What changed in this filing

/stocks — the workspaceLOADING

Item 9A. Controls and Procedures

2024-09-27 compared with 2023-09-27 · 229 added, 274 removed, 876 unchanged (36% of the section changed)

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

Under the supervision and with the participation of our management, including our Chief Executive Officer (our principal executive officer) and Chief Financial Officer (our principal financial officer and principal accounting officer), we performed an

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

Based on this assessment, management concluded that our internal controls over financial reporting were not effective as of June 30, 2024 due to the material weaknesses described below.

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

During the course of preparing our consolidated financial statements for the years ended June 30, 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.

During the course of preparing our consolidated financial statements for the years ended June 30, 2024 and 2023, 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 until the end of March 2023.

To improve internal controls, and starting with the

three months ended March 31, 2023 and continuing since, Management updates month end close checklists, has implemented more segregation of duties among its limited accounting staff and the CFO formally approves month end journal entries.

Changes in Internal Control over Financial Reporting

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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.

In April 2023, the Company hired a seasoned financial executive consultant as Chief Financial Officer.

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

The actions we have taken are subject to continued review, supported by confirmation and testing by management.

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Senior Vice President, Engineering

Thomas Lipiec

Senior Vice President, Sales and Customer Service

Francois Godfrey

Vice President of Business Development

Vice President, Technical Sales & Support

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The previous nine years he held engineering and operations positions at Christie, United Artists, and with other cinema exhibitors.

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.

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

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

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

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

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.

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Prior to Aspire, Dr.

Crothall served as a Principal of Liberty

Venture Partners, Inc.

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

from 2006 to November 2010.

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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.

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.

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.

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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.

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

Lipiec’s career began by occupying several

positions at various cinema exhibitors.

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

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

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.

Francois Godfrey is an experienced executive with over three decades of experience in business development, sales, and marketing across the cinema and professional services industries.

Francois joined Moving iMage Technologies in 2022 as VP of Business Development, Francois leads strategic initiatives for new products and SaaS solutions.

He began his career managing cinema operations while overseeing FF&E purchasing and construction.

At QSC Audio Products, Francois spearheaded the global launch of cinema loudspeaker and processor lines, building a robust distribution network.

As VP of Marketing at Ballantyne Strong, he led the company’s transition from manufacturing to distribution, driving significant growth.

At Barco, Francois played a pivotal role in expanding the adoption of laser projection systems, leading cross-functional teams to grow market share and increase revenue, while overseeing the successful launch of new technologies worldwide.

At Christie Digital Systems, spearheaded the acquisition and launched the Cinergy SaaS platform, securing contracts with major cinema chains like AMC, Cinemark, and Regal.

Frank Tees has been our Vice President, Technical Sales & Support since 2011.

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He managed a team of technicians in preparation, installation and service of film and digital cinema equipment for 1,000 screens in Southern California, Hawaii, Nevada and Arizona.

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

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

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

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Audit committee

Chaired by John C.

Stiska, Katherine D.

Crothall, Ph.D.

and Scott Lloyd Anderson serve on the audit committee, which is chaired by John C.

and Scott Lloyd Anderson also serve on the audit committee.

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.

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Compensation committee

Stiska, Katherine D.

Crothall, Ph.D.

and Scott Lloyd Anderson serve on the compensation committee, which is chaired by Katherine D.

Crothall, Ph.D.

Chaired by Katherine D.

Crothall, Ph.D, John C.

Stiska and Scott Lloyd Anderson also serve on the compensation committee.

Our board of directors has determined that each member of the compensation is “independent” as defined in the applicable NYSE American rules.

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Nominating and corporate governance committee

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.

Chaired by Scott Lloyd Anderson, Katherine D.

Crothall, Ph.D and John C.

Stiska and also serve on the nominating and governance committee.

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.

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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.

The information on our website is deemed not to be incorporated in this Report or to be a part of this

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.

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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.

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, 2024, except that William Greene did not timely file a Form 4 reporting for one stock option award 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.

and Scott Lloyd Anderson did not timely file a Form 4 for one option award and one stock award, and Jose Delgado did not timely file a Form 4 for a private transaction with the Company.

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, 2024.

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President and Chief Executive Officer

Jose Delgado(1)

Executive Vice President, Sales and Marketing

Executive Vice President, Operations

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

(1) On February 28, 2024, the Company and Joe Delgado, Executive Vice President of Sales (“Joe Delgado”) agreed to sell 49,586 shares of common stock at a price of $ 0.667 per share (based on the closing stock price as of February 27, 2024) for a total of $ 33,000 , which amount represents satisfaction of Mr.

Delgado’s $ 25,000 outstanding obligation to the Company plus an estimated $ 8,000 in federal and California state income taxes incurred in connection with the sale.

Following the purchase, the shares were cancelled by the Company.

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.

In addition, our named executive officers are not entitled to any payments or other benefits in connection with the 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

There were no equity awards grants for any named executive officer during the year ended June 30, 2024.

In the year ended June 30, 2023, 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.

Clawback Policy

Effective November 30, 2023, our board of directors adopted a clawback policy that may be applied in the event of a material financial restatement.

The clawback policy covers current and former executive officers and includes all incentive compensation.

Specifically, in the event of an accounting restatement, we must recover, reasonably promptly, any excess incentive compensation during the three completed fiscal years immediately preceding the date on which we are required to prepare an accounting restatement.

Compensation that may be recoverable under the policy includes cash or equity-based compensation for which the grant, payment or vesting is or was based wholly or in part on the attainment of a financial reporting measure.

The amount to be recovered will be the excess of the incentive compensation paid based on the erroneous data over the incentive compensation that would have been paid had it been based on the restated results.

The full text of our Clawback Policy is included as Exhibit 97.1 to this annual report.

2019 Omnibus 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.

At June 30, 2024, an aggregate of 1,150,000 shares of our Common Stock is 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.

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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.

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 interests 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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(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.

(4) The table amounts exclude shares of stock of 900, 600 and 1,800 shares for Katherine D.

Crothall, John C.

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

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

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.

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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

Policies and Procedures Regarding Related Person 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,

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

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

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

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

Transactions with Related Person

Except as described below, which transaction does not constitute as a Related Person transaction as defined under the Securities Act, none of the Related Person has had any material interest, direct or indirect, in any transaction with us or in any presently proposed transaction that has or will materially affect us:

On February 28, 2024, the Company and Jose Delgado, Executive Vice President of Sales agreed to sell 49,586 shares of our common stock at a price of $0.667 per share (based on the closing stock price as of February 27, 2024) for a total of $33,073.35, which amount represents satisfaction of Mr.

Delgado’s $25,036.52 outstanding obligation to the Company plus an estimated $8,036.83 in federal and California state income taxes incurred in connection with the sale.

Director Independence

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All Other Fees

(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.

(1) Audit fees include 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.

EXHIBITS, FINANCIAL STATEMENT SCHEDULES

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

CONSOLIDATED BALANCE SHEETS

CONSOLIDATED STATEMENTS OF OPERATIONS

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

CONSOLIDATED STATEMENTS OF CASH FLOWS

CONSOLIDATED BALANCE SHEETS AT JUNE 30, 2024 AND 2023

CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE YEARS ENDED JUNE 30, 2024 AND 2023

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY FOR THE YEARS ENDED JUNE 30, 2024 AND 2023

CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED JUNE 30, 2024 AND 2023

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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Current Assets:

Marketable securities - current

Accounts receivable, net

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Long-Term Assets:

Marketable securities – long-term

Right-of-use asset

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Lease liability–non-current

Deferred rent

Total Long-Term Liabilities

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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

Common stock, $ 0.00001 par value, 100,000,000 shares authorized, 9,986,850 and 10,685,778 shares issued and outstanding at June 30, 2024 and June 30, 2023, respectively

Additional paid-in capital

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General and administrative

Impairment of long-term assets

Total operating expenses

Operating loss

Other expenses (income)

Unrealized loss on marketable securities

Realized (gain)/loss on marketable securities

PPP loan forgiveness

Interest expense and other income, net

Total other expense (income)

Other income (expense)

Unrealized gain on marketable securities

Interest and other income, net

Total other income

Net income/(loss)

Weighted average shares outstanding:

basic and diluted (Note 5)

Net loss per common share basic and diluted

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

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

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Additional Paid-In

Balance as of June 30, 2021

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

Cashless exercise of warrants

Cashless exercise of underwriter warrants

Grant of options for services

Balance as of June 30, 2022

Balance June 30, 2022

Issuance of stock to employees

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Balance as of June 30, 2023

Grant of options to officer

Issuance of stock to board members

Cashless issuance of stock to officer

Share buyback and cancellation

Share buyback and cancellation for officer

Balance as of June 30, 2024

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

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Cash flows from operating activities:

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

PPP loan forgiveness

Provision for doubtful accounts

Net income/(loss)

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

Provision for credit losses

Inventory reserve

Depreciation expense

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Stock option compensation expense

Unrealized loss on investments

Realized (gain) loss on investments

Realized gain on investments

Changes in operating assets and liabilities

Accounts receivable

Inventories, net

Prepaid expenses and other

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Lease liabilities

Net cash provided by operating activities

Net cash provided by (used in) operating activities

Cash flows from investing activities

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Purchases of property and equipment

Advances on notes receivable

Advances on note receivable

Net cash provided by (used in) investing activities

Cash flows from financing activities

Net proceeds from initial public offering

Payments on notes payable

Payments on line of credit

Stock Buyback

Net cash provided by (used in) financing activities

Net increase in cash

Share Buyback

Net cash (used in) financing activities

Net (decrease) increase in cash

Cash, beginning of the year

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Non-cash investing and financing activities:

Share buyback and cancellation for officer

Issuance of stock to employees

Right-of-use assets from ASC842 adoption

Reclassification of IPO related costs from other assets to equity

Cash paid during the period:

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

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(“MiT Inc.”) to facilitate the Company’s initial public offering (“IPO”).

Upon formation of MiT Inc., 2,000,000 shares of MiT Inc.

Upon the formation of MiT Inc., 2,000,000 shares of MiT Inc.

common stock were issued to members of MiT LLC.

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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.

have been retroactively revised to reflect the consolidation of MiT Inc.

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.

The consolidated statements of stockholders’ equity have been retroactively revised to give effect of the change in reporting entity accounting of MiT Inc.

Initial Public Offering:

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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.

MOVING IMAGE TECHNOLOGIES, INC.

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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.

The repercussions of the COVID-19 global pandemic resulted in a significant impact on 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.

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

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

Based on the Company’s current estimates of recovery, it believes it has, and will generate, sufficient cash to sustain operations at least 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.

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

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

Measurement of Fair Values :

The Company’s accounting policies and disclosures require the measurement of fair values, for both financial and non-financial assets and liabilities on either a recurring or nonrecurring basis.

When measuring the fair value of an asset or a liability, the Company uses observable market data to the extent such information is available.

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

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

inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly (i.e., as prices) or indirectly (i.e., derived from prices).

inputs for the asset or liability that are not based on observable market data (unobservable inputs).

If the inputs used to measure the fair value of an asset or a liability fall into different levels of the fair value hierarchy, then the fair value measurement is categorized in its entirety in the same level of the fair value hierarchy as the lowest level input that is significant to the entire measurement.

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

Equity securities

State and Municipal Debt Securities

Fixed Income Funds

Alternative Funds

Real Estate Funds

Less Long-term

Marketable Securities:

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

As a result, the prior fair value and market data disclosure are no longer needed for the period ended June 30, 2024 and June 30, 2023.

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

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

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See the additional discussion in Note 7 below.

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

There were no impairments recognized for the year ended June 30, 2024.

MOVING IMAGE TECHNOLOGIES, INC.

NOTES TO 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 consolidated statement of stockholders’ equity as a reduction of the proceeds received from the offering.

Use of Estimates:

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

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

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.

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

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

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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.

Accounts receivables are carried at original invoice amount less allowance for credit losses.

Management determines the allowance for credit losses by identifying troubled accounts and by using historical experience applied to an aging of accounts.

Accounts receivables 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.

Accounts receivables 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.

As of June 30, 2024 and 2023, the allowance for credit losses is approximately $ 378,000 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.

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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.

We allocate the transaction price to each distinct performance obligation

MOVING IMAGE TECHNOLOGIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

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.

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Other than accounts receivable, there were no other contract assets as of June 30, 2024 or 2023.

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.

Contract Liabilities ($ in Thousands)

Contract Liabilities

2 unchanged sentences

Customer refunds

Cost of goods sold includes cost of inventory sold during the period, net of vendor discounts and allowances, and shipping and handling costs, and sales taxes.

Cost of goods sold includes cost of inventory sold during the period, net of vendor discounts and allowances, 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.

2 unchanged sentences

For the years ended

Disaggregation of Revenue (in 000’s):

Disaggregation of Revenue ($ in Thousands)

June 30, 2024

8 unchanged sentences

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.

MOVING IMAGE TECHNOLOGIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

Returns and Allowances:

1 unchanged sentence

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.

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

Advertising Costs:

1 unchanged sentence

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

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.

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.

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 Company’s impairment assessment begins with a qualitative assessment to determine whether it’s more likely than not that the 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.

6 unchanged sentences

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.

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

Total intangible assets, including trademark, patents and customer relationship, were $ 0.422 million as of June 30, 2024 compared to $ 0.480 million as of June 30, 2023.

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

1 unchanged sentence

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

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.

There was no intangible asset impairments recognized for the year ended June 30, 2024.

Business Combinations:

5 unchanged sentences

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.

Deferred income taxes represent the tax effects of differences between the financial reporting and tax

MOVING IMAGE TECHNOLOGIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

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.

5 unchanged sentences

As of June 30, 2024 and 2023, the Company has established a warranty reserve of $ 69,000 and $ 53,000 , respectively, which is included in accrued expenses in the accompanying consolidated balance sheets.

MOVING IMAGE TECHNOLOGIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

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

Warrant Liabilities

For the Year Ended

($ in Thousands)

Product warranty liability beginning of period

20 unchanged sentences

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.

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.

4 unchanged sentences

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.

MOVING IMAGE TECHNOLOGIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

In June 2016, the FASB issued ASU No.

2016-13, Financial Instruments-Credit Losses (Topic 326) (“ASU 2016-13”), which significantly changes how entities will account for credit losses for most financial assets and certain other instruments that are not measured at fair value through net income.

ASU 2016-13 replaces the existing incurred loss model with an expected credit loss model that requires entities to estimate an expected lifetime credit loss on most financial assets and certain other instruments.

Under ASU 2016-13 credit impairment is recognized as an allowance for credit losses, rather than as a direct write-down of the amortized cost basis of a financial asset.

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.

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 has estimated an allowance for expected credit losses on trade receivables.

Due to the Management’s continuing ability to obtain 90 % of contract value in up-front customer deposits, the Company’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 credit losses.

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.

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:

Cash Equivalents

Communication

Consumer Discretionary

Consumer Staples

Information Technology

State & Municipal Bonds

Fixed income funds

Alternative, real estate and other

NOTE 3 — SNDBX AGREEMENTS

2 unchanged sentences

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

Pursuant to the Letter Agreement, the Company agreed to lend The Five Agency $ 300,000 (the “Loan”), which will be provided in two equal installments as further described below, and The Five Agency will form a separate Florida corporation, SNDBX, INC ("SNDBX"), to conduct that business.

As a portion of the consideration

MOVING IMAGE TECHNOLOGIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 3 — SNDBX AGREEMENTS (continued)

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

3 unchanged sentences

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:

MOVING IMAGE TECHNOLOGIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 3 — SNDBX AGREEMENTS (continued)

(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”).

7 unchanged sentences

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.

6 unchanged sentences

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

MOVING IMAGE TECHNOLOGIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 3 — SNDBX AGREEMENTS (continued)

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

3 unchanged sentences

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 $ 400,000 balance.

The $ 0.400 million is included within impairment expense.

The $ 0.400 million is included within impairment expense for the year ended June 30, 2023.

MOVING IMAGE TECHNOLOGIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 4 - SHARE BUYBACK

1 unchanged sentence

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.

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.

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

On April 1, 2024, the Board of Directors authorized a new share repurchase program for the repurchase of up to $ 697,000 worth of shares and will expire at the earlier of June 30, 2024, or when the maximum dollar amount of shares is repurchased.

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

Securities Exchange Act of 1934.

The share repurchase plan ended on June 30, 2024.

Share Buyback

Total Number of

1 unchanged sentence

Shares that May

Yet Be Purchased

Average Price

Part of Publicly

Under the Plans

Yet Be Purchased

Announced Plans

(in thousands)

March 23, 2023 – March 31, 2023

May 18, 2023 - June 30, 2023

Under the Plans

Mar 23, 2023 - Mar 31, 2023

May 18 - Jun 30, 2023

Nov 1, 2023 - Dec 31, 2023

Jan 1, 2024 - Mar 31, 2024

Apr 1, 2024 - Jun 30, 2024

MOVING IMAGE TECHNOLOGIES, INC.

5 unchanged sentences

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

Dollars in Thousands

For the Year Ended

Loss per Share

For the Year Ended

(In Thousands except for share and per share price)

Net income/(loss)

Weighted average common shares outstanding, basic and diluted

Loss per share

Profit/(loss) per share

Basic and diluted

1 unchanged sentence

For the Year Ended

Total potentially dilutive shares

For the years ended June 30, 2024 and 2023, 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.

No options were granted in the year ended June 30, 2024.

MOVING IMAGE TECHNOLOGIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 6 — PROPERTY AND EQUIPMENT

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

Property and Equipment

For the Year Ended

($ in Thousands)

Production equipment

5 unchanged sentences

Net property and equipment

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 expense related to property and equipment were $ 12,000 in 2024 and $ 9,000 in 2023, with $ 0 and $ 0 included in cost of goods sold and $ 12,000 and $ 9,000 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:

10 unchanged sentences

Customer relations

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 .

MOVING IMAGE TECHNOLOGIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 7 — GOODWILL AND INTANGIBLE ASSETS (continued)

For the year ended June 30, 2024, amortization expenses were $ 58,000 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.

Amortization expense is included in general and administrative expense.

1 unchanged sentence

Estimated amortization expense related to intangible assets subject to amortization at June 30, 2024 in each of the five fiscal years subsequent to June 30, 2024, and thereafter is as follows (amounts in thousands):

MOVING IMAGE TECHNOLOGIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 8 — ACCRUED EXPENSES

Accrued expenses consist of the following (in thousands):

For the Year ended

Accrued Expenses

($ in Thousands)

Employee compensation

1 unchanged sentence

Customer refund

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.

MOVING IMAGE TECHNOLOGIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 9 — STOCKHOLDERS’ EQUITY

6 unchanged sentences

The shares were exchanged as part of the Exchange Agreement with the Company as described in Note 1.

MOVING IMAGE TECHNOLOGIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 9 — STOCKHOLDERS’ EQUITY (continued)

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.

13 unchanged sentences

Expected option term in years

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, 2024 and 2023 and changes during the years ended June 30, 2024 and 2023 are presented below.

Balance, July 1, 2023

Granted during the year

Exercised during the year

Terminated/Expired during the year

Balance, July 1, 2022

Granted during the year

Exercised during the year

Cancelled during the year

Granted during the period

Exercised during the period

Cancelled during the period

Balance, June 30, 2024

Future vesting of options will be 25,000 shares in each of years ended June 30, 2025 and 2027 , respectively.

Future option vesting expense will be $ 21,000 in each of years ended June 30, 2025 and 2027 , respectively.

The following table summarizes the outstanding stock options at June 30, 2024:

Range of Exercise Price

Exercise Price

MOVING IMAGE TECHNOLOGIES, INC.

1 unchanged sentence

NOTE 9 — 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.

Balance, July 1, 2021

Granted during the year

Exercised during the year

Terminated/Expired during the year

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, 2024.

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

On May 8, 2024, the Board of Directors authorized a $ 25,000 payment to CEO Phil Rafnson as part of a pay increase to $ 250,000 per year from the CEO’s current pay of $ 200,000 , effective as of November 1, 2023.

NOTE 10 — INCOME TAXES

The following table summarizes deferred tax assets and liabilities as of the date of the Exchange Agreement and through June 30, 2024:

Existing valuation allowance

Deferred Tax Liabilities

Prior to business combination

Deferred Tax Assets and Liabilities

Existing valuation

($ in Thousands)

allowance prior to

Tax Liabilities

business combination

Deferred tax assets

12 unchanged sentences

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

$ in Thousands

Deferred Tax Assets (Liabilities)

14 unchanged sentences

The following table shows the reasons for these differences:

$ in Thousands

For the Year Ended

Net loss before tax

2 unchanged sentences

Differences due to:

PPP Loan Forgiveness

Other, permanent differences

7 unchanged sentences

Management does not believe that it had any significant uncertain tax positions at June 30, 2024 and 2023, 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.

NOTE 11 — CUSTOMER AND VENDOR CONCENTRATIONS

No customer accounted for more than 10% of accounts receivable at June 30, 2024.

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

MOVING IMAGE TECHNOLOGIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 13 — CUSTOMER AND VENDOR CONCENTRATIONS

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

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.

NOTE 11 — CUSTOMER AND VENDOR CONCENTRATIONS (continued)

For the year ended June 30, 2024, the two largest vendors provided 16 % and 13 %, respectively, of the Company’s purchases.

12 unchanged sentences

The aggregate rent expense was $ 291,000 and $ 287,000 for the year ended June 30, 2024 and 2023, 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.

MOVING IMAGE TECHNOLOGIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 14 — COMMITMENTS AND CONTINGENCIES (continued)

On June 4, 2024, the Company notified its Grace facility location landlord of its intent to vacate at the end of the current January 31, 2025 lease term.

Future minimum lease payments at June 30, 2024 under these arrangements are as follows:

(in thousands)

Operating leases

($ in Thousands)

Total future minimum lease payments

7 unchanged sentences

Total ROU liabilities

MOVING IMAGE TECHNOLOGIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 12 — COMMITMENTS AND CONTINGENCIES (continued)

Legal Matters:

3 unchanged sentences

The Company has evaluated events from June 30, 2024 through September 27, 2024, the date these consolidated financial statements were available to be issued.

Following the June 30, 2024 year end, on July 23, 2024, the Company renewed its Fountain Valley location effective February 1, 2025 by an additional five years with a January 1, 2030.lease expiration date.

Both parties agreed that July 23, 2024 was the effective modification date.

The monthly rent payable for the first year of the extended term will be $ 19,362 and increases by 4 % on each anniversary date.

On June 4, 2024, the Company notified its Grace facility location landlord of its intent to vacate at the end of the current January 31, 2025 lease term.

On August 8, 2024, the Board of Directors authorized salary reductions of $ 100,000 for the CEO from $ 250,000 to $ 150,000 and salary reductions for the Executive VP, Operations, Executive VP, Sales and Marketing from $ 234,000 to $ 220,000 , respectively and the CFO from $ 220,000 to $ 200,000 .

Management has evaluated events from June 30, 2024 through September 27 2024, 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.

EXHIBIT INDEX

26 unchanged sentences

Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

Clawback Policy

The following financial statements from the Company’s Report on Form 10-K for the year ended June 30, 2023, formatted in Inline XBRL:

28 unchanged sentences

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

What changed 10-K

Item 9A. Controls and Procedures