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 September 30, 2022 or ☐ 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) (State or other jurisdi ...

Financial Performance - Net revenues increased 153.2% to $18.35 million for the year ended June 30, 2022, compared to $7.25 million for the prior fiscal year, primarily due to recovery from COVID-19 impacts on the exhibition industry[162]. - Gross profit rose 164.1% to $4.46 million for the year ended June 30, 2022, with gross margin increasing to 24.3% from 23.3% in the prior year, driven by a favorable product mix[163]. - The net loss for the year ended June 30, 2022, was $(1.35) million, compared to a net loss of $(0.645) million in the prior year, primarily due to higher selling, general and administrative expenses[168]. - Cash balance at June 30, 2022, was approximately $2.34 million, up from $1.27 million at June 30, 2021, while short-term investments increased to $4.36 million from $0[169]. - Net cash used in operating activities was $3.39 million for the year ended June 30, 2022, compared to $1.7 million for the year ended June 30, 2021[172]. - Net cash used in investing activities was $4.96 million for the year ended June 30, 2022, primarily due to investments in marketable securities[173]. - Net cash provided by financing activities was $9.41 million for the year ended June 30, 2022, mainly from net proceeds of $11.2 million received from the IPO[174]. Market Trends - The domestic box office was $4.4 billion in 2021, showing significant momentum going into 2022 with an estimated $7.0 billion through July 31, 2022[16]. - International markets accounted for approximately 73% of total worldwide box office revenues in 2019, highlighting their growing importance[18]. - The average ticket price in the U.S. was $9.57 in 2021, making movie-going one of the most affordable forms of out-of-home entertainment[17]. - Revenue growth is generally higher in the first and fourth quarters, while it slows in the second quarter due to seasonal factors[180]. - Inflation increased to levels not seen since the 1980s, but the company has historically offset inflationary effects by increasing prices or improving cost efficiencies[181]. Business Operations - The company is providing turnkey Furniture, Fixtures and Equipment (FF&E) services to 140 new movie screens under construction in the U.S.[23]. - Approximately 3,100 Series 1 projectors will need replacement over the next four years as obsolescence sets in, indicating a significant upgrade opportunity[24]. - 99% of the new projectors sold by the company have laser light sources, which offer longer lifespan and lower maintenance costs compared to traditional lamps[25]. - The company has recently introduced a multi-language ADA compliance system using AR glasses, targeting an underserved audience base[41]. - Direct view LED screens are being installed by the company, which are expected to disrupt traditional projection methods and offer improved image quality[42]. - The company offers a suite of enterprise software solutions, including CineQC, which enhances cinema operations and improves customer experience[33]. - The company provides project management services and proprietary products to movie theater operators and sports venues[139]. - The company resells third-party technologies, including screens, projectors, and servers, as part of its service offerings[141]. Customer Base - The top ten customers accounted for approximately 48% of net revenues for the year ended June 30, 2022, compared to 55% in 2021, indicating a diversification in customer base[47]. - The company's sales backlog was approximately $10.03 million as of June 30, 2022, representing orders to be shipped substantially in the next six months[82]. - The top ten customers accounted for approximately 48% and 55% of net revenues for the years ended June 30, 2022, and 2021, respectively[77]. Challenges and Risks - The COVID-19 pandemic has had a significant adverse impact on the company's business, leading to cash preservation strategies including temporary personnel and salary reductions[61]. - Regal Cinema's parent company, Cineworld, filed for bankruptcy protection on September 7, 2022, highlighting challenges in the cinema industry post-COVID[63]. - The company relies on a network of third-party suppliers for a majority of its parts and sub-assemblies, which could impact financial performance if supply issues arise[66]. - Significant pressure on pricing and costs is caused by intense competition, labor costs, and inflationary pressure, which may adversely affect operating margins[72]. - The company is exposed to risks related to product liability claims due to reliance on third-party manufacturers and suppliers[80]. - Changes in foreign currency rates and weak economic conditions could adversely affect relationships with significant customers[77]. - The company may not convert all of its backlog into revenue and cash flows, which could impact future revenues[84]. - The company faces significant strain on its managerial, operational, and financial resources due to business expansion, impacting its ability to attract and retain skilled personnel[95]. Corporate Governance - The company has identified material weaknesses in its internal control over financial reporting, which could lead to material misstatements in financial statements[116]. - As of June 30, 2022, the company's internal controls over financial reporting were deemed ineffective due to deficiencies in the financial reporting processes[117]. - The company is in the process of instituting new accounting processes and has hired a seasoned financial executive as Chief Financial Officer to address identified weaknesses[210]. - The company has implemented a plan to remediate identified weaknesses in internal controls, but there is no assurance of timely remediation, which could affect financial reporting accuracy[211]. - As an emerging growth company, the company is not required to include a report on the effectiveness of internal control over financial reporting by an independent registered public accounting firm[212]. Future Outlook - The company plans to continue investing in expanding operations and increasing headcount to support growth objectives[147]. - New product developments include a SaaS platform for theater management and augmented reality glasses for multilingual movie viewing, aimed at enhancing the customer experience[147]. - The company anticipates that gross margins will be affected by competition and pricing changes, but aims to introduce higher-margin products to offset potential declines[151]. - The company may need to raise additional capital for growth, and there is no assurance that it can obtain financing on acceptable terms[91]. - The company plans to issue additional capital stock in the future, which may dilute existing stockholders' ownership[122].

Financial Data and Key Metrics Changes - Fourth quarter revenue increased 167% to $5.6 million, driven by a pickup in projects for building or upgrading theaters [35] - Gross profit rose 256% to $1.5 million, with gross margin up 680 basis points to 26.8% [36] - Non-GAAP operating loss improved to $0.1 million from $0.6 million year-over-year, with non-GAAP net loss at $0.4 million or $0.04 per share compared to $0.6 million or $0.11 per share last year [37] Business Line Data and Key Metrics Changes - Projects accounted for roughly two-thirds of revenue, with margins in the mid-teens, while installation services had margins in the mid-20s and proprietary manufactured offerings ranged from 35% to 55% [32][33] - The acquisition of the USL product line is expected to enhance the product mix and improve margins [17][40] Market Data and Key Metrics Changes - The cinema industry is recovering from COVID-19, with box office receipts expected to improve significantly in 2022 and 2023 due to a strong slate of blockbuster releases [7][8] - Government grants from the CARES Act have provided significant funding to cinema operators, contributing to a multi-year growth cycle [9][10] Company Strategy and Development Direction - The company is focusing on a four-pillar growth strategy: driving revenue growth through higher-margin products, expanding beyond cinema into stadiums and esports, entering international markets, and pursuing accretive M&A [16][21][26][27] - The introduction of disruptive products like CineQC and MI Translator is part of the long-term growth strategy [18][20] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the industry's recovery despite potential geopolitical disruptions and inflation, maintaining a revenue guidance of $22 million to $23.5 million for fiscal 2023 [39][48] - The company anticipates strong gross margin expansion due to a shift towards higher-margin proprietary products and improved performance from existing product lines [40] Other Important Information - The company has no financial exposure to Cineworld, which filed for bankruptcy, and does not expect a negative impact on its business in fiscal 2023 [31] - Cash and cash equivalents decreased to $7 million, down $2.8 million from the previous quarter due to inventory acquisitions [38] Q&A Session Summary Question: Buyback situation and stock performance - The company is currently focused on ensuring capital for acquisitions and product development, with discussions on buyback policies to occur in upcoming board meetings [44] Question: Marketable securities and revenue expectations - Marketable securities are primarily short-term bonds, and the company expects margin expansion as revenues increase due to fixed costs [45][46] Question: Confidence in revenue guidance - Confidence in guidance is based on a strong macro view of the industry, despite economic headwinds [48] Question: Commentary on fiscal Q1 performance - Overall enthusiasm for the industry remains strong, and confidence in business performance is high [54] Question: Breakdown of fiscal '23 revenue guidance - Revenue guidance was derived from a balanced approach considering backlog, pipeline, and expected new product releases, with adjustments for potential disruptions [55] Question: Timing of new product rollouts - The domestic rollout for CineQC has been completed, with international expansion anticipated, while other new products are still in trial phases [57][59]

Financial Data and Key Metrics Changes - Revenue increased by 241% to $5.8 million, driven by new theater projects and upgrades [38] - Gross profit rose by 233% to $1.4 million, although gross margin decreased by 700 basis points due to a low-margin order [38] - GAAP net income was $0.6 million, or $0.06 per share, compared to a loss of $2 million, or a loss of $0.03 per share last year [40] - Cash and cash equivalents increased to $9.8 million from $9 million at the end of 2021 [41] - Revenue guidance for fiscal year 2022 was raised from $14 million to $16 million, now projected at $17.5 million to $18.5 million, indicating a growth of 155% to 169% year-over-year [42] Business Line Data and Key Metrics Changes - The company focuses on small to medium-sized cinema operators, which represent over 70% of revenue [13] - The proprietary manufactured products are expected to drive margin expansion, with gross profit margins ranging from 35% to 50% [18] Market Data and Key Metrics Changes - The domestic box office is expected to grow to over $10 billion in 2022, recovering from a low of $2.2 billion in 2020 [8] - Government grants from the Shuttered Venue Operations Grant (SVOG) are expected to benefit cinema operators, with over $14 billion already distributed [10] Company Strategy and Development Direction - The company aims to become a $50 million to $100 million per year business, focusing on growth opportunities in the cinema and live events industry [16] - Four pillars of growth strategy include driving revenue growth through higher-margin products, expanding beyond cinema, entering international markets, and pursuing accretive M&A [17][24][28][29] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the recovery of the cinema industry and the potential for significant revenue growth driven by government grants and new theater projects [10][41] - The company is in the early stages of a growth cycle, with strong demand for its products and services [16] Other Important Information - The company has installed over 40 in-home screening rooms for industry VIPs, enhancing its prestige in the market [14] - The acquisition of the USL product line is expected to open opportunities for theaters to engage underserved populations [21][22] Q&A Session Summary Question: Will revenue increases lead to operating leverage that drops to the bottom line? - Management confirmed that incremental revenue is expected to substantially contribute to the bottom line, although some will be reinvested in R&D and marketing [43]

Shareholder Structure and IPO - The company reported a total of 10,496,667 shares acquired, with existing stockholders holding 54.0% and new investors in the initial public offering holding 46.0%[120] - The total consideration from the share exchange and initial public offering amounted to $15,506,000, with an average price per share of $3.00 for new investors[120] Business Operations and Strategy - The company plans to continue investing in expanding operations and increasing headcount, expecting total operating expenses to rise in the foreseeable future[125] - The company aims to add new customers and expand sales to existing customers, focusing on educating prospective customers about the technical merits of its products[126] - Future performance will depend on the company's ability to achieve brand recognition and introduce new products, with increased marketing expenditures planned[127] Financial Performance - Net sales increased 241.2% to $5.835 million for the three months ended March 31, 2022, compared to $1.710 million for the same period in 2021, primarily due to recovery from COVID-19 impacts on the exhibition industry[139] - Gross profit rose 228.6% to $1.367 million for the three months ended March 31, 2022, with gross profit as a percentage of total revenues decreasing to 23.4% from 24.3% due to product mix[140] - For the nine months ended March 31, 2022, net sales increased 150.7% to $12.728 million from $5.076 million in 2021, again due to recovery from COVID-19 impacts[147] - Gross profit for the nine months ended March 31, 2022, increased 131.4% to $2.985 million, with gross profit margin declining to 23.5% from 25.4% due to product mix[148] - Net income was $593,000 for the three months ended March 31, 2022, compared to a net loss of $(164,000) for the same period in 2021, influenced by a $698,000 gain on the extinguishment of PPP loan[146] Expenses and Cash Flow - Research and development expenses increased to $53,000 for the three months ended March 31, 2022, from $42,000 in 2021, with expectations for further increases as product development expands[141] - Selling, general and administrative expenses rose to $1.445 million for the three months ended March 31, 2022, compared to $666,000 in 2021, driven by costs associated with becoming a public company[142] - Selling, general and administrative expenses for the nine months ended March 31, 2022, were $4.125 million, up from $2.143 million in 2021, reflecting ongoing public company costs[153] - Cash balance at March 31, 2022, was approximately $6.337 million, compared to $1.270 million at June 30, 2021, with short-term investments at $3.082 million[156] - Net cash used by operating activities was $916,000 for the nine months ended March 31, 2022, primarily due to a net loss of $626,000[161] Market Challenges - Gross margins are expected to be affected by competition and pricing changes, with a focus on maintaining gross profits despite potential price erosion[128] - The impact of the COVID-19 pandemic has led to significant challenges, including temporary cessation of operations by customers and delays in product orders[122] - The company anticipates that results of operations will continue to be adversely impacted by the pandemic and its effects on global economic conditions[123] - The sales cycle and contract fulfillment cycle are subject to fluctuations based on customer requirements, affecting backlog and revenue recognition[129] Product Development - The company has recently introduced a new system compliant with the Americans with Disabilities Act, which is expected to have higher margins than existing products[128]

Financial Data and Key Metrics Changes - Revenue increased by 113% to $3.4 million, driven by new theater builds and upgrades [30] - Gross profit also increased by 113% to $0.9 million, with gross margin rising to 26.4% [30] - GAAP operating loss was $0.6 million, compared to $0.4 million last year, while non-GAAP operating loss remained flat at $0.4 million [32][33] - Cash decreased to $9 million due to increased inventory and prepaids [34] - Revenue guidance for Fiscal 2022 was increased from $12 million to a range of $14 million to $16 million, representing 93% to 121% growth year-over-year [34] Business Line Data and Key Metrics Changes - The majority of revenue comes from small to medium-sized cinema operators, which are expanding more quickly than larger operators [15] - The company is focusing on increasing its proprietary product lines, which historically have been about one-third of the business [29] Market Data and Key Metrics Changes - The cinema industry is recovering from COVID-19, with box office receipts expected to exceed $10 billion in 2022 [11] - Government grants from the CARES Act are providing significant funding to cinema operators, with over $2.5 billion allocated to them [12] Company Strategy and Development Direction - The company has four pillars in its growth strategy: shifting towards higher margin proprietary products, developing disruptive technology products, expanding into international markets, and pursuing accretive M&A [16][20][21] - The introduction of the CineQC SaaS platform and a multi-language translation device are key components of the growth strategy [17][18] Management's Comments on Operating Environment and Future Outlook - Management believes the company is in a strong position operationally, financially, and competitively, despite recent stock performance [23] - The company anticipates significant year-over-year revenue growth driven by the recovery in the box office and the flow of SVOG funds [34] Other Important Information - The company has installed over 40 in-home screening rooms for industry VIPs, enhancing its prestige in the market [15] - The company is experiencing a technology upgrade cycle, particularly for laser projectors and servers [14] Q&A Session Summary - There were no questions during the Q&A session [36][37]

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 September 30, 2021 or ☐ 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) (I.R.S. Employer Identi ...

Moving iMage Technologies, Inc. (NYSE:MITQ) Q1 2022 Earnings Conference Call November 11, 2021 4:30 PM ET Company Participants Phil Rafnson - Chairman and CEO Mike Sherman - CFO Joe Delgado - Executive VP of Sales and Marketing Conference Call Participants Operator Good afternoon, and welcome to the Moving iMage Technologies First Quarter Fiscal Year 2022 Earnings Conference Call and Webcast. With me today is Chairman and CEO, Phil Rafnson, CFO Mike Sherman and Executive VP of Sales and Marketing Joe Delgad ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Securities registered pursuant to Section 12(g) of the Act: (Title of Class) Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ¨ No x Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act. Yes ¨ No x Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section ...