Exyn Technologies, Inc.

Previous wording

The following is a discussion and analysis of our financial condition and results of operations as of, and for, the periods presented. You should read the following discussion and analysis of the Company’s financial condition and results of operations together with the sections entitled “Risk Factors,” and “Special Note Regarding Forward-Looking Statements,” our audited consolidated financial statements, and related notes included in our registration statement on Form S-1 filed previously with the SEC. This discussion and analysis contains forward-looking statements, including statements regarding our expectations for the future of our business and our liquidity and capital resources as well as other non-historical statements. These statements are based upon our current plans, expectations, and beliefs, and are subject to numerous risks and uncertainties, including but not limited to the risks and uncertainties described in “Risk Factors” and “Special Note Regarding Forward-Looking Statements.” Our actual results may differ materially from those contained in or implied by these forward-looking statements.

Current wording

The following is a discussion and analysis of our financial condition and results of operations as of, and for, the periods presented. You should read the following discussion and analysis of the Company’s financial condition and results of operations together with the sections entitled “Risk Factors,” and “Special Note Regarding Forward-Looking Statements,” our audited consolidated financial statements, and related notes included in our IPO Registration. This discussion and analysis contains forward-looking statements, including statements regarding our expectations for the future of our business and our liquidity and capital resources as well as other non-historical statements. These statements are based upon our current plans, expectations, and beliefs, and are subject to numerous risks and uncertainties, including but not limited to the risks and uncertainties described in “Risk Factors” and “Special Note Regarding Forward-Looking Statements.” Our actual results may differ materially from those contained in or implied by these forward-looking statements.

Previous wording

Revenue consists primarily of product sales, software licensing revenue, fees for consulting services, warranty sales, and after sale service and support. For the three months ended March 31, 2026, approximately 82% of our revenue was derived from the Nexys product segment, approximately 68% of our revenue came from direct sales and approximately 32% of our revenue came from channel partners.

Current wording

Revenue consists primarily of product sales, software licensing revenue, fees for consulting services, warranty sales, and after sale service and support. For the three months ended June 30, 2026, approximately 71% of our revenue was derived from Nexys product sales, of which approximately 63% of our revenue came from direct sales and approximately 37% of our revenue came from channel partners. For the six months ended June 30, 2026, approximately 77% of our revenue was derived from Nexys product sales, of which approximately 66% of our revenue came from direct sales and approximately 34% of our revenue came from channel partners.

Previous wording

General and administrative expenses include costs of executive leadership, corporate governance, consulting fees, accounting and finance operations, travel, and support functions, including human resources and information technology. General and administrative expenses are expected to continue to increase as we incur additional costs associated with being a public company and certain terms of our consulting and incentive agreements becoming effective.

Current wording

Selling, general and administrative expenses primarily consist of salaries, benefits and payroll taxes, commissions, advertising, trade shows, travel, consulting fees, costs associated with executive leadership, corporate governance, accounting and finance operations, and support functions, including human resources and information technology. We expect selling, general and administrative expenses to continue to increase as we expand our sales and marketing capabilities to acquire new customers and incur additional costs

Previous wording

Other income (expense), gain/loss on foreign exchange, deferred financing cost amortization, loss on disposable assets and other nonoperating income.

Current wording

Other income (expense), net consists primarily of gain/loss on foreign exchange, deferred financing cost amortization, loss on disposable assets, and other nonoperating income.

Previous wording

For the three months ended March 31, 2026, revenues decreased by approximately $27 thousand to $1.2 million from $1.2 million for the three months ended March 31, 2025. The slight decrease was primarily attributable to timing of customer project activity and product deliveries during the period. Gross profit increased from $0.4 million to $0.5 million due to a more favorable revenue mix and lower costs incurred to deliver products and services.

Current wording

For the three months ended June 30, 2026, revenues decreased by approximately $0.4 million to $0.9 million from $1.3 million for the three months ended June 30, 2025. The decrease was primarily attributable to the timing of customer project activity and product deliveries during the period. Gross profit decreased from $0.6 million to $0.4 million primarily due to lower revenues, partially offset by lower costs incurred to deliver products and services.

Previous wording

For the three months ended March 31, 2026, cost of revenues decreased by approximately $0.1 million to $0.7 million from $0.8 million for the three months ended March 31, 2025. The decrease was primarily attributable to lower direct labor, materials, and other costs associated with product and service delivery.

Current wording

For the three months ended June 30, 2026, cost of revenues decreased by approximately $0.3 million to $0.5 million from $0.8 million for the three months ended June 30, 2025. The decrease was primarily attributable to lower direct labor, materials, and other costs associated with product and service delivery.

Previous wording

For the three months ended March 31, 2026, selling, general and administrative expenses increased by approximately $0.5 million to $2.0 million from $1.4 million for the three months ended March 31, 2025. The increase was primarily attributable to higher personnel-related costs, professional fees, and other expenses associated with preparing for and operating as a public company.

Current wording

For the three months ended June 30, 2026, selling, general and administrative expenses increased by approximately $1.7 million to $3.0 million from $1.3 million for the three months ended June 30, 2025. The increase was primarily attributable to higher personnel-related costs, professional fees, and other expenses associated with preparing to be and operating as a public company.

Previous wording

For the three months ended March 31, 2026, research and development expenses decreased by approximately $0.1 million to $1.2 million from $1.3 million for the three months ended March 31, 2025. The decrease was primarily attributable to lower product development and engineering expenditures.

Current wording

For the three months ended June 30, 2026, research and development expenses increased by approximately $0.2 million to $1.4 million from $1.2 million for the three months ended June 30, 2025. The increase was primarily attributable to higher product development and engineering expenditures.

Previous wording

For the three months ended March 31, 2026, stock-based compensation expense remained relatively consistent at $0.2 million compared to the three months ended March 31, 2025, decreasing by approximately $2 thousand. The slight decrease was primarily attributable to changes in the timing and mix of equity awards subject to amortization during the respective periods.

Current wording

For the three months ended June 30, 2026, stock-based compensation expense remained relatively consistent at $0.2 million compared to the three months ended June 30, 2025, decreasing by approximately $4 thousand. The slight decrease was primarily attributable to changes in the timing and mix of equity awards subject to amortization during the respective periods.

Previous wording

For the three months ended March 31, 2026 as compared to the three months ended March 31, 2025, interest expense increased by $0.2 million from $0.1 million to $0.3 million. Interest income decreased by $4 thousand from $8 thousand for the three months ended March 31, 2025 to $4 thousand for the three months ended March 31, 2026.

Current wording

For the three months ended June 30, 2026, as compared to the three months ended June 30, 2025, interest expense increased by approximately $0.4 million from $0.1 million to $0.5 million. Interest income increased by approximately $28 thousand from $8 thousand for the three months ended June 30, 2025 to $36 thousand for the three months ended June 30, 2026.

Previous wording

Our operating results for the three months ended March 31, 2026 were characterized by stable revenue, improved gross profit, and higher operating expenses compared to the prior-year period. The improvement in gross profit was driven by lower costs incurred in delivering our products and services, while the increase in operating expenses reflects continued investment in personnel, infrastructure, and activities supporting the growth and commercialization of our autonomous mapping and robotics solutions.

Current wording

Our operating results for the six months ended June 30, 2026 were characterized by lower revenue, relatively consistent gross profit, and higher operating expenses compared to the prior-year period. The decrease in revenue was primarily attributable to the timing of customer project activity and product deliveries, while gross profit remained relatively consistent as lower revenues were partially offset by lower costs incurred in delivering our products and services. The increase in operating expenses reflects continued investment in personnel, infrastructure, and activities supporting the growth and commercialization of our autonomous mapping and robotics solutions.

Previous wording

Over the next twelve months, we expect to finance our operations primarily through cash generated from commercial operations and, as needed, through short-term debt arrangements, private placements of our equity securities, and proceeds from public offerings, if completed.

Current wording

Over the next twelve months, we expect to finance our operations primarily through cash generated from commercial operations and, as needed, through short-term debt arrangements, private placements of our equity securities, and proceeds from public offerings, if completed. Beyond the next twelve months, we expect our long-term liquidity and capital resource needs to be driven primarily by our plans to scale production, expand our sales and marketing capabilities, and continue to invest in research and development. We

Previous wording

Net cash used in operating activities for the three months ended March 31, 2026 totaled approximately $1.6 million compared to approximately $1.5 million for the three months ended March 31, 2025, an increase of approximately $0.1 million. The increase was primarily driven by an increase in operating activities to reconcile net loss, such as non cash change in fair value of SAFE liabilities and credit loss changes, offset and combined with decreases in depreciation and amortization expenses and higher working capital consumption.

Current wording

Net cash used in operating activities for the six months ended June 30, 2026 totaled approximately $7.1 million compared to approximately $3.7 million for the six months ended June 30, 2025, an increase of approximately $3.4 million. The increase was primarily driven by a higher net loss during the period, partially offset by noncash items, including debt modification expense, stock payments made for settlement of debt, stock-based compensation, depreciation and amortization, amortization of debt issuance costs, changes in the fair value of SAFE liabilities, and changes in working capital.

Previous wording

Net cash used in investing activities for the three months ended March 31, 2026 totaled approximately $4 thousand compared to approximately $11 thousand for the three months ended March 31, 2025.

Current wording

Net cash used in investing activities for the six months ended June 30, 2026 totaled approximately $29 thousand compared to approximately $14 thousand for the six months ended June 30, 2025. The cash used in investing activities primarily related to purchases of property and equipment.

Previous wording

We enter into contractual obligations in the normal course of business. For additional discussion, see Note 14, “Commitments and Contingencies,” to our condensed consolidated financial statements included elsewhere in this Form 10-Q.

Current wording

We enter into contractual obligations in the normal course of business. For additional discussion, see Note 13, “Leases” and Note 14, “Commitments and Contingencies,” to our condensed consolidated financial statements included elsewhere in this Form 10-Q.

Previous wording

We operate in rapidly evolving markets. Key trends include the expanding adoption of autonomous data collection in mining and other geospatial applications; growing demand for autonomous systems in defense and contested environments; ongoing supply chain constraints affecting availability of LiDAR, sensors, and semiconductor components; increasing regulatory clarity from the FAA and international bodies on BVLOS operations; and competitive dynamics from both established defense contractors and emerging robotics companies. Collectively, these trends create both opportunities and risks. They may require increased investment in research and development, regulatory and security compliance, inventory and supplier diversification, and customer success resources. There can be no assurance that our strategies will successfully mitigate these uncertainties, that regulatory developments will proceed as anticipated, or that customer adoption will occur at the pace or scale we expect. See also “Risk Factors — Risks Related to Our Business Operations — If we fail to adapt and respond effectively to rapidly changing technology, evolving industry standards and changing customer needs or requirements, our solutions may become less competitive” for risks related to technological disruption.

Current wording

We operate in rapidly evolving markets. Key trends include the expanding adoption of autonomous data collection in mining and other geospatial applications; growing demand for autonomous systems in defense and contested environments; ongoing supply chain constraints affecting availability of LiDAR, sensors, and semiconductor components; increasing regulatory clarity from the FAA and international bodies on BVLOS operations; and competitive dynamics from both established defense contractors and emerging robotics companies. Collectively, these trends create both opportunities and risks. They may require increased investment in research and development, regulatory and security compliance, inventory and supplier diversification, and customer success resources. There can be no assurance that our strategies will successfully mitigate these uncertainties, that regulatory developments will proceed as anticipated,

Previous wording

This discussion and analysis of our financial condition and results of operations are based on our condensed consolidated financial statements, which have been prepared in accordance with GAAP. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, and expenses and the disclosure of contingent assets and liabilities in our financial statements. On an ongoing basis, we evaluate our estimates and judgments, including those related to reported revenue generated and reported expenses incurred during the reporting periods. We base our estimates on historical experience, known trends and events, and various other factors that are believed to be reasonable under the circumstances, the results of which form the

Current wording

This discussion and analysis of our financial condition and results of operations are based on our condensed consolidated financial statements, which have been prepared in accordance with GAAP. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, and expenses and the disclosure of contingent assets and liabilities in our financial statements. On an ongoing basis, we evaluate our estimates and judgments, including those related to reported revenue generated and reported expenses incurred during the reporting periods. We base our estimates on historical experience, known trends and events, and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.

Previous wording

While our significant accounting policies are described in more detail in the notes to our audited financial statements included in the registration statement on Form S-1 filed in connection with our initial public offering, we believe the following accounting policies to be most critical to the judgments and estimates used in the preparation of our financial statements.

Current wording

While our significant accounting policies are described in more detail in the notes to our audited financial statements included in the IPO Registration Statement in connection with our IPO, we believe the following accounting policies to be most critical to the judgments and estimates used in the preparation of our financial statements.

Previous wording

Accounts receivable are recorded at the invoiced amount and do not bear interest. Credit is granted in the normal course of business without collateral. Accounts receivable are stated net of credit losses, which represent estimated losses resulting from the inability of customers to make the required payments. Accounts that are outstanding longer than the contractual terms are considered past due. When determining the allowance for credit losses, the Company takes several factors into consideration including key inputs such as macroeconomic factors, industry trends, the creditworthiness of counterparties, historical experience, the financial conditions of the customers, and the amount and age of past due accounts. The Company writes off accounts receivable when they become uncollectible. The allowance for credit losses was $232,206 and $203,960 as of March 31, 2026 and December 31, 2025, respectively. There were two and one customers who represented in the aggregate 25% and 12% of total accounts receivable as of March 31, 2026 and December 31, 2025, respectively.

Current wording

Accounts receivable are recorded at the invoiced amount and do not bear interest. Credit is granted in the normal course of business without collateral. Accounts receivable are stated net of credit losses, which represent estimated losses resulting from the inability of customers to make the required payments. Accounts that are outstanding longer than the contractual terms are considered past due. When determining the allowance for credit losses, the Company takes several factors into consideration, including macroeconomic factors, industry trends, the creditworthiness of counterparties, historical experience, the financial conditions of the customers, and the amount and age of past due accounts. The Company writes off accounts receivable when they become uncollectible. The allowance for credit losses was $248,326 and $203,960 as of June 30, 2026 and December 31, 2025, respectively. There was one customer in each period who represented in the aggregate 10% and 12% of total accounts receivable as of June 30, 2026 and December 31, 2025, respectively.