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of Contents](#toc)\n\n \n\n**UNITED STATES**\n\n**SECURITIES AND EXCHANGE COMMISSION**\n\n**Washington, D.C. 20549**\n\n \n\n**FORM** **10-Q**\n\n \n\n☑ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934\n\n \n\nFor the quarterly period ended **March 31, 2026**\n\nor\n\n☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934\n\n \n\nFor the transition period from                                    to                                   \n\n \n\nCommission file number: ******001**-**40511******\n\n \n\n**Moving iMage Technologies,** **Inc.**\n\n(Exact name of Registrant as specified in its charter)\n\n \n\n**Delaware**\n\n******85**-**1836381******\n\n(State or other jurisdiction of incorporation or organization)\n\n(I.R.S. Employer Identification No.)\n\n \n\n**17760 Newhope Street,**\n \n\n**Fountain Valley, California**\n\n**92708**\n\n(Address of principal executive offices)\n\n(Zip Code)\n\n \n\n**(714)****751**‑**7998******\n\n(Registrant’s telephone number, including area code)\n\n \n\nSecurities registered pursuant to Section 12(b) of the Act:\n\n \n\nTitle of each class\n\nTrading Symbol(s)\n\nName of each exchange on which registered\n\nCommon Stock, $0.00001 par value\n\nMITQ\n\nNYSE American\n\n \n\nIndicate 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. Yes ☑ No ☐.\n\n \n\nIndicate 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). Yes ☑ No ☐.\n\n \n\nIndicate 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.\n\n \n\nLarge accelerated filer ☐\n\nAccelerated filer ☐\n\nNon-accelerated filer ☑\n\nSmaller reporting company ☑\n\n \nEmerging growth company ☑\n\n \n\nIf 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. ☐\n\n \n\nIndicate by check mark whether the Registrant is a shell company (as defined in Rule 12b‑2 of the Exchange Act). Yes ☐  No ☑.\n\n \n\nAs of May 13, 2026, there were **9,941,072 **shares of the registrant’s common stock, par value $0.00001 per share, outstanding.\n\n \n\n \n\n \n\n[Table of Contents](#toc)\n\n  \n\n \n\n**MOVING iMAGE TECHNOLOGIES,** **INC.**\n\n \n\n**TABLE OF CONTENTS**\n\n \n\n \n\n**Page**\n\n[**PART** **I** **- FINANCIAL INFORMATION**](#part1)\n\n \n\n \n \n\n[**ITEM** **1.**](#finstmts)\n\n[**Financial Statements**](#finstmts)\n\n \n\n \n\n[Condensed Consolidated Balance Sheets as of March 31, 2026 (unaudited) and June 30, 2025](#bs)\n\n**3**\n\n \n\n[Condensed Consolidated Statements of Operations (unaudited) for the three and nine months ended March 31, 2026 and 2025](#ops)\n\n**4**\n\n \n\n[Condensed Consolidated Statements of Changes in Stockholders’ Equity (unaudited) for the three and nine months ended March 31, 2026 and 2025](#se)\n\n**5**\n\n \n\n[Condensed Consolidated Statements of Cash Flows (unaudited) for the nine months ended March 31, 2026 and 2025](#cf)\n\n**6**\n\n \n\n[Notes to Unaudited Condensed Consolidated Financial Statements](#notes)\n\n**7**\n\n[**ITEM** **2.**](#mda)\n\n[**Management**’**s Discussion and Analysis of Financial Condition and Results of Operations**](#mda)\n\n**19**\n\n[**ITEM** **3.**](#quant)\n\n[**Quantitative and Qualitative Disclosures About Market Risk**](#quant)\n\n**26**\n\n[**ITEM** **4.**](#controls)\n\n[**Controls and Procedures**](#controls)\n\n**27**\n\n \n \n\n[**PART** **II** **- OTHER INFORMATION**](#part2)\n\n**27**\n\n \n \n\n[**ITEM** **1.**](#legal)\n\n[**Legal Proceedings**](#legal)\n\n**27**\n\n[**ITEM** **1A.**](#risk)\n\n[**Risk Factors**](#risk)\n\n**27**\n\n[**ITEM** **2.**](#unregistered)\n\n[**Unregistered Sales of Equity Securities and Use of Proceeds**](#unregistered)\n\n**27**\n\n[**ITEM** **3.**](#defaults)\n\n[**Defaults Upon Senior Securities**](#defaults)\n\n**27**\n\n[**ITEM** **4.**](#mine)\n\n[**Mine Safety Disclosures**](#mine)\n\n**28**\n\n[**ITEM** **5.**](#otherinfo)\n\n[**Other Information**](#otherinfo)\n\n**28**\n\n[**ITEM** **6.**](#exhibits)\n\n[**Exhibits**](#exhibits)\n\n**28**\n\n[**SIGNATURES**](#sigs)\n\n**29**\n\n \n\n \n\n2\n\n[Table of Contents](#toc)\n\n  \n\n \n\n**PART** **I** –**FINANCIAL INFORMATION**\n\n \n\n**ITEM** **1.**         **FINANCIAL STATEMENTS**\n\n \n\n**MOVING IMAGE TECHNOLOGIES, INC.**\n\n**CONDENSED CONSOLIDATED BALANCE SHEETS**\n\n**(in thousands except share and per share amounts)**\n\n \n\n  \n**March 31,**\n  \n**June 30,**\n \n\n  \n**2026**\n  \n**2025**\n \n\n  \n**(unaudited)**\n    ** **\n\nAssets\n        \n\n**Current Assets:**\n   *** ***   *** ***\n\nCash\n $2,363  $5,715 \n\nAccounts receivable, net\n  1,626   1,464 \n\nInventories, net\n  3,180   2,066 \n\nPrepaid expenses and other\n  372   162 \n\n**Total Current Assets**\n  7,541   9,407 \n\n**Long-Term Assets:**\n   *** ***   *** ***\n\nRight-of-use assets\n  915   1,087 \n\nProperty and equipment, net\n  51   15 \n\nIntangibles, net\n  320   364 \n\nOther assets\n  15   15 \n\n**Total Long-Term Assets**\n  1,301   1,481 \n\n**Total Assets**\n $8,842  $10,888 \n\n         \n\n**Liabilities And Stockholders’ Equity**\n   ** **   ** **\n\n**Current Liabilities:**\n   *** ***   *** ***\n\nAccounts payable\n $1,968  $3,009 \n\nAccrued expenses\n  409   362 \n\nCustomer refunds\n  277   379 \n\nCustomer deposits\n  270   1,101 \n\nLease liabilities–current\n  252   227 \n\nUnearned warranty revenue\n  57   35 \n\n**Total Current Liabilities**\n  3,233   5,113 \n\n         \n\n**Long-Term Liabilities:**\n   *** ***   *** ***\n\nLease liabilities–non-current\n  727   918 \n\n**Total Long-Term Liabilities**\n  727   918 \n\n**Total Liabilities**\n  3,960   6,031 \n\n**Stockholders’ Equity**\n   *** ***   *** ***\n\nCommon stock, $0.00001 par value, 100,000,000 shares authorized, 9,941,072 and 9,939,080 shares issued and outstanding at March 31, 2026 and June 30, 2025, respectively\n  —   — \n\nAdditional paid-in capital\n  12,087   12,061 \n\nAccumulated deficit\n  (7,205)  (7,204)\n\n**Total Stockholders’ Equity**\n  4,882   4,857 \n\n**Total Liabilities and Stockholders’ Equity**\n $8,842  $10,888 \n\n \n\nThe accompanying notes are an integral part of these condensed consolidated financial statements.\n\n \n\n3\n\n[Table of Contents](#toc)\n\n \n\n \n\n**MOVING IMAGE TECHNOLOGIES, INC.**\n\n**CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS**\n\n**(in thousands except share and per share amounts)**\n\n**(unaudited)**\n\n \n\n \n \n\n**Three Months Ended**\n\n \n \n\n**Nine Months Ended**\n\n \n\n \n \n\n**March 31,**\n\n \n \n\n**March 31,**\n\n \n\n \n \n\n**2026**\n\n \n \n\n**2025**\n\n \n \n\n**2026**\n\n \n \n\n**2025**\n\n \n\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\nNet sales\n\n \n$\n3,397\n \n \n$\n3,571\n \n \n$\n12,771\n \n \n$\n12,264\n \n\nCost of goods sold\n\n \n \n2,214\n \n \n \n2,508\n \n \n \n8,750\n \n \n \n8,894\n \n\nGross profit\n\n \n \n1,183\n \n \n \n1,063\n \n \n \n4,021\n \n \n \n3,370\n \n\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\nOperating expenses:\n\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\nResearch and development\n\n \n \n45\n \n \n \n49\n \n \n \n140\n \n \n \n157\n \n\nSelling and marketing\n\n \n \n484\n \n \n \n429\n \n \n \n1,316\n \n \n \n1,421\n \n\nGeneral and administrative\n\n \n \n788\n \n \n \n855\n \n \n \n2,757\n \n \n \n2,691\n \n\nTotal operating expenses\n\n \n \n1,317\n \n \n \n1,333\n \n \n \n4,213\n \n \n \n4,269\n \n\nOperating loss\n\n \n \n(134\n)\n \n \n(270\n)\n \n \n(192\n)\n \n \n(899\n)\n\nOther income (expense)\n\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\nExtinguishment of payables\n\n \n \n—\n \n \n \n—\n \n \n \n128\n \n \n \n—\n \n\nInterest and other income, net\n\n \n \n12\n \n \n \n30\n \n \n \n63\n \n \n \n107\n \n\nTotal other income\n\n \n \n12\n \n \n \n30\n \n \n \n191\n \n \n \n107\n \n\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\nNet loss\n\n \n$\n(122\n)\n \n$\n(240\n)\n \n$\n(1\n)\n \n$\n(792\n)\n\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\nLoss per share:\n\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\nBasic\n\n \n$\n(0.01\n)\n \n$\n(0.02\n)\n \n \n(0.00\n)\n \n \n(0.08\n)\n\nDiluted\n\n \n$\n(0.01\n)\n \n$\n(0.02\n)\n \n$\n(0.00\n)\n \n$\n(0.08\n)\n\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\nShares used in computing loss per share:\n\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\nBasic\n\n \n \n9,945,384\n \n \n \n9,911,015\n \n \n \n9,942,367\n \n \n \n9,901,554\n \n\nDiluted\n\n \n \n9,945,384\n \n \n \n9,911,015\n \n \n \n9,942,367\n \n \n \n9,901,554\n \n\n \n\nThe accompanying notes are an integral part of these condensed consolidated financial statements.\n\n \n\n4\n\n[Table of Contents](#toc)\n\n \n\n \n\n**MOVING IMAGE TECHNOLOGIES, INC.**\n\n**CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS**’**EQUITY**\n\n**(in thousands except for share amounts)**\n\n**(unaudited)**\n\n \n\nThree and Nine Months Ended March 31, 2026\n\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\n \n \n \n \n** **\n \n \n \n** **\n \n\n**Additional**\n\n \n \n \n \n** **\n \n \n \n** **\n\n \n \n**Common Stock**\n \n \n**Paid-In**\n \n \n**Accumulated**\n \n \n \n \n** **\n\n \n \n\n**Shares**\n\n \n \n\n**Amount**\n\n \n \n\n**Capital**\n\n \n \n\n**Deficit**\n\n \n \n\n**Total**\n\n \n\n**Balance as of June 30, 2025**\n\n \n \n9,939,080\n \n \n$\n—\n \n \n$\n12,061\n \n \n$\n(7,204\n)\n \n$\n4,857\n \n\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\nGrant of options to officer\n\n \n \n*—*\n \n \n \n—\n \n \n \n8\n \n \n \n—\n \n \n \n8\n \n\nIssuance of stock to directors\n\n \n \n652\n \n \n \n—\n \n \n \n1\n \n \n \n—\n \n \n \n1\n \n\nNet income\n\n \n \n*—*\n \n \n \n—\n \n \n \n—\n \n \n \n509\n \n \n \n509\n \n\n**Balance as of September 30, 2025**\n\n \n \n9,939,732\n \n \n$\n—\n \n \n$\n12,070\n \n \n$\n(6,695\n)\n \n$\n5,375\n \n\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\nGrant of options to officer\n\n \n \n*—*\n \n \n \n—\n \n \n \n8\n \n \n \n—\n \n \n \n8\n \n\nIssuance of stock to directors\n\n \n \n5,383\n \n \n \n—\n \n \n \n4\n \n \n \n—\n \n \n \n4\n \n\nNet loss\n\n \n \n*—*\n \n \n \n—\n \n \n \n—\n \n \n \n(388\n)\n \n \n(388\n)\n\n**Balance as of December 31, 2025**\n\n \n \n9,945,115\n \n \n$\n—\n \n \n$\n12,081\n \n \n$\n(7,082\n)\n \n$\n4,999\n \n\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\nIssuance of stock to directors\n\n \n \n5,957\n \n \n \n—\n \n \n \n4\n \n \n \n—\n \n \n \n4\n \n\nGrant of options to officer\n\n \n \n*—*\n \n \n \n—\n \n \n \n\n7\n\n \n \n \n—\n \n \n \n7\n \n\nStock repurchased\n\n \n \n(10,000)\n \n \n \n—\n \n \n \n(6\n)\n \n \n—\n \n \n \n(6\n)\n\nNet loss\n\n \n \n*—*\n \n \n \n—\n \n \n \n—\n \n \n \n(122\n)\n \n \n(122\n)\n\n**Balance as of March 31, 2026**\n\n \n \n9,941,072\n \n \n$\n—\n \n \n$\n\n12,087\n\n \n \n$\n(7,205\n)\n \n$\n4,882\n \n\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\nThree and Nine Months Ended March 31, 2025\n\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\n \n \n \n* *\n** **\n \n \n* *\n** **\n \n\n**Additional**\n\n \n \n \n* *\n** **\n \n \n* *\n** **\n\n \n \n\n**Common Stock**\n\n \n \n\n**Paid-In**\n\n \n \n\n**Accumulated**\n\n \n \n \n* *\n** **\n\n \n \n\n**Shares**\n\n \n \n\n**Amount**\n\n \n \n\n**Capital**\n\n \n \n\n**Deficit**\n\n \n \n\n**Total**\n\n \n\n**Balance as of June 30, 2024**\n\n \n \n9,896,850\n \n \n \n—\n \n \n \n11,965\n \n \n \n(6,255\n)\n \n \n5,710\n \n\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\nGrant of options to officer\n\n \n \n*—*\n \n \n \n—\n \n \n \n5\n \n \n \n—\n \n \n \n5\n \n\nNet loss\n\n \n \n*—*\n \n \n \n—\n \n \n \n—\n \n \n \n(25\n)\n \n \n(25\n)\n\n**Balance as of September 30, 2024**\n\n \n \n9,896,850\n \n \n$\n—\n \n \n$\n11,970\n \n \n$\n(6,280\n)\n \n$\n5,690\n \n\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\nGrant of options to officer\n\n \n \n*—*\n \n \n \n—\n \n \n \n32\n \n \n \n—\n \n \n \n32\n \n\nNet loss\n\n \n \n*—*\n \n \n \n—\n \n \n \n—\n \n \n \n(527\n)\n \n \n(527\n)\n\n**Balance as of December 31, 2024**\n\n \n \n9,896,850\n \n \n$\n—\n \n \n$\n12,002\n \n \n$\n(6,807\n)\n \n$\n5,195\n \n\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\nGrant of options to officer\n\n \n \n*—*\n \n \n \n—\n \n \n \n11\n \n \n \n—\n \n \n \n11\n \n\nIssuance of stock to directors\n\n \n \n36,829\n \n \n \n—\n \n \n \n23\n \n \n \n—\n \n \n \n23\n \n\nRepriced option for directors and officer\n\n \n \n*—*\n \n \n \n—\n \n \n \n11\n \n \n \n—\n \n \n \n11\n \n\nNet loss\n\n \n \n*—*\n \n \n \n—\n \n \n \n—\n \n \n \n(240\n)\n \n \n(240\n)\n\n**Balance as of March 31, 2025**\n\n \n \n9,933,679\n \n \n$\n-\n \n \n$\n12,046\n \n \n$\n(7,047\n)\n \n$\n5,000\n \n\n \n\nThe accompanying notes are an integral part of these condensed consolidated financial statements.\n\n \n\n5\n\n[Table of Contents](#toc)\n\n \n\n \n\n**MOVING IMAGE TECHNOLOGIES, INC.**\n\n**CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS**\n\n**(in thousands)**\n\n**(unaudited)**\n\n \n\n \n \n\n**Nine Months Ended**\n\n \n\n \n \n\n**March 31,**\n\n \n\n \n \n\n**2026**\n\n \n \n\n**2025**\n\n \n\n**Cash flows from operating activities:**\n\n \n*** ***\n*** ***\n*** ***\n \n*** ***\n*** ***\n*** ***\n\n \n \n \n \n \n \n \n \n \n\nNet loss\n\n \n$\n(1\n)\n \n$\n(792\n)\n\nAdjustments to reconcile net loss to net cash (used in) provided by operating activities:\n\n \n \n \n \n \n \n \n \n\nProvision for credit losses\n\n \n \n247\n \n \n \n59\n \n\nInventory reserve\n\n \n \n55\n \n \n \n277\n \n\nDepreciation expense\n\n \n \n9\n \n \n \n10\n \n\nAmortization expense\n\n \n \n44\n \n \n \n44\n \n\nRight-of-use amortization\n\n \n \n172\n \n \n \n197\n \n\nStock compensation expense\n\n \n \n23\n \n \n \n59\n \n\nStock issued for director expenses\n \n \n—\n \n \n \n23\n \n\nChanges in operating assets and liabilities\n\n \n \n \n \n \n \n \n \n\nAccounts receivable\n\n \n \n(409\n)\n \n \n50\n \n\nInventories\n\n \n \n(1,169\n)\n \n \n(226\n)\n\nPrepaid expenses and other\n\n \n \n(210\n)\n \n \n230\n \n\nAccounts payable\n\n \n \n(1,041\n)\n \n \n484\n \n\nAccrued expenses and customer refunds\n\n \n \n(46\n)\n \n \n(81\n)\n\nUnearned warranty revenue\n\n \n \n22\n \n \n \n22\n \n\nCustomer deposits\n\n \n \n(830\n)\n \n \n(117\n)\n\nLease liabilities\n\n \n \n(167\n)\n \n \n(148\n)\n\nNet cash (used in) provided by operating activities\n\n \n \n(3,301\n)\n \n \n91\n \n\n \n \n \n \n \n \n \n \n \n\nCash flows from investing activities\n\n \n \n \n \n \n \n \n \n\nPurchases of property and equipment\n \n \n(45\n)\n \n \n—\n \n\nNet cash used in investing activities\n \n \n(45\n)\n \n \n—\n \n\n \n \n \n \n \n \n \n \n \n\nCash flows from financing activities\n\n \n \n \n \n \n \n \n \n\nRepurchases of shares\n \n \n(6\n)\n \n \n—\n \n\nNet cash used in financing activities\n\n \n \n(6\n)\n \n \n—\n \n\n \n \n \n \n \n \n \n \n \n\nNet (decrease) increase in cash\n\n \n \n(3,352\n)\n \n \n91\n \n\n**Cash, beginning of the period**\n\n \n \n5,715\n \n \n \n5,278\n \n\n**Cash, end of the period**\n\n \n$\n2,363\n \n \n$\n5,369\n \n\n \n \n \n \n \n \n \n \n \n\nNon-cash investing and financing activities:\n\n \n \n \n \n \n \n \n \n\n    Director fees settled by stock issuance\n \n$\n9\n \n \n \n—\n \n\nRight-of-use assets from new lease\n\n \n$\n—\n \n \n$\n(207\n)\n\nRight-of-use assets from lease modification\n\n \n$\n—\n \n \n$\n(988\n)\n\n \n\n \n\nThe accompanying notes are an integral part of these condensed consolidated financial statements.\n\n \n\n6\n\n[Table of Contents](#toc)\n\n \n\n \n\n**NOTE 1**—**BUSINESS ACTIVITY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES**\n\n \n\nOrganization: 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.\n\n \n\nMoving iMage Acquisition Co. (DBA “Caddy Products”) designs, develops and manufactures innovative products for the entertainment, cinema, grocery, worship, restaurant, sports and restroom industries.\n\n \n\nBased 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.\n\n \n\nPrinciples of Consolidation: The condensed consolidated financial statements include the accounts of MiT Inc., its wholly owned subsidiary, MiT LLC, and MiT LLC’s wholly owned subsidiary, Moving iMage Acquisition Co., (DBA “Caddy Products”). All significant intercompany transactions and balances have been eliminated in consolidation.\n\n \n\nBasis of Presentation: The Company’s financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”).\n\n \n\nUnaudited 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 *nine* months ended *March 31, 2026* are *not* necessarily indicative of the results that *may*be expected for any subsequent quarters or for the year ending *June 30, 2026*.\n\n \n\n*7*\n\n[Table of Contents](#toc)\n\n \n\n**NOTE 1**—**BUSINESS ACTIVITY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)**\n\n \n\nAssets and Liabilities Measured on a Non-recurring Basis - In addition to assets and liabilities that are measured at fair value on a recurring basis, we also measure certain assets and liabilities at fair value on a nonrecurring basis. Our non-financial assets, including intangible assets and property and equipment, are measured at fair value when there is an indication of impairment and the carrying amount exceeds the asset’s projected undiscounted cash flows. These assets are recorded at fair value only when an impairment charge is recognized.\n\n \n\nUse of Estimates: The preparation of condensed consolidated financial statements in conformity with U.S. GAAP requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities (including sales returns, credit losses, inventory reserves, warranty reserves, purchase price allocation and asset impairments), disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ significantly from those estimates.\n\n \n\nConcentration of Cash: The Company maintains its cash in bank accounts which, at times, *may*exceed federally insured limits. The Company has *not* experienced any losses in such accounts. Management believes the Company is *not* exposed to any significant credit risk on its cash balances.\n\n \n\nAccounts Receivable: Accounts receivable are carried at original invoice amount less allowance for credit losses. Management determines the allowance for credit losses by identifying troubled accounts and by using historical experience applied to an aging of accounts. Accounts receivable are written off when deemed uncollectible. Recoveries of receivables previously written off are recorded when received. Accounts receivable are considered to be past due if any portion of the receivable balance is outstanding for more than *90* days past the customer’s granted terms. The Company does *not* charge interest on past-due balances or require collateral on its accounts receivable. As of *March 31, 2026* and *June 30, 2025* the allowance for credit losses is approximately $483,000 and $236,000, respectively.\n\n \n\nInventories: Inventories are stated at the lower of cost or net realizable value, with cost being determined on the *first*-in, *first*-out cost method of accounting. The Company purchases finished goods and materials to assemble kits in quantities that it anticipates will be fully used in the near term. Changes in operating strategy, customer demand, and fluctuations in market values can limit the Company’s ability to effectively utilize all products purchased and can result in finished goods with above-market carrying costs which *may*cause losses on sales to customers. The Company’s policy is to closely monitor inventory levels, obsolescence and lower market values compared to costs and, when necessary, reduce the carrying amount of its inventory to its net realizable value. As of *March 31, 2026* and *June 30, 2025*, the inventory reserve was $1,468,000 and $1,413,000 respectively, and inventory on hand was comprised primarily of finished goods ready for sale.\n\n \n\nRevenue Recognition: The Company follows Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic *606,* *Revenue from Contracts with Customers (*“*ASC 606*”*).*\n\n \n\nRevenue 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.\n\n \n\nThe 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.\n\n \n\n*8*\n\n[Table of Contents](#toc)\n\n \n\n**NOTE 1**—**BUSINESS ACTIVITY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued**)\n\n \n\nContract 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.\n\n \n\nContract 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. \n\n \n\n**Contract Liabilities ($ in Thousands)**\n \n**March 31,**\n  \n**June 30,**\n \n\n  \n**2026**\n  \n**2025**\n \n\nCustomer deposits\n $270  $1,101 \n\nUnearned warranty revenue\n  57   35 \n\nCustomer refunds\n  277   379 \n\nTotal\n $604  $1,515 \n\n \n\nCost of goods sold includes cost of inventory sold during the period, net of vendor discounts and allowances, and shipping and handling costs, and sales taxes. Taxes collected from customers are included in accounts payable on a net basis (excluded from revenues) until remitted to the government.\n\n \n\nDeferred contract acquisition costs consist of sales commissions paid to the sales force, and the related employer payroll taxes, and are considered incremental and recoverable costs of obtaining a contract with a customer. Management has determined that sales commissions paid are an immaterial component of obtaining a customer’s contract and has elected to expense sales commissions when earned.\n\n \n\n  \n**Three Months Ended March 31,**\n  \n**Nine Months Ended March 31,**\n \n\n**Disaggregation of Revenue ($ in Thousands)**\n \n**2026**\n  \n**2025**\n  \n**2026**\n  \n**2025**\n \n\nEquipment upon delivery (point in time)\n $3,367  $3,540  $12,630  $12,138 \n\nInstallation (point in time)\n  19   18   105   85 \n\nSoftware and services (over time)\n  11   13   36   41 \n\n**Total revenues**\n $3,397  $3,571  $12,771  $12,264 \n\n \n\nRevenue from the sale of equipment is recognized upon shipment of such equipment to customers and when performance conditions are satisfied at the custom location.\n\n \n\nRevenue from installation labor is recognized upon completion of the installation project and when the performance obligation is complete.\n\n \n\nSoftware 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.\n\n \n\nReturns and Allowances: The Company records allowances for discounts and product returns at the time of sale as a reduction of revenue as such allowances can be reliably estimated based on historical experience and known trends.\n\n \n\nShipping and Handling Costs: Shipping and handling costs are included in cost of goods sold and are recognized as a period expense during the period in which they are incurred.\n\n \n\n*9*\n\n[Table of Contents](#toc)\n\n \n\n**NOTE 1**—**BUSINESS ACTIVITY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)**\n\n \n\nAdvertising Costs: Advertising costs were approximately $0 and $4,600 for the *three* months ended *March 31, 2026*and *2025*, respectively and $6,400 and $16,800 for the *nine* months ended *March 31, 2026*and *2025,* respectively.   Advertising costs are expensed as incurred within selling and marketing expenses.\n\n \n\nIntangible assets: Intangible assets arising from business combinations, such as customer relationships, trade names, and/or intellectual property, are initially recorded at fair value. The Company amortizes these intangible assets over the determined useful life which generally ranges from 11 to 20 years. Management reviews its intangible assets for impairment whenever events or circumstances indicate that the carrying amount of an asset *may**not* be fully recoverable. There were no intangible asset impairments recognized for the *three* and *nine* months ended *March 31, 2026* or *2025.*\n\n \n\nBusiness Combinations: The Company includes the results of operations of the businesses that it acquires commencing on the respective dates of acquisition. The Company allocates the fair value of the purchase price of its acquisitions to the assets acquired and liabilities assumed based on their estimated fair values. The excess of the fair value of the purchase price over the fair values of these identifiable assets and liabilities is recorded as goodwill.\n\n \n\nIncome 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.\n\n \n\nThe following table summarizes the components of deferred tax assets and deferred tax liabilities at *March 31, 2026* and *June 30, 2025* (in thousands):\n\n \n\n**$ in Thousands**\n \n**Deferred Tax Assets (Liabilities)**\n \n\n  \n**March 31, 2026**\n  \n**June 30, 2025**\n \n\nInventory reserve\n $411   395 \n\nAccumulated depreciation\n  —   (3)\n\nAccumulated goodwill amortization\n  53   57 \n\nAccumulated intangible amortization\n  117   121 \n\nROU Asset\n  (256)  (304)\n\nROU Liability\n  274   321 \n\nWarranty reserve\n  16   10 \n\nStock compensation\n  68   68 \n\nNet operating loss carryforward\n  997   997 \n\nTax credits\n  —   86 \n\nAllowance for credit losses\n  135   66 \n\nNet\n  1,816   1,814 \n\nValuation allowance\n  (1,816)  (1,814)\n\n**Total**\n $—  $— \n\n \n\nProduct Warranty: The Company’s digital equipment products are sold under various limited warranty arrangements ranging from one year to three 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 *March 31, 2026* and *June 30, 2025*, the Company has established a warranty reserve of $20,000 and $37,000, respectively, which is included in accrued expenses in the accompanying condensed consolidated balance sheets.\n\n \n\n*10*\n\n[Table of Contents](#toc)\n\n \n\n**NOTE 1**—**BUSINESS ACTIVITY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)**\n\n \n\nThe changes in the Company’s aggregate warranty liabilities were as follows for the *nine* months ended *March **31,* *2026* and the year ended *June 30, 2025 (*in thousands):\n\n \n\n**Warranty Liabilities**\n \n**March 31,**\n  \n**June 30,**\n \n\n**($ in Thousands)**\n **2026**  **2025** \n\nProduct warranty liability beginning of period\n $37  $69 \n\nAccruals for warranties issued\n  64   354 \n\nSettlements made\n  (81)  (386)\n\nProduct warranty liability end of the period\n $20  $37 \n\n \n\nResearch and Development: The Company incurs costs to develop new products, as well as improve the appeal and functionality of its existing products. Research and development costs are charged to expense when incurred.\n\n \n\nRecently Issued Accounting Pronouncements:\n\nIn *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.\n\n \n\nIn *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.\n\n \n\nIn *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 interim periods within those periods.  The Company will *first* adopt this standard in the *first* quarter of its fiscal year ending *June 30, 2027.*\n\n \n\n*11*\n\n[Table of Contents](#toc)\n\n \n\n \n\n**NOTE 2**—** INCOME (LOSS) PER SHARE**\n\n \n\nBasic 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: \n\n \n\n**Loss per Share**\n\n \n\n**For the Three Months**\n\n \n \n\n**For the Nine Months**\n\n \n\n**(In Thousands except for share**\n\n \n\n**Ended March 31**\n\n \n \n\n**Ended March 31**\n\n \n\n**and per share price)**\n\n \n\n**2026**\n\n \n \n\n**2025**\n\n \n \n\n**2026**\n\n \n \n\n**2025**\n\n \n\nNumerator:\n\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\nNet loss\n\n \n$\n(122\n)\n \n$\n(240\n)\n \n$\n(1\n)\n \n$\n(792\n)\n\nDenominator:\n\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\nBasic Weighted average basic shares outstanding\n\n \n \n9,945,384\n \n \n \n9,911,015\n \n \n \n9,942,367\n \n \n \n9,901,554\n \n\nEffect of dilutive share-based awards\n\n \n \n-\n \n \n \n-\n \n \n \n-\n \n \n \n-\n \n\nWeighted-average dilutive shares\n\n \n \n9,945,384\n \n \n \n9,911,015\n \n \n \n9,942,367\n \n \n \n9,901,554\n \n\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\nNet loss per share\n\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\nBasic loss per share\n\n \n$\n(0.01\n)\n \n$\n(0.02\n)\n \n$\n(0.00\n)\n \n$\n(0.08\n)\n\nDiluted loss per share\n\n \n$\n(0.01\n)\n \n$\n(0.02\n)\n \n$\n(0.00\n)\n \n$\n(0.08\n)\n\n \n\nThe following securities were excluded from the calculation of diluted loss per share in each period because their inclusion would have been anti-dilutive:\n\n \n\n \n \n\n**For the Three and Nine Months Ended**\n\n \n\n \n \n\n**March 31,**\n\n \n \n\n**March 31,**\n\n \n\n \n \n\n**2026**\n\n \n \n\n**2025**\n\n \n\nOptions\n\n \n \n450,000\n \n \n \n450,000\n \n\nTotal potentially dilutive shares\n\n \n \n450,000\n \n \n \n450,000\n \n\n \n\nThe Company had net losses for *three* and *nine* months ended *March 31, 2026* and *March 31, 2025.*All potentially dilutive securities were deemed to be anti-dilutive in those periods because of the net losses incurred.\n\n  \n\n \n\n**NOTE** **3 **—**INTANGIBLE ASSETS**\n\n \n\nThe following table summarizes the Company’s intangible assets as of *March 31, 2026* (in thousands):\n\n \n\n \n \n\n**Amortization**\n\n \n \n \n \n** **\n \n \n \n** **\n \n \n \n** **\n\n \n \n\n**Period (in**\n\n \n \n\n**Gross Asset**\n\n \n \n\n**Accumulated**\n\n \n \n\n**Net Book**\n\n \n\n \n \n\n**years)**\n\n \n \n\n**Cost**\n\n \n \n\n**Amortization**\n\n \n \n\n**Value**\n\n \n\nCustomer relations\n\n \n \n11\n \n \n$\n970\n \n \n$\n749\n \n \n$\n221\n \n\nPatents\n\n \n \n20\n \n \n \n70\n \n \n \n23\n \n \n \n47\n \n\nTrademark\n\n \n \n20\n \n \n \n78\n \n \n \n26\n \n \n \n52\n \n\n \n \n \n* *\n \n \n$\n1,118\n \n \n$\n798\n \n \n$\n320\n \n\n  \n\n*12*\n\n[Table of Contents](#toc)\n\n \n\n**NOTE** **3 **—**INTANGIBLE ASSETS (continued)**\n\n \n\nThe following table summarizes the Company’s intangible assets as of *June 30, 2025* (in thousands):\n\n \n\n \n \n\n**Amortization**\n\n \n \n** **\n** **\n** **\n \n** **\n** **\n** **\n \n** **\n** **\n** **\n\n \n \n\n**Period (in**\n\n \n \n\n**Gross Asset**\n\n \n \n\n**Accumulated**\n\n \n \n\n**Net Book**\n\n \n\n \n \n\n**years)**\n\n \n \n\n**Cost**\n\n \n \n\n**Amortization**\n\n \n \n\n**Value**\n\n \n\nCustomer relations\n\n \n \n11\n \n \n$\n970\n \n \n$\n711\n \n \n$\n260\n \n\nPatents\n\n \n \n20\n \n \n \n70\n \n \n \n21\n \n \n \n49\n \n\nTrademark\n\n \n \n20\n \n \n \n78\n \n \n \n23\n \n \n \n55\n \n\n \n \n \n* *\n \n \n$\n1,118\n \n \n$\n755\n \n \n$\n364\n \n\n \n\nAmortization expense was $15,000 and $15,000 for the three months ended *March 31, 2026*and *2025* respectively, and $44,000 and $44,000 for the *nine* months ended *March 31, 2026*and *2025,* respectively,\n\nand is included in general and administrative expense.\n\n \n\nEstimated amortization expense related to intangible assets subject to amortization at *March 31, 2026* in each of the years subsequent to *March 31, 2026*, and thereafter is as follows (amounts in thousands);\n\n \n\n \n\n2026 balance of fiscal year\n\n \n$\n15\n \n\n2027\n\n \n \n60\n \n\n2028\n\n \n \n60\n \n\n2029\n\n \n \n60\n \n\n2030\n\n \n \n60\n \n\nThereafter\n\n \n \n65\n \n\nTotal\n\n \n$\n320\n \n\n  \n\n \n\n**NOTE** **4** —**ACCRUED EXPENSES**\n\n \n\nAccrued expenses consist of the following (in thousands):\n\n \n\n**Accrued Expenses**\n\n \n\n**March 31,**\n\n \n \n\n**June 30,**\n\n \n\n**($ in Thousands)**\n\n \n\n**2026**\n\n \n \n\n**2025**\n\n \n\nEmployee compensation\n\n \n$\n328\n \n \n$\n225\n \n\nAccrued warranty\n\n \n \n20\n \n \n \n37\n \n\nFreight\n\n \n \n23\n \n \n \n16\n \n\nSales tax\n\n \n \n19\n \n \n \n28\n \n\nOther\n\n \n \n19\n \n \n \n56\n \n\nTotal\n\n \n$\n409\n \n \n$\n362\n \n\n  \n\n \n\n**NOTE** **5** —**STOCKHOLDERS**’**EQUITY**\n\n \n\nIn *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 *March 31, 2026*, the Plan provides for the issuance of up to 1,500,000 stock-based awards. There are 1,050,000 stock-based awards available to grant under the Plan at *March 31, 2026*.\n\n \n\nOn *October 30, 2024,*and as part of Francis Godfrey’s appointment as the Company’s President and Chief Operating Officer, the Board granted Francis Godfrey 200,000 options with an exercise price of $0.65 with 25% vesting immediately and the remainder vesting at 25% per year thereafter. \n\n \n\n*13*\n\n[Table of Contents](#toc)\n\n \n\n**NOTE** **5** —**STOCKHOLDERS**’**EQUITY (continued)**\n\n \n\nOn *March 25, 2025,*the Board of Directors (the “Board”) of Moving iMage Technologies, Inc. cancelled the previously issued *May 23, 2023 *250,000 share options at $1.10 per share to outside directors consisting of 50,000 each to Directors Katherine Crothall, Scott Anderson and John Stiska and as well as 100,000 options to CFO William Greene at $1.10 per share. The Board reissued the 250,000 options at $0.65 per share which resulted in an incremental stock-based compensation charge of $11,000 in the *three* and *nine*-months ended *March 31, 2025.*\n\n \n\nThe Company recognized compensation expense of approximately $7,300 and $22,000 for stock options during the *three* and *nine* months ended *March 31, 2026,* respectively, and $15,000 and $59,000 during the *three* and *nine* months ended *March **31,* *2025,* respectively.  \n\n \n\nThe estimated fair value of each option award granted was determined on the date of grant using the Black-Scholes option valuation model. There were *no* option grants during the *three* and *nine* months ended *March 31, 2026*:\n\n \n\n  \n**March 31, 2025**\n  \n**October 30, 2024**\n \n\n  \n**Options**\n  \n**Options**\n \n\n         \n\nRisk-free interest rate\n  *4.35*%  4.22%\n\nExpected volatility\n  *83.50*%  83.50%\n\nDividend yield\n  *—*%  *—*%\n\nExpected option term in years\n  *2.4*   5.5 \n\n \n\n*14*\n\n[Table of Contents](#toc)\n\n \n\n**NOTE** **5** —**STOCKHOLDERS**’**EQUITY (continued)**\n\n \n\nA summary of the status of the Company’s stock options as of *March 31, 2026* and changes during the *nine* months ended *March 31, 2026* are presented below.\n\n \n\n   * *** ** \n**Wtd. Avg.**\n \n\n   * *** ** \n**Exercise**\n \n\n  \n**Options**\n  \n**Price**\n \n\nBalance, July 1, 2025\n  450,000  $0.65 \n\nGranted during the period\n  —   — \n\nExercised during the period\n  —   — \n\nCancelled during the period\n  —   — \n\nBalance, March 31, 2026\n  450,000  $0.65 \n\n \n\nA summary of the status of the Company’s stock options as of *March 31, 2025* and changes during the *nine* months ended *March 31, 2025* are presented below.\n\n \n\n   * *** ** \n**Wtd. Avg.**\n \n\n   * *** ** \n**Exercise**\n \n\n  \n**Options**\n  \n**Price**\n \n\nBalance, July 1, 2024\n  250,000  $1.10 \n\nGranted during the period  450.000   0.65 \n\nExercised during the period\n  —   — \n\nCanceled during the period\n  (250,000)   (1.10) \n\nBalance, March 31, 2025\n  450,000  $0.90 \n\n \n\nThe following table summarizes information about outstanding and exercisable stock options at *March 31, 2026*:\n\n \n\n**Range of**\n  \n**Number**\n  \n**Number**\n  \n**Wtd. Avg, Life**\n  \n**Wtd. Avg.**\n \n\n**Exercise Price**\n  \n**Outstanding**\n  \n**Exercisable**\n  \n**(in years)**\n  \n**Exercise Price**\n \n\n$0.65   450,000   331,000   7.79  $0.65 \n\n \n\nAs 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 *March 31, 2026*and *2025,* the Company issued 5,957 and 36,829 shares, respectively, to the independent directors for director fees earned. During the *nine* months ended *March 31, 2026*and *2025,* the Company issued 11,992 and 36,829 shares, respectively, to the independent directors for director fees earned.\n\n \n\n*15*\n\n[Table of Contents](#toc)\n\n \n\n \n\n**NOTE** **6** —**CUSTOMER AND VENDOR CONCENTRATIONS**\n\n \n\nCustomers: No customers accounted for more than *10%* of the Company's sales for the *three* months ended *March 31, 2026*.  One customer accounted for 10% of the Company’s sales for the *nine* months ended *March 31, 2026.*\n\n \n\nAt *March 31, 2026*, two customers accounted for 28% of accounts receivable. The amount of outstanding receivables related to the *two* customers was approximately *$615,000.*\n\n \n\nFor the *three* months ended *March 31, 2025,*one customer accounted for 12% of the Company’s sales.  For the *nine* months ended *March 31, 2025,*no customers accounted for more than *10%* of the Company’s sales.\n\n \n\nVendors: For the *three* months ended *March 31, 2026* one vendor accounted for 16% of the Company’s purchases.  For the *nine* months ended *March 31, 2026* three vendors accounted for 15%, 12% and 11%, respectively, of the Company’s purchases. For the *three* months ended *March 31, 2025,*two vendors accounted for 24% and 20% of the Company's purchases. For the *nine* months ended *March 31, 2025,*two vendors accounted for 18% and 15% of the Company’s purchases.  \n\n \n\n \n\n**NOTE** **7** —**LEASE COMMITMENTS AND CONTINGENCIES**\n\n \n\nOperating Leases:  \n\nThe 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.\n\n \n\nThe 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.  \n\n \n\nIn 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. \n\n \n\n*16*\n\n[Table of Contents](#toc)\n\n \n\n**NOTE** **7** —**LEASE COMMITMENTS AND CONTINGENCIES (continued)**\n\n \n\nThe Company’s operating lease expense was $79,000 and $98,000 for the *three* months ended *March 31, 2026*and *2025*, respectively, and $238,000 and $283,000 for the *nine* months ended *March 31, 2026*and *2025,* respectively.\n\n \n\nFuture minimum lease payments at *March 31, 2026* under these arrangements are as follows:\n\n \n\n**Operating leases**\n\n \n\n**Total**\n\n \n\n**($ in Thousands)**\n\n \n\n**Payments**\n\n \n\n2026 balance of fiscal year\n\n \n$\n80\n \n\n2027\n\n \n \n326\n \n\n2028\n\n \n \n303\n \n\n2029\n\n \n \n266\n \n\n2030\n\n \n \n159\n \n\nTotal future minimum lease payments\n\n \n \n1,134\n \n\nLess imputed interest (at 8%)\n\n \n \n(155\n)\n\nPresent value of operating lease payments\n\n \n$\n979\n \n\n \n\nThe following table sets forth the ROU assets and operating lease liabilities as of *March 31, 2026*:\n\n \n\n**Assets**\n\n \n\n**(in thousands)**\n\n \n\nROU assets-net\n\n \n$\n915\n \n\n \n \n \n \n \n\n**Liabilities**\n\n \n \n \n** **\n\nCurrent operating lease liabilities\n\n \n$\n252\n \n\nLong-term operating lease liabilities\n\n \n \n727\n \n\nTotal ROU liabilities\n\n \n$\n979\n \n\n \n\nThe Company’s weighted average remaining lease term for its operating leases is 3.52 years using a weighted average discount rate of 8.42%.\n\n \n\nLegal 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.\n\n  \n\n*17*\n\n[Table of Contents](#toc)\n\n \n\n \n\n**NOTE 8**—**SEGMENT INFORMATION**\n\n \n\nOperating 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 one 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. \n\n \n\n**($ in Thousands)**\n \n**Quarter Ended**\n \n\n  \n**March 31,**\n \n\n  \n**2026**\n  \n**2025**\n \n\nRevenue\n $3,397  $3,571 \n\nCost of Sales\n  2,214   2,508 \n\nGross Margin\n  1,183   1,063 \n\nSegment operating expenses:\n        \n\nPayroll and related\n  958   923 \n\nMarketing\n  62   50 \n\nG&A\n  86   128 \n\nCompliance\n  118   118 \n\nOccupancy\n  144   170 \n\nOverhead\n  (51)  (56)\n\nTotal segment operating expenses\n  1,317   1,333 \n\nInterest and other income\n  (12)  (30)\n\nNet loss\n $(122) $(240)\n\n \n\n**($ in Thousands)**\n \n**For the Nine Months Ended**\n \n\n  \n**March 31,**\n \n\n  \n**2026**\n  \n**2025**\n \n\nRevenue\n $12,771  $12,264 \n\nCost of Sales\n  8,750   8,894 \n\nGross Margin\n  4,021   3,370 \n\nSegment operating expenses:\n        \n\nPayroll and related\n  2,870   2,905 \n\nMarketing\n  134   192 \n\nG&A\n  302   302 \n\nCompliance\n  638   489 \n\nOccupancy\n  425   525 \n\nOverhead\n  (156)  (144)\n\nTotal segment operating expenses\n  4,213   4,269 \n\nInterest and other income\n  (191)  (107)\n\nNet loss\n $(1) $(792)\n\n \n\n \n\n**NOTE 9**—**SUBSEQUENT EVENTS**\n\n \n\nOn *April 27, 2026,*William Greene retired as CFO. On *April 27, 2026,*the Company hired Bart Bedard as CFO and he will be paid an annual salary of $200,000.\n\n \n\nManagement has evaluated events from *April 1, 2026*through *May 14, **2026,* 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.\n\n \n\n*18*\n\n[Table of Contents](#toc)\n\n  \n\n \n\n**ITEM** **2.**         **MANAGEMENT**’**S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS**\n\n \n\n**Forward-Looking Statements**\n\n \n\nCertain 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.\n\n \n\nForward-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.\n\n \n\nForward-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 26, 2025 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:\n\n \n\n \n\n●\n\nThe condition of the economy in general and of the cinema and/or cinema equipment industry in particular,\n\n \n\n \n\n●\n\nOur customers’ adjustments in their order levels,\n\n \n\n \n\n●\n\nSeasonality in our business, specifically our second fiscal quarter, is traditionally weaker,\n\n \n\n \n\n●\n\nChanges in our pricing policies or the pricing policies of our competitors or suppliers,\n\n \n\n \n\n●\n\nThe addition or termination of key supplier relationships,\n\n \n\n \n\n●\n\nThe rate of introduction and acceptance by our customers of new products and services,\n\n \n\n \n\n●\n\nOur ability to compete effectively with our current and future competitors,\n\n \n\n \n\n●\n\nOur ability to enter into and renew key relationships with our customers and vendors,\n\n \n\n \n\n●\n\nChanges in foreign currency exchange rates,\n\n \n\n \n\n●\n\nA major disruption of our information technology infrastructure,\n\n \n\n \n\n●\n\nUnforeseen catastrophic events such as the COVID-19 pandemic, armed conflict, terrorism, fires, typhoons and earthquakes,\n\n \n\n \n\n●\n\nA lack of entertainment content caused by entertainment content provider labor disputes, strikes and work shutdowns,\n\n \n\n19\n\n[Table of Contents](#toc)\n\n \n\nAny other disruptions, such as labor shortages, unplanned maintenance or other manufacturing problems.\n\n \n\nGiven 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.\n\n \n\nAny 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.\n\n \n\n*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.*\n\n \n\n**Overview**\n\n \n\nWe provide technology, products, and services to movie theater operators and sports and entertainment venues.\n\n \n\n \n\n1)\n\nWe 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.\n\n \n\n \n\n2)\n\nWe 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.\n\n \n\n \n\n3)\n\nWe 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).\n\n \n\n \n\n4)\n\nFinally, 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.\n\n \n\n**Factors affecting our performance**\n\n \n\n \n\n20\n\n[Table of Contents](#toc)\n\n \n\nBased on our current estimates of recovery, we believe we have, and will generate, sufficient cash to sustain operations.\n\n \n\n*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.\n\n \n\n*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.\n\n \n\n*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.\n\n \n\n*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.\n\n \n\n*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.\n\n \n\n*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.\n\n \n\n**Cost of goods sold**\n\n \n\nCost 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.\n\n \n\n21\n\n[Table of Contents](#toc)\n\n \n\n**General and administrative expenses**\n\n \n\nGeneral 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.\n\n \n\n**Selling and marketing expenses**\n\n \n\nSelling 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.\n\n \n\n**Research and development expenses**\n\n \n\nResearch 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.\n\n \n\n**Results of Operations**\n\n \n\n**Three** **months ended March 31, 2026 compared to** **the three months ended March 31, 2025**\n\n \n\n*Sales*\n\n \n\nThree Months Ended March 31,\n\n \n\n(in 000’s)\n\n \n\n2026\n\n \n \n\n2025\n\n \n\n$\n3,397\n \n \n$\n3,571\n \n\n \n\nNet sales decreased by 4.9% to $3.397 million for the three months ended March 31, 2026 from $3.571 million for the three months ended March 31, 2025 due to lower one-time project sales.  Estimated quarterly recurring sales revenues are $2.0 million. \n\n \n\n*Gross Profit*\n\n \n\nThree Months Ended March 31,\n\n \n\n(in 000’s)\n\n \n\n2026\n\n \n \n\n2025\n\n \n\n$\n1,183\n \n \n$\n1,063\n \n\n \n\nGross profit dollars increased by $0.120 million or 11.3% to $1.183 million for the three months ended March 31, 2026 from $1.063 million for the three months ended March 31, 2025. As a percentage of total revenues, gross profit percentage increased to 34.8% from 29.8% due to higher Digital Speaker Series (\"DCS\") sales and its related higher margin.  The Company realized approximately $0.065 million improvement in gross profit due to the purchase of DCS inventory at a discount from the initial October 2025 purchase.\n\n \n\n*Research and Development*\n\n \n\nThree Months Ended March 31,\n\n \n\n(in 000’s)\n\n \n\n2026\n\n \n \n\n2025\n\n \n\n$\n45\n \n \n$\n49\n \n\n \n\nResearch and development expenses decreased by $0.004 million for the three months ended March 31, 2026 compared to the three months ended March 31, 2025. This decrease is deemed immaterial.\n\n \n\n22\n\n[Table of Contents](#toc)\n\n \n\n*Selling, General and Administrative Expense*\n\n \n\nThree Months Ended March 31,\n\n \n\n(in 000’s)\n\n \n\n2026\n\n \n \n\n2025\n\n \n\n$\n1,272\n \n \n$\n1,284\n \n\n \n\nThe decrease in selling, general and administrative expense of $0.012 million or 0.9% and was virtually unchanged.\n\n \n\n*Other Income*\n\n \n\nThree Months Ended March 31,\n\n \n\n(in 000’s)\n\n \n\n2026\n\n \n \n\n2025\n\n \n\n$\n12\n \n \n$\n30\n \n\n \n\nOther Income was $0.012 million for the three months ended March 31, 2026 compared to Other Income of $0.030 million for the three months ended March 31, 2025 or a decrease of $0.018 million. The decrease was due to lower interest income on cash savings accounts in the three months ended March 31, 2026 compared to the three months ended March 31, 2025.\n\n \n\n \n\n*Net Income (Loss)*\n\n \n\nThree Months Ended March 31,\n\n \n\n(in 000’s)\n\n \n\n2026\n\n \n \n\n2025\n\n \n\n$\n(122\n)\n \n$\n(240\n)\n\n \n\nNet loss was $(0.122) million for the three months ended March 31, 2026 compared to a net loss of $(0.240) million for the three months ended March 31, 2025 or an improvement in loss reduction of $0.118 million. The improvement was due to higher gross margin of $0.120 million and lower operating expense of $0.016 million, offset by lower other income of $0.018 million.\n\n \n\n23\n\n[Table of Contents](#toc)\n\n \n\n***Nine*** **months ended March 31, 2026 compared to** **the nine months ended March 31, 2025**\n\n \n\n*Sales*\n\n \n\nNine Months Ended March 31,\n\n \n\n(in 000’s)\n\n \n\n2026\n\n \n \n\n2025\n\n \n\n$\n12,771\n \n \n$\n12,264\n \n\n \n\nNet sales increased 4.1% to $12.771 million for the nine months ended March 31, 2026 from $12.264 million for the nine months ended March 31, 2025 due to higher one-time project sales.\n\n \n\n*Gross Profit*\n\n \n\nNine Months Ended March 31,\n\n \n\n(in 000’s),\n\n \n\n2026\n\n \n \n\n2025\n\n \n\n$\n4,021\n \n \n$\n3,370\n \n\n \n\nGross profit dollars increased by $0.651 million or 19.3% to $4.021 million for the nine months ended March 31, 2026 from $3.370 million for the nine months ended March 31, 2025. As a percentage of total revenues, gross profit percentage increased to 31.5% from 27.5% due to DCS higher margin product revenues.\n\n \n\n*Research and Development*\n\n \n\nNine Months Ended March 31,\n\n \n\n(in 000’s)\n\n \n\n2026\n\n \n \n\n2025\n\n \n\n$\n140\n \n \n$\n157\n \n\n \n\nResearch and development expenses decreased by $(0.017) million or 10.8% for the nine months ended March 31, 2026 compared to the nine months ended March 31, 2025 due to headcount reduction.\n\n \n\n24\n\n[Table of Contents](#toc)\n\n \n\n*Selling, General and Administrative Expense*\n\n \n\nNine Months Ended March 31,\n\n \n\n(in 000’s)\n\n \n\n2026\n\n \n \n\n2025\n\n \n\n$\n4,073\n \n \n$\n4,112\n \n\n \n\nIn the nine months ended March 31, 2026, selling, general and administrative expense decreased by $0.039 million or 0.9% due primarily to lower payroll costs.\n\n \n\n*Other Income*\n\n \n\nNine Months Ended March 31,\n\n \n\n(in 000’s)\n\n \n\n2026\n\n \n \n\n2025\n\n \n\n$\n191\n \n \n$\n107\n \n\n \n\nOther Income was $0.191 million for the nine months ended March 31, 2026 compared to Other Income of $0.107 million for the nine months ended March 31, 2025 or an increase of $0.084 million. The increase was due to a one-time payables extinguishment in the nine months ended March 31, 2026 compared to the nine months ended March 31, 2025.\n\n \n\n*Net Income (Loss)*\n\n \n\nNine Months Ended March 31,\n\n \n\n(in 000’s)\n\n \n\n2026\n\n \n \n\n2025\n\n \n\n$\n(1)\n \n \n$\n(792\n)\n\n \n\nNet income was $(0.001) million for the nine months ended March 31, 2026 compared to a net loss of $(0.792) million for the nine months ended March 31, 2025 or an improvement in loss reduction of $0.791 million. The improvement was due to higher gross margin of $0.651 million, lower selling, general and administrative expenses of $0.039 million and higher other income of $0.084 million.\n\n \n\n25\n\n[Table of Contents](#toc)\n\n \n\n \n\n**Liquidity and Capital Resources**\n\n \n\nDuring 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 March 31, 2026 was approximately $2.400 million, as compared to $5.715 million at June 30, 2025.  The $3.352 million decrease was largely due to the DCS inventory purchase of $1.5 million in October 2025 and subsequent DCS inventory purchases during the March quarter.  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.\n\n \n\n*Cash Flows from Operating Activities*\n\n \n\nCompared to March 31, 2025, net cash used in operating activities increased by $3.393 million in March 31, 2026 due largely to the increased DCS inventory and payables of $2.200 million.  Net cash used in operating activities was $(3.301) million for the nine months ended March 31, 2026, which were offset by $0.001 million in net loss and $0.549 million in other non-cash expenses. Within the working capital change, cash used in operating activities included $(3.872) million in inventory, accounts payable, customer deposits, accounts receivable, prepaids and lease liabilities offset by $0.022 million in unearned warranty revenue.\n\n \n\nFor the nine months ended March 31, 2025, net cash provided by operating activities was $0.091 million, primarily due to $0.214 million in working capital increases along with $(0.792) million in net losses and $0.669 million in other non-cash expenses. Within the working capital change, net cash provided included $0.786 million in accounts receivable, prepaids, payables and unearned warranty revenue offset by 0.572 million in inventory, accrued expenses, customer deposit declines and lease liabilities.\n\n \n\n*Cash Flows from Investing Activities*\n\n \n\nNet cash used in investing activities was $0.045 million for equipment purchases for the nine months ended March 31, 2026 and zero for the nine months ended March 31, 2025. \n\n \n\n*Cash Flows from Financing Activities*\n\n \n\nNet cash used in financing activities was $0.006 million for repurchase of shares for the nine months ended March 31, 2026 and zero for the nine months ended March 31,2025.\n\n \n\n**Critical Accounting Policies and Estimates**\n\n \n\nFor 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 nine months ended March 31, 2026 to the judgments, assumptions and estimates upon which our critical accounting estimates are based.\n\n \n\nAdditionally, 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.\n\n \n\n**ITEM** **3.**         **QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK**\n\n \n\nNot applicable.\n\n \n\n26\n\n[Table of Contents](#toc)\n\n \n\n**ITEM** **4.**         **CONTROLS AND PROCEDURES**\n\n \n\n**Evaluation of Disclosure Controls and Procedures**\n\n \n\nWe 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 March 31, 2026. 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 March 31, 2026 due to material weaknesses in our internal controls over financial reporting as described below.\n\n \n\nSince 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.\n\n \n\n**Changes in Internal Control over Financial Reporting**\n\n \n\nDuring the quarter ended March 31, 2026, 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.\n\n \n\n \n\n** ****PART II** –**OTHER INFORMATION**\n\n \n\n**ITEM** **1.**         **LEGAL PROCEEDINGS**\n\n \n\nWe 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.\n\n \n\n**ITEM** **1A.**      **RISK FACTORS**\n\n \n\nThere 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.\n\n \n\n**ITEM** **2.**         **UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS**\n\n \n\n**Unregistered Sales of Equity Securities**\n\n \n\nNone.\n\n \n\n**ITEM** **3.**         **DEFAULTS UPON SENIOR SECURITIES**\n\n \n\nNot applicable.\n\n \n\n27\n\n[Table of Contents](#toc)\n\n \n\n**ITEM** **4.**         **MINE SAFETY DISCLOSURES**\n\n \n\nNot applicable.\n\n \n\n**ITEM** **5.**         **OTHER INFORMATION**\n\n \n\nNot applicable.  \n\n \n\n \n\n**ITEM** **6.**         **EXHIBITS**\n\n \n\nExhibit\nNo.\n\nExhibit Description\n\n3.1\n\n[Amended and Restated Bylaws of Moving iMage Technologies, Inc. (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed on January 9, 2024).](http://www.sec.gov/Archives/edgar/data/1770236/000155837024000152/mitq-20240108xex3d1.htm)\n\n31.1*\n\n[Certification of the Principal Executive Officer pursuant to Rule 13a‑14(a) or 15d‑14(a) of the Securities Exchange Act of 1934.](ex_922991.htm)\n\n31.2*\n\n[Certification of the Principal Financial Officer pursuant to Rule 13a‑14(a) or 15d‑14(a) of the Securities Exchange Act of 1934.](ex_922992.htm)\n\n32.1†\n\n[Certification of the Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.](ex_922993.htm)\n\n101.INS*\n\nThe following financial statements from the Company’s Quarterly Report on Form 10‑Q for the quarter ended March 31, 2026, 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.\n\n104*\n\nCover Page Interactive Data File (Embedded within the Inline XBRL document and included in Exhibit 101).\n\n \n\n \n\n*\n\nFiled herewith.\n\n \n\nIndicates a management contract or compensatory plan or arrangement.\n\n \n\n†\n\nFurnished herewith and not “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended.\n\n \n\n28\n\n[Table of Contents](#toc)\n\n \n\n**SIGNATURES**\n\n \n\nPursuant 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.\n\n \n\n \n\n**MOVING IMAGE TECHNOLOGIES,** **INC.**\n\n \n \n \n\n \n \n \n\nDate: May 14, 2026\n\n \n \n\n \n \n \n\n \n\nBy:\n\n/s/ Bart Bedard\n\n \n\nName:\n\nBart Bedard\n\n \n\nTitle:\n\nChief Financial Officer\n\n \n \n\n(Principal Financial and Accounting Officer)\n\n \n\n \n\n29"}