SAN DIEGO - Genasys Inc. (NASDAQ: NASDAQ:GNSS), a company specializing in protective communications, has secured a $15 million senior secured term loan with an institutional investor. The two-year loan, announced today, is aimed at bolstering the company's working capital and supporting its general corporate activities. This strategic financial move is expected to support Genasys's growth in its software segment and assist in fulfilling its commitments to a project in Puerto Rico.
The loan, backed by the majority of Genasys's assets, carries an original issue discount of 2%. Interest payments are due quarterly, based on the three-month Secured Overnight Financing Rate (SOFR) plus a 5% margin. Alternatively, the company can opt to pay half of the interest in cash and the other half in common shares at an increased rate of SOFR plus 6%.
The loan agreement also provides flexibility for Genasys, allowing for early repayment at 101% of the par value during the first year and at par before the maturity date of May 13, 2026. Furthermore, Genasys has issued approximately 3.1 million five-year warrants to the investor, each convertible into one share of common stock at an exercise price of $2.53, subject to adjustments.
ROTH Capital Partners served as the Placement Agent for the transaction, and Dentons Durham Jones Pinegar P.C. provided legal representation.
Genasys Inc. is recognized for its Genasys Protect platform, which includes a suite of preparedness, response, and analytics software and systems, as well as Long Range Acoustic Devices (LRAD®) that deliver clear and audible messages over long distances. The company's solutions are utilized by various sectors, including government agencies, enterprises, and the military, across more than 100 countries.
The information regarding the loan and its terms is based on a press release statement from Genasys Inc.
InvestingPro Insights
Amidst Genasys Inc.'s strategic financial maneuvers, real-time data from InvestingPro provides a deeper perspective on the company's financial health and market performance. With a market capitalization of $88.05 million, Genasys's current P/E ratio stands at -3.65, reflecting challenges in profitability, as further underscored by an adjusted P/E ratio for the last twelve months as of Q1 2024 at -4.07.
The company's revenue for the same period was $40.54 million, although it experienced a notable decline in revenue growth by -24.72%. Despite these figures, Genasys's gross profit margin remains strong at 45.41%, indicating a solid ability to control costs relative to revenue.
InvestingPro Tips highlight critical factors for investors to consider. Genasys holds more cash than debt on its balance sheet, providing some financial stability. Moreover, the company's liquid assets surpass its short-term obligations, suggesting a comfortable liquidity position.
These insights are particularly relevant in light of the new loan, as they may affect the company's ability to manage additional financial commitments. It is also worth noting that Genasys does not pay a dividend, which could influence investment decisions for income-focused investors.
For investors interested in a more comprehensive analysis, InvestingPro offers additional tips on Genasys Inc. By visiting https://www.investing.com/pro/GNSS, investors can access these insights and use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription. With a total of 8 InvestingPro Tips available, investors can gain a more nuanced understanding of the company's prospects and make more informed decisions.
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