10-Q - MITQ - Equibles

Table of Contents

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☑ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2023

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission file number: 001-40511

Moving iMage Technologies, Inc.

(Exact name of Registrant as specified in its charter)

Delaware	85-1836381
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)


17760 Newhope Street ,
Fountain Valley , California	92708
(Address of principal executive offices)	(Zip Code)

( 714 ) 751-7998

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $0.00001 par value	MITQ	NYSE American

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☑ No ☐.

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☑ No ☐.

Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☐	Accelerated filer ☐
Non-accelerated filer ☑	Smaller reporting company ☑
	Emerging growth company ☑

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☑.

As of May 15, 2023, there were 10,913,510 shares of the registrant’s common stock, par value $0.00001 per share, outstanding.

Table of Contents MOVING iMAGE TECHNOLOGIES, INC.

TABLE OF CONTENTS


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PART I - FINANCIAL INFORMATION

ITEM 1.	Financial Statements		F-3
	Condensed Consolidated Balance Sheets as of March 31, 2023 (unaudited) and June 30, 2022		F-3
	Condensed Consolidated Statements of Operations (unaudited) for the three and nine months ended March 31, 2023 and 2022		F-4
	Condensed Consolidated Statements of Changes in Stockholders’ Equity (Deficit) (unaudited) for the three and nine months ended March 31, 2023		F-5
	Condensed Consolidated Statements of Changes in Stockholders’ Equity (Deficit) (unaudited) for the three and nine months ended March 31, 2022		F-5
	Condensed Consolidated Statements of Cash Flows (unaudited) for the nine months ended March 31, 2023 and 2023		F-6
	Notes to Unaudited Condensed Consolidated Financial Statements		F-7
ITEM 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		25
ITEM 3.	Quantitative and Qualitative Disclosures About Market Risk		32
ITEM 4.	Controls and Procedures		33
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PART II - OTHER INFORMATION			34
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ITEM 1.	Legal Proceedings		34
ITEM 1A.	Risk Factors		34
ITEM 2.	Unregistered Sales of Equity Securities and Use of Proceeds		34
ITEM 3.	Defaults Upon Senior Securities		34
ITEM 4.	Mine Safety Disclosures		34
ITEM 5.	Other Information		34
ITEM 6.	Exhibits		35
SIGNATURES			36

F-2

Table of Contents PART I – FINANCIAL INFORMATION

ITEM 1.FINANCIAL STATEMENTS

MOVING IMAGE TECHNOLOGIES, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands except share and per share amounts)


	March 31,		June 30,
	2023		2022
	(unaudited)		(Note 1)
Assets
Current Assets:
Cash and cash equivalents	$	6,357	$	2,340
Marketable securities - current		—		4,363
Accounts receivable, net		979		1,762
Inventories, net		4,836		4,033
Prepaid expenses and other		575		864
Total Current Assets		12,747		13,362
Long-Term Assets:
Marketable securities – non–current		—		325
Right-of-use asset		479		—
Property and equipment, net		23		22
Intangibles, net		768		839
Goodwill		287		287
Other assets		16		16
Total Long-Term Assets		1,573		1,489
Total Assets	$	14,320	$	14,851

Liabilities and Stockholders’ Equity
Current Liabilities:
Accounts payable	$	2,141	$	1,583
Accrued expenses		496		655
Customer deposits		2,092		3,158
Lease liability–current		272		—
Unearned warranty revenue		48		18
Total Current Liabilities		5,049		5,414

Long-Term Liabilities:
Lease liability–non-current		224		—
Deferred rent		—		22
Total Long-Term Liabilities		224		22
Total Liabilities		5,273		5,436
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		—		—
Additional paid-in capital		12,604		12,500
Accumulated deficit		(3,557)		(3,085)
Total Stockholders’ Equity		9,047		9,415
Total Liabilities and Stockholders’ Equity	$	14,320	$	14,851

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

F-3

Table of Contents MOVING IMAGE TECHNOLOGIES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands except share and per share amounts)

(unaudited)


	Three Months		Three Months
	Ended		Ended		Nine Months Ended		Nine Months Ended
	March 31,		March 31,		March 31,		March 31,
	2023		2022		2023		2022
Net sales	$	3,741	$	5,835	$	14,435	$	12,728
Cost of goods sold		2,699		4,468		10,523		9,743
Gross profit		1,042		1,367		3,912		2,985

Operating expenses:
Research and development		66		53		195		172
Selling and marketing		663		539		1,867		1,653
General and administrative		839		906		2,464		2,470
Total operating expenses		1,568		1,498		4,526		4,295
Operating loss		(526)		(131)		(614)		(1,310)
Other (income) expenses:
Realized (gain) on investments		(81)		(17)		(243)		(17)
Unrealized (gain)/loss on investments		—		—		167		—
PPP loan and interest forgiveness		—		(705)		—		(705)
Interest and other income		(1)		(1)		(5)		(2)
Interest expense		—		2		—		40
Other Non-operating Expenses		(20)		—		(61)		—
Total other (income) expense		(102)		(724)		(142)		(684)
Net income (loss)	$	(424)	$	593	$	(472)	$	(626)

Weighted average shares outstanding: basic and diluted		10,956,413		10,636,278		10,947,790		10,508,152
Net loss per common share basic and diluted	$	(0.04)	$	0.06	$	(0.04)	$	(0.06)

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

F-4

Table of Contents MOVING IMAGE TECHNOLOGIES, INC.

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

(unaudited)

(in thousands except for share amounts)

Three and nine months ended March 31, 2023


										Retained Earnings
		Common Stock					Additional Paid-in			(Accumulated
	****	Shares	****	Amount		****	Capital		****	Deficit)		****	Total
Balance as of June 30, 2022	****	10,828,398		$	—		$	12,500		$	(3,085)		$	9,415
Issuance of stock to employees		130,000			—			153			—			153
Net loss		—			—			—			(95)			(95)

Balance as of September 30, 2022		10,958,398		$	—		$	12,653		$	(3,180)		$	9,473
Net income		—			—			—			46			46
Balance as of December 31, 2022		10,958,398			—			12,653			(3,134)			9,519

Net loss		—			—			—			(424)			(424)
Share buyback and cancellation– see Note 11		(47,467)			—			(49)			—			(49)
Balance as of March 31, 2023		10,910,931		$	—		$	12,604		$	(3,557)		$	9,047

Three and nine months ended March 31, 2022


										Retained Earnings
		Common Stock					Additional Paid-in			(Accumulated
	****	Shares	****	Amount		****	Capital		****	Deficit)		****	Total
Balance as of July 1, 2021		5,666,667		$	—		$	1,011		$	(1,740)		$	(729)
Share of common stock issued, net of issuance costs		4,830,000			—			11,244			—			11,244
Cashless exercise of warrants		139,611			—			—			—			—
Grant of options for services		—			—			56			—			56
Net loss		—			—			—			(577)			(577)

Balance as of September 30, 2021		10,636,278		$	—		$	12,311		$	(2,317)		$	9,994
Grant of options for services		—			—			62			—			62
Net loss		—			—			—			(644)			(644)

Balance as of December 31, 2021		10,636,278			—			12,373			(2,961)			9,412
Grant of options for services		—			—			60			—			60
Net income		—			—			—			593			593
Balance as of March 31, 2022		10,636,278		$	—		$	12,433		$	(2,368)		$	10,065

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

F-5

Table of Contents

MOVING IMAGE TECHNOLOGIES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

(unaudited)


	****	Nine Months Ended		****	Nine Months Ended
		March 31,			March 31,
		2023			2022
Cash flows from operating activities:

Net loss		$	(472)		$	(626)
Adjustments to reconcile net loss to net cash used in operating activities:
Provision for (reversal of) doubtful accounts			5			(230)
Depreciation expense			6			15
Amortization expense			72			72
Realized loss (gain) on investments			(76)			(17)
Stock compensation expense			—			178
Deferred rent			—			(1)
PPP loan forgiveness			—			(705)
Changes in operating assets and liabilities
Accounts receivable			778			(1,002)
Inventories			(803)			(1,451)
Prepaid expenses and other			289			426
Accounts payable			558			326
Accrued expenses			(6)			(99)
Unearned warranty revenue			30			3
Customer deposits			(1,066)			2,195
Net cash used in operating activities			(685)			(916)
Cash flows from investing activities
Proceeds from the sales of marketable securities			12,418			(3,412)
Purchase of marketable securities			(7,660)			—
Purchases of property and equipment			(7)			(18)
Net cash provided by (used in) investing activities			4,751			(3,430)
Cash flows from financing activities
Net Proceeds from initial public offering			—			11,244
Payments on line of credit			—			(590)
Payments on notes payable			—			(1,241)
Stock Buyback			(49)			—
Net cash (used in) provided by financing activities			(49)			9,413
Net increase in cash and cash equivalents			4,017			5,067
Cash and cash equivalents, beginning of the period			2,340			1,270
Cash and cash equivalents, end of the period		$	6,357		$	6,337
Non-cash investing and financing activities:

Reclassification of IPO related costs from other assets to equity		$	—		$	1,116
Accrued expenses settled by issuance of common stock		$	153		$	—
Right-of-use asset and liability recorded upon adoption of ASC 842		$	681		$	—
Cash paid during the period:
Interest		$	—		$	40

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

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MOVING IMAGE TECHNOLOGIES, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 — BUSINESS ACTIVITY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Organization: Moving iMage Technologies, Inc., a Delaware corporation, together with its wholly-owned subsidiaries unless the context indicates otherwise, the (“Company”) was incorporated in June 2020. The Company, through its wholly-owned subsidiary, Moving iMage Technologies, LLC (“MiT LLC”) and MiT LLC’s wholly-owned subsidiary, Moving iMage Acquisition Co., (DBA “Caddy Products”), designs, integrates, installs and distributes proprietary and custom designed equipment as well as off the shelf cinema products needed for contemporary cinema requirements. The Company also offers single source solutions for cinema design, procurement, installation and service to the creative and production communities for screening, digital intermediate and other critical viewing rooms. Additionally, the Company offers a wide range of technical, design and consulting services such as custom engineering, systems design, integration and installation, and digital technology, as well as software solutions for operations enhancement and theatre management. The Company also provides turnkey furniture, fixture and equipment services to commercial cinema exhibitors for new construction and remodels including design, consulting, installation and project management as well as procurement of seats, lighting, acoustical treatments, screens, projection and sound.

Moving iMage Acquisition Co. (DBA “Caddy Products”) designs, develops and manufactures innovative products for the entertainment, cinema, grocery, worship, restaurant, sports and restroom industries.

Share Exchange:

In June 2020, MiT LLC members created Moving iMage Technologies, Inc. (“MIT Inc.”) to facilitate the Company’s initial public offering (“IPO”). Upon formation of MiT, Inc., 2,000,000 shares of MiT, Inc. common stock were issued to members of MiT LLC. On July 7, 2021, MiT LLC and MiT Inc. entered into an exchange agreement (“Exchange Agreement”) whereby the members of MiT LLC exchanged their membership interest for 2,350,000 shares of common stock in MiT Inc. As a result of the Exchange Agreement, the members of MiT LLC owned approximately 79% or 4,452,334 of the outstanding common stock of MiT Inc. As a result, MiT LLC (the entity where the Company conducts its business) became a wholly-owned subsidiary of MiT Inc. (the SEC registrant).

The transaction was accounted for as a merger of entities under common ownership in accordance with generally accepted accounting principles in the United States of America (“GAAP”). This determination was primarily based on the facts that, immediately before and after the transaction: (i) MiT LLC owners owned a substantial majority of the voting rights in the combined company, (ii) MiT LLC designated a majority of the members of the initial board of directors of the combined company, and (iii) MiT LLC’s senior management holds all key positions in the senior management of the combined company.

Initial Public Offering: On July 12, 2021, the Company closed its initial public offering and issued 4,830,000 shares of its common stock at a price of $3.00 per share for net proceeds of approximately $12,360,000 after deducting underwriting discounts, commissions, and other expenses of approximately $2,130,000.

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

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MOVING IMAGE TECHNOLOGIES, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

Impact of the COVID-19 Pandemic: The COVID-19 pandemic has had an unprecedented impact on the world and the movie exhibition industry. The social and economic effects have been widespread. At various points during the pandemic, authorities around the world imposed measures intended to control the spread of COVID-19, including stay-at-home orders and restrictions on large public gatherings, which caused movie theaters in countries around the world to temporarily close. The repercussions of the COVID-19 global pandemic resulted in a significant impact to our customers, specifically those in the entertainment and cinema industries. As a result, the Company implemented various cash preservation strategies, including, but not limited to, temporary personnel and salary reductions, halting non-essential operating and capital expenditures, and negotiating modified timing and/or abatement of contractual payments with landlords and other major suppliers.

Throughout 2020 and 2021 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. 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 will generate, sufficient cash to sustain operations for a period of 12 months from the issuance of these financial statements. Nonetheless, the COVID-19 pandemic has had, and continues to have, adverse effects on the Company’s business, results of operations, cash flows and financial condition.

Principles of Consolidation: The condensed consolidated financial statements include the accounts of MiT Inc., its wholly-owned subsidiary, MiT LLC, and MiT LLC’s wholly-owned subsidiary, Moving iMage Acquisition Co., (DBA “Caddy Products”). All significant intercompany transactions and balances have been eliminated in consolidation.

Basis of Presentation: The Company’s financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”).

Unaudited Interim Condensed Consolidated Financial Statements: The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with U.S. GAAP for interim financial information. Accordingly, they do not include all of the information and notes required by U.S. GAAP. However, in the opinion of the management of the Company, all adjustments of a normal recurring nature necessary for a fair presentation of the financial position and operating results have been included in these statements. These condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements included in its Annual Report on Form 10-K for the fiscal year ended June 30, 2022, and with the disclosures and risk factors presented therein. The June 30, 2022 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.

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MOVING IMAGE TECHNOLOGIES, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

Marketable Securities: In March 2023, the Company sold all its marketable securities with the proceeds deposited to the Company’s cash account. As a result, the prior fair value and market data disclosure are no longer needed for the period ended March 31, 2023.

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


	****	June 30, 2022
	****	Level 1		****	Level 2		****	Level 3		****	Total
Equity Securities		$	764		$	—		$	—		$	764
State and Municipal Debt Securities			889		****	—			—			889
Fixed Income Funds			2,687			—			—			2,687
Alternative Funds		****	—			300			—			300
Real Estate Funds			—			48			—			48
Subtotal												4,688
Less Long-term												(325)
Net Current											$	4,363

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

Assets and Liabilities Not Measured - In addition to assets and liabilities that are measured at fair value on a recurring basis, we also measure certain assets and liabilities at fair value on a nonrecurring basis. Our non-financial assets, including goodwill, intangible assets and property and equipment, are measured at fair value when there is an indication of impairment and the carrying amount exceeds the asset’s projected undiscounted cash flows. These assets are recorded at fair value only when an impairment charge is recognized. There were no impairments recognized for the period ended March 31, 2023 or the year ended June 30, 2022.

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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.

Use of Estimates: The preparation of condensed consolidated financial statements in conformity with U.S. GAAP requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities (including sales returns, bad debts, inventory reserves, warranty reserves, purchase price allocation and asset impairments), disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ significantly from those estimates.

Concentration of Cash: The Company maintains its cash in bank accounts which, at times, may exceed federally insured limits. The Company has not experienced any losses in such accounts. Management believes the Company is not exposed to any significant credit risk on its cash balances.

Accounts Receivable: Accounts receivable are carried at original invoice amount less allowance for bad debts. Management determines the allowance for bad debts by identifying troubled accounts and by using historical experience applied to an aging of accounts. Accounts receivable are written off when deemed uncollectible. Recoveries of receivables previously written off are recorded when received. Accounts receivable are considered to be past due if any portion of the receivable balance is outstanding for more than 90 days past the customer’s granted terms. The Company does not charge interest on past due balances or require collateral on its accounts receivable. As of March 31, 2023 and June 30, 2022 the allowance for bad debts is approximately $143,000 and $138,000, respectively.

Inventories: Inventories are stated at the lower of cost or net realizable value, with cost being determined on the first-in, first-out cost method of accounting. The Company purchases finished goods and materials to assemble kits in quantities that it anticipates will be fully used in the near term. Changes in operating strategy, customer demand, and fluctuations in market values can limit the Company’s ability to effectively utilize all products purchased and can result in finished goods with above-market carrying costs which may cause losses on sales to customers. The Company’s policy is to closely monitor inventory levels, obsolescence and lower market values compared to costs and, when necessary, reduce the carrying amount of its inventory to its net realizable value. As of March 31, 2023 and June 30, 2022, the inventory reserve was $514,000 and $434,000, respectively, and inventory on hand was comprised primarily of finished goods ready for sale.

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

Revenue is recognized when control of the promised goods is transferred at the point of shipment to a customer, and when performance conditions are satisfied, 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. 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.

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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. GAAP criteria for determining whether to report revenue gross as a principal versus net as an agent. Factors considered include whether the Company is the primary obligor, has risks and rewards of ownership, and bears the risk that a customer may not pay for the products provided or services performed. If there are circumstances where the above criteria are not met, revenues recognized are presented net of cost of goods sold.

Contract assets consist of conditional or unconditional rights to consideration. Accounts receivable represent amounts billed to customers where the Company has an enforceable right to payment for performance completed to date (i.e., unconditional rights to consideration). 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. 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		****	June 30, 2022
Customer deposits	$	2,092		$	3,157
Unearned warranty revenue		48			18
Total contract liabilities	$	2,140		$	3,176

All values are in US Dollars.

Cost of goods sold includes cost of inventory sold during the period, net of vendor discounts and allowances, and shipping and handling costs, and sales taxes. Taxes collected from customers are included in accounts payable on a net basis (excluded from revenues) until remitted to the government.

Deferred contract acquisition costs consist of sales commissions paid to the sales force, and the related employer payroll taxes, and are considered incremental and recoverable costs of obtaining a contract with a customer. 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 Nine
		Months Ended						Months Ended
Disaggregation of Revenue (in 000’s):		March 31, 2023		****	March 31, 2022		****	March 31, 2023		****	March 31, 2022
Equipment upon delivery (point in time)		$	3,669		$	5,701		$	14,100		$	4,984
Installation (point in time)			60			134			293			239
Software subscription and services (over time)			12			—			42			—
Total revenues		$	3,741		$	5,835		$	14,435		$	12,728

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

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

Software subscription revenue for remote monitoring services is recognized on a straight-line basis over the term of the contract, usually one year. Services revenues are generally recognized over time as the contracts are performed.

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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: The Company records allowances for discounts and product returns at the time of sale as a reduction of revenue as such allowances can be reliably estimated based on historical experience and known trends.

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

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. Goodwill is reviewed for impairment at least annually, in June, or more frequently if a triggering event occurs between impairment testing dates. The Company operates as a single operating segment and as a single reporting unit for the purpose of evaluating goodwill impairment. On July 1, 2022, the Company adopted ASU 2017-04, “Intangibles-Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment”. As such, the Company’s goodwill impairment test includes a one-step qualitative impairment test whereby a goodwill impairment loss will be measured as the excess of a reporting units carrying amount over its fair value. The selection and assessment of qualitative factors used to determine whether it is more likely than not that the fair value of a reporting unit exceeds the carrying value involves significant judgment and estimates. If the fair value of the reporting unit exceeds its carrying value, then no impairment exists. If the estimated fair value of the reporting unit is less than its carrying value, an impairment loss would be recognized for the excess of the carrying value of the reporting unit over the fair value, not to exceed the carrying amount of goodwill.

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.

Intangible assets arising from business combinations, such as customer relationships, trade names, and/or intellectual property, are initially recorded at fair value. The Company amortizes these intangible assets over the determined useful life which generally ranges from 11 to 20 years. Management reviews its intangible assets for impairment whenever events or circumstances indicate that the carrying amount of an asset may not be fully recoverable. There were no intangible asset impairments recognized for the three months and nine months ended March 31, 2023 or 2022.

Business Combinations: The Company includes the results of operations of the businesses that it acquires commencing on the respective dates of acquisition. The Company allocates the fair value of the purchase price of its acquisitions to the assets acquired and liabilities assumed based on their estimated fair values. The excess of the fair value of the purchase price over the fair values of these identifiable assets and liabilities is recorded as goodwill.

Income Taxes: The Company utilizes an asset and liability approach for financial accounting and reporting for income taxes. The provision for income taxes is based upon income or loss after adjustment for those permanent items that are not considered in the determination of taxable income. Deferred income taxes represent the tax effects of differences between the financial reporting and tax basis of the Company’s assets and liabilities at the enacted tax rates in effect for the years in which the differences are expected to reverse. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the period that includes the enactment date. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized.

F-12

Table of Contents

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):


	****	Deferred Tax Assets (Liabilities)
		June 30, 2022		March 31, 2023
Inventory reserve		$	122	$	144
Accumulated depreciation			(6)		(5)
Accumulated goodwill amortization			(12)		(17)
Accumulated intangible amortization			8		(18)
Unrealized loss on investments			68		—
Deferred rent			6		5
Warranty reserve			5		13
Stock compensation			68		68
Net operating loss carryforward			594		757
Allowance for doubtful accounts			39		40
Net			892		919
Valuation allowance			(892)		(919)
Total		$	—	$	—

Leases: On July 1, 2022 the Company adopted ASU 2016-02, Leases (Topic 842) which requires lessees to recognize assets and liabilities for the rights and obligations created by most leases on their balance sheet. In accordance with ASC 842, on July 1, 2022 the Company recognized Right of Use Assets in the amount of $665,000 and a lease liability of $681,000 for the leases associated with its executive office and warehouse space, as described in Note 11.

Product Warranty: The Company’s digital equipment products are sold under various limited warranty arrangements ranging from one year to three years. Company policy is to establish reserves for estimated product warranty costs in the period when the related revenue is recognized. The Company has the right to return defective products for up to three years, depending on the manufacturers’ individual policies. As of March 31, 2023 and June 30, 2022, the Company has established a warranty reserve of $52,000 and $55,000, respectively, which is included in accrued expenses in the accompanying condensed consolidated balance sheets.

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


	****	Quarter Ended March 31,		****	Year Ended June 30,
		2023			2022
Product warranty liability, beginning of period		$	50		$	29
Accruals for warranties issued			46			60
Settlements made			(44)			(34)
Product warranty liability, end of period		$	52		$	55

Research and Development: The Company incurs costs to develop new products, as well as improve the appeal and functionality of its existing products. Research and development costs are charged to expense when incurred.

F-13

Table of Contents

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: 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. 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 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.

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.


		Adjusted			Unrealized			Unrealized			Fair			Cash and			Marketable			Marketable
	****	Cost		****	Gains		****	Losses		****	Value		****	Cash Equivalents		****	Securities		****	Securities
Cash		$	4,886		$	—		$	—		$	4,886		$	4,886		$	—		$	—

F-14

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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):


											****	Current		****	Non-current
	Adjusted		Unrealized		Unrealized		Fair		Cash and			Marketable			Marketable
	Cost		Gains		Losses		Value		Cash Equivalents			Securities			Securities
Cash	$	2,340	$	—	$	—	$	2,340	$	2,340		$	—		$	—

Equities
Communication		50		—		(11)		39		—			39			—
Consumer Discretionary		69		—		(15)		54		—			54			—
Consumer Staples		19		—		—		19		—			19			—
Energy		9		—		(1)		8		—			8			—
Financials		44		—		(8)		36		—			36			—
Health Care		40		—		—		40		—			40			—
Industrials		27		—		(7)		20		—			20			—
Information Technology		133		—		(25)		108		—			108			—
Materials		10		—		(2)		8		—			8			—
Real Estate		10		—		(2)		8		—			8			—
Utilities		6		—		—		6		—			6			—
Mutual Funds		482		—		(64)		418		—			418			—
										—
Subtotal		899		—		(135)		764		—			764			—

Fixed Income
State & Municipal Bonds		906		—		(17)		889		—			564			325
Fixed income funds		2,759		—		(72)		2,687		—			2,687			—

Subtotal		3,665		—		(89)		3,576		—			3,251			325

Alternative, real estate and other		366		—		(18)		348		—			348			—

Total		7,270		—		(242)		7,028		2,340			4,363			325

F-15

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MOVING IMAGE TECHNOLOGIES, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 3 — LOSS PER SHARE

Basic loss per share data for each period presented is computed using the weighted average number of shares of common stock outstanding during each such period. Diluted loss per share data is computed using the weighted average number of common and potentially dilutive securities outstanding during each period. Potentially dilutive securities consist of shares that would be issued upon the exercise of stock options and warrants, computed using the treasury stock method. A reconciliation of basic and diluted loss per share is as follows:


	****	For the Three Months Ended		****	For the Nine Months Ended		****	For the Three Months Ended		****	For the Nine Months Ended
		March 31,			March 31,		****	March 31,			March 31,
		2023			2023			2022			2022
Numerator:
Net income (loss in 000’s)		$	(424)		$	(472)		$	593		$	(626)
Denominator:
Weighted average common shares outstanding, basic and diluted			10,956,413			10,947,790			10,636,278			10,508,152

Income (Loss) per share
Basic and diluted		$	(0.04)		$	(0.04)		$	0.06		$	(0.06)

The following securities were excluded from the calculation of diluted loss per share in each period because their inclusion would have been anti-dilutive:


	For the Three Months Ended		For the Nine Months Ended		For the Three Months Ended	For the Nine Months Ended
	March 31,		March 31,		March 31,	March 31,
	2023	****	2023	****	2022	2022
Options	150,000		150,000		150,000	150,000
Warrants	—		—		241,500	241,500
Total potentially dilutive shares	150,000		150,000		391,500	391,500

For the nine months ended March 31, 2023 and the nine months ended March 31, 2022, the Company had net losses, therefore all potentially dilutive securities are deemed to be anti-dilutive and are not included in the diluted loss per share computation. For the three months ended March 31, 2023 the Company had net losses and the three months ended March 31, 2022 had net income. However, all potentially dilutive securities were also deemed to be anti-dilutive because their exercise price exceeded the weighted average trading price of the Company’s stock for the period.

F-16

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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):


	****	March 31,		****	June 30,
		2022			2022
Production equipment		$	307		$	307
Leasehold improvements			213			213
Furniture and fixtures			45			45
Computer equipment			53			47
Other equipment			120			120
			738			732
Accumulated depreciation			(715)			(710)
Net property and equipment		$	23		$	22

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

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

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


	****	Useful Lives
Leasehold improvements		5 years or remaining lease term
Furniture and fixtures		5 years
Production equipment		3 – 7 years
Computer equipment		3 years
Other equipment		3 – 7 years

NOTE 5 — GOODWILL AND INTANGIBLE ASSETS

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


	****	Amortization	****	Gross Asset		****	Accumulated		****	Net Book
		Period		Cost			Amortization			Value
Customer relationships		11 years		$	970		$	323		$	647
Patents		20 years			70			13			57
Trademark		20 years			78			14			64
				$	1,118		$	350		$	768

F-17

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MOVING IMAGE TECHNOLOGIES, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 5 — GOODWILL AND INTANGIBLE ASSETS (continued)

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


	****	Amortization	****	Gross Asset		****	Accumulated		****	Net Book
		Period		Cost			Amortization			Value
Customer relationships		11 years		$	970		$	257		$	713
Patents		20 years			70			10			60
Trademark		20 years			78			12			66
				$	1,118		$	279		$	839

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)	$	24
2024		96
2025		96
2026		96
2027		96
Thereafter		360
Total	$	768

NOTE 6 — ACCRUED EXPENSES

Accrued expenses consist of the following (in thousands):


	****	March 31,		****	June 30,
		2023			2022
Employee compensation		$	220		$	519
Accrued warranty			52			55
Customer refund			135			—
Others			89			81
Total		$	496		$	655

F-18

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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.

F-19

Table of Contents

MOVING IMAGE TECHNOLOGIES, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 8 — STOCKHOLDERS’ EQUITY

In 2019, the Company adopted the 2019 Omnibus Incentive Plan (the “Plan”). The Plan, as amended, provides for the issuance of stock-based awards to employees. As of March 31, 2023, the Plan provides for the issuance of up to 1,500,000 stock-based awards. There are 1,220,000 stock-based awards available to grant under the Plan at March 31, 2023.

In July 2021, MiT Inc. entered into an Exchange Agreement with MiT LLC pursuant to which MiT Inc. agreed to exchange membership units for 2,350,000 shares of Common Stock representing 41.4% of the equity as of such date on a fully diluted basis for no consideration. The shares were exchanged as part of the Exchange Agreement with the Company as described in Note 1.

In July 2021, the Company granted options to non-employee directors to purchase an aggregate of 150,000 shares of its common stock at an exercise price of $3.00 per share. These options, which were the only options granted during the nine months ended March 31, 2021, had a grant-date fair value of $1.63 per share. The Company recognized compensation expense for stock option awards of approximately $62,000 and $118,000 during the three and nine months ended March 31, 2021, respectively. The Company recognized no compensation expense for stock options during the three and nine months ended March 31, 2023.

On March 6, 2023, the Board of Directors (the “Board”) of Moving iMage Technologies, Inc. (the “Company”) approved an amendment (the “Amendment”) to the Company’s Amended and Restated Bylaws that amends the quorum for a stockholders’ meeting or action to be at least 33 1/3% of all shares of stock issued and outstanding and entitled to vote thereat, present in person or represented by proxy.

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

On March 23, 2023 the Board of Directors re-authorized a stock repurchase program. Under the stock repurchase program, the Company may repurchase up to $1 million of its outstanding common stock over the next 12 months. During the period of March 24 through 31, 2023, the Company repurchased 47,467 of the Company’s stock representing 0.44% of the 10,828,398 outstanding shares at the end of June 30, 2022 at an average price of $1.025 per share.

$ in Thousands, except shares and dollar per share amounts


	****	****	****		****	****	Total Number of	****	Approximate
							Shares		Dollar Value of
							Purchased as		Shares that May
		Total Number of					Part of Publicly		Yet Be Purchased
		Shares		Average Price			Announced Plans		Under the Plans
Period		Purchased		Paid per Share			or Programs		or Programs
March 23, 2023 – March 31, 2023		47,467		$	1.025		47,467		$	951
Total		47,467		$	1.025		47,467		$	951

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.

F-20

Table of Contents

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.


	****		Wtd. Avg.
			Exercise
		Options	Price
Balance, July 1, 2022		150,000	$	3.00
Granted during the period		—		—
Exercised during the period		—		—
Terminated/Expired during the period		—		—
Balance, March 31, 2023		150,000	$	3.00

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.


	****		Wtd. Avg.
			Exercise
		Options	Price
Balance, July 1, 2021		—	$	—
Granted during the period		150,000		3.00
Exercised during the period		—		—
Terminated/Expired during the period		—		—
Balance, March 31, 2022		150,000	$	3.00

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


		****	Number	****		Wtd. Avg.
Range of Exercise Price			Outstanding		Wtd. Avg, Life	Exercise Price
$	3.00		150,000		8.5 years	$	3.00

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.


	****		Wtd. Avg.
			Exercise
		Warrants	Price
Balance, July 1, 2021		236,667	$	2.76
Granted during the period		241,500		3.75
Exercised during the period		(139,611)		2.76
Terminated/Expired during the period		(97,056)		2.76
Balance, March 31, 2023		241,500	$	3.75

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.

F-21

Table of Contents

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. See Note 7.

NOTE 10 — CUSTOMER AND VENDOR CONCENTRATIONS

Customers: 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.

Vendors: Approximately 12% and 11% of the Company’s purchases were provided by 2 vendors for the three months ended March 31, 2023. Approximately 14% and 13% of the Company’s purchases were provided by two vendors for the three months ended March 31, 2022.

Approximately 22% and 13% of the Company’s purchases were provided by two vendors for the nine months ended March 31, 2023. Approximately 10% of the Company’s purchases were provided by one vendor for the nine months ended March 31, 2022.

NOTE 11 — LEASE COMMITMENTS AND CONTINGENCIES

Operating Leases: The Company leases executive office and warehouse space in Fountain Valley, CA, pursuant to separate lease agreements. Under ASC 842, at contract inception the Company determined whether the contract is or contains a lease and whether the lease should be classified as on operating or a financing lease. Operating leases are included in ROU (right-of-use) assets and operating lease liabilities in our condensed consolidated balance sheet.

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

The lease agreements, as amended, expire on January 31, 2025 and do not include any renewal options. The agreements provide for initial monthly base amounts plus annual escalations through the term of the leases.

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

The 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.

F-22

Table of Contents

MOVING IMAGE TECHNOLOGIES, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 11 — LEASE COMMITMENTS AND CONTINGENCIES (Continued)

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


	****	(in thousands)
		Total
Operating leases		Payments
2023		$	76
2024			302
2025			154
Total undiscounted operating lease payments		$	532
Less imputed interest (at 8%)			(36)
Present value of operating lease payments		$	496

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


Assets	****	(in thousands)
ROU assets-net		$	479

Liabilities
Current operating lease liabilities		$	272
Long-term operating lease liabilities			224
Total ROU liabilities		$	496

The Company’s weighted average remaining lease term for its operating leases is 1.75 years.

Legal Matters: From time to time, the Company is involved in routine litigation that arises in the ordinary course of business. There are no pending significant legal proceedings to which the Company is a party for which management believes the ultimate outcome would have a material adverse effect on the Company’s financial position.

NOTE 12 — 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. Mr. 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. F-23

Table of Contents

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; and

(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.

F-24

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ITEM 2.MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Forward-Looking Statements

Certain matters in this Quarterly Report on Form 10-Q (this “Report”), including (without limitation) statements under “Management’s Discussion and Analysis of Financial Condition and Results of Operations”, contain forward-looking statements. Although we believe that, in making any such statements, our expectations are based on reasonable assumptions, any such statement may be influenced by factors that could cause actual outcomes and results to be materially different from those projected.

Forward-looking statements include information concerning our possible or assumed future results of operations and expenses, business strategies and plans, competitive position, business environment, and potential growth opportunities. Forward-looking statements include all statements that are not historical facts. In some cases, forward-looking statements can be identified by terms such as “anticipates,” “believes,” “could,” “estimates,” “expects,” “intends,” “may,” “plans,” “potential,” “predicts,” “projects,” “seeks,” “should,” “will,” “would,” or similar expressions and the negatives of those terms.

Forward-looking statements involve known and unknown risks, uncertainties, and other factors that may cause our actual results, performance, or achievements to be materially different from any future results, performance, or achievements expressed or implied by the forward-looking statements. Although we believe that the expectations reflected in these forward-looking statements are reasonable, these expectations may not prove to be correct or we may not achieve the financial results, savings or other benefits anticipated in the forward-looking statements. These forward-looking statements are necessarily estimates reflecting the best judgment of our senior management and involve a number of risks and uncertainties, some of which may be beyond our control. These risks and uncertainties, including those disclosed under “Risk Factors” in Part I, Item 1A of our Annual Report on Form 10-K for the fiscal year ended June 30, 2022, filed with the Securities and Exchange Commission (the “SEC”) on September 28, 2022, and in our other filings with the SEC, could cause actual results to differ materially from those suggested by the forward-looking statements and include, without limitation:

●	the potential duration and impact of the COVID-19 pandemic and its effect on our business, financial condition, results of operations and cash flows;
●	interruptions or higher prices of products and services from our suppliers;
---	---
●	inability to timely introduce new products and services or enhance existing products and services;
---	---
●	our dependence on distributors, dealers and resellers to sell and market our products and services, and any failure on our part to maintain and further develop our sales channels;
---	---
●	inability to accurately forecast consumer demand for our products and services and adequately manage our inventory;
---	---
●	increasing product costs that may cause our operating margins to decline;
---	---
●	significant variation in revenues and profitability in a particular quarter as a result of the length, unpredictability and seasonality of our sales and contract fulfillment cycles;
---	---
●	significant customers who cease purchasing our products and services at any time;
---	---
●	inability ability to maintain our brand;
---	---
●	inability to offer high-quality customer support;
---	---
●	our ability to successfully address any product liability claims as well as other legal proceedings;
---	---
●	our ability to convert all of our backlog into revenue and cash flows;
---	---

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●	our ability to operate in a highly competitive market;
●	the extent of competitive pricing pressure from our customers;
---	---
●	our ability to successfully enter into and operate new lines of business;
---	---
●	our ability to successfully acquire other businesses, product lines and technologies and address any problems encountered therewith;
---	---
●	our ability to attract and retain highly skilled personnel and to manage our growth with our limited resources effectively;
---	---
●	our ability to protect our trademarks and other intellectual property;
---	---
●	the impact of security breaches through cyber-attacks, cyber intrusions or otherwise; and
---	---
●	the impact of general political, social and economic conditions.
---	---

Given these uncertainties, you should not place undue reliance on any forward-looking statements in this Report. Also, forward-looking statements represent our beliefs and assumptions only as of the date of this Report. You should read this Report and the documents that we have filed as exhibits, completely and with the understanding that our actual future results may be materially different from what we expect.

Any forward-looking statement made by us in this Report speaks only as of the date on which it is made. Except as required by law, we disclaim any obligation to update these forward-looking statements publicly, or to update the reasons actual results could differ materially from those anticipated in these forward- looking statements, even if new information becomes available in the future. All forward-looking statements are expressly qualified in their entirety by the foregoing cautionary statements.

The following discussion and analysis should be read in conjunction with the accompanying condensed consolidated financial statements and related notes included elsewhere in this Report.

Overview

We are a leading provider of technology, products, and services to movie theater operators and sports and entertainment venues.

1)	We provide a set of valuable services to movie theater operators and other critical screening and viewing rooms. These services include overall project management, which can encompass a wide range of design, integration, installation, and procurement services for new auditorium builds, refurbishments, or upgrades to existing facilities.
2)	We design and manufacture a set of proprietary products that are sold either as part of our project management services or a la carte. Examples of these products include our ADA-compliant accessibility products and our Caddy brand, a leading provider of proprietary cup holders, trays, and other products sold into our strategic markets of motion picture exhibition, entertainment, and sports venues as well as other non-strategic markets. We also resell third-party technologies, including but not limited to items such as screens, projectors, and servers.
---	---
3)	We resell third-party products as part of our project management services or a la carte. These include technology products such as screens, projectors, servers, and FF&E (furniture, fixtures, and equipment).
---	---
4)	Finally, we have a set of recently introduced products that we believe have the potential to be disruptive to the movie theater, entertainment and sports venue industries. For example, our operations enhancement and theater management solution include a software-as-a-service (SaaS) platform combined with other technologies that allow theater operators to improve their quality control. We have also developed a translator product and service that will enable moviegoers to watch a movie in any language that the film is available in, all in the same auditorium through a set of augmented reality
---	---

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glasses. Another example is a proprietary mobile cart we’ve developed to enable eSports and gaming in movie-theater auditoriums.

Factors affecting our performance

Effect of COVID-19 global pandemic.The COVID-19 pandemic has had an unprecedented impact on the world and the movie exhibition industry. The social and economic effects have been widespread. At various points during the pandemic, authorities around the world imposed measures intended to control the spread of COVID-19, including stay-at-home orders and restrictions on large public gatherings, which caused movie theaters in countries around the world to temporarily close. The repercussions of the COVID-19 global pandemic resulted in a significant impact to our customers, specifically those in the entertainment and cinema industries. As a result, the Company implemented various cash preservation strategies, including, but not limited to, temporary personnel and salary reductions, halting non-essential operating and capital expenditures, and negotiating modified timing and/or abatement of contractual payments with landlords and other major suppliers.

Based on our current estimates of recovery, we believe we have, and will generate, sufficient cash to sustain operations. 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.

Investment in Growth. We have invested, and intend to continue to invest, in expanding our operations, increasing our headcount, developing our products and services to support our growth and expanding our infrastructure. We expect our total operating expenses to increase in the foreseeable future to meet our growth objectives. We plan to continue to invest in our sales and support operations with a particular focus in the near term of adding additional sales personnel to further broaden our support and coverage of our existing customer base, in addition to developing new customer relationships. Any investments we make in our sales and marketing organization will occur in advance of experiencing any benefits from such investments, and the return on these investments may be lower than we expect. In addition, as we invest in expanding our operations internationally, our business and results of operations will become further subject to the risks and challenges of international operations, including higher operating expenses and the impact of legal and regulatory developments outside the United States.

Adding New Customers and Expanding Sales to Our Existing Customer Base. We intend to target new customers by continuing to invest in our field sales force. We also intend to continue to target large customers’ organizations who have yet to use our products and services. A typical initial order involves educating prospective customers about the technical merits and capabilities and potential cost savings of our products and services as compared to our competitors’ products. We believe that customer references have been, and will continue to be, an important factor in winning new business. We expect that a substantial portion of our future sales will be sales to existing customers, including expansion of their product and service offerings, as we offer new products and services through the existing sales channel. Our business and results of operations will depend on our ability to continue to add new customers and sell additional products and services to our growing base of customers.

Promoting Our Brand and Offering Additional Products. Our future performance will depend on our continued ability to achieve brand recognition for our proprietary line of products. We plan to increase our marketing expenditures to continue to create and maintain prominent brand awareness. Also, our future performance will depend on our ability to continue to offer high quality, high performance and high functionality products and services. We intend to continue to devote efforts to introduce new products and services including new versions of our existing product lines. We expect that our results of operations will be impacted by the timing, size and level of success of these brand awareness and product and service offering efforts.

Ability to Maintain Gross Margins. Our gross margins have been and are expected to continue to be affected by a variety of factors, including competition, the timing of changes in pricing, shipment volumes, new product introductions, changes in product mixes, changes in our purchase price of components and assembly and test service costs and inventory write downs, if any. Our goal is to strive to maintain gross profits for products that may have a declining average selling price by continuing to focus on increased 27

Table of Contents sales volume and looking to reduce operating costs. Decreases in average selling prices are primarily driven by competition and by reduced demand for products that face potential or actual technological obsolescence. We also focus on managing our inventory to reduce our overall exposure to price erosion. In addition, we seek to introduce new products and services with higher gross margins to offset the potential effect of price erosion on other lines of products. For example, we have recently productized and began marketing a new system which combines full compliance with the Americans with Disabilities Act with a multi-language capability — we expect this system will have higher margins than a substantial number of existing products we offer. In addition, we expect our offerings of Direct View LED screens to also carry significantly higher margins.

Fluctuations in Revenues and Earnings. Both the sales cycle and the contract fulfillment cycle are dependent on a number of factors from our customers that are not in our control. Accordingly, backlog, the conversion of backlog into revenue and related earnings may fluctuate from quarter to quarter depending on our customers’ particular requirements, which can sometimes change between the initial signing of a contract and its ultimate fulfillment.

Net sales

The principal factors that have affected or could affect our net sales from period to period are:

●	The condition of the economy in general and of the cinema and/or cinema equipment industry in particular,
●	Our customers’ adjustments in their order levels,
---	---
●	Seasonality in our business, specifically our second fiscal quarter which is traditionally weaker,
---	---
●	Changes in our pricing policies or the pricing policies of our competitors or suppliers,
---	---
●	The addition or termination of key supplier relationships,
---	---
●	The rate of introduction and acceptance by our customers of new products and services,
---	---
●	Our ability to compete effectively with our current and future competitors,
---	---
●	Our ability to enter into and renew key relationships with our customers and vendors,
---	---
●	Changes in foreign currency exchange rates,
---	---
●	A major disruption of our information technology infrastructure,
---	---
●	Unforeseen catastrophic events such as the COVID-19 pandemic, armed conflict, terrorism, fires, typhoons and earthquakes, and
---	---
●	Any other disruptions, such as labor shortages, unplanned maintenance or other manufacturing problems.
---	---

Cost of goods sold

Cost of goods sold includes the cost of products or components that we purchase from third party manufacturers plus assembly and packaging labor costs for these third parties or in-house designed products. Cost of goods sold is also affected by inventory obsolescence if our inventory management is not effective or efficient. We mitigate the risk of inventory obsolescence by stocking relatively small amounts of inventory at any given time, except for periodic strategic purchases, and relying instead on a strategy of manufacturing or acquiring products based on orders placed by our customers. 28

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General and administrative expenses

General and administrative expenses relate primarily to compensation and associated expenses for personnel in general management, information technology, human resources, procurement, planning and finance, as well as outside legal, investor relations, accounting, consulting and other operating expenses.

Selling and marketing expenses

Selling and marketing expenses relate primarily to salary and other compensation and associated expenses for internal sales and customer relations personnel, advertising, outbound shipping and freight costs, tradeshows, royalties under a brand license, and selling commissions.

Research and development expenses

Research and development expenses consist of compensation and associated costs of employees engaged in research and development projects, as well as materials and equipment used for these projects, and third-party compensation for research and development services. We do not engage in any long-term research and development contracts, and all research and development costs are expensed as incurred.

Results of Operations

Three months ended March 31, 2023 compared to the three months ended March 31, 2022

Sales


Three Months Ended March 31,
(in 000’s)
2023		2022
$	3,741	$	5,835

Net sales decreased 35.9% to $3.741 million for the three months ended March 31, 2023 from $5.835 million for the three months ended March 31, 2022. In 2023, with fewer new movie releases theater owners chose to reduce theater construction during the three months ended March 31, 2023.

Gross Profit


Three Months Ended March 31,
(in 000’s),
2023		2022
$	1,042	$	1,367

Along with the revenue decrease of 35.9%, gross profit decreased 23.8% to $1.042 million for the three months ended March 31, 2023 from $1.367 million for the three months ended March 31, 2022. As a percentage of total revenues, gross profit percentage increased to 27.9% from 23.4%. The Company’s lower cost strategic inventory purchases improved the gross margin percentage. Both the lower cost QSC purchases and the sales of lower cost used and refurbished equipment resulted in higher gross margin percentages.

Research and Development


Three Months Ended March 31,
(in 000’s)
2023		2022
$	66	$	53

The increase in research and development expense was primarily the result of the timing of activity. As part of future anticipated revenue increases, we also anticipate future research and development expense increases to fund product development on our green product line, SaaS (software as a service) products, LED screen support systems and Caddy products. 29

Table of Contents Selling, General and Administrative Expense


Three Months Ended March 31,
(in 000’s)
2023		2022
$	1,502	$	1,445

The increase in selling, general and administrative expense was due primarily to sales and marketing head count increases.

Other (Income) Expense


Three Months Ended March 31,
(in 000’s)
2023		2022
$	(102)	$	(724)

The March 31 2023 to March 31, 2022 change in other (income) expense was primarily due to the $705,000 gain on extinguishment of PPP debt in March 2022 offset by $83,000 in net gains on marketable securities.

Net Income (Loss)


Three Months Ended March 31,
(in 000’s)
2023		2022
$	(424)	$	593

Net loss was ($0.424) million for the three months ended March 31, 2023 compared to net income of $0.593 million for the three months ended March 31, 2022. The decrease was due to lower operating income from decreased sales and gross profit offset by gains on investment sales. In 2022, the increase in income was driven by a $0.705 million gain on the extinguishment due to forgiveness of the PPP loan, offset by an increase in public company related expenses and other selling, general and operating expenses.

Nine months ended March 31, 2023 compared to nine months ended March 31, 2022

Revenues


Nine Months Ended March 31,
(in 000’s)
2023		2022
$	14,435	$	12,728

Net revenues increased by $1.707 million or 13.4% for the nine months ended March 31, 2023 from $12.728 million for the nine months ended March 31, 2022 primarily due to the COVID-19 Shutter Venue Operators Grants (SVOG) exhibition industry program incentives hat increased revenues during the nine months ended March 31, 2023

Gross Profit


Nine Months Ended March 31,
(in 000’s),
2023		2022
$	3,912	$	2,985

Compared to the revenue increase of 13.4%, gross profit increased by $0.927 million or 31.1% for the nine months ended March 31, 2023 from $2,985 million for the nine months ended March 31, 2022. As a percentage of total revenues, gross profit improved to 27.1% for the nine months ended March 31, 2023 from 23.5% for the nine months ended March 31, 2022. The combination of increased sales and the Company’s lower cost strategic inventory purchases, improved the gross margin percentage. 30

Table of Contents Both the lower cost QSC purchases and the sales of lower cost used and refurbished equipment resulted in higher gross margin percentages.

Research and Development


Nine Months Ended March 31,
(in 000’s)
2023		2022
$	195	$	172

The increase in research and development expense was primarily associated with increased payroll cost in the 2023 period. We expected research and development expense to increase as a percentage of sales in the future as we continue to increase product development on our green product line, SaaS (software as a service) products, LED screen support systems, Caddy products, and others as our business expands into new areas.

Selling, General and Administrative Expense


Nine Months Ended March 31,
(in 000’s)
2023		2022
$	4,331	$	4,123

The increase in selling, general and administrative expense was due primarily to higher headcount, payroll and compensation expense in 2023.

Other (Income) Expense


Nine Months Ended March 31,
(in 000’s)
2023		2022
$	(142)	$	(684)

The change in other (income) expense is primarily due to the $0.704 million of PPP loan forgiveness.

Net Loss


Nine Months Ended March 31,
(in 000’s)
2023		2022
$	(472)	$	(626)

Net loss was $(472,000) for the nine months ended March 31, 2023 compared to a net loss of $(626,000) for the nine months ended March 31, 2022. This improvement is the net result of higher sales and gross margins, PPP loan forgiveness, offset by increase in public company related expenses and other selling, general and operating expenses.

Liquidity and Capital Resources

During the past several years, we have primarily met our working capital and capital resource needs from our operating cash flows and financing activities. We believe that our existing sources of liquidity, including cash and operating cash flow, will be sufficient to fund our operations and to meet our projected capital needs for a period of at least 12 months from the date the condensed consolidated financial statements are available to be issued. On July 7, 2021, the Company completed an initial public offering resulting in net proceeds of approximately $12.360 million. Cash balance at March 31, 2023 was approximately $6.357 million, as compared to $2.430 million at June 30, 2022. In March 2023, the Company sold all its marketable securities with the proceeds deposited to the Company’s cash account. Investments in marketable securities $4.688 million at June 30, 2022. 31

Table of Contents Cash Flows from Operating Activities

Net cash used by operating activities was ($0.685) million for the nine months ended March 31, 2023, primarily due to a net loss of ($0.472) million and ($0.213) million in other working capital balances. The net change in other working capital was primarily due to increases in inventory and payables and decreases in customer deposits, offset by decreases in accounts receivable and prepaid expenses. The Net cash used by operating activities was $0.916 million for the nine months ended March 31, 2022, primarily due to net loss of ($0.626) million offset by net changes in working capital items of $(0.398) million. The net change in working capital was primarily due to an increase in inventory of $1.451 million and accounts receivable of $1.02 million, offset by an increase in customer deposits of $2.195 million.

Cash Flows from Investing Activities

Net cash provided by investing activities was $4.751 million for the nine months ended March 31, 2023, predominantly the result of sales of investments of $4.758 million. Net cash used in investing activities was $3.430 million for the nine months ended March 31, 2022 primarily due to the investment in marketable securities.

Cash Flows from Financing Activities

Net cash used in financing activities was $49,000 for share repurchases for the three and the nine months ended March 31, 2023. Net cash provided by financing activities was $9.413 million for the nine months ended March 31, 2022. The increase relates to $11.244 million of IPO net proceeds offset by net repayments of $1.831 million of debt.

ITEM 3.QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Not applicable.

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ITEM 4.CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

We maintain disclosure controls and procedures designed to ensure that the information we are required to disclose in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified under the rules and forms of the SEC. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that such information is accumulated and communicated to our management, including our Chief Executive Officer and our Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosures. As required by paragraph (b) of Rules 13a-15 and 15d-15 under the Exchange Act, our Chief Executive Officer (our principal executive) and Chief Financial Officer (our principal financial officer and principal accounting officer) carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures as of March 31, 2023. Based on this evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures (as defined in paragraph (e) of Rules 13a-15 and 15d-15 under the Exchange Act) were not effective at March 31, 2023 due to material weaknesses in our internal control over financial reporting as described below.

Prior to the completion of our IPO, we had been a private company with limited accounting personnel and other resources to address our internal control over financial reporting. During the course of preparing our consolidated financial statements for the years ended June 30, 2022 and 2021, we determined that we had material weaknesses in our internal control over financial reporting relating to our financial reporting processes relating to (i) the design and operation of our closing and financial reporting process, (ii) the fact that we had no formal or documented accounting policies or procedures, (iii) the fact that certain segregation of duties issues existed and (iv) the fact that there was no formal review process around journal entries recorded. To improve internal controls during the three months ended March 31, 2023, Management updated month end close checklists, implemented more segregation of duties among it’s limited accounting staff and the CFO formally approved month end journal entries.

Changes in Internal Control over Financial Reporting

During the quarter ended March 31, 2023, other than hiring a new full-time CFO that has been no change in the Company’s internal control over financial reporting, as such term is defined in Rules 13a-15(f) and 15(d)-15(f) promulgated under the Exchange Act, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Table of Contents PART II – OTHER INFORMATION

ITEM 1.LEGAL PROCEEDINGS

We are not party to any material pending legal proceedings. From time to time, we may be subject to legal proceedings and claims arising in the ordinary course of business.

ITEM 1A.RISK FACTORS

There have been no material changes to the risk factors reported in Item 1A in the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 2022.

ITEM 2.UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

Unregistered Sales of Equity Securities

None.

Purchases of Equity Securities by the Issuer and Affiliated Purchasers

$ in Thousands, except shares and dollar per share amounts.


	****	****	****		****	****	Total Number of	****	Approximate
							Shares		Dollar Value of
							Purchased as		Shares that May
		Total Number of					Part of Publicly		Yet Be Purchased
		Shares		Average Price			Announced Plans		Under the Plans
Period		Purchased		Paid per Share			or Programs		or Programs
March 23, 2023 – March 31, 2023		47,467		$	1.025		47,467		$	951
Total		47,467		$	1.025		47,467		$	951

ITEM 3.DEFAULTS UPON SENIOR SECURITIES

Not applicable.

ITEM 4.MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5.OTHER INFORMATION

Not applicable.

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ITEM 6.EXHIBITS


Exhibit<br>No.		Exhibit Description
10.1*		Letter Agreement between Moving iMage Technologies, Inc. and The Five Agency dated April 25, 2023.
31.1*		Certification of the Principal Executive Officer pursuant to Rule 13a-14(a) or 15d-14(a) of the Securities Exchange Act of 1934.
31.2*		Certification of the Principal Financial Officer pursuant to Rule 13a-14(a) or 15d-14(a) of the Securities Exchange Act of 1934.
32.1†		Certification of the Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS*		The following financial statements from the Company’s Quarterly Report on Form 10-Q for the quarter ended December 31, 2021, formatted in Inline XBRL: (i) Condensed Consolidated Statements of Cash Flows, (ii) Condensed Consolidated Statements of Operations, (iii) Condensed Consolidated Balance Sheets, and (iv) Notes to Condensed Consolidated Financial Statements, tagged as blocks of text and including detailed tags.
104*		Cover Page Interactive Data File (Embedded within the Inline XBRL document and included in Exhibit 101).
*	Filed herewith.
---	---
ª	Indicates a management contract or compensatory plan or arrangement
---	---
†	Furnished herewith and not “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended.
---	---

Table of Contents SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	MOVING IMAGE TECHNOLOGIES, INC.
Date: May 15, 2023
	By:	/s/ William F. Greene
	Name:	William F. Greene
	Title:	Chief Financial Officer
		(Principal Financial and Accounting Officer)

Exhibit 10.1

[MOVING IMAGE TECHNOLOGIES LETTERHEAD]

April 25, 2023

The Five Agency, LLC 970 16^th^ Place Vero Beach, FL 32960 Attn: Rick Starr

Re: $300,000 Loan by MIT to the Five Agency and Award of Five Percent of Equity in the to be formed SNDBX Subsidiary

Dear Rick:

This Letter Agreement(“Letter Agreement”), is made and entered into as of April 25, 2023 (“Effective Date”) between The Five Agency, LLC, a Delaware limited liability company with offices at 970 16th Place, Vero Beach, FL 32960 (“The Five Agency)” and Moving Image Technologies, Inc., a Delaware corporation with an office at 17760 Newhope St., Fountain Valley, CA 92708 (“MIT”), “Party” shall mean MIT or The Five Agency or a to be formed entity named SNDBX (as hereinafter defined) individually. “Parties” shall mean MIT, The Five Agency and SNDBX, collectively.

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 Business). The Five Agency and MIT jointly designed the equipment package to be used for that purpose.

MIT has agreed to lend The Five Agency Three Hundred Thousand Dollars and No Cents ($300,000.00) under this Letter Agreement (“MIT Loan”). The Five Agency shall incorporate 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 Five Percent (5%) of the equity of SNDBX (“MIT Equity Interest”). MIT shall have the right to participate in any and all future capital and debt offerings by SNDBX.

1.The MIT Loan.

(a)Subject to the satisfaction of the conditions described in this Letter, MIT will lend $150,000 to the Five Agency LLC with interest only at 10% per annum payable

each year commencing on May 1, 2024 with principal due on May 1, 2026 under the Secured Promissory Note attached as Exhibit A and shall wire funds under the wire instructions attached as Exhibit B. The Promissory Note shall be secured by the interest of The Five Agency or Business in the Patents and the underlying intellectual property in Section 3, below.

(b)MIT shall advance an additional $150,000 upon the request of The Five Agency upon completing these conditions by May 31, 2023:

(i)The parties shall enter into an exclusive supply and marketing agreement requiring The Five Agency or SNDBX to purchase greater than $3.0 Million Dollars of systems from MIT by April 30, 2026 substantially in accordance with the supply agreement attached as Exhibit C. After the $3.0 million threshold is satisfied, the supply agreement shall be non-exclusive;

(ii)SNDBX shall be formed upon commercially reasonable terms. The Five Agency shall be granted 95% of common shares and MIT shall be granted 5% of common shares and there shall be no difference in the terms of the common shares issued to The Five Agency and MIT;

(iii)The Five Agency shall have disbursed the initial funds substantially under the Weekly Budget attached as Exhibit D; and

(iv)MIT shall have the right to appoint an advisory board member (The “MIT Member”) and shall have board observation rights for any formal board meetings of The Five Agency and SNDBX until April 30, 2026 or until the Promissory Note is paid in full, whichever comes later. The Five Agency shall have the right to approve the MIT Member which approval shall not be unreasonably withheld or delayed; and,

2.MIT Equity Interest. MIT shall be issued its 5% equity interest upon formation of the SNDBX subsidiary whether or not the conditions for the second $150,000 advance are satisfied by The Five Agency or SNDBX.

3.Co-ownership of Patents. MIT and either The Five Agency or SNDBX will be co-owners of the patents on the equipment (the “Patents”). The Five Agency shall apply for patents on or before April 30, 2024 and MIT shall reasonably cooperate in the application and share equally in the costs thereof. If either party objects to the payment of costs, the other party may continue to prosecute the patent applications and shall be the sole owner of the patents. After the expiration of the Supply Agreement in three years, either The Five Agency or SNDBX may sell equipment other than through MIT but MIT shall be entitled to a commercially reasonable royalty equal to a percentage of the net sales price of the equipment in consideration of its ownership rights in the Patents. The parties shall negotiate a commercially reasonable royalty agreement. Neither Party may license, transfer, or otherwise assign the Patents without the written consent of the other Party other

than licenses in the sale of equipment in the ordinary course of business. In the event of a transfer for the benefit of creditors or assignment for the benefit of creditors by Five Agency or SNDBX the patents co-owned by them and MIT shall automatically become the sole ownership of MIT.

4.Reasonably /Proposed Definitive Agreements. As soon as reasonably practicable after the execution of this Letter, the Parties shall commence to negotiate a definitive agreements (the “Definitive Agreements”) relating to MIT’s Loan, the conditions to the second advance, and the MIT Equity Interest. The Definitive Agreements would include the terms summarized in this Letter and such other representations, warranties, conditions, covenants, indemnities and other terms customary for transactions of this kind and are not inconsistent with this Letter.

5.Conditions. MIT’s obligation to advance the second $150,000 will be subject to customary conditions, including:

(a)the Board of Directors of MIT reasonably and timely approving the satisfaction of the conditions for the second advance;

(b)the Parties’ execution of the Definitive Agreements;

(c)Receiving any regulatory approvals and third-party consents, on terms satisfactory to reasonably satisfactory to MIT; and,

(d)there being no material adverse change in the business, results of operations, prospects, condition (financial or otherwise) or assets of The Five Agency or SNDBX.

6.Termination. This letter will automatically terminate and be of no further force or effect upon the earlier of (i) execution of the Definitive Agreements by MIT, The Five Agency and SNDBX and (ii) mutual agreement of MIT, The Five Agency and SNDBX.

7.GOVERNING LAW. THIS LETTER SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH INTERNAL LAWS OF THE STATE OF DELAWARE, WITHOUT GIVING EFFECT TO ANY CHOICE OR CONFLICT OF LAW PROVISION OR RULE (WHETHER OF THE STATE OF DELAWARE OR ANY OTHER JURISDICTION) THAT WOULD CAUSE THE APPLICATION OF LAWS OF ANY JURISDICTION OTHER THAN THOSE OF THE STATE OF DELAWARE. ANY DISPUTE WITH RESPECT TO A PROVISION OF THIS LETTER SHALL BE RESOLVED IN ACCORDANCE WITH THE TERMS OF SECTION 10 BELOW.

8.No Third-Party Beneficiaries. Except as specifically set forth or referred to herein, nothing herein is intended or shall be construed to confer upon any person or entity other than the Parties and their successors or assigns, any rights or remedies under or from this Letter.

9.Expenses. The Parties will each pay their own transaction expenses, including the fees and expenses of investment bankers and other advisors, incurred in connection with the proposed transaction.

10.Dispute Resolution. All disputes under this Letter shall be resolved:

(a)Mandatory Arbitration. Regarding any dispute relating to the binding provisions of this Letter that cannot be resolved by the parties, such dispute shall be settled by binding arbitration. The arbitrator shall be a retired state or federal judge or an attorney who has practiced business litigation or transaction work for at least 10 years. Arbitration will be conducted under the applicable provisions of this American Arbitration Association, except as limited by this Section, unless such rules contradict this Letter. Limited civil discovery shall be permitted for the production of documents and taking of depositions. Unresolved discovery disputes may be brought to the attention of the arbitrator who may dispose of such dispute. The arbitrator shall have the authority to award any remedy or relief that a court in the State of Delaware could order or grant; provided, however, that punitive or exemplary damages shall not be awarded. Judgment upon the award rendered by the arbitrator may be entered in any court having jurisdiction thereof. Unless otherwise agreed by the parties, the place of any arbitration proceedings shall be Orange County, California.

(b)Resolution of Certain Claims — Injunctive Relief. Paragraph (a) above shall have no application to claims seeking to enforce, by injunction or other equitable relief, the binding provisions of this Letter for which monetary damages are unavailable or inadequate. Such claims may be brought in a court of competent jurisdiction. The parties acknowledge that, in addition to, but not to the exclusion of any other remedy, each party may enforce such provisions by applying for and obtaining temporary and permanent restraining orders or injunctions from a court of competent jurisdiction without the necessity of filing a bond therefor, and without the necessity of proving actual damages.

11.Miscellaneous. This Letter may be executed in counterparts, each of which shall be deemed to be an original, but all of which together shall constitute one agreement. The headings of the sections of this Letter have been inserted for reference only and shall not be deemed to be a part of this Letter.

[SIGNATURE PAGE FOLLOWS]

If you agree with the terms set forth above and desire to proceed with the proposed transactions on that basis, please sign this Letter in the space below and return an executed copy to the attention of Philip Rafnson.

		Very truly yours,

		MOVING IMAGE
		TECHNOLOGIES, INC.


		By:	/s/ Philip Rafnson
		Philip Rafnson
		Chief Executive Officer


Agreed to and accepted:
The Five Agency, LLC


By:	/s/ Rich Starr
Rich Starr
Chief Executive Officer

EXHIBIT A TO LETTER OF INTENT

PROMISSORY NOTE

$300,000.00	April 25, 2023

FOR VALUE RECEIVED, The Five Agency, LLC, a Delaware limited liability company (“Borrower”), hereby promises to pay to Moving Image Technologies, Inc., a Delaware corporation (“Lender”), the sum of THREE HUNDRED THOUSAND AND 00/100 DOLLARS ($300,000.00), or such other amount as shall then be equal to the outstanding principal amount hereof and any unpaid accrued interest hereon (the “Loan”), as set forth below in accordance with Sections 1 and 2 below, Payment for all amounts due hereunder shall be made by wire transfer of immediately available funds in accordance with the wire transfer instructions set forth on Exhibit A attached hereto.

The following is a statement of the rights of Lender of this PROMISSORY NOTE (“Note”) and the conditions to which this Note is subject and to which Lender hereof, by the acceptance of this Note, agrees:

**1.**Repayment of Principal . The outstanding principal under this Note shall be due and payable on May 1, 2026 (the “Maturity Date”), unless such maturity date is accelerated in accordance with the terms hereof.

**2.**Interest . Interest on the outstanding principal amount hereunder shall be computed on the basis of the actual number of days elapsed on the basis of a year of 365 days at the annual rate of ten percent (10.0%) (the “Interest Rate”). Borrower shall make annual payments of accrued and unpaid interest on May 1, 2024, May 1, 2025 and a final payment of all then remaining accrued and unpaid interest hereunder shall be due and payable on the Maturity Date, unless such date is accelerated in accordance with the terms hereof. Upon default, including failure to pay upon final maturity, the interest rate on this Note shall be increased to fifteen percent (15.0%) (“Default Rate”), however, in no event will the interest rate exceed the maximum interest rate limitations under applicable law.

**3.**Prepayment . This Note may be prepaid, in whole or in part, by Borrower at any time or from time to time, without penalty or premium.

**4.**Disbursement Procedure . The Loan shall be advanced as follows:

(a) A disbursement in the amount of $150,000 on the date hereof by the Lender wiring funds to Borrower in accordance with the wiring instructions set forth on Exhibit B (the “Borrower Wire Instructions”) attached hereto; and

(b) A second disbursement in the amount of up to $150,000 (the “Second Advance”) to be made by Lender to Borrower in accordance with the Borrower Wire Instructions on or before May 31, 2023, upon receipt of a written request from the Borrower, subject to satisfaction by Borrower of the conditions set forth in that certain

PROMISSORY NOTE

$300,000.00	April 24, 2023

letter agreement of even date herewith by and between Borrower and Lender (the “Letter Agreement’; capitalized terms not otherwise defined herein being used herein as therein defined). The Lender shall be under no obligation to make the Second Advance if an Event of Default shall have occurred hereunder.

**5.**Collateral . For valuable consideration, including the making of the Loan by Lender to Borrower, Borrower and Lender as co-developers of the intellectual property agree to take all actions and to cause SNDBX to take all actions as they may deem reasonably necessary to grant to Lender a perfected first priority security interest in the underlying intellectual property and Patents as collateral for the Loan, including, without limitation, the execution of a commercially reasonable Patent Security Agreement (the “Security Agreement”) in the form provided by Lender. Borrower and Lender will, and will cause SNDBX to, at their commercially reasonable expense, perform all acts and execute all documents necessary to maintain the existence of any Patents as issued patents and to maintain all Patents as valid and subsisting, including, without limitation, the filing of any renewal affidavits and applications provided that with the prior written consent of Lender, Borrower or SNDBX, as applicable, may abandon any Patent or Patent application which in Borrower’s, SNDBX’s and Lender’s commercially reasonable judgment is not material and has minimal or no continuing value.

**6.**Representations and Warranties . As an inducement to the Lender to disburse the Loan to the Borrower, the Borrower represents and warrants to the Lender that:

(a)the Borrower is a limited liability company validly organized and existing and in good standing under the laws of the state of Delaware, has full power and authority to own its property and conduct its business substantially as presently conducted by it and is duly qualified to do business and is in good standing in Delaware and each other jurisdiction where the nature of its business makes such qualification necessary;

(b)Borrower has full power and authority to enter into and to perform its obligations under this Note, the Security Agreement (hereinafter defined) and the Letter Agreement;

(c)Borrower’s execution, delivery and performance of this Note and the Letter Agreement have been duly authorized by all necessary limited liability company action, do not require the consent or approval of any person or entity which has not been obtained, and do not conflict with Borrower’s articles of organization, limited liability company agreement, or other organizational document, as applicable, or any agreement binding upon Borrower or any of Borrower’s property;

(d)this Note and the Letter Agreement constitute the legal, valid, and binding obligations of Borrower and are enforceable against Borrower in accordance with their respective terms subject only to bankruptcy, insolvency, reincorporation, moratorium or similar laws at the time in effect affecting the enforceability of rights of creditors generally and by general equitable principles which may limit the right to obtain equitable remedies;

PROMISSORY NOTE

$300,000.00	April 24, 2023

(e)there is no litigation, bankruptcy proceeding, arbitration or governmental proceeding pending against Borrower or affecting the business, property or operations of Borrower which, if determined adversely to Borrower, could reasonably be expected to have a material adverse effect on Borrower;

(f)the Borrower (i) is in compliance in all material respects with all federal, state and local laws, rules and regulations applicable to it;

(g)the Borrower possesses adequate licenses, permits, franchises, patents, copyrights, trademarks and trade names, or rights thereto, to conduct its business substantially as now conducted and as presently proposed to be conducted;

(h)Borrower has filed all Federal and State income tax and other tax returns which are required to be filed, and has paid all taxes as shown on said returns and all assessments received by Borrower to the extent that such taxes have become due;

(i)Borrower is not in default of a material provision under any material agreement, instrument, decree or order to which it is a party or by which it or its property is bound or affected and assuming that this Note had been previously executed and delivered, no Event of Default has occurred and is continuing hereunder; and

(j)(i) neither the execution of this Note nor the use of the proceeds of the Loan violates the Trading with the Enemy Act of 1917, as amended, nor any of the foreign assets control regulations promulgated thereunder or under the International Emergency Economic Powers Act or the U.N. Participation Act of 1945; and (ii) Borrower is not listed on the Specially Designated Nationals and Blocked Person List or other similar lists maintained by the Office of Foreign Assets Control (“OFAC”), the Department of the Treasury or included in any Executive Orders.

(k)All representations and warranties contained in this Note shall survive the delivery of the Note and the making of the Loan, and any investigation at any time made by or on behalf of the Lender shall not diminish its rights to rely thereon.

**7.**Affirmative Covenants . From the date of this Note and thereafter until the Loan and all other obligations of the Borrower to the Lender under this Note and the Letter Agreement have been paid in full, the Borrower hereby agrees with the Lender to:

(a)promptly, but in any event within five days after any executive officer of the Borrower becomes aware of any Event of Default, a notice describing the nature thereof and what action the Borrower has taken, is taking or proposes to take with respect thereto;

(b)promptly, but in any event within five business days after any executive officer of the Borrower obtains knowledge of the occurrence thereof, notice of the institution of any litigation, arbitration or governmental proceeding against the Borrower or any of its property which, if determined adversely to the Borrower, could reasonably be expected to have a material adverse effect on the Borrower, or the rendering of a judgment

PROMISSORY NOTE

$300,000.00	April 24, 2023

or decision in such litigation or proceeding which could reasonably be expected to have a material adverse effect on the Borrower, and the steps being taken by the Borrower with respect thereto;

(c)maintain and preserve its existence as a limited liability company in good standing under the laws of the State of Delaware;

(d)file all federal and state income tax and other tax returns (including, without limitation, withholding tax returns) which are required and make payments as required of such taxes; provided, however, that the Borrower shall not be required to pay any such tax so long as the validity thereof is being contested in good faith by appropriate proceedings and adequate book reserves shall have been set aside with respect thereto;

(e)pay when due all taxes, lawful claims for labor, materials, supplies, rents, lease payments and other debts and liabilities which if unpaid would by law be a lien or charge upon the property of Borrower, unless and to the extent any thereof are being actively contested in good faith and by appropriate proceedings, and Borrower maintains reasonable reserves on its books therefor;

(f)maintain insurance policies in such types and amounts as in Borrower’s reasonable judgment, and subject to the reasonable satisfaction of the Lender, appropriate for its business. In the event a policy lapses, is modified or replaced, the Borrower shall promptly notify the Lender and send copies of the new policies;

(g)maintain in good repair and working order or replace all assets used in its business which if not so maintained or replaced would be reasonably likely to have a material adverse effect on the business of the Borrower;

(h)furnish promptly, at the Lender’s request, such information as the Lender may reasonably conclude is necessary to determine whether the Borrower is in compliance with the terms of this Note and the Letter Agreement or as may be needed by the Lender to prepare any required reports to appropriate federal and state regulatory authorities;

(i)file applications for the Patents with the United States Patent and Trademark Office (“USPTO”) on or before the date specified in Section 3 of the Letter Agreement and promptly execute and deliver to Lender any and all assignments, agreements, instruments, documents and such other papers that are necessary or reasonably desirable to evidence the security interest in and conditional assignment of each Patent in favor of Lender;

(j)notify Lender immediately in writing if Borrower knows or has reason to know of any reason why any application, registration, or recording with respect to any of the Patents may become abandoned, canceled, invalidated, avoided or avoidable;

(k)render any assistance, as Lender may determine is necessary, to Lender in any proceeding before the USPTO, any federal or state court, or any similar office or

PROMISSORY NOTE

$300,000.00	April 24, 2023

agency in the United States, or any State therein, or any other country, to protect Lender’s security interest therein;

(l) promptly notify Lender if Borrower (or SNDBX) learns of any use by any person of any term or design which infringes upon any Patent and upon the agreement of Lender and the equal sharing of litigations costs and expenses with Lender sue for and diligently pursue damages for such infringement; provided, that, if Borrower (or SNDBX) shall fail to take such action within one (1) month after such notice is given to Lender, Lender may, but shall not be required to, itself take such action in the name of Borrower (or SNDBX), and Borrower hereby appoints Lender the true and lawful attorney of Borrower, for Borrower and in Borrower’s name, place and stead, on behalf of Borrower, to commence judicial proceedings in any court or before any other tribunal to enjoin and recover damages for such infringement, any such paid damages due to Borrower less. litigation costs and expenses to be applied to the Borrower’s obligations under this Note;

(m) comply with all terms and conditions set forth in the Letter Agreement; and

(n) maintain in full force and effect all of its material rights, licenses, certifications, franchises and comply with all applicable laws and regulations necessary to enable it to conduct its business.

**8.**Negative Covenants . The Borrower covenants and agrees with the Lender that, for so long as the Loan remains unpaid, the Borrower shall not and shall not permit SNDBX to, without the Lender’s prior written consent:

(a)lease or sell, all or any substantial portion of its property and business to any other person, entity or entities, whether in one transaction or a series of related transactions;

(b)license the Patents to any person or entity or do any act, or omit to do any act, whereby any Patent may become abandoned, canceled, invalidated, unenforceable, avoided, or avoidable; or

(c)(i) consolidate with or merge into or with any other entity or entities or entities or liquidate, wind up or dissolve itself or suffer any liquidation or dissolution; or (ii) acquire a substantial interest in another entity either through the purchase of all or substantially all of the assets of that entity or the purchase of a controlling equity interest in that entity.

**9.**Events of Default .

(a) Any of the events specified in this Section 9 shall constitute a default by Borrower hereunder (an “Event of Default”):

(i) Failure to pay any principal or interest when due and payable under this Note, which is not cured within five (5) business days;

PROMISSORY NOTE

$300,000.00	April 24, 2023

(ii)Default by Borrower or SNDBX (each of Borrower and SNDBX being referred to herein as a “Loan Party”) in the performance or observance of any covenant, condition, undertaking or agreement contained in this Note or in the Letter Agreement or the Security Agreement, which default is not cured (if capable of cure) within thirty (30) days of the date Lender provides Borrower with written notice thereof;

(iii)Any representation, warranty or other statement by or on behalf of Borrower contained in this Note or the Letter Agreement or the Security Agreement is false or misleading in any material respect at the time made;

(iv)The Borrower or SNDBX shall become insolvent or generally fail to pay, or admit in writing such Loan Party’s inability to pay its debts as they become due; or either or both Loan Parties shall apply for, consent to, or acquiesce in, the appointment of a trustee, receiver or other custodian or for such Loan Party’s property, or make a general assignment for the benefit of creditors; or, in the absence of such application, consent or acquiescence, a trustee, receiver or other custodian shall be appointed for either or both Loan Parties or for a substantial part of the property of either or both Loan Parties and not be discharged within 60 days; or any bankruptcy, reincorporation, debt arrangement, or other case or proceeding under any bankruptcy or insolvency law, or any dissolution or liquidation proceeding shall be commenced in respect of either or both Loan Parties or be consented to or acquiesced in by either or both Loan Parties or remain for 60 days undismissed or unvacated;

(v)any judgments, writs, warrants of attachment, executions or similar process (not covered by insurance) shall be issued against either Loan Party or any of either or both Loan Parties’ assets where the aggregate amount of such judgments, writs, warrants of attachment, executions or similar process exceed $50,000.00 and are not released, vacated, suspended, stayed, abated or fully bonded prior to any sale and in any event within 30 days after its issue or levy;

(vi)Borrower shall default and fail to cure such default in the time provided therein, under the terms of any other agreement, indenture, deed of trust, mortgage, promissory note or security agreement governing the borrowing of money in excess of $50,000.00 and: (i) the maturity of any amount owed under such document or instrument is accelerated; or (ii) such default shall continue unremedied or unwaived for a period of time to permit such acceleration;

(vii) there is instituted against either Loan Party any criminal proceeding for which forfeiture of any material asset is a potential penalty, or either Loan Party is enjoined, restrained or in any way prevented by order of any governmental authority from conducting any material part of its business affairs and such order is not completely stayed, to the satisfaction of the Lender, or dissolved within 20 business days from the effective date of such order; or

PROMISSORY NOTE

$300,000.00	April 24, 2023

(viii) any representation or warranty of Borrower set forth in this Note. the Security Agreement or in the Letter Agreement shall be untrue in any material respect on the date as of which the facts set forth are stated or certified.

(b)Upon the happening of: (I) any Event of Default described in Section 9(a)(iv), the Lender’s obligation to make the Second Advance shall automatically terminate and the full unpaid principal amount of the Note, accrued interest and all other obligations of the Borrower to the Lender shall automatically be due and payable without any declaration, notice, presentment, protest or demand of any kind (all of which are hereby waived); or (2) any other Event of Default, the Lender, upon written notice, may terminate its commitment to make the Second Advance and may declare the outstanding principal amount of the Note, accrued interest and all other obligations of the Borrower to the Lender to be due and payable without other notice, presentment, protest or demand of any kind, whereupon the full unpaid amount of the Note, accrued interest and any and all other obligations, which shall be so declared due and payable, shall be and become immediately due and payable. In addition, the Lender may exercise any right or remedy available to it pursuant to the Security Agreement, the Letter Agreement, at law or in equity.

**10.**Miscellaneous.

(a)This Note may not be assigned by Borrower without the prior written consent of Lender, which consent may be withheld in Lender’s sole discretion. This Note may be assigned by Lender or any subsequent holder without the consent of Borrower or any other person or entity, but said assignment shall not relieve Lender of its funding obligations hereunder. The rights and obligations of Borrower and Lender shall be binding upon and benefit their respective successors, heirs, administrators and permitted assigns.

(b)Borrower and any endorsers or guarantors hereof severally waive presentment and demand for payment, notice of intent to accelerate maturity, protest or notice of protest and non-payment, bringing of suit and diligence in taking any action to collect any sums owing hereunder or in proceeding against any of the rights and properties securing payment hereunder, and expressly agree that this Note, or any payment hereunder, may be extended from time to time, and consent to the acceptance of further security or the release of any security for this Note, all without in any way affecting the liability of Borrower and any endorsers or guarantors hereof. No extension of time for the payment of this Note, or any installment thereof, made by agreement by Lender with any person now or hereafter liable for the payment of this Note, shall affect the original liability under this Note of the undersigned Borrower, even if the undersigned Borrower is not a party to such agreement. No act of omission or commission of the Lender, including specifically any failure to exercise any right or remedy, shall be deemed to be a waiver or release of the same, such waiver or release to be made only in writing signed by the Lender.

(c)Wherever possible each provision of this Note shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Note is found by a court of law to be prohibited by or in violation of any applicable law, then such provision shall be given full force and effect to the fullest possible extent permitted

PROMISSORY NOTE

$300,000.00	April 24, 2023

by applicable law, and the remainder of this Note shall be construed as if such unlawful, void or unenforceable provision were not contained herein, and the rights, obligations and interests of Borrower and Lender under the remainder of this Note shall continue in full force and effect.

(d)This Note has been reviewed by Borrower and Lender and incorporates the requirements of such parties. Each of Borrower and Lender waives the rule of construction that any ambiguities are to be resolved against the party drafting the same and agrees such rules will not be employed in the interpretation of this Note or the Letter Agreement.

(e)The Loan is a business loan. Borrower hereby represents that this loan is for commercial use and not for personal, family or household purposes. The Borrower agrees that the Loan evidenced by this Note is an exempted transaction under the Truth In Lending Act, 15 U.S.C., §1601, et seq.

(f)The Loan is not a revolving loan. Amounts repaid hereunder may not be reborrowed.

(g)It is expressly stipulated and agreed to be the intent of Borrower and Lender at all times to comply with applicable state law or applicable United States federal law (to the extent that it permits Lender to contract for, charge, take, reserve, or receive a greater amount of interest than permitted under state law) and that this Section shall control every other covenant and agreement in this Note and the Letter Agreement. If the applicable law is ever judicially interpreted so as to render usurious any amount called for under this Note or under the Letter Agreement, or contracted for, charged, taken, reserved, or received with respect to the indebtedness evidenced by this Note (“Indebtedness”), or if Lender’s exercise of the option to accelerate the maturity of this Note, or if any prepayment by Borrower results in Borrower having paid any interest in excess of that permitted by applicable law, then it is the express intent of Borrower and Lender that all excess amounts then collected by Lender shall be credited on the principal balance hereof and all other Indebtedness (or, if this Note and all other Indebtedness have been or would thereby be paid in full, refunded to Borrower), and the provisions of this Note a shall immediately be deemed reformed and the amounts thereafter collectible under this Note and thereunder reduced, without the necessity of the execution of any new documents, so as to comply with the applicable law, but so as to permit the recovery of the fullest amount otherwise called for under this Note or thereunder. All sums paid or agreed to be paid to Lender for the use, forbearance, or detention of the Indebtedness shall, to the extent permitted by applicable law, be amortized, prorated, allocated, and spread throughout the full stated term of the Indebtedness until payment in full so that the rate or amount of interest on account of the Indebtedness does not exceed the maximum lawful rate from time to time in effect and applicable to the Indebtedness for so long as the Indebtedness is outstanding. Notwithstanding anything to the contrary in this Note or the Letter Agreement, it is not the intention of Lender to accelerate the maturity of any interest that has not accrued at the time of such acceleration or to collect unearned interest at the time of such acceleration.

(h)THE BORROWER AND THE LENDER EACH WAIVES ANY RIGHT

PROMISSORY NOTE

$300,000.00	April 24, 2023

TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY RIGHTS (i) UNDER THIS NOTE, THE LETTER AGREEMENT OR UNDER ANY AMENDMENT, INSTRUMENT, DOCUMENT OR AGREEMENT DELIVERED OR WHICH MAY IN THE FUTURE BE DELIVERED IN CONNECTION THEREWITH OR (ii) ARISING FROM ANY RELATIONSHIP EXISTING IN CONNECTION WITH THIS NOTE, AND AGREES THAT ANY SUCH ACTION OR PROCEEDING SHALL BE TRIED BEFORE A COURT AND NOT BEFORE A JURY.

(i)OTHER THAN CLAIMS BASED UPON THE FAILURE OF THE LENDER TO ACT IN A COMMERCIALLY REASONABLE MANNER, THE BORROWER WAIVES EVERY PRESENT AND FUTURE DEFENSE (OTHER THAN THE DEFENSE OF PAYMENT IN FULL), CAUSE OF ACTION, COUNTERCLAIM OR SETOFF WHICH THE BORROWER MAY NOW HAVE OR HEREAFTER MAY HAVE TO ANY ACTION BY THE LENDER IN ENFORCING THIS NOTE OR THE LETTER AGREEMENT. THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE LENDER GRANTING ANY FINANCIAL ACCOMMODATION TO THE BORROWER.

(j)Neither the Lender nor any affiliate of the Lender shall have any liability with respect to, and the Borrower hereby waives, releases and agrees not to sue upon, any claim for any special, indirect or consequential damages suffered by Borrower in connection with, arising out of, or in any way related to, this Note or the Letter Agreement, or the transactions contemplated and the relationship established hereby or thereby, or any act, omission or event occurring in connection herewith or therewith.

(k)Any notice, request, demand, waiver, consent, approval or other communication that is required or permitted hereunder shall be in writing and shall be deemed given only if delivered personally, sent by a nationally-recognized overnight delivery service or sent by facsimile, registered or certified mail, postage prepaid, at the respective addresses set forth below:

If to Lender:

		Moving Image Technologies, Inc.
		17760 Newhope Street
		Fountain Valley, CA 92708
		Attention: Phil Rafnson, Chief Executive Officer

	With a copy to:

		Fabyanske, Westra, Hart & Thomson, P.A.
		333 South Seventh Street
		Suite 2600
		Minneapolis, MN 55402
		Attention: Scott L. Anderson, Esq.

PROMISSORY NOTE

$300,000.00	April 24, 2023

If to Borrower:

		The Five Agency, LLC
		970 16th Place
		Vero Beach, FL 32960
		Attention: Rich Starr, Chief Executive Officer

	With a copy to:

		Padgett LAW, PA
		201 E. KENNEDY Blvd., Suite 600
		Tampa, FL 33602

(l)All payments hereunder shall be applied first to accrued and unpaid interest under the Loan with the remainder, if any, to be applied to the payment of the outstanding principal balance of the Loan.

(m)This Note shall be governed by and construed in accordance with the internal laws of the State of Delaware, excluding that body of law relating to conflict of laws.

(n)All headings used herein are used for convenience only and shall not be used to construe or interpret this Note. Except where otherwise indicated, all references herein to Sections refer to Sections hereof.

Remainder of Page Left Intentionally Blank

IN WITNESS WHEREOF, Borrower has caused this Note to be signed by its duly authorized officer in favor of the Lender and to be dated as of the date set forth above.

THE FIVE AGENCY, LLC, a Delaware limited liability company


By:	/s/ Rich Starr
	Name:	Rich Starr
	Title:	Chief Executive Officer

Exhibit 31.1

CEO Certification

Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

I, Phil Rafnson, certify that:

1.	I have reviewed this report on Form 10-Q of Moving iMage Technologies, Inc.;
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
---	---
3.	Based on my knowledge, the financial statements, and other financial information included in this report fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
---	---
4.	The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
---	---
a.	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
---	---
b.	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
---	---
c.	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
---	---
d.	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
---	---
5.	The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
---	---
a.	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
---	---
b.	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
---	---

---	---	---
Date: May 15, 2023	By:	/s/ Phil Rafnson
		Phil Rafnson

Exhibit 31.2

CFO Certification

Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

I, William F. Greene, certify that:

1.	I have reviewed this report on Form 10-Q of Moving iMage Technologies, Inc.;
2.	Based on your knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
---	---
3.	Based on your knowledge, the financial statements, and other financial information included in this report fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
---	---
4.	The registrant's other certifying office and I have been responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(t) and 15d-15(t)) for the registrant and have:
---	---
a.	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
---	---
b.	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
---	---
c.	Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
---	---
d.	Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
---	---
5.	The registrant's other certifying officer and I have disclosed, based on their most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
---	---
a.	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
---	---
b.	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
---	---


Date: May 15, 2023
	By:	/s/ William F. Greene
	William F. Greene
	Chief Financial Officer

Exhibit 32.1

CERTIFICATION

PURSUANT TO 18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report on Form 10-Q for the period ended March 31, 2023 of Moving iMage Technologies, Inc. (the “Company”) as filed with the Securities and Exchange Commission on the date hereof (the “Report”), each of the undersigned, in the capacities and on the dates indicated below, hereby certifies, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to your knowledge:

1.	The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and
2.	The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company as of and for the periods presented in the Report.
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---	---
By:	/s/ Phil Rafnson
	Phil Rafnson
	Chief Executive Officer
	May 15, 2023

By:	/s/ William F. Greene
	William F. Greene
	Chief Financial Officer
	May 15, 2023