SEC Form 10-Q filed by Moving iMage Technologies Inc.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
For the quarterly period ended
or
For the transition period from to
Commission file number:
Moving iMage Technologies, Inc.
(Exact name of Registrant as specified in its charter)
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| (State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
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| (Address of principal executive offices) | (Zip Code) |
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(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
| | | |
Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b‑2 of the Exchange Act.
| Large accelerated filer ☐ | Accelerated filer ☐ |
| | Smaller reporting company |
| Emerging growth company |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b‑2 of the Exchange Act). Yes
As of February 11, 2026, there were
MOVING iMAGE TECHNOLOGIES, INC.
PART I – FINANCIAL INFORMATION
MOVING IMAGE TECHNOLOGIES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands except share and per share amounts)
| December 31, | June 30, | |||||||
| 2025 | 2025 | |||||||
| (unaudited) | ||||||||
| Assets | ||||||||
| Current Assets: | ||||||||
| Cash | $ | $ | ||||||
| Accounts receivable, net | ||||||||
| Inventories, net | ||||||||
| Prepaid expenses and other | ||||||||
| Total Current Assets | ||||||||
| Long-Term Assets: | ||||||||
| Right-of-use asset | ||||||||
| Property and equipment, net | ||||||||
| Intangibles, net | ||||||||
| Other assets | ||||||||
| Total Long-Term Assets | ||||||||
| Total Assets | $ | $ | ||||||
| Liabilities And Stockholders’ Equity | ||||||||
| Current Liabilities: | ||||||||
| Accounts payable | $ | $ | ||||||
| Accrued expenses | ||||||||
| Customer refunds | ||||||||
| Customer deposits | ||||||||
| Lease liability–current | ||||||||
| Unearned warranty revenue | ||||||||
| Total Current Liabilities | ||||||||
| Long-Term Liabilities: | ||||||||
| Lease liability–non-current | ||||||||
| Total Long-Term Liabilities | ||||||||
| Total Liabilities | ||||||||
| Stockholders’ Equity | ||||||||
| Common stock, $ par value, shares authorized, and shares issued and outstanding at December 31, 2025 and June 30, 2025, respectively | ||||||||
| Additional paid-in capital | ||||||||
| Accumulated deficit | ( | ) | ( | ) | ||||
| Total Stockholders’ Equity | ||||||||
| Total Liabilities and Stockholders’ Equity | $ | $ | ||||||
The accompanying notes are an integral part of these condensed consolidated financial statements.
MOVING IMAGE TECHNOLOGIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands except share and per share amounts)
(unaudited)
| Three Months Ended |
Six Months Ended |
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| December 31, |
December 31, |
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| 2025 |
2024 |
2025 |
2024 |
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| Net sales |
$ | $ | $ | $ | ||||||||||||
| Cost of goods sold |
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| Gross profit |
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| Operating expenses: |
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| Research and development |
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| Selling and marketing |
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| General and administrative |
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| Total operating expenses |
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| Operating (loss) |
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) | ( |
) | ( |
) | ( |
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| Other income (expense) |
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| Extinguishment of payables |
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| Interest and other income, net |
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| Total other income |
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| Net income (loss) |
$ | ( |
) | $ | ( |
) | $ | $ | ( |
) | ||||||
| Earnings (loss) per share: |
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| Basic |
$ | ( |
) | $ | ( |
) | ( |
) | ||||||||
| Diluted |
$ | ( |
) | $ | ( |
) | $ | $ | ( |
) | ||||||
| Shares used in computing earnings per share: |
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| Basic |
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| Diluted |
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The accompanying notes are an integral part of these condensed consolidated financial statements.
MOVING IMAGE TECHNOLOGIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY
(in thousands except for share amounts)
(unaudited)
| Additional |
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| Three and Six Months Ended December 31, 2025 |
Common Stock | Paid -In | Accumulated | |||||||||||||||||
| Shares |
Amount |
Capital |
Deficit |
Total |
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| Balance as of June 30, 2025 |
$ | $ | $ | ( |
) | $ | ||||||||||||||
| Issuance of stock to directors |
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| Grant of options to officers |
— | |||||||||||||||||||
| Net income |
— | |||||||||||||||||||
| Balance as of September 30, 2025 |
$ | $ | $ | ( |
) | $ | ||||||||||||||
| Issuance of stock to directors |
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| Grant of options to officers |
— | |||||||||||||||||||
| Net loss |
— | ( |
) | ( |
) | |||||||||||||||
| Balance as of December 31, 2025 |
$ | $ | $ | ( |
) | $ | ||||||||||||||
| Three and Six Months Ended December 31, 2024 |
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| Additional |
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| Common Stock |
Paid -In |
Accumulated |
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| Shares |
Amount |
Capital |
Deficit |
Total |
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| Balance as of June 30, 2024 |
( |
) | ||||||||||||||||||
| Grant of options to officer |
— | |||||||||||||||||||
| Net loss |
— | ( |
) | ( |
) | |||||||||||||||
| Balance as of September 30, 2024 |
$ | $ | $ | ( |
) | $ | ||||||||||||||
| Grant of options to officer |
— | |||||||||||||||||||
| Share buyback and cancellation |
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| Net loss |
— | ( |
) | ( |
) | |||||||||||||||
| Balance as of December 31, 2024 |
$ | $ | $ | ( |
) | $ | ||||||||||||||
The accompanying notes are an integral part of these condensed consolidated financial statements.
MOVING IMAGE TECHNOLOGIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)
| Six Months Ended |
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| December 31, |
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| 2025 |
2024 |
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| Cash flows from operating activities: |
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| Net income (loss) |
$ | $ | ( |
) | ||||
| Adjustments to reconcile net income (loss) to net cash (used in) provided by operating activities: |
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| Provision for credit losses |
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| Inventory reserve |
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| Depreciation expense |
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| Amortization expense |
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| Right-of-use amortization |
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| Stock compensation expense |
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| Changes in operating assets and liabilities |
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| Accounts receivable |
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| Inventories |
( |
) | ||||||
| Prepaid expenses and other |
( |
) | ||||||
| Accounts payable |
( |
) | ( |
) | ||||
| Accrued expenses and customer refunds |
( |
) | ||||||
| Unearned warranty revenue |
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| Customer deposits |
( |
) | ( |
) | ||||
| Lease liabilities |
( |
) | ( |
) | ||||
| Net cash (used in) provided by operating activities |
( |
) | ||||||
| Net decrease in cash |
( |
) | ||||||
| Cash, beginning of the period |
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| Cash, end of the period |
$ | $ | ||||||
| Non-cash investing and financing activities: |
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| Accruals settled by stock issuance |
$ | $ | ||||||
| Right-of-use assets from new lease |
$ | $ | ( |
) | ||||
| Right-of-use assets from lease modification |
$ | $ | ( |
) | ||||
The accompanying notes are an integral part of these condensed consolidated financial statements.
NOTE 1 — BUSINESS ACTIVITY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Organization: Moving iMage Technologies, Inc., a Delaware corporation, together with its wholly owned subsidiaries unless the context indicates otherwise, the (“Company”) was incorporated in June 2020. The Company, through its wholly owned subsidiary, Moving iMage Technologies, LLC (“MiT LLC”) and MiT LLC’s wholly-owned subsidiary, Moving iMage Acquisition Co., (DBA “Caddy Products”), designs, integrates, installs and distributes proprietary and custom designed equipment as well as off the shelf cinema products needed for contemporary cinema requirements. The Company also offers single source solutions for cinema design, procurement, installation and service to the creative and production communities for screening, digital intermediate and other critical viewing rooms. Additionally, the Company offers a wide range of technical, design and consulting services such as custom engineering, systems design, integration and installation, and digital technology, as well as software solutions for operations enhancement and theatre management. The Company also provides turnkey furniture, fixture and equipment services to commercial cinema exhibitors for new construction and remodels including design, consulting, installation and project management as well as procurement of seats, lighting, acoustical treatments, screens, projection and sound.
Moving iMage Acquisition Co. (DBA “Caddy Products”) designs, develops and manufactures innovative products for the entertainment, cinema, grocery, worship, restaurant, sports and restroom industries.
Impact of the COVID-19 Pandemic: The COVID-19 pandemic has had an unprecedented impact on the world and the movie exhibition industry. The social and economic effects have been widespread. At various points during the pandemic, authorities around the world-imposed measures intended to control the spread of COVID-19, including stay-at-home orders and restrictions on large public gatherings, which caused movie theaters in countries around the world to temporarily close. The repercussions of the COVID-19 global pandemic resulted in a significant impact to our customers, specifically those in the entertainment and cinema industries. As a result, the Company implemented various cash preservation strategies, including, 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.
Based on the management’s current estimates, it believes it will generate sufficient cash to sustain operations for a period of 12 months from the issuance of these financial statements.
Unaudited Interim Condensed Consolidated Financial Statements: The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with U.S. GAAP for interim financial information. Accordingly, they do not include all of the information and notes required by U.S. GAAP. However, in the opinion of the management of the Company, all adjustments of a normal recurring nature necessary for a fair presentation of the financial position and operating results have been included in these statements. These condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements included in its Annual Report on Form 10-K for the fiscal year ended June 30, 2025, and with the disclosures and risk factors presented therein. The June 30, 2025 condensed consolidated balance sheet has been derived from the audited consolidated financial statements. Operating results for the three and six months ended December 31, 2025 are not necessarily indicative of the results that may be expected for any subsequent quarters or for the year ending June 30, 2026.
NOTE 1 — BUSINESS ACTIVITY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Revenue Recognition: The Company follows Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 606, Revenue from Contracts with Customers (“ASC 606”).
Revenue is recognized when control of the promised goods is transferred at the point of shipment to a customer, and when performance conditions are satisfied at the customer location, in an amount that reflects the consideration that the Company expects to receive in exchange for those goods as per the agreement with the customer. The Company generates all its revenue from agreements with customers based on equipment shipment dates and when customer location work is completed. In cases of agreements with multiple performance obligations, management identifies each performance obligation and evaluates whether the performance obligations are distinct within the context of the agreement at the agreement’s inception. Performance obligations that are not distinct at agreement inception are combined. Management allocates the transaction price to each distinct performance obligation proportionately based on the estimated standalone selling price for each performance obligation and then evaluates how the services are transferred to the customer to determine the timing of revenue recognition.
The Company considers the U.S. GAAP criteria for determining whether to report revenue gross as a principal versus net as an agent. Factors considered include whether the Company is the primary obligor, has risks and rewards of ownership, and bears the risk that a customer may not pay for the products provided or services performed. If there are circumstances where the above criteria are not met, revenues recognized are presented net of cost of goods sold.
NOTE 1 — BUSINESS ACTIVITY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Contract assets consist of conditional or unconditional rights to consideration. Accounts receivable represent amounts billed to customers where the Company has an enforceable right to payment for performance completed to date (i.e., unconditional rights to consideration). The Company does not have contract assets that represent conditional rights to consideration.
Contract liabilities consist of customer refunds and warranty liabilities, as well as deposits received in advance on sales to certain customers. Such deposits are reflected as customer deposits and recognized in revenue when control of the products is transferred or when performance conditions are satisfied per the agreement.
| Contract Liabilities ($ in Thousands) | December 31, | June 30, | ||||||
| 2025 | 2025 | |||||||
| Customer refunds | $ | $ | ||||||
| Customer deposits | ||||||||
| Unearned warranty revenue | ||||||||
| Total | $ | $ | ||||||
Cost of goods sold includes cost of inventory sold during the period, net of vendor discounts and allowances, and shipping and handling costs, and sales taxes. Taxes collected from customers are included in accounts payable on a net basis (excluded from revenues) until remitted to the government.
Deferred contract acquisition costs consist of sales commissions paid to the sales force, and the related employer payroll taxes, and are considered incremental and recoverable costs of obtaining a contract with a customer. Management has determined that sales commissions paid are an immaterial component of obtaining a customer’s contract and has elected to expense sales commissions when earned.
| Three Months Ended December 31, | Six Months Ended December 31, | |||||||||||||||
| Disaggregation of Revenue ($ in Thousands) | 2025 | 2024 | 2025 | 2024 | ||||||||||||
| Equipment upon delivery (point in time) | $ | $ | $ | $ | ||||||||||||
| Installation (point in time) | ||||||||||||||||
| Software and services (over time) | ||||||||||||||||
| Total revenues | $ | $ | $ | $ | ||||||||||||
Revenue from the sale of equipment is recognized upon shipment of such equipment to customers and when performance conditions are satisfied at the custom location.
Revenue from installation labor is recognized upon completion of the installation project and when the performance obligation is complete.
Software subscription revenue for remote monitoring services is recognized on a straight-line basis over the term of the contract, usually one year. Services revenues are generally recognized over time as the contracts are performed.
NOTE 1 — BUSINESS ACTIVITY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Intangible assets: Intangible assets arising from business combinations, such as customer relationships, trade names, and/or intellectual property, are initially recorded at fair value. The Company amortizes these intangible assets over the determined useful life which generally ranges from
Income Taxes: The Company utilizes an asset and liability approach for financial accounting and reporting for income taxes. The provision for income taxes is based upon income or loss after adjustment for those permanent items that are not considered in the determination of taxable income. Deferred income taxes represent the tax effects of differences between the financial reporting and tax basis of the Company’s assets and liabilities at the enacted tax rates in effect for the years in which the differences are expected to reverse. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the period that includes the enactment date. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized.
The following table summarizes the components of deferred tax assets and deferred tax liabilities at December 31, 2025 and June 30, 2025 (in thousands):
| $ in Thousands | Deferred Tax Assets (Liabilities) | |||||||
| December 31, 2025 | June 30, 2025 | |||||||
| Inventory reserve | $ | |||||||
| Accumulated depreciation | ( | ) | ( | ) | ||||
| Accumulated goodwill amortization | ||||||||
| Accumulated intangible amortization | ||||||||
| ROU Asset | ( | ) | ( | ) | ||||
| ROU Liability | ||||||||
| Warranty reserve | ||||||||
| Stock compensation | ||||||||
| Net operating loss carryforward | ||||||||
| Tax credits | ||||||||
| Allowance for doubtful accounts | ||||||||
| Net | ||||||||
| Valuation allowance | ( | ) | ( | ) | ||||
| Total | $ | $ | ||||||
Product Warranty: The Company’s digital equipment products are sold under various limited warranty arrangements ranging from year to years. Company policy is to establish reserves for estimated product warranty costs in the period when the related revenue is recognized. The Company has the right to return defective products for up to three years, depending on the manufacturers’ individual policies. As of December 31, 2025 and June 30, 2025, the Company has established a warranty reserve of $
NOTE 1 — BUSINESS ACTIVITY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
The changes in the Company’s aggregate warranty liabilities were as follows for the six months ended December 31, 2025 and the year ended June 30, 2025 (in thousands):
| Warranty Liabilities | December 31, | June 30, | ||||||
| ($ in Thousands) | 2025 | 2025 | ||||||
| Product warranty liability beginning of period | $ | $ | ||||||
| Accruals for warranties issued | ||||||||
| Settlements made | ( | ) | ( | ) | ||||
| Product warranty liability end of the period | $ | $ | ||||||
Recently Issued Accounting Pronouncements:
In November 2024, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) No. 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses (“ASU 2024-03”) and in January 2025, the FASB issued ASU No. 2025-01, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Clarifying the Effective Date, which clarified the effective date of ASU 2024-03. ASU 2024-03 will require the Company to disclose the amounts of purchases of inventory, employee compensation, depreciation and intangible asset amortization, as applicable, included in certain expense captions in the Consolidated Statements of Operations, as well as qualitatively describe remaining amounts included in those captions. ASU 2024-03 will also require the Company to disclose both the amount and the Company’s definition of selling expenses. The Company will adopt ASU 2024-03 in its fourth quarter of 2028 using a prospective transition method.
In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures (“ASU 2023-09”), which will require the Company to disclose specified additional information in its income tax rate reconciliation and provide additional information for reconciling items that meet a quantitative threshold. ASU 2023-09 will also require the Company to disaggregate its income taxes paid disclosure by federal, state and foreign taxes, with further disaggregation required for significant individual jurisdictions. The Company will adopt ASU 2023-09 in its fourth quarter of 2026 using a prospective transition method for its 2026 fiscal year along with ASU 2025-05.
.
In July 2025, the FASB issued ASU 2025 No. 2025-05, Financial Instruments-Credit Losses (Topic 326), which provides for a practical expedient for the evaluation of expected credit losses that assumes that current conditions as of the balance sheet do not change for the remaining life of the asset. The provisions of this pronouncement are effective for annual periods beginning after December 15, 2025, and annual periods within those periods. The Company will first adopt this standard in the first quarter of its fiscal year ending June 30, 2027.
NOTE 2 — INCOME (LOSS) PER SHARE
Basic income (loss) per share data for each period presented is computed using the weighted average number of shares of common stock outstanding during each such period. Diluted income (loss) per share data is computed using the weighted average number of common and potentially dilutive securities outstanding during each period. Potentially dilutive securities consist of shares that would be issued upon the exercise of stock options and warrants, computed using the treasury stock method. A reconciliation of basic and diluted loss per share is as follows:
| Income (Loss) per Share | For the Three Months | For the Six Months | ||||||||||||||
| (In Thousands except for share | Ended December 31 | Ended December 31 | ||||||||||||||
| and per share price) | 2025 | 2024 | 2025 | 2024 | ||||||||||||
| Numerator: | ||||||||||||||||
| Net income (loss) | $ | ( | ) | $ | ( | ) | $ | $ | ( | ) | ||||||
| Denominator: | ||||||||||||||||
| Basic Weighted average basic shares outstanding | ||||||||||||||||
| Effect of dilutive share-based awards | ||||||||||||||||
| Weighted-average dilutive shares | ||||||||||||||||
| Net income (loss) per share | ||||||||||||||||
| Basic earnings per share | $ | ( | ) | $ | ( | ) | $ | $ | ( | ) | ||||||
| Diluted earnings per share | $ | ( | ) | $ | ( | ) | $ | $ | ( | ) | ||||||
For the quarter ended September 30, 2024, the following securities were excluded from the calculation of diluted loss per share in each period because their inclusion would have been anti-dilutive:
| For the Six Months Ended | ||||||||
| December 31, | December 31, | |||||||
| 2025 | 2024 | |||||||
| Options | ||||||||
| Total potentially dilutive shares | ||||||||
For the three months ended December 31, 2025 the Company had a net loss, while for the six months ended December 31, 2025 the Company had net income. However, all potentially dilutive securities were also deemed to be anti-dilutive because their exercise price exceeded the weighted average trading price of the Company’s stock for the period.
NOTE 3 — INTANGIBLE ASSETS
The following table summarizes the Company’s intangible assets as of December 31, 2025 (in thousands):
| Amortization | ||||||||||||||||
| Period (in | Gross Asset | Accumulated | Net Book | |||||||||||||
| years) | Cost | Amortization | Value | |||||||||||||
| Customer relations | $ | $ | $ | |||||||||||||
| Patents | ||||||||||||||||
| Trademark | ||||||||||||||||
| $ | $ | $ | ||||||||||||||
NOTE 3 — INTANGIBLE ASSETS (continued)
The following table summarizes the Company’s intangible assets as of June 30, 2025 (in thousands):
| Amortization | ||||||||||||||||
| Period (in | Gross Asset | Accumulated | Net Book | |||||||||||||
| years) | Cost | Amortization | Value | |||||||||||||
| Customer relations | $ | $ | $ | |||||||||||||
| Patents | ||||||||||||||||
| Trademark | ||||||||||||||||
| $ | $ | $ | ||||||||||||||
Amortization expense was $
and is included in general and administrative expense.
Estimated amortization expense related to intangible assets subject to amortization at December 31, 2025 in each of the years subsequent to December 31, 2025, and thereafter is as follows (amounts in thousands);
| 2026 | $ | |||
| 2027 | ||||
| 2028 | ||||
| 2029 | ||||
| 2030 | ||||
| Thereafter | ||||
| Total | $ |
NOTE 4 — ACCRUED EXPENSES
Accrued expenses consist of the following (in thousands):
| Accrued Expenses | December 31, | June 30, | ||||||
| ($ in Thousands) | 2025 | 2025 | ||||||
| Employee compensation | $ | $ | ||||||
| Accrued warranty | ||||||||
| Freight | ||||||||
| Sales tax | ||||||||
| Other | ||||||||
| Total | $ | $ | ||||||
NOTE 5 — STOCKHOLDERS’ EQUITY
In 2019, the Company adopted the 2019 Omnibus Incentive Plan (the “Plan”). The Plan, as amended, provides for the issuance of stock-based awards to employees. As of December 31, 2025, the Plan provides for the issuance of up to
On October 30, 2024, and as part of Francis Godfrey’s appointment as the Company’s President and Chief Operating Officer, the Board granted Francis Godfrey
NOTE 5 — STOCKHOLDERS’ EQUITY (continued)
The Company recognized compensation expense of approximately $
The estimated fair value of each option award granted was determined on the date of grant using the Black-Scholes option valuation model during the three and six months ended December 31, 2024. There were no option grants during the three and six months ended December 31, 2025:
| Three and Six | ||||
| Months Ended | ||||
| December 31, 2024 | ||||
| Options | ||||
| Risk-free interest rate | 4.22 | % | ||
| Expected volatility | 83.50 | % | ||
| Dividend yield | — | % | ||
| Expected option term in years | 5.5 | |||
NOTE 5 — STOCKHOLDERS’ EQUITY (continued)
A summary of the status of the Company’s stock options as of December 31, 2025 and changes during the six months ended December 31, 2025 are presented below.
| Wtd. Avg. | ||||||||
| Exercise | ||||||||
| Options | Price | |||||||
| Balance, July 1, 2025 | $ | |||||||
| Granted during the period | ||||||||
| Exercised during the period | ||||||||
| Cancelled during the period | ||||||||
| Balance, December 31, 2025 | $ | |||||||
A summary of the status of the Company’s stock options as of December 31, 2024 and changes during the six months ended December 31, 2024 are presented below.
| Wtd. Avg. | ||||||||
| Exercise | ||||||||
| Options | Price | |||||||
| Balance, July 1, 2024 | $ | |||||||
| Granted during the period | ||||||||
| Exercised during the period | ||||||||
| Canceled during the period | ||||||||
| Balance, December 31, 2024 | $ | |||||||
The following table summarizes information about outstanding and exercisable stock options at December 31, 2025:
| Range of | Number | Number | Wtd. Avg, Life | Wtd. Avg. | ||||||||||||||
| Exercise Price | Outstanding | Exercisable | (in years) | Exercise Price | ||||||||||||||
| $ | $ | |||||||||||||||||
As authorized by the Board on May 26, 2023, directors may receive their board fees as cash or in shares of the Company’s stock. The Company records director fee expense at the end of each board meeting. During the three months ended December 31, 2025, the Company issued
NOTE 6 — CUSTOMER AND VENDOR CONCENTRATIONS
Customers: One customer accounted for
At December 31, 2025, the amount of outstanding receivables related to the
For the three months ended December 31, 2024,
At December 31, 2025, the amount of outstanding receivables related to the customers was approximately $
Vendors: For the three months ended December 31, 2025 vendor accounted for
NOTE 7 — LEASE COMMITMENTS AND CONTINGENCIES
Operating Leases:
The Company occupies an executive office and warehouse space in Fountain Valley and Whittier, CA, pursuant to separate lease agreements. Under ASC 842, at contract inception the Company determined whether the contract is or contains a lease and whether the lease should be classified as an operating or a financing lease. Operating leases are included in ROU (right-of-use) assets and operating lease liabilities in our consolidated balance sheet.
The Company’s executive office and warehouse lease agreements are classified as operating leases. The office lease agreement, as amended, expires on January 31, 2030, and does not include any renewal options. The Whittier, CA warehouse lease agreement commenced on February 1, 2025 expires on January 31, 2028, and does not include any renewal options. The agreements provide for initial monthly base amounts plus annual escalations through the term of the leases. The monthly rent payable for the first year of the extended term will be $
In addition to the monthly base amounts in the lease agreements, the Company is required to pay a portion of real estate taxes and common operating expenses during the lease terms.
NOTE 7 — LEASE COMMITMENTS AND CONTINGENCIES (continued)
The Company’s operating lease expense was $
Future minimum lease payments at December 31, 2025 under these arrangements are as follows:
| Operating leases | Total | |||
| ($ in Thousands) | Payments | |||
| 2026, balance of the fiscal year | $ | |||
| 2027 | ||||
| 2028 | ||||
| 2029 | ||||
| 2030 | ||||
| Total future minimum lease payments | ||||
| Less imputed interest (at %) | ( | ) | ||
| Present value of operating lease payments | $ | |||
The following table sets forth the ROU assets and operating lease liabilities as of December 31, 2025:
| Assets | (in thousands) | |||
| ROU assets-net | $ | |||
| Liabilities | ||||
| Current operating lease liabilities | $ | |||
| Long-term operating lease liabilities | ||||
| Total ROU liabilities | $ | |||
The Company’s weighted average remaining lease term for its operating leases is
Legal Matters: From time to time, the Company is involved in routine litigation that arises in the ordinary course of business. There are no significant legal proceedings pending to which the Company is a party for which management believes the ultimate outcome would have a material adverse effect on the Company’s financial position.
NOTE 8—SEGMENT INFORMATION
Operating segments are defined as components of an enterprise about which separate discrete information is available or evaluation by the chief operating decision maker ("CODM"), in deciding how to allocate resources and in assessing performance. The Company and the Company's chief operating decision maker view the Company's operations and manage its business in operating segment, which is the business of identifying, developing and manufacturing products to meet the needs of the cinema market. The CODM, who is the President, manages and allocates resources to the operations of the Company on a consolidated basis. The Company's measure of segment profit or loss is currently a net loss. Managing and allocating resources on a consolidated basis enables the President to assess the overall level of resources available and how to best deploy those resources across functions that are in line with the Company's long-term company-wide strategic goals. Consistent with this decision-making process, the President uses consolidated financial information for purposes of evaluating performance, forecasting future period financial results, allocating resources and setting incentive targets. Operating expenses are used to monitor budget versus actual results. The CODM does not review assets in evaluating the results of the Company, and therefore, such information is not presented. In addition, substantially all of the Company's revenue was generated in the United States and substantially all of the Company's long-lived assets reside in the United States.
| ($ in Thousands) | Three Months Ended | |||||||
| December 31, | ||||||||
| 2025 | 2024 | |||||||
| Revenue | $ | $ | ||||||
| Cost of Sales | ||||||||
| Gross Margin | ||||||||
| Segment operating expenses: | ||||||||
| Payroll and related | ||||||||
| Marketing | ||||||||
| G&A | ||||||||
| Compliance | ||||||||
| Occupancy | ||||||||
| Overhead | ( | ) | ( | ) | ||||
| Total segment operating expenses | ||||||||
| Interest and other income | ||||||||
| Net income (loss) | $ | ( | ) | $ | ( | ) | ||
| ($ in Thousands) | Six Months Ended | |||||||
| December 31, | ||||||||
| 2025 | 2024 | |||||||
| Revenue | $ | $ | ||||||
| Cost of Sales | ||||||||
| Gross Margin | ||||||||
| Segment operating expenses: | ||||||||
| Payroll and related | ||||||||
| Marketing | ||||||||
| G&A | ||||||||
| Compliance | ||||||||
| Occupancy | ||||||||
| Overhead | ( | ) | ( | ) | ||||
| Total segment operating expenses | ||||||||
| Interest and other Income | ||||||||
| Net income (loss) | $ | $ | ( | ) | ||||
NOTE 9 — SUBSEQUENT EVENTS
Management has evaluated events from December 31, 2025 through February 12, 2025, the date these financial statements were available to be issued and determined that there have been no other events that occurred that would require adjustment to our disclosures in the condensed consolidated financial statements.
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Forward-Looking Statements
Certain matters in this Quarterly Report on Form 10-Q (this “Report”), including (without limitation) statements under “Management’s Discussion and Analysis of Financial Condition and Results of Operations”, contain forward-looking statements. Although we believe that, in making any such statements, our expectations are based on reasonable assumptions, any such statement may be influenced by factors that could cause actual outcomes and results to be materially different from those projected.
Forward-looking statements include information concerning our possible or assumed future results of operations and expenses, business strategies and plans, competitive position, business environment, and potential growth opportunities. Forward-looking statements include all statements that are not historical facts. In some cases, forward-looking statements can be identified by terms such as “anticipates,” “believes,” “could,” “estimates,” “expects,” “intends,” “may,” “plans,” “potential,” “predicts,” “projects,” “seeks,” “should,” “will,” “would,” or similar expressions and the negatives of those terms.
Forward-looking statements involve known and unknown risks, uncertainties, and other factors that may cause our actual results, performance, or achievements to be materially different from any future results, performance, or achievements expressed or implied by the forward-looking statements. Although we believe that the expectations reflected in these forward-looking statements are reasonable, these expectations may not prove to be correct, or we may not achieve the financial results, savings or other benefits anticipated in the forward-looking statements. These forward-looking statements are necessarily estimates reflecting the best judgment of our senior management and involve a number of risks and uncertainties, some of which may be beyond our control. These risks and uncertainties, including those disclosed under “Risk Factors” in Part I, Item 1A of our Annual Report on Form 10-K for the fiscal year ended June 30, 2025, filed with the Securities and Exchange Commission (the “SEC”) on September 27, 2024, and in our other filings with the SEC, could cause actual results to differ materially from those suggested by the forward-looking statements and include, without limitation:
| ● |
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, 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, |
| ● |
A lack of entertainment content caused by entertainment content provider labor disputes, strikes and work shutdowns, |
Any other disruptions, such as labor shortages, unplanned maintenance or other manufacturing problems.
Given these uncertainties, you should not place undue reliance on any forward-looking statements in this Report. Also, forward-looking statements represent our beliefs and assumptions only as of the date of this Report. You should read this Report and the documents that we have filed as exhibits, completely and with the understanding that our actual future results may be materially different from what we expect.
Any forward-looking statement made by us in this Report speaks only as of the date on which it is made. Except as required by law, we disclaim any obligation to update these forward-looking statements publicly, or to update the reasons actual results could differ materially from those anticipated in these forward- looking statements, even if new information becomes available in the future. All forward-looking statements are expressly qualified in their entirety by the foregoing cautionary statements.
The following discussion and analysis should be read in conjunction with the accompanying condensed consolidated financial statements and related notes included elsewhere in this Report.
Overview
We are a leading 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. These services include overall project management, which can encompass a wide range of design, integration, installation, and procurement services for new auditorium builds, refurbishments, or upgrades to existing facilities. |
| 2) |
We design and manufacture a set of proprietary products that are sold either as part of our project management services or a la carte. Examples of these products include our ADA-compliant accessibility products and our Caddy brand, a leading provider of proprietary cup holders, trays, and other products sold into our strategic markets of motion picture exhibition, entertainment, and sports venues as well as other non-strategic markets. We also resell third-party technologies, including but not limited to items such as screens, projectors, and servers. |
| 3) |
We resell third-party products as part of our project management services or a la carte. These include technology products such as screens, projectors, servers, and FF&E (furniture, fixtures, and equipment). |
| 4) |
Finally, we have a set of recently introduced products that we believe have the potential to be disruptive to the movie theater, entertainment and sports venue industries. 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. We have also developed a translator product and service that will enable moviegoers to watch a movie in any language that the film is available in, all in the same auditorium through a set of augmented reality glasses. Another example is a proprietary mobile cart we’ve developed to enable eSports and gaming in movie-theater auditoriums. |
Factors affecting our performance
After overcoming the prior year Covid-19 impacts, based on our current estimates of recovery, we believe we have, and will generate, sufficient cash to sustain operations.
Investment in growth. Based on FY2025 losses, we continue to selectively evaluate opportunities to expand our operations. We expect continued decreases to our total operating expenses 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. We intend to target new customers by selectively investing in our field sales force. We also intend to continue to target large customers’ organizations who have yet to use our products and services. A typical initial order involves educating prospective customers about the technical merits and capabilities and potential cost savings of our products and services as compared to our competitors’ products. We believe that customer references have been, and will continue to be, an important factor in winning new business. We expect that a substantial portion of our future sales will be sales to existing customers, including expansion of their product and service offerings, as we offer new products and services through the existing sales channel. Our business and results of operations will depend on our ability to continue to add new customers and sell additional products and services to our growing base of customers.
Promoting Our Brand and Offering Additional Products. Our future performance will depend on our continued ability to achieve brand recognition for our proprietary line of products. 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 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. Our gross margins have been and are expected to continue to be affected by a variety of factors, including competition, the timing of changes in pricing, shipment volumes, new product introductions, changes in product mixes, changes in our purchase price of components and assembly and test service costs and inventory write downs, if any. Our goal is to strive to maintain gross profits for products that may have a declining average selling price by continuing to focus on increased sales volume and looking to reduce operating costs. Decreases in average selling prices are primarily driven by competition and by reduced demand for products that face potential or actual technological obsolescence. We also focus on managing our inventory to reduce our overall exposure to price erosion. In addition, we seek to introduce new products and services with higher gross margins to offset the potential effect of price erosion on other lines of products. For example, we have recently productized and began marketing a new system which combines full compliance with the Americans with Disabilities Act with a multi-language capability we expect this system will have higher margins than a substantial number of existing products we offer. In addition, we expect our offerings of Direct View LED screens to also carry significantly higher margins.
Trade disputes could have a material adverse impact on our business, financial condition, liquidity and results of operations. Trade disputes can lead to the implementing of tariffs on products or on commodities that we use in our operations which could cause significant fluctuations in prices and have a material adverse effect on our operations and financial results. In early 2025, the Trump administration announced additional tariffs on various imports from China, Mexico, and Canada, and signaled a willingness to renegotiate or withdraw from existing trade agreements. A series of executive orders issued in March and April of 2025 proposed significant changes to U.S. trade policy, including a baseline 10% tariff on a broad range of imported goods, unless replaced by higher country-specific rates. These actions have prompted actual or threatened retaliatory measures against U.S. exports. However, there is currently significant uncertainty about potential trade actions or how they may affect our business. We cannot predict the impact that future trade policy or the terms of any negotiated trade agreements may have on our business or on our industry.
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. Accordingly, backlog, the conversion 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 and its ultimate fulfillment.
Cost of goods sold
Cost of goods sold includes the cost of products or components that we purchase from third party manufacturers plus assembly and packaging labor costs for these third parties or in-house designed products. Cost of goods sold is also affected by inventory obsolescence if our inventory management is not effective or efficient. We mitigate the risk of inventory obsolescence by stocking relatively small amounts of inventory at any given time, except for periodic strategic purchases, and rely instead on a strategy of manufacturing or acquiring products based on orders placed by our customers.
General and administrative expenses
General and administrative expenses relate primarily to compensation and associated expenses for personnel in general management, information technology, human resources, procurement, planning and finance, as well as outside legal, investor relations, accounting, consulting and other operating expenses.
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.
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. We do not engage in any long-term research and development contracts, and all research and development costs are expensed as incurred.
Results of Operations
Three months ended December 31, 2025 compared to the three months ended December 31, 2024
Sales
| Three Months Ended December 31, |
||||||
| (in 000’s) |
||||||
| 2025 |
2024 |
|||||
| $ | 3,793 | $ | 3,441 | |||
Net sales increased by 10.2% to $3.793 million for the three months ended December 31, 2025 from $3.441 million for the three months ended December 31, 2024 due to higher one-time sales. Estimated quarterly recurring sales revenues are 2 million.
Gross Profit
| Three Months Ended December 31, |
||||||
| (in 000’s) |
||||||
| 2025 |
2024 |
|||||
| $ | 1,165 | $ | 936 | |||
Gross profit dollars increased by $0.229 million or 24.5% to $1.165 million for the three months ended December 31, 2025 from $0.936 million for the three months ended December 31, 2024. As a percentage of total revenues, gross profit percentage increased to 30.7% from 27.2% due to higher margin product revenues.
Research and Development
| Three Months Ended December 31, |
||||||
| (in 000’s) |
||||||
| 2025 |
2024 |
|||||
| $ | 47 | $ | 47 | |||
Research and development expenses remained the same for both the three months ended December 31, 2025 and the three months ended December 31, 2024.
Selling, General and Administrative Expense
| Three Months Ended December 31, |
||||||
| (in 000’s) |
||||||
| 2025 |
2024 |
|||||
| $ | 1,526 | $ | 1,450 | |||
The increase in selling, general and administrative expense of $0.076 million or 5.2% was due to higher legal expense related the October 2025 DCS inventory purchase in the three months ended December 31, 2025 compared to the three months ended December 31, 2024.
Other Income
| Three Months Ended December 31, |
||||||
| (in 000’s) |
||||||
| 2025 |
2024 |
|||||
| $ | 20 | $ | 34 | |||
Other Income was $0.020 million for the three months ended December 31, 2025 compared to Other Income of $0.034 million for the three months ended December 31, 2024 or an increase of $0.014 million. The decrease was due to lower interest income on cash savings accounts in the three months ended December 31, 2025 compared to the three months ended December 31, 2024.
Net Income (Loss)
| Three Months Ended December 31, |
||||||
| (in 000’s) |
||||||
| 2025 |
2024 |
|||||
| $ | (388 | ) | $ | (527 | ) | |
Net loss was $(0.388) million for the three months ended December 31, 2025 compared to a net loss of $(0.527) million for the three months ended December 31, 2024 or an improvement in loss reduction of $0.139 million. The improvement was due to a combination of higher gross margin of $0.229 million offset by higher selling, general and administrative expenses of $0.076 million and lower other income of $0.014 million.
Six months ended December 31, 2025 compared to the six months ended December 31, 2024
Sales
| Six Months Ended December 31, |
||||||
| (in 000’s) |
||||||
| 2025 |
2024 |
|||||
| $ | 9,375 | $ | 8,693 | |||
Net sales increased 7.8% to $9.375 million for the six months ended December 31, 2025 from $8.693 million for the six months ended December 31, 2024 due to higher one-time sales.
Gross Profit
| Six Months Ended December 31, |
||||||
| (in 000’s), |
||||||
| 2025 |
2024 |
|||||
| $ | 2,839 | $ | 2,307 | |||
Gross profit dollars increased by $0.532 million or 23.1% to $2.839 million for the six months ended December 31, 2025 from $2.307 million for the six months ended December 31, 2024. As a percentage of total revenues, gross profit percentage increased to 30.3% from 26.5% due to higher margin product revenues.
Research and Development
| Six Months Ended December 31, |
||||||
| (in 000’s) |
||||||
| 2025 |
2024 |
|||||
| $ | 95 | $ | 109 | |||
Research and development expenses decreased by $(0.014) million or 12.8% for the six months ended December 31, 2025 compared to the six months ended December 31, 2024 due to headcount reduction.
Selling, General and Administrative Expense
| Six Months Ended December 31, |
||||||
| (in 000’s) |
||||||
| 2025 |
2024 |
|||||
| $ | 2,801 | $ | 2,827 | |||
In the six months ended December 31, 2025, selling, general and administrative expense decreased by $(0.026) million or 0.9% due largely to cost reductions enacted in August 2024 compared to the six months ended December 31, 2024.
Other Income
| Six Months Ended December 31, |
||||||
| (in 000’s) |
||||||
| 2025 |
2024 |
|||||
| $ | 51 | $ | 77 | |||
Other Income was $0.051 million for the six months ended December 31, 2025 compared to Other Income of $0.077 million for the six months ended December 31, 2024 or a decrease of $0.026 million. The decrease was due to lower interest income on cash savings accounts in the six months ended December 31, 2025 compared to the six months ended December 31, 2024.
Net Income (Loss)
| Six Months Ended December 31, |
||||||
| (in 000’s) |
||||||
| 2025 |
2024 |
|||||
| $ | 122 | $ | (552 | ) | ||
Net income was $0.122 million for the six months ended December 31, 2025 compared to a net loss of $(0.552) million for the six months ended December 31, 2024 or an improvement in loss reduction of $0.674 million. The improvement was due to a combination of higher gross margin of $0.532 million, and lower operating expenses of $0.040 million and lower other income of $0.026 million.
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 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. The cash balance at December 31, 2025 was approximately $3.913 million, as compared to $5.715 million at June 30, 2025. The $1.802 million decrease was largely due to the DCS inventory purchase of $1.5 million in October 2025. On October 31, 2025, the Company entered into an Asset Purchase Agreement (the “APA”) with QSC, LLC (“QSC”) pursuant to which the Company purchased certain assets comprising QSC’s Digital Cinema Speaker Series (“DCS”) loudspeaker product line including, the DCS loudspeaker product line, including the SC, SR, SB, and RSM product families; intellectual property, including trademarks, designs, and trade secrets; inventory and raw materials; OEM supplier agreements; product technical documentation; and rights to service and support existing DCS customers, for a purchase price of $1.5 million.
Cash Flows from Operating Activities
Compared to December 31, 2024, net cash used in operating activities decreased by $1.845 million in December 31, 2025 due largely to the DCS inventory purchase of $1.500 million in October 2025. Net cash used in operating activities was $(1.802) million for the six months ended December 31, 2025, primarily due to $(2.687) million in working capital decreases which were offset by $0.122 million in net income and $0.324 million in other non-cash expenses. Within the working capital change, cash used in operating activities included $(2.687) million in inventory, accounts payable, customer deposits, lease liabilities and accrued expenses and offset by $0.434 million in accounts receivable and unearned warranty revenue.
For the six months ended December 31, 2024, net cash provided by operating activities was $0.038 million for the six months ended December 31, 2024, primarily due to 0.202 million in working capital increases along with $(0.552) million in net losses and 0.388 million in other non-cash expenses. Within the working capital change, net cash provided included $1.518M in accounts receivable, inventory, prepaids, accrued expense, unearned warranty revenue offset by $(1.316) million in payables, customer deposit declines and lease liabilities.
Cash Flows from Investing Activities
Net cash from investing activities was zero for the six months ended December 31, 2025 and 2024.
Cash Flows from Financing Activities
Net cash from financing activities was zero for the six months ended December 31, 2025 and 2024.
Critical Accounting Policies and Estimates
For a discussion of the critical accounting policies and estimates, refer to the “Critical Accounting Policies and Estimates” section in Part II, Item 7 of our 2024 Form 10-K. There have been no material changes during the six months ended December 31, 2025 to the judgments, assumptions and estimates upon which our critical accounting estimates are based.
Additionally, refer to Note 1 of our notes to our unaudited consolidated financial statements included in this Form 10-Q for additional discussion of our summary of significant accounting policies and use of estimates.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Not applicable.
ITEM 4. CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures
We maintain disclosure controls and procedures designed to ensure that the information we are required to disclose in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified under the rules and forms of the SEC. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that such information is accumulated and communicated to our management, including our Chief Executive Officer and our Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosures. As required by paragraph (b) of Rules 13a-15 and 15d-15 under the Exchange Act, our Chief Executive Officer (our principal executive) and Chief Financial Officer (our principal financial officer and principal accounting officer) carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures as of December 31, 2025. Based on this evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures (as defined in paragraph (e) of Rules 13a-15 and 15d-15 under the Exchange Act) were not effective at December 31, 2025 due to material weaknesses in our internal controls over financial reporting as described below.
Since our July 2021 IPO filing in July 2021, we have had material weaknesses in our internal control over financial reporting relating to our financial reporting processes 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. Since March 31, 2023, Management updates month end close checklists, has implemented more segregation of duties among its limited accounting staff and formally approves month end journal entries. Upon future profitability and the ability to increase accounting staff, we will seek to implement further internal control improvements.
Changes in Internal Control over Financial Reporting
During the quarter ended December 31, 2025, there have been no changes in our internal controls over financial reporting, as such term is defined in Rules 13a-15(f) and 15(d)-15(f) promulgated under the Exchange Act, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
We are not party to any material pending legal proceedings. From time to time, we may be subject to legal proceedings and claims arising in the ordinary course of business.
There have been no material changes to the risk factors reported in Item 1A in the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 2025.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
Unregistered Sales of Equity Securities
None.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
Not applicable.
ITEM 4. MINE SAFETY DISCLOSURES
Not applicable.
applicable.
| Exhibit |
Exhibit Description |
| 3.1 |
|
| 31.1* |
|
| 31.2* |
|
| 32.1† |
|
| 101.INS* |
The following financial statements from the Company’s Quarterly Report on Form 10‑Q for the quarter ended December 31, 2025, formatted in Inline XBRL: (i) Condensed Consolidated Statements of Cash Flows, (ii) Condensed Consolidated Statements of Operations, (iii) Condensed Consolidated Balance Sheets, and (iv) Notes to Condensed Consolidated Financial Statements, tagged as blocks of text and including detailed tags. |
| 104* |
Cover Page Interactive Data File (Embedded within the Inline XBRL document and included in Exhibit 101). |
| * |
Filed herewith. |
 |
Indicates a management contract or compensatory plan or arrangement. |
| † |
Furnished herewith and not “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended. |
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| MOVING IMAGE TECHNOLOGIES, INC. |
||
| Date: February 12, 2026 |
||
| By: |
/s/ William F. Greene |
|
| Name: |
William F. Greene |
|
| Title: |
Chief Financial Officer |
|
| (Principal Financial and Accounting Officer) |
||