Palladyne AI Corp

Item 5. Other Information.

(a)

On November 13, 2024, we entered into an Open Market Sale Agreement SM (the “Sale Agreement”) with Jefferies LLC (“Jefferies”) to sell shares of our Common Stock, from time to time, through an “at the market offering” program under which Jefferies will act as sales agent. Any shares sold pursuant to the Sale Agreement will be issued pursuant our effective shelf registration statement on Form S-3 (File No. 333-268399), filed with the Securities and Exchange Commission (the “SEC”) on November 15, 2022 and declared effective on November 23, 2022, including the prospectus supplement relating to the sale of the shares dated November 13, 2024.

Upon delivery of an issuance notice and subject to the terms and conditions of the Sale Agreement, Jefferies will use commercially reasonable efforts consistent with its normal sales and trading practices and applicable state and federal laws, rules and regulations and the rules of The Nasdaq Stock Market LLC to sell shares from time to time based upon our instructions, including any price, time or size limits that we specify. Under the Sale Agreement, Jefferies may sell shares in privately negotiated transactions, as block transactions or by any method deemed to be an “at the market offering” as defined in Rule 415(a)(4) under the Securities Act of 1933, as amended.

We have agreed to pay Jefferies a commission of 3% of the aggregate gross proceeds from each sale of shares and have agreed to provide Jefferies with customary indemnification and contribution rights. We have also agreed to reimburse Jefferies for certain specified expenses. We are not obligated to sell any shares under the Sale Agreement. The offering of shares pursuant to the Sale Agreement will terminate upon the termination of the Sale Agreement by Jefferies or by us, as permitted therein.

The foregoing description of the Sale Agreement is not complete and is qualified in its entirety by reference to the full text of such agreement, a copy of which is filed herewith as Exhibit 10.2 to this Quarterly Report on Form 10-Q and is incorporated herein by reference.

The legal opinion of Wilson Sonsini Goodrich & Rosati, Professional Corporation, relating to the Shares being offered in connection with the November Prospectus Supplement is filed as Exhibit 5.1 to this Quarterly Report on Form 10-Q.

(b)

None.

(c)

During ourlast fiscal quarter, no director or officer, as defined in Rule 16a-1(f), adopted or terminated a “Rule 10b5-1 trading arrangement” or a “non-Rule 10b5-1 trading arrangement,” each as defined in Regulation S-K Item 408.