Palladyne AI Corp.

Previous wording

We derive revenue from multiple sources, including the sale of both software and hardware products, product development contracts with the Department of War, and engineering services. We accordingly classify our revenue into three primary streams: product revenue, product development contract revenue and engineering services revenue, with product revenue further disaggregated into software and hardware categories. Software product revenue is comprised of the sale of our proprietary AI software products based on our AI Foundational Technology (i.e., Palladyne IQ, SwarmOS and Palladyne Pilot). Hardware product revenue consists of the sale of our hardware products, including our advanced avionics compute hardware (BRAIN) and our UAV products under development (i.e., Gremlin-X and SwarmStrike). We also classify as hardware product revenue sales of our precision machined and fabricated components and structures. Product development contract revenue consists of contracts to develop, design and modify our technology and related products. Engineering services revenue are derived from aerospace and defense customers focused on developing high-performance unmanned systems.

Current wording

We derive revenue from multiple sources, including the sale of both software and hardware products, product development contracts with the Department of War ("DoW"), and engineering services. We accordingly classify our revenue into three primary streams: product revenue, product development contract revenue and engineering services revenue, with product revenue further disaggregated into software and hardware categories. Software product revenue is comprised of the sale of our proprietary AI software products based on our AI/ML Foundational Technology (i.e., Palladyne IQ, SwarmOS and Palladyne Pilot). Hardware product revenue consists of the sale of our hardware products, including our advanced avionics compute hardware (BRAIN) and our UAV products under development (i.e., Gremlin-X and SwarmStrike). We also classify as hardware product revenue sales of our precision machined and fabricated components and structures. Product development contract revenue consists of contracts to develop, design and modify our technology and related products. Engineering services revenue is derived from aerospace and defense customers focused on developing high-performance unmanned systems.

Previous wording

We expect to continue commercialization efforts, internal testing and customer trials for our products throughout 2026. Whether we are successful in these efforts depends on many factors, including those discussed under Part II Item 1A Risk Factors. Such risks may result in delay in achieving product revenues, which would adversely affect our financial condition and operating results.

Current wording

We expect to continue commercialization efforts, internal testing and customer trials for our products through the remainder of 2026. Whether we are successful in these efforts depends on many factors, including those discussed under Part II Item 1A Risk Factors. Such risks may result in delay in achieving product revenues, which would adversely affect our financial condition and operating results.

Previous wording

We have taken and continue to take numerous steps to manage our use of cash. For example, in 2023 we suspended our legacy hardware product development efforts and focused our product development efforts on our AI/ML Foundational Technology and related products, and terminated our operations in Pittsburgh, Pennsylvania in early 2024. Beginning in the fourth quarter of 2024 and through June 30, 2026 we raised approximately $86.8 million in gross proceeds from the sale of our Common Stock and warrants. For further information on our financing activities, see "Liquidity and Capital Resources."

Current wording

We have taken and continue to take numerous steps to manage our use of cash. For example, in 2023 we suspended our legacy hardware product development efforts and focused our product development efforts on our AI/ML Foundational Technology and related products, and terminated our operations in Pittsburgh, Pennsylvania in early 2024. Beginning in the fourth quarter of 2024 and through September 30, 2026 we raised approximately $98.9 million in gross proceeds from the sale of our Common Stock and warrants. For further information on our financing activities, see "Liquidity and Capital Resources."

Previous wording

Although demand for AI/ML software products has grown in recent years, the market continues to evolve. The market demand for our software is unproven, and important assumptions about the characteristics of targeted markets, pricing and sales cycles may be inaccurate. Based on interaction with dozens of potential customers, we believe that the sales cycle for Palladyne IQ is likely to be between 12 and 18 months, or even longer, while the sales cycle for Palladyne SwarmOS/Pilot is unknown. While we believe that our products will provide significant benefits and return on investment to customers, as it is a new technology, we are dependent on customers who are willing to adopt, purchase and implement new technologies and products. Further, we have U.S. government revenue-generating contracts related to various aspects of our AI/ML Foundational Technology and our Palladyne IQ and Palladyne SwarmOS/Pilot products and we have been affected by government shutdowns. For example, during the U.S. government shutdown in the fourth quarter of 2025, we experienced delays in our interactions with certain government agencies that affected our collection efforts, our ability to consummate new government contracts and our ability to maintain or renew government contracts in a timely manner. The duration of government shutdowns could have a compounding effect, and the longer they continue or the more frequently they occur, the more significant the potential adverse impact may be on our anticipated revenues. For additional information around the risks associated with our government contracts, see Part II Item 1A Risk Factors "A portion of our revenue is currently and will continue to be generated by contracts with government entities, which makes us subject to a number of uncertainties, challenges and risks." If customer demand does not develop as expected or we do not accurately estimate pricing, adoption rates and sales cycles for our products, our business, results of operations and financial condition will be adversely affected.

Current wording

Although demand for AI/ML software products has grown in recent years, the market continues to evolve. The market demand for our software is unproven, and important assumptions about the characteristics of targeted markets, pricing and sales cycles may be inaccurate. Based on interaction with dozens of potential customers, we believe that the sales cycle for Palladyne IQ is likely to be between 12 and 18 months, or even longer, while the sales cycles for our other products are unknown. While we believe that our products will provide significant benefits and return on investment to customers, as it is a new technology, we are dependent on customers who are willing to adopt, purchase and implement new technologies and products. Further, we have U.S. government revenue-generating contracts related to various aspects of our AI/ML Foundational Technology and our Palladyne IQ and Palladyne SwarmOS/Pilot products and we have been affected by government shutdowns. For example, during the U.S. government shutdown in the fourth quarter of 2025, we experienced delays in our interactions with certain government agencies that affected our collection efforts, our ability to consummate new government contracts and our ability to maintain or renew government contracts in a timely manner. The duration of government shutdowns could have a compounding effect, and the longer they continue or the more frequently they occur, the more significant the potential adverse impact may be on our anticipated revenues. For additional information around the risks associated with our government contracts, see Part II Item 1A Risk Factors "A portion of our revenue is currently and will continue to be generated by contracts with government entities, which makes us subject to a number of uncertainties, challenges and risks." If customer demand does not develop as expected or we do not accurately estimate pricing, adoption rates and sales cycles for our products, our business, results of operations and financial condition will be adversely affected.

Previous wording

Revenue increased $4.8 million or 470%, from $1.0 million for the three months ended June 30, 2025, to $5.8 million for the three months ended June 30, 2026, as explained below.

Current wording

Revenue increased $7.7 million or 895%, from $0.9 million for the three months ended September 30, 2025, to $8.6 million for the three months ended September 30, 2026, as explained below.

Previous wording

Product revenue was $2.7 million for the three months ended June 30, 2026. Our product revenue during the three months ended June 30, 2026, was derived mainly from the companies that we acquired in November 2025. It includes revenue from the sale of precision machined parts and components from our manufacturing business and from the sale of our BRAIN avionics product.

Current wording

Product revenue was $3.4 million for the three months ended September 30, 2026. Our product revenue during the three months ended September 30, 2026, was derived mainly from the companies that we acquired in November 2025. It includes revenue from the sale of precision machined parts and components from our manufacturing business, from the sale of our BRAIN avionics products and Palladyne legacy hardware product sales.

Previous wording

Product development contract revenue increased by $0.2 million, or 17%, from $1.0 million for the three months ended June 30, 2025 to $1.2 million for the three months ended June 30, 2026. The increase was primarily due to new product development contracts that started during the current year period, partially offset by contracts that were completed during the prior year. We expect future revenue from contracts to fluctuate due to the timing of new contracts signed, contract options being exercised, and the completion of existing contracts. We intend to take on only those product development contracts that we believe support and contribute to our product development efforts. As a result, there may be fewer opportunities to replace completed product development contracts in the future.

Current wording

Product development contract revenue increased by $1.9 million, or 222%, from $0.9 million for the three months ended September 30, 2025 to $2.8 million for the three months ended September 30, 2026. The increase was primarily due to new product development contracts that started during the second quarter of 2026, partially offset by contracts that were completed during the prior year. We expect future revenue from contracts to fluctuate due to the timing of new contracts signed, contract options being exercised, and the completion of existing contracts. We intend to take on only those product development contracts that we believe support and contribute to our product development efforts. As a result, there may be fewer opportunities to replace completed product development contracts in the future.

Previous wording

Engineering services revenue was $1.9 million for the three months ended June 30, 2026. Engineering services revenue is derived from one of the businesses acquired in November 2025.

Current wording

Engineering services revenue was $2.4 million for the three months ended September 30, 2026. Engineering services revenue is derived from one of the businesses acquired in November 2025.

Previous wording

Cost of revenue increased by $3.6 million or 765%, from $0.5 million for the three months ended June 30, 2025 to $4.1 million for the three months ended June 30, 2026. Cost of revenue consists of labor, materials and third-party costs associated with our products and services. Cost of revenue increased primarily due to increased product and service revenue recorded during the period.

Current wording

Cost of revenue increased by $4.3 million or 939%, from $0.5 million for the three months ended September 30, 2025 to $4.8 million for the three months ended September 30, 2026. Cost of revenue consists of labor, materials and third-party costs associated with our products and services. Cost of revenue increased primarily due to increased revenue recorded during the period.

Previous wording

Research and development expenses increased by $1.2 million, or 38% from $3.1 million for the three months ended June 30, 2025, to $4.3 million for the three months ended June 30, 2026. Research and development costs during the three months ended June 30, 2026 increased due primarily to labor and labor related expenses associated with product design, testing, debugging, stabilization and enhancements of our UAV products and software in development.

Current wording

Research and development expenses increased by $0.8 million, or 27% from $3.1 million for the three months ended September 30, 2025, to $4.0 million for the three months ended September 30, 2026. Research and development costs during the three months ended September 30, 2026 increased due primarily to labor and labor related expenses associated with product design, testing, debugging, stabilization and enhancements of our UAV products and software in development.

Previous wording

General and administrative expense increased by $4.0 million, or 95%, from $4.2 million for the three months ended June 30, 2025, to $8.1 million for the three months ended June 30, 2026. General and administrative expense increased primarily due to increased labor and labor related expenses associated with increases in headcount from the November 2025 acquisitions and hiring to support our new business activities. Stock compensation expenses also increased during the current year period driven primarily by the increased headcount and the 2025 Executive RSU awards that were granted in June 2026.

Current wording

General and administrative expense increased by $6.0 million, or 144%, from $4.1 million for the three months ended September 30, 2025, to $10.1 million for the three months ended September 30, 2026. General and administrative expense increased primarily due to increased labor and labor related expenses associated with increases in headcount from the November 2025 acquisitions and hiring to support our new business activities. Stock compensation expenses also increased during the current year period driven primarily by the increased headcount and the 2025 Executive RSU awards that were granted in June 2026.

Previous wording

Sales and marketing expense increased by $0.9 million, or 70%, from $1.3 million for the three months ended June 30, 2025, to $2.3 million for the three months ended June 30, 2026. This increase was driven by increased labor and labor related expenses as we have increased headcount to support our sales, business development and marketing efforts as we continue our initial sales development and outreach activities.

Current wording

Sales and marketing expense increased by $1.5 million, or 129%, from $1.2 million for the three months ended September 30, 2025, to $2.7 million for the three months ended September 30, 2026. This increase was driven by increased labor and labor related expenses as we have increased headcount to support our sales, business development and marketing efforts as we continue our initial sales development and outreach activities.

Previous wording

Other income increased by $0.5 million for the three months ended June 30, 2026, compared to the three months ended June 30, 2025, due to increased gains from changes in the fair value of our outstanding warrants, partially offset by a decrease in interest income due primarily to a decrease in invested funds.

Current wording

Other income decreased by $3.0 million for the three months ended September 30, 2026, compared to the three months ended September 30, 2025, due to decreased gains from changes in the fair value of our outstanding warrants and a decrease in interest income due primarily to a decrease in invested funds.

Previous wording

The following table presents our revenue for the six months ended June 30, 2026 and 2025, respectively:

Current wording

The following table presents our revenue for the nine months ended September 30, 2026 and 2025, respectively:

Previous wording

Revenue increased by $6.6 million, or 242%, from $2.7 million for the six months ended June 30, 2025, to $9.3 million for the six months ended June 30, 2026, as explained below.

Current wording

Revenue increased by $14.3 million, or 399%, from $3.6 million for the nine months ended September 30, 2025, to $17.9 million for the nine months ended September 30, 2026, as explained below.

Previous wording

Product revenue was $4.4 million for the six months ended June 30, 2026. Our product revenue during the six months ended June 30, 2026, was derived mainly from the companies that we acquired in November 2025. It includes revenue from the sale of precision machined parts and components from our manufacturing business and from the sale of our BRAIN avionics product.

Current wording

Product revenue was $7.8 million for the nine months ended September 30, 2026. Our product revenue during the nine months ended September 30, 2026, was derived mainly from the companies that we acquired in November 2025. It includes revenue from the sale of precision machined parts and components from our manufacturing business, from the sale of our BRAIN avionics products and Palladyne legacy hardware product sales.

Previous wording

Product development contract revenue decreased by $1.5 million, or 54%, from $2.7 million for the six months ended June 30, 2025, to $1.2 million for the six months ended June 30, 2026. The decrease was primarily due to a decrease in new contracts and funding during the first quarter of 2026 due to government delays and shutdowns. New contracts and funding were received during the second quarter of 2026, partially offsetting the decrease.

Current wording

Product development contract revenue increased by $0.4 million, or 12%, from $3.6 million for the nine months ended September 30, 2025, to $4.0 million for the nine months ended September 30, 2026. The increase was primarily due to new product development contracts that started during the second quarter of 2026, partially offset by contracts that were completed during the prior year and funding delays during the first quarter of 2026 due to the government delays and shutdowns.

Previous wording

Engineering services revenue was $3.7 million for the six months ended June 30, 2026. Engineering services revenue is derived from one of the businesses acquired in November 2025.

Current wording

Engineering services revenue was $6.1 million for the nine months ended September 30, 2026. Engineering services revenue is derived from one of the businesses acquired in November 2025.

Previous wording

The following table presents our operating expenses for the six months ended June 30, 2026 and 2025, respectively:

Current wording

The following table presents our operating expenses for the nine months ended September 30, 2026 and 2025, respectively:

Previous wording

Cost of revenue increased by $5.7 million, or 695%, from $0.8 million for the six months ended June 30, 2025, to $6.6 million for the six months ended June 30, 2026. Cost of revenue consists of labor, materials and third-party costs associated with our products and services. Cost of revenue increased primarily due to increased product and service revenue recorded during the period.

Current wording

Cost of revenue increased by $10.1 million, or 782%, from $1.3 million for the nine months ended September 30, 2025, to $11.4 million for the nine months ended September 30, 2026. Cost of revenue consists of labor, materials and third-party costs associated with our products and services. Cost of revenue increased primarily due to increased revenue recorded during the period.

Previous wording

Research and development expenses increased by $2.2 million, or 37% from $6.0 million for the six months ended June 30, 2025, to $8.2 million for the six months ended June 30, 2026. Research and development costs during the six months ended June 30, 2026 increased due primarily to labor and labor related expenses associated with product design, testing, debugging, stabilization and enhancements of our UAV products and software in development.

Current wording

Research and development expenses increased by $3.1 million, or 34% from $9.1 million for the nine months ended September 30, 2025, to $12.2 million for the nine months ended September 30, 2026. Research and development costs during the nine months ended September 30, 2026 increased due primarily to labor and labor related expenses associated with product design, testing, debugging, stabilization and enhancements of our UAV products and software in development.

Previous wording

General and administrative expense increased by $6.6 million, or 79%, from $8.4 million for the six months ended June 30, 2025, to $15.0 million for the six months ended June 30, 2026. General and administrative expense increased primarily due to increased labor and labor related expenses associated with increases in headcount from the November 2025 acquisitions and hiring to support our new business activities. Stock compensation expenses also increased during the current year period driven primarily by the increased headcount and the 2025 Executive RSU awards that were granted in June 2026. Legal and professional services also increased during the current year to support increased business activities.

Current wording

General and administrative expense increased by $12.6 million, or 101%, from $12.5 million for the nine months ended September 30, 2025, to $25.1 million for the nine months ended September 30, 2026. General and administrative expense increased primarily due to increased labor and labor related expenses associated with increases in headcount from the November 2025 acquisitions and hiring to support our new business activities. Stock compensation expenses also increased during the current year period driven primarily by the increased headcount and the 2025 Executive RSU awards that were granted in June 2026. Legal and professional services also increased during the current year to support increased business activities.

Previous wording

Sales and marketing expense increased by $1.6 million, or 61%, from $2.6 million for the six months ended June 30, 2025, to $4.1 million for the six months ended June 30, 2026. This increase was driven by increased labor and labor related expenses as we have increased headcount to support our sales, business development and marketing efforts as we continue our initial sales development and outreach activities.

Current wording

Sales and marketing expense increased by $3.1 million, or 83%, from $3.7 million for the nine months ended September 30, 2025, to $6.8 million for the nine months ended September 30, 2026. This increase was driven by increased labor and labor related expenses as we have increased headcount to support our sales, business development and marketing efforts as we continue our initial sales development and outreach activities.

Previous wording

Intangible amortization expenses increased to $0.7 million for the six months ended June 30, 2026. The increase in intangible amortization expense is attributable to the recognition of amortization related to identified intangible assets acquired as part of the acquisitions completed in November 2025.

Current wording

Intangible amortization expenses increased to $1.1 million for the nine months ended September 30, 2026. The increase in intangible amortization expense is attributable to the recognition of amortization related to identified intangible assets acquired as part of the acquisitions completed in November 2025.

Previous wording

The following table presents other income for the six months ended June 30, 2026 and 2025, respectively:

Current wording

The following table presents other income for the nine months ended September 30, 2026 and 2025, respectively:

Previous wording

Other income decreased by $29.9 million from a gain of $30.3 million for the six months ended June 30, 2025, to a gain of $0.4 million for the six months ended June 30, 2026. Other income decreased almost entirely as a result of changes in the fair value of our outstanding warrants as well as decreased interest income primarily due to a decrease in invested funds.

Current wording

Other income decreased by $32.9 million from $34.6 million for the nine months ended September 30, 2025, to $1.8 million for the nine months ended September 30, 2026. Other income decreased almost entirely as a result of changes in the fair value of our outstanding warrants as well as decreased interest income primarily due to a decrease in invested funds.

Previous wording

We had no significant income tax expense for the six months ended June 30, 2026 and 2025, respectively. The provision for income taxes for the six months ended June 30, 2026 and 2025 is based on the Company’s estimated annualized effective tax rate for the fiscal years ending December 31, 2026 and 2025, respectively. For the six months ended June 30, 2026 and 2025, the Company’s recognized effective tax rate differs from the U.S. federal statutory rate as the Company recorded net taxable losses during the period with a corresponding full valuation allowance on the net deferred tax assets created from the losses.

Current wording

We had no significant income tax expense for the nine months ended September 30, 2026 and 2025, respectively. The provision for income taxes for the nine months ended September 30, 2026 and 2025 is based on the Company’s estimated annualized effective tax rate for the fiscal years ending December 31, 2026 and 2025, respectively. For the nine months ended September 30, 2026 and 2025, the Company’s recognized effective tax rate differs from the U.S. federal statutory rate as the Company recorded net taxable losses during the period with a corresponding full valuation allowance on the net deferred tax assets created from the losses.

Previous wording

Our backlog, as of June 30, 2026, was $24.6 million, $21.2 million of which was funded and $3.4 million of which was unfunded. Our backlog, as of December 31, 2025, was $13.9 million, $13.5 million of which was funded and $0.4 million of which was unfunded. Our backlog is equal to our remaining performance obligations under contracts or the total value of committed customer contracts and purchase orders, both funded and unfunded, less revenue recognized to date. Our total estimated contract value, which combines backlog with estimated potential contract value, including unexercised options from existing firm contracts, was $30.9 million as of June 30, 2026 and $20.0 million as of December 31, 2025.

Current wording

Our backlog, as of September 30, 2026, was $18.7 million, $15.3 million of which was funded and $3.4 million of which was unfunded. Our backlog, as of December 31, 2025, was $13.9 million, $13.5 million of which was funded and $0.4 million of which was unfunded. Our backlog is equal to our remaining performance obligations under contracts or the total value of committed customer contracts and purchase orders, both funded and unfunded, less revenue recognized through September 30, 2026. Our total estimated contract value, which combines backlog with estimated potential contract value, including unexercised options from existing firm contracts, was $21.8 million as of September 30, 2026 and $20.0 million as of December 31, 2025.

Previous wording

Cash, cash equivalents and marketable securities were $43.7 million as of June 30, 2026, compared to $47.1 million as of December 31, 2025. We have incurred losses from operations and negative cash flows from operations since inception and are likely to continue to incur losses from operations and negative cash flows from operations in the near term. As of June 30, 2026, we had an accumulated deficit of approximately $505.7 million and working capital of $43.8 million.

Current wording

Cash, cash equivalents and marketable securities were $47.0 million as of September 30, 2026, compared to $47.1 million as of December 31, 2025. We have incurred losses from operations and negative cash flows from operations since inception and are likely to continue to incur losses from operations and negative cash flows from operations in the near term. As of September 30, 2026, we had an accumulated deficit of approximately $517.7 million and working capital of $47.3 million.

Previous wording

On November 13, 2024, we entered into an open market sale agreement (the "Sales Agreement") with Jefferies LLC to sell shares of our Common Stock from time to time through an "at-the-market" equity offering program (the "ATM Program"), under which Jefferies is acting as our sales agent. During the six months ended June 30, 2026, we sold a total of 2,531,336 shares pursuant to the ATM program, for gross sales proceeds of approximately $17.8 million, before deducting commission and other expenses. To date, we have sold a total of 10,653,920 shares pursuant to the ATM program, for gross sales proceeds of approximately $73.3 million, before deducting commission and other expenses.

Current wording

On November 13, 2024, we entered into an open market sale agreement (the "Sales Agreement") with Jefferies LLC to sell shares of our Common Stock from time to time through an "at-the-market" equity offering program (the "ATM Program"), under which Jefferies is acting as our sales agent. During the nine months ended September 30, 2026, we sold a total of 4,581,269 shares pursuant to the ATM program, for gross sales proceeds of approximately $29.9 million, before deducting commission and other expenses. Through September 30, 2026, we have sold a total of 12,703,853 shares pursuant to the ATM program, for gross sales proceeds of approximately $85.4 million, before deducting commission and other expenses.

Previous wording

Cash flows used in operating activities during the six months ended June 30, 2026 increased by $7.6 million to $20.4 million from $12.8 million during the same period in 2025. The increase to net cash used in operating activities was primarily attributable to changes in net (loss) income, net of the impact from non-cash items such as stock-based compensation, depreciation of property and equipment, amortization of intangible assets, changes in fair value of warrant liabilities and contingent consideration, loss on disposal of assets, and amortization of investment discount, and cash used by changes in operating assets and liabilities.

Current wording

Cash flows used in operating activities during the nine months ended September 30, 2026 increased by $9.0 million to $28.2 million from $19.1 million during the same period in 2025. The increase to net cash used in operating activities was primarily attributable to an increased net loss resulting from higher operating expenses, driven by increased headcount and operating costs from companies acquired in November 2025, as well as increases in accounts receivable and inventories, partially offset by changes in non-cash items such as stock-based compensation, intangible asset amortization and changes in fair value of warrant liabilities, as well as increases in accrued liabilities.

Previous wording

Our net cash provided by investing activities during the six months ended June 30, 2026 increased by $51.6 million as compared to the same period in 2025. The increase in cash provided by investing activities is almost entirely due to $19.3 million of maturities, net of purchases, of marketable securities during the six months ended June 30, 2026, as compared to $33.0 million of purchases net of maturities, of marketable securities during the six months ended June 30, 2025.

Current wording

Our net cash provided by investing activities during the nine months ended September 30, 2026 increased by $28.2 million compared to the same period in 2025. This increase was primarily driven by $9.6 million of maturities net of purchases, of marketable securities during the nine months ended September 30, 2026, as compared to $19.8 million of purchases net of maturities, of marketable securities during the nine months ended September 30, 2025. Additionally, purchases of property and equipment increased by $1.3 million to $1.8 million for the nine months ended September 30, 2026, up from $0.5 million during the nine months ended September 30, 2025.

Previous wording

Our net cash provided by financing activities decreased by $17.5 million during the six months ended June 30, 2026, compared to the prior year period. This decrease was primarily attributable to lower net proceeds from equity issuances; specifically, we received $17.3 million, after deducting transaction costs, in net proceeds from the sale of our Common Stock during the six months ended June 30, 2026, compared to $34.9 million, after deducting transaction costs, in net proceeds from the sale of our Common Stock and warrants during the six months ended June 30, 2025.

Current wording

Our net cash provided by financing activities decreased by $6.4 million during the nine months ended September 30, 2026, compared to the prior year period. This decrease was primarily attributable to lower net proceeds from equity issuances; specifically, we received $29.0 million, after deducting transaction costs, in net proceeds from the sale of our Common Stock during the nine months ended September 30, 2026, compared to $35.5 million, after deducting transaction costs, in net proceeds from the sale of our Common Stock and warrants during the nine months ended September 30, 2025.