MOVING iMAGE TECHNOLOGIES INC.

Previous wording

Throughout 2020 and 2021 the theatres reopened as soon as local restrictions, and the status of the COVID-19 pandemic would allow. As of June 30, 2024, 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.

Current wording

Throughout 2020 and 2021 theaters reopened as soon as local restrictions, and the status of the COVID-19 pandemic would allow. As of June 30, 2025, a large majority of domestic and international theaters 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.

Previous wording

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.

Current wording

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

Previous wording

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.

Current wording

Adding New Customers and Expanding Sales to Our Existing Customer Base. We intend to target new customers by selectively investing 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.

Previous wording

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 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.

Current wording

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 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 produced 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.

Previous wording

Net revenues decreased 0.3% to $20.14 million for the year ended June 30, 2024 from $20.21 million for the prior fiscal year primarily due to the protracted SAG/AFTRA strike. Backlog at June 30, 2024 was approximately $5.93 million, which represent orders currently planned for March 31, 2025 shipment. Backlog at June 30, 2023 was $12.02 million.

Current wording

Net revenues decreased 9.9% to $18.147 million for the year ended June 30, 2025 from $20.139 million for the prior fiscal year primarily due to the protracted SAG/AFTRA strike. Backlog at June 30, 2025 was approximately $7.52 million, which represent orders currently planned for April 30, 2026 shipment. Backlog at June 30, 2024 was $5.93 million.

Previous wording

Along with the revenue decline for the year ended June 30, 2024, gross profit decreased 11.8% to $4.68 million or by $0.63 million for the year ended June 30, 2024 from $5.31 million for the prior fiscal year. As a percentage of total revenues, gross margin decreased to 23.3% for the year ended June 30, 2024 from 26.3% for the prior year. The decrease in gross margin as a percentage of revenues was driven primarily by product mix, as lower margin seat revenues made up a larger percentage of total revenues.

Current wording

Along with the revenue decline for the year ended June 30, 2025, gross profit dollars decreased 2.3% to $4.573 million or by $0.110 million for the year ended June 30, 2025 from $4.683 million for the prior fiscal year. As a percentage of total revenues, gross margin increased to 25.2% for the year ended June 30, 2025 from 23.3% for the prior year. Compared to the prior year, the increase in gross margin as a percentage of revenues was driven primarily by product mix, as lower margin seat revenues made up a larger percentage of total revenues in the year ended June 30, 2024.

Previous wording

Net loss of $(1.37) million for the year ended June 30, 2024 compared to a net loss of $(1.80) million for the prior year improved by $0.43 million. This net loss decrease was largely due to the nonrecurring 2023 $(0.95) million Impairment of Long Term Assets, offset primarily by lower gross margin of $0.63 million in 2024.

Current wording

Net loss of $(0.948) million for the year ended June 30, 2025 compared to a net loss of $(1.372) million for the prior year and improved by $0.424 million. This net loss decrease was largely due to the staff reductions related to headcount reduction in 2025.

Previous wording

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 meet our projected capital needs for the foreseeable future. Our cash balance at June 30, 2024 was approximately $5.28 million, as compared to $6.62 million at June 30, 2023.

Current wording

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 meet our projected capital needs for the foreseeable future. Our cash balance at June 30, 2025 was approximately $5.715 million, as compared to $5.278 million at June 30, 2024.

Previous wording

In response to uncertainties associated with the COVID-19 pandemic, we took significant steps to preserve cash and remain in a strong competitive position for when the crisis subsided. From 2020 to 2022 the theatres reopened as soon as local restrictions and the status of the COVID-19 pandemic would allow. As of June 30, 2024, 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.

Current wording

As of June 30, 2025, and following the COVID-19 pandemic, a large majority of domestic and international theaters 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.

Previous wording

Based on the Company’s current estimates of recovery, it believes it has, 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.

Current wording

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

Previous wording

For the year ended June 30, 2023, net cash provided by operating activities was $0.27 million, primarily due to $0.67 million in working capital increases along with the $(1.80) million operating loss and offset by $1.40 million in other non-cash expenses.

Current wording

Net cash provided by operating activities was $0.411 million for year ended June 30, 2025, primarily due to $0.801 million in working capital increases along with the $(0.948) million in net losses and offset by $0.558 million in other non-cash expenses. Within the $0.801 million working capital increase, cash used by operations included inventory, prepaid expenses, accounts payable, accrued expense and unearned warranty revenue and offset primarily by changes in accounts receivable, customer deposits and lease liabilities.

Previous wording

Net cash used in operating activities was $(0.80) million for year ended June 30, 2024, primarily due to $(0.60) million in working capital decreases along with the $(1.37) million in net losses and offset by $1.17 million in other non-cash expenses. Within the $(0.60) million working capital decrease, cash used by operations included accounts receivable, prepaid expenses, customer deposits, lease liabilities and offset primarily by changes in inventory, accounts payable, accrued expenses.

Current wording

For the year ended June 30, 2024, net cash used in operating activities was $(0.80) million for year ended June 30, 2024, primarily due to $(0.60) million in working capital decreases along with the $(1.37) million in net losses and offset by $1.17 million in other non-cash expenses. Within the $(0.60) million working capital decrease, cash used by operations included accounts receivable, prepaid expenses, customer deposits, lease liabilities and offset primarily by changes in inventory, accounts payable, accrued expenses.

Previous wording

For the year ended June 30, 2024, net cash used by investing activities was $(0.01) million for the year ended June 30, 2024 related to information technology asset upgrades. For the year ended June 30, 2023, net cash provided by investing activities was $(4.31) million due to sales of marketable securities.

Current wording

For the year ended June 30, 2025, net cash used by investing activities was zero. For the year ended June 30, 2024, net cash provided by investing activities was $(0.012) for equipment purchases.

Previous wording

For the year ended June 30, 2024 and the year ended June 30, 2023, net cash used by financing activities of $(0.53) million and $(0.30) million, respectively, due to the stock buyback program during both years.

Current wording

For the year ended June 30, 2025 net cash used by financing activities was zero. For the year ended June 30, 2024, net cash used by financing activities was $(0.530) million due to the stock buyback program.

Previous wording

Our top ten customers accounted for approximately 45% and 37% of net revenues for the years ended June 30, 2024 and 2023, respectively. Trade accounts receivable from these customers represented approximately 62% and 19% of net receivables at June 30, 2024 and 2023, respectively. While we believe our relationships with such customers are stable, most arrangements are made by purchase order and are terminable at will by either party. We could also be adversely affected by such factors as changes in foreign currency rates and weak economic and political conditions in each of the countries in which we sell our products.

Current wording

Our top ten customers accounted for approximately 44% and 45% of net revenues for the years ended June 30, 2025 and 2024, respectively. Trade accounts receivable from these customers represented approximately 41% and 62% of net receivables at June 30, 2025 and 2024, respectively. While we believe our relationships with such customers are stable, most arrangements are made by purchase order and are terminable at will by either party. We could also be adversely affected by such factors as changes in foreign currency rates and weak economic and political conditions in each of the countries in which we sell our products.

Previous wording

Our operating results can vary from quarter to quarter as a result of seasonality in consumer spending and payment patterns. A large part of our business is concerned with new theater builds, which often see substantial delays due to weather, but also financing timing, permits and governmental delays, and other unpredictable problems often associated with large real estate projects. Specifically, our revenue growth generally is higher during the first and fourth quarters of the fiscal year as the weather improves, the digital cinema market becomes more active and customers begin new theater builds or remodel projects. During these periods, we tend to experience increased transaction volume. Conversely, our revenue growth generally slows during the second quarter of the fiscal year, as spending on new theater construction and theater improvement projects tends to slow leading up to the holiday season and through the winter months. As a result, growth in transaction volume also tends to slow during these periods. We expect this seasonality to continue for the foreseeable future, which may cause fluctuations in our operating results and financial metrics.

Current wording

Our operating results can vary from quarter to quarter as a result of seasonality in consumer spending and payment patterns. A large part of our business is concerned with new theater builds, which often see substantial delays due to weather, but also financing timing, permits and governmental delays, and other unpredictable problems often associated with large real estate projects. Specifically, our revenue growth generally is higher during the first and fourth quarters of the fiscal year as the weather improves, the digital cinema market becomes more active and customers begin new theater builds or remodel projects. During these periods, we tend to experience increased transaction volume. Conversely, our revenue growth generally slows during the second quarter of the fiscal year, as spending on new theater construction and theater improvement projects tends to slow leading up to the holiday season and through the winter months. As a result, growth in transaction volume also tends to slow during these periods. We expect this seasonality to continue for the foreseeable future, which may cause fluctuations in our operating results and financial metrics. However, our seasonality trends may vary in the future as we introduce new products to new industry verticals, and we become less concentrated in the new theater construction and improvement sector.

Previous wording

We believe that the relatively moderate rates of inflation in recent years have not had a significant impact on our net revenues or profitability. During the fiscal year ended June 30, 2024, inflation increased to levels not seen since the 1980’s. Historically, the Company has been able to offset any inflationary effects by either increasing prices or improving cost efficiencies and expects to do so in the future.

Current wording

We believe that the relatively moderate rates of inflation in recent years have not had a significant impact on our net revenues or profitability. Historically, the Company has been able to offset any inflationary effects by either increasing prices or improving cost efficiencies and expects to do so in the future.

Previous wording

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.

Current wording

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

Previous wording

deposits, MIT’s risk is only the remaining 10% of the customer’s contract value. The combined effect of up-front customer deposits, prompt collection of trade receivables and application of historical aging criteria has resulted in minimal bad debts and allowances for doubtful accounts.

Current wording

Due the Management’s continuing ability to obtain 90% of contract value in up-front customer deposits, MIT’s risk is only the remaining 10% of the customer’s contract value. The combined effect of up-front customer deposits, prompt collection of trade receivables and application of historical aging criteria has resulted in minimal bad debts and allowances for credit losses.