What changed in this filing

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Item 1. Financial Statements

2026-05-14 compared with 2026-02-12 · 152 added, 150 removed, 455 unchanged (40% of the section changed)

10 unchanged sentences

Long-Term Assets:

Right-of-use asset

Right-of-use assets

Property and equipment, net

9 unchanged sentences

Customer deposits

Lease liability–current

Lease liabilities–current

Unearned warranty revenue

1 unchanged sentence

Long-Term Liabilities:

Lease liability–non-current

Lease liabilities–non-current

Total Long-Term Liabilities

1 unchanged sentence

Stockholders’ Equity

Common stock, $ 0.00001 par value, 100,000,000 shares authorized, 9,945,115 and 9,939,080 shares issued and outstanding at December 31, 2025 and June 30, 2025, respectively

Common stock, $ 0.00001 par value, 100,000,000 shares authorized, 9,941,072 and 9,939,080 shares issued and outstanding at March 31, 2026 and June 30, 2025, respectively

Additional paid-in capital

10 unchanged sentences

Three Months Ended

Six Months Ended

Nine Months Ended

Cost of goods sold

9 unchanged sentences

Total other income

Net income (loss)

Earnings (loss) per share:

Shares used in computing earnings per share:

Loss per share:

Shares used in computing loss per share:

The accompanying notes are an integral part of these condensed consolidated financial statements.

2 unchanged sentences

(in thousands except for share amounts)

Three and Six Months Ended December 31, 2025

Three and Nine Months Ended March 31, 2026

Balance as of June 30, 2025

Grant of options to officer

Issuance of stock to directors

Grant of options to officers

Balance as of September 30, 2025

Grant of options to officer

Issuance of stock to directors

Grant of options to officers

Balance as of December 31, 2025

Three and Six Months Ended December 31, 2024

Issuance of stock to directors

Grant of options to officer

Stock repurchased

Balance as of March 31, 2026

Three and Nine Months Ended March 31, 2025

Balance as of June 30, 2024

2 unchanged sentences

Grant of options to officer

Share buyback and cancellation

Balance as of December 31, 2024

Grant of options to officer

Issuance of stock to directors

Repriced option for directors and officer

Balance as of March 31, 2025

The accompanying notes are an integral part of these condensed consolidated financial statements.

2 unchanged sentences

(in thousands)

Six Months Ended

Nine Months Ended

Cash flows from operating activities:

Net income (loss)

Adjustments to reconcile net income (loss) to net cash (used in) provided by operating activities:

Adjustments to reconcile net loss to net cash (used in) provided by operating activities:

Provision for credit losses

4 unchanged sentences

Stock compensation expense

Stock issued for director expenses

Changes in operating assets and liabilities

7 unchanged sentences

Net cash (used in) provided by operating activities

Net decrease in cash

Cash flows from investing activities

Purchases of property and equipment

Net cash used in investing activities

Cash flows from financing activities

Repurchases of shares

Net cash used in financing activities

Net (decrease) increase in cash

Cash, beginning of the period

1 unchanged sentence

Non-cash investing and financing activities:

Accruals settled by stock issuance

Director fees settled by stock issuance

Right-of-use assets from new lease

10 unchanged sentences

(DBA “Caddy Products”) designs, develops and manufactures innovative products for the entertainment, cinema, grocery, worship, restaurant, sports and restroom industries.

Impact of the COVID- 19 Pandemic:

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

The social and economic effects have been widespread.

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

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

As a result, the Company implemented various cash preservation strategies, including, but not limited to, temporary personnel and salary reductions, halting non-essential operating and capital expenditures, and negotiating modified timing and/or abatement of contractual payments with landlords and other major suppliers.

Based on the management’s current estimates, it believes it will generate sufficient cash to sustain operations for a period of 12 months from the issuance of these financial statements.

11 unchanged sentences

The June 30, 2025 condensed consolidated balance sheet has been derived from the audited consolidated financial statements.

Operating results for the three and six months ended December 31, 2025 are not necessarily indicative of the results that may be expected for any subsequent quarters or for the year ending June 30, 2026 .

Operating results for the three and nine months ended March 31, 2026 are not necessarily indicative of the results that may be expected for any subsequent quarters or for the year ending June 30, 2026 .

NOTE 1 — BUSINESS ACTIVITY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

17 unchanged sentences

The Company does not charge interest on past-due balances or require collateral on its accounts receivable.

As of December 31, 2025 and June 30, 2025 the allowance for credit losses is approximate ly $ 346,000 and $ 236,000 , respectively.

As of March 31, 2026 and June 30, 2025 the allowance for credit losses is approximate ly $ 483,000 and $ 236,000 , respectively.

Inventories are stated at the lower of cost or net realizable value, with cost being determined on the first -in, first -out cost method of accounting.

2 unchanged sentences

The Company’s policy is to closely monitor inventory levels, obsolescence and lower market values compared to costs and, when necessary, reduce the carrying amount of its inventory to its net realizable value.

As of December 31, 2025 and June 30, 2025 , the inventory reserve was $ 1,462,000 and $ 1,413,000 res pectively, and inventory on hand was comprised primarily of finished goods ready for sale.

As of March 31, 2026 and June 30, 2025 , the inventory reserve wa s $ 1,468,000 and $ 1,413,000 res pectively, and inventory on hand was comprised primarily of finished goods ready for sale.

Revenue Recognition:

16 unchanged sentences

Contract Liabilities ($ in Thousands)

Customer refunds

Customer deposits

$ 270 $ 1,101

Unearned warranty revenue

Customer refunds

$ 604 $ 1,515

3 unchanged sentences

Management has determined that sales commissions paid are an immaterial component of obtaining a customer’s contract and has elected to expense sales commissions when earned.

Three Months Ended December 31,

Six Months Ended December 31,

Three Months Ended March 31,

Nine Months Ended March 31,

Disaggregation of Revenue ($ in Thousands)

15 unchanged sentences

Advertising Costs:

Advertising costs were approximatel y $ 5,000 and $ 8,000 fo r the three months ended December 31, 2025 and 2024, respectively an d $ 6,400 and $ 12,200 for the six months ended December 31, 2024 and 2023, respectively.

Advertising costs were approximatel y $ 0 and $ 4,600 for the three months ended March 31, 2026 and 2025 , respectively and $ 6,400 and $ 16,800 for t he nine months ended March 31, 2026 and 2025, respectively.

Advertising costs are expensed as incurred within selling and marketing expenses.

3 unchanged sentences

Management reviews its intangible assets for impairment whenever events or circumstances indicate that the carrying amount of an asset may not be fully recoverable.

There was no intangible asset impairments recognized for the three and six months ended December 31, 2025 or 2024.

There were no intangible asset impairments recognized for the three and nine months ended March 31, 2026 or 2025.

Business Combinations:

8 unchanged sentences

Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized.

The following table summarizes the components of deferred tax assets and deferred tax liabilities at December 31, 2025 and June 30, 2025 (in thousands):

The following table summarizes the components of deferred tax assets and deferred tax liabilities at March 31, 2026 and June 30, 2025 (in thousands):

$ in Thousands

Deferred Tax Assets (Liabilities)

December 31, 2025

March 31, 2026

June 30, 2025

8 unchanged sentences

Net operating loss carryforward

Allowance for doubtful accounts

Allowance for credit losses

Valuation allowance

4 unchanged sentences

The Company has the right to return defective products for up to three years, depending on the manufacturers’ individual policies.

As of December 31, 2025 and June 30, 2025 , the Company has established a warranty reserve o f $ 37,000 and $ 37,000 , respectively, which is included in accrued expenses in the accompanying condensed consolidated balance sheets.

As of March 31, 2026 and June 30, 2025 , the Company has established a warranty reserve o f $ 20,000 and $ 37,000 , respectively, which is included in accrued expenses in the accompanying condensed consolidated balance sheets.

NOTE 1 — BUSINESS ACTIVITY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

The changes in the Company’s aggregate warranty liabilities were as follows for the six months ended December 31, 2025 and the year ended June 30, 2025 ( in thousands):

The changes in the Company’s aggregate warranty liabilities were as follows for the nine months ended March 31, 2026 and the year ended June 30, 2025 ( in thousands):

Warranty Liabilities

21 unchanged sentences

ASU 2023 - 09 will also require the Company to disaggregate its income taxes paid disclosure by federal, state and foreign taxes, with further disaggregation required for significant individual jurisdictions.

The Company will adopt ASU 2023 - 09 in its fourth quarter of 2026 using a prospective transition method for its 2026 fiscal year along with ASU 2025 - 05.

The Company will adopt ASU 2023 - 09 in its fourth quarter of 2026 using a prospective transition method for its 2026 fiscal year.

In July 2025, the FASB issued ASU 2025 No.

2025 - 05, Financial Instruments-Credit Losses (Topic 326 ), which provides for a practical expedient for the evaluation of expected credit losses that assumes that current conditions as of the balance sheet do not change for the remaining life of the asset.

The provisions of this pronouncement are effective for annual periods beginning after December 15, 2025, and annual periods within those periods.

The provisions of this pronouncement are effective for annual periods beginning after December 15, 2025, and interim periods within those periods.

The Company will first adopt this standard in the first quarter of its fiscal year ending June 30, 2027.

NOTE 2 — INCOME (LOSS) PER SHARE

Basic income (loss) per share data for each period presented is computed using the weighted average number of shares of common stock outstanding during each such period.

Basic 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.

1 unchanged sentence

A reconciliation of basic and diluted loss per share is as follows:

Income (Loss) per Share

Loss per Share

For the Three Months

For the Six Months

For the Nine Months

(In Thousands except for share

Ended December 31

Ended March 31

and per share price)

Net income (loss)

$ ( 388 ) $ ( 527 ) $ 122 $ ( 552 )

Basic Weighted average basic shares outstanding

9,942,658 9,896,850 9,940,890 9,896,850

Effect of dilutive share-based awards

— — 312,500 —

Weighted-average dilutive shares

9,942,658 9,896,850 10,253,390 9,896,850

Net income (loss) per share

Basic earnings per share

$ ( 0.04 ) $ ( 0.05 ) $ 0.01 $ ( 0.06 )

Diluted earnings per share

$ ( 0.04 ) $ ( 0.05 ) $ 0.01 $ ( 0.06 )

For the quarter ended September 30, 2024, the following securities were excluded from the calculation of diluted loss per share in each period because their inclusion would have been anti-dilutive:

For the Six Months Ended

450,000 450,000

Net loss per share

Basic loss per share

Diluted loss per share

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 and Nine Months Ended

Total potentially dilutive shares

450,000 450,000

For the three months ended December 31, 2025 the Company had a net loss, while for the six months ended December 31, 2025 the Company had net income.

However, all potentially dilutive securities were also deemed to be anti-dilutive because their exercise price exceeded the weighted average trading price of the Company’s stock for the period.

The Company had net losses for three and nine months ended March 31, 2026 and March 31, 2025.

All potentially dilutive securities were deemed to be anti-dilutive in those periods because of the net losses incurred.

NOTE 3 — INTANGIBLE ASSETS

The following table summarizes the Company’s intangible assets as of December 31, 2025 (in thousands):

The following table summarizes the Company’s intangible assets as of March 31, 2026 (in thousands):

Customer relations

11 $ 970 $ 736 $ 233

$ 1,118 $ 783 $ 334

NOTE 3 — INTANGIBLE ASSETS (continued)

1 unchanged sentence

Customer relations

11 $ 970 $ 711 $ 260

$ 1,118 $ 755 $ 364

Amortization expense w as $ 15,000 and $ 15,000 for the th ree months ended December 31, 2025 and 2024 respectively, and $ 29,000 and $ 29,000 for the six months ended December 31, 2025 and 2024, respectively,

Amortization expense w as $ 15,000 and $ 15,000 for the th ree months ended March 31, 2026 and 2025 respectively, and $ 44,000 and $ 44,000 for the nine months ended March 31, 2026 and 2025, respectively,

and is included in general and administrative expense.

Estimated amortization expense related to intangible assets subject to amortization at December 31, 2025 in each of the years subsequent to December 31, 2025 , and thereafter is as follows (amounts in thousands);

Estimated amortization expense related to intangible assets subject to amortization at March 31, 2026 in each of the years subsequent to March 31, 2026 , and thereafter is as follows (amounts in thousands);

2026 balance of fiscal year

NOTE 4 — ACCRUED EXPENSES

7 unchanged sentences

The Plan, as amended, provides for the issuance of stock-based awards to employees.

As of December 31, 2025 , the Plan provides for the issuance of up t o 1,500,000 sto ck-based awards.

There are 1,020,000 s tock-based awards available to grant under the Plan at December 31, 2025 .

As of March 31, 2026 , the Plan provides for the issuance of up t o 1,500,000 stock-based awards.

There are 1,050,000 st ock-based awards available to grant under the Plan at March 31, 2026 .

On October 30, 2024, and as part of Francis Godfrey’s appointment as the Company’s President and Chief Operating Officer, the Board granted Francis Godfrey 200,000 options with an exercise price of $ 0.65 with 25 % vesting immediately and the remainder vesting at 25 % per year thereafter .

NOTE 5 — STOCKHOLDERS ’ EQUITY (continued)

The Company recognized compensation expense of approxima tely $ 7,300 and $ 32,000 for stock options during the three months ended December 31, 2025 and 2024, respectively, and $ 15,000 and $ 37,000 during the six months ended December 31, 2025 and December 31, 2024, respectively.

For the quarter ended December 31, 2025, none of these potentially dilutive securities were included in the computation of diluted earnings per share while for the quarter ended September 30, 2024, none of these potentially dilutive securities were included in the computation of diluted earnings per share as their impact would be anti-dilutive.

The estimated fair value of each option award granted was determined on the date of grant using the Black-Scholes option valuation model during the three and six months ended December 31, 2024 .

There were no option grants during the three and six months ended December 31, 2025:

Three and Six

December 31, 2024

On March 25, 2025, the Board of Directors (the “Board”) of Moving iMage Technologies, Inc.

cancelled the previously issued May 23, 2023 250,000 share options at $ 1.10 per share to outside directors consisting of 50,000 each to Directors Katherine Crothall, Scott Anderson and John Stiska and as well as 100,000 options to CFO William Greene at $ 1.10 per share.

The Board reissued the 250,000 options at $ 0.65 per share which resulted in an incremental stock-based compensation charge of $ 11,000 in the three and nine -months ended March 31, 2025.

The Company recognized compensation expense of approxima tely $ 7,300 and $ 22,000 for stock options during the three and nine months ended March 31, 2026, respectively, and $ 15,000 and $ 59,000 during the three and nine months ended March 31, 2025, respectively.

The estimated fair value of each option award granted was determined on the date of grant using the Black-Scholes option valuation model.

There were no option grants during the three and nine months ended March 31, 2026 :

March 31, 2025

October 30, 2024

Risk-free interest rate

4.35 % 4.22 %

Expected volatility

83.50 % 83.50 %

Dividend yield

1 unchanged sentence

NOTE 5 — STOCKHOLDERS ’ EQUITY (continued)

A summary of the status of the Company’s stock options as of December 31, 2025 and changes during the six months ended December 31, 2025 are presented below.

A summary of the status of the Company’s stock options as of March 31, 2026 and changes during the nine months ended March 31, 2026 are presented below.

Balance, July 1, 2025

3 unchanged sentences

Cancelled during the period

Balance, December 31, 2025

Balance, March 31, 2026

450,000 $ 0.65

A summary of the status of the Company’s stock options as of December 31, 2024 and changes during the six months ended December 31, 2024 are presented below.

A summary of the status of the Company’s stock options as of March 31, 2025 and changes during the nine months ended March 31, 2025 are presented below.

Balance, July 1, 2024

3 unchanged sentences

Canceled during the period

Balance, December 31, 2024

(250,000) (1.10)

The following table summarizes information about outstanding and exercisable stock options at December 31, 2025 :

Balance, March 31, 2025

450,000 $ 0.90

The following table summarizes information about outstanding and exercisable stock options at March 31, 2026 :

Exercise Price

3 unchanged sentences

The Company records director fee expense at the end of each board m eeting.

During the three months ended December 31, 2025, the Company issued 5,383 shares to the independent directors for director fees earned.

Through the six months ended December 31, 2025, the Company issued 6,035 shares to the independent directors for director fees earned.

During the three months ended March 31, 2026 and 2025, the Company issued 5,957 and 36,829 shares, respectively, to the independent directors for director fees earned.

During the nine months ended March 31, 2026 and 2025, the Company issued 11,992 and 36,829 shares, respectively, to the independent directors for director fees earned.

NOTE 6 — CUSTOMER AND VENDOR CONCENTRATIONS

One customer accounted for 8 % of the Company’s net sales for the three months ended December 31, 2025 .

Two customers accounted for 7 % and 6 %, respectively, of the Company’s sales for the six months ended December 30, 2025.

At December 31, 2025 , the amount of outstanding receivables related to the two customers was approximately $ 287,000 .

For the three months ended December 31, 2024, two customers accounted for 15 % and 12 % of the Company’s sales.

For the six months ended December 31, 2024, two customers accounted for 13 % and 11 %, respectively, of the Company’s sales.

At December 31, 2025, the amount of outstanding receivables related to the two customers was approximately $ 287,000 .

At June 30, 2025, there were no outstanding receivables related to the top customers.

For the three months ended December 31, 2025 one vendor accounted for 31 % of the Company’s purchases.

For the six months ended December 31, 2025 one vendor accounted for 31 % of the Company’s purchases.

For the six months ended December 31, 2024, two vendors accounted for 17 and 10 % of the Company’s purchases.

Approximately 18 % of the Company’s purchases were provided by one vendor for the three months ended December 31, 2024 .

No customers accounted for more than 10% of the Company's sales for the three months ended March 31, 2026 .

One customer accounted for 10 % of the Company’s sales for the nine months ended March 31, 2026.

At March 31, 2026 , two customers accounted for 28 % of accounts receivable.

The amount of outstanding receivables related to the two customers was approximately $ 615,000 .

For the three months ended March 31, 2025, one customer accounted for 12 % of the Company’s sales.

For the nine months ended March 31, 2025, no customers accounted for more than 10% of the Company’s sales.

For the three months ended March 31, 2026 one vendor accounted for 16 % of the Company’s purchases.

For the nine months ended March 31, 2026 three vendors accounted for 15 %, 12 % and 11 %, respectively, of the Company’s purchases.

For the three months ended March 31, 2025, two vendors accounted for 24 % and 20 % of the Company's purchases.

For the nine months ended March 31, 2025, two vendors accounted for 18 % and 15 % of the Company’s purchases.

NOTE 7 — LEASE COMMITMENTS AND CONTINGENCIES

7 unchanged sentences

The agreements provide for initial monthly base amounts plus annual escalations through the term of the leases.

The monthly rent payable for the first year of the extended term will be $ 6,299 and increases by 4 % on each anniversary date.

In addition to the monthly base amounts in the lease agreements, the Company is required to pay a portion of real estate taxes and common operating expenses during the lease terms.

NOTE 7 — LEASE COMMITMENTS AND CONTINGENCIES (continued)

The Company’s operating lease expense was $ 79,000 and $ 99,000 for the three months ended December 31, 2025 and 2024, respectively, and $ 159,000 and $ 185,000 for the six months ended December 31, 2025 and 2024, respectively.

Future minimum lease payments at December 31, 2025 under these arrangements are as follows:

The Company’s operating lease expense w as $ 79,000 and $ 98,000 for the three months ended March 31, 2026 and 2025 , respectively, and $ 238,000 and $ 283,000 for the nine months ended March 31, 2026 and 2025, respectively.

Future minimum lease payments at March 31, 2026 under these arrangements are as follows:

Operating leases

($ in Thousands)

2026, balance of the fiscal year

2026 balance of fiscal year

Total future minimum lease payments

1 unchanged sentence

Present value of operating lease payments

The following table sets forth the ROU assets and operating lease liabilities as of December 31, 2025 :

The following table sets forth the ROU assets and operating lease liabilities as of March 31, 2026 :

(in thousands)

3 unchanged sentences

Total ROU liabilities

The Company’s weighted average remaining lease term for its operating leases is 3.77 years using a weighted average discount rate of 8.42%.

The Company’s weighted average remaining lease term for its operating leas es is 3.52 years using a weighted average discount rate of 8.42%.

Legal Matters:

12 unchanged sentences

($ in Thousands)

Three Months Ended

Quarter Ended

$ 3,397 $ 3,571

5 unchanged sentences

Interest and other income

Net income (loss)

( 12 ) ( 30 )

$ ( 122 ) $ ( 240 )

($ in Thousands)

Six Months Ended

For the Nine Months Ended

$ 12,771 $ 12,264

5 unchanged sentences

Interest and other income

Net income (loss)

( 191 ) ( 107 )

$ (1 ) $ ( 792 )

NOTE 9 — SUBSEQUENT EVENTS

Management has evaluated events from December 31, 2025 thro ugh February 12, 2025, t he date these financial statements were available to be issued and determined that there have been no other events that occurred that would require adjustment to our disclosures in the condensed consolidated financial statements.

On April 27, 2026, William Greene retired as CFO.

On April 27, 2026, the Company hired Bart Bedard a s CFO and he will be paid an annual salary of $ 200,000 .

Management has evaluated events from April 1, 2026 thro ugh May 14, 2026, t he date these financial statements were available to be issued and determined that there have been no other events that occurred that would require adjustment to our disclosures in the condensed consolidated financial statements.

MANAGEMENT ’ S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

8 unchanged sentences

These forward-looking statements are necessarily estimates reflecting the best judgment of our senior management and involve a number of risks and uncertainties, some of which may be beyond our control.

These risks and uncertainties, including those disclosed under “Risk Factors” in Part I, Item 1A of our Annual Report on Form 10-K for the fiscal year ended June 30, 2025, filed with the Securities and Exchange Commission (the “SEC”) on September 27, 2024, and in our other filings with the SEC, could cause actual results to differ materially from those suggested by the forward-looking statements and include, without limitation:

These risks and uncertainties, including those disclosed under “Risk Factors” in Part I, Item 1A of our Annual Report on Form 10-K for the fiscal year ended June 30, 2025, filed with the Securities and Exchange Commission (the “SEC”) o n September 26, 2025 and in ou r other filings with the SEC, could cause actual results to differ materially from those suggested by the forward-looking statements and include, without limitation:

The condition of the economy in general and of the cinema and/or cinema equipment industry in particular,

18 unchanged sentences

The following discussion and analysis should be read in conjunction with the accompanying condensed consolidated financial statements and related notes included elsewhere in this Report.

We are a leading provider of technology, products, and services to movie theater operators and sports and entertainment venues.

We provide technology, products, and services to movie theater operators and sports and entertainment venues.

We provide a set of valuable services to movie theater operators and other critical screening and viewing rooms.

10 unchanged sentences

Factors affecting our performance

After overcoming the prior year Covid-19 impacts, based on our current estimates of recovery, we believe we have, and will generate, sufficient cash to sustain operations.

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

Investment in growth .

46 unchanged sentences

Results of Operations

Three months ended December 31, 2025 compared to the three months ended December 31, 2024

Three Months Ended December 31,

Net sales increased by 10.2% to $3.793 million for the three months ended December 31, 2025 from $3.441 million for the three months ended December 31, 2024 due to higher one-time sales.

Estimated quarterly recurring sales revenues are 2 million.

Three Months Ended December 31,

Gross profit dollars increased by $0.229 million or 24.5% to $1.165 million for the three months ended December 31, 2025 from $0.936 million for the three months ended December 31, 2024.

As a percentage of total revenues, gross profit percentage increased to 30.7% from 27.2% due to higher margin product revenues.

Three months ended March 31, 2026 compared to the three months ended March 31, 2025

Three Months Ended March 31,

Net sales decreased by 4.9% to $3.397 million for the three months ended March 31, 2026 from $3.571 million for the three months ended March 31, 2025 due to lower one-time project sales.

Estimated quarterly recurring sa les revenues are $2.0 million.

Three Months Ended March 31,

Gross profit dollars increased by $0.120 million or 11.3% to $1.183 million for the three months ended March 31, 2026 from $1.063 million for the three months ended March 31, 2025.

As a percentage of total revenues, gross profit percentage increased to 34.8% from 29.8% due to highe r Digital Speaker Series ("DCS") sale s and its related higher margin.

The Company realized approximately $0.065 million improvement in gross profit due to the purchase of DCS inventory at a discount from the initial October 2025 purchase.

Research and Development

Three Months Ended December 31,

Research and development expenses remained the same for both the three months ended December 31, 2025 and the three months ended December 31, 2024.

Three Months Ended March 31,

Research and development expenses decreased by $0.004 million for the three months ended March 31, 2026 compared to the three months ended March 31, 2025.

This decrease is deemed immaterial.

Selling, General and Administrative Expense

Three Months Ended December 31,

The increase in selling, general and administrative expense of $0.076 million or 5.2% was due to higher legal expense related the October 2025 DCS inventory purchase in the three months ended December 31, 2025 compared to the three months ended December 31, 2024.

Three Months Ended December 31,

Other Income was $0.020 million for the three months ended December 31, 2025 compared to Other Income of $0.034 million for the three months ended December 31, 2024 or an increase of $0.014 million.

The decrease was due to lower interest income on cash savings accounts in the three months ended December 31, 2025 compared to the three months ended December 31, 2024.

Three Months Ended March 31,

The decrease in selling, general and administrative expense of $0.012 million or 0.9% and was virtually unchanged.

Three Months Ended March 31,

Other Income was $0.012 million for the three months ended March 31, 2026 compared to Other Income of $0.030 million for the three months ended March 31, 2025 or a decrease of $0.018 million.

The decrease was due to lower interest income on cash savings accounts in the three months ended March 31, 2026 compared to the three months ended March 31, 2025.

Net Income (Loss)

Three Months Ended December 31,

Net loss was $(0.388) million for the three months ended December 31, 2025 compared to a net loss of $(0.527) million for the three months ended December 31, 2024 or an improvement in loss reduction of $0.139 million.

The improvement was due to a combination of higher gross margin of $0.229 million offset by higher selling, general and administrative expenses of $0.076 million and lower other income of $0.014 million.

Six months ended December 31, 2025 compared to the six months ended December 31, 2024

Six Months Ended December 31,

Net sales increased 7.8% to $9.375 million for the six months ended December 31, 2025 from $8.693 million for the six months ended December 31, 2024 due to higher one-time sales.

Six Months Ended December 31,

Gross profit dollars increased by $0.532 million or 23.1% to $2.839 million for the six months ended December 31, 2025 from $2.307 million for the six months ended December 31, 2024.

As a percentage of total revenues, gross profit percentage increased to 30.3% from 26.5% due to higher margin product revenues.

Three Months Ended March 31,

Net loss was $(0.122) million for the three months ended March 31, 2026 compared to a net loss of $(0.240) million for the three months ended March 31, 2025 or an improvement in loss reduction of $0.118 million.

The improvement was due to higher gross margin of $0.120 million and lower operating expense of $0.016 million, offset by lower other income of $0.018 million.

Nine months ended March 31, 2026 compared to the nine months ended March 31, 2025

Nine Months Ended March 31,

Net sales increased 4.1% to $12.771 million for the nine months ended March 31, 2026 from $12.264 million for the nine months ended March 31, 2025 due to higher one-time project sales.

Nine Months Ended March 31,

Gross profit dollars increased by $0.651 million or 19.3% to $4.021 million for the nine months ended March 31, 2026 from $3.370 million for the nine months ended March 31, 2025.

As a percentage of total revenues, gross profit percentage increased to 31.5% from 27.5% due to DCS higher margin product revenues.

Research and Development

Six Months Ended December 31,

Research and development expenses decreased by $(0.014) million or 12.8% for the six months ended December 31, 2025 compared to the six months ended December 31, 2024 due to headcount reduction.

Nine Months Ended March 31,

Research and development expenses decreased by $(0.017) million or 10.8% for the nine months ended March 31, 2026 compared to the nine months ended March 31, 2025 due to headcount reduction.

Selling, General and Administrative Expense

Six Months Ended December 31,

In the six months ended December 31, 2025, selling, general and administrative expense decreased by $(0.026) million or 0.9% due largely to cost reductions enacted in August 2024 compared to the six months ended December 31, 2024.

Six Months Ended December 31,

Other Income was $0.051 million for the six months ended December 31, 2025 compared to Other Income of $0.077 million for the six months ended December 31, 2024 or a decrease of $0.026 million.

The decrease was due to lower interest income on cash savings accounts in the six months ended December 31, 2025 compared to the six months ended December 31, 2024.

Nine Months Ended March 31,

In the nine months ended March 31, 2026, selling, general and administrative expense decreased by $0.039 million or 0.9% due primarily to lower payroll costs.

Nine Months Ended March 31,

Other Income was $0.191 million for the nine months ended March 31, 2026 compared to Other Income of $0.107 million for the nine months ended March 31, 2025 or an increase of $0.084 million.

The increase was due to a one-time payables extinguishment in the nine months ended March 31, 2026 compared to the nine months ended March 31, 2025 .

Net Income (Loss)

Six Months Ended December 31,

Net income was $0.122 million for the six months ended December 31, 2025 compared to a net loss of $(0.552) million for the six months ended December 31, 2024 or an improvement in loss reduction of $0.674 million.

The improvement was due to a combination of higher gross margin of $0.532 million, and lower operating expenses of $0.040 million and lower other income of $0.026 million.

Nine Months Ended March 31,

Net income was $(0.001) million for the nine months ended March 31, 2026 compared to a net loss of $(0.792) million for the nine months ended March 31, 2025 or an improvement in loss reduction of $0.791 million.

The improvement was due to higher gross margin of $0.651 million, lower selling, general and administrative expenses of $0.039 million and higher other income of $0.084 million.

Liquidity and Capital Resources

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We believe that our existing sources of liquidity, including cash and operating cash flow, will be sufficient to fund our operations and to meet our projected capital needs for a period of at least 12 months from the date the condensed consolidated financial statements are available to be issued.

The cash balance at December 31, 2025 was approximately $3.913 million, as compared to $5.715 million at June 30, 2025.

The $1.802 million decrease was largely due to the DCS inventory purchase of $1.5 million in October 2025.

The cash balance at March 31, 2026 was approximate ly $2.400 milli on, as compared to $5.715 million at June 30, 2025.

The $3.352 million decrease was largely due to the DCS inventory purchase of $1.5 million in October 2025 and subsequent DCS inventory purchases during the March quarter.

On October 31, 2025, the Company entered into an Asset Purchase Agreement (the “APA”) with QSC, LLC (“QSC”) pursuant to which the Company purchased certain assets comprising QSC’s Digital Cinema Speaker Series (“DCS”) loudspeaker product line including, the DCS loudspeaker product line, including the SC, SR, SB, and RSM product families;

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Cash Flows from Operating Activities

Compared to December 31, 2024 , net cash used in operating activities decreased by $1.845 million in December 31, 2025 due largely to the DCS inventory purchase of $1.500 million in October 2025.

Net cash used in operating activities was $(1.802) million for the six months ended December 31, 2025 , primarily due to $(2.687) million in working capital decreases which were offset by $0.122 million in net income and $0.324 million in other non-cash expenses.

Within the working capital change, cash used in operating activities included $(2.687) million in inventory, accounts payable, customer deposits, lease liabilities and accrued expenses and offset by $0.434 million in accounts receivable and unearned warranty revenue.

For the six months ended December 31, 2024 , n et cash provided by operating activities was $0.038 million for the six months ended December 31, 2024, primarily due to 0.202 million in working capital increases along with $(0.552) million in net losses and 0.388 million in other non-cash expenses.

Within the working capital change, net cash provided included $1.518M in accounts receivable, inventory, prepaids, accrued expense, unearned warranty revenue offset by $(1.316) million in payables, customer deposit declines and lease liabilities.

Compared to March 31, 2025 , net cash used in operating activities increased by $3.393 million in March 31, 2026 due largely to the increased DCS inventory and payables of $2.200 million.

Net cash used in operating activities was $(3.301) million for the nine months ended March 31, 2026 , which were offset by $0.001 million in net loss and $0.549 million in other non-cash expenses.

Within the working capital change, cash used in operating activities included $(3.872) million in inventory, accounts payable, customer deposits, accounts receivable, prepaids and lease liabilities offset by $0.022 million in unearned warranty revenue.

For the nine months ended March 31, 2025 , n et cash provided by operating activities was $0.091 million, primarily due to $0.214 million in working capital increases along with $(0.792) million in net losses and $0.669 million in other non-cash expenses.

Within the working capital change, net cash provided included $0.786 million in accounts receivable, prepaids, payables and unearned warranty revenue offset by 0.572 million in inventory, accrued expenses, customer deposit declines and lease liabilities.

Cash Flows from Investing Activities

Net cash from investing activities was zero for the six months ended December 31, 2025 and 2024.

Net cash used in investing activities was $0.045 million for equipment purchases for the nine months ended March 31, 2026 and zero for the nine months ended March 31, 2025.

Cash Flows from Financing Activities

Net cash from financing activities was zero for the six months ended December 31, 2025 and 2024.

Net cash used in financing activities was $0.006 million for repurchase of shares for the nine months ended March 31, 2026 and zero for the nine months ended March 31,2025.

Critical Accounting Policies and Estimates

For a discussion of the critical accounting policies and estimates, refer to the “Critical Accounting Policies and Estimates” section in Part II, Item 7 of our 2024 Form 10-K.

There have been no material changes during the six months ended December 31, 2025 to the judgments, assumptions and estimates upon which our critical accounting estimates are based.

There have been no material changes during the nine months ended March 31, 2026 to the judgments, assumptions and estimates upon which our critical accounting estimates are based.

Additionally, refer to Note 1 of our notes to our unaudited consolidated financial statements included in this Form 10-Q for additional discussion of our summary of significant accounting policies and use of estimates.

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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-Q

Item 1. Financial Statements