@Karmast, this has and continues to be difficult for me. Can't do a damn thing until EOS responds. My mental model of EOS is:

• EOS is a fundamentally different organisation than 3-4 years ago
• The new exec management has changed the direction of the company to match product and market demand and my view is they have made the right strategic call, given the change in the battlefield since the Ukraine war, geopolitical changes etc
• Andreas Schwer, the CEO is no longer "new" - he is 3+ years in, he comes from a hard core defence and aviation background - he gets the market, the products and the technology, has the network
• The change in direction, establishment of execution discipline, financial, cashflow, balance sheet discipline etc have all turned nicely with Clive Cuthrell the COO/CFO and Andreas
• Communication of the turnaround, the revised strategy, the rise in the order book, the cleanup and strengthening of the balance sheet to prosecute the new strategy has gone as well as any I have watched - every big deal or M&A had a detailed investor call etc
• Things have gone swimmingly well - the order book has grown, locking in FY2026 and FY2027, the demand with Europe re-arming is there and likely to accelerate
• Key man shareholding policy has been fixed to ensure Andreas and Clive are very much tied to EOS' fortunes directly

Which is why this Grizzly report is a mess because the allegations are (1) almost completely out of whack with my mental model (2) seem totally unnecessary given that EOS products and technology have a real edge that creates demand momentum. An Exec team's almost perfect business scenario it seems where high demand drives the company and the challenge is how to deliver the sale. So, to be careless per the allegations, does not make sense to me at all - it seemsinsanely dumb to throw this all away.

What Does Not Make Sense

1. The need to hype the price for a capital raise - management has repeatedly said there is no need for much incremental capital. B/S is clean, no debt, manuf facilities will be set up via JV's with home countries wanting to control manufacturing etc. Grizzly also conveniently forgot to mention the $100m loan facility that EOS has entered into in Jan.

2. Selling EM Solutions - that was a strategic decision to be market relevant. You are either onboard with it, or you are not. It makes sense to me given the spike in the order book since and where demand seems to be. Yes they paid down debt from that. But accusing that the sale was solely to pay debt and ignoring the market reality and the need to pivot is hard to see.

3. MARSS - I struggle to work out why management would want to be flaky about past MARSS revenue. The Grizzly report fails to mention the 60 units deployed thus far, the technology is leading edge new, and so, the spike in revenue in the last 2 years would line up. MARSS only gets paid earn outs in EOS shares at $7.40. It seems crazy to jeopardise this by overstating revenue, which comes from pure conjecture from the absence of published financial statements.

4. The Korean deal is troubling for the apparent lack of due diligence on the counterparty - this is not consistent with how management has operated in the past 3 years. But to argue that this was needed to hype the price is again, hard to swallow - the deal fell from nowhere, it was not expected, continuous disclosure required its announcement, the announcement was like any other.

So, I struggle badly with marrying the allegations and my view of the company, which has been formed over many years.

What I Expect

1. MARSS can be dealt with by disclosing the annual revenue and tying it to the 60 deployments, including dates etc, and a clear understanding of the earnout conditions.

2. The sale of EMSolutions can be disposed off by the narrative of a changing market place, demand, focus etc. You either buy this, or you don't.

3. Capital raise needs - that can also be categorically disposed off as this has been a consistent theme that Grizzly convenient ignored as it will not suit their narrative.

4. While leaves the Korean deal, which is the one I am most concerned with - they will need to confirm the counterparty, state what due diligence was done, what back-to-back arrangements needed to be put in place, government approvals etc.

Regardless of what is revealed, I am definitely going to lighten as the holding has grown too big. If management provides clarity and my mental model is intact, then I'll stay in with maybe 6-7% allocation. If my mental model and confidence is shattered, I'll be completely out.

I was buying mostly below $1.50 to bring my average cost down to about $3, so the hit won't be to capital, but it will be to paper gains, which will add to the hurt from the SAAS dramas.

@jcmleng Remembering Grizzly have a vested interest in talking down EOS as a shorter. Whilst EOS do have to respond it's not as clear cut as Grizzly would have you believe and most likely EOS will be able to respond accordingly, as you describe above. It remains to see how much of the shit that has been thrown sticks!

The last period has been dramatic in falls for many companies and consequentially portfolio values. Especially if it's your retirement pot. No doubt many are slightly nervous across everything that's occurred, including the SAAS downgrades. I'm reading this one particularly as a speculative push at EOS to favour Grizzly. But lets see.

Discl: Held IRL 11.5% and in SM

EOS released a 15 page response to the nasty Grizzly Research Report at about 1035 AEST, after market open. 

TLDR version: Great fact-based response, no investor call, let the facts and the turnaround story speak for itself. Management played offensive, not defensive. This felt like an established batter hitting the ball back towards and past the bowler for a 6.

It also reiterated for me, how critical it is to really follow and understand my companies.

INITIAL REACTION

I was braced for a “defensive-like” approach to the response - a written response, followed by a call to explain the response. 

I liked the sharp 15 page response, no call approach - it came across that EOS was pissed, but not cowed by the report and then went to systematically state the facts against each Grizzly point. I had expected an investor call.

I was nodding throughout the response as it was (1) a good factual summary of the developments (2) it is as has been openly communicated (3) included earlier references to EOS management intentions in 2024, 2025 which I have missed, especially as it related to C2/Nidar capabilities and (4) it provided more background information of customer/government engagement which helped put the developments in better context.

Goldrone and Korean Deal

• EOS did not quarrel about Goldrone as the Korean counterparty, nor did they apologise for keeping Goldrone’s identity hidden, but went straight into the rationale for their thinking and deal engagement
• As expected, EOS clearly flagged they had to disclose the deal to stay compliant with ASX Continuous Disclosure rules
• Emphasised that in the deal announcement, the deal was CONDITIONAL and may not end up being Unconditional, and that Goldron has to comply with 2 requirements on their end (1) Pay US$18m deposit and (2) Provide a Letter of Credit for remaining amounts due under the contract
• I was looking for evidence that the Korean Govt and the Korean military were involved in the Goldrone discussions - this was provided on Page 11 - not only discussions, but also an onsite visit to CBR to have technical discussions and HELW demonstrations. 
• EOS provided more context on the pre-Goldrone assessment of Korean Partners and also how Callidus of the UAE might be involved.

In summary, apart from not outrightly naming Goldrone, which I think EOS is entitled to do, my sense is EOS has done what it has typically done with deals (as far as can be seen as a minority shareholder) - no concerns on my part

MARSS Acqusition, MARSS Revenue

• The background to the MARSS deal provided helpful context on how EOS ended up with MARSS
• The historical revenue issue was batted away - Grizzly only took the revenue of the UK business and failed to include the revenue earned by MARSS companies in Monaco and Saudi Arabia of EUR114m
• EOS also mentioned external advisory firms were engaged as part of the due dilligence, as you would expect

I did not have concerns pre-announcement, so this was expected

EMSolutions Divestment

• Response to this is as I expected
• EOS management’s focus on cleaning up the balance sheet was recapped - from a Turnaround perspective, it was an outstanding effort of going from existential debt/poor cashflow to now having $128m cash, no debt
• The key point made was that on 30 June 2025, EOS received $60m payment from the then-problematic Middle East customer, which would have enabled it to meet the debt obligations, even with no EMSolutions sale
• The $100m 2-year secured term loan facility, which Grizzly blatantly ommitted, was mentioned

Callidus and EOS Collaboration

• The additional context of the Callidus engagement was helpful and new
• The Middle East JV and production facility is a requirement of one of the large Middle East contracts, which EOS has all along confirmed, it is complying with - it looks like Callidus is the counterparty
• Would not surprise me if things fell apart with Goldrone (and the possibility is absolutely there), the deal could be continued via Callidus instead - it feels like EOS was setting things up for this possibility, particularly on Page 11

ASIC Matter

Grizzly wrongly charterised the ASIC settlement, nothing to see here

OVERALL

This was a good and detailed fact-based response.

While the objective of the report was to rebut a wildly misleading short report, I think EOS took a conscious approach of (1) not stooping to the allegation and (2) using the opportunity to recap the good story that is EOS, from the turnaround, the strategy evolution, market development context and reiterating the opportunity ahead - it was management paying offensive rather than defensive - that is a good sign of management confidence in their story and internal processes

Management clarity, coherence and consistency was on full display - it passed my test of being able to link ALL of the events and announcements in the past 2-3 years, since Andreas and crew arrived, into a very coherent story of how EOS has turned around from close to extinction to now being well placed to tap on global anti-drone demand. 

I was worried pre-announcement that this saga would unravel or create doubt in my read of EOS management - that would have been a thesis breaker for me. But I walk away, with management confidence very much unchanged.

The price today has been volatile as expected. From the close of 6.03, the high was 6.20, the low was 5.05, and EOS is now trading at 5.71, down ~5.31%. I was braced for much worse, but it does feel like this is a commensurate price response to the report.

Discl: Held IRL 14.4% and in SM

Very nice 2-day move for EOS this week, thus far. The price is now back to the levels on Thu 5 Feb 2026 where it closed at $7.17, the day before Grizzly released its report. Given the huge anxieties before the formal EOS response and the potential doomsday scenario's, this is a really good outcome.

The EOS price has tended to "behave" around the marked support and resistance levels on its way up and down, and did so again today, sitting nicely in the $7.10 to $7.29 support zone and I expect it will be bouncing around these levels for the next week or so, as it has done previously.

Impact of Goldrone Deal in the Coming Weeks

• "Sometime Feb/Mar" is when Goldrone is suppose to revert with a US$18m deposit and a Letter of Credit for the rest of the deal, to make the deal Unconditional
• I do see some decent risk that Goldrone may not fulfill these conditions.
• I would expect EOS to already recognise this risk and assuming the Korean Military still wants the HELW, I would not be surprised if the deal moved away from Goldrone to another partner or to the UAE entity, say Callidus - this would be a good outcome if it did indeed happen
• This does not alter the order book as management has specifically excluded the Goldrone deal from the Unconditional order book and has repeatedly called out that there could well be no deal, but there will be a short term market reaction if the deal is called off.

I suspect this caution is reflected in the price, which is still ~30% from the peak when the deal was announced.

Lightened 0.7% today IRL. Will further lighten around $8.00, then $9.00, both previous support/resistance levels, to bring the portfolio allocation size to more comfortable levels and to keep more cash for sudden price dives elsewhere.