What changed in this filing

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Item 1A. Risk Factors

2025-09-26 compared with 2024-09-27 · 56 added, 39 removed, 339 unchanged (22% of the section changed)

6 unchanged sentences

Risks Related to Our Business

The COVID-19 pandemic and ensuing governmental responses have negatively impacted, and could further materially adversely affect, our business, financial condition, results of operations and cash flows.

The COVID-19 pandemic had an unprecedented impact on the world and the movie exhibition industry.

The social and economic effects have been widespread.

At various points during the pandemic, authorities around the world-imposed measures intended to control the spread of COVID-19, including stay-at-home orders and restrictions on large public gatherings, which caused movie theaters in countries around the world to temporarily close.

The repercussions of the COVID-19 global pandemic resulted in a significant impact to our customers, specifically those in the entertainment and cinema industries.

Starting in 2020 and going into 2022 the theatres reopened as soon as local restrictions and the status of the COVID-19 pandemic would allow.

As of June 30, 2024, a large majority of domestic and international theatres were open.

The industry’s recovery to historical levels of new film content, both in terms of the number of new films and box office performance, is still underway, as the industry also continues to adjust to evolving theatrical release windows, competition from streaming and other delivery platforms, supply chain delays, inflationary pressures, labor shortages, wage rate pressures and other economic factors.

Based on our current estimates of recovery, we believe we have, and will generate, sufficient cash to sustain operations.

Nonetheless, the COVID-19 pandemic has had, and continues to have, adverse effects on the Company’s business, results of operations, cash flows and financial condition.

General political, social and economic conditions can adversely affect our business.

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With respect to those other products and components which we offer but do not manufacture in-house, the loss of, or substantial decrease in the availability of, products from our suppliers, or the loss of our key supplier agreements, could adversely impact our financial condition, operating results and cash flows.

In addition, supply interruptions have in the past arisen and could arise in the future from effects of the COVID-19 pandemic, shortages of raw materials, labor disputes or weather conditions affecting products or shipments, transportation disruptions, adjustments to our inventory levels or other factors within and beyond our control.

In addition, supply interruptions have in the past arisen and could arise in the future from effects of shortages of raw materials, labor disputes or weather conditions affecting products or shipments, transportation disruptions, adjustments to our inventory levels or other factors within and beyond our control.

Short- and long-term disruptions in our supply chain would result in a need to maintain higher inventory levels as we replace similar product, a higher cost of product and ultimately a decrease in our net sales and profitability.

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As we operate in a dynamic environment characterized by rapidly changing technologies and industry and legal standards, our products and services are subject to changing consumer preferences that cannot be predicted with certainty.

We must continually introduce new products and services, identify future products and product lines that complement existing products and product lines and that respond to our customers’ needs and improve and enhance our existing

products and services to maintain or increase our sales.

We may not be able to compete effectively unless our product selection keeps up with trends in the markets in which we compete or trends in new products.

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If our distributors, dealers and resellers are not successful in selling our products, our revenue would decrease.

Specifically, the shutdowns of local and state economies as a result of the COVID-19 pandemic have and may continue in the future to adversely affect the operations of our dealers and resellers.

In addition, our success in expanding and entering into new markets internationally will depend on our ability to establish relationships with new distributors.

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To ensure an adequate inventory supply, we must forecast inventory needs and expenses and place orders sufficiently in advance with our suppliers and contract manufacturers based on our estimates of future demand for particular products.

Our ability to accurately forecast demand for our products and services could be affected by many factors, including an increase or decrease in customer demand for our products and services or for products and services of our competitors, product and service introductions by competitors, unanticipated changes in general market conditions, effects of the COVID-19 pandemic and the weakening of economic conditions or consumer confidence in future economic conditions.

Our ability to accurately forecast demand for our products and services could be affected by many factors, including an increase or decrease in customer demand for our products and services or for products and services of our competitors, product and service introductions by competitors, unanticipated changes in general market conditions, and the weakening of economic conditions or consumer confidence in future economic conditions.

If we fail to accurately forecast customer demand, we may experience excess inventory levels or a shortage of products available for sale.

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We are substantially dependent upon significant customers who could cease purchasing our products and services at any time.

Our top ten customers accounted for approximately 45% and 37% of net revenues for the years ended June 30, 2024 and 2023, respectively.

Trade accounts receivable from these customers represented approximately 62% and 19% of net receivables at June 30, 2024 and 2023, respectively.

Our top ten customers accounted for approximate ly 44% and 45% of net revenues for the years ended June 30, 2025 and 2024, respectively.

Trade accounts receivable from these customers represented approximatel y 41% and 62% of net receivables at June 30, 2025 and 2024 , respectively.

No individual customer accounted for more than 10% of the Company’s revenue for the year ended June 30, 2025 or 2024 .

While we believe our relationships with such customers are stable, most arrangements are made by purchase order and are terminable at will by either party.

While we believe our relationships with su ch customers are stable, most arrangements are made by purchase order and are terminable at will by either party.

We could also be adversely affected by such factors as changes in foreign currency rates and weak economic and political conditions in each of the countries in which we sell our products.

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We may not convert all of our backlog into revenue and cash flows.

At June 30, 2024, our sales backlog was approximately $5.93 million, with planned order shipments by March 2025.

At June 30, 2025, our sales backlog was approximat ely $7.52 mi llion, with planned order shipments by April 30, 2026.

We list signed contracts for theater construction or refurbishing for which revenue has not been recognized as sales backlog prior to the time of revenue recognition.

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A security breach involving our networks and related systems could disrupt our operations in numerous ways that could ultimately have an adverse effect on our financial condition and results of operations.

Natural disasters and other catastrophic events beyond our control, including but not limited to the COVID-19 pandemic, has and could continue in the future adversely affect our business operations and financial performance.

Natural disasters and other catastrophic events beyond our control, have and could continue in the future to adversely affect our business operations and financial performance.

The occurrence of the global COVID‑19 pandemic has had a material adverse effect on our business.

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or other highly disruptive events, such as nuclear accidents, pandemics, unusual weather conditions or cyber-attacks, could adversely affect our operations and financial performance.

The occurrence of the global COVID-19 pandemic has resulted in, and such other events could result in, among other things, operational disruptions, or disruption of one or more of our properties or properties used by third parties in connection with the supply of products or services to us, the lack of an adequate workforce in parts or all of our operations and communications and transportation disruptions.

The occurrence of the global COVID-19 pandemic has caused, and these factors could also cause, consumer confidence and spending to decrease or result in increased volatility in the United States and global financial markets and economy.

These factors could also cause, consumer confidence and spending to decrease or result in increased volatility in the United States and global financial markets and economy.

Such occurrences have had and could in the future have a material adverse effect on us and could also have indirect consequences such as increases in the costs of insurance if they result in significant loss of property or other insurable damage.

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A lack of entertainment content featured at the cinema venues that we support as a result entertainment content providers labor disputes, strikes and shutdowns could ultimately have an adverse effect on our financial condition and results of operations.

Trade disputes could have a material adverse impact on our business, financial condition, liquidity and results of operations.

Trade disputes can lead to the implementing of tariffs on products or on commodities that we use in our operations which could cause significant fluctuations in prices and have a material adverse effect on our operations and financial results.

In early 2025, the Trump administration announced additional tariffs on various imports from China, Mexico, and Canada, and signaled a willingness to renegotiate or withdraw from existing trade agreements.

A series of executive orders issued in March and April of 2025 proposed significant changes to U.S.

trade policy, including a baseline 10% tariff on a broad range of imported goods, unless replaced by higher country-specific rates.

These actions have prompted actual or threatened retaliatory measures against U.S.

However, there is currently significant uncertainty about potential trade actions or how they may affect our business.

We cannot predict the impact that future trade policy or the terms of any negotiated trade agreements may have on our business or on our industry.

We are subject to the rules and regulation of the NYSE American stock exchange and are required to comply with certain continued exchange listing standards and requirements or be subject to delisting.

Our common stock is currently listed on and subject to the rules and regulations of, the NYSE American, LLC stock exchange (“NYSE American”).

As a result, the Company is required to comply with certain continuing listing standards to continue to trade its stock on the NYSE American.

For example, in the event our shares of common stock trade at a low price and for a substantial period of time determined by NYSE American, the Company may be notified to take certain action to regain compliance with such listing requirement, which may include effecting a reverse stock split within a reasonable time or face the possibility of having its stock delisted by NYSE American.

Also, we must be current in our SEC reporting obligations.

If the Company fails to meet one or a combination of such continued listing standards, the NYSE American may seek to delist the Company’s shares.

Action taken by the NYSE American to delist our stock may adversely impact the trading price and trading volume of our shares and adversely affect the Company’s ability raise additional equity or equity linked financing.

There can be no assurance we will continue to meet all of the NYSE American’s continued listing requirements.

Our business depends on motion picture production and performance and is subject to intense competition, including increases in alternative film delivery methods or other forms of entertainment .

Our ability to operate successfully depends upon the availability, diversity and appeal of motion pictures, our ability to sell our products to the motion pictures industry and the performance of such motion pictures in our markets.

The most attended films are usually released during the summer and the calendar year-end holidays, making our business seasonal.

Poor performance of, or any disruption in the production of these motion pictures (including by reason of a strike or lack of adequate financing), a reduction in, or suspension of, the marketing efforts of the major motion picture studios, the choice by distributors to release fewer feature-length movies theatrically, or the choice to release feature-length movies directly to video streaming or Premium Video on Demand (PVOD) platforms in lieu of a theatrical release, could hurt our business and results of operations.

Conversely, the successful performance of these motion pictures, particularly the sustained success of any one motion picture, or an increase in effective marketing efforts of the major motion picture studios and extension of the exclusive theatrical release windows, may generate positive results for our business and operations in a specific fiscal quarter or year that may not necessarily be indicative of, or comparable to, future results of operations.

Motion picture production is highly dependent on labor that is subject to various collective bargaining agreements.

Strikes by the Writers Guild of America and the Screen Actors Guild-American Federation of Television and Radio Artists during 2023 halted production of motion pictures for several months and are expected to delay or otherwise affect the supply, of certain motion pictures, and thus the demand for our products.

Other film and content delivery methods, including video streaming, network, syndicated cable and satellite television, as well as video-on-demand, pay-per-view services, subscription streaming services, and social media platforms may also affect our business negatively.

We also compete for the public’s leisure time and disposable income with other forms of entertainment, including sporting events, video gaming, social media, amusement parks, live music concerts, live theater, and restaurants.

An increase in the popularity of these alternative film delivery methods and other forms of entertainment could reduce the demand for our products and materially and adversely affect our business and results of operations.

Risks Related to Ownership of Our Common Stock

We do not know whether an active, liquid and orderly trading market will develop for our Common Stock or what the market price of our Common Stock will be and as a result it may be difficult for you to sell your shares of our Common Stock.

Prior to completion of our initial public offering in July 2021, there was no market for the shares of our Common Stock and, although our Common Stock is listed on NYSE American, an active trading market for these securities may never develop or be sustained.

The lack of an active market may impair your ability to sell your shares at the time you wish to sell them or at a price that you consider reasonable.

The lack of an active market may also reduce the fair market value of your shares.

Further, an inactive market may also impair our ability to raise capital by selling shares of our Common Stock and may impair our ability to enter into collaborations or acquire companies or products by using our shares of Common Stock as consideration.

The market price of our Common Stock may be volatile, and you could lose all or part of your investment.

An active trading market may not develop or continue to be liquid and the market price of shares of our common stock may be volatile.

Prior to the listing of our common stock on NYSE American, there was no public market for any of our securities, and an active market for our common stock may not develop or be sustained after, which could depress the market price of shares of our common stock and could affect the ability of our stockholders to sell our common stock.

In the absence of an active public trading market, investors may not be able to liquidate their investments in our common stock.

An inactive market may also impair our ability to raise capital by selling shares of our common stock, our ability to motivate our employees through equity incentive awards and our ability to acquire other companies, products or technologies by using shares of our common stock as consideration.

The public price of our common stock could be subject to wide fluctuations in response to the risk factors described in this prospectus and others beyond our control, including:

changes in the industries in which we operate;

variations in our operating performance and the performance of our competitors in general;

actual or anticipated fluctuations in our quarterly or annual operating results;

publication of research reports by securities analysts about us or our competitors or our industry;

the public’s reaction to our press releases, our other public announcements and our filings with the SEC;

our failure or the failure of our competitors to meet analysts’ projections or guidance that we or our competitors may give to the market;

additions and departures of key personnel;

changes in laws and regulations affecting our business;

commencement of, or involvement in, litigation involving us;

changes in our capital structure, such as future issuances of securities or the incurrence of additional debt;

the volume of shares of our common stock available for public sale;

general economic and political conditions such as recessions, interest rates, fuel prices, foreign currency fluctuations, international tariffs, social, political and economic risks and acts of war or terrorism.

In addition, securities exchanges have experienced price and volume fluctuations that have affected and continue to affect the market prices of equity securities of many companies.

Stock prices of many companies have fluctuated in a manner often unrelated to the operating performance of those companies.

In the past, stockholders have instituted securities class action litigation following periods of market volatility.

If we were to become involved in securities litigation, it could subject us to substantial costs, divert resources and the attention of management from our business and harm our business, results of operations and financial condition.

Our operating results and share price may be volatile and the market price of our Common Stock may decrease.

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If one or more of these analysts cease coverage of our company or fail to publish reports on us regularly, demand for our securities could decrease, which might cause the trading price of our shares of common stock and trading volume to decline.

Our business depends on motion picture production and performance and is subject to intense competition, including increases in alternative film delivery methods or other forms of entertainment .

The most attended films are usually released during the summer and the calendar year-end holidays, making our business seasonal.

Motion picture production is highly dependent on labor that is subject to various collective bargaining agreements.

Stikes by the Writers Guild of America and the Screen Actors Guild-American Federation of Television and Radio Artists during 2023 halted production of motion pictures for several months and are expected to delay or otherwise affect the supply, of certain motion pictures, and thus the demand for our products.

An increase in the popularity of these alternative film delivery methods and other forms of entertainment could reduce the demand for our products and materially adversely affect our business and results of operations.]

UNRESOLVED STAFF COMMENTS

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1A. Risk Factors