Highlights

• ION Video reported positive operating cash flow of AUD 180K for the June 2026 quarter, the first positive quarter in company history.

• Monthly recurring cash burn was AUD 158K, below management’s AUD 180K target.

• Cash at quarter-end increased to AUD 771K from AUD 204K at 31 March 2026.

• The company converted AUD 2.65 million of convertible notes into equity, eliminating all company debt and AUD 708,883 in future interest obligations.

• ION filed two additional patent applications, expanding its Virtual Video intellectual property portfolio to five patent families.

ION Video Limited (ASX:IOV) has released its June 2026 quarterly activities report and Appendix 4C, reporting the first positive operating cash flow quarter in the company’s history, a strengthened balance sheet and further progress across its Virtual Video technology platform.

ION Video shares traded flat at AUD 0.60 during the afternoon session on 7 July 2026 after touching an intraday high of AUD 0.62. The stock remains up 495.00% over the past year. The share price movement is separate from the latest update, which focused on financial management, debt reduction, intellectual property development, technology progress and commercial engagement.

ION Video describes itself as an infrastructure company virtualising video at the file architecture level. The company’s commercial model is based on licensing its patented intellectual property rather than developing customised software applications for individual customers. Its Virtual Video platform is being developed to support enterprise integration, third-party interoperability and future customer deployment opportunities.

Cash Flow Turns Positive for First Time

The major financial highlight from the June quarter was positive operating cash flow. ION reported net cash inflow from operating activities of AUD 179,847, rounded to AUD 180K in its Appendix 4C.

This marked the first positive operating cash flow quarter in the company’s history. The result was supported by customer receipts, government grant and tax incentive inflows, and recovered supplier payments.

Customer receipts for the quarter were AUD 109K, while the company received AUD 314K under the Australian Government’s Research and Development Tax Incentive program. ION also recovered AUD 255,354 related to payments made to suppliers prior to June 2025.

For the 12 months to 30 June 2026, net cash used in operating activities remained AUD 3.249 million, showing that the positive June quarter represents an important improvement from the broader full-year cash flow position.

Cash Burn Falls Below Management Target

ION continued to focus on cost control during the quarter. Average monthly recurring cash burn was AUD 158,522, below management’s target of AUD 180,000 per month.

Including exceptional items, monthly expenditure was AUD 167,758. Gross cash outflows for the quarter were approximately AUD 503,275. This included AUD 475,566 in recurring expenditure and AUD 27,709 in non-recurring costs related to redundancies in the United Kingdom.

Cash outflows included AUD 150,451 in development costs, AUD 172,302 in staff and consultant costs, AUD 105,162 in administration and corporate costs, AUD 21,821 in operating costs and AUD 53,538 in legal and patent costs.

Related party payments totalled AUD 84,563 and related to director fees, salary and superannuation paid to executives and directors in the ordinary course of business.

Balance Sheet Improves as Debt Is Eliminated

ION’s financial position also improved during the quarter. Total liabilities were reduced to approximately AUD 300K as at 30 June 2026, down from AUD 2.8 million at 30 June 2025 and AUD 561,802 at 31 December 2025.

A key balance sheet development was the conversion of AUD 2.65 million of remaining convertible notes into fully paid ordinary shares. The conversion took place at the first available conversion date and eliminated all company debt linked to the notes.

Following the conversion, ION said it no longer has outstanding convertible note debt and has removed future interest obligations of AUD 708,883.

The company also said its ten largest shareholders held approximately 62% of the company on a fully diluted basis after the conversion, while the top twenty shareholders held approximately 73%.

Cash Position Increases to AUD 771K

ION ended the June quarter with AUD 771K in cash, compared with AUD 204K at 31 March 2026. The increase reflected positive operating cash flow and AUD 387K in financing inflows.

During the quarter, financing cash flow included AUD 265K from convertible debt securities and AUD 122K from the exercise of options. For the full year, net financing inflows totalled AUD 3.793 million.

The company reported no financing facilities at quarter-end and no unused finance facilities available. Based on its current operating plan, ION said it has sufficient cash reserves to fund operations through at least June 2027.

Racing.com Contract Terminated by Mutual Agreement

During the quarter, ION and Racing.com mutually agreed to terminate an existing services contract with immediate effect.

ION said Racing.com had not used the company’s technology for the past 14 months. Under the negotiated termination, Racing.com paid ION 90% of the residual contract value.

The company also said the termination removes ongoing hosting costs that would otherwise have continued through to contract expiry.

Patent Portfolio Expands to Five Families

ION continued to build its intellectual property portfolio during the quarter by filing two additional patent applications.

The filings cover two new inventions and expand the company’s Virtual Video intellectual property portfolio to five patent families. Both applications have been filed with IP Australia and remain pending examination and grant.

The fourth patent family, referred to as Right to Identify References, relates to Patent Application No. 2026904970, titled System and Method for Policy-Gated Authentication and Cryptographic Hashing. The application describes a framework for authenticating digital video by creating a cryptographically verifiable record linked to individual binary samples.

The fifth patent family, referred to as Right to Classify References, relates to Patent Application No. 2026905599, titled System and Method for Content Safety Enforcement During Virtual Video Assembly. This application describes an approach for associating content classification information with individual binary samples and applying policy controls during video assembly.

ION said its broader portfolio now includes five patent families covering virtual video containers, distributed ledger-based content transactions, cryptographic video tokens, authentication of video references and content classification during video assembly.

Technology Platform Moves to AWS

Technology development remained another focus during the quarter. ION said its Virtual Video platform has moved from a demonstration environment to a cloud-based architecture hosted on Amazon Web Services.

The AWS migration is intended to provide scalable infrastructure for platform development, customer evaluations and potential future commercial deployments.

The company also continued integrating artificial intelligence capabilities into the platform. During the quarter, ION integrated Twelve Labs’ Marengo embedding model to support semantic video search and incorporated Amazon Bedrock to provide access to additional foundation models within the platform’s AI workflow.

ION said the platform is designed to support multiple AI models, allowing further technologies to be added as customer needs and available tools evolve.

Enterprise Integration Work Continues

As commercial discussions progress, ION’s development work has increasingly focused on enterprise integration requirements.

During the quarter, the company further enhanced its virtualisation platform, developed APIs to support integration with customer systems and continued preparing technical documentation for potential future licensees and commercial deployments.

The company said these activities are intended to support implementation planning and provide a more consistent approach to customer integration.

This aligns with ION’s licensing-based commercial model, which focuses on patented intellectual property rather than bespoke customer software builds.

Advisory Board Established to Support Commercial Engagement

ION also established an Advisory Board during the quarter to provide strategic advice and support commercial engagement.

The board includes executives with experience across technology, media, entertainment and government sectors. Members include former Apple executive Kelli Richards, digital media and streaming executive Daniel Sanders, government and cybersecurity adviser Dr Kellee Franklin, and international broadcast and media executive Howard Bolter.

The Advisory Board is expected to assist with strategic guidance, industry engagement, commercial introductions and market insights as ION continues discussions with potential customers and partners.

Commercial Discussions Continue Across Key Sectors

Commercial activity remained a key focus for ION during the quarter. The company continued discussions with organisations across technology, telecommunications, media, enterprise infrastructure and government sectors.

Several discussions relate to potential proof-of-concept engagements for the Virtual Video infrastructure. However, ION made clear that these discussions are non-binding, no commercial terms have been agreed, and the process remains subject to technical, commercial and legal engagement.

The company views proof-of-concept work as the first step in broader commercial engagement. The purpose would be to validate the integration of ION’s technology within a participating organisation’s existing operating environment and establish a pathway toward longer-term agreements.

Management said it is taking a disciplined approach and is focused on potential engagements that are profitable and include measurable success criteria.

What This Means for Investors

ION Video’s June quarter update shows progress across financial, technology and intellectual property priorities. The first positive operating cash flow quarter, lower monthly cash burn, increased cash balance and elimination of convertible note debt are important balance sheet developments. At the same time, the company is continuing to expand its patent portfolio and prepare its Virtual Video platform for potential enterprise integrations. Investors are likely to watch whether ongoing commercial discussions move into proof-of-concept engagements and whether those engagements can support longer-term licensing opportunities.