Is Electro Optic Systems on its way to reclaim previous highs?
EOS has responded to the allegations raised by Grizzly Research and the market had a positive reaction to the clarifications and the share price has rebounded since then.
Electro Optic Systems Holdings Limited (ASX: EOS)
faced a sharp decline in recent days and even went to as low as $5.05 on Tuesday but the selling pressure eased after the company released its response to Grizzly research on 10 February 2026.
Grizzly Research had stated that the rise in its share price from $1.31 in January 2025 to a peak of $11.02 in January 2026 was due to what it implied were inflated expectations around the company’s order book and MARSS acquisition revenue claims.
EOS rejected the report's conclusions and said the allegations were misleading and the company did not disclose any new accounting issues or regulatory breaches.
The company confirmed that the Korean High Energy Laser Weapon contract valued at US$80 million is conditional and has not been included in the reported order book.
The company also defended its acquisition of MARSS and stated that the revenue figures were accurate and based on a full review of all MARSS entities and not just the UK business.
Management explained that the acquisition followed a structured review process which was supported by due diligence across multiple jurisdictions.
EOS recorded a net operating cash inflow of $19.3 million for the December 2025 quarter which marked a strong turnaround from the $34.3 million outflow in the prior quarter due to customer receipts of $77.3 million.
Total contract backlog rose to $459 million at year end which represents a 238% increase year-on-year and reflects strong demand for Remote Weapon Systems and High Energy Laser Weapons across the United States, Europe, Asia and the Middle East.
During the quarter, EOS secured major contracts including a $108 million LAND 400-3 project award with Hanwha Australia and a €11.4 million counter drone contract with a NATO customer along with a US$22 million agreement with General Dynamics Land Systems.
The conditional US$80 million Korean High Energy Laser Weapon contract remains outside the reported backlog which means that if it is finalised total backlog would rise to about $579 million.
Cash and cash equivalents stood at $106.9 million with no borrowings at quarter end which provides balance sheet strength to support execution and future growth plans.
(Source: Company Announcements)
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