UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark one)


☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended ~~June~~December 3031, 2025


☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to .

Commission File Number: 000-24248

GENASYS INC.

(Exact name of registrant as specified in its charter)



Delaware	87-0361799
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification Number)

16262 West Bernardo Drive, San Diego, California	92127
(Address of principal executive offices)	(Zip Code)

(858) 676-1112

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which securities are registered
Common stock, $0.00001 par value per share	GNSS	NASDAQ Capital Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ☒ Yes ☐ No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). ☒ Yes ☐ No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer”, “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☒
Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). ☐ Yes ☒ No

The number of shares of Common Stock, $0.00001 par value, outstanding on ~~August~~February 84, ~~2025~~2026 was 45,~~154~~212,~~504~~311.

Table of Contents

		Page
PART I.	FINANCIAL INFORMATION	1
Item 1.	Financial Statements (Unaudited)	1
	Condensed Consolidated Balance Sheets	1
	Condensed Consolidated Statements of Operations	2
	Condensed Consolidated Statements of Comprehensive Loss	3
	Condensed Consolidated Statements of Cash Flows	4
	Notes to Unaudited Condensed Consolidated Financial Statements	6
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	2826
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	3934
Item 4.	Controls and Procedures	3934
PART II.	OTHER INFORMATION	4034
Item 1.	Legal Proceedings	4034
Item 1A.	Risk Factors	4035
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	4135
Item 3.	Defaults Upon Senior Securities	4135
Item 4.	Mine Safety Disclosures	4135
Item 5.	Other Information	4135
Item 6.	Exhibits	4236
Signatures		4337

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

Genasys Inc.

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except par value and share amounts)

	June 30,2025			September 30,2024
	December 31,2025			September 30,2025
	(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	510,~~339~~286		$	47,~~945~~969
Short-term marketable securities		~~120~~30			~~7,945~~70
Restricted cash		95			95
Accounts receivable, net of allowance for credit losses of $65		8,882			7,596
Accounts receivable, net of allowance for credit losses of $65		4,648			3,283
Contract assets		7,150			6,117
Contract assets		2,846			—
Inventories, net		8,573			8,805
Inventories, net		11,426			7,313
Prepaid expenses and other		9,079			8,742
Prepaid expenses and other		7,458			2,559
Total current assets		44,000			39,299
Total current assets		31,932			26,140
Long-term restricted cash		585			585
Long-term marketable securities		—			249
Property and equipment, net		1,020			1,125
Long-term restricted cash		585			250
Goodwill		13,451			13,450
Property and equipment, net		1,169			1,291
Intangible assets, net		5,570			6,147
Goodwill		13,451			13,329
Operating lease right of use assets, net		2,214			2,419
Intangible assets, net		6,724			8,506
Other assets		806			844
Operating lease right of use assets, net		2,550			3,110
Total assets	$	67,646		$	63,869
Other assets		982			1,061
Total assets	$	57,393		$	53,936
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable	$	7,~~797~~463		$	48,~~034~~181
Accrued liabilities		23,473			9,030
Customer deposit		30,305			19,669
Operating lease liabilities, current portion		1,075			1,021
Accrued liabilities		7,276			7,451
Notes payable, at fair value - short term		17,050			—
Operating lease liabilities, current portion		1,145			1,125
Total current liabilities		49,395			14,085
Notes payable, at fair value - short term		13,820			18,010
Notes payable, at fair value - long term		—			12,010
Total current liabilities		60,009			54,436
Warrant liability		2,~~080~~700			63,~~640~~570
Deferred revenue, noncurrent		~~294~~1,209			~~369~~1,478
Operating lease liabilities, noncurrent		21,~~465~~922			32,~~269~~218
Total liabilities		5465,~~234~~840			3661,~~373~~702
Stockholders' equity:
Preferred stock, $0.00001 par value; 5,000,000 shares authorized; none issued and outstanding		—			—
Common stock, $0.00001 par value; 100,000,000 shares authorized; 45,154,504 and 44,631,030 shares issued and outstanding as of June 30, 2025 and September 30, 2024, respectively		—			—
Common stock, $0.00001 par value; 100,000,000 shares authorized; 45,212,311 and 45,161,172 shares issued and outstanding as of December 31, 2025 and September 30, 2025, respectively		—			—
Additional paid-in capital		~~126~~127,~~979~~835			~~125~~127,~~690~~384
Accumulated deficit		(~~124~~126,~~496~~721	)		(~~107~~125,~~792~~904	)
Accumulated other comprehensive income (loss)		676			(335	)
Accumulated other comprehensive income		692			687
Total stockholders' equity		31,~~159~~806			172,~~563~~167
Total liabilities and stockholders' equity	$	5767,~~393~~646		$	5363,~~936~~869

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

Genasys Inc.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share and share amounts)

(Unaudited)

	Three Months EndedJune 30,						Nine Months EndedJune 30,
	Three Months EndedDecember 31,
	2025			2024			~~2025~~			~~2024~~
Revenues:
Product sales	$	714,~~001~~261		$	4,~~576~~144		$	~~14,215~~		$	~~9,951~~
Contract and other		2,~~856~~804			2,~~591~~796			~~9,514~~			~~7,316~~
Total revenues		917,~~857~~065			76,~~167~~940			~~23,729~~			~~17,267~~
Cost of revenues		78,~~260~~882			3,~~383~~762			~~15,344~~			~~9,827~~
Gross profit		28,~~597~~183			3,~~784~~178			~~8,385~~			~~7,440~~
Operating expenses
Selling, general and administrative		6,~~422~~640			6,~~649~~834			~~19,904~~			~~19,806~~
Research and development		21,~~100~~895			2,~~496~~285			~~6,602~~			~~7,218~~
Total operating expenses		8,~~522~~535			9,~~145~~119			~~26,506~~			~~27,024~~
Loss from operations		(~~5,925~~352	)		(5,~~361~~941	)		~~(18,121~~	)		~~(19,584~~	)
Other (expense) income, net		(554	)		(1,363	)		1,496			(1,236	)
Other (expenses) income
Loss before income taxes		(6,479	)		(6,724	)		(16,625	)		(20,820	)
Interest income		7			62
Income tax expense (benefit)		8			(42	)		79			(476	)
Interest expense		(435	)		(368	)
Net loss	$	(6,487	)	$	(6,682	)	$	(16,704	)	$	(20,344	)
Change in fair value of Term Loans and warrants		99			2,100
Net loss per common share - basic and diluted	$	(0.14	)	$	(0.15	)	$	(0.37	)	$	(0.46	)
Other		(11	)		69
Weighted average common shares outstanding:
Other (expense) income, net		(340	)		1,863
Basic and diluted		45,154,504			44,598,393			45,022,635			44,216,602
Loss before income taxes		(692	)		(4,078	)
Income tax expense		125			—
Net loss	$	(817	)	$	(4,078	)
Net loss per common share - basic and diluted	$	(0.02	)	$	(0.09	)
Weighted average common shares outstanding:
Basic and diluted		45,197,278			44,912,206

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

Genasys Inc.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

(in thousands)

(Unaudited)

	Three Months EndedJune 30,						Nine Months EndedJune 30,
	Three Months EndedDecember 31,
	2025			2024			~~2025~~			~~2024~~
Net loss	$	(~~6,487~~817	)	$	(64,~~682~~078	)	$	~~(16,704~~	)	$	~~(20,344~~	)
Unrealized (loss) gain on marketable securities		—			1			(8	)		8
Unrealized gain on marketable securities		—			7
Unrealized foreign currency gain (loss)		~~311~~5			(26214	)		~~199~~			27
Change in fair value of Term Loans related to credit risk		820			—			820			—
Comprehensive loss	$	(812	)	$	(4,285	)
Comprehensive loss	$	(5,356	)	$	(6,707	)	$	(15,693	)	$	(20,309	)

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

Genasys Inc.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

(Unaudited)

	Nine Months EndedJune 30,
	Three Months EndedDecember 31,
	2025			2024
Operating Activities:
Net loss	$	(~~16,704~~817	)	$	(204,~~344~~078	)
Adjustments to reconcile net loss to net cash used in operating activities:
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization		~~2,114~~682			~~2,193~~737
Warranty provision		(12	)		(56	)
Warranty provision (settlement)		20			(6	)
Inventory obsolescence		~~254~~26			~~139~~73
Loss on disposition of fixed assets		1			6
Share-based compensation		419			391
Stock-based compensation		1,264			1,269
Gain on change in fair value of warrants		(870	)		(2,470	)
Partial release of valuation allowance		—			(525	)
Loss on change in fair value of Term Loans		771			370
Gain on change in fair value of warrants		(4,560	)		(21	)
Amortization of operating lease right of use asset		205			192
Loss on change in fair value of Term Loans		1,380			124
Accretion of investment of marketable securities		—			33
Loss on issuance of First Amendment Term Loan		480			—
Amortization of operating lease right of use asset		570			584
Accretion of acquisition holdback liability		—			15
Remeasurement of acquisition contingent consideration		—			(16	)
Accretion of investment of marketable securities		(40	)		—
Changes in operating assets and liabilities:
Accounts receivable, net		(1,~~353~~287	)		~~434~~259
Contract assets		(21,~~846~~033	)		—
Inventories, net		~~(4,367~~206	)		(~~952~~260	)
Prepaid expenses and other		(~~4,793~~513	)		(31,~~995~~084	)
Accounts payable		~~3,737~~(711	)		~~1,776~~500
Accrued and other liabilities		13,604			(641	)
Customer deposit		10,636			—
Net cash used in operating activities		(11,271	)		(20,010	)
Accrued and other liabilities		(534	)		6,290
Net cash provided by operating activities		7,200			947
Investing Activities:
Purchases of marketable securities		~~(1,401~~—	)		(111,~~796~~400	)
Proceeds from maturities of marketable securities		~~9,507~~41			94,~~240~~102
Cash paid for acquisitions net of cash acquired		—			(908	)
Capital expenditures		—			(69	)
Cash paid for asset purchase holdback liability		—			(764	)
Net cash provided by investing activities		41			2,633
Capital expenditures		(213	)		(161	)
Net cash provided by (used in) investing activities		7,893			(4,389	)
Financing Activities:
Proceeds from issuance of Close Date Term Loan and warrants, net of issuance cost		—			13,698
Proceeds from exercise of stock options	34				1
Proceeds from issuance of First Amendment Term Loan		4,000			—
Repayment of First Amendment Term Loan principal		(4,000	)		—
Proceeds from exercise of stock options	43				—
Payment of minimum return on First Amendment Term Loan		(961	)		—
Proceeds from offering of common stock, net of issuance costs		—			10,449
Shares retained for payment of taxes in connection with exercise of stock options		(2	)		—
Payment of contingent consideration		—			(219	)
Net cash (used in) provided by financing activities		(4,929	)		1
Shares retained for payment of taxes in connection with settlement of restricted stock units		(18	)		(12	)
Effect of foreign exchange rate on cash		5			(55	)
Net cash provided by financing activities		4,025			23,916
Net increase in cash, cash equivalents, and restricted cash		2,317			3,526
Effect of foreign exchange rate on cash		82			(18	)
Cash, cash equivalents and restricted cash, beginning of period		8,554			5,288
Net increase (decrease) in cash, cash equivalents, and restricted cash		729			(501	)
Cash, cash equivalents and restricted cash, end of period	$	10,871		$	8,814
Cash, cash equivalents and restricted cash, beginning of period		5,290			9,519
Cash, cash equivalents and restricted cash, end of period	$	6,019		$	9,018
Reconciliation of cash, cash equivalents and restricted cash to the consolidated balance sheets:
Cash and cash equivalents	$	510,~~339~~286		$	8,~~672~~469
Restricted cash, current portion		95—			—95
Long-term restricted cash		585			~~346~~250
Total cash, cash equivalents and restricted cash shown in the consolidated balance sheets	$	610,~~019~~871		$	98,~~018~~814

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

Genasys Inc.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (continued)

(in thousands)

(Unaudited)

	Nine Months EndedJune 30,
	Three Months EndedDecember 31,
	2025			2024
Noncash investing and financing activities:
Change in unrealized (loss) gain on marketable securities	$	(8	)	$	8
Change in unrealized gain on marketable securities	$	—		$	7
Purchases of property and equipment included in accounts payable and accrued liabilities	$	2—		$	—3
Obligation to issue common stock in connection with the Evertel acquisition	$	—		$	(685	)
Shares issued in connection with the Evertel acquisition	$	—		$	(1,924	)
Settlement of Contingent consideration in shares of common stock	$	—		$	(656	)
Holdback liability payable in connection with the Evertel acquisition	$	—		$	(245	)
Accrued term loan and warrant issuance cost not paid	$	—		$	(119	)
Supplemental disclosure of cash flow information
Cash paid for interest	$	~~1,124~~435		$	—368
Cash paid for taxes	$	39109		$	—11

Genasys Inc.

Notes to the Condensed Consolidated Financial Statements

(in thousands, except per share and share amounts)

(Unaudited)

1. OPERATIONS

Genasys Inc. (“Genasys” or the “Company”) is a global provider of Protective Communications™ solutions including its Genasys Protect™ software platform and Genasys Long Range Acoustic Devices (“LRAD”). Genasys’ unified platform receives information from a wide variety of sensors and Internet-of-Things (“IoT”) inputs to collect real-time information on developing and active emergency situations. The Company’s customers can use this information to create and disseminate alerts, warnings, notifications, and instructions through multiple channels before, during, and after public safety and enterprise threats, critical events, and other crisis situations.

2. BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES

General

The Company’s unaudited interim condensed consolidated financial statements included herein have been prepared in accordance with the instructions to Form 10-Q and Article 8 of Regulation S-X and the rules and regulations of the Securities and Exchange Commission (“SEC”). Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations. In management’s opinion, the accompanying financial statements reflect adjustments necessary to present fairly the financial position, results of operations, and cash flows for those periods indicated, and contain adequate disclosure to make the information presented not misleading. Adjustments included herein are of a normal, recurring nature unless otherwise disclosed in the footnotes. The condensed consolidated financial statements and notes thereto should be read in conjunction with the Company’s audited financial statements and notes thereto for the year ended September 30, ~~2024~~2025, included in the Company’s Annual Report on Form 10-K, as filed with the SEC on December 1315, ~~2024~~2025. The accompanying condensed consolidated balance sheet as of September 30, ~~2024~~2025, has been derived from the audited consolidated balance sheet as of September 30, ~~2024~~2025, contained in the above referenced Form 10-K. Results of operations for interim periods are not necessarily indicative of the results of operations for a full year.

Principles of consolidation

The Company has ~~seven~~six wholly owned subsidiaries, Genasys II Spain, S.A.U. (“Genasys Spain”), Genasys Communications Canada ULC ~~(“Genasys Canada”)~~, Genasys ~~Singapore PTE Ltd, Genasys~~ Puerto Rico, LLC, Zonehaven LLC (“Zonehaven”), Evertel Technologies LLC (“Evertel”), and one currently inactive subsidiary, Genasys America de CV. The ~~condensed~~ consolidated financial statements include the accounts of these subsidiaries after elimination of intercompany transactions and accounts.

Use of Estimates

The preparation of financial statements in conformity with generally accepted accounting principles in the United States requires management to make estimates and assumptions (e.g., share-based compensation valuation, allowance for doubtful accounts for expected credit losses, fair value of term loans and warrant liabilities, ~~contingent consideration,~~ valuation of inventory, goodwill and intangible assets, warranty reserve, valuation of operating lease right of use assets and operating lease liabilities, accrued bonus and valuation allowance related to deferred tax assets) that affect the reported amounts of assets and liabilities, and disclosure of contingent assets and liabilities at the date of the financial statements and that affect the reported amounts of revenues and expenses during the reporting periods. Actual results could materially differ from those estimates.

Cash, cash equivalents and restricted cash

The Company considers all highly liquid investments with an original maturity of three months or less, when purchased, to be cash equivalents. As of ~~June~~December 3031, 2025, the amount of cash and cash equivalents was $510,~~339~~286. As of September 30, ~~2024~~2025, the amount of cash and cash equivalents was $47,~~945~~969.

The Company considers any amounts pledged as collateral or otherwise restricted for use in current operations to be restricted cash. In addition, the Company excludes from cash and cash equivalents cash required to fund specific future contractual obligations related to business combinations. Restricted cash is classified as a current asset unless amounts are not expected to be released and available for use in operations within one year. As of ~~June~~December 3031, 2025 and September 30, ~~2024~~2025, restricted cash was $~~680~~585 ~~and~~at ~~$345,~~both ~~respectively~~dates, ~~which~~and was restricted for a maintenance contract and corporate card ~~payment~~program.

Accounts receivable and allowance for credit losses

The Company maintains an allowance for credit losses primarily for estimated losses resulting from the inability or failure of individual customers to make required payments. The Company maintains an allowance under Accounting Standards Codification (“ASC”) Topic 326, based on historical losses, changes in payment history, customer-specific information, current economic conditions, and reasonable and supportable forecasts of future economic conditions. The allowance under ASC 326 is updated as additional losses are incurred or information becomes available related to the customer or economic conditions.

Genasys Inc.

Notes to the Condensed Consolidated Financial Statements

(in thousands, except per share and share amounts)

(Unaudited)

The Company’s allowance for credit losses was $65 as of both ~~June~~December 3031, 2025 and September 30, ~~2024~~2025.

The Company writes off accounts receivable based on the age of the receivable and the facts and circumstances surrounding the customer and reasons for non-payment. Actual write-offs might differ from the recorded allowance. The Company’s historical credit losses have not been significant due to this dispersion and the financial stability of the Company’s customers. The Company considers its historical credit losses to be immaterial to its business and, therefore, has not provided all the disclosures otherwise required by the standard.

Term Loans

The Company determined that it is eligible for the fair value option (“FVO”) election in connection with the Term Loans (as defined below). The Term Loans meet the definition of a “recognized financial liability” which is an acceptable financial instrument eligible for the ~~fair~~FVO ~~value option~~ under ASC 825-10-15-4 and do not meet the definition of any of the financial instruments found within ASC 825-10-15-5 that are not eligible for the ~~fair value option~~FVO. The ~~fair~~FVO ~~value option~~ election was made to enhance the relevance and transparency of information presented related to the features embedded in the Term Loan. At the date of issuance, the fair value of the Term Loans were estimated using a discounted cash flow method. Changes in the fair value of the Term Loan, other than changes associated with the Company's own credit risk, are recorded as gains or losses in the Company’s condensed consolidated statements of operations and comprehensive loss in each reporting period. Changes in fair value attributable to the Company’s own credit risk are recorded in other comprehensive income or loss in the Company’s condensed consolidated statements of operations and comprehensive loss in each reporting period. Under the ~~fair value option~~FVO, debt issuance costs are expensed as incurred and recorded in other expenses in the Company’s condensed consolidated statements of operations and comprehensive loss.

Warrants

The warrants issued in conjunction with the Close Date Term Loan are classified as liabilities under ASC 815-40 due to not being indexed to the Company’s stock. The warrants are measured at fair value using a Monte Carlo simulation to capture the down-round provision in the warrant agreement. Changes in fair value of the warrants, are recorded as gains or losses in other income in the Company’s condensed consolidated statements of operations and comprehensive loss in each reporting period.

3. RECENT ACCOUNTING PRONOUNCEMENTS

Recently adopted pronouncements

In November 2023, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2023-07, “Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures” (“ASU 2023-07”). ASU 2023-07 expands annual and interim disclosure requirements for reportable segments, primarily through enhanced disclosures about significant segment expenses. The standard is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, which means that it will be effective for the Company’s annual periods beginning October 1, 2024, and interim periods beginning October 1, 2025. The adoption of this standard did not have a material effect on the Company’s condensed consolidated financial statements. Refer to “Note 18. Segment Information”, for additional information.

Accounting pronouncements not yet adopted

In ~~November~~December 2023, the ~~Financial Accounting Standards Board (the “~~FASB”) issued ~~Accounting Standards Update (“~~ASU”) No. 2023-0709, “~~Segment~~Income ~~Reporting~~Taxes (Topic ~~280~~740): Improvements to ~~Reportable~~Income ~~Segment~~Tax Disclosures” (“ASU 2023-0709”). ASU 2023-0709 ~~expands~~requires ~~annual~~disaggregated ~~and~~information ~~interim~~about ~~disclosure~~a ~~requirements~~reporting ~~for~~entity’s ~~reportable~~effective ~~segments,~~tax ~~primarily~~rate ~~through~~reconciliation ~~enhanced~~as ~~disclosures~~well ~~about~~as ~~significant~~disaggregated ~~segment~~information ~~expenses~~on income tax paid. The standard is effective for fiscal years beginning after December 15, ~~2023, and interim periods within fiscal years beginning after December 15,~~ 2024, which means ~~that~~ it will be effective for the Company’s ~~annual~~fiscal ~~periods~~year beginning October 1, ~~2024,~~2025. ~~and~~The ~~interim~~Company ~~periods~~expects ~~beginning~~to ~~October~~adopt 1,the ~~2025.~~standard ~~Early~~in ~~adoption~~its isconsolidated ~~permitted.~~financial ~~The~~statements ~~Company~~for the fiscal year ending September 30, 2026 and is currently evaluating the impact of the ~~updated~~adoption; ~~standard~~however, ~~will~~the ~~have~~Company ondoes ~~disclosures~~not ~~within~~expect the adoption to have a material effect on its consolidated financial statements.

In ~~December~~November ~~2023~~2024, the FASB issued ASU No. ~~2023~~2024-0903, “Income ~~Taxes~~Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (~~Topic~~Subtopic ~~740~~220-40): ~~Improvements~~Disaggregation toof Income ~~Tax~~Statement ~~Disclosures~~Expenses” (“ASU ~~2023~~2024-0903”). ASU ~~2023~~2024-0903 requires ~~disaggregated~~public ~~information~~business ~~about~~entities ato ~~reporting~~disclose, ~~entity’s~~in ~~effective~~tabular ~~tax~~form, ~~rate~~the ~~reconciliation~~disaggregation asof ~~well~~relevant asincome ~~disaggregated~~statement ~~information~~expense oncaptions ~~income~~into ~~tax~~specified ~~paid~~natural expense categories. ~~The~~In ~~standard~~addition, isin January 2025, the FASB issued ASU No. 2025-01 “ Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Interim Disclosure Effective Date Clarification” (“ASU 2025-01”). ASU 2025-01 clarifies that the new disaggregation disclosure requirements are effective for annual reporting periods beginning after December 15, 2026, and for interim periods within fiscal years beginning after December 15, ~~2024~~2027, which means it will be effective for the Company’s ~~fiscal~~annual ~~years~~periods beginning October 1, ~~2025.~~2027, ~~Early~~and ~~adoption~~interim isperiods ~~permitted~~beginning October 1, 2028. The Company is currently evaluating the impact ~~the~~these updated ~~standard~~standards will have on its disclosures within the consolidated financial statements.

In ~~November~~February ~~2024~~2025, the FASB issued ASU ~~No. 2024~~2025-0305, “~~Income~~Financial ~~Statement~~Instruments—~~Reporting~~Credit ~~Comprehensive~~Losses ~~Income—Expense Disaggregation Disclosures~~ (~~Subtopic~~Topic ~~220-40~~326): ~~Disaggregation~~Measurement of ~~Income~~Credit ~~Statement~~Losses ~~Expenses”~~for ~~(“ASU~~Accounts ~~2024-03”).~~Receivable ~~ASU~~and ~~2024-03~~Contract ~~requires~~Assets.” ~~additional~~The ~~disclosure~~ASU ofprovides ~~specific~~clarifications ~~types~~and oftargeted ~~expenses~~improvements ~~included~~related into the ~~expense~~application ~~captions presented on the face~~ of the ~~income~~CECL ~~statement~~model asto ~~well~~trade asreceivables ~~disclosures~~and ~~about~~contract ~~selling expenses~~assets. ASU ~~2024~~2025-0305 is effective for fiscal years beginning after December 15, 2026, and interim periods beginning after December 15, 2027, with early adoption permitted. ASU 2024-03 may be applied either prospectively with the option for retrospective application for all prior periods presented. The Company is currently evaluating the impact the updated standard will have on disclosures within the consolidated financial statements.

4. BUSINESS COMBINATIONS

On October 4, 2023, the Company completed the acquisition of all of the membership interests in Evertel, pursuant to a Membership Interest Purchase Agreement (“Purchase Agreement”) with Word Systems Operations, LLC (“Seller”) and Evertel.

Evertel offers a secure and compliant mission-critical collaboration platform for the public safety market that connects public safety personnel, information, and tools in one space.

The Evertel acquisition was accounted for as a business combination using the acquisition method pursuant to ASC Topic 805. As the acquirer for accounting purposes, the Company has estimated the purchase consideration, assets acquired and liabilities assumed as of the acquisition date, with the excess of the purchase consideration over the fair value of net assets acquired recognized

Genasys Inc.

Notes to the Condensed Consolidated Financial Statements

(in thousands, except per share and share amounts)

(Unaudited)

asDecember ~~goodwill.~~15, ~~The~~2025, ~~estimated~~including ~~fair~~interim ~~value~~periods ofwithin ~~assets~~those ~~purchased~~years. For the Company, ~~and~~this ~~liabilities~~standard ~~assumed~~will be effective beginning October 1, in2026. ~~certain~~The ~~cases~~Company ~~may~~is becurrently ~~subject~~evaluating the impact of this ASU, but does not expect it to ~~revision~~have ~~based~~a onmaterial ~~the~~effect ~~final~~on ~~determination~~its ofconsolidated ~~fair~~financial ~~value~~statements.

~~The~~4. ~~consideration~~REVENUE ~~consisted of the following:~~RECOGNITION

Cash paid	$	923
Common stock issued		2,609
Contingent consideration		890
Acquisition holdback liability		230
Working capital adjustment		(15	)
	$	4,637

The Company funded the cash portion of the total consideration with available cash on hand. The Company also issued 986,486 shares of the Company’s common stock to the former owners of Evertel. The fair value of the Company’s stock on the closing date was $1.95, resulting in the addition of $1,924 to additional-paid-in-capital. The contingent consideration liability is a current liability and recorded in the current portion of accrued liabilities. Under the terms of the Purchase Agreement, the Company recorded a $158 credit to additional-paid-in-capital and an addition to goodwill as this is consideration transferred to the former owners of Evertel during the second quarter of fiscal 2024, and the Company issued common stock to the former owners of Evertel and three key employees during the third quarter of fiscal 2024 to settle the obligation. The Company also recorded a holdback liability and an obligation to issue common stock as security for potential indemnification claims against the Seller. The holdback liability and the common stock was released twelve months from the closing date, subject to amounts withheld for actual, pending or potential claims. The holdback liability was recorded as a current liability at $230, which represented the fair value of the holdback liability as of the acquisition date. The fair value of the holdback liability has and will be adjusted each reporting period with the change in fair value recorded in the condensed consolidated statement of operations. The obligation to issue common stock was recorded as a credit to additional paid in capital for $527 on the acquisition date. During the second quarter of fiscal 2024, the Company and the former owners of Evertel, agreed on a working capital adjustment that resulted in a payment of $15 to the Company.

The Company incurred $151 in expenses related to this transaction. $39 of the expenses were incurred in the fourth quarter of fiscal year 2023, $12 in the first quarter of fiscal 2024, $62 in the second quarter of fiscal 2024, $18 in the third quarter of fiscal 2024, and $20 in the fourth quarter of fiscal 2024. The expense was recorded in selling, general and administrative expenses in the consolidated statement of operations.

The preliminary allocation of the purchase price as of the acquisition date is as follows:

Assets acquired
Accounts receivable	$	142
Prepaid expenses		27
Intangible assets		2,550
Goodwill		2,923
Total Assets	$	5,642
Liabilities assumed
Accrued commissions	$	10
Deferred revenue		470
Deferred tax liability		525
Total liabilities		1,005
Net assets acquired	$	4,637

The estimated fair value of identifiable intangible assets acquired and their estimated useful lives are as follows:

	Fair Value		Est. UsefulLife (in years)
Developed technology	$	2,290	7
Customer relationships		260	5
	$	2,550

Genasys Inc.

Notes to the Condensed Consolidated Financial Statements

(in thousands, except per share and share amounts)

(Unaudited)

Identifiable intangible assets consist of certain technology and customer relationships purchased from Evertel. Identifiable intangible assets are amortized over their estimated useful lives based upon several assumptions, including the estimated period of economic benefit and utilization. The weighted average amortization period for identifiable intangible assets acquired is 6.8 years. These intangible assets are classified as Level 3 in the ASC Topic 820 three-tier fair value hierarchy.

The goodwill for Evertel is attributable to combining the Company’s existing emergency communications solutions with the software and software development capabilities of Evertel to enhance product offerings. Goodwill is also attributable to the skill level of the acquired workforce. Goodwill from the Evertel acquisition will not be deductible for tax purposes.

As of June 30, 2025, $874 of the contingent consideration was issued to the former owners of Evertel. The Company paid $219 in cash and issued 236,343 shares of common stock. During the period since acquisition, the contingent consideration decreased $16 due to remeasurement adjustments. As of June 30, 2025, no contingent consideration liability remained outstanding.

The Company has included the operating results of Evertel in continuing operations in its unaudited condensed consolidated financial statements since the acquisition date.

REVENUE RECOGNITION

ASC 606, Revenue from Contracts with Customers (“ASC 606”), outlines a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersedes most revenue recognition guidance, including industry-specific guidance. This new revenue recognition model provides a five-step analysis in determining when and how revenue is recognized:

Identify the contract(s) with customers

Identify the performance obligations

Determine the transaction price

Allocate the transaction price to the performance obligations

Recognize revenue when or as the performance obligations have been satisfied

ASC 606 requires revenue recognition to depict the transfer of promised goods or services to customers in an amount that reflects the consideration a company expects to receive in exchange for those goods or services.

The Company derives its revenue from the sale of products to customers, contracts, software license fees, other services and freight. The Company sells its products through its direct sales force and through authorized resellers and system integrators. The Company recognizes revenue for goods, including software, when all the significant risks and rewards have been transferred to the customer, no continuing managerial involvement usually associated with ownership of the goods is retained, no effective control over the goods sold is retained, the amount of revenue can be measured reliably, it is probable that the economic benefits associated with the transactions will flow to the Company and the costs incurred or to be incurred in respect of the transaction can be measured reliably. Software license revenue, maintenance and/or software development service fees may be bundled in one arrangement or may be sold separately.

Product revenue

Product revenue is recognized as a distinct single performance obligation when products are tendered to a carrier for delivery, which represents the point in time that the Company’s customer obtains control of the products. A smaller portion of product revenue is recognized when the customer receives delivery of the products. A portion of products are sold through resellers and system integrators based on firm commitments from an end user, and as a result, resellers and system integrators carry little or no inventory. The Company’s customers do not have a right to return product unless the product is found ~~to be~~ defective and therefore the Company’s estimate for returns has historically been insignificant.

~~Perpetual~~Long-term ~~licensed~~contracts ~~software~~- over-time revenue recognition using input cost measures

~~The~~We ~~sale~~recognize ~~and/or~~revenue ~~license~~for ofour ~~software~~Puerto ~~products~~Rico isEarly ~~deemed~~Warning toSystem ~~have~~(EWS) ~~occurred~~project ~~when~~(the a“Puerto ~~customer~~Rico ~~either~~EWS ~~has~~Project”) ~~taken~~over ~~possession~~time ~~of,~~in oraccordance ~~has~~with ~~the~~ASC ~~ability~~606-10-25-27(c), using a cost-to-cost ~~take~~input ~~immediate~~method ~~possession~~that ~~of,~~includes ~~the~~a ~~software~~zero-margin ~~and~~approach ~~the~~for ~~software~~uninstalled ~~key~~materials. ~~Perpetual~~As ~~software~~hardware ~~licenses~~costs ~~can~~are ~~include~~incurred, ~~one-year~~we ~~maintenance~~record ~~and~~an ~~support~~equal ~~services.~~amount Inof ~~addition~~revenue, ~~the~~resulting ~~Company~~in ~~sells~~zero ~~maintenance~~margin. ~~services~~We onthen ameasure ~~stand-alone~~overall ~~basis~~project ~~and~~progress isby ~~therefore~~comparing ~~capable~~labor ofcosts ~~determining~~incurred ~~their~~to ~~fair~~total ~~value.~~estimated Onlabor ~~this basis~~costs, ~~the~~excluding ~~amount~~hardware offrom the ~~embedded~~calculation. ~~maintenance~~This islabor-based ~~separated~~percentage ~~from~~of ~~the~~completion ~~fee~~is ~~for~~applied to determine both the ~~perpetual~~portion ~~license~~of ~~and~~hardware ismargin to be recognized on apreviously ~~straight~~recorded zero-~~line~~margin ~~basis~~hardware ~~over~~and the ~~period~~amount of non-hardware revenue to ~~which~~record for the ~~maintenance relates~~period.

Time-based licensed software

The time-based license agreements include the use of a software license for a fixed term, generally one-year, and maintenance and support services during the same period. The Company does not sell time-based licenses without maintenance and support services and therefore revenues for the entire arrangements are recognized on a straight-line basis over the term.

9Warranty, maintenance and services

The Company offers extended warranty, maintenance and other services. Extended warranty and maintenance contracts are offered with terms ranging from one to several years, which provide repair and maintenance services after expiration of the original one-year warranty term. Revenues from separately priced extended warranty and maintenance contracts are recognized based on time elapsed over the service period and classified as contract and other revenues. Revenue from other services such as training or installation is recognized when the service is completed.

Genasys Inc.

Notes to the Condensed Consolidated Financial Statements

(in thousands, except per share and share amounts)

(Unaudited)

Warranty, maintenance and services

Multiple performance obligation arrangements

The Company has entered into a number of arrangements that contain multiple performance ~~obligation arrangements~~obligations, such as the sale of a product or perpetual software licenses that may include maintenance and support (included in ~~the~~ price of perpetual licenses) and time-based software licenses (that include embedded maintenance and support, both of which may be sold with software development services, training, and other product sales). In some cases, the Company delivers software development services bundled with the sale of the software. In an arrangement with multiple performance ~~obligation arrangements~~obligations, the Company ~~uses~~allocates ~~either~~ the ~~stand-alone selling price or an expected cost-plus margin approach to determine the~~ fair value of each ~~performance~~element ~~obligation~~ within the arrangement, including software and software-related services such as maintenance and support, using the known stand-alone selling price, or if unknown, an expected cost-plus margin approach to determine the stand-alone selling price. In general, ~~performance~~elements ~~obligations~~ in such arrangements are also sold on a stand-alone basis and stand-alone selling prices are ~~available~~observable.

Revenue is allocated to each ~~performance~~deliverable ~~obligation~~ based on the fair value of each individual ~~performance~~element ~~obligation~~ and is recognized when the revenue recognition criteria described above are met, except for time-based licenses which are not unbundled. When software development services are performed and are considered essential to the functionality of the software, the Company recognizes revenue from the software development services on a stage of completion basis, and the revenue from the software when the related development services have been completed.

The Company disaggregates revenue by reporting segment (Hardware and Software) and geographically to depict the nature of revenue in a manner consistent with its business operations and to be consistent with other communications and public filings. Refer to “Note ~~19,~~18. Segment Information” and “Note ~~20,~~19. Major Customers, Suppliers and Related Information” for additional details of revenues by reporting segment and disaggregation of revenue.

Variable consideration

The transaction price may include variable consideration, such as rebates, discounts, and returns, estimated using the expected value or most likely amount method. These estimates are based on historical experience and contractual terms and are constrained to avoid significant revenue reversals. Adjustments are recognized when new information becomes available, and variable consideration is allocated to performance obligations as applicable.

Contract assets and liabilities

The Company enters into contracts to sell products and provide services and recognizes contract assets and liabilities that arise from these transactions. The Company recognizes revenue and corresponding accounts receivable according to ASC 606 and, at times, recognizes revenue in advance of the time when contracts give the Company the right to invoice a customer. Sales commissions are considered incremental and recoverable costs of obtaining a contract with a customer. Subscription related commission costs are deferred and then amortized on a straight-line basis over the period of benefit. The Company may also receive consideration, per terms of a contract, from customers prior to transferring goods to the customer. The Company records customer deposits as a contract liability. Additionally, the Company may receive payments, most typically for service and warranty contracts, at the onset of the contract and before the services have been performed. In such instances, a deferred revenue liability is recorded. The Company recognizes these contract liabilities as revenue after all revenue recognition criteria are met. The table below reflects the balances of contract liabilities as of ~~June~~December 3031, 2025 and September 30, ~~2024~~2025, including the change between the periods. ~~Contract~~The ~~assets~~current ~~balance~~portion ~~was $2,846 and $150 as~~ of ~~June~~contract ~~30,~~liabilities ~~2025~~ and ~~September~~the ~~30, 2024, respectively. The current and~~ noncurrent portion ~~of contract liabilities~~ are included in “Accrued liabilities” and “Other liabilities, noncurrent”, respectively, on the accompanying condensed consolidated balance sheets. Refer to “Note ~~11,~~9. Accrued and Other Liabilities” for additional details. Contract asset balance was $7,150 as of December 31, 2025, of which $7,058 related to the Puerto Rico EWS Project. Contract asset balance was $6,117 as of September 30, 2025, of which $6,025 related to the Puerto Rico EWS Project.

~~The Company’s contract liabilities were as follows:~~9

	Customerdeposits			Deferredrevenue			Totalcontractliabilities
Balance as of September 30, 2024	$	1,606		$	4,012		$	5,618
New performance obligations		22,241			6,672			28,913
Recognition of revenue as a result of satisfying performance obligations		(7,210	)		(7,131	)		(14,341	)
Effect of exchange rate on deferred revenue		—			(9	)		(9	)
Balance as of June 30, 2035	$	16,637		$	3,544		$	20,181
Less: non-current portion		—			(294	)		(294	)
Current portion as of June 30, 2025	$	16,637		$	3,250		$	19,887

Genasys Inc.

Notes to the Condensed Consolidated Financial Statements

(in thousands, except per share and share amounts)

(Unaudited)

The Company’s contract liabilities were as follows:


	Customer deposits			Deferred revenue			Total contract liabilities
Balance as of September 30, 2025	$	19,669		$	5,743		$	25,412
New performance obligations		22,785			1,822			24,607
Recognition of revenue as a result of satisfying performance obligations		(12,149	)		(2,532	)		(14,681	)
Effect of exchange rate on deferred revenue		—			(1	)		(1	)
Balance as of December 31, 2025	$	30,305		$	5,032		$	35,337
Less: non-current portion		—			(1,209	)		(1,209	)
Current portion as of December 31, 2025	$	30,305		$	3,823		$	34,128

Remaining performance obligations

Remaining performance obligations related to ASC 606 represent the aggregate transaction price allocated to performance obligations under an original contract with a term greater than one year, which are fully or partially unsatisfied at the end of the period.

As of ~~June~~December 3031, 2025, the aggregate amount of the transaction price allocated to remaining performance obligations was approximately $2035,~~181~~337, of which $1425,~~210~~289 , or 72% of the total performance obligations, was related to the Puerto Rico ~~contract~~EWS Project. The Company expects to recognize revenue on approximately $1934,~~887~~128 or 9997% of the remaining performance obligations over the next 12 months, and the remainder is expected to be recognized thereafter. The customer deposit balance as of December 31, 2025 included $25,038 for the Puerto Rico EWS Project.

For the three months ended December 31, 2025, the Company recognized $6,475 from the customer deposit balance and $2,188 from the deferred revenue balance, both as of September 30, 2025.

Practical expedients

In cases where the Company is responsible for shipping after the customer has obtained control of the goods, the Company has elected to treat these activities as fulfillment activities rather than as a separate performance obligation. Additionally, the Company has elected to capitalize the cost to obtain a contract only if the period of amortization iswould be longer than one year. The Company only gives consideration to whether a customer agreement has a financing component if the period of time between transfer of goods and services and customer payment is greater than one year. The Company also utilizes the “as invoiced” practical expedient in certain cases where performance obligations are satisfied over time and the invoiced amount corresponds directly with the value ~~the~~provided ~~Company is providing~~ to the customer.

65. FAIR VALUE MEASUREMENTS

The Company’s financial instruments consist principally of cash equivalents, short and long-term marketable securities, accounts receivable, accounts payable, Term Loans, and warrant liabilities. The fair value of a financial instrument is the amount that would be received in an asset sale or paid to transfer a liability in an orderly transaction between unaffiliated market participants. Assets and liabilities measured at fair value are categorized based on whether or not the inputs are observable in the market and the degree that the inputs are observable. The categorization of financial instruments within the valuation hierarchy is based on the lowest level of input that is significant to the fair value measurement. The hierarchy is prioritized into three levels (with Level 3 being the lowest) defined as follows:


Level 1:	Inputs are based on quoted market prices for identical assets or liabilities in active markets at the measurement date.
Level 2:	Inputs include quoted prices for similar assets or liabilities in active markets and/or quoted prices for identical or similar assets or liabilities in markets that are not active near the measurement date.
Level 3:	Inputs include management’s best estimate of what market participants would use in pricing the asset or liability at the measurement date. The inputs are unobservable in the market and significant to the instrument’s valuation.

The fair value of the Company’s cash equivalents and marketable securities were determined based on Level 1 and Level 2 inputs. The valuation techniques used to measure the fair value of the “Level 2” instruments were based on quoted market prices or model-driven valuations using significant inputs derived from or corroborated by observable market data. The valuation techniques used to measure the Term Loans and warrant liabilities were determined based on Level 3 inputs not observable in the market and ~~significant to the instruments’ valuations. Refer to Note 12, Term Loans and Warrant Liabilities, for additional information regarding the valuation techniques and significant inputs used.~~

Other than the Term Loans and the warrant liabilities, the Company did not have any financial instruments in the Level 3 category as of June 30, 2025 and September 30, 2024. The Company believes that the recorded values of its other financial instruments approximate their current fair values because of their nature and respective relatively short maturity dates or durations. There have been no changes in Level 1, Level 2, and Level 3 and no changes in valuation techniques for financial instruments measured at fair value on a recurring basis for the periods ended June 30, 2025 and September 30, 2024.10

Instruments measured at fair value on a recurring basis

Cash equivalents and marketable securities: The following tables present the Company’s cash equivalents and marketable securities’ costs, gross unrealized gains and losses, and fair value by major security type recorded as cash equivalents or short-term or long-term marketable securities as of June 30, 2025, and September 30, 2024. Unrealized gains and losses from the remeasurement of marketable securities are recorded in accumulated other comprehensive income (loss) until recognized in earnings upon the sale or maturity of the security.

Genasys Inc.

Notes to the Condensed Consolidated Financial Statements

(in thousands, except per share and share amounts)

(Unaudited)

	June 30, 2025
	CostBasis		GrossUnrealizedGain		GrossUnrealizedLoss		FairValue		CashEquivalents		Short-termSecurities		Long-termSecurities
Level 1:
Money market funds	$	53	$	—	$	—	$	53	$	53	$	—	$	—
Level 2:
Municipal securities		120		—		—		120		—		120		—
Subtotal		120		—		—		120		—		120		—
Total	$	173	$	—	$	—	$	173	$	53	$	120	$	—

significant to the instruments’ valuations. Refer to “Note 11. Term Loans and Warrant Liabilities”, for additional information regarding the valuation techniques and significant inputs used.

	September 30, 2024
	CostBasis		GrossUnrealizedGain		GrossUnrealizedLoss		FairValue		CashEquivalents		Short-termSecurities		Long-termSecurities
Level 1:
Money market funds	$	301	$	—	$	—	$	301	$	301	$	—	$	—
Level 2:
Certificates of deposit		401		—		—		401		152		—		249
U.S. government agency bonds		2,591		3		—		2,594		—		2,594		—
Municipal securities		2,127		2		—		2,129		—		2,129		—
Corporate bonds		3,219		3		—		3,222		—		3,222		—
Subtotal		8,338		8		—		8,346		152		7,945		249
Total	$	8,639	$	8	$	—	$	8,647	$	453	$	7,945	$	249

Other than the Term Loans and the warrant liabilities, the Company did not have any financial instruments in the Level 3 category as of December 31, 2025 or September 30, 2025. The Company believes that the recorded values of its other financial instruments approximate their current fair values because of their nature and respective relatively short maturity dates or durations. There have been no changes in Level 1, Level 2, and Level 3 and no changes in valuation techniques for financial instruments measured at fair value on a recurring basis for the periods ended December 31, 2025 and September 30, 2025.

~~The~~Instruments ~~Company~~measured manages debt investments as a single portfolio of highly marketable securities that is intended to be available to meet current cash requirements. Historically, the gross unrealized losses related to the Company’s portfolio of available-for-sale debt securities were immaterial, and primarily due to normal market fluctuations and not due to increased credit risk or other valuation concerns. Gross unrealized losses on available-for-sale debt securities was $0 as of June 30, 2025, and historically, such gross unrealized losses have been temporary in nature. The Company believes that it is probable the principal and interest will be collected in accordance with the contractual terms. The debt investment portfolio is reviewed at ~~least~~fair quarterly, or when there are changes in credit risks or other potential valuation concerns, to identify and evaluate whether an allowance for credit losses or impairment would be necessary. Factors considered in determining whether a loss is temporary include the magnitude of the decline in market value, ~~the~~on ~~length of time the market value has been below cost (or adjusted cost), credit quality, and the Company’s ability and intent to hold the securities for~~ a ~~period~~recurring ~~of time sufficient to allow for any anticipated recovery in market value.~~basis

AsCash equivalents and marketable securities: The following tables present the Company’s cash equivalents and marketable securities’ costs, gross unrealized gains and losses, and fair value by major security type recorded as cash equivalents or short-term or long-term marketable securities as of ~~June~~December 3031, 2025, and September 30, ~~2024,~~2025. ~~there~~Unrealized ~~were~~gains noand ~~unrealized~~losses ~~loss~~from ~~positions~~the ~~related~~remeasurement toof ~~available-for-~~marketable securities are recorded in accumulated other comprehensive income until recognized in earnings upon the sale ~~debt~~or ~~securities~~maturity of the security.

Instruments measured at fair value on a non-recurring basis


	December 31, 2025
	Cost Basis		Gross Unrealized Gain		Gross Unrealized Loss		Fair Value		Cash Equivalents		Short-term Securities		Long-term Securities
Level 1:
Money market funds	$	1,152	$	—	$	—	$	1,152	$	1,152	$	—	$	—

Level 2:
Municipal securities		30		—		—		30		—		30		—
Subtotal		30		—		—		30		—		30		—

Total	$	1,182	$	—	$	—	$	1,182	$	1,152	$	30	$	—

Nonfinancial assets: Nonfinancial assets such as goodwill, other intangible assets, long-lived assets held and used, and right-of-use (“ROU”) assets are measured at fair value when there is an indicator of impairment and recorded at fair value only when impairment is recognized or for a business combination.


	September 30, 2025
	Cost Basis		Gross Unrealized Gain		Gross Unrealized Loss		Fair Value		Cash Equivalents		Short-term Securities		Long-term Securities
Level 1:
Money market funds	$	105	$	—	$	—	$	105	$	105	$	—	$	—

Level 2:
Municipal securities		70		—		—		70		—		70		—
Subtotal		70		—		—		70		—		70		—

Total	$	175	$	—	$	—	$	175	$	105	$	70	$	—

~~Goodwill~~The ~~and~~Company ~~intangible~~manages ~~assets~~debt ~~are~~investments ~~recognized~~as ata ~~fair~~single ~~value~~portfolio ~~during~~of ~~the~~highly ~~period~~marketable insecurities ~~which~~that anis ~~acquisition~~intended isto ~~completed,~~be ~~from~~available ~~updated~~to ~~estimates~~meet ~~during~~current ~~the~~cash ~~measurement~~requirements. ~~period~~Historically, orthe ~~when~~gross ~~they~~unrealized ~~are~~losses ~~considered~~related to bethe ~~impaired.~~Company’s ~~These~~portfolio ~~non~~of available-~~recurring~~for-sale ~~fair~~debt ~~value~~securities ~~measurements~~were immaterial, and primarily ~~for~~due ~~intangible~~to ~~assets~~normal ~~acquired,~~market fluctuations and not due to increased credit risk or other valuation concerns. There were ~~based~~no gross unrealized losses on ~~Level~~available-for-sale 3debt ~~inputs~~securities as of December 31, 2025, and historically, such gross unrealized losses have been temporary in nature. The Company ~~estimates~~believes that it is probable the ~~fair~~principal ~~value~~and ofinterest ~~these~~will ~~long-lived~~be ~~assets~~collected onin aaccordance ~~non-recurring~~with ~~basis~~the ~~based~~contractual onterms. aThe ~~market~~debt ~~valuation~~investment ~~approach~~portfolio is reviewed at least quarterly, ~~engaging~~or ~~independent~~when there are changes in credit risks or other potential valuation ~~experts~~concerns, to ~~assist~~identify and evaluate whether an allowance for credit losses or impairment would be necessary. Factors considered in determining whether a loss is temporary include the ~~determination~~magnitude of ~~fair~~the ~~value.~~decline ~~There~~in ~~were~~market novalue, ~~impairments~~the ~~during~~length of time the ~~nine~~market ~~months~~value ~~ended~~has ~~June~~been ~~30,~~below ~~2025~~cost (or ~~June~~adjusted 30cost), ~~2024~~credit quality, ~~respectively~~and the Company’s ability and intent to hold the securities for a period of time sufficient to allow for any anticipated recovery in market value.

~~Contingent~~As ~~consideration~~of ~~liability:~~December In31, ~~connection~~2025 ~~with~~and ~~the~~September ~~Evertel acquisition~~30, ~~the Company recorded a liability related to future performance criteria. A payment of up to $1~~2025,~~050~~ ~~was~~there ~~payable~~were ~~based~~no onunrealized ~~future~~loss ~~performance.~~positions ~~The~~related ~~Company engaged independent valuation experts~~ to ~~assist~~available-for-sale indebt ~~determining the fair value of the contingent consideration~~securities. ~~The contingent consideration liability was~~

1211

Genasys Inc.

Notes to the Condensed Consolidated Financial Statements

(in thousands, except per share and share amounts)

(Unaudited)

~~initially~~Instruments ~~recorded~~measured at ~~the~~ fair value on ~~the~~a ~~acquisition~~non-recurring date of $890 and subsequently adjusted when performance criteria were not achieved. The change in fair value was recorded in other income in the accompanying consolidated statement of operations. $874 of the contingent consideration was issued to the former owners of Evertel. The Company paid $219 in cash and issued 236,343 shares of common stock to former owners of Evertel during fiscal 2024. In October 2024, the Company issued 270,271 shares of common stock to former owners of Evertel. As of June 30, 2025, there was no remaining contingent consideration liability.basis

~~Acquisition~~Nonfinancial ~~holdback liability~~assets: Nonfinancial Inassets ~~connection~~such ~~with~~as ~~the Evertel acquisition~~goodwill, ~~the~~other ~~Company~~intangible ~~recorded~~assets, along-lived ~~holdback~~assets ~~liability~~held ~~related~~and toused, ~~potential future misrepresentations~~ and ~~indemnifications against third~~right-~~party~~of-use ~~claims.~~(“ROU”) ~~The~~assets ~~holdback~~are ~~liability~~measured ~~was released twelve months from the closing date, subject to amounts withheld for actual, pending or potential claims. The holdback liability was recorded~~ at ~~the present value, which was the~~ fair value atwhen ~~the~~there ~~acquisition~~is ~~date.~~an ~~The~~indicator ~~Company engaged independent valuation experts to assist in determining the present value~~ of ~~the~~impairment ~~holdback liability. The expected future payment was discounted using a rate representative of the Company’s payment risk~~ and ~~credit rating. Accretion is~~ recorded ~~in each subsequent reporting period based on the discount factor used to arrive~~ at ~~the original~~ fair value. ~~This~~only ~~change~~when inimpairment ~~fair~~is ~~value~~recognized ~~was~~or ~~recorded~~for ina ~~other~~business ~~income in the accompanying consolidated statement of operations~~combination.

~~The~~Goodwill ~~change~~and intangible assets are recognized at fair value during the period in which an acquisition is completed, from updated estimates during the ~~carrying~~measurement ~~amount~~period, or when they are considered to be impaired. These non-recurring fair value measurements, primarily for intangible assets acquired, were based on Level 3 inputs. The Company estimates the fair value of these long-lived assets on a non-recurring basis based on a market valuation approach, engaging independent valuation experts to assist in the ~~holdback~~determination ~~liability~~of ~~was~~fair asvalue. ~~follows:~~There were no impairments during the three months ended December 31, 2025 or December 31, 2024, respectively.

Balance as of September 30, 2024	$	250
Payment		(250	)
Balance as of June 30, 2025	$	—

The following table presents nonfinancial assets that were subject to fair value measurement during the twelve months ended September 30, 2025. Certain intangible assets, operating lease ROU assets and goodwill are subject to foreign currency translation adjustments.

As of June 30, 2025, there was no remaining acquisition holdback liability.


			Fair Value Measurements at September 30, 2025
Carrying Value	Carrying Value		(Level 1)		(Level 2)		(Level 3)		Gain (Loss)
Operating Lease ROU Asset	$	67	$	—	$	—	$	67	$	—

76. INVENTORIES, NET

Inventories, net consisted of the following:

	June 30,2025			September 30,2024
	December 31,2025			September 30,2025
Raw materials	$	~~7,989~~205		$	52,~~442~~470
Finished goods		16,~~870~~938			14,~~377~~987
Work in process		2,~~658~~744			12,~~331~~636
Inventories, gross		129,~~517~~887			810,~~150~~093
Reserve for obsolescence		(1,~~091~~314	)		(~~837~~1,288	)
Inventories, net	$	118,~~426~~573		$	78,~~313~~805

87. PROPERTY AND EQUIPMENT, NET

Property and equipment, net consisted of the following:

	June 30,2025			September 30,2024
	December 31,2025			September 30,2025
Office furniture and equipment	$	1,633		$	1,~~697~~633
Machinery and equipment		1,~~480~~663			1,480
Leasehold improvements		2,294			2,~~312~~294
Construction in progress		~~139~~—			30183
Property and equipment, gross		5,~~546~~590			5,~~519~~590
Accumulated depreciation		(4,~~377~~570	)		(4,~~228~~465	)
Property and equipment, net	$	1,~~169~~020		$	1,~~291~~125

Depreciation and amortization expense for property and equipment was $~~108~~105 and $~~112~~118 for the three months ended ~~June~~December 3031, 2025 and 2024, respectively. ~~Depreciation and amortization expense for property and equipment was $335 and $335 for the nine months ended June 30, 2025 and 2024, respectively.~~

98. GOODWILL AND INTANGIBLE ASSETS

Goodwill is attributable to the acquisitions of Genasys Spain, Zonehaven, Evertel, and the Amika Mobile asset purchase and is due to combining the integrated emergency critical communications, mass messaging solutions and software development capabilities with existing hardware products for enhanced offerings and the skill level of the acquired workforces. The Company periodically reviews goodwill for impairment in accordance with relevant accounting standards. As of December 31, 2025 and September 30, 2025, goodwill was $13,451 and $13,450, respectively. There were no additions or impairments to goodwill during the three months ended December 31, 2025 or December 31, 2024.

1312

Genasys Inc.

Notes to the Condensed Consolidated Financial Statements

(in thousands, except per share and share amounts)

(Unaudited)

~~goodwill~~The ~~for~~changes ~~impairment~~ in ~~accordance~~the ~~with~~carrying ~~relevant~~amount ~~accounting standards. As~~ of ~~June 30, 2025 and September 30, 2024,~~ goodwill ~~was~~by ~~$13,451~~segment ~~and~~as ~~$13,329,~~of ~~respectively.~~December ~~There were no additions or impairments to goodwill during the nine months ended June 30~~31, 2025~~. During the nine months ended June 30~~, ~~2024,~~were ~~$2,923 was added to goodwill~~ as ~~a result of the Evertel acquisition.~~follows:

The changes in the carrying amount of goodwill by segment as of June 30, 2025, were as follows:


	Hardware		Software		Total
Balance as of September 30, 2025	$	—	$	13,450	$	13,450
Currency translation		—		1		1
Balance as of December 31, 2025	$	—	$	13,451	$	13,451

	Hardware		Software		Total
Balance as of September 30, 2024	$	—	$	13,329	$	13,329
Acquisitions		—		—		—
Currency translation		—		122		122
Balance as of June 30, 2025	$	—	$	13,451	$	13,451

The changes in the carrying amount of intangible assets by segment as of December 31, 2025, were as follows:

The changes in the carrying amount of intangible assets by segment as of June 30, 2025, were as follows:


	Hardware			Software			Total
Balance as of September 30, 2025	$	12		$	6,135		$	6,147
Amortization		(1	)		(576	)		(577	)
Currency translation		—			—			—
Balance as of December 31, 2025	$	11		$	5,559		$	5,570

	Hardware			Software			Total
Balance as of September 30, 2024	$	14		$	8,492		$	8,506
Acquisitions		—			—			—
Amortization		(2	)		(1,777	)		(1,779	)
Currency translation		—			(3	)		(3	)
Balance as of June 30, 2025	$	12		$	6,712		$	6,724

Intangible assets and goodwill related to Genasys Spain are translated from Euros to U.S. dollars at the balance sheet date. The net impact of foreign currency exchange differences arising during the period related to goodwill and intangible assets was an increase of $1.

The Company’s consolidated intangible assets consisted of the following:

	June 30,2025			September 30,2024
	December 31,2025			September 30,2025
Technology	$	14,~~233~~285		$	14,~~252~~234
Customer relationships		2,~~063~~112			2,~~081~~063
Trade name portfolio		~~610~~628			~~617~~610
Patents		72			72
		16,978			17,022
		17,097			16,979
Accumulated amortization		(1011,~~254~~527	)		(810,~~516~~832	)
	$	65,~~724~~570		$	86,~~506~~147

As of ~~June~~December 3031, 2025, future amortization expense was as follows:

Fiscal year ending September 30,
2025 (remaining three months)		576
2026 (remaining nine months)		1,644
2026		2,222
2027		2,048
2028		1,220
2029		329
Thereafter		329
2030		328
Total estimated amortization expense	$	6,724
Thereafter		1
Total estimated amortization expense	$	5,570

Amortization expense was $577 and $~~619~~618 for the three months ended ~~June~~December 3031, 2025 and 2024, respectively. ~~Amortization expense was $1,779 and $1,858 for the nine months ended June 30, 2025 and 2024, respectively.~~

1413

Genasys Inc.

Notes to the Condensed Consolidated Financial Statements

(in thousands, except per share and share amounts)

(Unaudited)

109. PREPAID EXPENSES AND OTHER

Prepaid expenses and other current assets consisted of the following:

	June 30,2025		September 30,2024
	December 31,2025		September 30,2025
Deposits for inventory	$	56,~~122~~689	$	46,617
Prepaid insurance		414		288
Puerto Rico sales tax receivable		602		491
Puerto Rico Income Tax Retention and Special Contribution Retention		407		—
Prepaid commissions		394		410
Spain value-added tax and bank withholdings		~~357~~394		~~225~~360
Prepaid professional services		~~353~~311		~~595~~345
Prepaid commissions		345		540
Dues and subscriptions		244		207
Dues and subscriptions		305		516
Prepaid insurance		220		185
Trade shows and travel		9461		~~116~~60
Canadian goods and services and harmonized sales tax receivable		3710		6929
Other		24154		~~206~~38
	$	79,~~458~~079	$	28,~~559~~742

Deposits for inventory

Deposits for inventory consisted of cash payments to vendors for inventory to be delivered in the future. ~~Balance~~The atbalance ~~June~~as 30of December 31, 2025 included $46,~~728~~056 for the Puerto Rico ~~project~~EWS Project.

~~Prepaid~~Puerto ~~insurance~~Rico sales tax receivable

~~Prepaid~~Puerto ~~insurance~~Rico ~~consisted~~sales oftax ~~premiums~~receivable represents sales and use tax paid ~~for~~on ~~health,~~importations ~~commercial~~into ~~and~~Puerto ~~corporate~~Rico ~~insurance~~that is recoverable from the Puerto Rico Treasury Department (“Hacienda”). ~~These~~The ~~premiums~~balance ~~are~~is ~~amortized~~eligible onto abe ~~straight-line~~credited, ~~basis~~refunded, ~~over~~or ~~the~~applied ~~term~~to ofother tax obligations and is expected to be applied against the ~~agreements~~Company’s Puerto Rico income tax liability in its annual return.

Puerto Rico Income Tax Retention and Special Contribution Retention

Puerto Rico income tax retention represents amounts withheld at source and remitted to the Puerto Rico Treasury Department (“Hacienda”) on behalf of the Company. These amounts are expected to be applied against the Company’s Puerto Rico income tax liability in its annual return. Additionally, the Company has recorded a receivable for sales tax paid on importations into Puerto Rico. This amount may be subject to future credit, refund, or transfer to other tax obligations, pending consultation with Hacienda.

Spain value-added tax receivable and bank withholdings

Spain VAT is a consumption tax applied to most goods and services. Registered businesses can recover VAT paid on eligible purchases by submitting periodic tax returns. The VAT receivable represents the amount refundable from the Spanish tax authorities.

Prepaid professional services

Prepaid professional services consist of payments made in advance for services such as accounting, consulting and legal services.

Prepaid commissions

Prepaid commissions represented the current portion of sales commissions paid in connection with obtaining a contract with a customer. These costs are deferred and are amortized on a straight-line basis over the period of benefit, which is typically between three and five years. Amortization of prepaid commissions is included in selling, general and administrative expenses in the accompanying condensed consolidated statement of operations.

Spain value-added tax receivable and bank withholdings

Spain value-added tax (“VAT”) is a consumption tax applied to most goods and services. Registered businesses can recover VAT paid on eligible purchases by submitting periodic tax returns. The VAT receivable represents the amount refundable from the Spanish tax authorities.

Prepaid professional services

Prepaid professional services consisted of payments made in advance for services such as accounting and legal services.

Dues and subscriptions

Dues and subscriptions consisted of payments made in advance for software subscriptions and trade and professional organizations. These payments are amortized on a straight-line basis over the term of the agreements.

Prepaid insurance

Prepaid insurance consisted of premiums paid for health, commercial and corporate insurance. These premiums are amortized on a straight-line basis over the term of the agreements.

Trade shows and travel

Trade shows and travel consisted of payments made in advance for trade show events.

15Canadian goods and services and harmonized sales tax receivable

The goods and services tax and harmonized sales tax (“GST/HST”) is a Canadian value-added tax that applies to many goods and services. Registrants may claim refundable tax credits for GST/HST incurred through filing periodic tax returns. This GST/HST receivable is a receivable from the Canadian Revenue Agency.

Genasys Inc.

Notes to the Condensed Consolidated Financial Statements

(in thousands, except per share and share amounts)

(Unaudited)

~~Canadian~~10. ~~goods~~ACCRUED ~~and~~AND ~~services~~OTHER ~~and~~LIABILITIES ~~harmonized sales tax receivable~~

The goods and services tax and harmonized sales tax (“GST/HST”) is a Canadian value-added tax (“VAT”) that applies to many goods and services. Registrants may claim refundable tax credits for GST/HST incurred through filing periodic tax returns. This GST/HST receivable is a receivable from the Canadian Revenue Agency.

11. ACCRUED AND OTHER LIABILITIES

Accrued liabilities consisted of the following:

	June 30,2025		September 30,2024
	December 31,2025		September 30,2025
Customer deposits	$	16,637	$	1,606
Deferred revenue	$	3,823	$	4,265
Deferred revenue		3,250		3,643
Payroll and related		2,480		2,471
Payroll and related		2,933		3,249
Accrued contract costs		688		550
Accrued contract costs		403		—
Warranty reserve		82		62
Short-term provision		~~153~~58		~~155~~83
Acquisition holdback liability		—		250
Other		145		20
Warranty reserve		64		76
Total	$	7,276	$	7,451
Other		33		51
Total	$	23,473	$	9,030

Payroll and related

Payroll and related consisted primarily of accrued vacation, bonus, sales commissions and benefits.

Deferred revenue

Deferred revenue as of ~~June~~December 3031, 2025, included prepayments from customers for services, including extended warranty, scheduled to be performed within the next twelve months. Deferred extended warranty consisted of warranties purchased in excess of the Company’s standard warranty. Extended warranties typically range from one to two years.

~~Customer~~Payroll ~~deposits~~and related

~~Customer~~Accrued ~~deposits~~payroll ~~represent~~and ~~amounts~~related ~~paid~~obligations byconsisted ~~customers~~primarily asof aaccrued ~~down payment on hardware orders to be delivered within the next twelve months. Balance at June 30~~bonus, ~~2025~~accrued ~~included $14~~vacation,~~210~~ ~~for~~accrued ~~the~~sales ~~Puerto~~commissions ~~Rico~~and ~~project~~benefits.

Accrued contract costs

Accrued contract costs consisted of accrued expenses for contracting a third-party service provider to fulfill repair and maintenance obligations required under a contract with a foreign military for units sold in ~~fiscal~~the year ended September 30, 2011. Payments to the service provider will be made annually upon completion of each year of service. The Company is contractually obligated to provide such repair and maintenance services through November 2027. These services are being recorded in cost of revenues to correspond with the revenues for these services.

Warranty reserve

Changes in the warranty reserve and extended warranty were as follows:

	Nine Months EndedJune 30,
	Three Months EndedDecember 31,
	2025			2024
Beginning balance	$	7662		$	~~132~~76
Warranty provision		527			~~(35~~—	)
Warranty settlements		(177	)		(216	)
Ending balance	$	6482		$	7670

The Company establishes a warranty reserve based on anticipated warranty claims at the time product revenue is recognized. Factors affecting warranty reserve levels include the number of units sold, anticipated cost of warranty repairs and anticipated rates of warranty claims. The Company evaluates the adequacy of the provision for warranty costs each reporting period and adjusts the accrued warranty liability to an amount equal to estimated warranty expense for products currently under warranty.

1611. TERM LOANS AND WARRANT LIABILITIES

On May 13, 2024, the Company entered into a term loan and security agreement (the “Loan Agreement”), pursuant to which the Company received $14,700 in cash proceeds in exchange for a $15,000 term loan (the “Close Date Term Loan”) and the issuance of warrants to purchase up to 3,068,182 shares of the Company’s common stock (“Warrants”). Because the Close Date Term Loan and Warrants were determined to be freestanding financial instruments both recorded subsequently at fair value, the proceeds received were allocated to each instrument on a relative fair value basis.

On May 9, 2025, the Company entered into a First Amendment to Term Loan and Security Agreement (the “First Amendment”), which amended the terms of the Loan Agreement. Pursuant to the First Amendment, the lenders (the “Lenders”) agreed to: (i) extend an additional term loan to the Company in the aggregate principal amount of $4,000 (the “First Amendment Term Loan” and with the Close Date Term Loan, the “Term Loans”), and (ii) provide a process to obtain, at the Lenders’ sole discretion, an additional term loan of up to $4,000 (the “Additional Term Loan”). The terms of the existing $15,000 Close Date Term Loan remain

Genasys Inc.

Notes to the Condensed Consolidated Financial Statements

(in thousands, except per share and share amounts)

(Unaudited)

12unchanged. ~~TERM~~As ~~LOANS~~of ~~AND~~December ~~WARRANT~~31, ~~LIABILITIES~~2025, the Additional Term Loan had not been drawn.

OnThe ~~May~~Loan ~~13,~~Agreement ~~2024~~contains ~~(the~~customary ~~“Close~~representation ~~Date”),~~and warranties of the Company, ~~entered~~affirmative ~~into a term loan~~ and ~~security~~negative ~~agreement (the “Loan Agreement”)~~covenants, ~~pursuant~~including towithout ~~which~~limitation restricting the Company ~~received~~from ~~$14~~certain distributions,~~700~~ ininvestments, ~~cash~~indebtedness, ~~proceeds~~sales inof ~~exchange~~assets, ~~for~~loans aand ~~$15~~payments,~~000~~ ~~term~~of ~~loan (~~the ~~“Close~~Company, ~~Date~~events ~~Term~~of ~~Loan”)~~default and ~~the~~remedies ~~issuance~~thereupon, ofindemnification ~~warrants~~obligations toof ~~purchase~~the upCompany, totermination 3provisions,~~068,182~~ ~~shares~~and ofother ~~the~~obligations ~~Company’s~~and ~~common~~rights ~~stock~~of ~~(“Warrants”)~~the parties. ~~Because~~All ~~the~~obligations ~~Close~~under ~~Date~~the ~~Term~~ Loan ~~and~~Agreement ~~Warrants~~are ~~were~~secured ~~determined~~by tosubstantially beall ~~freestanding~~of ~~financial~~the ~~instruments~~Company’s ~~both~~assets. ~~recorded~~As ~~subsequently~~of atDecember ~~fair~~31, ~~value~~2025, the ~~proceeds~~Company ~~received~~was ~~were~~in ~~allocated~~compliance towith ~~each~~all ~~instrument~~financial onand areporting ~~relative~~covenants ~~fair~~of ~~value~~the ~~basis~~Loan Agreement.

OnThe ~~May~~Company 9,determined ~~2025~~that (the ~~“First~~Term ~~Amendment~~Loans ~~Date”),~~were ~~the~~eligible ~~Company~~for ~~entered~~the ~~into~~FVO aand ~~First~~accordingly ~~Amendment~~elected to the ~~Loan~~FVO ~~Agreement~~for (the ~~“First~~Term ~~Amendment”),~~Loans. ~~which~~This ~~amended~~election ~~the~~was ~~terms~~made because of operational efficiencies in valuing and reporting for the ~~Loan~~Term ~~Agreement~~Loans in their entirety at each reporting date. ~~Pursuant~~As toa ~~the~~result ~~First~~of ~~Amendment,~~electing the ~~lenders~~FVO, (the ~~“Lenders”)~~Term ~~agreed~~Loans ~~to:~~were ~~(i)~~recorded ~~extend~~at anfair ~~additional~~value ~~term~~at ~~loan~~issuance towith ~~the~~subsequent remeasurements at fair value each reporting period. The Company inrecognizes the ~~aggregate~~resulting ~~principal~~gain ~~amount~~or ofloss ~~$4,000 (~~related to changes to the ~~“First~~fair ~~Amendment~~value of the Term ~~Loan”)~~Loans, ~~and~~other ~~(ii)~~than ~~provide~~changes aassociated ~~process~~with tothe ~~obtain~~Company’s own credit risk, aton the ~~Lenders’~~condensed ~~sole~~consolidated ~~discretion,~~statements anof ~~additional~~operations ~~term~~within ~~loan~~other ofincome. upThe tochange ~~$4,000~~in (fair value related to the ~~“Additional~~accrued interest components of the Term ~~Loan”)~~Loans is also included within other income on the condensed consolidated statement of operations. The ~~terms~~change ofin fair value attributable to the ~~existing~~Company’s ~~$15,000~~own ~~Close~~credit ~~Date~~risk ~~Term~~is ~~Loan~~recorded ~~remain~~in ~~unchanged.~~other Ascomprehensive ofincome ~~June~~or ~~30,~~loss ~~2025,~~in the ~~Additional~~Company’s condensed consolidated statements of operations and comprehensive loss. Direct costs and fees related to the Term ~~Loan~~Loans ~~had~~were ~~not~~expensed ~~been~~as ~~drawn~~incurred within other income on the condensed consolidated statement of operations.

The Loan Agreement contains customary representation and warranties of the Company, affirmative and negative covenants, including without limitation restricting the Company from certain distributions, investments, indebtedness, sales of assets, loans and payments, of the Company, events of default and remedies thereupon, indemnification obligations of the Company, termination provisions, and other obligations and rights of the parties. All obligations under the Loan Agreement are secured by substantially all of the Company’s assets. As of June 30, 2025, the Company was in compliance with all financial and reporting covenants of the Loan Agreement.

The Company determined that the Close Date Term Loan and First Amendment Term Loan under the Loan Agreement (collectively the “Term Loans”) were eligible for the FVO and accordingly elected the FVO for the Term Loans. This election was made because of operational efficiencies in valuing and reporting for the Term Loans in their entirety at each reporting date. As a result of electing the FVO, the Term Loans were recorded at fair value at issuance with subsequent remeasurements at fair value each reporting period. The Company recognizes the resulting gain or loss related to changes to the fair value of the Term Loans, other than changes associated with the Company’s own credit risk, on the condensed consolidated statements of operations within other income. The change in fair value related to the accrued interest components of the Term Loans is also included within other income on the condensed consolidated statement of operations. The change in fair value attributable to the Company’s own credit risk is recorded in other comprehensive income or loss in the Company’s condensed consolidated statements of operations and comprehensive loss. Direct costs and fees related to the Term Loans were expensed as incurred within other income on the condensed consolidated statement of operations.

Close Date Term Loan

The principal amount of the Close Date Term Loan is $15,000 and is payable upon maturity on May 13, 2026. The Close Date Term Loan provides a two percent original issue discount to the lenders. The Company is required to make quarterly interest payments on the Close Date Term Loan. The Company may elect to pay quarterly interest on the Close Date Term Loan based on the three-month Secured Overnight Financing Rate (“SOFR”) plus five percent (5%) in cash or the Company may elect to pay interest based on the three-month SOFR plus six percent (6%) with 50% paid in cash and the remainder paid by issuing shares of the Company’s common stock. The Company may voluntarily redeem the Close Date Term Loan within one year of the issuance at 101% of the principal amount and after one year at par value.

The Company utilized the discounted cash flow method with reliance on the Monte Carlo simulation model to determine the fair value of the Close Date Term Loan at issuance and subsequently at each reporting date. The fair value of the Close Date Term Loan was determined based on significant inputs not observable in the market, which represents a Level 3 measurement within the fair value hierarchy. One of the significant fair value assumptions is the discount rate, which was 36.40% and 2636.01% as of ~~June~~December 3031, 2025 and September 30, ~~2024~~2025, respectively.

A summary of the changes in the fair value of the Close Date Term Loan Level 3 rollforward is as follows:

Fair value as of September 30, 2024	$	12,010
	Three Months Ended
Change in fair value related to non-credit risk recorded within net loss		1,230
	December 31, 2025			December 31, 2024
Change in fair value related to credit risk in other comprehensive income		(820	)
Beginning balance	$	13,100		$	12,010
Fair value as of June 30, 2025	$	12,420
Change in fair value in net loss		720			370
Ending balance	$	13,820		$	12,380

17First Amendment Term Loan

The principal of the First Amendment Term Loan is $4,000 and is payable upon maturity on December 31, 2025. The First Amendment Term Loan and any Additional Term Loan provided under the First Amendment will bear interest at a rate equal to the three-month Term SOFR plus five percent (5.00%) per annum. Interest on the outstanding principal balance of the First Amendment Term Loan and any Additional Term Loan is payable quarterly in arrears in cash. In addition, the Company will be required to pay to the Lenders, concurrently with each payment of principal under the First Amendment Term Loan and any Additional Term Loan, an additional amount such that the Lenders receive a total return equal to 30% of the principal amount being repaid, including the interest paid on such principal amount and such additional payment amount (“Minimum Return Amount”).

The Company utilized the discounted cash flow method with reliance on the Monte Carlo simulation model to determine the fair value of the First Amendment Term Loan at issuance and subsequently at each reporting date. The fair value of the First Amendment Term Loan was determined based on significant inputs not observable in the market, which represents a Level 3 measurement within the fair value hierarchy. One of the significant fair value assumptions is the discount rate, which was 34.8% as of September 30, 2025.

Genasys Inc.

Notes to the Condensed Consolidated Financial Statements

(in thousands, except per share and share amounts)

(Unaudited)

First Amendment Term Loan

The principal of the First Amendment Term Loan is $4,000 and is payable upon maturity on December 31, 2025. The First Amendment Term Loan and any Additional Term Loan provided under the First Amendment will bear interest at a rate equal to the three-month Term SOFR plus five percent (5.00%) per annum. Interest on the outstanding principal balance of the First Amendment Term Loan and any Additional Term Loan is payable quarterly in arrears in cash. In addition, the Company will be required to pay to the Lenders, concurrently with each payment of principal under the First Amendment Term Loan and any Additional Term Loan, an additional amount such that the lenders receive a total return equal to the 30% of the principal amount being repaid, including the interest paid on such principal amount and such additional payment amount (“Minimum Return Amount”.

The Company recognized a loss on issuance of the First Amendment Term Loan of $480 which represents the difference between the cash received for the First Amendment Term Loan and the fair value of the First Amendment Term Loan at issuance. The loss on issuance of the First Amendment Term Loan is recorded within other income on the condensed consolidated statement of operations.

AThe ~~summary~~Company ofpaid ~~the~~off ~~changes in~~ the ~~fair value of the~~ First Amendment Term Loan ~~Level~~as 3of ~~rollforward~~December is31, ~~as follows:~~2025.

Fair value as of September 30, 2024	$	—
	Three Months Ended
Transfer in		4,480
	December 31, 2025
Change in fair value related to non-credit risk recorded within net loss		150
Beginning balance	$	4,910
Change in fair value related to credit risk in other comprehensive income		—
Change in fair value in net loss		51
Fair value as of June 30, 2025	$	4,630
Payment		(4,961	)
Ending balance	$	—

Warrant Liabilities

The Company issued Warrants to the lenders to purchase up to 3,068,182 shares of the Company’s common stock at an initial exercise price of $2.53 per share, subject to certain adjustments. The Warrants are exercisable upon issuance through May 13, 2029 and may be exercised via cashless exercise.

The Warrants are recognized as liabilities in the condensed consolidated balance sheet and are subject to remeasurement at each balance sheet date from issuance. Any change in fair value is recognized in other income within the condensed consolidated statement of operations.

The Company utilized the Monte Carlo simulation model to determine the fair value of the warrant liabilities at issuance and subsequently at each reporting date. The fair value of the warrant liabilities is the present value of the warrant payoff at expiration; discounted at the risk-free rate. The fair value of the warrant liabilities was determined based on significant inputs not observable in the market, which represents a Level 3 measurement within the fair value hierarchy.

The following is a summary of the fair value assumptions applied in determining the initial fair value and the subsequent fair value of the warrant liabilities as of each respective date:

	June 30,			September 30
	December 31,			September 30
	2025			~~2024~~2025
Discount Rate		3.76	%		3.67	%
Volatility		62.0	%		5862.06	%

A summary of the changes in the fair value of the warrant liabilities Level 3 rollforward is as follows:

Fair value as of September 30, 2024	$	6,640
	Three Months Ended
Change in fair value in net loss		(4,560	)
	December 31, 2025			December 31, 2024
Fair value as of June 30, 2025	$	2,080
Beginning balance	$	3,570		$	6,640
Change in fair value in net loss		(870	)		(2,470	)
Ending balance	$	2,700		$	4,170

1812. LEASES

The Company determines if an arrangement is a lease at inception. The guidance in ASC 842 defines a lease as a contract, or part of a contract, that conveys the right to control the use of identified property, plant, or equipment (an identified asset) for a period of time in exchange for consideration. Operating lease ROU assets and lease liabilities are recognized based on the present value of future minimum lease payments over the lease term at commencement date. The Company’s leases do not provide an implicit rate. The Company uses its incremental borrowing rate based on the information available at the commencement date in determining the present value of future payments. Additionally, the portfolio approach is used in determining the discount rate used to present value lease payments. The ROU asset includes any lease payments made and excludes lease incentives and initial direct costs incurred.

The Company is party to operating leases for office and production facilities and equipment under agreements that expire at various dates through fiscal year 2028. The Company elected the package of practical expedients permitted under the lease standard. In electing the practical expedient package, the Company is not required to reassess whether an existing or expired contract is or contains a lease, reassess the lease classification for expired or existing leases nor reassess the initial direct costs for leases that

Genasys Inc.

Notes to the Condensed Consolidated Financial Statements

(in thousands, except per share and share amounts)

(Unaudited)

13commenced before the adoption of ASC 842. ~~LEASES~~The Company also elected the short-term lease exemption such that the lease standard was applied to leases greater than one year in duration. Leases with an initial term of twelve months or less are not recorded on the balance sheet. The Company recognizes lease expense for these leases on a straight-line basis over the lease term.

The ~~Company~~tables ~~determines~~below ifshow ~~an arrangement is a lease at inception. The guidance in ASC 842 defines a lease as a contract, or part of a contract, that conveys~~ the ~~right~~operating ~~to control the use of identified property, plant, or equipment (an identified asset) for a period of time in exchange for consideration. Operating~~ lease ROU assets and ~~lease~~ liabilities ~~are~~as ~~recognized based on the present value~~ of ~~future~~September ~~minimum~~30, ~~lease~~2025, ~~payments~~and ~~over~~ the ~~lease~~balances ~~term~~as at commencement date. The Company’s leases do not provide an implicit rate. The Company uses its incremental borrowing rate based on the information available at the commencement date in determining the present value of ~~future~~December ~~payments.~~31, ~~Additionally~~2025, including the ~~portfolio~~changes ~~approach~~during ~~is used in determining~~ the ~~discount rate used to present value lease payments~~periods. ~~The ROU asset includes any lease payments made and excludes lease incentives and initial direct costs incurred.~~

The Company is party to operating leases for office and production facilities and equipment under agreements that expire at various dates through fiscal 2028. The Company elected the package of practical expedients permitted under the lease standard. In electing the practical expedient package, the Company is not required to reassess whether an existing or expired contract is or contains a lease, reassess the lease classification for expired or existing leases nor reassess the initial direct costs for leases that commenced before the adoption of ASC 842. The Company also elected the short-term lease exemption such that the lease standard was applied to leases greater than one year in duration. Leases with an initial term of twelve months or less are not recorded on the balance sheet. The Company recognizes lease expense for these leases on a straight-line basis over the lease term.


	Operating lease ROU assets
Operating lease ROU assets as of September 30, 2025	$	2,419
Less amortization of operating lease ROU assets		(205	)
Operating lease ROU assets as of December 31, 2025	$	2,214

The tables below show the operating lease ROU assets and liabilities as of September 30, 2024, and the balances as of June 30, 2025, including the changes during the periods.


	Operating lease liabilities
Operating lease liabilities at September 30, 2025	$	3,343
Less lease principal payments on operating lease liabilities		(276	)
Operating lease liabilities as of December 31, 2025		3,067
Less non-current portion		(1,922	)
Current portion as of December 31, 2025	$	1,145

	OperatingleaseROU assets
Operating lease ROU assets as of September 30, 2024	$	3,110
Less amortization of operating lease ROU assets		(570	)
Effect of exchange rate on operating lease ROU assets		10
Operating lease ROU assets as of June 30, 2025	$	2,550

As of December 31, 2025, the Company’s operating leases have a weighted-average remaining lease term of 2.6 years and a weighted-average incremental borrowing rate of 4.23%. The maturities of the operating lease liabilities are as follows:

	Operatingleaseliabilities
Fiscal year ending September 30,
Operating lease liabilities at September 30, 2024	$	4,290
2026 (remaining nine months)	$	933
Less lease principal payments on operating lease liabilities		(760	)
2027		1,260
Effect of exchange rate on operating lease liabilities		10
2028		1,047
Operating lease liabilities as of June 30, 2025		3,540
2029		—
Less non-current portion		(2,465	)
2030		—
Current portion as of June 30, 2025	$	1,075
Thereafter		—
Total undiscounted operating lease payments		3,240
Less imputed interest		(173	)
Present value of operating lease liabilities	$	3,067

AsFor ~~of June 30, 2025,~~ the ~~Company’s~~three ~~operating~~months ~~leases~~ended ~~have~~December a31, ~~weighted-average~~2025 ~~remaining lease term of 3.1 years~~ and a2024, ~~weighted-average~~total ~~incremental~~lease ~~borrowing~~expense ~~rate~~under ofoperating ~~4.16%.~~leases ~~The~~was ~~maturities~~approximately of$239 ~~the~~and ~~operating~~$235, ~~lease liabilities are as follows:~~respectively.

Fiscal year ending September 30,
2025 (remaining three months)	$	295
2026		1,207
2027		1,228
2028		1,047
2029		—
Thereafter		—
Total undiscounted operating lease payments		3,777
Less imputed interest		(237	)
Present value of operating lease liabilities	$	3,540

13. INCOME TAXES

~~For~~The ~~the~~Company’s ~~three~~effective ~~months~~tax ~~ended~~rate ~~June~~for ~~30, 2025 and 2024, total lease expense under operating leases was approximately $229 and $245, respectively. For~~ the ~~nine~~three months ended ~~June~~December 3031, 2025 and 2024, ~~total lease expense under operating leases~~ was ~~approximately~~negative ~~$690~~18.1% and ~~$736~~0%, respectively.

19For the three months ended December 31, 2025, the Company recorded an income tax expense of $125 using an estimated annual effective tax rate approach pursuant to ASC 740-270-25-2. For the three months ended December 31, 2024, the Company did not record an income tax benefit for the current period tax loss as the benefits were not expected to be realized during the current or future periods.

The Company continues to maintain a full valuation allowance against its U.S. and foreign deferred tax assets.

ASC 740, Income Taxes, requires the Company to recognize in its consolidated financial statements uncertainties in tax positions taken that may not be sustained upon examination by the taxing authorities. If interest or penalties are assessed, the Company would recognize these charges as income tax expense. The Company has not recorded any income tax expense or benefit for uncertain tax positions.

Genasys Inc.

Notes to the Condensed Consolidated Financial Statements

(in thousands, except per share and share amounts)

(Unaudited)

14. ~~INCOME~~COMMITMENTS ~~TAXES~~AND CONTINGENCIES

The Company’s effective tax rate for the nine months ended June 30, 2025 and 2024 was negative 0.5% and 2.3%, respectively.

For the nine months ended June 30, 2025, the Company recorded an income tax expense of $79 using an estimated annual effective tax rate approach pursuant to ASC 740-270-25-2 and factoring in a discrete tax benefit related to the filing of the 2023 Canadian tax return. The income tax benefit of $476 for the nine months ended June 30, 2024 is primarily attributable to the partial release of $525 of U.S. valuation allowance in conjunction with the acquisition of Evertel as the acquired net deferred tax liabilities will provide a source of income for the Company to realize a portion of its deferred tax assets, for which a valuation allowance is no longer needed.

The Company continues to maintain a full valuation allowance against its U.S. and foreign deferred tax assets.

15. COMMITMENTS AND CONTINGENCIES

Litigation

~~The~~We ~~Company~~ may at times be involved in litigation in the ordinary course of business. ~~The~~We ~~Company~~ will also, from time to time, when appropriate in ~~the Company~~management’s estimation, record adequate reserves in ~~the~~our ~~Company’s consolidated~~ financial statements for pending litigation. ~~Currently, there are no pending material legal proceedings to which the Company is a party or to which any of its property is subject.~~

~~SHARE-BASED~~On ~~COMPENSATION~~November 19, 2025, Gerry Darden, individually and as representative of the estate of Stacey Darden, filed a lawsuit in Los Angeles Superior Court against Southern California Edison Company and Edison International (collectively, the “Edison Defendants”) and the Company, related to the wildfire that occurred in early January 2025 in the Eaton Canyon/Altadena area of Los Angeles County. In the complaint, the plaintiff alleges products liability and negligence claims against the Company based on Los Angeles County’s use of the Company’s products and seeks unspecified damages. The Company cannot assess with any meaningful probability the likelihood of an adverse outcome or the possible loss or range of loss, if any, related to this lawsuit. The Company will vigorously defend itself in the lawsuit.

On January 20, 2026, the Edison Defendants filed a cross-complaint in Los Angeles Superior Court against the Company and 11 other public and private entities related to the same wildfire, in a lawsuit that had been filed by Jeremy Gursey against the Edison Defendants. In the cross-complaint, the Edison Defendants allege negligence claims against the Company based on Los Angeles County’s use of the Company’s products and seek unspecified contribution. The Company cannot assess with any meaningful probability the likelihood of an adverse outcome or the possible loss or range of loss, if any, related to this lawsuit. The Company will vigorously defend itself in the lawsuit.

15. SHARE-BASED COMPENSATION

Equity compensation plans

The Amended and Restated 2015 Equity Incentive Plan (“2015 Equity Plan”) expired on January 19, 2025, with awards relating to 4,918,238 shares of common stock remaining outstanding under such plan. The 2025 Equity Incentive Plan (“2025 Equity Plan” and, together with the 2015 Equity Plan, the “Equity Plans”) was adopted by the Company’s Board of Directors on January 27, 2025 and approved by the Company’s stockholders on March 17, 2025. The 2025 Equity Plan authorizes the issuance of stock options, restricted stock, stock appreciation rights, restricted stock units (“RSUs”) and performance awards, up to an aggregate of 6,000,000 shares of common stock to employees, directors, advisors or consultants. As of ~~June~~December 3031, 2025, there were options and restricted stock units outstanding covering 4,~~684~~592,~~060~~248 shares of common stock under the Equity Plans, and 5,~~666~~197,~~184~~129 shares of common stock available for grant, for a total of 109,~~350~~789,~~244~~377 shares of common stock authorized and unissued under the Equity Plans.

Share-based compensation

The Company’s ~~employee~~ stock options have various restrictions that reduce option value, including vesting provisions and restrictions on transfer and hedging, among others, and are often exercised prior to their contractual maturity. Share-based compensation is accounted for in accordance with ASC Topic 718: Compensation - Stock Compensation. Total compensation expense for all share-based awards is based on the estimated fair market value of the equity instrument issued on the grant date. For share-based awards that vest based solely on a service condition, compensation expense is recognized on a straight-line basis over the total requisite service period for the entire award. For share-based awards that vest based on a market condition, compensation expense is recognized on a straight-line basis over the requisite service period of each separately vesting tranche. For share-based awards that vest based on a performance condition, compensation expense is recognized for the number of awards that are expected to vest based on the probable outcome of the performance condition. Compensation cost for these awards will be adjusted to reflect the number of awards that ultimately vest.

20Stock options

A summary of the activity in options of the Company as of December 31, 2025, is presented below:


	Number of Shares			Weighted Average Exercise Price
Outstanding September 30, 2025		3,999,116		$	2.71
Granted		279,500		$	2.15
Forfeited/expired		(132,126	)	$	2.94
Exercised		(19,084	)	$	1.70
Outstanding December 31, 2025		4,127,406		$	2.67
Exercisable December 31, 2025		1,946,720		$	2.84

The aggregate intrinsic value of options outstanding and exercisable as of December 31, 2025 was $295 and $169, respectively. The aggregate intrinsic value represents the difference between the Company’s closing stock price on the last day of trading for the

Genasys Inc.

Notes to the Condensed Consolidated Financial Statements

(in thousands, except per share and share amounts)

(Unaudited)

~~Stock~~quarter, which was $2.15 per share, and the exercise price multiplied by the number of applicable options. The total intrinsic value of stock options exercised during the three months ended December 31, 2025 was $32 and proceeds from these exercises were $32. The total intrinsic value of stock options exercised during the three months ended December 31, 2024 was $1 and proceeds from these exercises were $1.

AThe ~~summary~~following oftable ~~the~~summarizes ~~activity~~information inabout stock options ofoutstanding ~~the Company~~ as of ~~June~~December 3031, 2025~~, is presented below~~:

	Number ofShares			WeightedAverageExercise Price
Range ofExercise Prices	NumberOutstanding			WeightedAverageRemainingContractualTerm		WeightedAverageExercisePrice		NumberExercisable		WeightedAverageExercisePrice
Outstanding September 30, 2024		3,695,740		$	2.84
$1.70-$1.70		662,791			5.17	$	1.70		380,222	$	1.70
Granted		1,063,250		$	2.76
$2.15-$2.45		319,500			9.38	$	2.16		13,959	$	2.26
Forfeited/expired		(358,125	)	$	4.22
$2.59-$2.59		694,750			5.93	$	2.59		227,852	$	2.59
Exercised		(24,147	)	$	1.78
$2.64-$2.68		85,000			4.49	$	2.67		52,292	$	2.67
Outstanding June 30, 2025		4,376,718		$	2.72
$2.69-$2.69		1,000,000			3.77	$	2.69		200,000	$	2.69
Exercisable June 30, 2025		1,383,228		$	3.02
$2.70-$3.39		702,138			4.16	$	2.92		542,763	$	2.98
$3.40-$6.87		663,227			2.89	$	3.68		529,632	$	3.71
		4,127,406			4.73	$	2.67		1,946,720	$	2.84

The ~~aggregate~~Company ~~intrinsic~~recorded ~~value of options outstanding and exercisable as of June 30, 2025 was~~ $24229 and $6,242 ~~respectively.~~of ~~The aggregate intrinsic value represents the difference between the Company’s closing~~ stock ~~price~~option oncompensation ~~the~~expense ~~last day of trading~~ for ~~the quarter~~employees, ~~which~~directors ~~was $1.73 per share,~~ and ~~the~~consultants ~~exercise~~for ~~price multiplied by~~ the ~~number~~three ~~of applicable options. The total intrinsic value of stock options exercised during the nine~~ months ended ~~June~~December 3031, 2025 ~~was $43~~ and ~~proceeds from these exercises was $43. There was no stock options exercised during the nine months ended June 30~~2024, ~~2024~~respectively.

~~The~~As ~~following~~of ~~table~~December ~~summarizes~~31, ~~information~~2025, ~~about~~there were approximately $1,505 of total unrecognized compensation costs related to outstanding stock options. ~~outstanding~~This asamount is expected to be recognized over a weighted average period of ~~June~~1.5 30years. To the extent the forfeiture rate is different from what the Company anticipated, ~~2025:~~share-based compensation related to these awards will be different from the Company’s expectations.

Range ofExercise Prices	NumberOutstanding		WeightedAverageRemainingContractualTerm		WeightedAverageExercisePrice		NumberExercisable		WeightedAverageExercisePrice
$1.70-$2.59		1,625,665		6.08	$	2.14		229,101	$	1.73
$2.64-$2.70		1,538,000		4.86	$	2.69		387,459	$	2.69
$3.09-$3.56		1,126,053		3.52	$	3.39		685,231	$	3.36
$3.95-$6.87		87,000		3.08	$	5.21		81,437	$	5.25
		4,376,718		4.93	$	2.72		1,383,228	$	3.02

Stock options that do not contain market-based vesting conditions are valued using the Black-Scholes option pricing model. The weighted average estimated fair value of employee stock options that vest without a market condition granted during the three months ended December 31, 2025 and 2024, was calculated using the Black-Scholes option-pricing model with the following weighted average assumptions (annualized percentages):

The Company recorded $282 and $166 of stock option compensation expense for employees, directors and consultants for the three months ended June 30, 2025 and 2024, respectively. The Company recorded $780 and $565 of stock option compensation expense for employees, directors and consultants for the nine months ended June 30, 2025 and 2024, respectively.


	Three Months Ended December 31,
	2025			2024
Volatility		61.6	%		60.7	%
Risk-free interest rate		3.6	%		4.1	%
Dividend yield		0.0	%		0.0	%
Expected term in years		3.7			3.6

AsExpected ofvolatility ~~June~~is ~~30,~~based ~~2025,~~on ~~there~~the ~~was~~historical ~~approximately~~volatility ~~$1,935~~ of ~~total~~the ~~unrecognized~~Company’s ~~compensation~~common ~~costs~~stock ~~related~~over tothe ~~outstanding~~period ~~employee~~commensurate ~~stock~~with the expected term of the options. ~~This~~The ~~amount~~risk-free interest rate is ~~expected~~based toon berates ~~recognized~~published ~~over~~by athe ~~weighted~~Federal ~~average~~Reserve ~~period~~Board. The contractual term of ~~1.6~~the ~~years.~~options Togranted under the ~~extent~~Company’s 2015 Equity Plan was seven years, and ten years for options granted under the Company’s 2025 Equity Plan. The expected term is based on observed and expected time to post-vesting exercise. The expected forfeiture rate is ~~different~~based ~~from~~on ~~what~~past experience and employee retention data. Forfeitures are estimated at the ~~Company~~time ~~anticipated,~~of ~~stock-based~~the ~~compensation~~grant ~~related~~and torevised ~~these~~in ~~awards~~subsequent periods if actual forfeitures differ from those estimates. Such revision adjustments to expense will be ~~different~~recorded ~~from~~as a cumulative adjustment in the period in which the estimate is changed. The Company’s ~~expectations~~has not paid a dividend for the three months ended December 31, 2025 and December 31, 2024.

~~Stock options that do not contain market~~Performance-based ~~vesting conditions are valued using the Black-Scholes option pricing model. The weighted average estimated fair value of employee~~ stock options ~~granted during the nine months ended June 30, 2025 and 2024, was calculated using the Black-Scholes option-pricing model with the following weighted average assumptions (annualized percentages):~~

	Nine Months Ended June 30,
	2025			2024
Volatility		60.8	%		57.7	%
Risk-free interest rate		4.1	%		4.3	%
Dividend yield		0.0	%		0.0	%
Expected term in years		3.7			4.2

On October 8, 2022, the Company awarded performance-based stock options (“PVOs”) to purchase 800,000 shares of the Company’s common stock to an executive officer, with a contractual term of seven years. Vesting is based upon the achievement of certain performance criteria for each of fiscal year 2025 and 2026, including a minimum free cash flow margin and net revenue targets. Additionally, vesting is subject to the executive officer being employed by the Company at the time the Company achieves such financial targets. The Company did not record compensation expense related to these options. Those PVOs were cancelled in January 2026.

Expected volatility is based on the historical volatility of the Company’s common stock over the period commensurate with the expected term of the options. The risk-free interest rate is based on rates published by the Federal Reserve Board. The contractual term of the options was seven years. The expected term is based on observed and expected time to post-vesting exercise. The expected forfeiture rate is based on past experience and employee retention data. Forfeitures are estimated at the time of the grant and revised in subsequent periods if actual forfeitures differ from those estimates. Such revision adjustments to expense will be recorded as a 20

Genasys Inc.

Notes to the Condensed Consolidated Financial Statements

(in thousands, except per share and share amounts)

(Unaudited)

~~cumulative~~On ~~adjustment~~March 20, 2023, the Company granted PVOs to purchase up to 450,000 shares of the Company’s stock to a key member of management with a contractual term of seven years. Vesting is based upon the achievement of certain performance criteria for each of the first three twelve-month periods following the employee’s start date, including targets related to growth in the ~~period~~institutional ownership of the Company’s common stock and growth in ~~which~~the trading volume of the ~~estimate~~Company’s iscommon ~~changed~~stock during such periods. ~~The~~Additionally, ~~Company~~vesting ~~has~~is ~~not~~subject ~~paid~~to athe ~~dividend~~employee ~~for~~being employed by the ~~nine~~Company ~~months~~on ~~ended~~each ~~June~~of 30the first three anniversaries of the employee’s start date. 225,000 ~~2025~~of these options contain a market-based vesting condition and ~~did~~accounting principles do not ~~pay~~require athe ~~dividend~~market condition to be achieved for compensation expense to be recognized. The Company recorded $3 of compensation expense related to these options during the ~~nine~~three months ended ~~June~~December 3031, 2024. The grant recipient is no longer employed by the Company, and the previously recorded PVO expense was reversed and included in the stock option compensation expense above.

~~Performance-based~~The ~~stock~~Company ~~options~~did not grant any PVOs during the three months ended December 31, 2025. As of December 31, 2025, there was no unrecognized compensation related to PVOs.

On October 8, 2022, the Company awarded performance-based stock options (PVOs) to purchase 800,000 shares of the Company’s common stock to an executive officer, with a contractual term of seven years. Vesting is based upon the achievement of certain performance criteria for each of fiscal 2025 and 2026, including a minimum free cash flow margin and net revenue targets. Additionally, vesting is subject to the executive officer being employed by the Company at the time the Company achieves such financial targets. The Company has not recorded compensation expense related to these options.

On March 20, 2023, the Company granted PVOs to purchase up to 450,000 shares of the Company’s stock to a key member of management with a contractual term of seven years. Vesting is based upon the achievement of certain performance criteria for each of the first three twelve-month periods following the employee’s start date, including targets related to growth in the institutional ownership of the Company’s common stock and growth in the trading volume of the Company’s common stock during such periods. Additionally, vesting is subject to the employee being employed by the Company on each of the first three anniversaries of the employee’s start date. 225,000 of these options contain a market-based vesting condition and accounting principles do not require the market condition to be achieved for compensation expense to be recognized. The Company recorded $2 and $3 of compensation expense related to these options during the three months ended June 30, 2025 and 2024, respectively. The Company recorded $8 and $127 of compensation expense related to these options during the nine months ended June 30, 2025 and 2024, respectively. PVO expense was included in the stock option compensation expense above.

The Company did not grant any PVOs during the nine months ended June 30, 2025. As of June 30, 2025, there was no unrecognized compensation related to PVOs.

Restricted stock units

Compensation expense for RSUs was $~~177~~190 and $~~134~~149 for the three months ended ~~June~~December 3031, 2025 and 2024, respectively. ~~Compensation expense for RSUs was $484 and $705 for the nine months ended June 30, 2025 and 2024, respectively.~~ As of ~~June~~December 3031, 2025, there was approximately $~~558~~537 of total unrecognized compensation costs related to outstanding RSUs. This amount is expected to be recognized over a weighted average period of 01.92 years.

A summary of the Company’s RSUs as of ~~June~~December 3031, 2025, is presented below:

	Number ofShares			WeightedAverage GrantDate Fair Value
Outstanding September 30, 2024		288,059		$	2.78
Outstanding September 30, 2025		277,342		$	2.62
Granted		~~253~~219,~~816~~555		$	2.3520
Vested		(~~234~~32,~~533~~055	)	$	2.5634
Forfeited/cancelled		—		$	—
Outstanding June 30, 2025		307,342		$	2.59
Outstanding December 31, 2025		464,842		$	2.44

Performance-based units

On December 24, 2025, the Company granted 70,000 restricted stock units to its Chief Financial Officer, of which 35,000 were performance-based RSUs. Vesting is subject to the achievement of specified operational performance targets and continued employment. The Company has recognized compensation expense for the portion of the award deemed probable as of December 31, 2025. This RSU expense was included in the RSU expense above.

The Company recorded share-based compensation expense and classified it in the condensed consolidated statements of operations as follows:

	Three Months EndedJune 30,				Nine Months EndedJune 30,
	Three Months EndedDecember 31,
	2025		2024		~~2025~~		~~2024~~
Cost of revenues	$	1821	$	2717	$	55	$	69
Selling, general and administrative		~~384~~353		~~243~~326		~~1,048~~		~~1,071~~
Research and development		5745		2948		~~161~~		~~129~~
	$	~~459~~419	$	~~299~~391	$	~~1,264~~	$	~~1,269~~

2221

Genasys Inc.

Notes to the Condensed Consolidated Financial Statements

(in thousands, except per share and share amounts)

(Unaudited)

1716. STOCKHOLDERS’ EQUITY

Summary

The following table summarizes changes in the components of stockholders’ equity during the ~~nine~~three months ended ~~June~~December 3031, 2025 and 2024, respectively (amounts in thousands, except par value and share amounts):

	Common Stock
	Shares		Par ValueAmount		AdditionalPaid-inCapital			AccumulatedDeficit			AccumulatedOtherComprehensiveIncome ~~(Loss)~~			TotalStockholders'Equity
Balance as of September 30, 2024		44,631,030	$	446	$	125,690		$	(107,792	)	$	(335	)	$	17,563
Balance as of September 30, 2025		45,161,172	$	451	$	127,384		$	(125,904	)	$	687		$	2,167
Share-based compensation expense		—		—		~~391~~419			—			—			~~391~~419
Issuance of common stock upon exercise of stock options, net		~~667~~19,084		—		132			—			—			132
Issuance of common stock upon vesting of restricted stock units		2732,~~666~~055		—		—			—			—			—
Obligation to issue common stock in Evertel acquisition		270,271		3		—			—			—			—
Other comprehensive income		—		—		—			—			5			5
Other comprehensive loss		—		—		—			—			(207	)		(207	)
Net loss		—		—		—			(817	)		—			(817	)
Net loss		—		—		—			(4,078	)		—			(4,078	)
Balance as of December 31, 2025		45,212,311	$	451	$	127,835		$	(126,721	)	$	692		$	1,806
Balance as of December 31, 2024		44,929,634	$	449	$	126,082		$	(111,870	)	$	(542	)	$	13,670
Share-based compensation expense		—	$	—	$	414		$	—		$	—		$	414
Issuance of common stock upon exercise of stock options, net		23,480		—		42			—			—			42
Issuance of common stock upon vesting of restricted stock units		201,390		2		(18	)		—			—			(18	)
Other comprehensive income		—		—		—			—			87			87
Net loss		—		—		—			(6,139	)		—			(6,139	)
Balance as of March 31, 2025		45,154,504	$	451	$	126,520		$	(118,009	)	$	(455	)	$	8,056
Share-based compensation expense		—	$	—	$	459		$	—		$	—		$	459
Other comprehensive income		—		—		—			—			1,131			1,131
Net loss		—		—		—			(6,487	)		—			(6,487	)
Balance as of June 30, 2025		45,154,504	$	451	$	126,979		$	(124,496	)	$	676		$	3,159


	Common Stock
	Shares		Par Value Amount		Additional Paid-in Capital		Accumulated Deficit			Accumulated Other Comprehensive Loss			Total Stockholders' Equity
Balance as of September 30, 2024		44,631,030	$	446	$	125,690	$	(107,792	)	$	(335	)	$	17,563
Share-based compensation expense		—		—		391		—			—			391
Issuance of common stock upon exercise of stock options, net		667		—		1		—			—			1
Issuance of common stock upon vesting of restricted stock units		27,666		—		—		—			—			—
Obligation to issue common stock in Evertel acquisition		270,271		3		—		—			—			—
Other comprehensive loss		—		—		—		—			(207	)		(207	)
Net loss		—		—		—		(4,078	)		—			(4,078	)
Balance as of December 31, 2024		44,929,634	$	449	$	126,082	$	(111,870	)	$	(542	)	$	13,670

Preferred Stock

The Company is authorized under its certificate of incorporation and bylaws to issue 5,000,000 shares of preferred stock, $0.00001 par value, without any further action by the stockholders. The board of directors has the authority to divide any and all shares of preferred stock into series and to fix and determine the relative rights and preferences of the preferred stock, such as the designation of series and the number of shares constituting such series, dividend rights, redemption and sinking fund provisions, liquidation and dissolution preferences, conversion or exchange rights and voting rights, if any. Issuance of preferred stock by the board of directors could result in such shares having dividend and or liquidation preferences senior to the rights of the holders of common stock and could dilute the voting rights of the holders of common stock.

No shares of preferred stock were outstanding as of December 31, 2025 or September 30, 2025.

Dividends

There were no dividends declared in the three months ended December 31, 2025 and 2024.

Genasys Inc.

Notes to the Condensed Consolidated Financial Statements

(in thousands, except per share and share amounts)

(Unaudited)

	Common Stock
	Shares			Par ValueAmount		AdditionalPaid-inCapital			AccumulatedDeficit			AccumulatedOtherComprehensiveLoss			TotalStockholders'Equity
Balance as of September 30, 2023		37,211,071		$	372	$	110,379		$	(76,062	)	$	(505	)	$	33,812
Share-based compensation expense		—			—		446			—			—			446
Issuance of common stock upon offering, net of issuance costs		5,750,000			57		10,449			—			—			10,449
Issuance of common stock upon vesting of restricted stock units		10,000			—		—			—			—			—
Issuance of common stock in business combination		986,486			10		1,924			—			—			1,924
Obligation to issue common stock		—			—		527			—			—			527
Release of obligation to issue common stock		69,564			1		—			—			—			—
Other comprehensive income		—			—		—			—			119			119
Net loss		—			—		—			(6,724	)		—			(6,724	)
Balance as of December 31, 2023		44,027,121		$	440	$	123,725		$	(82,786	)	$	(386	)	$	40,553
Share-based compensation expense		—		$	—	$	524		$	—		$	—		$	524
Issuance of common stock upon vesting of restricted stock units		229,233			2		—			—			—			—
Shares retained for payment of taxes in connection with settlement of restricted stock units		(6,846	)		—		(12	)		—			—			(12	)
Settlement of contingent consideration in shares of common stock		236,343			3		656			—			—			656
Obligation to issue common stock		—			—		158			—			—			158
Other comprehensive loss		—			—		—			—			(59	)		(59	)
Net loss		—			—		—			(6,938	)		—			(6,938	)
Balance as of March 31, 2024		44,485,851		$	445	$	125,051		$	(89,724	)	$	(445	)	$	34,882
Share-based compensation expense		—		$	—	$	299		$	—		$	—		$	299
Issuance of common stock upon vesting of restricted stock units		7,080			—		—			—			—			—
Settlement of contingent consideration in shares of common stock		111,083			1					—			—			—
Other comprehensive loss		—			—		—			—			(25	)		(25	)
Net loss		—			—		—			(6,682	)		—			(6,682	)
Balance as of June 30, 2024		44,604,014		$	446	$	125,350		$	(96,406	)	$	(470	)	$	28,474

17. NET LOSS PER SHARE

Common stock activity

In connection with the Evertel acquisition, the Company issued 986,486 shares of common stock to the former owners of Evertel. The fair value of the Company’s stock on the closing date was $1.95 which resulted in the addition of $1,924 to additional-paid-in-capital. The Company also issued 236,343 shares of common stock to the former owners of Evertel, in connection with the settlement of a portion of the contingent consideration liability. This resulted in the addition of $656 to additional-paid-in-capital.

Under the terms of the Purchase Agreement, the Company recorded an obligation to issue 81,083 shares of common stock to the former owners of Evertel and three key employees during the three months ended June 30, 2024, resulting in an addition of $158 to additional-paid-in-capital. Also, in connection with the Evertel acquisition, the Company issued 270,271 shares of the Company’s common stock to the seller of Evertel twelve months from the closing date. The fair value of the Company’s common stock on the closing date was $1.95, resulting in the addition of $527 to additional paid-in-capital.

During the six months ended March 31, 2024, the Company issued the final 69,564 shares to the former owners of the Amika Mobile assets in connection with the Amika Mobile asset purchase.

Share buyback program

In December 2022, the Board of Directors extended the Company’s share buyback program through December 31, 2024. Under the program, the Company was authorized to repurchase up to $5,000 of its outstanding common shares, the program expired on December 31, 2024.

Genasys Inc.

Notes to the Condensed Consolidated Financial Statements

(in thousands, except per share and share amounts)

(Unaudited)

There were no shares repurchased during the nine months ended June 30, 2025 and 2024. All repurchased shares have been retired.

Dividends

There were no dividends declared in the nine months ended June 30, 2025 and 2024.

18. NET LOSS PER SHARE

The following table sets forth the computation of basic and diluted net loss per share:

	Three months endedJune 30,						Nine months endedJune 30,
	Three months endedDecember 31,
	2025			2024			~~2025~~			~~2024~~
Net loss	$	(~~6,487~~817	)	$	(64,~~682~~078	)	$	~~(16,704~~	)	$	~~(20,344~~	)
Basic and diluted loss per share	$	(0.1402	)	$	(0.1509	)	$	~~(0.37~~	)	$	~~(0.46~~	)
Weighted average shares outstanding – basic		45,~~154~~197,~~504~~278			44,~~598~~912,~~393~~206			~~45,022,635~~			~~44,216,602~~
Assumed exercise of dilutive options		—			—			—			—
Weighted average shares outstanding – diluted		45,197,278			44,912,206
Weighted average shares outstanding – diluted		45,154,504			44,598,393			45,022,635			44,216,602
Potentially dilutive securities outstanding at period end excluded from diluted computation as the inclusion would have been antidilutive:
Potentially dilutive securities outstanding at period end excluded from diluted computation as the inclusion would have been antidilutive:
Options		4,127,406			4,660,198
Options		4,376,718			3,365,740			4,376,718			3,365,740
RSU		464,842			270,393
RSU		307,342			273,059			307,342			273,059
Warrants		3,068,182			3,068,182
Warrants		3,068,182			3,068,182			3,068,182			3,068,182
Total		7,660,430			7,998,773
Obligation to issue common stock		—			270,270			—			270,270
Total		7,752,242			6,977,251			7,752,242			6,977,251

1918. SEGMENT INFORMATION

The Company is engaged in the design, development and commercialization of ~~directed~~critical ~~and~~communications ~~multidirectional~~hardware ~~sound technologies, voice broadcast products,~~ and ~~location-based~~software ~~mass~~solutions ~~messaging~~designed ~~software~~to ~~for~~alert, ~~emergency~~inform, ~~warning~~ and ~~evacuation management~~protect. The Company operates in two business segments: Hardware and Software and its principal markets are North and South America, Europe, the Middle East and Asia. As reviewed by the Company’s chief operating decision maker, the Company evaluates the performance of each segment based on sales and operating income. Cash and cash equivalents, marketable securities, accounts receivable, inventory, property and equipment, deferred tax assets, goodwill and intangible assets are primary assets identified by segment. The accounting policies for segment reporting are the same for the Company as a whole.

25Our Chief Operating Decision Maker (“CODM”) is our Chief Executive Officer, Richard Danforth. As reviewed by the CODM, the Company evaluates the performance of each segment based on sales, gross margin, operating income (loss), certain expenses including sales and marketing expense, research and development expense, depreciation and amortization expense, and share-based compensation expense to allocate resources in the annual planning process. Cash and cash equivalents, marketable securities, accounts receivable, inventory, property and equipment, deferred tax assets, goodwill and intangible assets are primary assets identified by segment. The operating segments are not evaluated using asset information. The accounting policies for segment reporting are the same for the Company as a whole and transactions between the two operating segments are not material.

Genasys Inc.

Notes to the Condensed Consolidated Financial Statements

(in thousands, except per share and share amounts)

(Unaudited)

The following table presents the Company’s segment disclosures: for three months ended December 31, 2025:

	Three Months EndedJune 30,						Nine Months EndedJune 30,
	Three Months Ended
	2025			2024			2025			2024
	December 31, 2025
Revenue from external customers
	Hardware			Software
Hardware	$	7,656		$	5,108		$	16,966		$	12,053
Revenues	$	14,794		$	2,271
Software		2,201			2,059			6,763			5,214
Cost of revenues		7,907			975
	$	9,857		$	7,167		$	23,729		$	17,267
Gross profit		6,887			1,296
Intersegment revenues
Gross margin		47	%		57	%
Hardware	$	7,343		$	—		$	7,636		$	—
Operating expenses:
Software		1,619			1,022			4,724			4,047
Selling, general and administrative		4,049			2,591
	$	8,962		$	1,022		$	12,360		$	4,047
Research and development		941			954
Segment operating loss
Total operating expenses		4,990			3,545
Hardware	$	(2,589	)	$	(1,920	)	$	(8,952	)	$	(7,867	)
Income (loss) from operations		1,897			(2,249	)
Software		(3,336	)		(3,441	)		(9,169	)		(11,717	)
Other expenses:
	$	(5,925	)	$	(5,361	)	$	(18,121	)	$	(19,584	)
Depreciation and amortization expense		88			594
Other expenses:
Share-based compensation		339			80
Depreciation and amortization expense
Income (loss) before income taxes		1,530			(2,222	)
Hardware	$	86		$	114		$	271		$	338
Income tax expense		125			—
Software		599			633			1,843			1,900
Net income (loss)	$	1,405		$	(2,222	)
	$	685		$	747		$	2,114		$	2,238
Income tax expense (benefit)
Hardware	$	10		$	(8	)	$	81		$	(13	)
Software		(2	)		(34	)		(2	)		(463	)
	$	8		$	(42	)	$	79		$	(476	)

	June 30,2025		September 30,2024
Long-lived assets
Hardware	$	1,087	$	1,203
Software		6,806		8,594
	$	7,893	$	9,797
Total assets
Hardware	$	35,291	$	30,216
Software		22,102		23,720
	$	57,393	$	53,936

The following table presents the Company’s segment disclosures for three months ended December 31, 2024:

20. MAJOR CUSTOMERS, SUPPLIERS AND RELATED INFORMATION


	Three Months Ended
	December 31, 2024
	Hardware			Software
Revenues	$	4,627		$	2,313
Cost of revenues		2,964			798
Gross profit		1,663			1,515
Gross margin		36	%		65	%

Operating expenses:
Selling, general and administrative		4,019			2,815
Research and development		795			1,490
Total operating expenses		4,814			4,305
Loss from operations		(3,151	)		(2,790	)

Other expenses:
Depreciation and amortization expense		97			640
Share-based compensation		310			81

Loss before income taxes		(1,311	)		(2,767	)
Income tax expense		—			—
Net loss	$	(1,311	)	$	(2,767	)

For the three months ended June 30, 2025, revenues from two customers accounted for 44% and 17% of total revenues with no other single customer accounting for more than 10% of revenues. For the nine months ended June 30, 2025, revenues from two customers accounted for 23% and 10% of total revenues. with no other single customer accounting for more than 10% of revenues. As of June 30, 2025, accounts receivable from three customers accounted for 23%, 14% and 12% of total accounts receivable, with no other single customer accounting for more than 10% of the accounts receivable balance.24

For the three months ended June 30, 2024, revenues from one customer accounted for 45% of total revenues with no other single customer accounting for more than 10% of revenues. For the nine months ended June 30, 2024, revenues from one customer accounted for 23% of total revenues with no other single customer accounting for more than 10% of revenues. As of June 30, 2024,

Genasys Inc.

Notes to the Condensed Consolidated Financial Statements

(in thousands, except per share and share amounts)

(Unaudited)

~~accounts~~The ~~receivable~~following ~~from~~table ~~two~~presents ~~customers~~the ~~accounted~~Company’s ~~for~~segment ~~40%~~assets ~~and~~as ~~17%~~ of ~~total~~December ~~accounts receivable~~31, ~~with~~2025 noand ~~other~~September ~~single~~30, ~~customer accounting for more than 10% of the accounts receivable balance.~~2025:

Revenue from customers in the United States was $8,632 and $6,165 for the three months ended June 30, 2025 and 2024, respectively. Revenue from customers in the United States was $19,095 and $12,389 for the nine months ended June 30, 2025 and 2024, respectively. Revenues are attributed to countries based on customer’s delivery location. The following table summarizes revenues by geographic region:


	December 31,		September 30,
	2025		2025
Long-lived assets
Hardware	$	957	$	1,046
Software		5,633		6,226
	$	6,590	$	7,272

Total assets
Hardware	$	46,853	$	40,908
Software		20,793		22,961
	$	67,646	$	63,869

	Three months endedJune 30,				Nine months endedJune 30,
	2025		2024		2025		2024
Americas	$	8,786	$	6,220	$	19,568	$	12,837
Asia Pacific		455		208		1,892		1,029
Europe, Middle East and Africa		616		739		2,269		3,401
Total Revenues	$	9,857	$	7,167	$	23,729	$	17,267

19. MAJOR CUSTOMERS, SUPPLIERS AND RELATED INFORMATION

For the three months ended December 31, 2025, revenues from two customers accounted for 58% and 10% of total revenues with no other single customer accounting for more than 10% of revenues. As of December 31, 2025, accounts receivable from two customers accounted for 70% and 13% of total accounts receivable, with no other single customer accounting for more than 10% of the accounts receivable balance.

For the three months ended December 31, 2024, revenues from two customers accounted for 12% and 11% of total revenues with no other single customer accounting for more than 10% of revenues. As of December 31, 2024, accounts receivable from three customers accounted for 19%, 11% and 11% of total accounts receivable, with no other single customer accounting for more than 10% of the accounts receivable balance.

Revenue from customers in the United States was $12,697 and $4,666 for the three months ended December 31, 2025 and 2024, respectively. Revenues are attributed to countries based on customer’s delivery location.

The following table summarizes revenues by geographic region:


	Three months ended December 31,
	2025		2024
Americas	$	12,763	$	4,862
Asia Pacific		2,390		1,037
Europe, Middle East and Africa		1,912		1,041
Total Revenues	$	17,065	$	6,940

The following table summarizes long-lived assets by geographic region:

	June 30,2025		September 30,2024
	December 31,2025		September 30,2025
United States	$	76,~~799~~516	$	97,~~644~~181
Europe, Middle East and Africa		9474		~~153~~91
Total long lived assets	$	76,~~893~~590	$	97,~~797~~272

2720. SUBSEQUENT EVENT

On January 26, 2026, the Company’s Board of Directors and Compensation Committee approved revisions to the compensation arrangement for the Company’s Chief Executive Officer for fiscal year 2026. The revised arrangement includes a base salary, eligibility for a performance-based cash bonus, and grants of an aggregate of 400,000 restricted stock units under the Company’s 2025 Equity Plan, consisting of time-based and performance-based awards. In connection with these grants, certain previously outstanding performance-based stock options were cancelled.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The discussion and analysis set forth below should be read in conjunction with the accompanying unaudited condensed consolidated financial statements and the related notes included under Item 1 of this Quarterly Report on Form 10-Q, together with Management’s Discussion and Analysis of Financial Condition and Results of Operations included in our Annual Report on Form 10-K for the year ended September 30, ~~2024~~2025. All dollar amounts presented in this section are in thousands.

Forward Looking Statements

This report contains certain statements of a forward-looking nature relating to future events or future performance. Any statements contained in this report that are not statements of historical fact may be deemed to be forward-looking statements. When used in this report and other reports, statements, and information we have filed with the Securities and Exchange Commission (“Commission” or “SEC”), in our press releases, presentations to securities analysts or investors, or in oral statements made by or with the approval of an executive officer, the words or phrases such as “expects,” “anticipates,” “intends,” “plans,” “believes,” “seeks,” “estimates” and similar expressions or variations of such words are intended to identify forward-looking statements but are not the only means of identifying forward-looking statements. Such statements are predictions; actual events or results may differ materially.

These forward-looking statements represent our expectations, beliefs, intentions or strategies concerning future events, including, but not limited to, any statements regarding growth strategy; product and development programs; financial performance and financial condition; the continuation of historical trends; the sufficiency of our cash balances for future liquidity and capital resource needs; anticipated problems and our plans for future operations; and the economy in general or the future of the emergency communications industry.

We caution that these statements by their nature involve risks and uncertainties, certain of which are beyond our control, and actual results may differ materially depending on a variety of important factors. Such risks and uncertainties include, but are not limited to, risks relating to receiving timely payment under, regulatory uncertainties surrounding, or disruptions in governmental support or funding of, the Puerto Rico project, our reliance on a limited number of customers, the likely need for additional capital, actual or perceived failures or breaches of our information and security systems, continued funding of government spending, the timing of such funding, general economic and business conditions, including unforeseen weakness in the Company’s markets, effects of continued geopolitical unrest and regional conflicts, competition, changes in technology and methods of marketing, changes in customer order patterns, changes in product mix, continued success in technological advances and delivering technological innovations, market acceptance of the Company’s products, shortages in components or price increases that cannot be passed on to customers, inability to fully realize the expected benefits from acquisitions and restructurings or delays in realizing such benefits, challenges in integrating acquired businesses and achieving anticipated synergies, changes to export regulations, difficulties in retaining key employees and customers, changes in the market for microcap stocks regardless of growth and value and various other factors beyond our control. Some of these risks and uncertainties are identified in this Management’s Discussion and Analysis of Financial Condition and Results of Operations (especially the “Liquidity and Capital Resources” section) and the section “Risk Factors” in this report and in our Annual Report on Form 10-K and you are urged to review those sections. You should understand that it is not possible to predict or identify all such factors. Consequently, you should not consider any such list to be a complete list of all potential risks or uncertainties.

For purposes of this Quarterly Report, the terms “we,” “us,” “our” “Genasys” and the “Company” refer to Genasys Inc. and its consolidated subsidiaries.

Overview

We are a global provider of Protective Communications™ solutions (“Protective Communications”), including our Genasys Protect™® software platform (“Genasys Protect”) and Genasys Acoustics (“Acoustics”) and Long Range Acoustic Device® (“LRAD®”) hardware products. Our unified software platform receives information from a wide variety of sensors and Internet-of-Things (“IoT”) inputs to collect real-time information on developing and active emergency situations. Genasys’ ~~uses~~customers use this information to create and disseminate alerts, warnings, notifications, and instructions through multiple channels before, during, and after public safety and enterprise threats, critical events, and other crisis situations.

Genasys Protect is a comprehensive portfolio of Protective Communications software and hardware systems serving federal governments and agencies; state and local governmental agencies, and education (“SLED”); and enterprise organizations in sectors including but not limited to oil and gas, utilities, manufacturing, automotive, and healthcare. Genasys Protect solutions have a diverse range of applications, including emergency warning and mass notification for public safety; critical event management for enterprise companies; de-escalation for defense and law enforcement; critical infrastructure protection; zone-based planning for accelerated, precise emergency response; secure and compliant cross-agency collaboration; and automated detection of real-time threats such as active shooters and severe weather.

LRAD by Genasys products broadcast audible voice messages with exceptional ~~vocal~~ clarity from close range out to 5,~~500~~000 meters. We have a history of successfully delivering innovative products, systems, and solutions for mission critical situations, pioneering the acoustic hailing device (“AHD”) market with the introduction of our first LRAD long-range communication systems in 2002, and creating the first multi-directional, voice-based public safety mass notification systems in 2012. Building on our proven, best in class, and reliable solutions, we offer the first and only unified, end-to-end Protective Communications platform.

2826

Acoustic Hailing Device (“AHD”) market with the introduction of our LRAD in 2002, and creating the first multi-directional, voice-based public safety mass notification systems in 2012, and the first AHDs with a digital interface for remote operations in 2023. Building on our proven, best in class, and reliable solutions, we offer the first and only unified, end-to-end Protective Communications platform.

Software Products

The Genasys Protect Platform

The Complete Protective Communications Platform

The Genasys Protect platform provides a full suite of Protective Communications tools for ~~all~~many hazards, ~~that is~~ designed to provide targeted emergency communication, data-driven decision making, secure inter- and intra-agency collaboration, and more. By enabling communications with precision, speed and clarity, Genasys Protect helps to enable preparedness, responsiveness, and collaboration to keep people, assets, and operations protected against the impacts of natural disasters, terrorism, violent civil unrest, and other dangerous situations, as well as power failures, facility shutdowns, and other non-emergency operational disruptions.

Proven Technology: Genasys solutions have been on the front lines for more than 40 years, providing targeted communications capabilities designed to ensure the right people get the right message - right away.

Modular Suite: Built on open standards, Genasys software and hardware systems are designed to easily integrate, whether using the full Genasys suite or complementing the ~~critical~~notification ~~event management~~ platforms customers already have in place.

Predictive Simulation: Genasys Protect is designed to permit customers to test response plans preemptively with advanced simulation of evacuation-level events, including fires and floods, and their impact on infrastructure, including traffic patterns and perimeter establishment.

Unified Viewpoint: One common safety operating picture provides real-time visibility into our customers’ people, assets, and environment by combining first-party data from asset / ~~public safety~~people-management platforms and IoT sensors with third-party data sources, including the Federal Emergency Management Agency ~~(“FEMA”)~~, National Oceanic and Atmospheric Administration, Department of Homeland Security, and more.

Unmatched Precision: Customized zone mapping enables targeting of mass notifications at the street level, making it easier to sequence response areas from most to least critical.

Multichannel: Genasys Protect is designed to allow operators to saturate their notification area by simultaneously alerting people across location-based SMS, CBC mobile push, text, email, social media, TV, radio, digital displays and acoustic devices.

Network Effect: Implementation in neighboring municipalities and across public and private sector organizations within the same municipality extends coverage and enables greater precision when notifying people of threats.

The Genasys ~~ALERT~~Evertel Platform

Genasys ~~ALERT~~Evertel ~~(“ALERT”)~~ is ana ~~interactive,~~leading ~~cloud~~cross-~~based~~agency, ~~Software~~Criminal asJustice aInformation ~~Service~~Services ~~(“SaaS”)~~compliant, ~~solution~~collaboration platform that isstreamlines ~~designed to enable SLED~~ and ~~enterprise~~secures ~~customers~~team ~~to send critical information to at-risk individuals or groups when an emergency occurs. ALERT acts as both a communications input~~ and ~~output, receiving information from state~~one-ofon-~~the-art~~one ~~sensors~~communications ~~and~~for ~~emergency~~first ~~services,~~responders and ~~quickly~~public ~~relaying~~safety ~~notifications,~~agencies. ~~alerts,~~With ~~and instructions to at~~real-~~risk~~time ~~populations~~intelligence ~~and~~sharing ~~first~~that ~~responders.~~exceeds ~~ALERT~~regulatory ~~communications~~privacy inrequirements for public ~~spaces~~agencies, ~~can be enhanced via~~ Genasys ~~ACOUSTICS~~Evertel’s -instant ~~connected,~~communication ~~voice~~platform ~~broadcast~~empowers ~~speakers - while ALERT communications among~~ first responders and ~~emergency~~public safety personnel ~~can~~to becollaborate ~~augmented~~ and ~~accelerated~~share ~~with~~information ~~Genasys~~in ~~CONNECT.~~a ~~ALERT~~single ~~clients~~space ~~can~~with ~~create~~text, ~~and send critical~~videos, ~~verified~~images, and ~~secure~~audio ~~notifications~~from ~~and~~any ~~messages that are geographically specific and targeted using~~ location~~-based~~. ~~SMS,~~Genasys ~~CBC~~Evertel ~~mobile~~provides ~~push,~~a ~~text,~~secure ~~email,~~space ~~social~~where ~~media,~~professionals ~~TV,~~can ~~radio,~~exchange ~~digital displays~~information, ~~acoustic~~make ~~devices~~decisions, ~~panic~~and ~~buttons,~~collaborate ~~desktop~~with ~~alerts,~~trust ~~TV,~~in ~~social~~data ~~media, and more~~security. ~~Additionally,~~Record ~~Genasys~~retention ispolicies adrive ~~certified~~compliance ~~provider~~that ofallows ~~Integrated~~agencies ~~Public Alert~~ and ~~Warning~~personnel ~~System (“IPAWS”) notifications. IPAWS is the federal public notification platform for the United States, which ALERT customers can use~~ to ~~deliver~~communicate ~~critical communications in multiple languages to specific populations~~securely.

~~Similarly,~~Enabling ~~enterprise~~public ~~customers~~safety ~~are~~professionals ~~able~~ to ~~send~~collaborate ~~critical~~with ~~communications~~other toagencies ~~employees,~~throughout ~~contractors,~~their ~~visitors~~region, ~~or groups based on geographic location or team status. Enterprises often use ALERT to distribute targeted notifications to customers~~state, ~~including~~and ~~billing updates~~country, ~~downtime~~Genasys ~~notices,~~Evertel ~~and~~provides ~~more. Operated and controlled via a single dashboard that includes two~~real-~~way~~time ~~polling,~~interoperability ~~duress~~to ~~buttons,~~address ~~field~~critical ~~check-ins,~~events and ~~recipient~~crisis ~~locations,~~situations ~~ALERT~~through ~~integrates~~coordinated ~~with~~efforts. ~~various~~Genasys Evertel data ~~sources,~~is ~~including~~protected ~~sensors, panic buttons, emergency services, active directories, human resources, visitor management,~~ and ~~building~~secured ~~control~~through ~~systems~~high-level todata ~~find~~encryption ~~and~~within ~~deliver~~a ~~safety alerts and notifications to residents~~secure, ~~employees,~~U.S. ~~staff~~based, ~~contractors,~~government-only ~~temporary~~cloud ~~workers, and visitors~~environment.

ALERT sends targeted messages based on geographic location, permitting relevant information and instructions to be sent to the appropriate populations. Emergency managers can prepare for natural or man-made disasters by developing evacuation plans that map routes, shelters, traffic control locations, and road closures. This information is easily shared with the public and reduces the time it takes to execute emergency evacuations and conduct orderly repopulations. Auto-Discovery, an innovative feature of the platform, locates and connects with anyone on a wired or wireless network in a fixed area with no opt-in required. When discovered, ALERT anonymizes all recipient information and data. When an emergency occurs, these tools allow at-risk groups or individuals to be notified as quickly as possible without sacrificing their privacy.

In addition to disseminating alerts and notifications, ALERT uses two-way communication tools, including polls and check-ins to receive feedback for enterprise clients. With direct feedback, operators can survey the safety and status of at-risk individuals, learn of developments, update notifications and/or instructions in response to new information, and more.

Similarly, enterprise customers are able to send critical communications to at-risk employees, contractors, visitors, or groups based on geographic location or team status. Operated and controlled via a single dashboard that includes two-way polling, duress buttons, field check-ins and recipient locations, ALERT integrates with various data sources, including sensors, emergency services, active directories, human resources, visitor management, and building control systems to find and deliver safety alerts and notifications to residents, employees, staff, contractors, temporary workers, and visitors.

Genasys EVAC

Genasys EVAC (“EVAC”) - enables responding agencies to react swiftly, make collaborative decisions, and communicate event status in real time to other agencies, businesses, and the public. EVAC determines and communicates the proper scope of a response or evacuation by replacing guesswork with data-driven, zone-based intelligence. EVAC enhances safety levels for first responders, communities, and large campuses by providing:

Intelligent zones to improve evacuation planning and communication. EVAC users can build, edit, and act upon geographical location data, including shelters, facilities, and traffic;

Modeling behaviors to plan for effective responses and/or evacuation scenarios covering emergencies that include wildfires, floods, active shooters, hurricanes, and more;

Actionable communication through the Genasys Protect mobile app to keep people informed before, during, and after a critical event;

A common operating picture across agencies to reduce response times as much as 90%; and

Targeted notifications and updates to community members through a public website and free mobile app.

Genasys CONNECT

Genasys CONNECT (“CONNECT”) is a leading cross-agency, Criminal Justice Information Services (“CJIS”) compliant, collaboration platform that streamlines and secures team and one-on-one communications for first responders and public safety agencies. With real-time intelligence sharing that exceeds regulatory privacy requirements for public agencies, CONNECT’s instant communication platform empowers first responders and public safety personnel to collaborate and share information in a single space with text, videos, images, and audio from any location. CONNECT provides a secure space where professionals can exchange information, make decisions, and collaborate with trust in data security. Record retention policies drive compliance that allows agencies and personnel to communicate in confidence.

Enabling public safety professionals to collaborate with other agencies throughout their region, state, and country, CONNECT provides real-time interoperability to address critical events and crisis situations more quickly through coordinated efforts. Compliant with all federal and state-level legal requirements for public safety communications, CONNECT data is protected and secured through high-level data encryption within a secure, U.S. based, government-only cloud environment.

Hardware Products

Genasys ~~ACOUSTICS~~Acoustics

~~Genasys~~Acoustics ~~ACOUSTICS (“ACOUSTICS”)~~ unites Genasys’ next generation of mass notification speaker systems with Genasys Protect command-and-control software. Most legacy mass notification systems are sirens with limited, if any, voice broadcast capability. ~~ACOUSTICS~~Acoustics systems feature the industry’s highest Speech Transmission Index ~~(“STI”)~~, large directional and omni-directional broadcast coverage areas, and an array of options, including solar power, battery backup, and satellite connectivity that enable the systems to continue to operate when power and telecommunications infrastructure goes down.

~~ACOUSTICS~~Acoustics gives operators the ability to send critical alerts and notifications from emergency operations centers, and authorized computers or smart phones. ~~ACOUSTICS~~Acoustics provides highly audible, clear voice messaging thousands of meters away, staying on and connected even during broad power outages and network failures. ~~ACOUSTICS~~Acoustics ~~are~~provides networked, remotely operated devices optimized with advanced driver and waveguide technology that enable audible voice broadcasts to be clearly heard and understood above background noise and over long distances. ACOUSTICS’ reliability enables a constant stream of information, providing redundancy when key infrastructure fails during critical events.

~~Genasys LRAD~~27

~~LRAD is the world’s leading AHD,~~ with ~~the~~advanced ~~ability~~driver toand ~~project~~waveguide ~~alert~~technology ~~tones~~so ~~and~~that ~~audible~~ voice ~~messages~~broadcasts ~~with~~are ~~exceptional~~clearly ~~vocal~~heard ~~clarity~~and inunderstood aabove ~~30°~~loud ~~beam~~background ~~from~~noise ~~close~~and ~~range~~over tolong ~~5,500 meters~~distances. ~~LRADs~~Acoustics’ ~~are~~reliability ~~used~~enables ~~throughout~~a ~~the~~constant ~~world~~stream inof ~~multiple applications and circumstances to safely hail~~information, ~~warn,~~providing ~~inform,~~redundancy ~~direct,~~when ~~prevent~~key ~~misunderstandings,~~infrastructure ~~determine~~fails ~~intent,~~during ~~establish~~critical ~~large safety zones, resolve~~ events.

30LRAD by Genasys

LRAD is the world’s leading AHD, with the ability to project alert tones and audible voice messages with exceptional vocal clarity in a 30° beam from close range to 5,000 meters. LRADs are used throughout the world in multiple applications and circumstances to safely hail, warn, inform, direct, prevent misunderstandings, determine intent, establish large safety zones, resolve uncertain situations, and save lives. LRADs have been deployed in defense, law enforcement, fire rescue, critical infrastructure protection, maritime, border, and homeland security installations and applications where clear, intelligible voice communications are essential.

LRAD product models are available in varying audio outputs, communication coverage areas, sizes, functionalities, and mounting options. Several accessories and options (cameras, searchlights, mounts, and more) are also available to enhance LRAD capabilities.

All LRAD products are defined by their unparalleled audio output and clarity. LRADs use Genasys’ proprietary XL driver technology, which generates higher audio output in a smaller, lighter form factor. The technology also enables voice messages and alert tones to cut through background noise and be clearly heard and understood. These competitive advantages, and constant innovation, have made LRAD the de facto standard of the global AHD industry.

Recent Business Developments

Business developments during the first ~~nine~~three months of fiscal ~~2025~~year 2026:

•

~~U.S.~~Received ~~Bureau~~a of$1,000 ~~Reclamation~~international ~~ordered~~ LRAD-RT ~~950NXT~~order ~~integrated~~for ~~surveillance,~~bird ~~security,~~ and ~~first~~wildlife ~~response systems to replace first-generation LRAD systems at Hoover Dam~~preservation.

•

~~Awarded~~Entered into a ~~four-year~~strategic ~~contract~~partnership bywith ~~the~~law ~~Maui~~enforcement ~~Emergency Management Agency to provide EVAC~~ and ~~AI-powered~~crisis ~~traffic~~communications ~~management~~leader ~~solutions~~Julie byParker ~~Ladris for the island of Maui~~Communications.

•

~~Received~~Announced a$1,000 ~~four-year~~Genasys ~~contract~~Acoustics order from ~~Los~~a ~~Angeles~~nuclear ~~County~~energy ~~for ALERT mass notification software services~~operator

•

~~Secured~~In aaccordance ~~three-year~~with the terms of the First Amendment, $3dated May 9,~~350~~ ~~follow-~~2025, to the Term Loan and Security Agreement among the Company, Evertel Technologies, LLC, Zonehaven LLC, Genasys Puerto Rico, LLC, the lenders from time to time party thereto and Cantor Fitzgerald Securities, as administrative agent and collateral agent (the “Close Date Term Loan”), on ~~maintenance~~December ~~agreement~~29, ~~for~~2025, ~~LRAD~~the ~~systems~~Company ~~deployed~~repaid byin full the ~~Indian~~additional ~~Navy~~$4 million term loan extended pursuant to such amendment (the “First Amendment Term Loan” and with the Close Date Term Loan, the “Term Loans”), plus related interest and fees.

~~Expanded~~In ~~our~~addition, ~~Board~~on ofJanuary ~~Directors~~23, to2026, ~~include~~the ~~new~~Company ~~independent~~announced ~~director~~that Rthe first two groups under its Puerto Rico Early Warning System project (the “Puerto Rico EWS Project”) had been completed in line with the project plan and scheduled milestones. ~~Rimmy~~Genasys ~~Malhotra~~does not expect to receive additional compensation with respect to these two groups.

~~Entered~~Trends ~~into a partnership with FloodMapp to combine dynamic emergency management~~ and ~~flood preparedness~~Uncertainties

~~Announced~~We $1have been affected by price increases from our suppliers and logistics and other inflationary factors such as increased salary,~~000~~ labor, and overhead costs. We regularly review and adjust the sales price of our finished goods to offset these inflationary factors. Although we do not believe that inflation has had a material impact on our financial results through September 30, 2025, sustained or increased inflation in ~~domestic~~the future may have a negative effect on our ability to achieve certain expectations in gross margin and ~~international~~operating ~~energy~~expenses. ~~sector~~If ~~LRAD~~we ~~orders~~are unable to offset the negative impacts of inflation with increased prices, our future results could be materially affected.

~~Received~~In $4addition,~~500~~ the United States has recently experienced a decline in ~~new~~federal funding. Changes in defense and ~~follow-~~other government spending could have an adverse effect on our current and future revenues. Sales of our products to U.S. government agencies and organizations, including, for example, our recently received LRAD ~~orders~~order ~~from~~for CROWS, are subject to the overall U.S. ~~Military~~government budget and congressional appropriation decisions and processes which are driven by numerous factors, including domestic political conditions, geopolitical events and macroeconomic conditions, and are beyond our control. Even awards granted may not result in orders due to spending constraints or Congressional delays in passing the federal budget.

~~Entered~~The ~~into~~funding of U.S. government programs is subject to an annual congressional budget authorization and appropriations process. In years when the ~~First~~U.S. ~~Amendment~~government does not complete its appropriations before the beginning of the new fiscal year on October 1, government operations are typically funded pursuant to ~~Term~~a ~~Loan~~“continuing resolution,” which allows federal government agencies to operate at spending levels approved in the previous appropriations cycle, but does not authorize new spending initiatives. When the U.S. government operates under a continuing resolution, delays can occur in the procurement of the products, services and ~~Security~~solutions ~~Agreement~~that ~~with~~we $4provide and may result in new initiatives being canceled. We have on occasion experienced delays in contract awards which affect our future revenues as a result of this annual appropriations cycle,~~000~~ ~~First~~and ~~Amendment~~we ~~Term~~could ~~Loan~~experience similar declines in

For several years through fiscal 2023, the Company had recognized revenue under a $110,000 U.S. Army program of record for Long Range Acoustic Devices. Final deliveries under this program occurred in the fourth quarter of fiscal year 2023. A new, larger multiyear Common Remotely Operated Weapon Station (“CROWS”) program was approved by Congress in March 2024, as part of fiscal year 2024’s Department of Defense budget. Due to the timing of the budget passage, and common hurdles in the initial procurement and purchase order process, revenues are not anticipated to begin until fiscal 2026. Historically, hardware revenue has been characterized by large and inconsistent orders that in aggregate have been a generator of cash for the Company. 28

Werevenues ~~continue~~from tofuture bedelays ~~optimistic~~in ~~about~~the ~~our~~appropriations ~~future~~process. ~~with~~When the ~~fully~~U.S. ~~funded~~government ~~award~~fails ofto acomplete ~~contract~~its ofappropriations upprocess toor ~~$75,000~~ to ~~engineer,~~provide ~~procure and build an Early Warning System (“EWS”)~~ for ~~Puerto~~a ~~Rico.~~continuing Weresolution, ~~anticipate~~a ~~most~~full ofor ~~the~~partial ~~revenue~~federal ~~from~~government ~~this~~shutdown ~~contract~~may ~~will be realized in our fiscal years 2025 and 2026~~result. InA ~~addition,~~federal wegovernment ~~continue~~shutdown tocould ~~invest~~result in ~~our~~delays ~~Genasys~~or ~~Protect~~cancellations ~~software~~of ~~platform~~key ~~with~~programs aor ~~significant~~during ~~win~~extended ingovernment ~~fiscal~~shutdown ~~2024 in Los Angeles County~~periods, inthe ~~addition~~delay toof ~~wins~~contract ~~in other counties in California~~payments, ~~Colorado,~~which ~~Utah,~~could ~~and~~have ~~Oregon.~~a ~~The~~negative ~~early-stage~~effect ~~Software~~on ~~segment~~our ~~continues~~cash toflows ~~generate operating losses; however, revenue continues to grow year over year~~ and ~~segment~~adversely ~~operating~~affect ~~loss~~our ~~has~~future ~~improved incrementally from prior years~~results.

~~With~~From ~~the~~October ~~delay~~1, in2025 ~~hardware~~to ~~orders~~November ~~and~~12, ~~continued investment in software~~2025, the ~~Company~~federal ~~used~~government ~~$19,454~~ of ~~cash in fiscal 2024. To address~~ the ~~ongoing~~United ~~cash~~States ~~needs,~~was ~~the~~in ~~Company completed~~ a ~~follow-on~~shutdown ~~equity~~as ~~offering~~Congress ~~for~~failed ~~$11,500~~to inpass ~~October~~appropriations oflegislation ~~2023,~~for ~~and~~the ~~entered~~2026 ~~into~~fiscal ~~a $15,000, two-~~year. ~~senior~~On ~~secured~~November ~~Term~~10, ~~Loan~~2025, ~~agreement~~Congress inpassed ~~May~~a ~~2024~~continuing ~~and~~resolution ~~a $4~~(“CR”),~~000~~ ~~increase~~which onfunded the ~~Term~~government ~~Loan~~at inexisting ~~May~~spending ~~2025.~~levels ~~This~~through ~~capital~~January ~~activity~~30, is2026. ~~expected~~On toFebruary ~~enable~~3, ~~the~~2026, ~~Company~~a tofunding ~~continue~~appropriation ~~operations~~bill ~~and~~was ~~return~~passed toby ~~expected~~Congress ~~growth in annual revenue~~ and ~~generation~~signed ofby ~~cash~~the ~~from~~President ~~operations~~which ascovers athe ~~result~~majority of ~~the~~U.S. ~~anticipated~~Government ~~revenues~~spending ~~under~~for the ~~EWS~~2026 ~~for~~fiscal ~~Puerto~~year. ~~Rico~~However, ~~contract and~~ the ~~CROWS~~funding ~~program~~bill ~~for~~excluded the ~~U.S.~~ Department of ~~Defense.~~Homeland ~~For~~Security, ~~the~~which ~~nine~~includes ~~months~~FEMA. ~~ended~~Funding ~~June~~for ~~30,~~the ~~2025,~~Department ~~the~~of ~~Company’s~~Homeland ~~operating~~Security ~~activities~~remains ~~used~~subject ~~cash~~to offurther ~~$11,271~~negotiations.

~~Business~~Critical ~~Outlook~~Accounting Policies and Estimates

~~Our~~We ~~products,~~have ~~systems,~~identified ~~and~~a ~~solutions~~number ~~continue~~of toaccounting ~~gain~~policies ~~worldwide awareness~~ and ~~recognition~~estimates ~~through~~as ~~increased~~critical ~~marketing~~to ~~efforts,~~our ~~product~~business ~~demonstrations,~~operations and ~~word~~the understanding of ~~mouth~~our asresults ~~a result~~ of ~~positive~~operations. ~~responses~~These ~~and~~are ~~increased~~described ~~acceptance.~~in WeManagement’s ~~believe~~Discussion weand ~~have~~Analysis aof ~~solid~~Financial ~~global~~Condition ~~brand, technology,~~ and ~~product~~Results ~~foundation,~~of ~~which~~Operations wein ~~continue~~our toAnnual ~~expand~~Report toon ~~serve~~Form ~~new~~10-K ~~markets~~for ~~and~~the ~~customers~~year ~~for~~ended ~~greater~~September ~~business~~30, ~~growth~~2025. WeThe ~~believe~~impact weand ~~have~~any ~~strong~~associated ~~market~~risks ~~opportunities~~related ~~for~~to ~~our~~these ~~product~~policies ~~offerings~~on ~~throughout~~our ~~the~~business ~~world~~operations inare ~~the~~discussed ~~defense,~~throughout ~~public~~“Management’s ~~safety,~~Discussion ~~emergency~~and ~~warning,~~Analysis ~~mass~~of ~~notification,~~Financial ~~critical~~Condition ~~event management, enterprise safety,~~ and ~~law~~Results ~~enforcement sectors as a result~~ of ~~increasing~~Operations” ~~threats~~when tosuch ~~government,~~policies ~~commerce,~~affect ~~law~~our ~~enforcement,~~reported ~~homeland security,~~ and ~~critical~~expected ~~infrastructure.~~financial ~~Our products,~~ results.

31The methods, estimates and judgments we use in applying our accounting policies and estimates, in conformity with U.S. generally accepted accounting principles (“U.S. GAAP”), involve a significant level of estimation uncertainty and have a significant impact on the results we report in our financial statements, including with respect to financial conditions and results of operations. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances. These estimates affect the carrying values of assets and liabilities. Actual results may differ from these estimates under different assumptions or conditions.

~~systems, and solutions also have many applications within the fire rescue, maritime, asset protection, and wildlife preservation business segments.~~29

~~Genasys~~Comparison has developed a global market and an increased demand for LRADs and advanced mass notification speakers. We have a reputation for producing quality products that feature industry-leading broadcast area coverage, voice intelligibility, and product reliability. We intend to continue building on our AHD market leadership position by offering enhanced voice broadcast systems and accessories for an expanding range of ~~applications.~~Results ~~In executing our strategy, we use direct sales to governments, militaries, large end-users, system integrators, and prime vendors. We have built a worldwide distribution channel consisting~~ of ~~partners~~Operations ~~and~~for ~~resellers~~the ~~that~~Three ~~have~~Months ~~significant~~Ended ~~expertise~~December ~~and experience selling integrated communication solutions into our various target markets. As our primary AHD sales opportunities are with domestic and international governments~~31, ~~military~~2025 ~~branches,~~ and ~~law~~2024 ~~enforcement~~(in ~~agencies, we are subject to each customer’s unique budget cycle, which leads to long selling cycles and uneven revenue flow, complicating our product planning.~~ thousands)

The proliferation of natural and man-made disasters, crisis situations, and civil unrest requires technologically advanced, multichannel solutions to deliver clear and timely protective communications to help keep people safe during critical events. Businesses are also incorporating protective communication and emergency management systems that locate and help safeguard employees and infrastructure when crises occur.


	Three Months Ended
	December 31, 2025						December 31, 2024
				% of						% of
				Total						Total			Fav (Unfav)
	Amount			Revenue			Amount			Revenue			Amount			%
Revenues:
Product sales	$	14,261			83.6	%	$	4,144			59.7	%	$	10,117			244.1	%
Contract and other		2,804			16.4	%		2,796			40.3	%		8			0.3	%
Total revenues		17,065			100.0	%		6,940			100.0	%		10,125			145.9	%

Cost of revenues		8,882			52.0	%		3,762			54.2	%		(5,120	)		(136.1	)%
Gross profit		8,183			48.0	%		3,178			45.8	%		5,005			157.5	%

Operating expenses
Selling, general and administrative		6,640			38.9	%		6,834			98.5	%		194			2.8	%
Research and development		1,895			11.1	%		2,285			32.9	%		390			17.1	%
Total operating expenses		8,535			50.0	%		9,119			131.4	%		584			6.4	%

Loss from operations		(352	)		(2.1	%)		(5,941	)		(85.6	%)		5,589			(94.1	)%

Other (expense) income, net		(340	)		(2.0	%)		1,863			26.8	%		(2,203	)	N/A

Loss before income taxes		(692	)		(4.1	%)		(4,078	)		(58.8	%)		3,386			83.0	%
Income tax expense		125			0.7	%		—			0.0	%		(125	)	N/A
Net loss	$	(817	)		(4.8	%)	$	(4,078	)		(58.8	%)	$	3,261			80.0	%

Net revenue
Hardware	$	14,794			86.7	%	$	4,627			66.7	%		10,167			219.7	%
Software		2,271			13.3	%		2,313			33.3	%		(42	)		(1.8	)%
Total net revenue	$	17,065			100.0	%	$	6,940			100.0	%	$	10,125			145.9	%

US v International Revenue
US Revenue	$	12,697			74.4	%	$	4,661			67.2	%	$	8,036			172.4	%
International Revenue		4,368			25.6	%		2,279			32.8	%		2,089			91.7	%
Total	$	17,065			100.0	%	$	6,940			100.0	%	$	10,125			145.9	%

By providing the only SaaS platform that unifies sensors and IoT inputs with multichannel, multi-agency alerting and notifications, Genasys seeks to deliver reliable, fast, and intuitive solutions for creating and disseminating geolocation-targeted warnings, information, and instructions before, during, and after public safety and enterprise threats.

While the software and hardware mass notification markets are more mature with many established manufacturers and suppliers, we believe that our advanced technology and unified platform provide opportunities to succeed in the large and growing public safety, emergency warning, and critical communications markets.

We intend to continue pursuing domestic and international business opportunities with the support of key representatives and resellers. We plan to grow our revenues through increased direct sales to governments and agencies that desire to integrate our communication technologies into their homeland security and public safety systems. This includes continuing to pursue further U.S. military opportunities. We also plan to pursue domestic and international emergency warning, critical event management, enterprise, government, law enforcement, fire rescue, homeland security, private and commercial security, border security, maritime security, critical infrastructure protection, and wildlife preservation business opportunities. In addition to the matters above, we are authorized for the performance of services and provision of goods pursuant to Delaware General Corporation Law.

Our research and development strategy involves incorporating further innovations and capabilities into our Genasys Protect platform to meet the needs of our target markets.

Our Genasys Protect software solutions are more complex offerings. We are pursuing certain certifications, which are often required when bidding on government and mass notification opportunities. We intend to invest engineering resources to enhance our ALERT, EVAC, and CONNECT software solutions to compete for larger emergency warning and critical communications business opportunities. We are also configuring alternative solutions to achieve lower price points to meet the needs of certain customers or applications. We also engage in ongoing value engineering to reduce the cost and simplify the manufacturing of our products.

A large number of LRAD and ACOUSTICS components and sub-assemblies manufactured by outside suppliers within our supply chain are produced within 50 miles of our facility. We do not source component parts from suppliers in China. It is likely that some of our suppliers source parts in China. Negative impacts on our supply chain could have a material adverse effect on our business.

We have been affected by price increases from our suppliers and logistics as well as other inflationary factors such as increased salary, labor, and overhead costs. We regularly review and adjust the sales price of our finished goods to offset these inflationary factors. Although we do not believe that inflation has had a material impact on our financial results through June 30, 2025, sustained or increased inflation in the future may have a negative effect on our ability to achieve certain expectations in gross margin and operating expenses. If we are unable to offset the negative impacts of inflation with increased prices, our future results could be materially affected.

During the second and third quarters of fiscal year 2025, higher tariffs impacting certain sources of the Company’s materials were imposed by the U.S. government. We are monitoring these imposed tariffs and related ongoing negotiations between the U.S. government and the countries in which we source products. See "Item 1A — Risk Factors — International trade policies, including tariffs, sanctions and trade barriers may adversely affect our business, financial condition, results of operations and prospects,” which is incorporated herein by reference.

It is uncertain how inflation and interest rates will be impacted during the remainder of 2025 by the imposition of tariffs and other trade-related actions or inactions. World events, including the Russia-Ukraine War and the ongoing conflict in the Middle East continue to have negative effects on the global economy.

Prolonged or recurring disruptions or instability in the United States and global economies, and how the world reacts to those disruptions or instability, could have long-term impacts on our business. These business impacts could negatively affect us in a number of ways, including, but not limited to, reduced demand for our products and services, declines in our revenue and profitability,

costs associated with complying with new or amended laws and regulations and mitigating the increased cost of the new tariffs affecting our business, declines in our stock price, reduced availability and less favorable terms of future borrowings, reduced credit-worthiness of our customers, and potential impairment of the carrying value of goodwill or other intangible assets.

Critical Accounting Policies

We have identified a number of accounting policies as critical to our business operations and the understanding of our results of operations. These are described in our consolidated financial statements located in Management’s Discussion and Analysis of Financial Condition and Results of Operations in our Annual Report on Form 10-K for the year ended September 30, 2024. The impact and any associated risks related to these policies on our business operations is discussed below and throughout Management’s Discussion and Analysis of Financial Condition and Results of Operations when such policies affect our reported and expected financial results.

The methods, estimates and judgments we use in applying our accounting policies, in conformity with U.S. generally accepted accounting principles, have a significant impact on the results we report in our financial statements. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances. The estimates affect the carrying values of assets and liabilities. Actual results may differ from these estimates under different assumptions or conditions.

Comparison of Results of Operations for the Three Months Ended June 30, 2025 and 2024 (in thousands)

	Three Months Ended
	June 30, 2025						June 30, 2024
				% of						% of
				Total						Total			Fav (Unfav)
	Amount			Revenue			Amount			Revenue			Amount			%
Revenues:
Product sales	$	7,001			71.0	%	$	4,576			63.8	%	$	2,425			53.0	%
Contract and other		2,856			29.0	%		2,591			36.2	%		265			10.2	%
Total revenues		9,857			100.0	%		7,167			100.0	%		2,690			37.5	%
Cost of revenues		7,260			73.7	%		3,383			47.2	%		(3,877	)		(114.6	)%
Gross profit		2,597			26.3	%		3,784			52.8	%		(1,187	)		(31.4	%)
Operating expenses
Selling, general and administrative		6,422			65.2	%		6,649			92.8	%		227			3.4	%
Research and development		2,100			21.3	%		2,496			34.8	%		396			15.9	%
Total operating expenses		8,522			86.5	%		9,145			127.6	%		623			6.8	%
Loss from operations		(5,925	)		(60.1	%)		(5,361	)		(74.8	%)		(564	)		10.5	%
Other expense, net		(554	)		(5.6	%)		(1,363	)		(19.0	%)		809		N/A
Loss before income taxes		(6,479	)		(65.7	%)		(6,724	)		(93.8	%)		245			(3.6	)%
Income tax expense (benefit)		8			0.1	%		(42	)		(0.6	%)		(50	)		119.0	%
Net loss	$	(6,487	)		(65.8	%)	$	(6,682	)		(93.2	%)	$	195			(2.9	)%
Net revenue
Hardware	$	7,656			77.7	%	$	5,108			71.3	%		2,548			49.9	%
Software		2,201			22.3	%		2,059			28.7	%		142			6.9	%
Total net revenue	$	9,857			100.0	%	$	7,167			100.0	%	$	2,690			37.5	%
US v International Revenue
US Revenue	$	8,632			87.6	%	$	6,220			86.8	%	$	2,412			38.8	%
International Revenue		1,225			12.4	%		947			13.2	%		278			29.4	%
Total	$	9,857			100.0	%	$	7,167			100.0	%	$	2,690			37.5	%

The table above sets forth for the periods indicated certain items of our condensed consolidated statements of operations expressed in dollars and as a percentage of net revenues. The financial information and the discussion below should be read in conjunction with the condensed consolidated financial statements and notes contained in this report.

Revenues

Revenues increased $210,~~690~~125, or 38146%, compared with the ~~third~~first fiscal quarter of the prior year. Hardware ~~and software~~ revenue increased $210,~~548~~167, or 220%, and software revenue decreased $~~142~~42 or 2%, respectively, compared with the prior year ~~quarter~~period. The ~~increased~~higher hardware revenue in the ~~third~~first quarter of fiscal ~~2025~~year 2026 was largely due to ~~$4,333 from~~ the ~~initial~~strong ~~deliveries~~backlog toat ~~our~~the ~~Puerto~~start ~~Rico~~of ~~customer,~~the ~~which~~fiscal ~~was~~year ~~recognized~~compared ~~using~~with the ~~percentage-of-completion~~prior ~~methodology~~year period, ~~which~~and weincluded ~~expect~~$9.8 tomillion ~~use for the majority~~ of ~~future~~revenue ~~revenues~~ from our Puerto Rico ~~customer~~EWS Project. ~~The~~As ~~percentage-~~of~~-completion~~ ~~methodology~~December we31, ~~used~~2025, ~~was~~we ~~based~~had onaggregate ~~the~~deferred ~~installation~~revenue ~~labor hours incurred as a percentage~~ of ~~the~~$3,823 ~~total installation labor hours estimated~~ for ~~the~~extended ~~entire~~warranty ~~Puerto~~obligations ~~Rico~~and ~~project. The higher~~ software ~~revenue~~support ~~was primarily due to an 8% increase in recurring revenue and offset by a small decrease in revenue from professional services performed in the quarter ended June 30, 2025~~agreements.

The receipt of orders and signing of contracts is often uneven due to the timing of budget cycles, government financial issues, and military conflict. As of June 30, 2025, we had aggregate deferred revenue of $3,250 for extended warranty obligations and software support agreements.

Gross Profit

Gross profit ~~decreased~~increased $15,~~187~~005, or 31157%, compared with the same quarter last year. The ~~decrease~~increase inwas ~~gross~~due ~~profit~~to ~~was~~higher ~~primarily~~revenue ~~due~~from tohardware. ~~the~~Gross ~~impact~~profit ofas a percentage- of~~-completion~~ ~~revenue~~sales ~~recognition~~was ~~associated~~higher compared with the ~~early-stage~~prior ~~Puerto~~year ~~Rico~~period ~~project,~~primarily ~~and~~due to a ~~less~~ favorable ~~hardware~~ mix ~~and~~of ~~increased~~higher ~~tariff~~hardware ~~costs~~revenue onand ~~imported~~increased ~~components.~~higher ~~Software’s gross~~ margin ~~was~~hardware ~~essentially~~revenue ~~unchanged~~in ~~compared~~the tofirst ~~the~~quarter ~~prior~~of fiscal year ~~quarter~~2026.

As our products have varying gross margins, product mix may affect gross profits. In addition, our margins vary based on the sales channels through which our products are sold in a given period. We continue to implement product updates and changes, including raw material and component changes, that may impact product costs. We have limited warranty cost experience with product updates and changes and estimated future warranty costs can impact our gross margins. We do not believe that historical gross profit margins should be relied upon as an indicator of future gross profit margins.

product updates and changes and estimated future warranty costs can impact our gross margins. We do not believe that historical gross profit margins should be relied upon as an indicator of future gross profit margins.

Selling, General and Administrative Expenses

Selling, general and administrative expenses decreased $~~227~~194, or 3% ~~over~~compared to the prior year period. The decrease was ~~primarily~~largely ~~driven~~due byto ~~lower~~a ~~professional~~$409 ~~services~~decrease in ~~the~~professional ~~three~~service-related ~~months~~expenses, ~~ending~~partially ~~June~~offset ~~30,~~by ~~2025~~a $240 increase in sales representative commission.

We incurred non-cash share-based compensation expenses allocated to selling, general and administrative expenses in the three months ended ~~June~~December 3031, 2025 and 2024 of $~~384~~353 and $~~242~~326, respectively.

We may expend additional resources on the marketing and selling of our products in future periods as we identify ways to optimize potential opportunities. Commission expenses will fluctuate based on the nature of our sales based on sales channels.

Research and Development Expenses

Research and development expenses decreased $~~396~~390, or 1617%, in the first quarter of fiscal ~~third~~year ~~quarter~~2026 compared to the prior year ~~quarter~~period due to ~~the~~a ~~capitalization~~decrease ~~of Puerto Rico-related software development resources~~ in ~~the~~employee ~~most~~expense ~~recent~~driven ~~fiscal~~by ~~quarter.~~headcount ~~Labor~~reduction ~~capitalization was $197, with the remaining decrease of $113 in expenditures from employee costs~~ and ~~$79 in~~ professional services expense.

We incurred non-cash share-based compensation expenses allocated to research and development expenses in the three months ended ~~June~~December 3031, 2025 and 2024 of $5745 and $2948, respectively.

Research and development costs vary period to period due to the timing of projects, and the timing and extent of using outside consulting, design, and development firms. We seek to continually improve our product offerings, and we expect to continue to expand our product line with new products, customizations, and enhancements. Based on current plans, we may expend additional resources on research and development in the current fiscal year compared to the prior fiscal year.

Other (Expense) Income, Net

Other expense, net was $~~554~~340 in the ~~third~~first quarter of this fiscal year, compared to other income, net of $1,~~363~~863 in the prior ~~fiscal~~ year ~~quarter~~period. The ~~loss~~change inof ~~the~~$2,203 ~~current year~~ included a $~~480~~2,001 loss onfrom the ~~issuance of the First Amendment Term Loan, $580~~ change in the fair value of the Term Loans and ~~$406 in interest expense from the Term Loans, $104 professional expense related to the $4,000 First Amendment Term Loan, partially offset by $1,140 non-cash income from the change in fair value of~~ warrants ~~and $16 of interest income~~.

Comparison of Results of Operations for the Nine Months Ended June 30, 2025 and 2024 (in thousands)

	Nine Months Ended
	June 30, 2025						June 30, 2024
				% of						% of
				Total						Total			Fav (Unfav)
	Amount			Revenue			Amount			Revenue			Amount			%
Revenues:
Product sales	$	14,215			59.9	%	$	9,951			57.6	%	$	4,264			42.8	%
Contract and other		9,514			40.1	%		7,316			42.4	%		2,198			30.0	%
Total revenues		23,729			100.0	%		17,267			100.0	%		6,462			37.4	%
Cost of revenues		15,344			64.7	%		9,827			56.9	%		(5,517	)		(56.1	)%
Gross profit		8,385			35.3	%		7,440			43.1	%		945			12.7	%
Operating expenses
Selling, general and administrative		19,904			83.9	%		19,806			114.7	%		(98	)		(0.5	%)
Research and development		6,602			27.8	%		7,218			41.8	%		616			8.5	%
Total operating expenses		26,506			111.7	%		27,024			156.5	%		518			1.9	%
Loss from operations		(18,121	)		(76.4	%)		(19,584	)		(113.4	%)		1,463			(7.5	)%
Other income (expense), net		1,496			6.3	%		(1,236	)		(7.2	%)		2,732		N/A
Loss before income taxes		(16,625	)		(70.1	%)		(20,820	)		(120.6	%)		4,195			(20.1	)%
Income tax expense (benefit)		79			0.3	%		(476	)		(2.8	%)		(555	)		116.6	%
Net loss	$	(16,704	)		(70.4	%)	$	(20,344	)		(117.8	%)	$	3,640			(17.9	)%
Net revenue

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