Greetings, and welcome to the Moving iMage Technologies Second Quarter Fiscal 2023 Earnings Results Conference Call. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Brian Siegel from Hayden IR. Thank you, Brian. You may begin.

Thank you, operator. Good morning, and welcome to the Moving iMage Technologies Second Quarter of Fiscal 2023 Earnings Conference Call and Webcast. With me today is Chairman and CEO, Phil Rafnson; Co-Founder and Executive VP of Sales and Marketing, Joe Delgado; and Interim CFO, Bill Greene. For those of you that have not seen today's release, it is available on the Investors section of our website. Before beginning, I would like to remind everyone that except for historical information, the matters discussed in this presentation are forward-looking statements that involve several risks and uncertainties. Words like believe, expect and anticipate mean that these are our best estimates as of this writing, but that there can be no assurances that expected or anticipated results or events will actually take place. So our actual future results could differ significantly from those statements. Further information on the Company's risk factors is contained in the Company's quarterly and annual reports filed with the US SEC. Now I'd like to turn the call over to Phil. Phil?

Thank you, Brian, and thank you all for joining us today. I'm Phil Rafnson, CEO of Moving iMage Technologies, or MiT for short. Like last quarter, today I'm going to spend my part providing an update on overall industry trends that we believe will drive the tremendous growth opportunity for MiT over the next few years, and then Joe will provide an overview of MiT's business and growth strategy. He will then turn the call over to Brian to review our financials and outlook followed by question and answer. MiT serves commercial cinema owners, stadiums, arenas, live event venues and eSports. Today, most of our business is surveyed cinema operators and owners. In North America, there are approximately 40,000 screens, 18,000 of which are outside the top five circuits. So while we work with the studios, most of our business is with small to medium size operators. As you look at MiT as an investment, both industry and company specific factors will contribute to our future performance. First, I'll address the industry tailwinds. And then, Joe will discuss our company's specific reasons to invest in MiT. Industry tailwinds provide for underlying optimism in our ability to grow the company, include the domestic box office improvement, technology and venue upgrade cycles, new theatre bills, and the addition of amenities to the movie going experience. As you probably know, this industry was hit hard by COVID during 2020 and the first half of 2021 with box office receipts declining from over $11 billion in 2019 to 2.1 billion in 2020. But they recovered in 2022 to over 5.7 billion. Momentum should continue into 2023 with an already exciting slate of releases expected, setting the backdrop for an even stronger year. Additionally, while the studios have made it clear, I want to reiterate…

Thank you, Phil, and good morning everyone. I'm going to start with a review of our growth strategy. First pillar is driving revenue growth and margin expansion by shifting our product mix towards higher margin proprietary products. Our proprietary products fall into two categories. The first is, proprietary manufactured goods made right here in the US. Today, we have over 50 proprietary manufactured products that help increase project margins and overall margins when sold a la carte. These include our Caddy products and our line of ADA products, the latter of which are a requirement for every theatre in the country. And the acquisition of his product line last year forms the low end of our accessibility strategy. Second, our products we feel have disruptive potential. These products are more technology focused and bring higher margins and reoccurring revenue streams for example, we have a bundled solution from venue management called CineQC. CineQC is recurring revenue SaaS platform consisting of hardware and services application, for quality assurance, theatre operations, staff management, inventory control, back office analytics and remote access and control over auditorium systems. We believe there's nothing like it available in the industry and the shining of National Amusements as a customer, strongly validated the solution. We've been doing additional development with CineQC and we hope to have more clients announced in the coming quarters. Next, we have the MiTranslator, which will provide a high end product for our accessibility strategy. The MiTranslator is a multi-language translation device with a reoccurring revenue service attached. This disruptive offering brings multi-language in theatre captioning capabilities, including American Sign Language through augmented reality glasses. The market in North America alone is tremendous with over 70 million non-English proficient speakers that may not have previously attended the movies or for those who did,…

Thanks, Joe. Good morning, and Thank you everyone for attending our earnings call. We'll just spend a little time reviewing your model, and then I'll take you through the quarter, followed by Q&A. Currently, projects are the key revenue driver for our business, making up roughly 62% to 65% of revenue. In this part of business, we serve as a project manager procuring and reselling FF&E and services for refurbishing, upgrading and building new theaters. Since much of these are pass-through costs, margins are in the mid-teens. We have several routes to improve project margins, as demonstrated by our first quarter results these include installation services, the resale of higher margin technology products. And finally we sell our higher margin proprietary manufactured offerings, which include our Caddy and ADA products. Our proprietary manufacturing products have margins ranging from 35% to 55%. As we continue to increase the number of proprietary manufacturing products that we sell, we expect the mix to shift and more favorably impact gross margin. Over the near-term, we expect our proprietary manufactured products and the resale of higher margin technology products will drive this margin expansion. For example, in Q2, in addition to our ADA products, we also saw several orders related to the technology upgrade cycle for servers and projectors. Over time, as our CineQC SaaS platform becomes a more significant contributor and the MiTranslator and other products and development comes from markets. We expect our mix shift to shift even more significantly away from FF&E. Now move into the results. The second quarter is traditionally our slowest quarter, due to the seasonality associated with the holidays, as theatre owners are more focused on filling capacity than upgrades and refurbishments. Nevertheless, our second quarter revenue increased 42% to $4.8 million. Gross Profit increased 46% to $1.3…

Thank you. We will now be conducting a question-and-answer session. [Operator Instructions] We take our first question from lineup Kurt Caramanidis with Carl M. Hennig Inc. Please go ahead. Q – Kurt Caramanidis: Hi guys. Again, you do a really, really good job explaining the current state of your business and the opportunities ahead. So I don't have tons of questions because you really do a really nice job. But I think I know the answer to this, but based on all of that data would you agree that earnings, -- actual earnings, sustainable earnings are likely going forward with the mix shift, the revenues going up your fixed costs, gross margin, once we become profitable, barring a quarter here and there of seasonal or something, maybe, but seeing more sustained profits? A – Phil Rafnson: Yes. Hi, Kurt. So I think that's the plan. Obviously, as you mentioned, there could be a quarter here and there because our business still is relatively small, where you could see breakeven type earnings, but our goal is to continue to improve profitability going forward. And obviously without it with as minimal one time drop offs possible. Q – Kurt Caramanidis: Okay and great to hear about the buyback because I would agreed at this level, that would be a great investment investing in your business that you know, better than an acquisition which maybe there's some acquisitions, but certainly you know, this business better than anything you could acquire and at this price, I think it's very smart to do that. And Brian, I missed that. How many additional gaming sales do you need to reach your forecast? You've had -- if I can think maybe six or eight or something. Did you say you needed an additional dozen A – Brian Siegel: Additional 15 to 17. Q – Kurt Caramanidis: Okay, so the pipeline looks pretty good. A – Brian Siegel: The pipeline looks good. That's -- that's kind of what we're doing. It's -- yes, I think the biggest challenge there is just timing of new theatre signing on. And that's a little bit out of our control Sandbox, our partner is working very diligently to continue to expand to lease and sign on new theatres. But given that so early, it's a little bit more -- want to be a little bit more conservative with our forecasts and so we can start to see a more consistent run rate. Q – Kurt Caramanidis: Great. Thank you, guys. A – Phil Rafnson: Thanks Kurt.

Thank you. We take next question from line of Scott Weiss [ph] with Samco Capital. Please go ahead. Q – Unidentified Analyst: Thanks. Hi, guys, how are you? A – Phil Rafnson: Hi, Scott. Q – Unidentified Analyst: I have a couple of questions regarding CineQC. Can you comment on the rollout with National Amusements and how many theatres are using the technology, how's it going? And then, a second question is can you comment on the CineQC pipeline or backlog of other customers? A – Phil Rafnson: Yes I can grab that. We're actually working hand in glove with National Amusements to continue to customize making them more bespoke platform for them. We're doing very well. We're probably about 90% there. And that'll start to tiers up for the international expansion with them. With respect to customers in the pipeline, we've already had a couple of demos with a tremendous amount of interest. And we look forward to that moving ahead, in the short to mid-term, Scott. So that's looking very promising. And again, it's like anything software base, right, you're never done. So development continues and the customization portion of it has been -- what's been most attractive to the end user.

Okay. Great. Thank you very much.

Thank you. We take next question from the line of Kurt Caramanidis with Carl M. Hennig. Please go ahead.

Sorry, one follow-up. What are the marketable securities on the balance sheet?

Yes. Hey, Kurt. It's a mixed portfolio of fixed income type securities, notes, some mutual funds and some equities. I would like to point out that we are reviewing that and looking to go in a different direction that will remove some of the volatility that we've seen on the other income and loss part of the financial statements. So, we will -- we're evaluating that now and we'll be ideally coming to conclusion in the near term.

Cool. Thank you.

You’re welcome. Operator, I think we can close it out.

I'm sorry, Sir. Are you saying we do not have any questions from the online participants?

Correct.

Should we now conclude?

Yes.

Thank you. Ladies and gentlemen, as there are no further questions from any participants, this concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation.

Thank you, all.