What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2023-11-14 compared with 2023-05-15 · 147 added, 259 removed, 331 unchanged (55% of the section changed)

3 unchanged sentences

(in thousands except share and per share amounts)

September 30,

Current Assets:

Cash and cash equivalents

Marketable securities - current

Accounts receivable, net

3 unchanged sentences

Long-Term Assets:

Marketable securities – non–current

Right-of-use asset

12 unchanged sentences

Lease liability–non-current

Deferred rent

Total Long-Term Liabilities

1 unchanged sentence

Stockholders’ Equity

Common stock, $ 0.00001 par value, 100,000,000 shares authorized, 10,958,398 and 10,828,398 shares issued;

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

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

Additional paid-in capital

6 unchanged sentences

(in thousands except share and per share amounts)

Nine Months Ended

Three Months Ended

September 30,

Cost of goods sold

4 unchanged sentences

Total operating expenses

Operating loss

Other (income) expenses:

Realized (gain) on investments

Unrealized (gain)/loss on investments

PPP loan and interest forgiveness

Interest and other income

Interest expense

Other Non-operating Expenses

Operating profit

Other income (expense)

Unrealized loss on marketable securities

Realized loss on marketable securities

Interest and other income, net

Total other income (expense)

Net income (loss)

Net profit/(loss)

Weighted average shares outstanding:

basic and diluted

Net loss per common share basic and diluted

basic and diluted (Note 3)

Net profit/(loss) per common share basic and diluted

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

MOVING IMAGE TECHNOLOGIES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (DEFICIT)

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

(in thousands except for share amounts)

Three and nine months ended March 31, 2023

Three months ended September 30, 2023

Retained Earnings

1 unchanged sentence

Balance as of June 30, 2023

Issuance of stock to employees

Grant of options to officer

Balance as of September 30, 2023

Balance as of December 31, 2022

Share buyback and cancellation– see Note 11

Balance as of March 31, 2023

Three and nine months ended March 31, 2022

Three months ended September 30, 2022

Retained Earnings

Additional Paid-in

Balance as of July 1, 2021

Share of common stock issued, net of issuance costs

Cashless exercise of warrants

Grant of options for services

Balance as of June 30, 2022

Issuance of stock to employees

Balance as of September 30, 2022

Grant of options for services

Balance as of December 31, 2021

Grant of options for services

Balance as of March 31, 2022

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

2 unchanged sentences

(in thousands)

Nine Months Ended

Three Months Ended

September 30,

Cash flows from operating activities:

Adjustments to reconcile net loss to net cash used in operating activities:

Provision for (reversal of) doubtful accounts

Net profit/(loss)

Adjustments to reconcile net profit/(loss) to net cash provided by (used in) operating activities:

Provision for doubtful accounts

Depreciation expense

Amortization expense

Realized loss (gain) on investments

Stock compensation expense

Deferred rent

PPP loan forgiveness

ROU amortization

Stock option compensation expense

Unrealized loss on investments

Realized loss on investments

Changes in operating assets and liabilities

Accounts receivable

Inventories, net

Prepaid expenses and other

3 unchanged sentences

Customer deposits

Lease liabilities

Net cash used in operating activities

Cash flows from investing activities

Proceeds from the sales of marketable securities

Purchase of marketable securities

Sales of marketable securities

Purchases of marketable securities

Purchases of property and equipment

Net cash provided by (used in) investing activities

Cash flows from financing activities

Net Proceeds from initial public offering

Payments on line of credit

Payments on notes payable

Stock Buyback

Net cash (used in) provided by financing activities

Net increase in cash and cash equivalents

Cash and cash equivalents, beginning of the period

Cash and cash equivalents, end of the period

Net cash used in investing activities

Net decrease in cash

Cash, beginning of the year

Cash, end of the year

Non-cash investing and financing activities:

Reclassification of IPO related costs from other assets to equity

Accrued expenses settled by issuance of common stock

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

Cash paid during the period:

Issuance of stock to employees

Right-of-use assets from ASC842 adoption

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

MOVING IMAGE TECHNOLOGIES, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 — BUSINESS ACTIVITY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

23 unchanged sentences

On July 12, 2021, in connection with the IPO, warrants to purchase 139,611 shares of the Company’s common stock were exercised on a cashless basis.

MOVING IMAGE TECHNOLOGIES, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

6 unchanged sentences

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

As of March 31, 2023, a large majority of domestic and international theatres were open.

As of September 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.

13 unchanged sentences

The June 30, 2023 condensed consolidated balance sheet has been derived from the audited consolidated financial statements.

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

MOVING IMAGE TECHNOLOGIES, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Operating results for the three months ended September 30, 2023 are not necessarily indicative of the results that may be expected for any subsequent quarters or for the year ending June 30, 2024.

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

1 unchanged sentence

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

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

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

June 30, 2022

Equity Securities

State and Municipal Debt Securities

Fixed Income Funds

Alternative Funds

Real Estate Funds

Less Long-term

As a result, the prior fair value and market data disclosure are no longer needed for the period ended September 30, 2023 and June 30 , 2023.

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

2 unchanged sentences

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

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

MOVING IMAGE TECHNOLOGIES, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

Deferred Offering Costs:

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

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

After completion of the IPO in July 2021, these costs were recorded in the condensed consolidated statements of changes in stockholders’ equity (deficit) as a reduction of proceeds received from the offering.

For the year ended June 30, 2023, the Company impaired $( 0.287 ) million in Goodwill, $( 0.363 ) million in Intangible assets and $( 0.304 ) in Note Receivables.

There were no impairments recognized for the period ended September 30, 2023.

Use of Estimates:

13 unchanged sentences

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

As of March 31, 2023 and June 30, 2022 the allowance for bad debts is approximately $ 143,000 and $ 138,000 , respectively.

As of September 30, 2023 and June 30, 2023 the allowance for bad debts is approximately $ 128,000 and $ 127,000 , respectively.

Inventories are stated at the lower of cost or net realizable value, with cost being determined on the first-in, first-out cost method of accounting.

2 unchanged sentences

The Company’s policy is to closely monitor inventory levels, obsolescence and lower market values compared to costs and, when necessary, reduce the carrying amount of its inventory to its net realizable value.

As of March 31, 2023 and June 30, 2022, the inventory reserve was $ 514,000 and $ 434,000 , respectively, and inventory on hand was comprised primarily of finished goods ready for sale.

As of September 30, 2023 and June 30, 2023, the inventory reserve was $ 647,000 and $ 584,000 , respectively, and inventory on hand was comprised primarily of finished goods ready for sale.

Revenue Recognition:

The Company follows Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 606, Revenue from Contracts with Customers (“ASC 606”).

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

Revenue is recognized when control of the promised goods is transferred at the point of shipment to a customer, and when performance conditions are satisfied, in an amount that reflects the consideration that the Company expects to receive in exchange for those goods as per the agreement with the customer.

The Company generates all its revenue from agreements with customers.

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

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

Performance obligations that are not distinct at agreement inception are combined.

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

MOVING IMAGE TECHNOLOGIES, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

The Company considers the U.S.

5 unchanged sentences

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

Contract liabilities consist of refund and warranty liabilities, as well as deposits received in advance on sales to certain customers.

Contract liabilities consist of customer refunds and warranty liabilities, as well as deposits received in advance on sales to certain customers.

Such deposits are reflected as customer deposits and recognized in revenue when control of the products is transferred or when performance conditions are satisfied per the agreement.

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

$in Thousands

March 31, 2023

The change in contract liabilities (customer deposits and unearned warranty revenue) during the three months ended September 30, 2023 included $ 1.982 million for revenue recognized that was included in contract liability as of July 1, 2023.

Contract Liabilities ($ in Thousands)

September 30, 2023

June 30, 2023

1 unchanged sentence

Unearned warranty revenue

Customer refunds

Total contract liabilities

3 unchanged sentences

The Company has determined that sales commissions paid are an immaterial component of obtaining a customer’s contract and has elected to expense sales commissions when earned.

For the Three

For the three months ended

Disaggregation of Revenue (in 000’s):

March 31, 2023

March 31, 2022

March 31, 2023

March 31, 2022

September 30, 2023

September 30, 2022

Equipment upon delivery (point in time)

Installation (point in time)

Software subscription and services (over time)

Software and services (over time)

Total revenues

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

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

2 unchanged sentences

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

MOVING IMAGE TECHNOLOGIES, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

Returns and Allowances:

2 unchanged sentences

Shipping and handling costs are included in cost of goods sold and are recognized as a period expense during the period in which they are incurred.

Advertising Costs Advertising costs were approximately $ 3,400 and $ 6,700 for the three months ended September 30, 2023 and 2022, respectively.

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

Goodwill and Intangible Assets:

Goodwill as of March 31, 2023 and June 30, 2022 represents the excess of the purchase price over the fair value of the net identifiable assets acquired in the 2019 Caddy Acquisition.

The Company had no Goodwill as of September 30, 2023 and June 30, 2023.

Goodwill represents the excess of the purchase price over the fair value of the net identifiable assets acquired in the 2019 Caddy Acquisition.

Goodwill is reviewed for impairment at least annually, in June, or more frequently if a triggering event occurs between impairment testing dates.

10 unchanged sentences

Management reviews its intangible assets for impairment whenever events or circumstances indicate that the carrying amount of an asset may not be fully recoverable.

There were no intangible asset impairments recognized for the three months and nine months ended March 31, 2023 or 2022.

There were no intangible asset impairments recognized for the three months months ended September 30, 2023 or 2022.

Business Combinations:

2 unchanged sentences

The excess of the fair value of the purchase price over the fair values of these identifiable assets and liabilities is recorded as goodwill.

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

Income Taxes:

4 unchanged sentences

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.

MOVING IMAGE TECHNOLOGIES, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

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

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

Deferred Tax Assets (Liabilities)

September 30, 2023

June 30, 2023

March 31, 2023

Inventory reserve

15 unchanged sentences

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

As of March 31, 2023 and June 30, 2022, the Company has established a warranty reserve of $ 52,000 and $ 55,000 , respectively, which is included in accrued expenses in the accompanying condensed consolidated balance sheets.

As of September 30, 2023 and June 30, 2023, the Company has established a warranty reserve of $ 61,000 and $ 53,000 , respectively, which is included in accrued expenses in the accompanying condensed consolidated balance sheets.

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):

Quarter Ended March 31,

Year Ended June 30,

September 30,

Product warranty liability beginning of period

Accruals for warranties issued

Change in estimates

Settlements made

Product warranty liability, end of period

Product warranty liability end of the period

Research and Development:

1 unchanged sentence

Research and development costs are charged to expense when incurred.

MOVING IMAGE TECHNOLOGIES, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

Recently Issued Accounting Pronouncements:

4 unchanged sentences

The impairment allowance is a valuation account deducted from the amortized cost basis of financial assets to present the net amount expected to be collected on the financial asset.

Once the new pronouncement is adopted by the Company, the allowance for credit losses must be adjusted for management’s current estimate at each reporting date.

The Company adopted the new pronouncement on July 1, 2023.

The allowance for credit losses has been adjusted for management’s current estimate at each reporting date.

The new guidance provides no threshold for recognition of impairment allowance.

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

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

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

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

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

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

ASU 2016-13 is effective for annual periods, including interim periods within those annual periods.

Management has assessed that the adoption of ASU 2016-13 has had no impact on its September 30, 2023 10-Q consolidated financial statements.

Due the Management’s continuing ability to obtain 90 % of contract value in up-front customer deposits, MIT’s risk is only the remaining 10 % of the customer’s contract value.

The combined effect of up-front customer deposits, prompt collection of trade receivables and application of historical aging criteria has resulted in minimal bad debts and allowances for doubtful accounts.

NOTE 2 — INVESTMENTS

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

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

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

Cash Equivalents

MOVING IMAGE TECHNOLOGIES, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 2 — INVESTMENTS (continued)

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

Cash Equivalents

Communication

Consumer Discretionary

Consumer Staples

Information Technology

State & Municipal Bonds

Fixed income funds

Alternative, real estate and other

MOVING IMAGE TECHNOLOGIES, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 3 — LOSS PER SHARE

3 unchanged sentences

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

Dollars in Thousands

For the Three Months Ended

For the Nine Months Ended

For the Three Months Ended

For the Nine Months Ended

Net income (loss in 000’s)

September 30,

Net profit/(loss)

Weighted average common shares outstanding, basic and diluted

Income (Loss) per share

Profit/(loss) per share

Basic and diluted

1 unchanged sentence

For the Three Months Ended

For the Nine Months Ended

For the Three Months Ended

For the Nine Months Ended

September 30,

Total potentially dilutive shares

For the nine months ended March 31, 2023 and the nine months ended March 31, 2022, the Company had net losses, therefore all potentially dilutive securities are deemed to be anti-dilutive and are not included in the diluted loss per share computation.

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

For the three months ended September 30, 2023 the Company had net income and the three months ended June 30, 2023 had a net loss.

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

MOVING IMAGE TECHNOLOGIES, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 4 — PROPERTY AND EQUIPMENT

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

September 30,

Production equipment

5 unchanged sentences

Net property and equipment

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

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

Depreciation expense related to property and equipment was $ 2,500 of which $ 2,100 is included in cost of goods and $ 400 in general and administrative expense.

F or the three months ended September 30, 2022, depreciation expense related to property and equipment was $ 2,000 , of which $ 0 is included in cost of goods sold and $ 2,000 in general and administrative expense.

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

5 unchanged sentences

Other equipment

NOTE 5 — GOODWILL AND INTANGIBLE ASSETS

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

Customer relationships

MOVING IMAGE TECHNOLOGIES, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 5 — GOODWILL AND INTANGIBLE ASSETS (continued)

NOTE 5 — INTANGIBLE ASSETS

The following table summarizes the Company’s intangible assets as of September 30, 2023 (in thousands):

Customer relations

NOTE 5 — INTANGIBLE ASSETS (continued)

The following table summarizes the Company’s intangible assets as of June 30, 2023 (in thousands):

Customer relationships

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

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

2023 (remaining quarter of 2023)

Customer relations

Amortization expense was $ 14,000 and $ 24,000 for the three months ended September 30, 2023 and 2022, respectively, and is included in general and administrative expense.

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

NOTE 6 — ACCRUED EXPENSES

Accrued expenses consist of the following (in thousands):

September 30,

Employee compensation

1 unchanged sentence

Customer refund

MOVING IMAGE TECHNOLOGIES, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 7 — 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.

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.

In July 2021, the outstanding balance of the line of credit, approximately $ 590,000 , and all accrued interest, was paid in full.

Notes Payable

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

Paycheck Protection Program

On May 6, 2020, the Company received loan proceeds in the amount of approximately $ 694,000 under the Paycheck Protection Program (“PPP”).

On March 13, 2021, the Company received proceeds in the amount of approximately $ 698,000 from a second PPP loan.

The PPP, established as part of the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”), provided 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 were forgivable as long as the borrower uses the loan proceeds for eligible purposes, including payroll, benefits, rent and utilities, and maintains its payroll levels.

In May 2021, the Company received notification from the Small Business Administration that the first loan in the amount of $ 694,000 , including accrued interest, has been fully forgiven.

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

There is no outstanding debt as of March 31, 2023 or June 30, 2022.

MOVING IMAGE TECHNOLOGIES, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 7 — STOCKHOLDERS’ EQUITY

1 unchanged sentence

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

As of March 31, 2023, the Plan provides for the issuance of up to 1,500,000 stock-based awards.

There are 1,220,000 stock-based awards available to grant under the Plan at March 31, 2023.

As of September 30, 2023, the Plan provides for the issuance of up to 1,500,000 stock-based awards.

There are 1,220,000 stock-based awards available to grant under the Plan at September 30, 2023.

In July 2021, MiT Inc.

3 unchanged sentences

In July 2021, the Company granted options to non-employee directors to purchase an aggregate of 150,000 shares of its common stock at an exercise price of $ 3.00 per share.

These options, which were the only options granted during the nine months ended March 31, 2021, had a grant-date fair value of $ 1.63 per share.

The Company recognized compensation expense for stock option awards of approximately $ 62,000 and $ 118,000 during the three and nine months ended March 31, 2021, respectively.

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

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.

The Company recognized $ 5,000 in compensation expense for stock options during the three months ended September 30, 2023.

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

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

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

At September 30, 2023, there was no unrecognized compensation cost related to nonvested stock option awards and no option grants during the period.

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

No options were granted during the three months ended September 30, 2023.

The following weighted average assumptions were used for option grants during the three months ended June 30, 2023:

Risk-free interest rate

Expected volatility

Dividend yield

Expected option term in years

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

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

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

During the period of March 24 through June 30, 2023, the Company repurchased 272,620 of the Company’s stock representing 2.55 % of the 10,685,778 outstanding

NOTE 7 — STOCKHOLDERS’ EQUITY (continued)

shares at the end of June 30, 2023 at an average price of $ 1.11 per share.

There were no share repurchases for the three months ended September 30, 2023.

$ in Thousands, except shares and dollar per share amounts

9 unchanged sentences

Paid per Share

March 23, 2023 – March 31, 2023

March 23, 2023 – June 30, 2023

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

MOVING IMAGE TECHNOLOGIES, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 8 — STOCKHOLDERS’ EQUITY (continued)

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

A summary of the status of the Company’s stock options as of September 30, 2023 and changes during the three months ended September 30, 2023 are presented below.

Balance, July 1, 2023

Granted during the period

Exercised during the period

Terminated/Expired during the period

Balance, March 31, 2023

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

Granted during the year

Exercised during the year

Cancelled during the year

Balance, September 30, 2023

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

Balance, July 1, 2022

2 unchanged sentences

Terminated/Expired during the period

Balance, March 31, 2022

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

Range of Exercise Price

Balance, September 30, 2022

The following table summarizes information about outstanding and exercisable stock options at September 30, 2023:

Exercise Price

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

Balance, July 1, 2021

Granted during the period

Exercised during the period

Terminated/Expired during the period

Balance, March 31, 2023

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

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

MOVING IMAGE TECHNOLOGIES, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 9 — 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.

Exercise Price

There was no warrant activity during the year ended June 30, 2023 or for the three months ended September 30, 2023.

NOTE 8 — CUSTOMER AND VENDOR CONCENTRATIONS

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

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

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

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

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

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

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

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

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

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

Two customers accounted for 15 % and 14 % of the Company’s sales for the three months ended September 30, 2023.

At September 30, 2023, the amount of outstanding receivables related to the two customers was approximately $ 612,000 .

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

At September 30, 2022, the amount of outstanding receivables related to this customers was zero .

Approximately 23 % and 20 % of the Company’s purchases were provided by two vendors for the three months ended September 30, 2023.

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

NOTE 9 — LEASE COMMITMENTS AND CONTINGENCIES

7 unchanged sentences

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

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

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

MOVING IMAGE TECHNOLOGIES, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

The Company’s operating lease expense was $ 73,000 and $ 68,000 for the three months ended September 30, 2023 and 2022, respectively.

NOTE 9 — LEASE COMMITMENTS AND CONTINGENCIES (continued)

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

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

(in thousands)

3 unchanged sentences

Present value of operating lease payments

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

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

(in thousands)

8 unchanged sentences

NOTE 10 — SUBSEQUENT EVENTS

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

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

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

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

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

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

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

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

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

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

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

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

MOVING IMAGE TECHNOLOGIES, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 12 — SUBSEQUENT EVENTS (continued)

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

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

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

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

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

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

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

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

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

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

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

The Company has evaluated subsequent events from March 31, 2023 through May 15, 2023, the date these financial statements were available to be issued, and determined that there have been no events that have occurred that would require adjustments to our disclosures in the condensed consolidated financial statements.

On October 2, 2023, the Company entered into a 10b5-1 stock trading plan to facilitate the Company’s previously re-authorized one-year , $ 1 million share repurchase program announced on March 23, 2023.

All repurchases will be implemented in accordance with the applicable requirements of Rule 10b-18 under the U.S.

Securities Exchange Act of 1934.

Through June 30, 2023, the Company had repurchased approximately 273,000 shares for $ 303,000 , leaving $ 697,000 available for future repurchases.

On November 1, 2023, the Company increased CEO Phil Rafnson’s compensation from $ 150,000 to $ 200,000 annually.

Management has evaluated events from September 30, 2023 through November 14 2023, the date these financial statements were available to be issued and determined that there have been no other events that occurred that would require adjustment to our disclosures in the condensed consolidated financial statements.

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

What changed 10-Q

Item 1. Financial Statements