MOVING iMAGE TECHNOLOGIES INC.

NOTE1 — 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.

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mpact 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, butnot 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.

Throughout2020 and through2022 the theatres reopened as soon as local restrictions, and the status of the COVID-19 pandemic would allow. As of* September 30, 2025*, 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 management’s current estimates, it believes it will generate sufficient cash to sustain operations for a period of12 months from the issuance of these financial statements.

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 donot 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 Form10-K for the fiscal year ended* June 30, 2025*, and with the disclosures and risk factors presented therein. The* June 30, 2025* condensed consolidated balance sheet has been derived from the audited consolidated financial statements. Operating results for thethree months ended* September 30, 2025* arenot necessarily indicative of the results that* maybe expected for any subsequent quarters or for the year ending June 30, 2026*.

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Assets and Liabilities Measured on a Non-recurring Basis- 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 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.

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, credit losses, 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,* mayexceed federally insured limits. The Company hasnot* experienced any losses in such accounts. Management believes the Company isnot exposed to any significant credit risk on its cash balances.

Accounts Receivable: Accounts receivable are carried at original invoice amount less allowance for credit losses. Management determines the allowance for credit losses by identifying troubled accounts and by using historical experience applied to an aging of accounts. Accounts 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 than90 days past the customer’s granted terms. The Company doesnot charge interest on past-due balances or require collateral on its accounts receivable. As of* September 30, 2025* and* June 30, 2025* the allowance for credit losses is approximately$281,000 and $236,000, respectively.

Inventories: Inventories are stated at the lower of cost or net realizable value, with cost being determined on thefirst-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* maycause 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 September 30, 2025* and* June 30, 2025*, the inventory reserve was $1,413,000 and $1,413,000 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”) Topic606, Revenue from Contracts with Customers (“ASC606**”).

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 at the customer location, 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 based on equipment shipment dates and when customer location work is completed. In cases of 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 arenot 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.

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 arenot met, revenues recognized are presented net of cost of goods sold.

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NOTE1 — BUSINESS ACTIVITY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

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 doesnot have contract assets that represent conditional rights to consideration.

Contract liabilities consist of customer refunds and warranty liabilities, as well as deposits received in advance on sales to certain customers. Such deposits are reflected as customer deposits and recognized in revenue when control of the products is transferred or when performance conditions are satisfied per the agreement.

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. Management 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.

Revenue from the sale of equipment is recognized upon shipment of such equipment to customers and when performance conditions are satisfied at the custom location.

Revenue from installation labor 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, usuallyone year. Services revenues are generally recognized over time as the contracts are performed.

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.

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Advertising Costs: Advertising costs were approximately $3,000 and $4,000 for thethree months ended* September 30, 2025and2024*, respectively. Advertising costs are expensed as incurred within selling and marketing expenses.

Intangible assets: 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 wasno intangible asset impairments recognized for thethree months ended* September 30, 2025* or2024.

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 arenot 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 thannot that some portion or all of the deferred tax assets willnot be realized.

The following table summarizes the components of deferred tax assets and deferred tax liabilities at* September 30, 2025* and* June 30, 2025* (in thousands):

Product Warranty: The Company’s digital equipment products are sold under various limited warranty arrangements ranging fromone year tothree 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 tothree years, depending on the manufacturers’ individual policies. As of* September 30, 2025* and* June 30, 2025*, the Company has established a warranty reserve of $37,000 and $35,000, respectively, which is included in accrued expenses in the accompanying condensed consolidated balance sheets.

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

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.

Recently Issued Accounting Pronouncements:

In* November 2024,the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”)No. 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic220-40): Disaggregation of Income Statement Expenses* (“ASU2024-03”) and in* January 2025,the FASB issued ASUNo.* 2025-01, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic220*-40): Clarifying the Effective Date*, which clarified the effective date of ASU2024-03. ASU2024-03 will require the Company to disclose the amounts of purchases of inventory, employee compensation, depreciation and intangible asset amortization, as applicable, included in certain expense captions in the Consolidated Statements of Operations, as well as qualitatively describe remaining amounts included in those captions. ASU2024-03 will also require the Company to disclose both the amount and the Company’s definition of selling expenses. The Company will adopt ASU2024-03 in itsfourth quarter of2028 using a prospective transition method.

In* December 2023,the FASB issued ASUNo.* 2023-09, Income Taxes (Topic740*): Improvements to Income Tax Disclosures* (“ASU2023-09”), which will require the Company to disclose specified additional information in its income tax rate reconciliation and provide additional information for reconciling items that meet a quantitative threshold. ASU2023-09 will also require the Company to disaggregate its income taxes paid disclosure by federal, state and foreign taxes, with further disaggregation required for significant individual jurisdictions. The Company will adopt ASU2023-09 in itsfourth quarter of2026 using a prospective transition method.

In* July 2025,the FASB issued ASU2025* No. 2025-05, Financial Instruments-Credit Losses (Topic326), which provides for a practical expedient for the evaluation of expected credit losses that assumes that current conditions as of the balance sheet donot change for the remaining life of the asset. The provisions of this pronouncement are effective for annual periods beginning after* December 15, 2025,and annual periods within those periods. The Company willfirst* adopt this standard in thefirst quarter of its fiscal year ending* June 30, 2027.*

NOTE2 — 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 quarter ended* September 30, 2024,*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 thethree months ended* September 30, 2025* the Company had net income while on* September 30, 2024* the Company had a net loss. However, all potentially dilutive securities were also deemed to be anti-dilutive because their exercise price exceeded the weighted average trading price of the Company’s stock for the period.

NOTE 3 — INTANGIBLE ASSETS

The following table summarizes the Company’s intangible assets as of* September 30, 2025* (in thousands):

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NOTE 3 — INTANGIBLE ASSETS (continued)

The following table summarizes the Company’s intangible assets as of* June 30, 2025* (in thousands):

Amortization expense was $15,000 and $15,000 for the three months ended* September 30, 2025and2024*, respectively, and is included in general and administrative expense.

Estimated amortization expense related to intangible assets subject to amortization at* September 30, 2025* in each of the years subsequent to* September 30, 2025*, and thereafter is as follows (amounts in thousands);

NOTE 4 —** ACCRUED EXPENSES**

Accrued expenses consist of the following (in thousands):

NOTE 5 —** STOCKHOLDERS**’** EQUITY**

In2019, the Company adopted the2019 Omnibus Incentive Plan (the “Plan”). The Plan, as amended, provides for the issuance of stock-based awards to employees. As of* September 30, 2025*, the Plan provides for the issuance of up to 1,500,000 stock-based awards. There are 1,020,000 stock-based awards available to grant under the Plan at* September 30, 2025*.

On* October 30, 2024,*and as part of Francis Godfrey’s appointment as the Company’s President and Chief Operating Officer, the Board granted Francis Godfrey 200,000 options with an exercise price of $0.65 with 25% vesting immediately and the remainder vesting at 25% per year thereafter.

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NOTE 5 — STOCKHOLDERS’** EQUITY (continued)******

The Company recognized compensation expense of approxima tely $7,300 and $5,000 forstock options during thethree months ended* September 30, 2025and2024*, respectively. For the quarter ended* September 30, 2024,*none of these potentially dilutive securities were included in the computation of diluted earnings per share as their impact would be anti-dilutive.

The estimated fair value of each option award granted was determined on the date of grant using the Black-Scholes option valuation model during thethree months ended* September 30, 2025*. There wereno option grants during thethree months ended* September 30, 2024*:

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NOTE 5 — STOCKHOLDERS’** EQUITY (continued)******

A summary of the status of the Company’s stock options as of* September 30, 2025* and changes during thethree months ended* September 30, 2025* are presented below.

A summary of the status of the Company’s stock options as of* September 30, 2024* and changes during thethree months ended* September 30, 2024* are presented below.

The following table summarizes information about outstanding and exercisable stock options at* September 30, 2025*:

As authorized by the Board on* May 26, 2023,directors mayreceive their board fees as cash or in shares of the Company’s stock. The Company records director fee expense at the end of each board meeting. On September 24,2025, the Company subsequently issued 652 shares to an independent director for director fees earned during thethree-month period of July 2025through September 2025.*

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NOTE 6 —** CUSTOMER AND VENDOR CONCENTRATIONS**

Customers: One customer accounted for 12%of the Company’s net sales for thethree months ended* September 30, 2025*. Three customers accounted for 17%,13% and 11%, respectively, of the Company’s sales for thethree months ended* September 30, 2024.*

At* September 30, 2025*, the amount of outstanding receivables related to theone customer was appro ximately $348,000.

At* September 30, 2024,*the amount of outstanding receivables related to theone customer was approximately $135,000.

Vendors: Two vendors accounted for 22% and 17%, respectively, of the Company’s purchases for thethree months ended* September 30, 2025*. Approximately 26% of the Company’s purchases were provided byone vendor for thethree months ended* September 30, 2024*.

NOTE 7 —** LEASE COMMITMENTS AND CONTINGENCIES**

Operating Leases: The Company occupies an executive office and warehouse space in Fountain Valley and Whittier, CA, pursuant to separate lease agreements. Under ASC842, 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 consolidated balance sheet.

The Company’s executive office and warehouse lease agreements are classified as operating leases. The office lease agreement, as amended, expire on* January 31, 2030,and doesnot* include any renewal options. The Whittier, CA warehouse lease agreement commenced on* February 1, 2025expires on January 31, 2028,and doesnot* include any renewal options. The agreements provide for initial monthly base amounts plus annual escalations through the term of the leases. The monthly rent payable for thefirst year of the extended term will be $6,299 and increases by 4% on each anniversary date.

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.

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NOTE 7 —** LEASE COMMITMENTS AND CONTINGENCIES (continued)**

The Company’s operating lease expense was$79,000 and $86,000 for thethree months ended* September 30, 2025and2024*, respectively.

Future minimum lease payments at* September 30, 2025* under these arrangements are as follows:

The following table sets forth the ROU assets and operating lease liabilities as of* September 30, 2025*:

The Company’s weighted average remaining lease term for its operating leases is 4.02 years using a weighted average discount rateof 8.42%.

Legal Matters: From time to time, the Company is involved in routine litigation that arises in the ordinary course of business. There areno significant legal proceedings pending 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.

NOTE8—SEGMENT INFORMATION

Operating segments are defined as components of an enterprise about which separate discrete information is available or evaluation by the chief operating decision maker ("CODM"), in deciding how to allocate resources and in assessing performance. The Company and the Company's chief operating decision maker view the Company's operations and manage its business inone operating segment, which is the business of identifying, developing and manufacturing products to meet the needs of the cinema market. The CODM, who is the President, manages and allocates resources to the operations of the Company on a consolidated basis. The Company's measure of segment profit or loss is currently a net loss. Managing and allocating resources on a consolidated basis enables the President to assess the overall level of resources available and how to best deploy those resources across functions that are in line with the Company's long-term company-wide strategic goals. Consistent with this decision-making process, the President uses consolidated financial information for purposes of evaluating performance, forecasting future period financial results, allocating resources and setting incentive targets. Operating expenses are used to monitor budget versus actual results. The CODM doesnot review assets in evaluating the results of the Company, and therefore, such information isnot presented. In addition, substantially all of the Company's revenue was generated in the United States and substantially all of the Company's long-lived assets reside in the United States.

NOTE9 — SUBSEQUENT EVENTS

On* October 31, 2025,*Moving iMage Technologies, Inc. (the “Company”) entered into an Asset Purchase Agreement (the “APA”) with QSC, LLC (“QSC”) pursuant to which the Company purchased certain assets comprising QSC’s Digital Cinema Speaker Series (“DCS”) loudspeaker product line including, the DCS loudspeaker product line, including the SC, SR, SB, and RSM product families; intellectual property, including trademarks, designs, and trade secrets; inventory and raw materials; OEM supplier agreements; product technical documentation; and rights to service and support existing DCS customers, for a purchase price of $1.5 million.

Management has evaluated events from* September 30, 2025through November**14,* 2025, the date these financial statements were available to be issued and determined that there have beenno other events that occurred that would require adjustment to our disclosures in the condensed consolidated financial statements.

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