Nautilus Biotechnology, Inc.

Previous wording

In order to commercialize our Nautilus Voyager TM platform in volume, we will need to establish internal manufacturing capacity or to contract with one or more manufacturing partners, or both. Our technology is complex, and the manufacturing process for our products will be similarly complex, involving a large number of unique precision parts in addition to the production of various reagents and antibodies. We may encounter unexpected difficulties in manufacturing our Nautilus Voyager platform, instruments, and related consumables. Among other factors, we will need to develop reliable supply chains for the various components in our Nautilus Voyager platform, instruments, and consumables to support large-scale commercial production. In connection with our Nautilus Voyager platform, upon completion of development we intend to utilize hundreds of unique multi-affinity reagents and various standard antibodies in order to generate deep proteomic information at the speed and scale which we expect our Nautilus Voyager platform to perform. Such reagents and antibodies are expected to be more difficult to manufacture and more expensive to procure. There is no assurance that we will be able to build manufacturing or consumable production capacity internally or find one or more suitable manufacturing or production partners, or both, to meet the volume and quality requirements necessary to be successful in the proteomics market.

Current wording

In order to commercialize our Nautilus Voyager platform in volume, we will need to establish internal manufacturing capacity or to contract with one or more manufacturing partners, or both. Our technology is complex, and the manufacturing process for our products will be similarly complex, involving a large number of unique precision parts in addition to the production of various reagents and antibodies. We may encounter unexpected difficulties in manufacturing our Nautilus Voyager platform, instruments, and related consumables. Among other factors, we will need to develop reliable supply chains for the various components in our Nautilus Voyager platform, instruments, and consumables to support large-scale commercial production. In connection with our Nautilus Voyager platform, upon completion of development we intend to utilize hundreds of unique multi-affinity reagents and various standard antibodies in order to generate deep proteomic information at the speed and scale which we expect our Nautilus Voyager TM platform to perform. Such reagents and antibodies are expected to be more difficult to manufacture and more expensive to procure. There is no assurance that we will be able to build manufacturing or consumable production capacity internally or find one or more suitable manufacturing or production partners, or both, to meet the volume and quality requirements necessary to be successful in the proteomics market.

Previous wording

Prior to the Business Combination, we financed our operations primarily through private placements of convertible preferred stock and had raised aggregate net proceeds of $108.4 million from these private placements. In connection with the consummation of the Business Combination and PIPE Financing, we received additional gross proceeds of approximately $345.5 million from PIPE Investors and the Business Combination, offset by approximately $18.2 million of transaction costs and underwriters’ fees relating to the closing of the Business Combination. As of June 30, 2026, we had cash, cash equivalents and short-term investments of $84.0 million. As of the filing of this Quarterly Report on Form 10-Q, we believe that our existing cash, cash equivalents, and short-term investments will enable us to fund our planned operating expenses and capital expenditures through at least the next 12 months.

Current wording

Prior to the Business Combination, we financed our operations primarily through private placements of convertible preferred stock and had raised aggregate net proceeds of $108.4 million from these private placements. In connection with the consummation of the Business Combination and PIPE Financing, we received additional gross proceeds of approximately $345.5 million from PIPE Investors and the Business Combination, offset by approximately $18.2 million of transaction costs and underwriters’ fees relating to the closing of the Business Combination. As of September 30, 2026, we had cash, cash equivalents and investments of $114.3 million. As of the filing of this Quarterly Report on Form 10-Q, we believe that our existing cash, cash equivalents, and investments will enable us to fund our planned operating expenses and capital expenditures through at least the next 12 months.

Previous wording

We have incurred significant losses since the commencement of our operations. Our net loss was $29.2 million during the six months ended June 30, 2026, and we expect to continue to incur significant losses for the foreseeable future as we continue our research and development activities and planned commercialization of our Nautilus Voyager TM platform. As of June 30, 2026, we had an accumulated deficit of $361.2 million. These losses have resulted primarily from costs incurred in connection with research and development activities and to a lesser extent from selling, general and administrative costs associated with our operations. We expect to incur significant and increasing expenses and operating losses for the foreseeable future. Our net losses may fluctuate significantly from period to period, depending on the timing of and expenditures on our planned commercialization and research and development activities.

Current wording

We have incurred significant losses since the commencement of our operations. Our net loss was $44.8 million during the nine months ended September 30, 2026, and we expect to continue to incur significant losses for the foreseeable future as we continue our research and development activities and planned commercialization of our Nautilus Voyager TM platform. As of September 30, 2026, we had an accumulated deficit of $376.8 million. These losses have resulted primarily from costs incurred in connection with research and development activities and to a lesser extent from selling, general and administrative costs associated with our operations. We expect to incur significant and increasing expenses and operating losses for the foreseeable future. Our net losses may fluctuate significantly from period to period, depending on the timing of and expenditures on our planned commercialization and research and development activities.

Previous wording

Grant revenue consists of a research-related grant from The Michael J. Fox Foundation and reflects the commencement of grant-related activities during the second quarter of 2026. Our service revenue is derived from the generation and analysis of proteomic data for our Early Access Program customers, which commenced in the second quarter of 2026.

Current wording

Grant revenue is derived from activities related to a research-related grant from The Michael J. Fox Foundation and service revenue is derived from the generation and analysis of proteomic data for our Early Access Program customers, both of which commenced in the second quarter of 2026.

Previous wording

Revenue was $0.2 million for the three months ended June 30, 2026, driven by grant revenue of $0.2 million from the commencement of our activities related to the grant awarded from The Michael J. Fox Foundation in the second quarter of 2026, and service revenue of less than $0.1 million for the sales of services under the Early Access Program during the three months ended June 30, 2026.

Current wording

Revenue was $0.2 million for the three months ended September 30, 2026, driven by grant revenue of $0.2 million related to the grant awarded from The Michael J. Fox Foundation, and service revenue of less than $0.1 million for the sales of services under the Early Access Program during the three months ended September 30, 2026.

Previous wording

Research and development expenses were $9.6 million for the three months ended June 30, 2026, compared to $10.4 million for the three months ended June 30, 2025, a decrease of $0.8 million, or 8%. The decrease was due to a $0.2 million decrease in stock-based compensation expense and a $0.2 million decrease in laboratory and professional services. Also contributing to the decrease was a $0.2 million decrease in facilities expense driven by the expiration of the San Diego lease, decreases in maintenance costs for our leases, and a $0.2 million decrease in depreciation expense.

Current wording

Research and development expenses were $10.2 million for the three months ended September 30, 2026, compared to $9.6 million for the three months ended September 30, 2025, an increase of $0.6 million, or 6%. The increase was due to a $0.7 million increase in laboratory and professional services driven by higher development-related costs and a $0.3 million increase in salaries and related benefits. These increases were partially offset by a $0.2 million decrease in depreciation expense and a $0.2 million decrease in facilities expense.

Previous wording

Selling, general and administrative expenses were $6.3 million for the three months ended June 30, 2026, compared to $6.7 million for the three months ended June 30, 2025, a decrease of $0.4 million, or 6%. The decrease was due to a $0.3 million decrease in salaries and related benefits, attributable to reduced incentive compensation costs during the period, and a $0.3 million decrease in stock-based compensation expense. These decreases were partially offset by a $0.2 million increase in professional services attributable to legal and recruiting fees.

Current wording

Selling, general and administrative expenses were $6.8 million for the three months ended September 30, 2026, compared to $5.9 million for the three months ended September 30, 2025, an increase of $0.9 million, or 15%. The increase was due to a $0.6 million increase in professional services primarily attributable to legal and marketing expenses, and a $0.4 million increase in salaries and related benefits, attributable to reduced incentive compensation costs in the prior period. These increases were partially offset by a $0.1 million decrease in facilities expense.

Previous wording

Other income (expense) was $1.3 million for the three months ended June 30, 2026, compared to $2.1 million for the three months ended June 30, 2025, a decrease of $0.8 million, or 37%. The net decrease was primarily due to a $0.8 million decrease in interest income driven by a lower cash, cash equivalents, and investments balance as well as decreased yield rates on investments during the period.

Current wording

Other income (expense) was $1.1 million for the three months ended September 30, 2026, compared to $1.9 million for the three months ended September 30, 2025, a decrease of $0.8 million, or 42%. The net decrease was primarily due to a $0.7 million decrease in interest income driven by a lower cash, cash equivalents, and investments balance as well as decreased yield rates on investments during the period.

Previous wording

Comparison of the Six Months Ended June 30, 2026 to the Six Months Ended June 30, 2025

Current wording

Comparison of the Nine Months Ended September 30, 2026 to the Nine Months Ended September 30, 2025

Previous wording

Revenue was $0.2 million for the six months ended June 30, 2026, driven by grant revenue of $0.2 million from the commencement of our activities related to the grant awarded from The Michael J. Fox Foundation in the second quarter of 2026, and service revenue of less than $0.1 million for the sales of services under the Early Access Program during the six months ended June 30, 2026.

Current wording

Revenue was $0.4 million for the nine months ended September 30, 2026, driven by grant revenue of $0.4 million related to the grant awarded from The Michael J. Fox Foundation, and service revenue of less than $0.1 million for the sales of services under the Early Access Program during the nine months ended September 30, 2026.

Previous wording

Research and development expenses were $19.3 million for the six months ended June 30, 2026, compared to $21.9 million for the six months ended June 30, 2025, a decrease of $2.6 million, or 12%. The decrease was primarily due to a $1.1 million decrease in salaries and related benefits, which was primarily driven by savings from the reduction in force implemented in the first quarter of 2025 and reduced incentive compensation costs during the period, as well as a $0.5 million decrease in stock-based compensation expense. The decrease in stock-based compensation expense is primarily driven by stock options granted at the time of the Merger becoming fully expensed in 2025. Also contributing to the decrease was a $0.4 million decrease in facilities expense driven by decreases in maintenance costs for our leases and the expiration of the San Diego lease, a $0.4 million decrease in laboratory and professional services, and a $0.3 million decrease in depreciation expense.

Current wording

Research and development expenses were $29.5 million for the nine months ended September 30, 2026, compared to $31.5 million for the nine months ended September 30, 2025, a decrease of $2.0 million, or 6%. The decrease was primarily due to a $0.7 million decrease in salaries and related benefits, which was primarily driven by savings from the reduction in force implemented in the first quarter of 2025 and reduced incentive compensation costs during the period, as well as a $0.6 million decrease in stock-based compensation expense. The decrease in stock-based compensation expense is primarily driven by lower expense associated with stock options granted since the Merger and stock options granted at the time of the Merger becoming fully expensed in 2025. Also contributing to the decrease was a $0.6 million decrease in facilities expense driven by decreases in maintenance costs for our leases and the expiration of the San Diego lease and a $0.5 million decrease in depreciation expense. These decreases were partially offset by a $0.2 million increase in laboratory and professional services.

Previous wording

Selling, general and administrative expenses were $12.7 million for the six months ended June 30, 2026, compared to $14.0 million for the six months ended June 30, 2025, a decrease of $1.3 million, or 9%. The decrease was primarily due to a $0.9 million decrease in stock-based compensation expense, which was primarily driven by stock options granted at the time of the Merger becoming fully expensed in 2025. Also contributing to the decrease was a $0.7 million decrease in salaries and related benefits driven by savings from the reduction in force implemented in the first quarter of 2025 and reduced incentive compensation costs during the period, and a $0.2 million decrease in facilities expense. These decreases were partially offset by a $0.4 million increase in professional services attributable to legal and recruiting fees.

Current wording

Selling, general and administrative expenses were $19.5 million for the nine months ended September 30, 2026, compared to $19.9 million for the nine months ended September 30, 2025, a decrease of $0.4 million, or 2%. The decrease was primarily due to a $1.0 million decrease in stock-based compensation expense, which was primarily driven by lower expense associated with stock options granted since the Merger and stock options granted at the time of the Merger becoming fully expensed in 2025. Also contributing to the decrease was a $0.4 million decrease in facilities expense and a $0.3 million decrease in salaries and related benefits. These decreases were partially offset by a $1.1 million increase in professional services attributable to legal, marketing and recruiting expenses.

Previous wording

Other income (expense) was $2.7 million for the six months ended June 30, 2026, compared to $4.3 million for the six months ended June 30, 2025, a decrease of $1.6 million, or 37%. The net decrease was primarily due to a $1.6 million decrease in interest income driven by a lower cash, cash equivalents, and investments balance as well as decreased yield rates on investments during the period.

Current wording

Other income (expense) was $3.8 million for the nine months ended September 30, 2026, compared to $6.2 million for the nine months ended September 30, 2025, a decrease of $2.4 million, or 38%. The net decrease was primarily due to a $2.3 million decrease in interest income driven by a lower cash, cash equivalents, and investments balance as well as decreased yield rates on investments during the period.

Previous wording

Since our inception, we have not generated any material revenue from product sales and have incurred significant operating losses and negative cash flows from our operations. Our net loss was $29.2 million for the six months ended June 30, 2026. As of June 30, 2026, we had an accumulated deficit of $361.2 million. Prior to the Business Combination, we funded our operations primarily with proceeds from the sale of convertible preferred stock. Prior to the Business Combination, we had raised net proceeds of $108.4 million from these private placements of our convertible preferred stock. In June 2021, in conjunction with the consummation of the Business Combination with ARYA, we received additional gross proceeds of approximately $345.5 million from PIPE Investors and the Business Combination, offset by approximately $18.2 million of transaction costs and underwriters’ fees relating to the closing of the Business Combination. As of June 30, 2026, we had cash, cash equivalents and investments of $129.2 million.

Current wording

Since our inception, we have not generated any material revenue from product sales and have incurred significant operating losses and negative cash flows from our operations. Our net loss was $44.8 million for the nine months ended September 30, 2026. As of September 30, 2026, we had an accumulated deficit of $376.8 million. Prior to the Business Combination, we funded our operations primarily with proceeds from the sale of convertible preferred stock. Prior to the Business Combination, we had raised net proceeds of $108.4 million from these private placements of our convertible preferred stock. In June 2021, in conjunction with the consummation of the Business Combination with ARYA, we received additional gross proceeds of approximately $345.5 million from PIPE Investors and the Business Combination, offset by approximately $18.2 million of transaction costs and underwriters’ fees relating to the closing of the Business Combination. As of September 30, 2026, we had cash, cash equivalents and investments of $114.3 million.

Previous wording

In February 2024, we entered into a sales agreement (the “Sales Agreement”) with Cowen and Company, LLC (“TD Cowen”)under which we may offer and sell up to $125.0 million of shares of our common stock from time to time through an “at the market” offering program under which TD Cowen will act as sales agent. Under the Sales Agreement, we set the parameters for the sale of shares, including the number or dollar amount of shares to be issued, the time period during which sales are requested to be made, limitations on the number or dollar amount of shares that may be sold in any one trading day and any minimum price below which sales may not be made. The Sales Agreement provides that TD Cowen will be entitled to compensation for its services in an amount equal to up to 3.0% of the gross proceeds of all shares of common stock sold through TD Cowen under the Sales Agreement. We have no obligation to sell any shares under the Sales Agreement and may at any time suspend solicitation and offers under the Sales Agreement. During the six months ended June 30, 2026, we did not sell any shares of common stock pursuant to the Sales Agreement.

Current wording

In September 2026, we terminated the Prior Sales Agreement and entered into a new sales agreement (the “Sales Agreement”) with TD Cowen under which we may offer and sell up to $125.0 million of shares of our common stock from time to time through an “at the market” offering program under which TD Cowen will act as sales agent. Under the Sales Agreement, we set the parameters for the sale of shares, including the number or dollar amount of shares to be issued, the time period during which sales are requested to be made, limitations on the number or dollar amount of shares that may be sold in any one trading day and any minimum price below which sales may not be made. The Sales Agreement provides that TD Cowen will be entitled to compensation for its services in an amount equal to up to 3.0% of the gross proceeds of all shares of common stock sold through TD Cowen under the Sales Agreement. We have no obligation to sell any shares under the Sales Agreement and may at any time suspend solicitation and offers under the Sales Agreement. During the nine months ended September 30, 2026, we did not sell any shares of common stock pursuant to the Prior Sales Agreement or Sales Agreement.

Previous wording

The shares of our common stock to be offered and sold under the Sales Agreement will be issued and sold pursuant to our shelf registration statement on Form S-3 (File No. 333-277437) (the “Shelf Registration Statement”), which was filed with the SEC on February 28, 2024 and which became effective March 6, 2024. No securities have yet been sold under the Shelf Registration Statement.

Current wording

The shares of our common stock to be offered and sold under the Sales Agreement will be issued and sold pursuant to our shelf registration statement on Form S-3 (File No. 333-298884) (the “Shelf Registration Statement”), which was filed with the SEC on September 11, 2026, and which became effective September 18, 2026. No securities have yet been sold under the Shelf Registration Statement.

Previous wording

As of the filing of this Quarterly Report on Form 10-Q, we expect our current cash, cash equivalents, and short-term investments will be sufficient to fund our operating expenses and capital expenditures for at least the next 12 months. We continue to face challenges and uncertainties and, as a result, our available capital resources may be consumed more rapidly than currently expected due to: delays in execution of our development plans; the scope and timing of our investment in our sales, marketing, and distribution capabilities; changes we may make to the business that affect ongoing operating expenses; the costs of filing, prosecuting, defending and enforcing any patent claims and other intellectual property rights; changes we may make in our business or commercialization strategy; changes we may make in our research and development spending plans; our need to implement additional infrastructure and internal systems; the impact of global and national conflicts or other disruptions; and other items affecting our forecasted level of expenditures and use of cash resources including potential acquisitions.

Current wording

As of the filing of this Quarterly Report on Form 10-Q, we expect our current cash, cash equivalents, and investments will be sufficient to fund our operating expenses and capital expenditures for at least the next 12 months. We continue to face challenges and uncertainties and, as a result, our available capital resources may be consumed more rapidly than currently expected due to: delays in execution of our development plans; the scope and timing of our investment in our sales, marketing, and distribution capabilities; changes we may make to the business that affect ongoing operating expenses; the costs of filing, prosecuting, defending and enforcing any patent claims and other intellectual property rights; changes we may make in our business or commercialization strategy; changes we may make in our research and development spending plans; our need to implement additional infrastructure and internal systems; the impact of global and national conflicts or other disruptions; and other items affecting our forecasted level of expenditures and use of cash resources including potential acquisitions.

Previous wording

Until such time as we can generate significant revenue from commercialization of our products, if ever, we will continue to require substantial additional capital to develop our Nautilus Voyager platform and fund operations for the foreseeable future. We intend to obtain such capital through public or private equity offerings or debt financings (including potential sales under the Sales Agreement), credit or loan facilities or a combination of one or more of these funding sources. We may also seek additional financing opportunistically. We may be unable to raise additional funds on favorable terms or at all. Our ability to raise additional funds may be adversely impacted by potential worsening global economic conditions and disruptions to, and volatility in, the credit and financial markets in the United States and worldwide, any potential future financial institution failures, geopolitical conflicts, such asthe conflicts in Eastern Europe and the Middle East, and otherwise. Our failure to raise additional capital, if needed, would have a negative impact on our financial condition and our ability to execute our business plan.

Current wording

Until such time as we can generate significant revenue from commercialization of our products, if ever, we will continue to require substantial additional capital to develop our Nautilus Voyager TM platform and fund operations for the foreseeable future. We intend to obtain such capital through public or private equity offerings or debt financings (including potential sales under the Sales Agreement), credit or loan facilities or a combination of one or more of these funding sources. We may also seek additional financing opportunistically. We may be unable to raise additional funds on favorable terms or at all. Our ability to raise additional funds may be adversely impacted by potential worsening global economic conditions and disruptions to, and volatility in, the credit and financial markets in the United States and worldwide, any potential future financial institution failures, geopolitical conflicts, such asthe conflicts in Eastern Europe and the Middle East, and otherwise. Our failure to raise additional capital, if needed, would have a negative impact on our financial condition and our ability to execute our business plan.

Previous wording

Our expected future capital requirements depend on many factors including expansion of our product portfolio and the timing and extent of spending on sales and marketing and the development of our technology. If we raise additional funds by issuing equity securities, including any issuances pursuant to our “at the market” equity offering program under our Sales Agreement with TD Cowen or our Shelf Registration Statement, our stockholders will experience dilution. Any future debt financing into which we enter may impose upon us additional covenants that restrict our operations, including limitations on our ability to incur liens or additional debt, pay dividends, repurchase our common stock, make certain investments and engage in certain merger, consolidation or asset sale transactions. Any debt financing or additional equity that we raise may contain terms that are not favorable to us or our stockholders.

Current wording

Our expected future capital requirements depend on many factors including expansion of our product portfolio and the timing and extent of spending on sales and marketing and the development of our technology. If we raise additional funds by issuing equity securities, including any issuances pursuant to our “at the market” equity offering program under our Sales Agreement with TD Cowen or otherwise under our Shelf Registration Statement, our stockholders will experience dilution. Any future debt financing into which we enter may impose upon us additional covenants that restrict our operations, including limitations on our ability to incur liens or additional debt, pay dividends, repurchase our common stock, make certain investments and engage in certain merger, consolidation or asset sale transactions. Any debt financing or additional equity that we raise may contain terms that are not favorable to us or our stockholders.

Previous wording

The following table summarizes our cash flows for the six months ended June 30, 2026 and 2025:

Current wording

The following table summarizes our cash flows for the nine months ended September 30, 2026 and 2025:

Previous wording

During the six months ended June 30, 2026, net cash used in operating activities was $26.8 million, resulting from our net loss of $29.2 million and decrease in net changes in assets and liabilities aggregating $2.9 million. Net cash used in operating activities includes non-cash charges aggregating $5.2 million, which is driven by $2.5 million of stock-based compensation expense, $2.2 million of amortization of operating lease right-of-use assets, and $0.6 million of depreciation. These non-cash charges were partially offset by $0.1 million of net accretion of discounts on securities.

Current wording

During the nine months ended September 30, 2026, net cash used in operating activities was $40.1 million, resulting from our net loss of $44.8 million and decrease in net changes in assets and liabilities aggregating $3.1 million. Net cash used in operating activities includes non-cash charges aggregating $7.8 million, which is driven by $3.8 million of stock-based compensation expense, $3.2 million of amortization of operating lease right-of-use assets, and $0.9 million of depreciation. These non-cash charges were partially offset by less than $0.1 million of net accretion of discounts on securities.

Previous wording

During the six months ended June 30, 2025, net cash used in operating activities was $27.3 million, resulting from our net loss of $31.6 million and decrease in net changes in assets and liabilities aggregating $1.8 million. Net cash used in operating activities includes non-cash charges aggregating $6.2 million, which is driven by $3.9 million of stock-based compensation expense, $2.3 million amortization of operating lease right-of-use assets, and$0.9 million of depreciation. These non-cash charges were partially offset by$1.0 million of net accretion of discounts on securities.

Current wording

During the nine months ended September 30, 2025, net cash used in operating activities was $38.3 million, resulting from our net loss of $45.2 million and decrease in net changes in assets and liabilities aggregating $2.1 million. Net cash used in operating activities includes non-cash charges aggregating $9.0 million, which is driven by $5.4 million of stock-based compensation expense, $3.5 million of amortization of operating lease right-of-use assets, and$1.3 million of depreciation. These non-cash charges were partially offset by$1.3 million of net accretion of discounts on securities.

Previous wording

During the six months ended June 30, 2025, net cash provided by investing activities was $34.0 million, resulting from $45.9 million in proceeds from maturities of securities, partially offset by$11.3 million in purchases of securities and $0.6 million in purchases of property and equipment.

Current wording

During the nine months ended September 30, 2026, net cash provided by investing activities was $36.7 million, resulting from $76.6 million in proceeds from the maturities of securities, partially offset by $37.5 million in purchases of securities and $2.4 million in purchases of property and equipment.

Previous wording

During the six months ended June 30, 2026, net cash provided by investing activities was $26.3 million, resulting from $55.7 million in proceeds from the maturities of securities, partially offset by $28.5 million in purchases of securities and $1.0 million in purchases of property and equipment.

Current wording

During the nine months ended September 30, 2025, net cash provided by investing activities was $34.4 million, resulting from $74.2 million in proceeds from the maturities of securities, partially offset by$38.8 million in purchases of securities and $1.0 million in purchases of property and equipment.

Previous wording

During the six months ended June 30, 2026, cash provided by financing activities was comprised of $1.3 million of proceeds from the exercise of stock options and issuance of common stock under the employee stock purchase plan.

Current wording

During the nine months ended September 30, 2026, cash provided by financing activities was comprised of $1.4 million of proceeds from the exercise of stock options and issuance of common stock under the employee stock purchase plan.

Previous wording

During the six months ended June 30, 2025, cash provided by financing activities was comprised of$0.1 million ofproceeds from the exercise of stock optionsand issuance of common stock under the employee stock purchase plan.

Current wording

During the nine months ended September 30, 2025, cash provided by financing activities was comprised of$0.1 million ofproceeds from the exercise of stock optionsand issuance of common stock under the employee stock purchase plan.