Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Mar. 31, 2022 | May 10, 2022 | |
Document and Entity Information [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Document Period End Date | Mar. 31, 2022 | |
Entity File Number | 001-40511 | |
Entity Registrant Name | Moving iMage Technologies, Inc. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 85-1836381 | |
Entity Address State Or Province | CA | |
Entity Address, Address Line One | 17760 Newhope Street | |
Entity Address, City or Town | Fountain Valley | |
Entity Address, Postal Zip Code | 92708 | |
City Area Code | 714 | |
Local Phone Number | 751-7998 | |
Title of 12(b) Security | Common Stock, $0.00001 par value | |
Trading Symbol | MITQ | |
Security Exchange Name | NYSEAMER | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | true | |
Entity Ex Transition Period | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 10,828,378 | |
Entity Central Index Key | 0001770236 | |
Current Fiscal Year End Date | --06-30 | |
Document Fiscal Year Focus | 2022 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) | Mar. 31, 2022 | Jun. 30, 2021 |
Current Assets: | ||
Cash and cash equivalents | $ 6,337,000 | $ 1,270,000 |
Marketable securities | 3,082,000 | |
Accounts receivable, net | 1,686,000 | 454,000 |
Inventories, net | 2,985,000 | 1,534,000 |
Prepaid expenses and other | 785,000 | 95,000 |
Total Current Assets | 14,875,000 | 3,353,000 |
Long-Term Assets: | ||
Marketable securities | 347,000 | |
Property, plant and equipment, net | 24,000 | 21,000 |
Intangibles, net | 863,000 | 935,000 |
Goodwill | 287,000 | 287,000 |
Other assets | 16,000 | 1,133,000 |
Total Long-Term Assets | 1,537,000 | 2,376,000 |
Total Assets | 16,412,000 | 5,729,000 |
Current Liabilities: | ||
Accounts payable | 2,237,000 | 1,911,000 |
Accrued expenses | 515,000 | 620,000 |
Customer deposits | 3,534,000 | 1,339,000 |
Line of credit | 0 | 590,000 |
Notes payable - current | 237,000 | |
Unearned warranty revenue | 37,000 | 34,000 |
Total Current Liabilities | 6,321,000 | 4,731,000 |
Long-Term Liabilities: | ||
Notes payable, net of current portion | 1,702,000 | |
Deferred rent | 24,000 | 25,000 |
Total Long-Term Liabilities | 24,000 | 1,727,000 |
Total Liabilities | 6,345,000 | 6,458,000 |
Stockholders' Equity (Deficit) | ||
Common stock, $0.00001 par value, 100,000,000 shares authorized, 10,636,278 and 5,666,667 shares issued and outstanding at March 31, 2022 and June 30, 2021, respectively | ||
Additional paid-in capital | 12,433,000 | 1,011,000 |
Accumulated deficit | (2,368,000) | (1,740,000) |
Total Stockholders' Equity (Deficit) | 10,065,000 | (729,000) |
Total Liabilities and Stockholders' Equity (Deficit) | $ 16,412,000 | $ 5,729,000 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Mar. 31, 2022 | Jun. 30, 2021 |
CONDENSED CONSOLIDATED BALANCE SHEETS | ||
Common stock par value | $ 0.00001 | $ 0.00001 |
Common stock, Authorized | 100,000,000 | 100,000,000 |
Common stock, Issued | 10,636,278 | 10,636,278 |
Common stock, Outstanding | 5,666,667 | 5,666,667 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Mar. 31, 2022 | Mar. 31, 2021 | Mar. 31, 2022 | Mar. 31, 2021 | |
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | ||||
Net sales | $ 5,835 | $ 1,710 | $ 12,728 | $ 5,076 |
Cost of goods sold | 4,468 | 1,294 | 9,743 | 3,786 |
Gross profit | 1,367 | 416 | 2,985 | 1,290 |
Operating expenses: | ||||
Research and development | 53 | 42 | 172 | 103 |
Selling and marketing | 539 | 277 | 1,653 | 934 |
General and administrative | 906 | 389 | 2,470 | 1,209 |
Total operating expenses | 1,498 | 708 | 4,295 | 2,244 |
Operating loss | (131) | (292) | (1,310) | (956) |
Other (income) expense: | ||||
Unrealized gain on marketable securities | (17) | (17) | ||
Realized gain on marketable securities | (185) | (459) | ||
PPP loan and interest forgiveness | (705) | (705) | ||
Interest and other income | (1) | (2) | ||
Interest expense | 2 | 57 | 40 | 194 |
Total other (income) expense | (724) | (128) | (684) | (265) |
Net income (loss) | $ 593 | $ (164) | $ (626) | $ (691) |
Weighted average shares outstanding: basic | 10,636,278 | 5,666,667 | 10,508,152 | 5,638,626 |
Weighted average shares outstanding: diluted | 10,636,278 | 5,666,667 | 10,508,152 | 5,638,626 |
Net income (loss) per common share basic | $ 0.06 | $ (0.03) | $ (0.06) | $ (0.12) |
Net income (loss) per common share diluted | $ 0.06 | $ (0.03) | $ (0.06) | $ (0.12) |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT) - USD ($) | Common StockPrivate Placement | Common Stock | Additional Paid-in CapitalPrivate Placement | Additional Paid-in Capital | Accumulated DeficitPrivate Placement | Accumulated Deficit | Private Placement | Total |
Balance at the beginning at Jun. 30, 2020 | $ 0 | $ 101,000 | $ 0 | $ 101,000 | ||||
Balance at the beginning (in shares) at Jun. 30, 2020 | 2,650,000 | |||||||
Share Exchange (see Note 1) | $ 0 | $ 784,000 | 126,000 | $ 0 | (1,095,000) | $ 784,000 | (969,000) | |
Share Exchange (see Note 1) (in shares) | 666,667 | 2,350,000 | ||||||
As adjusted | $ 0 | 227,000 | (1,095,000) | (868,000) | ||||
As adjusted (in shares) | 5,000,000 | |||||||
Net loss | $ 0 | 0 | (370,000) | (370,000) | ||||
Shares issued in private placement | $ 0 | 784,000 | 126,000 | 0 | (1,095,000) | 784,000 | (969,000) | |
Shares issued in private placement (in shares) | 666,667 | 2,350,000 | ||||||
Balance at the end at Sep. 30, 2020 | $ 0 | 1,011,000 | (1,465,000) | (454,000) | ||||
Balance at the end (in shares) at Sep. 30, 2020 | 5,666,667 | |||||||
Balance at the beginning at Jun. 30, 2020 | $ 0 | 101,000 | 0 | 101,000 | ||||
Balance at the beginning (in shares) at Jun. 30, 2020 | 2,650,000 | |||||||
Share Exchange (see Note 1) | $ 0 | $ 0 | 784,000 | 126,000 | 0 | (1,095,000) | 784,000 | (969,000) |
Share Exchange (see Note 1) (in shares) | 666,667 | 2,350,000 | ||||||
As adjusted | $ 0 | 237,000 | (1,095,000) | (868,000) | ||||
As adjusted (in shares) | 5,000,000 | |||||||
Net loss | $ 0 | 0 | (691,000) | (691,000) | ||||
Shares issued in private placement | $ 0 | $ 0 | $ 784,000 | 126,000 | $ 0 | (1,095,000) | $ 784,000 | (969,000) |
Shares issued in private placement (in shares) | 666,667 | 2,350,000 | ||||||
Balance at the end at Mar. 31, 2021 | $ 0 | 1,011,000 | (1,786,000) | (775,000) | ||||
Balance at the end (in shares) at Mar. 31, 2021 | 5,666,667 | |||||||
Balance at the beginning at Sep. 30, 2020 | $ 0 | 1,011,000 | (1,465,000) | (454,000) | ||||
Balance at the beginning (in shares) at Sep. 30, 2020 | 5,666,667 | |||||||
Net loss | $ 0 | 0 | (157,000) | (157,000) | ||||
Balance at the end at Dec. 31, 2020 | $ 0 | 1,011,000 | (1,622,000) | (611,000) | ||||
Balance at the end (in shares) at Dec. 31, 2020 | 5,666,667 | |||||||
Net loss | $ 0 | 0 | (164,000) | (164,000) | ||||
Balance at the end at Mar. 31, 2021 | $ 0 | 1,011,000 | (1,786,000) | (775,000) | ||||
Balance at the end (in shares) at Mar. 31, 2021 | 5,666,667 | |||||||
Balance at the beginning at Jun. 30, 2021 | $ 0 | 1,011,000 | (1,740,000) | (729,000) | ||||
Balance at the beginning (in shares) at Jun. 30, 2021 | 5,666,667 | |||||||
Shares of common stock issued for cash, net of issuance costs | $ 0 | 11,244,000 | 0 | 11,244,000 | ||||
Shares of common stock issued for cash, net of issuance costs (in shares) | 4,830,000 | |||||||
Cashless exercise of warrants | $ 0 | 0 | 0 | 0 | ||||
Cashless exercise of warrants (in shares) | 139,611 | |||||||
Grant of option for services | $ 0 | 56,000 | 0 | 56,000 | ||||
Net loss | 0 | 0 | (577,000) | (577,000) | ||||
Balance at the end at Sep. 30, 2021 | $ 0 | 12,311,000 | (2,317,000) | 9,994,000 | ||||
Balance at the end (in shares) at Sep. 30, 2021 | 10,636,278 | |||||||
Balance at the beginning at Jun. 30, 2021 | $ 0 | 1,011,000 | (1,740,000) | (729,000) | ||||
Balance at the beginning (in shares) at Jun. 30, 2021 | 5,666,667 | |||||||
Shares of common stock issued for cash, net of issuance costs | $ 0 | 11,244,000 | 0 | 11,244,000 | ||||
Shares of common stock issued for cash, net of issuance costs (in shares) | 4,830,000 | |||||||
Cashless exercise of warrants | $ 0 | 0 | 0 | 0 | ||||
Cashless exercise of warrants (in shares) | 139,611 | |||||||
Grant of option for services | $ 0 | 178,000 | 0 | 178,000 | ||||
Net loss | 0 | 0 | (628,000) | (626,000) | ||||
Balance at the end at Mar. 31, 2022 | $ 0 | 12,433,000 | (2,368,000) | 10,065,000 | ||||
Balance at the end (in shares) at Mar. 31, 2022 | 10,636,278 | |||||||
Balance at the beginning at Sep. 30, 2021 | $ 0 | 12,311,000 | (2,317,000) | 9,994,000 | ||||
Balance at the beginning (in shares) at Sep. 30, 2021 | 10,636,278 | |||||||
Grant of option for services | $ 0 | 62,000 | 0 | 62,000 | ||||
Net loss | 0 | 0 | (644,000) | (644,000) | ||||
Balance at the end at Dec. 31, 2021 | $ 0 | 12,373,000 | (2,961,000) | 9,412,000 | ||||
Balance at the end (in shares) at Dec. 31, 2021 | 10,636,278 | |||||||
Grant of option for services | $ 0 | 60,000 | 0 | 60,000 | ||||
Net loss | 0 | 0 | 593,000 | 593,000 | ||||
Balance at the end at Mar. 31, 2022 | $ 0 | $ 12,433,000 | $ (2,368,000) | $ 10,065,000 | ||||
Balance at the end (in shares) at Mar. 31, 2022 | 10,636,278 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) | 9 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Cash flows from operating activities: | ||
Net loss | $ (626,000) | $ (691,000) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Provision for (reversal of) doubtful accounts | (230,000) | 8,000 |
Depreciation expense | 15,000 | 99,000 |
Amortization expense | 72,000 | 72,000 |
Unrealized gain on investments | (17,000) | |
Realized gain on investments | (459,000) | |
Deferred rent | (1,000) | 5,000 |
Stock option compensation expense | 178,000 | |
PPP loan forgiveness | (705,000) | |
Changes in operating assets and liabilities | ||
Accounts receivable | (1,002,000) | 139,000 |
Inventories | (1,451,000) | (263,000) |
Prepaid expenses and other | 426,000 | (104,000) |
Accounts payable | 326,000 | (311,000) |
Accrued expenses | (99,000) | (78,000) |
Unearned warranty revenue | 3,000 | (21,000) |
Customer deposits | 2,195,000 | (270,000) |
Net cash used in operating activities | (916,000) | (1,874,000) |
Cash flows from investing activities | ||
Sale of (investment in) marketable securities | (3,412,000) | 550,000 |
Purchases of property, plant and equipment | (18,000) | |
Net cash used in investing activities | (3,430,000) | 550,000 |
Cash flows from financing activities | ||
Net Proceeds from initial public offering | 11,244,000 | |
Payments on line of credit | (590,000) | (60,000) |
Proceeds from private placement | 1,334,000 | |
Paycheck Protection Program loan proceeds | 698,000 | |
Payments on notes payable | (1,241,000) | (59,000) |
Net cash provided by financing activities | 9,413,000 | 1,363,000 |
Net increase (decrease) in cash and cash equivalents | 5,067,000 | 39,000 |
Cash and cash equivalents, beginning of the period | 1,270,000 | 1,059,000 |
Cash and cash equivalents, end of the period | 6,337,000 | 1,098,000 |
Non-cash investing and financing activities: | ||
Deferred IPO costs | 72,000 | |
Reclassification of IPO related costs from other assets to equity | 1,116,000 | |
Cash paid during the period: | ||
Interest | $ 40,000 | $ 165,000 |
BUSINESS ACTIVITY AND SUMMARY O
BUSINESS ACTIVITY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 9 Months Ended |
Mar. 31, 2022 | |
BUSINESS ACTIVITY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
BUSINESS ACTIVITY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 1 — BUSINESS ACTIVITY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Organization: Moving iMage Acquisition Co. (DBA “Caddy Products”) designs, develops and manufactures innovative products for the entertainment, cinema, grocery, worship, restaurant, sports and restroom industries. Share Exchange: In June 2020, MiT LLC members created Moving iMage Technologies, Inc. (“MIT Inc.”) to facilitate the Company’s initial public offering offering (“IPO”). Upon formation of MiT, Inc., 2,000,000 shares of MiT, Inc. common stock were issued to members of MiT LLC. On July 7, 2021, MiT LLC and MiT Inc. entered into an exchange agreement (“Exchange Agreement”) whereby the members of MiT LLC exchanged their membership interest for 2,350,000 shares of common stock in MiT Inc. As a result of the Exchange Agreement, the members of MiT LLC owned approximately 79% or 4,452,334 of the outstanding common stock of MiT Inc. As a result, MiT LLC (the entity where the Company conducts its business) became a wholly-owned subsidiary of MiT Inc. (the SEC registrant). The transaction was accounted for as a merger of entities under common ownership in accordance with generally accepted accounting principles in the United States of America (“GAAP”). This determination was primarily based on the facts that, immediately before and after the transaction: (i) MiT LLC owners owned a substantial majority of the voting rights in the combined company, (ii) MiT LLC designated a majority of the members of the initial board of directors of the combined company, and (iii) MiT LLC’s senior management holds all key positions in the senior management of the combined company. As a result, the historical financial statements of MiT LLC and MiT Inc. for the three months and for the nine months ended March 31, 2021 have been retroactively revised to reflect the consolidation of MiT, Inc. and MiT LLC. All inter-company transactions and balances between MiT Inc. and MiT, LLC have been eliminated. The condensed consolidated statements of stockholders’ equity (deficit) for the periods ended March 31, 2022 and 2021 have been retroactively revised to give effect of the change in reporting entity accounting of MiT Inc. and MiT LLC. NOTE 1 — BUSINESS ACTIVITY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) Initial Public Offering: per share. None of the potentially dilutive securities were included in the computation of diluted earnings per share as their impact would be anti-dilutive. On July 12, 2021, in connection with the IPO, warrants to purchase 139,611 shares of the Company’s common stock were exercised on a cashless basis. COVID-19 Impact and Liquidity The repercussions of the COVID-19 global pandemic resulted in a significant impact to our customers, specifically those in the entertainment and cinema industries. Cinemas have been shuttered since March 2020 in an effort to stem the spread of COVID-19 and studios, for the most part, have rescheduled their film releases until cinemas can reopen. Specifically, the pandemic has had a material adverse effect on our business. A significant number of our customers have temporarily ceased operations and others have cancelled or pushed back the delivery of pending product orders and/or delayed the start of scheduled theater refurbishing and construction projects. In addition, we have experienced increased challenges in, or cost of, acquiring new customers and increased risk in collectability of accounts receivable. As a result of the aforementioned factors, our financial and operating results for the three and nine months ended March 31, 2022 and 2021, have been adversely affected. Additionally, our projected financial and operating results for the remainder of fiscal 2022 are expected to be materially adversely affected. The ultimate impact of the COVID-19 pandemic on our business and results of operations in fiscal 2022 and beyond is unknown and will depend on future developments, which are highly uncertain and cannot be predicted with confidence, including the duration and severity of the COVID-19 pandemic and any additional preventative and protective actions that governments, or we, or our customers, may direct, which may result in an extended period of continued business disruption and reduced operations. We expect that our results of operations, including revenues, in future periods will continue to be adversely impacted by the COVID-19 pandemic and its negative effects on global economic conditions, which include the possibility of a global recession. During the second half of the 2021 calendar year, several larger theater chains have reopened in many parts of the United States. The ability of these chains to reopen was predicated in large part on decisions by state and local officials to allow, limit or prohibit the reopening of establishments such as cinemas in response to regionally specific COVID-19 outbreaks. Such reopening has been done on a gradual basis with limited occupancy and specific procedures, products, and technologies required to be implemented to protect the safety and health of returning patrons and employees. In response to uncertainties associated with the COVID-19 pandemic, we have taken, and are continuing to take, significant steps to preserve cash and remain in a strong competitive position when the current crisis subsides by eliminating non-essential costs, reducing employee hours and deferring all non-essential capital expenditures to minimum levels. NOTE 1 — BUSINESS ACTIVITY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) We have also implemented remote work policies for many employees, and the resources available to such employees may not enable them to maintain the same level of productivity and efficiency, and these and other employees may face additional demands on their time, such as increased responsibilities resulting from school closures or illness of family members. Our increased reliance on remote access to our information systems also increases our exposures to potential cybersecurity breaches. As of the date these Condensed Consolidated Financial Statements were issued, with the actions taken above, existing cash, including the cash raised from our initial public offering (see Initial Public Offering), the Company will have sufficient liquidity to fund operations and essential capital expenditures for the 12 months from the date these condensed consolidated financial statements were available to be issued. Principles of Consolidation Basis of Presentation: Unaudited Interim Condensed Consolidated Financial Statements: Measurement of Fair Values : — Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities. — Level 2: inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly (i.e., as prices) or indirectly (i.e., derived from prices). — Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs). If the inputs used to measure the fair value of an asset or a liability fall into different levels of the fair value hierarchy, then the fair value measurement is categorized in its entirety in the same level of the fair value hierarchy as the lowest level input that is significant to the entire measurement. Deferred Offering Costs: As of June 30, 2021, $1,116,000 of deferred offering costs were capitalized in other assets. After completion of the IPO in July 2021, these costs have been recorded in the condensed consolidated statements of changes in stockholders’ equity (deficit) as a reduction of proceeds received from the offering. NOTE 1 — BUSINESS ACTIVITY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) Use of Estimates: Concentration of Cash: Cash Equivalents and Marketable Securities: All highly liquid investments with maturities of three months or less at the date of purchase are classified as cash equivalents. The Company’s investments in marketable debt securities are carried at either amortized cost or fair value. Investments in debt securities that the Company has the positive intent and ability to hold to maturity are carried at amortized cost and classified as held-to-maturity. Investments in debt securities that are not classified as held-to-maturity are carried at fair value and classified as available-for sale. Realized gains and losses on available-for-sale debt securities are included in net income/loss. Unrealized gains and losses, net of tax, on available-for-sale debt securities are recognized in other comprehensive gain/(loss). The Company’s investments in marketable equity securities are classified based on the nature of the securities and their availability for use in current operations. The Company’s marketable equity securities are measured at fair value with gains and losses recognized in other income/(expense), net. The cost of securities sold is determined using the specific identification method. Accounts Receivable: 31, 2022 and June 30, 2021, the allowance for bad debts is approximately Inventories: 31, 2022 and June 30, 2021, inventory on hand was comprised primarily of finished goods ready for sale. As of March 31, 2022 and June 30, 2021, inventory reserve was $ Revenue Recognition: 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 as per the agreement, in an amount that reflects the consideration that we expect to receive in exchange for those goods as per the agreement with the customer. We generate all our revenue from agreements with customers. In cases where there are agreements with multiple performance obligations, we identify each performance obligation and evaluate 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. We allocate the transaction price to each distinct performance obligation proportionately based on the estimated standalone selling price for each performance obligation and then evaluate 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. 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). Accounts receivable balance as of July 1, 2020 was $809,000. The Company does not have contract assets that represent conditional rights to consideration. NOTE 1 — BUSINESS ACTIVITY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) Contract liabilities consist of refund and warranty liabilities, as well as deposits received in advance on sales to certain customers. Such deposits are reflected as customer deposits and recognized in revenue when control of the products is transferred or when performance conditions are satisfied per the agreement. The change in contract liabilities (customer deposits and unearned warranty revenue) during the nine months ended March 31, 2022 included $1.273 million for revenue recognized that was included in contract liability as of July 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. The Company 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. For the Three For the Three For the Nine For the Nine Months Ended Months Ended Months Ended Months Ended Disaggregation of Revenue (in 000’s): March 31, 2022 March 31, 2021 March 31, 2022 March 31, 2021 Equipment upon delivery (point in time) $ 5,701 $ 1,682 $ 12,489 $ 4,984 Installation (point in time) 134 28 239 92 Total revenues $ 5,835 $ 1,710 $ 12,728 $ 5,076 Revenue from the sale of equipment is recognized upon delivery of such equipment to customers and when performance conditions are satisfied. Revenue from installation 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. There were no software revenues during the three or nine months ended March 31, 2022 or 2021. Returns and Allowances: Shipping and Handling Costs: Advertising Costs: and $16,000 and $9,700 for the nine months ended March 31, 2022 and 2021, respectively. Advertising costs are expensed as incurred within selling and marketing expenses. NOTE 1 — BUSINESS ACTIVITY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) Goodwill and Intangible Assets: The Company tested goodwill impairment in relation to the COVID-19 pandemic and no impairments were identified for the three and nine months ended March 31, 2022 or 2021. Goodwill is at risk of future impairment in the event of significant unexpected changes in the Company’s forecasted future results and cash flows, or if there is a negative change in the long-term outlook for the business or in other factors such as the discount rate, or if there is a decline in the stock price. 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. The Company 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 months and nine months ended March 31, 2022 or 2021. Business Combinations: Income Taxes: NOTE 1 — BUSINESS ACTIVITY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) The Company evaluates the recoverability of deferred tax assets and establishes a valuation allowance when it is more likely than not that some portion or all the deferred tax assets will not be realized. Because the Company has had recurring losses from operations, at March 31, 2022 it has taken a full valuation allowance against all potential deferred tax assets. Prior to July 7, 2021, MiT LLC was a limited liability company treated as a partnership for federal and state income tax purposes with all income tax liabilities and/or benefits (losses) of the Company being passed through to the members. As such, there is no recognition of federal or state income taxes in the financial statements prior to July 7, 2021. Any uncertain tax position taken by the members is not an uncertain position of the Company. The Company evaluates the recoverability of deferred tax assets and establishes a valuation allowance when it is more likely than not that some portion or all of the deferred tax assets will not be realized. The Company evaluated the realizability of deferred tax assets (“DTA”) at June 30, 2021 (most recent year end, presented as comparative in 10Q balance sheet), July 7, 2021 (date of exchange agreement), September 30, 2021 (Q1 reporting period) December 31, 2021 (Q2 reporting period) and March 31, 2022 (Q3 reporting period). Because the Company has had recurring losses from operations at June 30, 2021, and further losses for the nine months ended March 31, 2022, which will generate NOL’s, and it has taken a full valuation allowance against all potential deferred tax assets. Goodwill recognized in connection with acquisitions represents the residual amount of the purchase price over separately identifiable intangible assets and pursuant to 26 U.S. Code section 197 is deductible for tax purposes. The following table summarizes deferred tax assets and liabilities as of the date of the Exchange Agreement through March 31, 2022: Deferred Existing valuation allowance Tax Assets Deferred Tax Liabilities Prior to business combination Net Position MiT Inc. $ — $ — $ — $ — MiT LLC 248 (13) (235) — Total July 7, 2021 $ 248 $ (13) $ (235) $ — Deferred tax assets $ 622 $ — $ — $ 622 Deferred tax liabilities — (12) — (12) Valuation allowance — — (610) (610) Total MiT Inc. March 31, 2022 $ 622 $ (12) $ (610) $ — NOTE 1 — BUSINESS ACTIVITY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) The following table summarizes the components of deferred tax assets and deferred tax liabilities through March 31, 2022: Deferred Tax Assets (Liabilities) Inventory reserve $ 133 Accumulated depreciation (7) Accumulated goodwill amortization (6) Accumulated intangible amortization 13 Deferred rent 7 Warranty reserve 8 Allowance for doubtful accounts 100 Net 248 Valuation allowance (248) Total July 1, 2021 $ — Inventory reserve $ 152 Accumulated depreciation (1) Accumulated goodwill amortization (11) Accumulated intangible amortization 17 Deferred rent 7 Warranty reserve 9 Stock compensation 50 Net operating loss carryforward 370 Allowance for doubtful accounts 35 Net 627 Valuation allowance (627) Total March 31, 2022 $ — NOTE 1 — BUSINESS ACTIVITY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) Product Warranty: The changes in the Company’s aggregate warranty liabilities were as follows for the following periods (in thousands): Nine Months Ended Twelve Months Ended March 31, June 30, 2022 2021 Product warranty liability, beginning of period $ 29 $ 65 Accruals for warranties issued 37 29 Change in estimates — (37) Settlements made (29) (28) Product warranty liability, end of period $ 37 $ 29 Research and Development: Recently Issued Accounting Pronouncements: Leases (Topic 842 02 requires modified retrospective adoption for all leases existing at, or entered into after, the date of initial application, with an option to use certain transition relief. Management is in the process of evaluating the impact of this standard effective July 1, 2022. In December 2019, the FASB issued ASU No. 2019-12, Income Taxes (Topic 740) Simplifying the Accounting for Income Taxes |
INVESTMENTS
INVESTMENTS | 9 Months Ended |
Mar. 31, 2022 | |
INVESTMENTS | |
INVESTMENTS | NOTE 2 — INVESTMENTS Other pronouncements issued by the FASB with future effective dates are either not applicable or not significant to the consolidated financial statements of the Company. The following tables show the Company’s cash, cash equivalents and marketable securities by significant investment category as of March 31, 2022 (amounts in 000’s): Current Non-current Adjusted Unrealized Unrealized Fair Cash and Marketable Marketable Cost Gains Losses Value Cash Equivalents Securities Securities Cash $ 6,337 $ — $ — $ 6,337 $ 6,337 $ — $ — Equities Communication 40 — (1) 39 — 39 — Consumer Discretionary 56 2 — 58 — 58 — Consumer Staples 19 1 — 20 — 20 — Energy 9 — (1) 8 — 8 — Financials 44 — (2) 42 — 42 — Health Care 40 1 — 41 — 41 — Industrials 27 1 — 28 — 28 — Information Technology 120 3 — 123 — 123 — Materials 10 1 — 11 — 11 — Real Estate 10 — — 10 — 10 — Utilities 6 1 — 7 — 7 — Mutual Funds 327 — — 327 — 327 — — Subtotal 708 10 (4) 714 — 714 — Fixed Income State & Municipal Bonds 673 3 — 676 — 329 347 Fixed income funds 1,655 2 — 1,657 — 1,657 — Subtotal 2,328 5 — 2,333 — 1,986 347 Alternative, real estate and other 381 1 — 382 — 382 — Total $ 9,754 $ 16 $ (4) $ 9,766 $ 6,337 $ 3,082 $ 347 |
INCOME (LOSS) PER SHARE
INCOME (LOSS) PER SHARE | 9 Months Ended |
Mar. 31, 2022 | |
LOSS PER SHARE | |
LOSS PER SHARE | NOTE 3 — 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 income (loss) per share is as follows: For the Three Months Ended For the Nine Months Ended For the Three Months Ended For the Nine Months Ended March 31, March 31, March 31, December 31, 2022 2022 2021 2021 Numerator: Net income (loss) $ 593 $ (628) $ (164) $ (691) Denominator: Weighted average common shares outstanding, basic and diluted 10,636,278 10,508,152 5,666,667 5,638,626 Income (loss) per share Basic and diluted $ .06 $ (0.06) $ (0.03) $ (0.12) 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 Three Months Ended For the Nine Months Ended For the Three Months Ended For the Nine Months Ended March 31, March 31, March 31, March 31, 2022 2022 2021 2021 Options 150,000 150,000 — — Warrants 241,500 241,500 236,667 236,667 Total potentially dilutive shares 391,500 391,500 236,667 236,667 For the three month period ended March 31, 2021 and the nine month periods ended March 31, 2022 and 2021, the Company had a net loss, therefore all potentially dilutive securities are deemed to be anti-dilutive and are not included in the diluted loss per share computation. For the three month period ended March 31, 2022 the Company had net income. All potentially dilutive securities for the three month period ended March 31, 2022 were excluded from the computation of earnings per share because their exercise prices were out of the money and were thus also anti-dilutive when computed using the treasury stock method. |
PROPERTY, PLANT AND EQUIPMENT
PROPERTY, PLANT AND EQUIPMENT | 9 Months Ended |
Mar. 31, 2022 | |
PROPERTY, PLANT AND EQUIPMENT | |
PROPERTY, PLANT AND EQUIPMENT | NOTE 4 — PROPERTY, PLANT AND EQUIPMENT Property, plant and equipment consist of the following (in thousands): March 31, June 30, 2022 2021 Production equipment $ 307 $ 307 Leasehold improvements 213 202 Furniture and fixtures 45 45 Computer equipment 46 44 Other equipment 120 114 730 712 Accumulated depreciation (706) (691) Net property plant and equipment $ 24 $ 21 Depreciation expense related to property, plant and equipment was $3,000 and $33,000 for the three months ended March NOTE 4 — PROPERTY, PLANT AND EQUIPMENT (continued) Depreciation expense related to property, plant and equipment was $15,000 and $98,000 Depreciation of property, plant and equipment is calculated using the straight-line method over their estimated useful lives as follows: Useful Lives Leasehold improvements 5 years or remaining lease term Furniture and fixtures 5 years Production equipment 3 – 7 years Computer equipment 3 years Other equipment 3 – 7 years |
INTANGIBLE ASSETS
INTANGIBLE ASSETS | 9 Months Ended |
Mar. 31, 2022 | |
INTANGIBLE ASSETS | |
INTANGIBLE ASSETS | NOTE 5 —INTANGIBLE ASSETS The following table summarizes the Company’s intangible assets as of March 31, 2022 (in thousands): Amortization Gross Asset Accumulated Net Book Period Cost Amortization Value Customer relationships 11 years $ 970 $ 235 $ 735 Patents 20 years 70 10 60 Trademark 20 years 78 10 68 $ 1,118 $ 231 $ 863 The following table summarizes the Company’s intangible assets as of June 30, 2021 (in thousands): Amortization Gross Asset Accumulated Net Book Period Cost Amortization Value Customer relationships 11 years $ 970 $ 169 $ 801 Patents 20 years 70 7 63 Trademark 20 years 78 7 71 $ 1,118 $ 183 $ 935 Amortization expense was $24,000 and $24,000 for the three Estimated amortization expense related to intangible assets subject to amortization at March 31, 2022 in each of the five years subsequent to March 31, 2022, and thereafter is as follows (amounts in thousands): 2022 $ 96 2023 96 2024 96 2025 96 2026 96 Thereafter 383 Total $ 863 |
ACCRUED EXPENSES
ACCRUED EXPENSES | 9 Months Ended |
Mar. 31, 2022 | |
ACCRUED EXPENSES | |
ACCRUED EXPENSES | NOTE 6 — ACCRUED EXPENSES Accrued expenses consist of the following (in thousands): March 31, June 30, 2022 2021 Employee compensation $ 311 $ 485 Others 204 135 Total $ 515 $ 620 |
DEBT
DEBT | 9 Months Ended |
Mar. 31, 2022 | |
DEBT | |
DEBT | NOTE 7 — DEBT Line of Credit In October 2019, MiT LLC executed a line of credit agreement with an unaffiliated lender to provide a $1.0 million asset-based bridge loan to be used for working capital purposes. Funds borrowed bore interest at 13% per annum and were due and payable one year from the origination date of the loan. The loan was secured by all assets of MiT LLC and was personally guaranteed by Phil Rafnson, our CEO and Chairman of the Board. Sound Management Investors, LLC, an entity controlled by Mr. Rafnson, pledged all membership units of MiT LLC held by it as further security for the repayment of such loan. In connection with this borrowing, the lender was issued warrants to acquire shares of the Company's common stock upon completion of its IPO. On the effective date of the IPO, the lender exercised these warrants to acquire 94,723 shares of the common stock on a cashless basis. Approximately $400,000 of the proceeds from this loan were used to pay amounts owed to Caddy in connection with the Caddy acquisition. No further borrowings are available under this agreement from March 31, 2020. As of June 30, 2021, the outstanding balance of this line of credit was $590,000. In July 2021, the outstanding balance, and all accrued interest, was paid in full. There was no outstanding debt as of March 31, 2022. Long-term debt at June 30, 2021 was as follows (in thousands): June 30, 2021 Balance Current Long Term Caddy promissory note $ 1,059 $ 142 $ 917 PPP loan 698 73 625 Caddy indemnity promissory note 182 22 160 Total $ 1,939 $ 237 $ 1,702 The Caddy Promissory note was payable in monthly installments through August 2024 at an interest rate of Prime plus 2.75%. The Caddy Indemnity note was payable in monthly installments due July 2024 at an interest rate of Prime plus 2.75%. On January 1, 2020, the interest rate margin increased to 3.75% on both notes. All of the notes were collateralized by Caddy assets. In addition, the notes were guaranteed by Phil Rafnson, the Company’s majority shareholder. In August 2021, all related Caddy notes and balances were paid in full NOTE 7 — DEBT (continued) Paycheck Protection Program On May 6, 2020, the Company received loan proceeds in the amount of approximately $694,000 under the Paycheck Protection Program (“PPP”). On March 13, 2021, the Company received proceeds in the amount of approximately $698,000 from a second PPP loan. The PPP, established as part of the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”), provides for loans to qualifying businesses for amounts up to 2.5 times of the average monthly payroll expenses of the qualifying business. The loans and accrued interest are forgivable as long as the borrower uses the loan proceeds for eligible purposes, including payroll, benefits, rent and utilities, and maintains its payroll levels. The amount of loan forgiveness will be reduced if the borrower terminates employees or reduces salaries during the eight-week period. In May 2021, the Company received notification from the Small Business Administration that the first loan in the amount of $694,000, including accrued interest, has been fully forgiven. Any unforgiven portion of a PPP loan is payable over two years at an interest rate of 1%, with a deferral of payments for the first six months. The Company used the proceeds for purposes consistent with the PPP. In April 2022, the Company received notice that on March 23, 2022, its second PPP loan in the amount of $698,000 plus accrued interest has been fully forgiven and is paid in full. |
STOCKHOLDERS' EQUITY
STOCKHOLDERS' EQUITY | 9 Months Ended |
Mar. 31, 2022 | |
STOCKHOLDERS' EQUITY | |
STOCKHOLDERS' EQUITY | NOTE 8 — 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, 2021, the Plan provides for the issuance of up to 750,000 stock-based awards. There are 600,000 stock-based awards available to grant under the Plan at March 31, 2022. In July 2020, the Company, through a Private Placement, issued 666,667 shares of stock for total gross proceeds of $887,000. Net proceeds of $784,000 were received after deducting offering costs of $103,000. In conjunction with the private placement, warrants for 50,000 shares were issued to Boustead Securities, LLC. In July 2021, MiT Inc. entered into an Exchange Agreement with MiT LLC pursuant to which MiT Inc. agreed to exchange membership units for 2,350,000 shares of Common Stock representing 41.4% of the equity as of such date on a fully diluted basis for no consideration. The shares were exchanged as part of the Exchange Agreement with the Company as described in Note 1. In July 2021, the Company granted options to non-employee directors to purchase an aggregate of 150,000 shares of its common stock at an exercise price of $3.00 per share. The options vest one year from the date of grant, expire ten years from the date of grant and had an aggregate grant date fair value of $244,200, which will be recognized ratably over the vesting period. These options, which were the only options granted during the nine months ended March 31, 2022, had a grant-date fair value of $1.63 per share. The Company recognized compensation expense for stock option awards of approximately $60,000 and $178,000 during the three and nine month periods ended March 31, 2022, respectively. None of the these potentially dilutive securities were included in the computation of diluted earnings per share as their impact would be anti-dilutive. At March 31, 2022, there was $66,000 of total unrecognized compensation cost related to nonvested stock option awards that is expected to be recognized over a weighted average period of three months. During the nine months ended March 31, 2022, warrant holders exercised 139,611 warrants on a cashless basis. |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 9 Months Ended |
Mar. 31, 2022 | |
RELATED PARTY TRANSACTIONS | |
RELATED PARTY TRANSACTIONS | NOTE 9 — RELATED PARTY TRANSACTIONS In July 2021, the Company provided a discretionary $50,000 payment to the Company’s CEO and Chairman of the Board of Directors for personal guarantees provided in conjunction with financing Company debt. See Note 6. |
CUSTOMER AND VENDOR CONCENTRATI
CUSTOMER AND VENDOR CONCENTRATIONS | 9 Months Ended |
Mar. 31, 2022 | |
CUSTOMER AND VENDOR CONCENTRATIONS | |
CUSTOMER AND VENDOR CONCENTRATIONS | NOTE 10 — CUSTOMER AND VENDOR CONCENTRATIONS Customers : At March 31, 2022, the amount of outstanding receivables related to these customers was approximately $120,000. Two customers accounted for 14% and 13% of the Company’s sales for the three months ended March 31, 2021. One customer accounted for 31% of the Company's sales for the nine months ended March 31, 2021. At March 31, 2021, the amount of outstanding receivables related to this customer was approximately $1,000. Vendors: Approximately 10% of the Company’s purchases were provided by one vendor for the nine months ended March 31, 2022. Approximately 50% of the Company’s purchases were provided by one vendor for the nine months ended March 31, 2021. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 9 Months Ended |
Mar. 31, 2022 | |
COMMITMENTS AND CONTINGENCIES | |
COMMITMENTS AND CONTINGENCIES | NOTE 11 — COMMITMENTS AND CONTINGENCIES Operating Leases: Future minimum lease payments for the next 5 years at March December 31, 2021 under these arrangements are as follows: (in thousands) Total Operating leases Payments 2022 $ 288 2023 297 2024 278 Total future minimum lease payments $ 862 Legal Matters: |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 9 Months Ended |
Mar. 31, 2022 | |
SUBSEQUENT EVENTS | |
SUBSEQUENT EVENTS | NOTE 12 — SUBSEQUENT EVENTS The Company has evaluated subsequent events through the filing of this Quarterly Report on Form 10-Q, and determined that there have been no events that have occurred that would require adjustments to our disclosures in the condensed consolidated financial statements except for the transaction described below. On April 21, 2022, Moving iMage Technologies, Inc. (the “Company”) entered into an Asset Purchase Agreement (the “Agreement”) with QSC, LLC (the”Seller”) whereby the Company agreed to purchase from the Seller all of its infrared-based assistive listening and closed caption devices for cinema patrons for an aggregate purchase price of $1.5 million, which amount may be adjusted based on the full cost value and quantities in inventory at the time of closing. In April 2022, underwriter warrants were exercised on a cashless basis resulting in the issuance of 192,120 shares of common stock. |
BUSINESS ACTIVITY AND SUMMARY_2
BUSINESS ACTIVITY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 9 Months Ended |
Mar. 31, 2022 | |
BUSINESS ACTIVITY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Organization | Organization: Moving iMage Acquisition Co. (DBA “Caddy Products”) designs, develops and manufactures innovative products for the entertainment, cinema, grocery, worship, restaurant, sports and restroom industries. |
Share Exchange | Share Exchange: In June 2020, MiT LLC members created Moving iMage Technologies, Inc. (“MIT Inc.”) to facilitate the Company’s initial public offering offering (“IPO”). Upon formation of MiT, Inc., 2,000,000 shares of MiT, Inc. common stock were issued to members of MiT LLC. On July 7, 2021, MiT LLC and MiT Inc. entered into an exchange agreement (“Exchange Agreement”) whereby the members of MiT LLC exchanged their membership interest for 2,350,000 shares of common stock in MiT Inc. As a result of the Exchange Agreement, the members of MiT LLC owned approximately 79% or 4,452,334 of the outstanding common stock of MiT Inc. As a result, MiT LLC (the entity where the Company conducts its business) became a wholly-owned subsidiary of MiT Inc. (the SEC registrant). The transaction was accounted for as a merger of entities under common ownership in accordance with generally accepted accounting principles in the United States of America (“GAAP”). This determination was primarily based on the facts that, immediately before and after the transaction: (i) MiT LLC owners owned a substantial majority of the voting rights in the combined company, (ii) MiT LLC designated a majority of the members of the initial board of directors of the combined company, and (iii) MiT LLC’s senior management holds all key positions in the senior management of the combined company. As a result, the historical financial statements of MiT LLC and MiT Inc. for the three months and for the nine months ended March 31, 2021 have been retroactively revised to reflect the consolidation of MiT, Inc. and MiT LLC. All inter-company transactions and balances between MiT Inc. and MiT, LLC have been eliminated. The condensed consolidated statements of stockholders’ equity (deficit) for the periods ended March 31, 2022 and 2021 have been retroactively revised to give effect of the change in reporting entity accounting of MiT Inc. and MiT LLC. |
Initial Public Offering | Initial Public Offering: per share. None of the potentially dilutive securities were included in the computation of diluted earnings per share as their impact would be anti-dilutive. On July 12, 2021, in connection with the IPO, warrants to purchase 139,611 shares of the Company’s common stock were exercised on a cashless basis. |
COVID19 Impact and Liquidity | COVID-19 Impact and Liquidity The repercussions of the COVID-19 global pandemic resulted in a significant impact to our customers, specifically those in the entertainment and cinema industries. Cinemas have been shuttered since March 2020 in an effort to stem the spread of COVID-19 and studios, for the most part, have rescheduled their film releases until cinemas can reopen. Specifically, the pandemic has had a material adverse effect on our business. A significant number of our customers have temporarily ceased operations and others have cancelled or pushed back the delivery of pending product orders and/or delayed the start of scheduled theater refurbishing and construction projects. In addition, we have experienced increased challenges in, or cost of, acquiring new customers and increased risk in collectability of accounts receivable. As a result of the aforementioned factors, our financial and operating results for the three and nine months ended March 31, 2022 and 2021, have been adversely affected. Additionally, our projected financial and operating results for the remainder of fiscal 2022 are expected to be materially adversely affected. The ultimate impact of the COVID-19 pandemic on our business and results of operations in fiscal 2022 and beyond is unknown and will depend on future developments, which are highly uncertain and cannot be predicted with confidence, including the duration and severity of the COVID-19 pandemic and any additional preventative and protective actions that governments, or we, or our customers, may direct, which may result in an extended period of continued business disruption and reduced operations. We expect that our results of operations, including revenues, in future periods will continue to be adversely impacted by the COVID-19 pandemic and its negative effects on global economic conditions, which include the possibility of a global recession. During the second half of the 2021 calendar year, several larger theater chains have reopened in many parts of the United States. The ability of these chains to reopen was predicated in large part on decisions by state and local officials to allow, limit or prohibit the reopening of establishments such as cinemas in response to regionally specific COVID-19 outbreaks. Such reopening has been done on a gradual basis with limited occupancy and specific procedures, products, and technologies required to be implemented to protect the safety and health of returning patrons and employees. In response to uncertainties associated with the COVID-19 pandemic, we have taken, and are continuing to take, significant steps to preserve cash and remain in a strong competitive position when the current crisis subsides by eliminating non-essential costs, reducing employee hours and deferring all non-essential capital expenditures to minimum levels. NOTE 1 — BUSINESS ACTIVITY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) We have also implemented remote work policies for many employees, and the resources available to such employees may not enable them to maintain the same level of productivity and efficiency, and these and other employees may face additional demands on their time, such as increased responsibilities resulting from school closures or illness of family members. Our increased reliance on remote access to our information systems also increases our exposures to potential cybersecurity breaches. As of the date these Condensed Consolidated Financial Statements were issued, with the actions taken above, existing cash, including the cash raised from our initial public offering (see Initial Public Offering), the Company will have sufficient liquidity to fund operations and essential capital expenditures for the 12 months from the date these condensed consolidated financial statements were available to be issued. |
Principles of Consolidation | Principles of Consolidation |
Basis of Presentation | Basis of Presentation: |
Unaudited Interim Consolidated Financial Statements | Unaudited Interim Condensed Consolidated Financial Statements: |
Measurement of Fair Values | Measurement of Fair Values : — Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities. — Level 2: inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly (i.e., as prices) or indirectly (i.e., derived from prices). — Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs). If the inputs used to measure the fair value of an asset or a liability fall into different levels of the fair value hierarchy, then the fair value measurement is categorized in its entirety in the same level of the fair value hierarchy as the lowest level input that is significant to the entire measurement. |
Deferred Offering Costs | Deferred Offering Costs: As of June 30, 2021, $1,116,000 of deferred offering costs were capitalized in other assets. After completion of the IPO in July 2021, these costs have been recorded in the condensed consolidated statements of changes in stockholders’ equity (deficit) as a reduction of proceeds received from the offering. |
Use of Estimates | Use of Estimates: |
Concentration of Cash | Concentration of Cash: |
Cash Equivalents and Marketable Securities | Cash Equivalents and Marketable Securities: All highly liquid investments with maturities of three months or less at the date of purchase are classified as cash equivalents. The Company’s investments in marketable debt securities are carried at either amortized cost or fair value. Investments in debt securities that the Company has the positive intent and ability to hold to maturity are carried at amortized cost and classified as held-to-maturity. Investments in debt securities that are not classified as held-to-maturity are carried at fair value and classified as available-for sale. Realized gains and losses on available-for-sale debt securities are included in net income/loss. Unrealized gains and losses, net of tax, on available-for-sale debt securities are recognized in other comprehensive gain/(loss). The Company’s investments in marketable equity securities are classified based on the nature of the securities and their availability for use in current operations. The Company’s marketable equity securities are measured at fair value with gains and losses recognized in other income/(expense), net. The cost of securities sold is determined using the specific identification method. |
Accounts Receivable | Accounts Receivable: 31, 2022 and June 30, 2021, the allowance for bad debts is approximately |
Inventories | Inventories: 31, 2022 and June 30, 2021, inventory on hand was comprised primarily of finished goods ready for sale. As of March 31, 2022 and June 30, 2021, inventory reserve was $ |
Revenue Recognition | Revenue Recognition: 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 as per the agreement, in an amount that reflects the consideration that we expect to receive in exchange for those goods as per the agreement with the customer. We generate all our revenue from agreements with customers. In cases where there are agreements with multiple performance obligations, we identify each performance obligation and evaluate 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. We allocate the transaction price to each distinct performance obligation proportionately based on the estimated standalone selling price for each performance obligation and then evaluate 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. 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). Accounts receivable balance as of July 1, 2020 was $809,000. The Company does not have contract assets that represent conditional rights to consideration. NOTE 1 — BUSINESS ACTIVITY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) Contract liabilities consist of refund and warranty liabilities, as well as deposits received in advance on sales to certain customers. Such deposits are reflected as customer deposits and recognized in revenue when control of the products is transferred or when performance conditions are satisfied per the agreement. The change in contract liabilities (customer deposits and unearned warranty revenue) during the nine months ended March 31, 2022 included $1.273 million for revenue recognized that was included in contract liability as of July 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. The Company 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. For the Three For the Three For the Nine For the Nine Months Ended Months Ended Months Ended Months Ended Disaggregation of Revenue (in 000’s): March 31, 2022 March 31, 2021 March 31, 2022 March 31, 2021 Equipment upon delivery (point in time) $ 5,701 $ 1,682 $ 12,489 $ 4,984 Installation (point in time) 134 28 239 92 Total revenues $ 5,835 $ 1,710 $ 12,728 $ 5,076 Revenue from the sale of equipment is recognized upon delivery of such equipment to customers and when performance conditions are satisfied. Revenue from installation 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. There were no software revenues during the three or nine months ended March 31, 2022 or 2021. |
Returns and Allowances | Returns and Allowances: |
Shipping and Handling Costs | Shipping and Handling Costs: |
Advertising Costs | Advertising Costs: and $16,000 and $9,700 for the nine months ended March 31, 2022 and 2021, respectively. Advertising costs are expensed as incurred within selling and marketing expenses. |
Goodwill and Intangible Assets | Goodwill and Intangible Assets: The Company tested goodwill impairment in relation to the COVID-19 pandemic and no impairments were identified for the three and nine months ended March 31, 2022 or 2021. Goodwill is at risk of future impairment in the event of significant unexpected changes in the Company’s forecasted future results and cash flows, or if there is a negative change in the long-term outlook for the business or in other factors such as the discount rate, or if there is a decline in the stock price. 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. The Company 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 months and nine months ended March 31, 2022 or 2021. |
Business Combinations | Business Combinations: |
Income Taxes | Income Taxes: NOTE 1 — BUSINESS ACTIVITY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) The Company evaluates the recoverability of deferred tax assets and establishes a valuation allowance when it is more likely than not that some portion or all the deferred tax assets will not be realized. Because the Company has had recurring losses from operations, at March 31, 2022 it has taken a full valuation allowance against all potential deferred tax assets. Prior to July 7, 2021, MiT LLC was a limited liability company treated as a partnership for federal and state income tax purposes with all income tax liabilities and/or benefits (losses) of the Company being passed through to the members. As such, there is no recognition of federal or state income taxes in the financial statements prior to July 7, 2021. Any uncertain tax position taken by the members is not an uncertain position of the Company. The Company evaluates the recoverability of deferred tax assets and establishes a valuation allowance when it is more likely than not that some portion or all of the deferred tax assets will not be realized. The Company evaluated the realizability of deferred tax assets (“DTA”) at June 30, 2021 (most recent year end, presented as comparative in 10Q balance sheet), July 7, 2021 (date of exchange agreement), September 30, 2021 (Q1 reporting period) December 31, 2021 (Q2 reporting period) and March 31, 2022 (Q3 reporting period). Because the Company has had recurring losses from operations at June 30, 2021, and further losses for the nine months ended March 31, 2022, which will generate NOL’s, and it has taken a full valuation allowance against all potential deferred tax assets. Goodwill recognized in connection with acquisitions represents the residual amount of the purchase price over separately identifiable intangible assets and pursuant to 26 U.S. Code section 197 is deductible for tax purposes. The following table summarizes deferred tax assets and liabilities as of the date of the Exchange Agreement through March 31, 2022: Deferred Existing valuation allowance Tax Assets Deferred Tax Liabilities Prior to business combination Net Position MiT Inc. $ — $ — $ — $ — MiT LLC 248 (13) (235) — Total July 7, 2021 $ 248 $ (13) $ (235) $ — Deferred tax assets $ 622 $ — $ — $ 622 Deferred tax liabilities — (12) — (12) Valuation allowance — — (610) (610) Total MiT Inc. March 31, 2022 $ 622 $ (12) $ (610) $ — NOTE 1 — BUSINESS ACTIVITY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) The following table summarizes the components of deferred tax assets and deferred tax liabilities through March 31, 2022: Deferred Tax Assets (Liabilities) Inventory reserve $ 133 Accumulated depreciation (7) Accumulated goodwill amortization (6) Accumulated intangible amortization 13 Deferred rent 7 Warranty reserve 8 Allowance for doubtful accounts 100 Net 248 Valuation allowance (248) Total July 1, 2021 $ — Inventory reserve $ 152 Accumulated depreciation (1) Accumulated goodwill amortization (11) Accumulated intangible amortization 17 Deferred rent 7 Warranty reserve 9 Stock compensation 50 Net operating loss carryforward 370 Allowance for doubtful accounts 35 Net 627 Valuation allowance (627) Total March 31, 2022 $ — |
Product Warranty | Product Warranty: The changes in the Company’s aggregate warranty liabilities were as follows for the following periods (in thousands): Nine Months Ended Twelve Months Ended March 31, June 30, 2022 2021 Product warranty liability, beginning of period $ 29 $ 65 Accruals for warranties issued 37 29 Change in estimates — (37) Settlements made (29) (28) Product warranty liability, end of period $ 37 $ 29 |
Research and Development | Research and Development: |
Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements: Leases (Topic 842 02 requires modified retrospective adoption for all leases existing at, or entered into after, the date of initial application, with an option to use certain transition relief. Management is in the process of evaluating the impact of this standard effective July 1, 2022. In December 2019, the FASB issued ASU No. 2019-12, Income Taxes (Topic 740) Simplifying the Accounting for Income Taxes |
BUSINESS ACTIVITY AND SUMMARY_3
BUSINESS ACTIVITY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 9 Months Ended |
Mar. 31, 2022 | |
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |
Summary of disaggregation of Revenue | For the Three For the Three For the Nine For the Nine Months Ended Months Ended Months Ended Months Ended Disaggregation of Revenue (in 000’s): March 31, 2022 March 31, 2021 March 31, 2022 March 31, 2021 Equipment upon delivery (point in time) $ 5,701 $ 1,682 $ 12,489 $ 4,984 Installation (point in time) 134 28 239 92 Total revenues $ 5,835 $ 1,710 $ 12,728 $ 5,076 |
Summary of Deferred tax assets and liabilities | The following table summarizes the components of deferred tax assets and deferred tax liabilities through March 31, 2022: Deferred Tax Assets (Liabilities) Inventory reserve $ 133 Accumulated depreciation (7) Accumulated goodwill amortization (6) Accumulated intangible amortization 13 Deferred rent 7 Warranty reserve 8 Allowance for doubtful accounts 100 Net 248 Valuation allowance (248) Total July 1, 2021 $ — Inventory reserve $ 152 Accumulated depreciation (1) Accumulated goodwill amortization (11) Accumulated intangible amortization 17 Deferred rent 7 Warranty reserve 9 Stock compensation 50 Net operating loss carryforward 370 Allowance for doubtful accounts 35 Net 627 Valuation allowance (627) Total March 31, 2022 $ — |
Summary of warranty liabilities | The changes in the Company’s aggregate warranty liabilities were as follows for the following periods (in thousands): Nine Months Ended Twelve Months Ended March 31, June 30, 2022 2021 Product warranty liability, beginning of period $ 29 $ 65 Accruals for warranties issued 37 29 Change in estimates — (37) Settlements made (29) (28) Product warranty liability, end of period $ 37 $ 29 |
Exchange Agreement | |
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |
Summary of Deferred tax assets and liabilities | The following table summarizes deferred tax assets and liabilities as of the date of the Exchange Agreement through March 31, 2022: Deferred Existing valuation allowance Tax Assets Deferred Tax Liabilities Prior to business combination Net Position MiT Inc. $ — $ — $ — $ — MiT LLC 248 (13) (235) — Total July 7, 2021 $ 248 $ (13) $ (235) $ — Deferred tax assets $ 622 $ — $ — $ 622 Deferred tax liabilities — (12) — (12) Valuation allowance — — (610) (610) Total MiT Inc. March 31, 2022 $ 622 $ (12) $ (610) $ — |
INVESTMENTS (Tables)
INVESTMENTS (Tables) | 9 Months Ended |
Mar. 31, 2022 | |
INVESTMENTS | |
Schedule of Company's cash, cash equivalents and marketable securities by significant investment category | The following tables show the Company’s cash, cash equivalents and marketable securities by significant investment category as of March 31, 2022 (amounts in 000’s): Current Non-current Adjusted Unrealized Unrealized Fair Cash and Marketable Marketable Cost Gains Losses Value Cash Equivalents Securities Securities Cash $ 6,337 $ — $ — $ 6,337 $ 6,337 $ — $ — Equities Communication 40 — (1) 39 — 39 — Consumer Discretionary 56 2 — 58 — 58 — Consumer Staples 19 1 — 20 — 20 — Energy 9 — (1) 8 — 8 — Financials 44 — (2) 42 — 42 — Health Care 40 1 — 41 — 41 — Industrials 27 1 — 28 — 28 — Information Technology 120 3 — 123 — 123 — Materials 10 1 — 11 — 11 — Real Estate 10 — — 10 — 10 — Utilities 6 1 — 7 — 7 — Mutual Funds 327 — — 327 — 327 — — Subtotal 708 10 (4) 714 — 714 — Fixed Income State & Municipal Bonds 673 3 — 676 — 329 347 Fixed income funds 1,655 2 — 1,657 — 1,657 — Subtotal 2,328 5 — 2,333 — 1,986 347 Alternative, real estate and other 381 1 — 382 — 382 — Total $ 9,754 $ 16 $ (4) $ 9,766 $ 6,337 $ 3,082 $ 347 |
INCOME (LOSS) PER SHARE (Tables
INCOME (LOSS) PER SHARE (Tables) | 9 Months Ended |
Mar. 31, 2022 | |
LOSS PER SHARE | |
Schedule of basic and diluted earnings (loss) per share | For the Three Months Ended For the Nine Months Ended For the Three Months Ended For the Nine Months Ended March 31, March 31, March 31, December 31, 2022 2022 2021 2021 Numerator: Net income (loss) $ 593 $ (628) $ (164) $ (691) Denominator: Weighted average common shares outstanding, basic and diluted 10,636,278 10,508,152 5,666,667 5,638,626 Income (loss) per share Basic and diluted $ .06 $ (0.06) $ (0.03) $ (0.12) |
Schedule of antidilutive securities excluded | For the Three Months Ended For the Nine Months Ended For the Three Months Ended For the Nine Months Ended March 31, March 31, March 31, March 31, 2022 2022 2021 2021 Options 150,000 150,000 — — Warrants 241,500 241,500 236,667 236,667 Total potentially dilutive shares 391,500 391,500 236,667 236,667 |
PROPERTY, PLANT AND EQUIPMENT (
PROPERTY, PLANT AND EQUIPMENT (Tables) | 9 Months Ended |
Mar. 31, 2022 | |
PROPERTY, PLANT AND EQUIPMENT | |
Schedule of property, plant and equipment | Property, plant and equipment consist of the following (in thousands): March 31, June 30, 2022 2021 Production equipment $ 307 $ 307 Leasehold improvements 213 202 Furniture and fixtures 45 45 Computer equipment 46 44 Other equipment 120 114 730 712 Accumulated depreciation (706) (691) Net property plant and equipment $ 24 $ 21 |
Schedule of estimated useful lives of the assets | Depreciation of property, plant and equipment is calculated using the straight-line method over their estimated useful lives as follows: Useful Lives Leasehold improvements 5 years or remaining lease term Furniture and fixtures 5 years Production equipment 3 – 7 years Computer equipment 3 years Other equipment 3 – 7 years |
INTANGIBLE ASSETS (Tables)
INTANGIBLE ASSETS (Tables) | 9 Months Ended |
Mar. 31, 2022 | |
INTANGIBLE ASSETS | |
Summary of intangible assets | The following table summarizes the Company’s intangible assets as of March 31, 2022 (in thousands): Amortization Gross Asset Accumulated Net Book Period Cost Amortization Value Customer relationships 11 years $ 970 $ 235 $ 735 Patents 20 years 70 10 60 Trademark 20 years 78 10 68 $ 1,118 $ 231 $ 863 The following table summarizes the Company’s intangible assets as of June 30, 2021 (in thousands): Amortization Gross Asset Accumulated Net Book Period Cost Amortization Value Customer relationships 11 years $ 970 $ 169 $ 801 Patents 20 years 70 7 63 Trademark 20 years 78 7 71 $ 1,118 $ 183 $ 935 |
Summary of estimated amortization expense related to intangible assets | Estimated amortization expense related to intangible assets subject to amortization at March 31, 2022 in each of the five years subsequent to March 31, 2022, and thereafter is as follows (amounts in thousands): 2022 $ 96 2023 96 2024 96 2025 96 2026 96 Thereafter 383 Total $ 863 |
ACCRUED EXPENSES (Tables)
ACCRUED EXPENSES (Tables) | 9 Months Ended |
Mar. 31, 2022 | |
ACCRUED EXPENSES | |
Schedule of accrued expenses | Accrued expenses consist of the following (in thousands): March 31, June 30, 2022 2021 Employee compensation $ 311 $ 485 Others 204 135 Total $ 515 $ 620 |
DEBT (Tables)
DEBT (Tables) | 9 Months Ended |
Mar. 31, 2022 | |
DEBT | |
Summary of long-term debt | Long-term debt at June 30, 2021 was as follows (in thousands): June 30, 2021 Balance Current Long Term Caddy promissory note $ 1,059 $ 142 $ 917 PPP loan 698 73 625 Caddy indemnity promissory note 182 22 160 Total $ 1,939 $ 237 $ 1,702 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Tables) | 9 Months Ended |
Mar. 31, 2022 | |
COMMITMENTS AND CONTINGENCIES | |
Summary of future minimum lease payments | (in thousands) Total Operating leases Payments 2022 $ 288 2023 297 2024 278 Total future minimum lease payments $ 862 |
BUSINESS ACTIVITY AND SUMMARY_4
BUSINESS ACTIVITY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) - USD ($) | Jul. 12, 2021 | Jul. 07, 2021 | Jul. 31, 2021 | Jun. 30, 2020 | Sep. 30, 2020 | Mar. 31, 2021 | Mar. 31, 2022 | Jul. 01, 2021 | Jun. 30, 2021 | Jul. 01, 2020 |
Subsidiary or Equity Method Investee [Line Items] | ||||||||||
Common stock, Outstanding | 5,666,667 | 5,666,667 | ||||||||
Inventory reserve | $ 581,000 | $ 375,000 | ||||||||
Warrants exercised for number of shares | 139,611 | |||||||||
Deferred offering costs | 1,116,000 | |||||||||
Allowance for bad debts | $ 126,000 | 261,000 | ||||||||
Accounts Receivable, after Allowance for Credit Loss, Current | 1,686,000 | 454,000 | $ 809,000 | |||||||
Contract liabilities | $ 3,534,000 | $ 1,273,000 | $ 1,339,000 | $ 854,000 | ||||||
Initial public offering | ||||||||||
Subsidiary or Equity Method Investee [Line Items] | ||||||||||
Number of shares issued | 4,830,000 | |||||||||
Share Price | $ 3 | |||||||||
Net proceeds | $ 12,360,000 | |||||||||
Underwriting discounts, commissions and other expenses | 2,130,000 | |||||||||
Other assets to additional paid in capital | $ 1,116,000 | |||||||||
Warrants exercised for number of shares | 139,611 | |||||||||
MiT LLC | MiT Inc | ||||||||||
Subsidiary or Equity Method Investee [Line Items] | ||||||||||
Percentage of outstanding member unit exchanged | 79.00% | 41.40% | ||||||||
Shares of common stock issued for acquiring members unit | 2,350,000 | |||||||||
Common stock, Outstanding | 4,452,334 | |||||||||
Number of Shares Exchanged | 2,350,000 | |||||||||
Number of shares issued | 2,000,000 | |||||||||
Common Stock | ||||||||||
Subsidiary or Equity Method Investee [Line Items] | ||||||||||
Number of shares issued | 2,350,000 | 2,350,000 | ||||||||
Common Stock | Initial public offering | ||||||||||
Subsidiary or Equity Method Investee [Line Items] | ||||||||||
Share Price | $ 3.75 | |||||||||
Warrants exercised for number of shares | 241,500 |
BUSINESS ACTIVITY AND SUMMARY_5
BUSINESS ACTIVITY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Disaggregation of Revenue (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Mar. 31, 2022 | Mar. 31, 2021 | Mar. 31, 2022 | Mar. 31, 2021 | |
Disaggregation of Revenue [Line Items] | ||||
Total revenues | $ 5,835,000 | $ 1,710,000 | $ 12,728,000 | $ 5,076,000 |
Equipment upon delivery | Point in time | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | 5,701,000 | 1,682,000 | 12,489,000 | 4,984,000 |
Installation | Point in time | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | 134,000 | $ 28,000 | 239,000 | $ 92,000 |
Software and services | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | $ 0 | $ 0 |
BUSINESS ACTIVITY AND SUMMARY_6
BUSINESS ACTIVITY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Advertising Costs (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Mar. 31, 2022 | Mar. 31, 2021 | Mar. 31, 2022 | Mar. 31, 2021 | |
Finite-Lived Intangible Assets [Line Items] | ||||
Advertising Expense | $ 4,300 | $ 4,600 | $ 16,000 | $ 9,700 |
Impairment on goodwill | 0 | 0 | ||
Impairment on intangible assets | $ 0 | $ 0 | ||
Maximum | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Amortization Period | 20 years | |||
Minimum | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Amortization Period | 11 years |
BUSINESS ACTIVITY AND SUMMARY_7
BUSINESS ACTIVITY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Income Taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jun. 30, 2021 | Mar. 31, 2022 | Jul. 07, 2021 | |
Deferred Tax Assets | $ 622 | $ 248 | |
Deferred tax liabilities | (12) | (13) | |
Valuation allowance | $ (248) | (627) | (235) |
Federal or state income taxes | $ 0 | ||
MiT Inc | |||
Deferred Tax Assets | 622 | ||
Deferred tax liabilities | (12) | ||
Valuation allowance | $ (610) | ||
MiT LLC | |||
Deferred Tax Assets | 248 | ||
Deferred tax liabilities | (13) | ||
Valuation allowance | $ (235) |
BUSINESS ACTIVITY AND SUMMARY_8
BUSINESS ACTIVITY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Deferred assets and liabilities (Details) - USD ($) $ in Thousands | Mar. 31, 2022 | Jul. 07, 2021 | Jun. 30, 2021 | Mar. 31, 2021 |
BUSINESS ACTIVITY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ||||
Inventory reserve | $ 152 | $ 133 | ||
Accumulated depreciation | (1) | (7) | ||
Accumulated goodwill amortization | (11) | (6) | ||
Accumulated intangible amortization | 13 | $ 17 | ||
Deferred rent | 7 | 7 | ||
Warranty reserve | 9 | 8 | ||
Valuation allowance | (627) | $ (235) | (248) | |
Stock compensation | 50 | |||
Net operating loss carryforward | 370 | |||
Allowance for doubtful accounts | 35 | 100 | ||
Net | $ 627 | $ 248 |
BUSINESS ACTIVITY AND SUMMARY_9
BUSINESS ACTIVITY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - warranty liabilities (Details) - USD ($) | 9 Months Ended | 12 Months Ended |
Mar. 31, 2022 | Jun. 30, 2021 | |
Product Warranty Liability [Line Items] | ||
Period of right to return defective products | 3 years | |
Product warranty liability beginning of period | $ 29,000 | $ 65,000 |
Accruals for warranties issued | 37,000 | 29,000 |
Change in estimates | (37,000) | |
Settlements made | (29,000) | (28,000) |
Product warranty liability end of the period | $ 37,000 | $ 29,000 |
Maximum | ||
Product Warranty Liability [Line Items] | ||
Warranty period | 3 years | |
Minimum | ||
Product Warranty Liability [Line Items] | ||
Warranty period | 1 year |
INVESTMENTS - Cash, cash equiva
INVESTMENTS - Cash, cash equivalents and marketable securities by significant investment category (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Mar. 31, 2022 | Jun. 30, 2021 | |
Net Investment Income [Line Items] | ||
Adjusted Cost | $ 9,754 | |
Unrealized Gains | 16 | |
Unrealized Losses | 4 | |
Fair Value | 9,766 | |
Cash and cash equivalents | 6,337 | $ 1,270 |
Current Marketable Securities | 3,082 | |
Non-current Marketable Securities | 347 | |
Cash | ||
Net Investment Income [Line Items] | ||
Adjusted Cost | 6,337 | |
Fair Value | 6,337 | |
Cash and cash equivalents | 6,337 | |
Equities | ||
Net Investment Income [Line Items] | ||
Adjusted Cost | 708 | |
Unrealized Gains | 10 | |
Unrealized Losses | 4 | |
Fair Value | 714 | |
Current Marketable Securities | 714 | |
Communication | ||
Net Investment Income [Line Items] | ||
Adjusted Cost | 40 | |
Unrealized Losses | 1 | |
Fair Value | 39 | |
Current Marketable Securities | 39 | |
Consumer Discretionary | ||
Net Investment Income [Line Items] | ||
Adjusted Cost | 56 | |
Unrealized Gains | 2 | |
Fair Value | 58 | |
Current Marketable Securities | 58 | |
Consumer Staples | ||
Net Investment Income [Line Items] | ||
Adjusted Cost | 19 | |
Unrealized Gains | 1 | |
Fair Value | 20 | |
Current Marketable Securities | 20 | |
Energy | ||
Net Investment Income [Line Items] | ||
Adjusted Cost | 9 | |
Unrealized Losses | 1 | |
Fair Value | 8 | |
Current Marketable Securities | 8 | |
Financials | ||
Net Investment Income [Line Items] | ||
Adjusted Cost | 44 | |
Unrealized Losses | 2 | |
Fair Value | 42 | |
Current Marketable Securities | 42 | |
Health Care | ||
Net Investment Income [Line Items] | ||
Adjusted Cost | 40 | |
Unrealized Gains | 1 | |
Fair Value | 41 | |
Current Marketable Securities | 41 | |
Industrials | ||
Net Investment Income [Line Items] | ||
Adjusted Cost | 27 | |
Unrealized Gains | 1 | |
Fair Value | 28 | |
Current Marketable Securities | 28 | |
Information Technology | ||
Net Investment Income [Line Items] | ||
Adjusted Cost | 120 | |
Unrealized Gains | 3 | |
Fair Value | 123 | |
Current Marketable Securities | 123 | |
Materials | ||
Net Investment Income [Line Items] | ||
Adjusted Cost | 10 | |
Unrealized Gains | 1 | |
Fair Value | 11 | |
Current Marketable Securities | 11 | |
Real Estate | ||
Net Investment Income [Line Items] | ||
Adjusted Cost | 10 | |
Fair Value | 10 | |
Current Marketable Securities | 10 | |
Utilities | ||
Net Investment Income [Line Items] | ||
Adjusted Cost | 6 | |
Unrealized Gains | 1 | |
Fair Value | 7 | |
Current Marketable Securities | 7 | |
Mutual Funds | ||
Net Investment Income [Line Items] | ||
Adjusted Cost | 327 | |
Fair Value | 327 | |
Current Marketable Securities | 327 | |
Fixed Income | ||
Net Investment Income [Line Items] | ||
Adjusted Cost | 2,328 | |
Unrealized Gains | 5 | |
Fair Value | 2,333 | |
Current Marketable Securities | 1,986 | |
Non-current Marketable Securities | 347 | |
State & Municipal Bonds | ||
Net Investment Income [Line Items] | ||
Adjusted Cost | 673 | |
Unrealized Gains | 3 | |
Fair Value | 676 | |
Current Marketable Securities | 329 | |
Non-current Marketable Securities | 347 | |
Fixed income funds | ||
Net Investment Income [Line Items] | ||
Adjusted Cost | 1,655 | |
Unrealized Gains | 2 | |
Fair Value | 1,657 | |
Current Marketable Securities | 1,657 | |
Alternative, real estate and other | ||
Net Investment Income [Line Items] | ||
Adjusted Cost | 381 | |
Unrealized Gains | 1 | |
Fair Value | 382 | |
Current Marketable Securities | $ 382 |
INCOME (LOSS) PER SHARE (Detail
INCOME (LOSS) PER SHARE (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Mar. 31, 2022 | Mar. 31, 2021 | Mar. 31, 2022 | Dec. 31, 2021 | Mar. 31, 2021 | |
Numerator: | |||||
Net income (loss) | $ 593 | $ (164) | $ (628) | $ (691) | |
Denominator: | |||||
Weighted average common shares outstanding, basic | 10,636,278 | 5,666,667 | 10,508,152 | 5,638,626 | 5,638,626 |
Weighted average common shares outstanding, diluted | 10,636,278 | 5,666,667 | 10,508,152 | 5,638,626 | |
Income (loss) per share | |||||
Basic | $ 0.06 | $ (0.03) | $ (0.06) | $ (0.12) | $ (0.12) |
Diluted | $ 0.06 | $ (0.03) | $ (0.06) | $ (0.12) |
INCOME (LOSS) PER SHARE - Antid
INCOME (LOSS) PER SHARE - Antidilutive shares (Details) - shares | 3 Months Ended | 9 Months Ended | ||
Mar. 31, 2022 | Mar. 31, 2021 | Mar. 31, 2022 | Mar. 31, 2021 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Total potentially dilutive shares | 391,500 | 236,667 | 391,500 | 236,667 |
Options | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Total potentially dilutive shares | 150,000 | 150,000 | ||
Warrants | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Total potentially dilutive shares | 241,500 | 236,667 | 241,500 | 236,667 |
PROPERTY, PLANT AND EQUIPMENT_2
PROPERTY, PLANT AND EQUIPMENT (Details) - USD ($) $ in Thousands | Mar. 31, 2022 | Jun. 30, 2021 |
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | $ 730 | $ 712 |
Accumulated depreciation | (706) | (691) |
Net property plant and equipment | 24 | 21 |
Production equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 307 | 307 |
Leasehold improvements | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 213 | 202 |
Furniture and fixtures | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 45 | 45 |
Computer equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 46 | 44 |
Other equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | $ 120 | $ 114 |
PROPERTY, PLANT AND EQUIPMENT -
PROPERTY, PLANT AND EQUIPMENT - Depreciation expense (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Mar. 31, 2022 | Mar. 31, 2021 | Mar. 31, 2022 | Mar. 31, 2021 | |
Property, Plant and Equipment [Line Items] | ||||
Depreciation | $ 3,000 | $ 33,000 | $ 15,000 | $ 99,000 |
Cost of goods sold | ||||
Property, Plant and Equipment [Line Items] | ||||
Depreciation | 0 | 30,000 | 9,000 | 90,000 |
General and administrative expense. | ||||
Property, Plant and Equipment [Line Items] | ||||
Depreciation | $ 3,000 | $ 3,000 | $ 7,000 | $ 8,000 |
PROPERTY, PLANT AND EQUIPMENT_3
PROPERTY, PLANT AND EQUIPMENT - Useful lives (Details) | 9 Months Ended |
Mar. 31, 2022 | |
Leasehold improvements | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life | 5 years |
Furniture and fixtures | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life | 5 years |
Production equipment | Maximum | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life | 7 years |
Production equipment | Minimum | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life | 3 years |
Computer equipment | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life | 3 years |
Other equipment | Maximum | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life | 7 years |
Other equipment | Minimum | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life | 3 years |
INTANGIBLE ASSETS (Details)
INTANGIBLE ASSETS (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended |
Mar. 31, 2022 | Jun. 30, 2021 | |
Intangible assets | ||
Gross Asset Cost | $ 1,118 | $ 1,118 |
Accumulated Amortization | 231 | 183 |
Net Book Value | $ 863 | $ 935 |
Customer relationships | ||
Finite-Lived Intangible Assets [Line Items] | ||
Amortization Period | 11 years | 11 years |
Intangible assets | ||
Gross Asset Cost | $ 970 | $ 970 |
Accumulated Amortization | 235 | 169 |
Net Book Value | $ 735 | $ 801 |
Patents | ||
Finite-Lived Intangible Assets [Line Items] | ||
Amortization Period | 20 years | 20 years |
Intangible assets | ||
Gross Asset Cost | $ 70 | $ 70 |
Accumulated Amortization | 10 | 7 |
Net Book Value | $ 60 | $ 63 |
Trademark | ||
Finite-Lived Intangible Assets [Line Items] | ||
Amortization Period | 20 years | 20 years |
Intangible assets | ||
Gross Asset Cost | $ 78 | $ 78 |
Accumulated Amortization | 10 | 7 |
Net Book Value | $ 68 | $ 71 |
INTANGIBLE ASSETS - Amortizatio
INTANGIBLE ASSETS - Amortization expense (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Mar. 31, 2022 | Mar. 31, 2021 | Mar. 31, 2022 | Mar. 31, 2021 | |
Finite-Lived Intangible Assets [Line Items] | ||||
Amortization expense | $ 72,000 | $ 72,000 | ||
General and administrative expense. | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Amortization expense | $ 24,000 | $ 24,000 | $ 72,000 | $ 72,000 |
INTANGIBLE ASSETS - Estimated a
INTANGIBLE ASSETS - Estimated amortization expense related to intangible assets subject to amortization (Details) - USD ($) $ in Thousands | Mar. 31, 2022 | Jun. 30, 2021 |
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract] | ||
2022 | $ 96 | |
2023 | 96 | |
2024 | 96 | |
2025 | 96 | |
2026 | 96 | |
Thereafter | 383 | |
Net Book Value | $ 863 | $ 935 |
ACCRUED EXPENSES (Details)
ACCRUED EXPENSES (Details) - USD ($) $ in Thousands | Mar. 31, 2022 | Jun. 30, 2021 |
ACCRUED EXPENSES | ||
Employee compensation | $ 311 | $ 485 |
Others | 204 | 135 |
Total | $ 515 | $ 620 |
DEBT - Line of Credit (Details)
DEBT - Line of Credit (Details) - USD ($) | 1 Months Ended | |||
Oct. 31, 2019 | Mar. 31, 2022 | Jun. 30, 2021 | Mar. 31, 2020 | |
Debt Instrument [Line Items] | ||||
Term of debt | 1 year | |||
Number of shares for which warrants exercised | 139,611 | |||
Outstanding balance of line of credit | $ 0 | $ 590,000 | ||
Line of Credit [Member] | ||||
Debt Instrument [Line Items] | ||||
Maximum borrowing capacity | $ 1,000,000 | |||
Interest rate | 13.00% | |||
Number of shares for which warrants exercised | 94,723 | |||
Amount of proceeds from loan used to pay business combination | $ 400,000 | |||
Available borrowing capacity | $ 0 | |||
Outstanding balance of line of credit | $ 590,000 |
DEBT - Long term debt (Details)
DEBT - Long term debt (Details) $ in Thousands | Jun. 30, 2021USD ($) |
Debt Instrument [Line Items] | |
Balance | $ 1,939 |
Current | 237 |
Long Term | 1,702 |
Closing promissory note | |
Debt Instrument [Line Items] | |
Balance | 1,059 |
Current | 142 |
Long Term | 917 |
PPP loan | |
Debt Instrument [Line Items] | |
Balance | 698 |
Current | 73 |
Long Term | 625 |
Caddy indemnity promissory note | |
Debt Instrument [Line Items] | |
Balance | 182 |
Current | 22 |
Long Term | $ 160 |
DEBT - Caddy Promissory (Detail
DEBT - Caddy Promissory (Details) | 9 Months Ended |
Mar. 31, 2022 | |
Debt Instrument [Line Items] | |
Spread on variable interest rate | 3.75% |
Closing promissory note | Prime Rate [Member] | |
Debt Instrument [Line Items] | |
Spread on variable interest rate | 2.75% |
Caddy indemnity promissory note | Prime Rate [Member] | |
Debt Instrument [Line Items] | |
Spread on variable interest rate | 2.75% |
DEBT - Paycheck Protection Prog
DEBT - Paycheck Protection Program (Details) - USD ($) | Mar. 13, 2021 | May 06, 2020 | Apr. 30, 2022 | May 31, 2021 | Mar. 31, 2022 | Jun. 30, 2021 |
Debt Instrument [Line Items] | ||||||
Debt forgiven | $ 694,000 | |||||
Outstanding balance | $ 1,939,000 | |||||
Notes payable current | 237,000 | |||||
PPP loan | ||||||
Debt Instrument [Line Items] | ||||||
Proceeds from loan | $ 698,000 | $ 694,000 | ||||
Outstanding balance | $ 698,000 | |||||
Interest rate | 1.00% | |||||
PPP loan | Subsequent Event | ||||||
Debt Instrument [Line Items] | ||||||
Accrued interest | $ 698,000 |
STOCKHOLDERS' EQUITY (Details)
STOCKHOLDERS' EQUITY (Details) - USD ($) | Jul. 07, 2021 | Jul. 31, 2021 | Jul. 31, 2020 | Mar. 31, 2022 | Mar. 31, 2022 | Mar. 31, 2021 | Dec. 31, 2021 |
Limited Partners' Capital Account [Line Items] | |||||||
Maximum stock based awards available for issuance | 750,000 | ||||||
Share based payment award option outstanding | 600,000 | 600,000 | |||||
Net Proceeds | $ 784,000 | ||||||
Gross Proceeds | 887,000 | ||||||
Offering costs | $ 103,000 | $ 72,000 | |||||
Options granted | 150,000 | ||||||
Exercise price, options granted | $ 3 | ||||||
Vesting period | 1 year | ||||||
Option expiration period | 10 years | ||||||
Aggregate grant date fair value | $ 244,200 | ||||||
Grant-date fair value | $ 1.63 | ||||||
Compensation expense | $ 60,000 | $ 178,000 | |||||
Total unrecognized compensation | $ 66,000 | $ 66,000 | |||||
Weighted average period | 3 months | ||||||
Warrants exercised for number of shares | 139,611 | 139,611 | |||||
Private Placement | |||||||
Limited Partners' Capital Account [Line Items] | |||||||
Shares issued | 666,667 | ||||||
Boustead Securities | |||||||
Limited Partners' Capital Account [Line Items] | |||||||
Share Price | 50,000 | ||||||
MiT LLC | MiT Inc | |||||||
Limited Partners' Capital Account [Line Items] | |||||||
Shares of common stock issued for acquiring members unit | 2,350,000 | ||||||
Percentage of outstanding member unit exchanged | 79.00% | 41.40% |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details) | 1 Months Ended |
Jul. 31, 2021USD ($) | |
RELATED PARTY TRANSACTIONS | |
Discretionary payment to the related parties for personal guarantees provided in conjunction with financing company debt | $ 50,000 |
CUSTOMER AND VENDOR CONCENTRA_2
CUSTOMER AND VENDOR CONCENTRATIONS (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||||
Mar. 31, 2022 | Mar. 31, 2021 | Mar. 31, 2022 | Mar. 31, 2021 | Jun. 30, 2021 | Jul. 01, 2020 | |
Concentration Risk [Line Items] | ||||||
Outstanding receivables | $ 1,686,000 | $ 1,686,000 | $ 454,000 | $ 809,000 | ||
Sales | Customer concentration | Customer one | ||||||
Concentration Risk [Line Items] | ||||||
Concentration risk percentage | 11.00% | 14.00% | 32.00% | 31.00% | ||
Sales | Customer concentration | Customer two | ||||||
Concentration Risk [Line Items] | ||||||
Concentration risk percentage | 10.00% | 13.00% | ||||
Outstanding receivables | Customer concentration | ||||||
Concentration Risk [Line Items] | ||||||
Outstanding receivables | $ 120,000 | $ 1,000 | $ 120,000 | $ 1,000 |
CUSTOMER AND VENDOR CONCENTRA_3
CUSTOMER AND VENDOR CONCENTRATIONS (continued) (Details) - Purchases - Supplier concentration | 3 Months Ended | 9 Months Ended | ||
Mar. 31, 2022 | Mar. 31, 2021 | Mar. 31, 2022 | Mar. 31, 2021 | |
Vendor one | ||||
Concentration Risk [Line Items] | ||||
Concentration risk percentage | 14.00% | 17.00% | 10.00% | |
Vendor two | ||||
Concentration Risk [Line Items] | ||||
Concentration risk percentage | 13.00% | 16.00% | 50.00% | |
Vendor three | ||||
Concentration Risk [Line Items] | ||||
Concentration risk percentage | 10.00% |
COMMITMENTS AND CONTINGENCIES_2
COMMITMENTS AND CONTINGENCIES (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Mar. 31, 2022 | Mar. 31, 2021 | Mar. 31, 2022 | Mar. 31, 2021 | |
Operating Leased Assets [Line Items] | ||||
Rent expense | $ 141,000 | $ 141,000 | ||
Executive office lease | ||||
Operating Leased Assets [Line Items] | ||||
Rent expense | $ 70,000 | $ 70,000 |
COMMITMENTS AND CONTINGENCIES_3
COMMITMENTS AND CONTINGENCIES (Future minimum lease payments) (Details) $ in Thousands | Mar. 31, 2022USD ($) |
Future minimum lease payments | |
2022 | $ 288 |
2023 | 297 |
2024 | 278 |
Total future minimum lease payments | $ 862 |
SUBSEQUENT EVENTS (Details)
SUBSEQUENT EVENTS (Details) - USD ($) $ in Millions | Apr. 30, 2022 | Mar. 31, 2022 | Apr. 21, 2021 |
Subsequent Event [Line Items] | |||
Underwriter warrants exercised | 139,611 | ||
Aggregate purchase price | $ 1.5 | ||
Subsequent Event | |||
Subsequent Event [Line Items] | |||
Underwriter warrants exercised | 192,120 |