Genasys Inc.

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International trade policies, including tariffs, sanctions and trade barriers, and a decline in federal funding in the United States, may adversely affect our business, financial condition, results of operations and prospects.

Previous report

The recent announcements of substantial new tariffs and other restrictive trade policies have created a dynamic and unpredictable trade landscape, which may adversely impact our business. Current or future tariffs or other restrictive trade measures may raise the costs of raw materials, components or finished goods, which may adversely impact both our product offerings and our operational expenses. Such cost increases may reduce our margins and require us to increase prices, which could harm our competitive position, reduce customer demand and damage customer relationships.

Previous report

Trade disputes, trade restrictions, tariffs and other political tensions between the U.S. and other countries may also exacerbate unfavorable macroeconomic conditions including inflationary pressures, foreign exchange volatility, financial market instability, and economic recessions or downturns, which may also negatively impact customer demand for our products or services, delay purchases or renewals, limit expansion opportunities with customers, limit our access to capital, or otherwise negatively impact our business and operations. Ongoing tariff, trade restrictions and macroeconomic uncertainty has and may continue to contribute to volatility in the price of our common stock. Furthermore, a decline in, or delays in the receipt of, federal funding is impacting many of our software and hardware customers, and may lead to a reduction in demand for our products.

Previous report

Ongoing uncertainty regarding trade and federal funding policies may also complicate our short- and long-term strategic planning, and that of our partners and customers, including decisions regarding hiring, product strategy, capital investment, supply chain design and geographic expansion. While we continue to monitor trade and federal funding developments, the ultimate impact of these risks remains uncertain and any prolonged economic downturn, escalation in trade tensions, deterioration in international perception of U.S.-based companies or governmental funding shortfalls could materially and adversely affect our business, results of operations, financial condition and prospects.

Previous report

Our short-term liquidity may be materially adversely affected by administrative complexities surrounding the disbursement of funds under the Puerto Rico Early Warning System project. Furthermore, our ability to receive the full benefits of such project could be materially and adversely affected by the economic, governmental, and environmental conditions in Puerto Rico.

Previous report

As a result of administrative complexities surrounding the approval process within the authority responsible for electricity generation, distribution and transmission in Puerto Rico, which is responsible for requesting disbursement of funds from FEMA, we have recently experienced delays in receiving payments under the Puerto Rico Early Warning System project. A continuation or exacerbation of these delays could materially adversely affect our liquidity position in the short term.

Previous report

Furthermore, Puerto Rico’s ongoing fiscal challenges, including government debt restructuring, austerity measures, and political instability, may result in regulatory uncertainties, delays in contract execution, delays in timely payment of contract amounts due, or disruptions in governmental support or funding tied to our services related to the Puerto Rico Early Warning System project. Additionally, Puerto Rico’s geographic location in the Caribbean makes it highly susceptible to hurricanes, tropical storms, earthquakes, and other natural disasters. These events can severely damage infrastructure, disrupt power and telecommunications, and hinder our ability to deliver contracted services in a timely and effective manner. The increasing frequency and intensity of such events, potentially driven by climate change, heightens the risk of prolonged service interruptions or inability to meet contractual obligations.

Previous report

If the government of Puerto Rico is unable to maintain essential public services, or fund projects we are engaged in, including the Puerto Rico Early Warning System project, or if future weather events or other disasters impair our operations or supply chain, we may face significant challenges in meeting our performance obligations, which could result in penalties, reputational harm, or loss of future business, and we may not timely achieve the anticipate benefits related to the project. Any of these factors could materially adversely affect our business, results of operations, and financial condition.