DEBT

In connection with the acquisition of Genasys Spain the Company acquired certain debts of Genasys Spain. The carrying value of the acquired debt approximates fair value. The balances of the acquired debt consist of loans with governmental agencies as of

December 31, 2019.

Loans with governmental agencies represent interest free debt granted by ministries within Spain for the purpose of stimulating economic development and promoting research and development. Loans with governmental agencies as of

December 31, 2019

are as follows:

Agency	Due Date	Principal
Ministry of Economy and Competitiveness	February 2, 2022		50,610
Ministry of Economy and Competitiveness	February 2, 2024		269,830	(a)
		$	320,440

(a)

This loan is secured by

$269,830

of cash pledged as collateral by Genasys Spain, which is the current balance of the loan. This amount is included in restricted cash at

December 31, 2019.

The Company expects the Ministry of Economy and Competitiveness to declare the terms of the loan satisfied within fiscal

2020

and that the outstanding balance of the loan will be paid in full during fiscal

2020.

Accordingly, this has been included in the current portion of notes payable as of

December 31, 2019.

The following is a schedule of future annual payments as of

December 31, 2019:

2020	$	286,700
2021		16,870
2022		16,870
Total	$	320,440

The current portion of debt is

$286,700

and the noncurrent portion of debt is

$33,740.