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 March 31, 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 recovers from the 2023 SAG-AFTRA strike, 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 the theatres reopened as soon as local restrictions and the status of the COVID-19 pandemic would allow. As of September 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

Previous wording

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.

Current wording

Investment in growth. Based on 2024 losses, we will selectively invest in expanding our operations. We expect our total operating expenses to decrease in the foreseeable future to meet our revenue and cost control objectives. We plan to invest in our sales and support operations to support our new product initiatives and budget goals.

Previous wording

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.

Current 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.

Previous wording

While revenue increased, gross profit decreased 35.1% to $0.676 million for the three months ended March 31, 2024 from $1.402 million for the three months ended March 31, 2023 or an decrease of $(0.366) million. As a percentage of total revenues, gross profit percentage decreased to 17.4% from 27.9% due to lower margin seat revenues.

Current wording

Along with the 20.8% revenue decline, gross profit decreased 24.6% to $1.372 million for the three months ended September 30, 2024 from $1.819 million for the three months ended September 30, 2023 or an decrease of $(0.447) million. As a percentage of total revenues, gross profit percentage decreased to 26.1% from 27.4% due to lower margin revenues.

Previous wording

Other Income(Expense) was $0.048 million for the three months ended March 31, 2024 compared to Other Income(Expense) of $0.102 million for the three months ended March 31, 2023 or a decline $(0.054) million was primarily due to the higher marketable securities gains in the three months ended March 31, 2023 compared to the fixed interest income in the three months ended March 31, 2024.

Current wording

Other Income(Expense) was $0.043 million for the three months ended September 30, 2024 compared to Other Income(Expense) of $0.055 million for the three months ended September 30, 2023 or a decline $(0.012) million. The decline was primarily due to a lower cash balance and the related lower interest income in the three months ended September 30, 2023 compared to the higher cash balance and the related higher interest income in the three months ended September 30, 2024.

Previous wording

Net loss was $(0.601) million for the three months ended March 31, 2024 compared to net loss of $(0.424) million for the three months ended March 31, 2023 or a decline $(0.177) million. The decrease was due to the lower gross margin of $(0.366) million, offset by lower operating expenses of $0.243 million and lower other income of $(0.054) million.

Current wording

Net loss was $(0.025) million for the three months ended September 30, 2024 compared to net income of $0.439 million for the three months ended September 30, 2023 or a decline $(0.464) million. The decrease was due to the lower gross margin of $(0.447) million, offset by higher operating expenses of $0.005 million and lower other income of $(0.012) million.

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 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, 2024 was approximately $5.946 million, as compared to $6.616 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 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 September 30, 2024 was approximately $5.246 million, as compared to $5.278 million at June 30, 2024.

Previous wording

Net cash provided by operating activities was $(0.337) million for the nine months ended March 31, 2024, primarily due to $(0.030) million in working capital decreases along with $(0.956) million in net losses and offset by $0.649 million in other non-cash expenses. Within working capital change, the uses of cash of $(0.978) million included changes in inventory, prepaids, payables and lease liabilities offset by $0.948 million of changes in receivables, accrued expense, unearned warranty revenue and deposits. Net cash used by operating activities was ($0.685) million for the nine months ended March 31, 2023, was primarily due to a net loss of ($0.472) million, $0.087 million in non-cash expenses and ($0.300) 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.

Current wording

and offset by $0.173 million in other non-cash expenses. Within working capital change, the cash used of $(0.818) million included declines in payables, customer deposits and lease liabilities offset by $0.638M in provision for receivables, inventory, prepaids, accrued expense and unearned warranty revenue. Net cash used in operating activities was $(0.207) million for the three months ended September 30, 2023, primarily due to $(0.735) million in working capital declines offset by the $0.439 million in net income and $0.090 million in other non-cash expenses. The net change in other working capital was primarily due to increases in receivables, inventory and payables and decreases in customer deposits, offset by decreases in prepaid and accrued expenses.

Previous wording

Net cash used in investing activities was $(0.012) million for the nine months ended March 31, 2024, for equipment purchases. Net cash used in investing activities was $(4.751) million for the nine months ended March 31, 2023 waspredominantly the result of sales of investments of $4.758 million.

Current wording

Net cash used in investing activities was zero for the three months ended September 30, 2024. Net cash used in investing activities was $(0.001) million for the three months ended September 30, 2023, for equipment purchases.

Previous wording

Net cash used in financing activities was $(0.334) million used to repurchase shares for the nine months ended March 31, 2024 and $(0.049) for March 31, 2023.

Current wording

Net cash used in financing activities was zero for the three months ended September 30, 2024 and the three months ended September 30, 2023.