PDYN 8-K
Palladyne AI Corp. (PDYN)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
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Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
Securities registered pursuant to Section 12(b) of the Act:
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Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Item 3.02 Unregistered Sales of Equity Securities
On November 14, 2025, Palladyne AI Corp. (the "Company"), issued 2,672,013 shares of the Company's Common Stock, par value $0.0001 per share (the “Common Stock”), in accordance with the terms and subject to the conditions set forth in the Agreement and Plan of Merger (the “GuideTech Merger Agreement”) by and among the Company, Palares I Inc., a Utah corporation and wholly owned subsidiary of Parent (“Merger Sub I”), Palares LLC, a Utah limited liability company and wholly owned subsidiary of Parent (“Merger Sub II”), GuideTech, LLC, a Utah limited liability company (“GuideTech”) and certain individual equity holders of GuideTech (the “Members”). Pursuant to the GuideTech Merger Agreement, the Company may also issue additional shares of Common Stock in connection with an earnout, in an amount not to exceed $25.0 million. The exact number of shares of Common Stock to be issued will depend upon whether earnout targets are achieved, the market value of the Common Stock, the working capital and other adjustments to the Purchase Price set forth in the GuideTech Merger Agreement, including offsets, if any, for indemnification obligations, and whether the earnout consideration will be paid in cash or Common Stock, at the Company’s election. In no event will the Company issue a number of shares of Common Stock equal to or in excess of 19.9% of the number of shares of Common Stock outstanding before the issuance of shares in this transaction without stockholder approval. The offer and sale of the Common Stock is being made in reliance on the exemption from registration afforded under Section 4(a)(2) of the Securities Act of 1933 and/or Rule 506 of Regulation D under the Securities Act.
Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
On November 15, 2025, based on the recommendation of the Compensation Committee of the Company’s board of directors given after multiple meetings and discussions and after receiving the advice of outside, independent advisors, the Company’s board of directors approved new restricted stock unit awards to our Chief Executive Officer and certain other executives covering 5,360,659 shares of the common stock of the Company, subject to the Company’s attainment of the following stock price goals and vesting requirements.
The Company will seek approval of these executive restricted stock unit awards at its next annual meeting of stockholders, or at an earlier special meeting of stockholders called for this purpose. If stockholder approval is not received, each of the awards will terminate without vesting.
Vesting Tranche |
Stock Price Goal |
Vesting Condition |
1 |
$20.00 |
25% on attainment of the stock price goal, and an additional 25% on the six-, twelve- and eighteen-month anniversaries of this attainment, subject to the executive’s continued service through each vesting date |
2 |
$25.00 |
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3 |
$30.00 |
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4 |
$35.00 |
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5 |
$40.00 |
25% on attainment of the stock price goal, and an additional 25% on the three-, six-, and twelve-month anniversaries of this attainment, subject to the executive’s continued service through each vesting date |
6 |
$45.00 |
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7 |
$50.00 |
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8 |
$55.00 |
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9 |
$60.00 |
33.3% on attainment of the stock price goal, an additional 33.3% on the three-month anniversary of this attainment, and an additional 33.4% on the six-month anniversary of this attainment, subject to the executive’s continued service through each vesting date |
10 |
$65.00 |
Each award will be divided into 10 equally-sized tranches. The stock price goal for each tranche will be met only when the closing price per share of the Company’s common stock meets or exceeds (and does not drop below) the stock price goal on a sustained basis for a period of 60 consecutive trading days.
If the stock price goal for a tranche is achieved, the number of restricted stock units that will be eligible for vesting for that tranche on a vesting date will be based on the increase in value of the Company’s stock from the time of grant to the time of vesting. The increase in value will be determined by multiplying (a) the number of units subject to the tranche scheduled to vest on that vesting date by (b) (i) the excess, if any, of the volume-weighted average closing price of the Company’s common shares for the 20-trading day period prior to and including the vesting date over the volume-weighted average closing price of the Company’s common shares for the 20-trading day period ending on and including November 15, 2025 divided by (ii) by the volume-weighted average closing price of the Company’s common shares for the 20-trading day period prior to and including the vesting date.
On termination of the executive’s service due to a termination by the Company without cause or by the executive for good reason (in each case within the meaning of the executive’s employment agreement), if executive otherwise satisfies the conditions for payment
of severance under the executive’s employment agreement, including executive’s release of claims against the Company, then executive will become vested in all tranches for which the stock price goal has been achieved prior to the date of such termination.
On termination of the executive’s service due to the executive’s death or by the Company for disability (within the meaning of the executive’s employment agreement), or, for Mr. Wolff only, if he continues to be a member of our board of directors after he ceases to be an employee and subsequently ceases to be a director because he is not nominated for reelection or he is not reelected, if executive satisfies the condition of receipt of severance under executive’s employment agreement applicable to termination by the Company without cause, including executive’s release of claims against the Company, then executive will become vested in all tranches for which the stock price goal has been achieved prior to the date of such termination.
In the event of a change in control (which has the same definition used in the Company’s stockholder-approved 2021 Equity Incentive Plan) that occurs before achievement of the stock price goal for any tranche, achievement will be measured based on the closing price of our common stock on the last trading day prior to closing of the change in control, any tranche for which the stock price goal is met as so measured will vest in full on the executive’s continued service through the closing date and any tranche for which the stock price goal is not met as so measured will be forfeited.
The numbers of shares subject to these executive restricted stock unit awards are 4,470,942 for our Chief Executive Officer, Benjamin Wolff; 447,094 for Denis Garagic, our Chief Technology Officer and co-founder; and 147,541 each for Trevor Thatcher, our Chief Financial Officer, Kristi Martindale, our Chief Commercial Officer, and Stephen Sonne, our Chief Legal Officer and Secretary. If there is a change in our capitalization that would result in an adjustment of the number of shares under the terms of our stockholder-approved equity plan, the number of shares subject to these awards will be adjusted in the same manner.
The foregoing description of the restricted stock unit awards is qualified in its entirety by reference to the form of Stand-Alone Restricted Stock Unit Agreement, a copy of which is filed as Exhibit 10.1 to this Current Report on Form 8-K and is incorporated herein by reference.
Item 7.01 Regulation FD Disclosure.
On November 17, 2025, the Company issued a press release announcing the completion of the transactions contemplated in the GuideTech Merger Agreement and the Membership Purchase Agreement dated November 14, 2025 by and among the Company, Palladyne Corp., a wholly owned subsidiary of the Company, Crucis Partners, LLC, Warnke Precision Machining, LLC, MKR Fabrication, LLC, MKR Fabrication Properties, LLC, and certain other parties named therein (the "Crucis Membership Purchase Agreement"). A copy of the press release is furnished herewith as Exhibit 99.1 to this Current Report on Form 8-K.
The Company announces material information to the public through a variety of means, including filings with the SEC, public conference calls, the Company’s website (https://www.palladyneai.com/), its investor relations website (https://investor.palladyneai.com/), and its news site (https://www.palladyneai.com/press/). The Company uses these channels, as well as its social media, including its X (@PalladyneAI) and LinkedIn accounts (https://www.linkedin.com/company/palladyneaicorp/), to communicate with investors and the public news and developments about the Company, its products and other matters. Therefore, the Company encourages investors, the media, and others interested in the Company to review the information it makes public in these locations, as such information could be deemed to be material information. The information that can be accessed through hyperlinks or website addresses included in this Current Report on Form 8-K and Exhibits 99.1 and 99.2 attached hereto is deemed not to be incorporated in or part of this Current Report on Form 8-K.
The information contained in this Item 7.01 (including Exhibit 99.1) is being furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that Section. The information in this Current Report on Form 8-K shall not be deemed incorporated by reference in any filing under the Securities Act or the Exchange Act, except as expressly set forth by specific reference in such filing.
Item 8.01 Other Events.
On November 14, 2025, the Company completed its acquisition of GuideTech (the “Closing”), pursuant to the GuideTech Merger Agreement. Pursuant to the GuideTech Merger Agreement, Merger Sub I merged with and into GuideTech, with GuideTech continuing as the surviving corporation and a wholly owned subsidiary of the Company (the “First Merger”). Immediately following the First Merger, and as part of the same overall transaction, GuideTech merged with and into Merger Sub II, with Merger Sub II continuing as the surviving entity (the “Second Merger, and together with the First Merger, the “Merger”). The Merger is intended to qualify as a tax-free reorganization for U.S. federal income tax purposes.
Under the terms of the GuideTech Merger Agreement, the Company issued to the Members (i) 2,672,013 shares of Company Common Stock, par value $0.0001 per share, (the “Common Stock”) valued at $20,000,000 based on the volume weighted average closing price per share of Company Common Stock on Nasdaq for 10 consecutive trading days ending on the third business day immediately preceding the date of the Closing (the “Stock Consideration”), and (ii) a cash payment of $5,000,000 (the “Cash
Consideration” and together with the Stock Consideration, the “Purchase Price”). Payment of the Purchase Price at Closing was subject to customary adjustments for outstanding indebtedness, transaction expenses and working capital. 267,202 shares of the Stock Consideration are subject to a lock-up for 18 months following the acquisition and will serve as security for certain indemnification obligations of the Members and any post-closing adjustments to the Purchase Price. In addition, the Members will be eligible to receive up to $25,000,000 in additional consideration, payable in cash or shares of Common Stock as determined by the Company in its sole discretion (the “Earnout” and, together with the Purchase Price, the “Merger Consideration”), conditioned upon achievement of certain net revenue milestones attributable to eligible GuideTech products and services over the five year period ending on December 31, 2030. In no event will the Company issue as Merger Consideration a number of shares equal to or in excess of 19.9% of the number of shares of Common Stock outstanding before the issuance of such shares in the Merger without stockholder approval.
The Company is required to file a registration statement for the Merger Consideration issued or issuable in Common Stock pursuant to the GuideTech Merger Agreement as soon as practicable but no later than 90 days following the Closing, and to use commercially reasonable efforts to cause the registration statement to be declared effective as soon as reasonably practicable after filing.
The Merger Agreement contains customary representations and warranties by GuideTech and the Company Members, and indemnification obligations of the Company Members arising from breach of representations, certain specified matters, covenant breaches or fraud. The breach of certain representations and warranties provided by GuideTech beyond certain stated amounts is covered through a representation and warranty insurance policy held by the Company.
Separately, on November 14, 2025, the Company also completed the acquisition of Warnke Precision Machining, LLC, MKR Fabrication, LLC and MKR Fabrication Properties, LLC (the "Crucis Acquisition") pursuant to the Crucis Membership Purchase Agreement. The companies acquired in the Crucis acquisition bring certain debt obligations and ownership of certain real estate, and the Company made an immaterial cash payment to the Sellers in connection with the acquisition.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
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Exhibit |
Description |
10.1 |
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99.1 |
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104 |
Cover Page Interactive Data File (formatted as Inline XBRL) |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
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Palladyne AI Corp. |
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Dated: |
November 17, 2025 |
By: |
/s/ Stephen Sonne |
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Name: Title: |
Stephen Sonne |
Exhibit 10.1
PALLADYNE AI CORP.
STAND-ALONE RESTRICTED STOCK UNIT AGREEMENT
NOTICE OF RESTRICTED STOCK UNIT GRANT
Participant Name: (“Participant”)
Address:
Participant has been granted an award of Restricted Stock Units (the “Award”) subject to the terms and conditions of this Stand-Alone Restricted Stock Unit Agreement, which includes this Notice of Restricted Stock Unit Grant (the “Notice of Grant”), the Terms and Conditions of Restricted Stock Unit Grant attached hereto as Exhibit A, and all other exhibits, appendices and addenda attached hereto (the “Award Agreement”).
Grant Number: ______________________________
Date of Grant: ______________________________
Vesting Commencement Date: ______________________________
Total Number of Restricted Stock Units: ______________________________
Event Deadline Date: ______________________________
Stockholder Approval:
The Company intends to submit this Award to the Company’s stockholders for their approval at the next annual meeting of the stockholders of the Company, which is expected to occur in or around June of 2026 (the “Annual Meeting”) or at an earlier special meeting of stockholders called for the purpose of approving this Award. In the event that the stockholders of the Company do not approve this Award by the date of such Annual Meeting or the last adjournment thereof, the Award shall be null and void, and of no further effect, and Participant will have no further rights under the Award Agreement. In no event will any portion of this Award vest prior to stockholder approval of this Award. To the extent that any vesting condition with respect to this Award otherwise would be satisfied pursuant to the Vesting Schedule prior to the date of any such stockholder approval, the applicable vesting date for the portion of the Award will not occur before, and will be delayed until, the date of such stockholder approval.
Vesting Schedule:
Subject to any acceleration provisions contained in this Award Agreement, or any other written agreement authorized by the Administrator between Participant and the Company (or any Parent or Subsidiary of the Company, as applicable) governing the terms of this Award entered into after the Date of Grant, the Restricted Stock Units will be scheduled to vest according to the following vesting schedule:
As detailed in the table below, the Restricted Stock Units are divided into ten (10) vesting tranches (each a “Tranche”), with each Tranche representing one tenth (1/10th) of the Total Number of Restricted Stock Units. The vesting of each Tranche is conditioned on the satisfaction of both the Service Requirement and attainment of the Tranche’s designated Stock Price Goal, and applies only to Restricted Stock Units that become Eligible RSUs, in each case as described below.
Vesting Tranche |
Stock Price Threshold * |
1 |
$20.00 |
2 |
$25.00 |
3 |
$30.00 |
4 |
$35.00 |
5 |
$40.00 |
6 |
$45.00 |
7 |
$50.00 |
8 |
$55.00 |
9 |
$60.00 |
10 |
$65.00 |
* These Stock Price Threshold figures will be appropriately and proportionately adjusted by the Plan Administrator in the event of any Capitalization Adjustment.
The “Stock Price Goal” for a Tranche is achieved if the closing price per share of the Company’s Common Stock equals or exceeds the Stock Price Threshold set forth in the table above (taking into account any adjustment by the Plan Administrator in response to any Capitalization Adjustment) for each of a series of sixty (60) consecutive trading days that ends on or prior to the Event Deadline Date.
If the Stock Price Goal for a Tranche is achieved, the number of Restricted Stock Units eligible for vesting under that Tranche for a given vesting date (before application of the percentage of such Restricted Stock Units available for vesting on that date pursuant to the table below) will be equal to the product of (i) the total number of Restricted Stock Units allocated to that Tranche, mulitiplied by (ii) the VWAP Growth Factor for such vesting date (such Restricted Stock Units, the “Eligible RSUs”). For this purpose the “VWAP Growth Factor” for a vesting date equals the quotient of (x) the difference of (A) the 20-day VWAP for such vesting date, reduced (but not below zero) by (B) the 20-day VWAP as of the Vesting Commencement Date, divided by (y) the 20-day VWAP as of the Vesting Commencement Date. For this purpose, the “20-day VWAP” represents the volume-weighted average closing price per share of the Company’s Common Stock, measured with respect to a given date over the consecutive, trailing 20 trading days ending on and including such date.
Participant will have no right with respect to any Restricted Stock Units allocated to a Tranche for which the Stock Price Goal is not achieved on or prior to the Event Deadline Date, or
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any Restricted Stock Units that do not become Eligible RSUs (regardless of the extent to which the Service-Based Requirement is satisfied).
If the Stock Price Goal for a Tranche is achieved:, the Service Requirement will be satisfied as to a portion of the Eligible RSUs for that Tranche on the first date on which that Stock Price Goal is achieved (the “Stock Price Achievement Date”), and as to an additional portion of the Eligible RSUs for that Tranche on the designated anniversaries of the Stock Price Achievement Date, in each case as set forth in the table below, subject in each case to Participant remaining an Employee through the Stock Price Achievement Date and remaining a Service Provider through the applicable vesting date.
Vesting Tranches |
Vesting on Stock Price Achievement Date |
Vesting following Stock Price Achievement Date |
1, 2, 3 and 4 |
25% |
25% on each of the six (6) month, twelve (12) month and eighteen (18) month anniversaries of the Stock Price Achievement Date |
5, 6, 7 and 8 |
25% |
25% on each of the three (3) month, six (6) month and twelve (12) month anniversaries of the Stock Price Achievement Date |
9 and 10 |
33.3% |
33.3% on the three (3) month anniversary and 33.4% on the six (6) month anniversary of the Stock Price Achievement Date |
Notwithstanding anything to the contrary herein, the total number of Eligible RSUs for a Tranche that become vested shall not exceed one hundred percent (100%) of the total number of Restricted Stock Units allocated to that Tranche.
Qualifying Termination of Employment:
In the event that Participant becomes eligible for severance payments in connection with a termination of Participant’s employment pursuant to an offer letter or employment agreement by and between Participant and the Company (or by and among Participant, the Company and a Company subsidiary) (Participant’s “Employment Agreement”) due to a termination by the Company or an affiliate without Cause (within the meaning of the Employment Agreement) or Participant’s resignation for Good Reason (within the meaning of the Employment Agreement) outside of the Change in Control Period or similar period of heighted protection designated therein, then, notwithstanding the Service Requirement as described above, subject to Participant’s satisfaction of all conditions of receipt of such severance payments under the Employment Agreement, including Participant’s entry into and non-revocation of a Separation Agreement and Release of Claims and Participant’s compliance with the Employee Intellectual Property and Non-Compete Agreement previously executed by Participant, Participant will become vested in each Tranche for which the Stock Price Goal has been achieved prior to the date of such termination, with respect to any portion of such Tranche for which the vesting date has not occurred on or prior to such termination.
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[Qualifying Termination of Board Service:
In the event that Participant ceases to be an Employee, but continues to be a Director following such cessation of employment, and Participant subsequently ceases to be a Director because Participant is not nominated by the Company for reelection to the Board (and not because Participant declines to stand for reelection), or the stockholders of the Company fail to reelect Participant to the Board, then, notwithstanding the Service Requirement as described above, subject to Participant’s satisfaction of all conditions of receipt of severance payments under the Employment Agreement applicable to a termination of employment by the Company without Cause, including Participant’s entry into and non-revocation of a Separation Agreement and Release of Claims and Participant’s compliance with the Employee Intellectual Property and Non-Compete Agreement previously executed by Participant, Participant will become vested in each Tranche for which the Stock Price Goal has been achieved, with respect to any portion of such Tranche for which the vesting date has not occurred on or prior to such cessation of service on the Board.]
Termination of Employment due to Death or Disability:
In the event that Participant’s employment terminates due to Participant’s death or due to a termination by the Company or an affiliate based on Participant’s Disability (within the meaning of the Employment Agreement), then, notwithstanding the Service Requirement as described above, subject to Participant’s satisfaction of all conditions of receipt of severance payments under such Employment Agreement applicable to a termination of employment by the Company without Cause, including Participant’s entry into and non-revocation of a Separation Agreement and Release of Claims (which may be executed by Participant’s representative, guardian or executor, as applicable, in the case of Participant’s incapacity or death) and Participant’s compliance with the Employee Intellectual Property and Non-Compete Agreement previously executed by Participant, Participant will become vested in each Tranche for which the Stock Price Goal has been achieved, with respect to any portion of such Tranche for which the vesting date has not occurred on or prior to such termination.
Change in Control:
In the event of a Change in Control that occurs before achievement of the Stock Price Goal for any Tranche, (i) achievement of such Stock Price Goal will be measured using the closing price of the Common Stock for the last trading day prior to the date of consummation of such Change in Control in lieu of measurement of the closing price over a consecutive sixty (60) trading day period that would otherwise apply, (ii) any such Tranche for which the Stock Price Goal is not achieved based on this measurement will be forfeited in full, and (iii) any Tranche for which the Stock Price Goal is so met will vest in full upon Participant’s continued service through the the date of consummation of such Change in Control.
By Participant’s signature and the signature of the representative of the Company below, Participant and the Company agree that this Award of Restricted Stock Units is granted under and governed by the terms and conditions of this Award Agreement, including the Terms and Conditions of Restricted Stock Unit Grant, attached hereto as Exhibit A, and all other exhibits, appendices and addenda attached hereto, all of which are made a part of this document. Participant
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has reviewed this Award Agreement in its entirety, has had an opportunity to obtain the advice of counsel prior to executing this Award Agreement and fully understands all provisions of this Award Agreement. Participant hereby agrees to accept as binding, conclusive and final all decisions or interpretations of the Administrator upon any questions relating to this Award Agreement. Participant further agrees to notify the Company upon any change in Participant’s residence address indicated below.
PARTICIPANT PALLADYNE AI CORP.
Signature Signature
Print Name Print Name
Title
Residence Address:
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EXHIBIT A
PALLADYNE AI CORP.
RESTRICTED STOCK UNIT AGREEMENT
TERMS AND CONDITIONS OF RESTRICTED STOCK UNIT GRANT
Unless otherwise defined herein, defined terms shall have the meanings set forth in the Notice of Restricted Stock Unit Grant of this Award Agreement (the “Notice of Grant”) or in Section 30 below.
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In the event that the successor corporation does not assume or substitute for the Award of Restricted Stock Units (or portion thereof) in such a merger or Change in Control, all restrictions on the Award of Restricted Stock Units (or portion thereof) not assumed or substituted for will lapse, in each case unless specifically provided otherwise under this Award Agreement or other written agreement authorized by the Administrator between Participant and the Company or any of its Subsidiaries or Parents, as applicable.
For the purposes of this Section 10(c), the Award of Restricted Stock Units will be considered assumed if, following the merger or Change in Control, the Award of Restricted Stock Units confers the right to purchase or receive, for each Share subject to the Award immediately prior to the merger or Change in Control, the consideration (whether stock, cash, or other securities or property) received in the merger or Change in Control by holders of Common Stock for each Share held on the effective date of the transaction (and if holders were offered a choice of consideration, the type of consideration chosen by the holders of a majority of the outstanding Shares).
Notwithstanding anything in this Section 10(c) to the contrary, and unless otherwise provided in this Award Agreement, if the Award of Restricted Stock Units is subject to Section 409A and if the change in control definition contained in the Award Agreement (or other agreement related to the Award, as applicable) does not comply with the definition of “change in control” for purposes of a distribution under Section 409A, then any payment of an amount that is otherwise accelerated under this Section will be delayed until the earliest time that such payment would be permissible under Section 409A without triggering any penalties applicable under Section 409A.
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Participant understands that the Company and the Service Recipient may hold certain personal information about Participant, including, but not limited to, Participant’s name, home address and telephone number, date of birth, social insurance number or other identification number, salary, nationality, job title, any Shares or directorships held in the Company, details of all Restricted Stock Units or any other entitlement to Shares awarded, canceled, exercised, vested, unvested or outstanding in Participant’s favor (“Data”), for the exclusive purpose of implementing, administering and managing the Award of Restricted Stock Units.
Participant understands that Data may be transferred to a stock plan service provider, as may be selected by the Company in the future, assisting the Company with the implementation, administration and management of the Award of Restricted Stock Units. Participant understands that the recipients of the Data may be located in the United States or elsewhere, and that the recipients’ country of operation (e.g., the United States) may have different data privacy laws and protections than Participant’s country. Participant understands that if he or she resides outside the United States, he or she may request a list with the names and addresses of any potential recipients of the Data by contacting his or her local human resources representative. Participant authorizes the Company, any stock plan service provider selected by the Company and any other possible recipients which may assist the Company (presently or in the future) with implementing, administering and managing the Award of Restricted Stock Units to receive, possess, use, retain and transfer the Data, in electronic or other form, for the sole purpose of implementing, administering and managing his or her participation in the Award of Restricted Stock Units. Participant understands that Data will be held only as long as is necessary to implement, administer and manage Participant’s participation in the Award of Restricted Stock Units. Participant understands if he or she resides outside the United States, he or she may, at any time, view Data, request additional information about the storage and processing of Data, require any necessary amendments to Data or refuse or withdraw the consents herein, in any case without cost, by contacting in writing his or her local human resources representative. Further, Participant understands that he or she is providing the consents herein on a purely voluntary basis. If Participant does not consent, or if Participant later seeks to revoke his or her consent, his or her status as a Service Provider and career with the Service Recipient will not be adversely affected. The only adverse consequence of refusing or withdrawing Participant’s consent is that the Company would not be able to grant Participant Restricted Stock Units or other equity awards or administer or maintain such awards. Therefore, Participant understands that refusing or withdrawing his or her consent may affect Participant’s ability to participate in the Award of
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Restricted Stock Units. For more information on the consequences of Participant’s refusal to consent or withdrawal of consent, Participant understands that he or she may contact his or her local human resources representative.
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For purposes of this Section 30(d), persons will be considered to be acting as a group if they are owners of a corporation that enters into a merger, consolidation, purchase or acquisition of stock, or similar business transaction with the Company.
Notwithstanding the foregoing, a transaction will not be deemed a Change in Control unless the transaction qualifies as a change in control event within the meaning of Section 409A.
Further and for the avoidance of doubt, a transaction will not constitute a Change in Control if: (x) its sole purpose is to change the jurisdiction of the Company’s incorporation, or (y) its sole purpose is to create a holding company that will be owned in substantially the same proportions by the persons who held the Company’s securities immediately before such transaction.
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* * *
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APPENDIX A
PALLADYNE AI CORP.
COUNTRY ADDENDUM TO RESTRICTED STOCK UNIT AGREEMENT
Unless otherwise defined herein, capitalized terms used in this Country Addendum to Restricted Stock Unit Agreement (the “Country Addendum”) will be ascribed the same defined meanings as set forth in the Restricted Stock Unit Agreement of which this Country Addendum forms a part (or other written agreement as specified in the Restricted Stock Unit Agreement).
Terms and Conditions
This Country Addendum includes additional terms and conditions that govern the Award of Restricted Stock Units granted to a Participant to the extent Participant resides and/or works in one of the countries listed below. If Participant is a citizen or resident (or is considered as such for local law purposes) of a country other than the country in which Participant is currently residing and/or working, or if Participant relocates to another country after the Award of Restricted Stock Units is granted, the Company, in its discretion, will determine to what extent the terms and conditions contained herein will apply to Participant.
Notifications
This Country Addendum also may include information regarding exchange controls and certain other issues of which Participant should be aware with respect to Participant’s participation in the Award of Restricted Stock Units. The information is based on the securities, exchange control and other Applicable Laws in effect in the respective countries as of [DATE]. Such Applicable Laws often are complex and change frequently. As a result, the Company strongly recommends that Participant not rely on the information in this Country Addendum as the only source of information relating to the consequences of Participant’s participation in the Award of Restricted Stock Units because the information may be out of date at the time Participant vests in or receives or sells the Shares covered by the Restricted Stock Units.
In addition, the information contained in this Country Addendum is general in nature and may not apply to Participant’s particular situation, and the Company is not in a position to assure Participant of any particular result. Participant should seek appropriate professional advice as to how the Applicable Laws in Participant’s country may apply to his or her situation.
Finally, if Participant is a citizen or resident of a country other than the one in which Participant currently is residing and/or working, transfers residence and/or employment to another country after the grant of the Restricted Stock Units, or is considered a resident of another country for local law purposes, the information in this Country Addendum may not apply to Participant in the same manner.
Exhibit 99.1
Palladyne AI Establishes Vertically Integrated U.S. Defense Technology Pioneer Through Transformative Acquisitions Delivering Advanced Avionics, Precision Component Manufacturing and Embodied AI
Establishes Palladyne Defense, redefining the Mid-Tier Prime with existing revenue from leading defense contractors and emerging defense technology companies
Unites patented embodied AI, rapid design of autonomous systems and airframes and U.S. production of precision electronic and mechanical components into a vertically integrated defense platform that advances reshoring of critical capabilities
Expands portfolio with proprietary, flight-tested attritable autonomous weapons systems that deliver low cost-per-effect and scalable production capacity, addressing gaps in current defense portfolios without competing with existing customers
Transactions expected to more than triple Palladyne AI’s 2024 revenue of $7.8 million in 2026
Palladyne Commercial continues expanding Palladyne™ IQ and Pilot across industrial and commercial applications
SALT LAKE CITY—November 17, 2025 —Palladyne AI Corp. (NASDAQ: PDYN and PDYNW) (“Palladyne” or “the Company”), a developer of artificial intelligence software for autonomous platforms in the defense and commercial sectors, today announced the acquisitions of GuideTech LLC. (“GuideTech”), and two Crucis companies: Warnke Precision Machining and MKR Fabricators (the “Crucis Companies”). The acquisitions, combined with the defense variant of Palladyne™Pilot embodied AI for drones, now branded as SwarmOS™, create Palladyne Defense, a new operating division of Palladyne AI that unites patented embodied AI, UAV and loitering munitions components and systems, advanced engineering and U.S.-based manufacturing. Palladyne Defense will immediately deliver revenue-generating programs and scalable U.S. production capacity while advancing the Department of War’s modernization priorities, including intelligent autonomy, rapid iteration, low cost per effect and the reshoring of critical defense production.
Ben Wolff, President and CEO of Palladyne AI, commented:
“This marks a defining inflection point for Palladyne AI. Through the creation of Palladyne Defense, we are transforming from an AI software innovator into a vertically integrated defense technology company. We are combining breakthrough autonomy with American manufacturing strength to create a defense enterprise that is fast and scalable by design. Our ethical embodied AI operates at the edge, enabling machines to perceive, decide and act independently while maintaining alignment with mission objectives
and human intent. By uniting our patented AI with proven design, engineering and manufacturing capabilities, we are advancing the Department of War’s modernization priorities through intelligent, resilient, low cost-per-effect, reshored defense systems that strengthen readiness and preserve U.S. technological sovereignty, ensuring America’s ability to build and sustain its own next-generation defense systems.”
“We can now execute across the defense value chain, from advanced AI software through design, engineering and precision manufacturing and sales of electronics, components and subsystems. Our acquired operations already generate meaningful revenue from major primes and emerging defense technology companies, providing a foundation for growth as we bring next-generation, flight-tested attritable systems to market.”
For 2026, the acquisitions are expected to more than triple Palladyne’s 2024 revenue of $7.8 million, with near-term contributions from GuideTech’s engineering services and avionics sales, and the Crucis Companies’ manufacturing. The acquired businesses are expected to be adjusted EBITDA positive in 2026. However, Palladyne intends to invest approximately $5 million over the next 12-18 months to bring GuideTech’s proprietary loitering munitions systems to TRL (Technology Readiness Level) 9 (proven operational). The combined companies also bring a growing 18-month backlog of more than $10 million.
Redefining the Mid-Tier Prime and Technology Integration
Palladyne Defense redefines what it means to be a modern mid-tier prime contractor. The division merges embodied AI, advanced avionics, complete, low-cost, attritable weapons systems and domestic manufacturing into a single, vertically integrated enterprise designed for speed, adaptability and scalability.
Traditional primes are large and process-driven, while smaller innovators often lack production depth and staying power. Palladyne Defense bridges that gap. Its integrated structure allows rapid design-to-deployment capability within a reshored industrial base—creating a new model for American defense manufacturing that delivers faster and at lower cost per effect than many legacy systems.
This approach positions Palladyne as an agile, mission-aligned partner to both the Department of War and leading defense contractors, capable of developing proprietary systems or engineering tailored solutions that enhance U.S. and allied readiness.
Wolff continued:
“Palladyne Defense brings together embodied AI, advanced avionics and American manufacturing to deliver smarter, faster and more affordable solutions. Our vertically integrated model allows us to meet emerging defense and public safety needs while reshoring capability and accelerating innovation. This is how America maintains its technological advantage by building it here, with intelligence at the edge and purpose at the core.”
Division and Product Architecture
Palladyne Defense unites three core elements that together form a closed-loop innovation and production system:
Technology Integration and Reshoring Impact
The creation of Palladyne Defense supports one of the Department of War’s most critical modernization priorities -- the reshoring of essential defense technology and production capacity.
GuideTech brings advanced avionics, flight software and system engineering, enabling Palladyne to reduce design-to-prototype timelines from years to months. The Crucis Companies contribute full-spectrum domestic manufacturing capabilities, including precision machining, fabrication and assembly for air, land and sea systems as well as direct access to its existing defense prime customers such as Lockheed Martin, and the Boeing and Kratos teaming project.
Together, these capabilities will enable Palladyne Defense to design, develop and produce components and complete systems entirely within the United States in the near future, strengthening supply chain security and ensuring sustained access to mission-critical components.
By aligning engineering, autonomy, and production within a single domestic enterprise, Palladyne Defense delivers systems optimized for cost per effect, achieving mission success with precision and adaptability at a fraction of the traditional cost structure.
James Cook, Co-Founder and President of GuideTech, commented:
“Joining Palladyne AI allows us to accelerate commercialization and strengthen our competitive position. By combining autonomy, avionics and manufacturing at scale, we can deliver faster, smarter and more affordable solutions to our customers.”
Non-Competitive Collaboration Model
Palladyne Defense does not intend to compete with existing or potential customers. The division will not only focus on supplying avionics, components and software together with best-in-class design and engineering services, but it will also opportunistically address capability gaps that are not currently served by traditional primes or suppliers with its own proprietary products, while also fulfilling bespoke development requests from the Department of War, individual military branches and allied partners.
This approach positions Palladyne as a collaborator and force multiplier within the broader defense ecosystem. The Company’s embodied AI and manufacturing integration will enhance, not disrupt,
existing supply chains while providing partners with faster paths from design to deployment and measurable cost-per-effect improvements across programs.
Operational Strength and Market Expansion
GuideTech contributes its BRAIN avionics product, the FLEX flight software suite, project Banshee loitering munition system, and project SwarmStrike cruise-class autonomous munition, along with existing programs that support both traditional primes and new entrants. The Crucis Companies contribute precision machining, heavy fabrication and assembly capacity, supporting major programs including the F-16, F-35, Tomahawk, Harpoon and Bradley Fighting Vehicle.
Together these operations provide Palladyne Defense with engineering depth and domestic production capacity to deliver mission-ready autonomous systems that align with Department of War modernization goals. Each program is designed to optimize cost per effect and deliver maximum operational value while strengthening the U.S. defense industrial base.
Kevan Johnston, President of Palladyne Manufacturing and former Chairman of The Crucis Companies, commented:
“By joining forces with Palladyne AI and GuideTech, we gain the scale and technology needed to expand our reach and better serve America’s defense industry. We currently work with primes such as Lockheed Martin, Kratos, Renk, Stark and more. This partnership will further strengthen our capacity to deliver high-quality U.S.-made components that keep America’s defense industrial base strong and competitive.”
Palladyne Commercial
Palladyne Commercial continues to pursue opportunities in industrial and commercial verticals with Palladyne™ IQ and Palladyne Pilot. These technologies are commercialized, with next-generation versions in the final stages of refinement. The Company is actively engaged with many potential customers in the aviation, manufacturing and logistics sectors.
Palladyne Commercial leverages the same core underlying AI technologies as Palladyne Defense, but with a distinct focus on the needs of the private sector. It applies the Company’s embodied-AI expertise to industrial and commercial markets where precision, adaptability and efficiency improve productivity and safety. Together, the divisions show how Palladyne technology scales across sectors to create value from factory floors to national defense.
Transaction Overview
Purchase Price Breakdown |
|
Stock |
$20 million |
Cash |
$5 million |
Debt Assumed |
$6 million |
Total Purchase Price |
$31 million |
|
|
Maximum Earnout Potential |
Up to $25 million |
Earnout Period |
5 years |
The combined purchase price for the acquisitions is approximately $31 million, consisting of $20 million in stock and $5 million in upfront cash, along with the assumption of approximately $6 million in equipment finance and real estate debt.
GuideTech’s owners will begin earning contingent consideration of up to $25 million (paid in stock or cash at Palladyne AI’s discretion) over five years only after cumulative revenue from GuideTech’s products and services exceeds $71 million. The earnout is calculated as a percentage of eligible sales, including sales generated from technologies that were in development prior to its acquisition, such as BRAIN, Banshee, SwarmStrike and other legacy products. Once cumulative revenues from eligible products and services surpasses $71 million, the sellers will be entitled to a share of the eligible revenue during the earnout period.
Conference Call and Webcast Information
Palladyne AI’s management will host a conference call and webcast to discuss this morning’s announcements today, November 17, 2025, at 4:30 p.m. ET.
Live Call-in Info:
Date/Time: Monday, November 17, 2025 at 4:30 p.m. ET
Toll Free: 1-877-407-0789
International: 1-201-689-8562
Participant Access Code: 13757186
Call me™: https://callme.viavid.com/viavid/?callme=true&passcode=13757186&h=true&info=company&r=true&B=6
Participants can use the Guest dial-in #s above and be answered by an operator OR click the Call me™ link for instant telephone access to the event. Call me™ link will be made active 15 minutes prior to the scheduled start time.
Webcast URL: https://viavid.webcasts.com/starthere.jsp?ei=1743010&tp_key=c3bd19c4c5
Replay Info:
Toll Free: 1-844-512-2921
International: 1-412-317-6671
Replay Passcode: 13757186
About GuideTech
GuideTech designs and builds advanced flight software, avionics and control systems for unmanned aerial, space and missile platforms. Its BRAIN series of guidance and navigation avionics, along with its FLEX modular software platform, are deployed across multiple defense programs. GuideTech is also developing project Banshee, a low-cost, high-performance loitering munition designed to enhance mission adaptability and precision, and project SwarmStrike, a cruise-class autonomous munition with hundreds of miles of range at an attritable cost.
GuideTech operates from Tucson, Kansas City and Huntsville, employing 32 staff members.
About The Crucis Companies
With deep expertise in U.S. manufacturing and defense supply chain operations, the Crucis Companies provide advanced precision machining, heavy fabrication and assembly for the aerospace and defense sectors. The Crucis Companies supports programs, including the F-16, F-35, Tomahawk, JDAM, P-JDAM, M1A1 Abrams, Harpoon and Bradley Fighting Vehicle.
About Palladyne AI Corp.
Palladyne AI Corp. (NASDAQ: PDYN) has developed an advanced artificial intelligence (AI) and machine learning (ML) software platform poised to revolutionize the capabilities of robots, enabling them to observe, learn, reason, and act in a manner akin to human intelligence. Our AI and ML software platform empowers robots to perceive variations or changes in the real-world environment, enabling them to autonomously maneuver and manipulate objects accurately in response.
The Palladyne AI software solution operates on the edge and dramatically reduces the significant effort required to program and deploy robots, enabling industrial robots and collaborative robots (cobots) to quickly achieve autonomous capabilities even in dynamic and or complex environments. It is designed to enable robotic systems to perceive their environment and quickly adapt to changing circumstances by generalizing (i.e., learning) from their past experience using dynamic real-time operations “on the edge” (i.e., on the robotic system) without extensive programming and with minimal robot training. Palladyne AI believes its software has wide application, including in industries such as automotive, aviation, construction, defense, general manufacturing, infrastructure inspection, logistics and warehousing. Its applicability extends beyond traditional robotics to include Unmanned Aerial Vehicles (UAVs), Unmanned Ground Vehicles (UGVs), and Remotely Operated Vehicles (ROVs). Palladyne AI’s approach is expected to elevate the return on investment associated with a diverse range of machines that are fixed, fly, float, or roll.
By enabling autonomy, reducing programming complexity, and enhancing efficiency, we are paving the way for a future where machines can excel in tasks that were once considered beyond their reach.
For more information on Palladyne AI, please visit www.palladyneai.com.
Forward-Looking Statements
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements regarding the capabilities or future capabilities of the Company’s AI/ML foundational technology and related software products; the benefits of the software and the industries that could benefit from it; the applicability of the software to different kinds of machines (such as UAVs, UGVs and ROVs); the benefits and capabilities to be achieved from the announced acquisitions; the impact of those capabilities on the American defense sector and capabilities and the ability to meet the priorities of the Department of War; future revenues, EBITDA and financial performance; the ability to combine the capabilities of the acquired companies with those of the Company successfully and achieve the expected benefits; potential competition; areas of future market focus; and future
product development. Forward-looking statements are inherently subject to risks, uncertainties, and assumptions. Generally, statements that are not historical facts, including statements concerning possible or assumed future actions, business strategies, events, or results of operations, are forward-looking statements. These statements may be preceded by, followed by, or include the words “believes,” “estimates,” “expects,” “projects,” “forecasts,” “may,” “will,” “should,” “seeks,” “plans,” “scheduled,” “anticipates,” “intends” or “continue” or similar expressions. Such forward-looking statements involve risks and uncertainties that may cause actual events, results, or performance to differ materially from those indicated by such statements. These forward-looking statements are based on Palladyne AI’s management’s current expectations and beliefs, as well as a number of assumptions concerning future events. However, there can be no assurance that the events, results, or trends identified in these forward-looking statements will occur or be achieved. Forward-looking statements speak only as of the date they are made, and Palladyne AI is not under any obligation and expressly disclaims any obligation, to update, alter or otherwise revise any forward-looking statement, whether as a result of new information, future events, or otherwise, except as required by law.
Readers should carefully review the statements set forth in the reports which Palladyne AI has filed or will file from time to time with the Securities and Exchange Commission (the “SEC”), in particular the risks and uncertainties set forth in the sections of those reports entitled “Risk Factors” and “Cautionary Note Regarding Forward-Looking Statements,” for a description of risks facing Palladyne AI and that could cause actual events, results or performance to differ from those indicated in the forward-looking statements contained herein. The documents filed by Palladyne AI with the SEC may be obtained free of charge at the SEC’s website at www.sec.gov.
Palladyne AI Investor Contact:
Brian Siegel, IRC, MBA
Senior Managing Director
Hayden IR
(346) 396-8696
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