Financial Performance - For the three months ended March 31, 2024, net revenue was $3,441,000, representing a 50% increase from $2,296,000 in the same period of 2023[93] - Revenue increased by $1.1 million, or 50%, from $2.3 million for the three months ended March 31, 2023, to $3.4 million for the three months ended March 31, 2024[94] - Product development contract revenue decreased by 62% from $2,296,000 in Q1 2023 to $882,000 in Q1 2024[93] - Product development contract revenue decreased by $1.4 million, or 62%, from $2.3 million for the three months ended March 31, 2023, to $0.9 million for the three months ended March 31, 2024[95] - Total operating expenses decreased by $14.7 million, or 58%, from $25.5 million for the three months ended March 31, 2023, to $10.8 million for the three months ended March 31, 2024[97] - Research and development expense decreased by $6.5 million, or 69%, from $9.4 million for the three months ended March 31, 2023, to $2.9 million for the three months ended March 31, 2024[99] - General and administrative expense decreased by $4.6 million, or 47%, from $9.7 million for the three months ended March 31, 2023, to $5.1 million for the three months ended March 31, 2024[100] - Net cash used in operating activities decreased by $12.9 million to $7.2 million from $20.1 million during the same period in 2023[111] - As of March 31, 2024, the company had $31.8 million in cash, cash equivalents, and marketable securities[105] - Other income decreased by $1.6 million for the three months ended March 31, 2024, primarily due to decreased interest income from investments in marketable securities[102] Operational Changes - The company has implemented reductions in force in July and November 2023 to conserve cash resources and manage operating expenses[88] - The majority of cash payments related to the July 2023 RIF were made in Q3 2023, while payments for the November 2023 RIF were completed in early 2024[88] - The company believes it has sufficient liquidity to operate for at least the next twelve months without needing additional capital[88] Product Development - The AI/ML Software Platform is expected to be ready for initial customer testing by June 2024, with revenue generation anticipated to begin in 2025[84] - The AI/ML Software Platform is designed to be hardware agnostic, compatible with most industrial robots, and aims to enhance robotic systems' adaptability in dynamic environments[84] - The company is focusing on the development of its AI/ML Software Platform, suspending the commercialization of hardware products due to limited resources[85] Market Conditions - Customer demand for AI/ML platforms is evolving, and the company is dependent on customers adopting new technologies[89] - Geopolitical and macroeconomic factors, such as inflation and international conflicts, may significantly impact the company's business and operating results[92] Backlog and Contracts - The backlog as of March 31, 2024, was $4.2 million, with $2.8 million funded and $1.4 million unfunded[104] - Total estimated contract value, including backlog and estimated potential contract value, was $14.1 million as of March 31, 2024[104] Compliance and Controls - The company is classified as a smaller reporting company and is not required to provide certain disclosures under the Exchange Act[119] - Disclosure controls and procedures were evaluated by the Certifying Officers and deemed effective as of March 31, 2024[119] - There were no changes in internal control over financial reporting during the fiscal quarter ended March 31, 2024, that materially affected internal controls[121] - The company is not currently involved in any legal proceedings that could materially impact its business or financial condition[122]
Palladyne AI Corp.(PDYN) - 2024 Q1 - Quarterly Report