years . The monthly rent payable for the first year of the extended term was $ 9,465 and increases by 3 % on each anniversary date. In April 2020, the Company reached an agreement whereby April, May and June 2020 monthly rent payments in the amount of $ 14,624 were deferred but payable in six monthly installments of $ 2,437 commencing on the first day of July 2020. In addition, the term of the lease was extended for one year from the anniversary date, through January 2025.
F-25
Table of Contents
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:
(in thousands)
Total
Operating leases
Payments
2024
$
302
2025
154
Total future minimum lease payments
$
456
Less imputed interest (at 8 % )
( 25 )
Present value of operating lease payments
$
431
The following table sets forth the ROU assets and operating lease liabilities as of June 30, 2023:
Assets
(in thousands)
ROU assets-net
$
415
Liabilities
Current operating lease liabilities
$
280
Long-term operating lease liabilities
151
Total ROU liabilities
$
431
Legal Matters: From time to time, the Company is involved in routine litigation that arises in the ordinary course of business. There are no pending significant legal proceedings to which the Company is a party for which management believes the ultimate outcome would have a material adverse effect on the Company’s financial position.
NOTE 15 — SUBSEQUENT EVENTS
The Company has evaluated events from June 30, 2023 through September 27 2023, the date these consolidated financial statements were available to be issued.
F-26
Table of Contents
EXHIBIT INDEX
Index to Exhibits
Incorporated by Reference
Exhibit No.
Exhibit Description
Form
File No.
Exhibit
Filing Date
Filed/
Furnished
Herewith
3.1
Certificate of Incorporation, as amended
S-1/A
333-234159
3.1
10/1/20
3.2
Bylaws
S-1/A
333-234159
3.2
10/1/20
3.3
Amendment No. 1 to the Amended and Restated Bylaws
8-K
001-40511
3.1
3/10/23
4.1
Form of Common Stock Certificate
S-1/A
333-234159
4.1
2/21/20
4.2
Description of Securities
✓
10.1
Form of Indemnity Agreement between the Company and its directors and officers
S-1/A
333-234159
10.2
2/21/20
10.2†
2019 Omnibus Incentive Plan
S-1/A
333-234159
10.3
10/11/19
10.2(a)†
Amendment No. 1 to 2019 Omnibus Incentive Plan
S-8
333-266822
99.1(a)
8/12/22
10.2(b)†
Form of Stock Option Award Agreement
S-1/A
333-234159
10.3(a)
10/11/19
10.2(c)†
Form of Restricted Stock Award Agreement
S-1/A
333-234159
10.3(b)
10/11/19
10.2(d)†
Form of Restricted Stock Unit Agreement
S-1/A
333-234159
10.3(c)
10/11/19
10.3
Asset Purchase Agreement dated April 21, 2022 between Moving iMage Technologies, Inc. and QSC, LLC
8-K
001-40511
10.1
4/26/22
10.4†
Interim CFO Engagement Agreement, dated January 19, 2023, between the Company and William Greene
8-K
001-40511
10.1
1/24/23
10.5
Letter Agreement between Moving iMage Technologies, Inc. and The Five Agency dated April 25, 2023
10-Q
001-40511
10.1
5/15/23
10.6
Convertible Note Purchase Agreement dated June 6, 2023
8-K
001-40511
10.1
6/12/23
21.1
List of Subsidiaries
10-K
001-40511
21.1
9/28/22
23.1
Consent of Haskell & White LLP
✓
24
Power of Attorney (included on signature page)
✓
31.1
Certification of the Principal Executive Officer pursuant to Rule 13a-14(a) or 15d-14(a) of the Securities Exchange Act of 1934.
✓
31.2
Certification of the Principal Financial Officer pursuant to Rule 13a-14(a) or 15d-14(a) of the Securities Exchange Act of 1934.
✓
32.1
Certification of the Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
✓
101.INS
The following financial statements from the Company’s Report on Form 10-K for the year ended June 30, 2023, formatted in Inline XBRL: (i) Condensed Consolidated Statements of Cash Flows, (ii) Condensed Consolidated Statements of Operations, (iii) Condensed Consolidated Balance Sheets, and (iv) Notes to Condensed Consolidated Financial Statements, tagged as blocks of text and including detailed tags.
104
Cover Page Interactive Data File (Embedded within the Inline XBRL document and included in Exhibit 101).
†
Indicates a management contract or compensatory plan or arrangement.
47
Table of Contents
SIGNATURES
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 27, 2023.
Moving iMage Technologies, Inc.
By:
/s/ Phil Rafnson
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.
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
Title
Date
/s/ Phil Rafnson
President, Chief Executive Officer and Chairman of the Board
September 27, 2023
Phil Rafnson
(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.
Director
September 27, 2023
Katherine D. Crothall, Ph.D.
/s/ John C. Stiska
Director
September 27, 2023
John C. Stiska
/s/ Scott Anderson
Director
September 27, 2023
Scott Anderson
48
Text extracted from the filing as submitted to EDGAR. Formatting, tables and exhibits are simplified for reading; the original document is authoritative for anything you rely on.