View Policies Current Attempt in Progress Mobile Security, Inc. Mobile Security, Inc. (MSI) has been an audit client of Leo & Lee LLP for the past 12 years. MSI is a small, publicly traded aviation company based in Cleveland, Ohio, where it manufactures high-tech unmanned aerial vehicles (UAV), also known as drones, and other surveillance and security equipment. MSI's products are primarily used by the military and scientific research institutions, but there is growing demand for UAVs for commercial and recreational use. MSI must go through an extensive bidding process for large government contracts. Because of the sensitive nature of government contracts and military product designs, both the facilities and records of MSI must be highly secured. In October 2025, MSI installed a new cloud-based inventory costing system to replace a system that had been developed in-house. The old system could no longer keep up with the complex and detailed manufacturing costing process that provides information to support competitive bidding. MSI's IT department, together with consultants from the software company, implemented the new inventory costing system, which went live on December 1, 2025. Key operational staff and the internal audit team from MSI were significantly engaged in the selection, testing, training, and implementation stages. MSI's fiscal year-end is June 30. The following table shows financial information for the first two quarters of the fiscal year-end June 30, 2026 (amounts in millions). Note that the financial data listed are for the three-month quarter ended (i.e., the second quarter does not include the first-quarter data). Item 1st Quarter 2nd Quarter