Sec Form 4 Filing - GARAGIC DENIS @ Palladyne AI Corp. - 2024-04-17

FORM 4 Check this box if no longer subject to Section 16. Form 4 or Form 5 obligations may continue. See Instruction 1(b).

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 STATEMENT OF CHANGES IN BENEFICIAL OWNERSHIP Filed pursuant to Section 16(a) of the Securities Exchange Act of 1934, Section 17(a) of the Public Utility Holding Company Act of 1935 or Section 30(h) of the Investment Company Act of 1940

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1. Name and Address of Reporting Person GARAGIC DENIS 2. Issuer Name and Ticker or Trading Symbol Palladyne AI Corp. [ PDYN] 5. Relationship of Reporting Person(s) to Issuer (Check all applicable) _____ Director _____ 10% Owner X __ Officer (give title below) _____ Other (specify below) CHIEF TECHNOLOGY OFFICER (Last) (First) (Middle) C/O PALLADYNE AI CORP., 650 SOUTH 500 WEST, SUITE 150 3. Date of Earliest Transaction (MM/DD/YY) 04/17/2024 (Street) SALT LAKE CITY, UT84101 4. If Amendment, Date Original Filed (MM/DD/YY) 6. Individual or Joint/Group Filing (Check Applicable Line) __ X __ Form filed by One Reporting Person _____ Form filed by More than One Reporting Person (City) (State) (Zip)

Table I - Non-Derivative Securities Acquired, Disposed of, or Beneficially Owned 1.Title of Security (Instr. 3) 2. Transaction Date (MM/DD/YY) 2A. Deemed Execution Date, if any (MM/DD/YY) 3. Transaction Code (Instr. 8) 4. Securities Acquired (A) or Disposed of (D) (Instr. 3, 4 and 5) 5. Amount of Securities Beneficially Owned Following Reported Transaction(s) (Instr. 3 and 4) 6. Ownership Form: Direct (D) or Indirect (I) (Instr. 4) 7. Nature of Indirect Beneficial Ownership (Instr. 4) Code V Amount (A) or (D) Price

Table II - Derivative Securities Acquired, Disposed of, or Beneficially Owned ( e.g. , puts, calls, warrants, options, convertible securities) 1. Title of Derivative Security (Instr. 3) 2. Conversion or Exercise Price of Derivative Security 3. Transaction Date (MM/DD/YY) 3A. Deemed Execution Date, if any (MM/DD/YY) 4. Transaction Code (Instr. 8) 5. Number of Derivative Securities Acquired (A) or Disposed of (D) (Instr. 3, 4, and 5) 6. Date Exercisable and Expiration Date (MM/DD/YY) 7. Title and Amount of Underlying Securities (Instr. 3 and 4) 8. Price of Derivative Security (Instr. 5) 9. Number of Derivative Securities Beneficially Owned Following Reported Transaction(s) (Instr. 4) 10. Ownership Form of Derivative Security: Direct (D) or Indirect (I) (Instr. 4) 11. Nature of Indirect Beneficial Ownership (Instr. 4) Code V (A) (D) Date Exercisable Expiration Date Title Amount or Number of Shares Stock Option (right to buy) $ 7.44 ( 1 ) 04/17/2024 D 21,372 ( 1 ) ( 2 ) 05/28/2030 Common Stock 21,372 ( 3 ) 0 D Stock Option (right to buy) $ 24.54 ( 4 ) 04/17/2024 D 14,204 ( 4 ) ( 5 ) 05/20/2032 Common Stock 14,204 ( 3 ) 0 D Stock Option (right to buy) $ 2.82 ( 6 ) 04/17/2024 D 68,486 ( 6 ) ( 6 ) 03/29/2033 Common Stock 68,486 ( 3 ) 0 D Stock Option (right to buy) $ 1.59 04/17/2024 A 21,372 ( 7 ) 05/28/2030 Common Stock 21,372 ( 3 ) 21,372 D Stock Option (right to buy) $ 1.59 04/17/2024 A 14,204 ( 7 ) 05/20/2032 Common Stock 14,204 ( 3 ) 14,204 D Stock Option (right to buy) $ 1.59 04/17/2024 A 68,486 ( 7 ) 03/29/2033 Common Stock 68,486 ( 3 ) 68,486 D

Reporting Owners Reporting Owner Name / Address Relationships Director 10% Owner Officer Other GARAGIC DENIS C/O PALLADYNE AI CORP. 650 SOUTH 500 WEST, SUITE 150 SALT LAKE CITY, UT84101 CHIEF TECHNOLOGY OFFICER Signatures /s/ Stephen Sonne, attorney-in-fact on behalf of Denis Garagic 04/19/2024 Signature of Reporting Person Date

Explanation of Responses:

( 1 )This option award was granted on May 29, 2020 and was previously reported as covering 128,230 shares at an exercise price of $1.24 per share, but was adjusted to reflect a 1-for-6 reverse stock split that occurred on July 5, 2023. ( 2 )One-third (1/3) of the shares subject to the Option vested on May 29, 2021 and one-thirty-sixth (1/36) of the shares have vested or will vest each month thereafter. ( 3 )Outstanding options were amended to reduce the exercise price and revise the vesting terms. This amendment was approved by the compensation committee of the Issuer's board of directors and is intended to be exempt pursuant to Rule 16b-3 of the Exchange Act. ( 4 )This option award was granted on May 20, 2022 and was previously reported as covering 85,220 shares at an exercise price of $4.09 per share, but was adjusted to reflect a 1-for-6 reverse stock split that occurred on July 5, 2023. ( 5 )25% of the shares subject to the Option vested on May 20, 2023, and then 1/12 of the shares subject to the Option vest on each Quarterly Vesting Date thereafter, subject to the Reporting Person's continued service to the Issuer through such date. ( 6 )This option award was granted on May 29, 2023 and was previously reported as covering 410,914 shares at an exercise price of $0.47 per share, but was adjusted to reflect a 1-for-6 reverse stock split that occurred on July 5, 2023. ( 7 )The option is fully unvested as of the amendment. 25% of the shares subject to the option will vest on March 29, 2025, and then 1/12 of the shares subject to the option vest on each quarterly vesting date thereafter, subject to the Reporting Person's continued service to the Issuer through such date.

Reminder: Report on a separate line for each class of securities beneficially owned directly or indirectly.

* If the form is filed by more than one reporting person, see Instruction 4(b)(v).

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