10q10k10q10k.net
MOVING iMAGE TECHNOLOGIES INC.

MOVING iMAGE TECHNOLOGIES INC.MITQEarnings & Financial Report

NYSE · Information Technology · Photographic Equipment & Supplies

Silicon Image Inc. was an American fabless semiconductor company based in Hillsboro, Oregon, and active from 1995 to 2015. The company designed circuits for mobile phones, consumer electronics and personal computers (PCs). It also manufactured wireless and wired connectivity products used for high-definition content. The company's semiconductor and IP products were deployed by manufacturers in devices such as smartphones, tablets, digital televisions (DTVs), and other consumer electronics, as...

What changed in MOVING iMAGE TECHNOLOGIES INC.'s 10-K — 2023 vs 2024

Top changes in MOVING iMAGE TECHNOLOGIES INC.'s 2024 10-K

135 paragraphs added · 138 removed · 111 edited across 5 sections

Item 1. Business

Business — how the company describes what it does

21 edited+2 added−3 removed58 unchanged
Our Project Management includes consulting with architects through to final fixturing and calibration. Our staff of mechanical and electrical engineers work closely with end users as well as OEM manufacturers, and can participate in every phase of the process from conceptual design and development to production on most any scale.
Our Project Management includes consulting with architects through final fixturing and calibration. Our staff of mechanical and electrical engineers work closely with end users as well as OEM manufacturers and can participate in every phase of the process from conceptual design and development to production on most any scale.
Also, LED is ideal for displaying High Dynamic Range (HDR) which we believe is the main video aesthetic enhancement used to boost audience experience in cinemas. Since the LED consumes no power when they are switched off to ‘illuminate’ black, this saves on electricity versus the always-on energy of laser projection or xenon lamps.
Also, LED is ideal for displaying High Dynamic Range (HDR) which we believe is the main video aesthetic enhancement used to boost audience experience in cinemas. Since the LED consumes no power when they are switched off to ‘illuminate’ black, this saves electricity versus the always-on energy of laser projection or xenon lamps.
We believe that the contractual obligations for theater system installations that are listed in sales backlog are valid and binding commitments.
We believe that the contractual obligations for theater system installations that are listed in the sales backlog are valid and binding commitments.
MiT’s IS-20 & IS-20d Power Managers power audio and video systems up and down on a controlled schedule, offering savings on wasteful energy consumption during system idle time. This suite of products support MiT’s green initiatives with an emphasis on energy savings, reliability and value. Enterprise and Operations Software Solutions CineQC — Cinema Presence Management & Remote Control System .
MiT’s IS-20 & IS-20d Power Managers power audio and video systems up and down on a controlled schedule, offering savings on wasteful energy consumption during system idle time. This suite of products supports MiT’s green initiatives with an emphasis on energy savings, reliability and value. Enterprise and Operations Software Solutions CineQC — Cinema Presence Management & Remote Control System .
“Green energy efficient” Products, Lighting Fixtures and Dimmers — We offer a series of in-house designed and assembled lighting products and dimmers designed to reduce energy consumption in cinemas, theaters, and performance venues. LED-based lighting has rapidly become an important aspect of MiT’s product line, offering advantages in efficiency and reduced maintenance, which translate into lower operating cost.
“Green energy efficient” Products, Lighting Fixtures and Dimmers — We offer a series of in-house designed and assembled lighting products and dimmers designed to reduce energy consumption in cinemas, theaters, and performance venues. LED-based lighting has rapidly become an important aspect of MiT’s product line, offering advantages in efficiency and reduced maintenance, which translate into lower operating costs.
MiT personnel have designed, specified and installed thousands of commercial cinemas, post production, screening and high-end residential rooms and have been involved in the digital cinema conversion rollouts of clients such as AMC, Cinemark, Cinepolis, Cinemex, Reading, Metropolitan, Hollywood, Regal, Syufy, Harkins, and other smaller circuits. 5 Table of Contents New Business Initiatives We continue to explore new lines of business complementary with our core business, focusing on entertainment technologies and related products and services.
MiT personnel have designed, specified and installed thousands of commercial cinemas, postproduction, screening and high-end residential rooms and have been involved in the digital cinema conversion rollouts of clients such as AMC, Cinemark, Cinepolis, Cinemex, Reading, Metropolitan, Hollywood, Regal, Syufy, Harkins, and other smaller circuits. 5 Table of Contents New Business Initiatives We continue to explore new lines of business complementary with our core business, focusing on entertainment technologies and related products and services.
There can be no assurance that in all instances a substitute for a prohibited raw material or process would be available, or be available at reasonable cost. Employees We employed 32 full-time personnel as of June 30, 2023. We are not a party to any collective bargaining agreement.
There can be no assurance that in all instances a substitute for a prohibited raw material or process would be available or be available at reasonable cost. Employees We employed 32 full-time personnel as of June 30, 2024. We are not a party to any collective bargaining agreement.
We believe our green initiative Architectural LED Fixture (ALF) is the first LED-based 8” downlight luminaire and companion MiT’s M-Series lighting dimmers are specifically designed for commercial cinemas, screening rooms, post production facilities, museums, performance venues and meeting spaces. In addition to our LED and dimmer products, MiT offers a number of other “green” products designed for energy efficiency.
We believe our green initiative Architectural LED Fixture (ALF) is the first LED-based 8” downlight luminaire and companion MiT’s M-Series lighting dimmers are specifically designed for commercial cinemas, screening rooms, postproduction facilities, museums, performance venues and meeting spaces. In addition to our LED and dimmer products, MiT offers a number of other “green” products designed for energy efficiency.
For example, our operations enhancement and theater management solution includes a software-as-a-service (SaaS) platform combined with other technologies that allow theater operators to improve their quality control.
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.
While LED displays have been around for years (e.g., the giant displays in virtually every sports arena), the constant miniaturization of this technology has now made cinema exhibition possible.
While LED displays have been around for years (e.g., the giant displays in virtually every sports arena), the constant miniaturization of this technology has now made cinema exhibitions possible.
Our sales and marketing professionals have extensive experience with our product and service offerings and have long-term relationships throughout the industry. 6 Table of Contents Our top ten customers accounted for approximately 37% and 48% of net revenues for the years ended June 30, 2023 and 2022, respectively.
Our sales and marketing professionals have extensive experience with our product and service offerings and have long-term relationships throughout the industry. 6 Table of Contents 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 19% and 48% of net receivables at June 30, 2023 and 2022, respectively. No customer accounted for more than 10% of the Company’s revenue for the years ended June 30, 2023 and 2022.
Trade accounts receivable from these customers represented approximately 62% and 19% of net receivables at June 30, 2024 and 2023, respectively. No customer accounted for more than 10% of the Company’s revenue for the years ended June 30, 2024 and 2023.
Projection replacements and upgrades. According to the Motion Picture Association of America, at the end of 2021 there were 40,000 screens in the United States and more than 176,000 elsewhere around the globe, and 96% of the world’s cinema screens are digitized; the conversion to digital cinema began in 2006.
Projection replacements and upgrades. According to the Motion Picture Association of America, at the end of 2023 there were 39,000 screens in the United States and more than 203,000 elsewhere around the globe, and 96% of the world’s cinema screens are digitized; the conversion to digital cinema began in 2006.
According to the Motion Picture Association of America, international markets continue to be an increasingly important component of the overall box office revenues generated by Hollywood films, accounting for approximately 71% of 2022 total worldwide box office revenues. Introduction of New Platforms and Product Offerings that Enhance the Movie-Going Experience .
Increased Importance and Growth of International Markets . According to the Motion Picture Association of America, international markets continue to be an increasingly important component of the overall box office revenues generated by Hollywood films, accounting for approximately 42% of 2023 total worldwide box office revenues. Introduction of New Platforms and Product Offerings that Enhance the Movie-Going Experience .
Movie-going continues to be one of the most affordable forms of out-of-home entertainment, with an estimated average ticket price in the U.S. of $10.53 in 2022. Movie theaters continue to draw more people than all theme parks and major U.S. sports combined according to the Motion Picture Association of America. Increased Importance and Growth of International Markets .
Convenient and Affordable Form of Out-Of-Home Entertainment . Movie-going continues to be one of the most affordable forms of out-of-home entertainment, with an estimated average ticket price in the U.S. of $10.78 in 2023. Movie theaters continue to draw more people than all theme parks and major U.S. sports combined according to the Motion Picture Association of America.
All open orders at June 30, 2022, except one for approximately $0.2 million due to customer deferral, were fulfilled in year ended June 30, 2023. Sales backlog typically represents the fixed contracted revenue under signed theater system installation or upgrade agreements that we believe will be recognized as revenue upon installation/upgrade and acceptance of the associated theater.
All open orders at June 30, 2023 were fulfilled in the year ended June 30, 2024. Sales backlog typically represents the fixed contracted revenue undersigned theater system installation or upgrade agreements that we believe will be recognized as revenue upon installation/upgrade and acceptance of the associated theater.
We believe our success will not be dependent upon trademark protection, but rather upon our engineering capabilities and research and production techniques. Backlog Our sales backlog at June 30, 2023 was approximately $12.02 million, which represented orders currently planned to be shipped substantially by January 31, 2024. Backlog at June 30, 2022 was $10.03 million.
We believe our success will not be dependent upon trademark protection, but rather upon our engineering capabilities and research and production techniques. Backlog Our sales backlog at June 30, 2024 was approximately $5.93 million, which represents orders currently planned for March 31, 2025 shipment. Backlog at June 30, 2023 was $12.02 million.
New technologies like motion seats, immersive sound and virtual reality are also offered for in-theater enjoyment at some locations. 3 Table of Contents New Theater Construction . According to the National Association of Theatre Owners, the number of U.S. movie screens remained relatively consistent at 40,150 in 2021 and 39,007 in 2022.
New technologies like motion seats, immersive sound and virtual reality are also offered for in-theater enjoyment at some locations. 3 Table of Contents New Theater Construction . According to the National Association of Theatre Owners, the number of U.S. movie screens declined from 39,000 in 2024 from 44,000 in 2023 due the lingering impacts of COVID and the SAG/AFTRA strikes.
The Company includes the website link solely as a textual reference. The information contained on our website is not incorporated by reference into this Report. Copies of these reports are also available, without charge, by contacting Moving iMage Technologies, Inc. located at 17760 Newhope Street, Fountain Valley, CA 92708.
Copies of these reports are also available, without charge, by contacting Moving iMage Technologies, Inc. located at 17760 Newhope Street, Fountain Valley, CA 92708.
Moving iMage Technologies, LLC, commenced operations in September 2003, and its wholly-owned subsidiary, MiT Acquisition Co., LLC, acquired all of the assets of Caddy Products in July 2019.
Moving iMage Technologies, LLC, commenced operations in September 2003, and its wholly owned subsidiary, MiT Acquisition Co., LLC, acquired all of the assets of Caddy Products in July 2019. The Company’s Annual Report on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K, and amendments thereto, are filed electronically with the Securities and Exchange Commission (“SEC”).
The Company’s Annual Report on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K, and amendments thereto, are filed electronically with the Securities and Exchange Commission (“ SEC ”). The SEC maintains an internet site that contains these reports at: www.sec.gov. You can also access these reports through links from our website at: www.movingimagetech.com.
The SEC maintains an internet site that contains these reports at: www.sec.gov. You can also access these reports through links from our website at: www.movingimagetech.com. The Company includes the website link solely as a textual reference. The information contained on our website is not incorporated by reference into this Report.
Removed
Industry and Revenue Drivers Our Industry Trends In 2021, the return to a more normalized theater environment led to a broader and more diverse slate of movie releases compared to prior year’s lower pandemic-related movie releases, more tent poles (blockbusters) from a wider range of distributors, and movie studios cutting back on or abandoning the direct-to-streaming model.
Added
Industry and Revenue Drivers Our Industry Trends In 2023, movie releases increased to $9 billion. up from $7.4 billion in 2022 due to higher post- pandemic movie releases. The SAG/AFTRA strikes began in July 2023 and ended in November 2023. New movie production and related releases did not rebound until the summer of 2024.
Removed
The domestic box office for 2021 finished at $4.5 billion with significant momentum going into 2022. With studios re-focusing on exclusive theatrical releases, 2022 continued to see the domestic box office recover, reporting $7.4 billion in sales. Convenient and Affordable Form of Out-Of-Home Entertainment .
Added
While the strikes ended in November 2023, movie production and related movie releases did not rebound until the summer of 2024. Existing Theaters — Upgrades and Refurbishing . Upgrade and refurbishing opportunities consist of three segments: Seating, equipment and operations upgrades.
Removed
MiT is providing turnkey Furniture, Fixtures and Equipment (“FF&E”) services to under-construction movie theaters in the United States opening 140 such new screens in the United States. Existing Theaters — Upgrades and Refurbishing . Upgrade and refurbishing opportunities consist of three segments: Seating, equipment and operations upgrades.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

40 edited+12 added−1 removed160 unchanged
The number of our business customers has grown significantly, which puts additional pressure on our support organization. If we are unable to provide efficient and effective customer support, our ability to grow our operations may be harmed and we may need to hire additional support personnel, which could harm our margins and results of operations.
The number of our business customers has grown significantly, which puts additional pressure on our support organization. If we are unable to provide efficient and effective customer support, our ability to grow our operations may be harmed and we may need to hire additional support personnel, which could harm our margins and the results of operations.
Specifically, as a result 12 Table of Contents of the effects of the COVID-19 pandemic, a significant number of our customers had temporarily ceased operations and others have cancelled or pushed back the delivery of pending product orders and/or delayed the start of scheduled theater refurbishing and construction projects. We operate in a highly competitive market.
Specifically, as a result of the effects of the COVID-19 pandemic, a significant number of our customers had temporarily ceased operations and others have cancelled or pushed back the delivery of pending product orders and/or delayed the start of scheduled theater refurbishing and construction projects. 12 Table of Contents We operate in a highly competitive market.
Any potential future acquisitions also involve numerous risks, including: ● problems assimilating the purchased operations, technologies or products; ● costs associated with the acquisition; 14 Table of Contents ● adverse effects on existing business relationships with suppliers and customers; ● risks associated with entering markets in which we have no or limited prior experience; ● potential loss of key employees of purchased organizations; and ● potential litigation arising from the acquired company’s operations before the acquisition.
Any potential future acquisitions also involve numerous risks, including: ● problems assimilating the purchased operations, technologies or products; ● costs associated with the acquisition; ● adverse effects on existing business relationships with suppliers and customers; ● risks associated with entering markets in which we have no or limited prior experience; 14 Table of Contents ● potential loss of key employees of purchased organizations; and ● potential litigation arising from the acquired company’s operations before the acquisition.
A significant number of our customers have temporarily ceased operations and others have cancelled or pushed back the delivery of pending product orders and/or delayed the start of scheduled theater refurbishing and construction projects. In addition, we have experienced increased challenges in or cost of acquiring new customers and increased risk in collectability of accounts receivable.
A significant number of our customers have temporarily ceased operations and others have cancelled or pushed back the delivery of pending product orders and/or delayed the start of scheduled theater refurbishing and construction projects. In addition, we have experienced increased challenges in our cost of acquiring new customers and increased risk in collectability of accounts receivable.
In such case, the trading price of our Common Stock could decline and investors in our Common Stock could lose all or part of their investment. Risks Related to Our Business The COVID-19 pandemic and ensuing governmental responses have negatively impacted, and could further materially adversely affect, our business, financial condition, results of operations and cash flows.
In such a case, the trading price of our Common Stock could decline and investors in our Common Stock could lose all or part of their investment. Risks Related to Our Business The COVID-19 pandemic and ensuing governmental responses have negatively impacted, and could further materially adversely affect, our business, financial condition, results of operations and cash flows.
During the course of preparing our consolidated financial statements for the years ended June 30, 2023 and 2022, we determined that we had material weaknesses in our internal control over financial reporting 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.
During the course of preparing our consolidated financial statements for the years ended June 30, 2024 and 2023, we determined that we had material weaknesses in our internal control over financial reporting 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.
As a result of the aforementioned factors, our financial and operating results for the year ended June 30, 2023 have been and our projected financial and operating results for fiscal 2024 will be adversely affected.
As a result of the aforementioned factors, our financial and operating results for the year ended June 30, 2024 have been and our projected financial and operating results for fiscal 2024 will be adversely affected.
If we are unable to generate sufficient cost savings to offset any price reductions, our financial condition, operating results and cash flows may be adversely affected. Our international operations subject us to indirect risks, which could adversely affect our operating results. The Company sells internationally thru existing domestic customers.
If we are unable to generate sufficient cost savings to offset any price reductions, our financial condition, operating results and cash flows may be adversely affected. Our international operations subject us to indirect risks, which could adversely affect our operating results. The Company sells internationally through existing domestic customers.
If our distributors, dealers and resellers are not successful in selling our products, our revenue would decrease. Specifically, the shutdowns of local and state economies as a result of the COVID-19 pandemic have and may continue in the future to adversely affected the operations of our dealers and resellers.
If our distributors, dealers and resellers are not successful in selling our products, our revenue would decrease. Specifically, the shutdowns of local and state economies as a result of the COVID-19 pandemic have and may continue in the future to adversely affect the operations of our dealers and resellers.
A lack of entertainment content at our customer cinema venues results in revenues losses at the cinema and may impact our customer’s ability to continue with existing or new venue upgrades using our products and services.
A lack of entertainment content at our customer cinema venues results in revenues losses at the cinema and may impact our customers’ ability to continue with existing or new venue upgrades using our products and services.
We maintain directors’ and officers’ insurance coverage at a level that we believe is customary for similarly situated companies and adequate to provide us with insurance coverage for foreseeable risks, which will increase our insurance cost.
We maintain directors’ and officers’ insurance coverage at a level that we believe is customary for similarly situated companies and adequate to provide us with insurance coverage for foreseeable risks, which will increase our insurance costs.
If we fail to successfully maintain, promote, and position our brand and protect our reputation or if we incur significant expenses in this effort, our business, financial condition and operating results may be adversely affected. Any failure to offer high-quality customer support may harm our relationships with our customers and our results of operations.
If we fail to successfully maintain, promote, and position our brand and protect our reputation or if we incur significant expenses in this effort, our business, financial condition and operating results may be adversely affected. 11 Table of Contents Any failure to offer high-quality customer support may harm our relationships with our customers and our results of operations.
Based on this assessment, management concluded that our internal controls over financial reporting were not effective as of June 30, 2023 due to the material weaknesses described below.
Based on this assessment, management concluded that our internal controls over financial reporting were not effective as of June 30, 2024 due to the material weaknesses described below.
No customer accounted for more than 10% of the Company’s revenue for the year ended June 30, 2023 or 2022. 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.
No individual customer accounted for more than 10% of the Company’s revenue for the year ended June 30, 2024 or 2023. 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 may not be successfully attract and retaining qualified personnel on a timely basis, on competitive terms or at all. To date we have had to limit the engagement of critical management and other key personnel due in part to limited financial resources.
We may not successfully attract and retain qualified personnel on a timely basis, on competitive terms or at all. To date we have had to limit the engagement of critical management and other key personnel due in part to limited financial resources.
Our brand could be harmed 11 Table of Contents if we fail to achieve these objectives or if our public image or brand were to be tarnished by negative publicity. We also believe that our reputation and brand may be harmed if we fail to maintain a consistently high level of customer service.
Our brand could be harmed if we fail to achieve these objectives or if our public image or brand were to be tarnished by negative publicity. We also believe that our reputation and brand may be harmed if we fail to maintain a consistently high level of customer service.
Confidential intellectual property is increasingly stored or carried on mobile devices, such as laptop computers, which increases the risk of inadvertent disclosure where the mobile devices are lost or stolen and the information has not been adequately 15 Table of Contents safeguarded or encrypted.
Confidential intellectual property is increasingly stored or carried on mobile devices, such as laptop computers, which increases the risk of inadvertent disclosure where the mobile devices are lost or stolen, and the information has not been adequately safeguarded or encrypted.
If we are not successful in attracting and retain these personnel, our business, prospects, financial condition and operating results would be materially adversely affected.
If we are not successful in attracting and retaining these personnel, our business, prospects, financial condition and operating results would be materially adversely affected.
Costs for the raw materials used in the manufacture of our products are affected by, among other things, energy prices, consumer demand, fluctuations in commodity prices 10 Table of Contents and currency, and other factors that are generally unpredictable and beyond our control.
Costs for the raw materials used in the manufacture of our products are affected by, among other things, energy prices, consumer demand, fluctuations in commodity prices and currency, and other factors that are generally unpredictable and beyond our control.
These economic conditions may also impact the financial condition of one or more of our key suppliers, which could affect our ability to secure product to meet our customers’ demand. In addition, a downturn in the cinema market could impact the valuation and collectability of certain receivables held by us.
These economic conditions may also impact the financial condition of one or more of our key suppliers, which could affect our ability to secure products to meet our customers’ demands. In addition, a downturn in the cinema market could impact the valuation and collectability of certain receivables held by us.
We have been and will continue to be required to expand our operational and financial systems significantly and to expand, train and manage our work force to manage the expansion of our operations.
We have been and will continue to be required to expand our operational and financial systems significantly and to expand, train and manage our workforce to manage the expansion of our operations.
Many of our customers are large enterprises, whose purchasing decisions, budget cycles and constraints and evaluation processes are unpredictable and out of our control. Further, the timing of our sales is difficult to predict.
The timing of our sales and related customer contract fulfillment is difficult to predict. Many of our customers are large enterprises, whose purchasing decisions, budget cycles and constraints and evaluation processes are unpredictable and out of our control. Further, the timing of our sales is difficult to predict.
We must continually introduce new products and services, identify future products and product lines that complement existing products and product lines and that respond to our customers’ needs and improve and enhance our existing products and services to maintain or increase our sales.
We must continually introduce new products and services, identify future products and product lines that complement existing products and product lines and that respond to our customers’ needs and improve and enhance our existing 9 Table of Contents products and services to maintain or increase our sales.
If one or more of these analysts cease coverage of our company or fail to publish reports on us regularly, demand for our securities could decrease, which might cause the trading price of our shares of common stock and trading volume to decline. ITEM 1B. UNRESOLVED STAFF COMMENTS None.
If one or more of these analysts cease coverage of our company or fail to publish reports on us regularly, demand for our securities could decrease, which might cause the trading price of our shares of common stock and trading volume to decline.
Our top ten customers accounted for approximately 37% and 48% of net revenues for the years ended June 30, 2023 and 2022, respectively. Trade accounts receivable from these customers represented approximately 19% and 48% of net receivables at June 30, 2023 and 2022, respectively.
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.
Securities litigation against us could result in substantial costs and divert our management’s attention from other business concerns, which could seriously harm our business. Insiders exercise significant control over our company and all corporate matters. Our directors and executive officers beneficially owned, in the aggregate, approximately 31.6% of our outstanding capital stock as of September 22, 2023.
Securities litigation against us could result in substantial costs and divert our management’s attention from other business concerns, which could seriously harm our business. Insiders exercise significant control over our company and all corporate matters. Our directors and executive officers beneficially owned, in the aggregate, approximately 34.9% of our outstanding capital stock as of September 26, 2024.
We are undertaking and may enter into new lines of business and these new business initiatives may not be successful. We have recently undertaken some new lines of business and intend to continue to opportunistically pursue new lines in the future. For example, Caddy’s product line consists of products we had not previously offered to our customer base.
We have recently undertaken some new lines of business and intend to continue to opportunistically pursue new lines in the future. For example, Caddy’s product line consists of products we had not previously offered to our customer base.
Our success depends in part on our ability to anticipate and satisfy consumer preferences in a timely manner. As we operate in a dynamic environment characterized by rapidly changing technologies and industry and legal standards, our products and services are subject to changing consumer preferences that cannot be predicted with certainty.
As we operate in a dynamic environment characterized by rapidly changing technologies and industry and legal standards, our products and services are subject to changing consumer preferences that cannot be predicted with certainty.
Still, our international operations are exposed to the following risks, several of which are out of our control: ● political and economic instability, international terrorism and anti-American sentiment, particularly in emerging markets; ● preference for locally-branded products, and laws and business practices favoring local competition; ● unusual or burdensome foreign laws or regulations, and unexpected changes to those laws or regulations; ● import and export license requirements, tariffs, taxes and other barriers; ● costs of customizing products for foreign countries; ● increased difficulty in managing inventory; ● less effective protection of intellectual property; and ● difficulties and costs of staffing and managing foreign operations. 13 Table of Contents Any or all of these factors could adversely affect our ability to execute any geographic expansion strategies or have a material adverse effect on our business and results of operations.
Still, our international operations are exposed to the following risks, several of which are out of our control: ● political and economic instability, international terrorism and anti-American sentiment, particularly in emerging markets; ● preference for locally branded products, and laws and business practices favoring local competition; ● unusual or burdensome foreign laws or regulations, and unexpected changes to those laws or regulations; ● import and export license requirements, tariffs, taxes and other barriers; ● costs of customizing products for foreign countries; ● increased difficulty in managing inventory; ● less effective protection of intellectual property; and ● difficulties and costs of staffing and managing foreign operations.
The repercussions of the COVID-19 global pandemic resulted in a significant impact to our customers, specifically those in the entertainment and cinema industries. Through 2020 and 2022 the theatres reopened as soon as local restrictions and the status of the COVID-19 pandemic would allow. As of June 30, 2023, a large majority of domestic and international theatres were open.
The repercussions of the COVID-19 global pandemic resulted in a significant impact to our customers, specifically those in the entertainment and cinema industries. Starting in 2020 and going into 2022 the theatres reopened as soon as local restrictions and the status of the COVID-19 pandemic would allow.
Our operating results could be materially harmed if we are unable to accurately forecast consumer demand for our products and services and adequately manage our inventory. To ensure adequate inventory supply, we must forecast inventory needs and expenses and place orders sufficiently in advance with our suppliers and contract manufacturers based on our estimates of future demand for particular products.
To ensure an adequate inventory supply, we must forecast inventory needs and expenses and place orders sufficiently in advance with our suppliers and contract manufacturers based on our estimates of future demand for particular products.
At June 30, 2023, our sales backlog was approximately $12.02 million, which represented orders to be shipped substantially by January 2024. We list signed contracts for theater construction or refurbishing for which revenue has not been recognized as sales backlog prior to the time of revenue recognition.
At June 30, 2024, our sales backlog was approximately $5.93 million, with planned order shipments by March 2025. We list signed contracts for theater construction or refurbishing for which revenue has not been recognized as sales backlog prior to the time of revenue recognition.
Increases in the cost of raw materials used to manufacture our products or in the cost of labor and other costs of doing business in the United States and internationally could have an adverse effect on, among other things, the cost of our products, gross margins, operating results, financial condition, and cash flows.
Increases in the cost of raw materials used to manufacture our products or in the cost of labor and other costs of doing business in the United States and internationally could have an adverse effect on, among other things, the cost of our products, gross margins, operating results, financial condition, and cash flows. 10 Table of Contents Our sales and contract fulfillment cycles can be long, unpredictable and vary seasonally, which can cause significant variation in revenues and profitability in a particular quarter.
Short-term changes in the cost of these materials, some of which are subject to significant fluctuations, are sometimes, but not always passed on to our customers.
Short-term changes in the cost of these materials, some of which are subject to significant fluctuations, are sometimes, but not always passed on to our customers. Our inability to pass on material price increases to our customers could adversely impact our financial condition, operating results and cash flows.
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. 8 Table of Contents On September 7, 2022, Regal Cinema’s (our customer) parent company, Cineworld, filed for bankruptcy protection due to the slow recovery following the effects of COVID on the industry resulting in a canceled order.
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. 8 Table of Contents Based on our current estimates of recovery, we believe we have, and will generate, sufficient cash to sustain operations.
General political, social and economic conditions can adversely affect our business. Demand for our products and services depends to a significant degree on spending in our markets. Commercial movie exhibitors generate revenues from consumer attendance at their theaters, which depends on the willingness of consumers to visit movie theaters and spend discretionary income at movie theaters.
Commercial movie exhibitors generate revenues from consumer attendance at their theaters, which depends on the willingness of consumers to visit movie theaters and spend discretionary income at movie theaters.
This also makes it easier for someone with access to our systems, or someone who gains unauthorized access, to steal information and use it to our disadvantage. Advances in technology, which permit increasingly large amounts of information to be stored on mobile devices or on third-party “cloud” servers, may exacerbate these risks.
This also makes it easier for someone with access to our systems, or someone who gains unauthorized access, to steal information and use it to our disadvantage.
Our inability to pass on material price increases to our customers could adversely impact our financial condition, operating results and cash flows. 9 Table of Contents If we are unable to timely introduce new products and services or enhance existing products and services, our business may be adversely affected. New technological innovations continue to impact our industry.
If we are unable to timely introduce new products and services or enhance existing products and services, our business may be adversely affected. New technological innovations continue to impact our industry. Our success depends in part on our ability to anticipate and satisfy consumer preferences in a timely manner.
On August 1, 2023, Cineworld emerged from bankruptcy. 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.
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. General political, social and economic conditions can adversely affect our business. Demand for our products and services depends to a significant degree on spending in our markets.
Our business could be adversely affected by security breaches through cyber-attacks, cyber intrusions or otherwise.
Advances in technology, which permit increasingly large amounts of information to be stored on mobile devices or on third-party “cloud” servers, may exacerbate these risks. 15 Table of Contents Our business could be adversely affected by security breaches through cyber-attacks, cyber intrusions or otherwise.
Removed
Our sales and contract fulfillment cycles can be long, unpredictable and vary seasonally, which can cause significant variation in revenues and profitability in a particular quarter. The timing of our sales and related customer contract fulfillment is difficult to predict.
Added
As of June 30, 2024, a large majority of domestic and international theatres were open.
Added
Our operating results could be materially harmed if we are unable to accurately forecast consumer demand for our products and services and adequately manage our inventory.
Added
Any or all of these factors could adversely affect our ability to execute any geographic expansion strategies or have a material adverse effect on our business and results of operations. 13 Table of Contents We are undertaking and may enter into new lines of business and these new business initiatives may not be successful.
Added
Our business depends on motion picture production and performance and is subject to intense competition, including increases in alternative film delivery methods or other forms of entertainment .
Added
Our ability to operate successfully depends upon the availability, diversity and appeal of motion pictures, our ability to sell our products to the motion pictures industry and the performance of such motion pictures in our markets. The most attended films are usually released during the summer and the calendar year-end holidays, making our business seasonal.
Added
Poor performance of, or any disruption in the production of these motion pictures (including by reason of a strike or lack of adequate financing), a reduction in, or suspension of, the marketing efforts of the major motion picture studios, the choice by distributors to release fewer feature-length movies theatrically, or the choice to release feature-length movies directly to video streaming or Premium Video on Demand (PVOD) platforms in lieu of a theatrical release, could hurt our business and results of operations.
Added
Conversely, the successful performance of these motion pictures, particularly the sustained success of any one motion picture, or an increase in effective marketing efforts of the major motion picture studios and extension of the exclusive theatrical release windows, may generate positive results for our business and operations in a specific fiscal quarter or year that may not necessarily be indicative of, or comparable to, future results of operations.
Added
Motion picture production is highly dependent on labor that is subject to various collective bargaining agreements.
Added
Stikes by the Writers Guild of America and the Screen Actors Guild-American Federation of Television and Radio Artists during 2023 halted production of motion pictures for several months and are expected to delay or otherwise affect the supply, of certain motion pictures, and thus the demand for our products.
Added
Other film and content delivery methods, including video streaming, network, syndicated cable and satellite television, as well as video-on-demand, pay-per-view services, subscription streaming services, and social media platforms may also affect our business negatively.
Added
We also compete for the public’s leisure time and disposable income with other forms of entertainment, including sporting events, video gaming, social media, amusement parks, live music concerts, live theatre, and restaurants.
Added
An increase in the popularity of these alternative film delivery methods and other forms of entertainment could reduce the demand for our products and materially adversely affect our business and results of operations.] ​ ITEM 1B. UNRESOLVED STAFF COMMENTS None.

Item 2. Properties

Properties — owned and leased real estate

2 edited+0 added−0 removed0 unchanged
ITEM 2. PROPERTIES Our corporate headquarters is located in Fountain Valley, California, and covers 28,000 square feet pursuant to an operating lease that expires in 2024 at a monthly rental of $14,000. We also lease an additional 13,000 square foot warehouse facility in Fountain Valley pursuant to an operating lease that expires in 2024 at a monthly rental of $11,000.
ITEM 2. PROPERTIES Our corporate headquarters is located in Fountain Valley, California, and covers 28,000 square feet pursuant to an operating lease that expires in 2025 at a monthly rental of $14,000. We also lease an additional 13,000 square foot warehouse facility in Fountain Valley pursuant to an operating lease that expires in 2025 at a monthly rental of $11,000.
We lease all of our facilities and do not own any real property. We believe that our facilities are generally suitable to meet our current needs.
We lease all of our facilities and do not own any real property. We believe that our facilities are generally suitable to meet our current needs. 22 Table of Contents

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

6 edited+2 added−1 removed1 unchanged
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Market Information Our Common Stock is listed on the NYSE American under the symbol “MITQ.” Holders As of September 26, 2023, there were 12 holders of record of our Common Stock. Dividends We have never declared or paid cash dividends on our capital stock.
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Market Information Our Common Stock is listed on the NYSE American under the symbol “MITQ.” Holders As of September 26, 2024, there were 11 holders of record of our Common Stock. Dividends We have never declared or paid cash dividends on our capital stock.
We currently intend to retain all of our future earnings, if any, to finance the growth and development of our business. In addition, the terms of any future debt agreements may preclude us from paying dividends.
We currently intend to retain all of our future earnings, if any, to finance the growth and development of our business. In addition, the terms of any future debt agreements may preclude us from paying dividends. As a result, capital appreciation, if any, of our shares of common stock will be your sole source of gain for the foreseeable future.
Under the stock repurchase program, the Company may repurchase up to $1 million of its outstanding Common Stock over the next 12 months. .
Issuer’s Purchases of Equity Securities 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.
For the year ended June 30, 2023, the Company repurchased a combined total of 272,620 share representing 2.55% of the 10,685,778 outstanding shares at the end of June 30, 2023 at an average price of $1.111 per share.
For the years ended June 30, 2023 and June 30, 2024, the Company repurchased a combined total of 1,030,900 shares representing 9.64% of the 9,986,850 outstanding shares at the end of June 30, 2024 at an average price of $0.841 per share.
During three months ended June 30, 2023, the Company repurchased 225,153 shares of the Company’s Common Stock, as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 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 May 1 - June 30, 2023 225,153 ​ $ 1.13 ​ $ 225,153 ​ $ 697,000 Total 225,153 ​ $ 1.13 ​ $ 225,153 ​ $ 697,000 ​ Securities Authorized for Issuance Under Equity Compensation Plans The following table summarizes our equity compensation plan information as of June 30, 2023.
The share repurchase plan ended on June 30, 2024. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 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 Mar 23, 2023 - Mar 31, 2023 47,467 ​ $ 1.04 ​ ​ 47,467 ​ $ 951,000 May 18 - Jun 30, 2023 ​ 225,153 ​ ​ 1.13 ​ ​ 225,153 ​ ​ 696,000 Nov 1, 2023 - Dec 31, 2023 ​ 109,135 ​ ​ 0.93 ​ ​ 109,135 ​ ​ 594,000 Jan 1, 2024 - Mar 31, 2024 ​ 260,024 ​ ​ 0.77 ​ ​ 260,024 ​ ​ 363,000 Apr 1, 2024 - Jun 30, 2024 ​ 389,121 ​ ​ 0.59 ​ ​ 389,121 ​ ​ 133,000 Total 1,030,900 ​ $ 0.81 ​ ​ 1,030,900 ​ $ 133,000 ​ ​ ​ 23 Table of Contents Securities Authorized for Issuance Under Equity Compensation Plans The following table summarizes our equity compensation plan information as of June 30, 2024.
“Executive Compensation - 2019 Omnibus Incentive Stock Plan.” ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (c) ​ ​ ​ ​ ​ ​ Number of ​ ​ ​ ​ ​ ​ securities ​ ​ ​ ​ ​ ​ remaining ​ ​ (a) ​ (b) ​ available ​ ​ Number of ​ Weighted- ​ for future ​ ​ securities ​ average ​ issuance ​ ​ to be issued ​ exercise ​ under equity ​ ​ upon ​ price per ​ compensation ​ ​ exercise of ​ share of ​ plans ​ ​ outstanding ​ outstanding ​ (excluding ​ ​ options, ​ options, ​ securities ​ ​ warrants ​ warrants ​ reflected in Plan Category and rights and rights column (a)) Equity compensation plans approved by stockholders 250,000 1.10 ​ 1,220,000 Equity compensation plans not approved by stockholders — — ​ — Total 250,000 1.10 ​ 1,220,000 ​ ​ ITEM 6.
“Executive Compensation - 2019 Omnibus Incentive Stock Plan.” ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (c) ​ ​ ​ ​ ​ ​ Number of ​ ​ ​ ​ ​ ​ securities ​ ​ ​ ​ ​ ​ remaining ​ ​ (a) ​ (b) ​ available ​ ​ Number of ​ Weighted- ​ for future ​ ​ securities ​ average ​ issuance ​ ​ to be issued ​ exercise ​ under equity ​ ​ upon ​ price per ​ compensation ​ ​ exercise of ​ share of ​ plans ​ ​ outstanding ​ outstanding ​ (excluding ​ ​ options, ​ options, ​ securities ​ ​ warrants ​ warrants ​ reflected in Plan Category and rights and rights column (a)) Equity compensation plans approved by stockholders 250,000 1.10 ​ 1,220,000 Equity compensation plans not approved by stockholders — — ​ — Total 250,000 1.10 ​ 1,220,000 ​ ​ Unregistered Sales of Equity Securities ​ For this fiscal year, except as set forth below, there were no unregistered securities to report which have not been previously included in a Quarterly Report on Form 10-Q, Annual Report on Form 10-K, or a Current Report on Form 8-K. ​ On February 28, 2024, the Company and Jose Delgado, Executive Vice President of Sales agreed to sell 49,586 shares of our common stock at a price of $0.667 per share (based on the closing stock price as of February 27, 2024) for a total of $33,073.35, which amount represents satisfaction of Mr.
Removed
As a result, capital appreciation, if any, of our shares of common stock will be your sole source of gain for the foreseeable future. 22 Table of Contents Issuer’s Purchases of Equity Securities On March 23, 2023, the Board of Directors re-authorized a stock repurchase program.
Added
Delgado’s $25,036.52 outstanding obligation to the Company plus an estimated $8,036.83 in federal and California state income taxes incurred in connection with the sale.
Added
The were cancelled by the Company upon the purchase. ​ Repurchases of Equity Securities Neither we nor any “affiliated purchaser,” as defined in Rule 10b-18(a)(3) of the Exchange Act, purchased any of our equity securities during the period covered by this annual report. ​ ​ ITEM 6. RESERVED

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

42 edited+8 added−22 removed35 unchanged
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.
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.
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 is dependent on a number of factors from our customers that are not in our control.
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.
Actual results and the timing of events may differ materially from those stated in or implied by these forward-looking statements due to a number of factors, including those discussed in the sections entitled “Risk Factors” and “Cautionary Note Regarding Forward-Looking Statements”, and elsewhere in this Report. 23 Table of Contents Overview We are a key 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.
Actual results and the timing of events may differ materially from those stated in or implied by these forward-looking statements due to a number of factors, including those discussed in the sections entitled “Risk Factors” and “Cautionary Note Regarding Forward-Looking Statements”, and elsewhere in this Report. 24 Table of Contents Overview We are a key 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.
The provisions 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.
The provisions for income taxes are based upon income or loss after adjustment for those permanent items that are not considered in the determination of taxable income.
Inflation 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, 2023, inflation increased to levels not seen since the 1980’s.
Inflation 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.
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.
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 25 Table of Contents have been, and will continue to be, an important factor in winning new business.
Deferred income taxes represent the tax effects of difference 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 difference are expected to reverse.
Deferred income taxes represent the tax effects of difference 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 difference is expected to reverse.
The repercussions of the COVID-19 global pandemic resulted in a significant impact to our customers, specifically those in the entertainment and cinema industries.
The repercussions of the COVID-19 global pandemic resulted in a significant impact on our customers, specifically those in the entertainment and cinema industries.
The future estimated payments under these arrangements are summarized below: ​ ​ ​ ​ ​ (in 000’s) ​ ​ Total Operating leases ​ Payments 2024 ​ 302 2025 ​ 154 Total future lease payments ​ $ 456 ​ There were no other material contractual obligations other than inventory, property and production and computer equipment purchases in the ordinary course of business.
The future estimated payments under these arrangements are summarized below: ​ ​ ​ ​ ​ (in 000’s) ​ ​ Total Operating leases ​ Payments 2025 ​ 154 2026 ​ — Total future lease payments ​ $ 154 ​ There were no other material contractual obligations other than inventory, property and production and computer equipment purchases in the ordinary course of business.
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.
We expect this seasonality to continue for the foreseeable future, which may cause fluctuations in our operating results and financial metrics. 30 Table of Contents 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.
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 .
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 . Based on 2024 losses, we will selectively invest in expanding our operations.
Financial Instruments and Credit Risk Concentrations Our top ten customers accounted for approximately 37% and 48% of net revenues for the years ended June 30, 2023 and 2022, respectively. Trade accounts receivable from these customers represented approximately 19% and 48% of net receivables at June 30, 2023 and 2022, respectively.
Financial Instruments and Credit Risk Concentrations 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.
As of June 30, 2023, a large majority of domestic and international theatres were open.
As of June 30, 2024, a large majority of domestic and international theatres were open.
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.
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.
Throughout 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, 2023, a large majority of domestic and international theatres were open.
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.
Accordingly, backlog, the recognition 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 to its ultimate fulfillment. 25 Table of Contents 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.
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, 26 Table of Contents ● 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.
Management believes the following critical accounting policies reflect its more significant estimates and assumptions used in the preparation of the financial statements. 30 Table of Contents Revenue Recognition The Company follows Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 606, Revenue from Contracts with Customers (“ASC 606”).
Our accounting policies are discussed in Note 1 of the financial statements in this Report. Management believes the following critical accounting policies reflect its more significant estimates and assumptions used in the preparation of the financial statements. Revenue Recognition The Company follows Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 606, Revenue from Contracts with Customers (“ASC 606”).
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.
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.
Financial instruments that potentially expose us to a concentration of credit risk principally consist of accounts receivable and notes receivable. We sell products to a large number of customers in many different geographic regions.
Financial instruments that potentially expose us to a concentration of credit risk principally consist of accounts receivable and notes receivable. We sell products to a large number of customers in many different geographic regions. To minimize credit concentration risk, we perform ongoing credit evaluations of our customers’ financial condition or use letters of credit.
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 .
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 .
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. 24 Table of Contents Throughout 2020 and 2021 the theatres reopened as soon as local restrictions and the status of the COVID-19 pandemic would allow.
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.
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 plan to selectively 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.
The Company incurred no impairment costs during the year ended June 30, 2022. ​ Interest and Other Expense/(Income) ​ ​ ​ ​ ​ Year Ended June 30, (in 000’s) 2023 2022 $ (177) ​ $ (417) ​ The Company realized investment income including dividends and interest earned in 2023 compared to investment losses in 2022.
The Company incurred no impairment costs during the year ended June 30, 2024. ​ 28 Table of Contents Interest and Other (Expense)/Income ​ ​ ​ ​ ​ Year Ended June 30, (in 000’s) 2024 2023 $ 185 ​ $ 177 ​ The Company earned interest in 2024 compared to investment and interest income in 2023.
Deferred contract acquisition costs consist of sales commissions paid to the sales force and the related employer payroll taxes, collectively “deferred contract acquisition costs”, are considered incremental and recoverable costs of obtaining a contract with a customer.
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, collectively “deferred contract acquisition costs”, are considered incremental and recoverable costs of obtaining a contract with a customer.
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. 26 Table of Contents 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.
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.
Deferred tax assets are reduced by 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. 31 Table of Contents ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK Not applicable. ITEM 8.
The effects 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 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. ITEM 7A.
Selling, General and Administrative Expense ​ ​ ​ ​ ​ Year Ended June 30, (in 000’s) 2023 2022 $ 6,070 ​ $ 5,985 ​ 27 Table of Contents 2023 Selling, General and Administrative expense increased by a negligible $85,000 or 1% compared to 2022 as the Company controlled its spending in 2023. ​ Impairment of Long Term Assets ​ ​ ​ ​ ​ ​ Year Ended June 30, (in 000’s) 2023 2022 $ 954 ​ $ — ​ During the year ended June 30, 2023 the Company impaired Goodwill, Intangible and Note Receivable assets totaling $0.954 million.
Selling, General and Administrative Expense ​ ​ ​ ​ ​ Year Ended June 30, (in 000’s) 2024 2023 $ 5,963 ​ $ 6,070 ​ 2024 Selling, General and Administrative expense decreased by $107,000 or 1.8% compared to 2023 primarily due to lower legal, SEC edgarizing, D&O insurance and other public company compliance spending in 2024. ​ Impairment of Long Term Assets ​ ​ ​ ​ ​ ​ Year Ended June 30, (in 000’s) 2024 2023 $ — ​ $ 954 ​ During the year ended June 30, 2023 the Company impaired Goodwill, Intangible and Note Receivable assets totaling $0.954 million.
This was comprised primarily of marketable securities investment sales. Net cash used by investing activities was $(4.96) million for the year ended June 30, 2022 was comprised predominately of sales of marketable securities. Cash Flows from Financing Activities Net cash provided by financing activities was ($0.30) million for the year ended June 30, 2023 due the stock buyback program.
Cash Flows from Investing Activities 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.
To reduce volatility in investments and assure stable returns, the Company liquidated its marketable securities portfolio in March 2023 and placed the proceeds into a savings account.
To reduce volatility in investments and assure stable returns, the Company liquidated its marketable securities portfolio in March 2023 and placed the proceeds into a savings account. ​ Net Loss ​ ​ ​ ​ ​ Year Ended June 30, (in 000’s) 2024 2023 $ (1,372) ​ $ (1,798) ​ 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.
Results of Operations Year ended June 30, 2023 compared to year ended June 30, 2022 Net sales ​ ​ ​ ​ ​ Year Ended June 30, (in 000’s) 2023 2022 $ 20,207 ​ $ 18,351 ​ Net revenues increased 10.1% to $20.21 million for the year ended June 30, 2023 from $18.35 million for the prior fiscal year primarily due to the recovery from the impact of COVID-19 on the exhibition industry.
Results of Operations Year ended June 30, 2024 compared to year ended June 30, 2023 Net sales ​ ​ ​ ​ ​ Year Ended June 30, (in 000’s) 2024 2023 $ 20,139 ​ $ 20,207 ​ 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.
We expect research and development expense and headcount 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.
Research and Development ​ ​ ​ ​ ​ Year Ended June 30, (in 000’s) 2024 2023 $ 277 ​ $ 261 ​ The $16,000 increase in research and development expense was in line with the expected research and development expense as we continue to increase product development on our SaaS (software as a service) products, Caddy products, and others as our business expands into new areas.
As a percentage of total revenues, gross margin increased to 26.3% for the year ended June 30, 2023 from 24.3% for the prior 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.
To minimize credit concentration risk, we perform ongoing credit evaluations of our customers’ financial condition or use letters of credit. 29 Table of Contents Off-Balance Sheet Arrangements and Contractual Obligations Our contractual obligations consist principally of leasing equipment and facilities under operating leases.
Off-Balance Sheet Arrangements and Contractual Obligations Our contractual obligations consist principally of leasing equipment and facilities under operating leases.
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.
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, shipping and handling costs, and sales taxes.
Gross Profit ​ ​ ​ ​ ​ Year Ended June 30, (in 000’s), 2023 2022 $ 5,310 ​ $ 4,461 ​ Gross profit increased 19.0% to $5.31 million or by $0.85 million for the year ended June 30, 2023 from $4.46 million for the prior fiscal year.
Backlog at June 30, 2023 was $12.02 million. 27 Table of Contents Gross Profit ​ ​ ​ ​ ​ Year Ended June 30, (in 000’s), 2024 2023 $ 4,683 ​ $ 5,310 ​ 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.
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 meet our projected capital needs for the foreseeable future.
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.
Our short-term investments balance at June 30, 2023 was $0.00 million compared to the $4.36 million short-term investment balance at June 30, 2022 as the Company sold its investments in March 2023. 28 Table of Contents 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.
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.
Cash Flows from Operating Activities Net cash provided by operating activities was $0.27 million for year ended June 30, 2023 including the operating loss of $(1.80) million. Other sources of cash provided included accounts receivable, recovery of bad debts, non-cash impairment and amortization expense, non-cash option expense, and a decline in prepaid expense totaling $2.82 million.
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. 29 Table of Contents Within the $0.67 million working capital increases, cash provided by operations primarily included lower accounts receivable and prepaid expenses and higher accrued expenses.
The net change in working capital was primarily due to a decrease in accounts payable and prepaid and other, offset by a decrease in accounts receivable and an increase in customer deposits. Cash Flows from Investing Activities Net cash provided by investing activities was $(4.31) million for the year ended June 30, 2023.
Cash Flows from Operating Activities 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.
This net loss increase was largely due to the 2023 $(0.95) million Impairment of Long Term Assets, stock option expense of $(0.27) million in 2023 offset by higher gross margin of $0.85 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. 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 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 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. Adding New Customers and Expanding Sales to Our Existing Customer Base .
Net cash provided by financing activities of $9.41 million for the year ended June 30, 2022 was due to proceeds received from the IPO, less payments on notes payable and our line of credit.
Cash Flows from Financing Activities 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.
Removed
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.
Added
Accordingly, backlog, the recognition 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 to its ultimate fulfillment.
Removed
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.
Added
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.
Removed
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”).
Added
Backlog at June 30, 2024 was approximately $5.93 million, which represent orders currently planned for March 31, 2025 shipment.
Removed
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.
Added
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.
Removed
As a result, the historical financial statements of MiT LLC and MiT Inc. for the year ended June 30, 2022 have been retroactively revised to reflect the consolidation of MiT, Inc. and MiT LLC. All inter-company transactions and balances between MiT Inc. and MiT, LLC have been eliminated. Factors affecting our performance Effect of COVID-19 global pandemic .
Added
Critical Accounting Policies and Estimates The preparation of condensed consolidated financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and 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.
Removed
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.
Added
Management has assessed that the adoption of ASU 2016-13 has had no material impact on its June 30, 2024 10-K consolidated financial statements. Due the Management’s continuing ability to obtain 90% of contract value in up-front customer 31 Table of Contents deposits, MIT’s risk is only the remaining 10% of the customer’s contract value.
Removed
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.
Added
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. Contract liabilities consist of refund and warranty liabilities, as well as deposits received in advance on sales to certain customers.
Removed
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 .
Added
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK Not applicable.
Removed
In April 2022, the Company entered into an Asset Purchase Agreement with QSC, LLC to purchase an aggregate of $1.5 million of inventory from QSC, LLC.
Removed
This asset purchase agreement was not within the Company's normal policy of acquiring small amounts of inventory, however management viewed this purchase as a strategic opportunity to improve its gross margins and expand its strategy of enabling under-served communities to enjoy the movie going experience and as such entered into this transaction.
Removed
Backlog at June 30, 2023 was approximately $12.02 million, which represented orders currently planned to be shipped substantially by January 31, 2024. Backlog at June 30, 2022 was $10.03 million. All open orders at June 30, 2022, except one for approximately $0.2 million due to customer deferral, were fulfilled in the fiscal year 2023.
Removed
The increase in gross margin as a percentage of revenues was driven primarily by product mix, as higher margin parts and services revenues such as the QSC LLC purchases made up a larger percentage of total revenues.
Removed
Research and Development ​ ​ ​ ​ ​ Year Ended June 30, (in 000’s) 2023 2022 $ 261 ​ $ 238 ​ The increase in research and development expense was primarily associated with the impact of COVID-19 I in 2022.
Removed
In 2022, the $(0.24) million unrealized loss was offset by $(0.71) million in PPP loan forgiveness for a net $(0.42) million. ​ Net Loss ​ ​ ​ ​ ​ Year Ended June 30, (in 000’s) 2023 2022 $ (1,798) ​ $ (1,345) ​ Net loss of $(1.80) million for the year ended June 30, 2023 compared to a net loss of $(1.35) million for the prior year increased by $(0.45) million.
Removed
On July 7, 2021, the Company completed an initial public offering resulting in net proceeds of approximately $11.24 million. Our cash balance at June 30, 2023 was approximately $6.62 million, as compared to $2.34 million at June 30, 2022.
Removed
Other uses of cash included a realized loss on investments, inventory increases to support the increased sales and related increases in accounts payable and lease liability totaling $(0.75) million.
Removed
Net cash used in operating activities was $3.39 million for the year ended June 30, 2022, due to the operating loss combined with, the non-cash gain on forgiveness of debt and net changes in working capital items of approximately $0.20 million.
Removed
Critical Accounting Policies and Estimates The following accounting policies involve judgments and estimates used in preparation of the financial statements.
Removed
Our accounting policies are discussed in Note 1 to the financial statements in this Report.
Removed
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.
Removed
The effects on deferred tax assets and liabilities of a change in tax rates is recognized in the period that includes the enactment date.
Removed
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA The financial statements required by this item are set forth following Item 16 of this Report and are incorporated herein by reference.

Other MITQ 10-K year-over-year comparisons