[Summary Risk Factors](index=3&type=section&id=Summary%20Risk%20Factors) This section summarizes key risks: early-stage status, AI/ML software pivot, and substantial capital needs - The company is an **early-stage entity** with a **history of losses** and expects to incur **significant losses** for the **foreseeable future**[4](index=4&type=chunk) - In late **2023**, the company **pivoted its strategy** to focus on its **AI/ML Software Platform** and **suspended the development** and **commercialization of its hardware products** due to **limited resources** and **failure to properly estimate time and expense**[4](index=4&type=chunk) - The company has **no prior experience** in **commercializing software products** and was **unsuccessful in its previous efforts** to **commercialize its hardware technologies**[4](index=4&type=chunk) - **Future revenues** are expected to be **primarily derived from licensing** the **AI/ML Software Platform**[4](index=4&type=chunk) - In March **2024**, the company **changed its name** from **Sarcos Technology and Robotics Corporation** to **Palladyne AI Corp** to reflect its **new strategic focus** on **AI/ML software**[5](index=5&type=chunk) - The company's **business plans require substantial capital**, and if it **cannot generate revenue** or **secure new funding**, it may have to **cease operations**[4](index=4&type=chunk)[5](index=5&type=chunk) [PART I. FINANCIAL INFORMATION](index=5&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) [Item 1. Financial Statements (Unaudited)](index=5&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)) This section presents unaudited consolidated financial statements, detailing financial position, performance, and cash flows [Condensed Consolidated Balance Sheets](index=5&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) The balance sheet shows decreased assets and equity from reduced cash and marketable securities, reflecting the net loss Condensed Consolidated Balance Sheet Highlights (in thousands) | Metric | Sep 30, 2024 | Dec 31, 2023 | | :------------------------- | :----------- | :----------- | | Cash and cash equivalents | $21,328 | $23,139 | | Marketable securities | $0 | $15,947 | | Total Assets | $38,738 | $60,426 | | Total Liabilities | $15,317 | $19,521 | | Total Stockholders' Equity | $23,421 | $40,905 | [Condensed Consolidated Statements of Operations](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) The company reported significantly reduced net losses for Q3 and nine-month periods due to substantial operating expense cuts Statement of Operations Summary (in thousands, except per share data) | Metric (Unaudited) | Q3 2024 | Q3 2023 | Nine Months 2024 | Nine Months 2023 | | :------------------------------------------- | :----------- | :----------- | :--------------- | :--------------- | | **Revenue, net** | $871 | $1,827 | $7,025 | $5,400 | | **Total operating expenses** | $8,170 | $32,581 | $27,464 | $89,301 | | **Loss from operations** | $(7,299) | $(30,754) | $(20,439) | $(83,901) | | **Net loss** | $(7,096) | $(28,981) | $(19,648) | $(79,117) | | **Net loss per share (Basic and diluted)** | $(0.27) | $(1.13) | $(0.76) | $(3.09) | [Condensed Consolidated Statements of Cash Flows](index=10&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Net cash used in operating activities decreased significantly, with investing activities providing cash, resulting in a net cash decrease Cash Flow Summary (Nine Months Ended Sep 30, in thousands) | Activity | 2024 | 2023 | | :---------------------------------------- | :---------- | :---------- | | Net cash used in operating activities | $(17,531) | $(60,123) | | Net cash provided by investing activities | $15,783 | $60,345 | | Net cash used in financing activities | $(63) | $(71) | | **Net decrease in cash** | **$(1,811)** | **$151** | | **Cash at end of period** | **$21,328** | **$35,310** | [Notes to Unaudited Condensed Consolidated Financial Statements](index=11&type=section&id=Notes%20to%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) These notes detail the company's strategic shift to AI/ML software, liquidity, and subsequent capital raises - The company **changed its name** from **Sarcos Technology and Robotics Corporation** to **Palladyne AI Corp** in March **2024** to reflect its transition from a hardware-focused to a software-focused company[16](index=16&type=chunk) - As of September **30**, **2024**, the company had **cash, cash equivalents, and marketable securities** of **$21.3 million**. **Management believes** it has **sufficient financial resources** for **at least the next 12 months**[23](index=23&type=chunk)[24](index=24&type=chunk) - On October **31**, **2024**, the company entered into agreements for a **registered offering** and **private placements** to **sell common stock and warrants**, raising approximately **$7 million** in **gross proceeds**[86](index=86&type=chunk)[87](index=87&type=chunk) - On April **17**, **2024**, the company **repriced options** to **purchase 773,551 shares** of common stock, **reducing the exercise price** to **$1.59 per share**. This resulted in an **incremental fair value** of **$0.2 million** to be recognized as **stock-based compensation**[71](index=71&type=chunk)[72](index=72&type=chunk)[73](index=73&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=22&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the strategic pivot to AI/ML software, cost reductions, and liquidity bolstered by recent capital raises - The company's strategy is now focused on its **AI/ML Software Platform**, which is designed to be **hardware-agnostic** and **enable robots to learn and adapt** in **dynamic environments**[95](index=95&type=chunk)[97](index=97&type=chunk) - The **initial commercial version** of the **Palladyne IQ product** was released on October **1**, **2024**. The **Palladyne Pilot product** is **expected to be released** by the end of Q**1** **2025**[99](index=99&type=chunk) Q3 2024 vs Q3 2023 Results (in thousands) | Metric | Q3 2024 | Q3 2023 | % Change | | :------------------------- | :------ | :------ | :------- | | Revenue, net | $871 | $1,827 | (52)% | | Total operating expenses | $8,170 | $32,581 | (75)% | Nine Months 2024 vs 2023 Results (in thousands) | Metric | Nine Months 2024 | Nine Months 2023 | % Change | | :------------------------- | :--------------- | :--------------- | :------- | | Revenue, net | $7,025 | $5,400 | 30% | | Total operating expenses | $27,464 | $89,301 | (69)% | - The **significant decrease in operating expenses** is primarily due to **reduced labor and related costs** following the **reductions in force (RIFs)** conducted in July and November **2023**[120](index=120&type=chunk)[121](index=121&type=chunk) - As of September **30**, **2024**, the company's **backlog** was **$3.7 million**. Its **total estimated contract value**, including **unexercised options**, was **$10.6 million**[139](index=139&type=chunk) - The company believes its **cash on hand** (**$21.3M** as of Sep **30**, **2024**), supplemented by a subsequent **$7M capital raise**, is **sufficient to fund operations** for **at least the next 12 months**[140](index=140&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=32&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) As a smaller reporting company, Palladyne AI is not required to provide market risk disclosures - As a **smaller reporting company**, **Palladyne AI** is **not required to provide quantitative and qualitative disclosures about market risk**[155](index=155&type=chunk) [Controls and Procedures](index=32&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded disclosure controls were effective, with no material changes to internal controls - The company's **management**, including the **Certifying Officers (CEO and CFO)**, concluded that **disclosure controls and procedures** were **effective** as of September **30**, **2024**[156](index=156&type=chunk) - There were **no material changes** to the company's **internal control over financial reporting** during the third quarter of **2024**[158](index=158&type=chunk) [PART II. OTHER INFORMATION](index=33&type=section&id=PART%20II.%20OTHER%20INFORMATION) [Legal Proceedings](index=33&type=section&id=Item%201.%20Legal%20Proceedings) The company is not currently a party to any legal proceedings with a material adverse effect - The company is **not currently a party** to any proceedings that it believes will have a **material adverse effect** on its business[158](index=158&type=chunk) [Risk Factors](index=33&type=section&id=Item%201A.%20Risk%20Factors) This section outlines significant risks: historical losses, unproven AI/ML software strategy, capital needs, competition, and potential delisting - The company is an **early-stage company** with a **history of significant losses**, an **accumulated deficit** of **$437.9 million** as of September **30**, **2024**, and may **never achieve profitability**[160](index=160&type=chunk) - The **strategic pivot** to focus on the **AI/ML Software Platform** is a **new direction**, and the company has **no prior experience commercializing software products**, which may **not be successful**[164](index=164&type=chunk)[166](index=166&type=chunk) - The business **requires significant capital**, and if **additional funding is not secured**, the company may have to **curtail or cease operations**. **Market conditions** may make **raising capital difficult or dilutive to stockholders**[240](index=240&type=chunk)[241](index=241&type=chunk)[242](index=242&type=chunk) - The company faces **competition from established and emerging companies** in the **AI and robotics industries**, which may have **greater resources** and **established customer relationships**[201](index=201&type=chunk)[202](index=202&type=chunk) - **Real or perceived defects** in the **AI/ML software** could lead to **personal injury**, **property damage**, **reputational harm**, and **product liability claims**[210](index=210&type=chunk)[211](index=211&type=chunk) - The company is **highly dependent on its senior management**, particularly its **Chief Technology Officer, Dr. Denis Garagic**, and the **loss of key personnel** could **significantly harm development efforts**[251](index=251&type=chunk)[252](index=252&type=chunk) - The company's **common stock is subject to potential delisting** from **The Nasdaq Global Market** if it **fails to meet continued listing requirements**, such as the **$1.00 minimum bid price**, which it has **failed to meet in the past**[337](index=337&type=chunk)[339](index=339&type=chunk)[340](index=340&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=60&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company reported no unregistered sales of equity securities during the last fiscal quarter - **None**[359](index=359&type=chunk) [Defaults Upon Senior Securities](index=60&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) This item is not applicable to the company - **Not Applicable**[359](index=359&type=chunk) [Mine Safety Disclosures](index=60&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company - **Not applicable**[359](index=359&type=chunk) [Other Information](index=60&type=section&id=Item%205.%20Other%20Information) The company established an 'at the market offering' program with Jefferies LLC for common stock sales, with a 3% commission - On November **13**, **2024**, the company entered into an **Open Market Sale Agreement** with **Jefferies LLC** to **sell shares of its Common Stock** through an "**at the market offering**" program[359](index=359&type=chunk) - **Jefferies** will act as the **sales agent** and will be **paid a commission** of **3%** of the aggregate **gross proceeds** from each sale of shares[361](index=361&type=chunk) [Exhibits](index=61&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed with the Form 10-Q, including corporate documents, legal opinions, and certifications

Revenue and Financial Performance - The Company generated $0.2 million and $0.9 million in revenue from international customers during the three and six months ended June 30, 2023, respectively, indicating a strong reliance on U.S. customers[74]. - Revenue for the three months ended June 30, 2024, increased by $1.4 million, or 112%, to $2.7 million compared to $1.3 million for the same period in 2023[95]. - Revenue for the six months ended June 30, 2024, increased by $2.6 million, or 72%, to $6.2 million compared to $3.6 million for the same period in 2023[107]. - Product revenue for the six months ended June 30, 2024, increased significantly by $2.6 million, or 85,200%, from $3 in 2023[109]. - Other income decreased by $2.4 million to $588,000 for the six months ended June 30, 2024, primarily due to a 64% decline in interest income from investments in marketable securities[117]. Operating Expenses and Cost Management - Total operating expenses decreased by $22.7 million, or 73%, from $31.2 million in Q2 2023 to $8.5 million in Q2 2024[99]. - Research and development expenses dropped by $9.4 million, or 80%, from $11.7 million in Q2 2023 to $2.3 million in Q2 2024, primarily due to reduced labor costs[101]. - General and administrative expenses decreased by $4.0 million, or 48%, from $8.3 million in Q2 2023 to $4.3 million in Q2 2024[102]. - Sales and marketing expenses fell by $3.0 million, or 69%, from $4.4 million in Q2 2023 to $1.4 million in Q2 2024[103]. - Total operating expenses for the six months ended June 30, 2024, decreased by $37.4 million, or 66%, from $56.7 million in 2023 to $19.3 million[110]. - Cost of revenue for the six months ended June 30, 2024, decreased by $0.3 million, or 10%, from $2.7 million in 2023 to $2.5 million[111]. Product Development and Market Strategy - The Company is developing two products: Palladyne IQ for stationary industrial robots and Palladyne Pilot for mobile robotic platforms, with expected commercial launches in the second half of 2024 and first quarter of 2025, respectively[83][84]. - Customer trials for Palladyne IQ began in June 2024, with ongoing trials expected to continue throughout the second half of 2024, aiming to generate revenue from commercial customers in 2025[83]. - The Company expects to derive commercial licensing revenues from its products starting in 2025, with ongoing commercialization efforts and customer trials throughout 2024[89]. - The market demand for AI/ML platforms remains unproven, and the Company is dependent on customer adoption and implementation of new technologies[92]. - The AI/ML Software Platform is expected to enable robotic systems to perform tasks in dynamic environments, enhancing productivity and reducing downtime[80]. Liquidity and Financing - The Company believes it has sufficient liquidity to operate for at least the next twelve months without raising additional capital, but may seek financing to bolster cash reserves[91]. - Cash, cash equivalents, and marketable securities totaled $25.8 million as of June 30, 2024, expected to support operations for at least the next 12 months[120]. - The company may need to seek additional financing if cash reserves are insufficient to support working capital or acquisitions[122]. - The company plans to monitor liquidity and may opportunistically raise capital when market conditions are favorable[123]. Government Contracts and Development Milestones - The Company has met all development milestones for U.S. government contracts related to its AI/ML Software Platform and products, recognizing revenue based on completed work[85]. Tax and Accounting - The effective tax rate for the six months ended June 30, 2024, was impacted by net losses and a full valuation allowance on deferred tax assets[118]. - The company is classified as an emerging growth company and has elected to take advantage of the extended transition period for new accounting standards[130]. Other Financial Metrics - Net cash used in operating activities decreased by 67% to $13.0 million for the six months ended June 30, 2024, driven by a $37.6 million decrease in net loss[126]. - Net cash provided by investing activities decreased by $14.7 million, primarily due to a reduction in maturities of marketable securities[127]. - The backlog as of June 30, 2024, was $1.5 million, with $0.4 million funded and $1.1 million unfunded, while the total estimated contract value was $11.4 million[119]. - The company recorded a 4,500% loss on warrant liability, resulting in a loss of $132,000 for the six months ended June 30, 2024[117].

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 Delaware 001-39897 85-2838301 (State or Other Jurisdiction of Incorporation) (Commission File Number) (IRS Employer Identification No.) Securities registered pursuant to Section 12(b) of the Act: Title of each class Trading Symbol(s) Name of each exchange on which registered Common Stock, par value $0.0001 per share PDYN The Nasdaq Stock Market LLC Redeemable warrants, exercisable for shares of Common Stock at an exercise price of $69.0 ...

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]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K (Mark One) ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2023 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM TO Commission File Number 001-39897 SARCOS TECHNOLOGY AND ROBOTICS CORPORATION (Exact name of registrant as specified in its charter) Delaware 85-2838301 (State or ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 Title of each class Trading Symbol(s) Name of each exchange on which registered FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2023 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _______ to _______ Commission File Number: 001-39897 SARCOS TECHNOLOGY AND R ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 Title of each class Trading Symbol(s) Name of each exchange on which registered FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2023 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _______ to _______ Commission File Number: 001-39897 SARCOS TECHNOLOGY AND ROBOTI ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 Title of each class Trading Symbol(s) Name of each exchange on which registered FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2023 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _______ to _______ Commission File Number: 001-39897 SARCOS TECHNOLOGY AND ROBOT ...

Financial Performance - The company incurred a net loss of $157.1 million for the year ended December 31, 2022, compared to a net loss of $81.5 million for the year ended December 31, 2021, and expects to continue incurring losses until at least 2025[160]. - Negative cash flow from operating activities was $65.4 million for the year ended December 31, 2022, and $42.1 million for the year ended December 31, 2021, with expectations of continued negative cash flow until 2025[164]. - The company has not yet achieved positive operating cash flow, and its ability to generate such cash flow remains uncertain[163]. - The company does not expect to achieve positive operating cash flows until at least 2025, necessitating additional financing for ongoing operations[192]. - The company may not achieve profitability in the near future, as it continues to generate taxable losses[300]. Product Development and Commercialization - The company began production of the initial commercial version of the Guardian XM in September 2022 and the Guardian XT in December 2022, with expected customer deliveries starting in the first half of 2023[175]. - Production of the Guardian Sea Class is expected to begin in the second half of 2023, with deliveries anticipated in the same timeframe[175]. - The company anticipates delays in the commercialization of core systems, which could postpone initial deliveries and revenue recognition[186]. - The company has limited experience in large-scale commercialization of robotic systems, which may hinder effective market penetration[190]. - The company anticipates significant additional product development efforts and expenses, with ongoing challenges in commercializing core and future products[211]. - The company may face delays in product development phases, which could postpone customer testing and lead to missed sales opportunities[213]. Supply Chain and Operational Challenges - The company has faced supply chain challenges, including increased costs and interruptions in the supply of components, which could delay product development and commercialization[176]. - The company is dependent on suppliers, some of which are sole or limited source suppliers, and any inability to secure necessary components could adversely affect its business[181]. - The company relies on third-party suppliers for key components, which may affect sales, revenue, and profitability if supply issues arise[182]. - The company has limited negotiating leverage with suppliers, potentially leading to unfavorable pricing and terms[183]. - Significant increases in material costs and supply chain disruptions are currently impacting the company, particularly in securing components for product development[184]. - The company is experiencing disruptions and delays in its supply chain, which could materially affect its business and financial condition[242]. Human Resources and Management - The company continues to experience challenges in hiring qualified personnel, which could impact product development and commercialization timelines[179]. - The ongoing COVID-19 pandemic has adversely impacted the company's ability to recruit skilled employees and meet product development timelines[242]. - The company faces risks related to hiring and retaining qualified employees, which could harm its ability to compete and operate effectively[236]. - The management team has limited experience in operating a publicly-traded company, which may affect its ability to manage regulatory obligations[238]. Legal and Regulatory Compliance - The company incurs significant legal and accounting expenses as a publicly-traded entity, which could adversely impact its financial condition[240]. - The company may face litigation risks related to past accounting issues and the potential for future material weaknesses in financial reporting[287]. - The California Consumer Privacy Act (CCPA) and other state laws may increase compliance costs and potential liabilities as the company expands operations[311]. - Compliance with evolving data privacy laws, such as the GDPR, may result in substantial costs and necessitate changes to business practices[312]. - The company is subject to audits and investigations by government agencies, which could divert resources and impact operations[326]. Strategic Initiatives and Market Position - The acquisition of RE2, completed in April 2022, is expected to enhance the company's product portfolio and market reach, although integration risks remain[169]. - The company plans to expand its production capabilities and sales infrastructure, which will require significant investment and may lead to increased operational costs[161]. - The company is shifting to a standard product sales model for its robotic systems, reducing capital requirements and improving manufacturing efficiency[207]. - The company targets large multinational businesses as customers, which have substantial negotiating power and may develop competitive internal solutions[265]. - The competitive landscape includes established companies like ABB Robotics and Honeywell, which could pose significant challenges[269]. Financial Risks and Capital Needs - Future capital needs may require the company to seek additional financing, potentially diluting stockholder equity[191]. - The company has recorded a full valuation allowance related to net operating loss carryforwards due to uncertainty in realizing future benefits[304]. - Significant capital is required for business development, including R&D, production, and marketing, leading to ongoing high expenses that may impact profitability[258]. - The company may face challenges in developing production processes within projected costs and timelines, which could adversely affect its business prospects[252]. Cybersecurity and Data Protection - The company faces increasing cybersecurity risks due to remote work and geopolitical tensions, particularly related to the war in Ukraine[315]. - The company has implemented security measures to protect data, but these cannot guarantee complete security against breaches[320]. - The company may incur significant costs related to privacy and security breaches, impacting its financial condition[322]. Environmental and Compliance Risks - Environmental costs and regulations related to climate change could adversely affect future earnings and product affordability[345]. - Future climate change regulations may lead to increased direct compliance costs and indirect costs from suppliers and customers, potentially decreasing demand for products[347]. - Compliance with export control laws is critical, as non-compliance could lead to severe penalties and affect revenue generation[333].

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2022 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _______ to _______ Commission File Number: 001-39897 SARCOS TECHNOLOGY AND ROBOTICS CORPORATION (Exact Name of Registrant as Specified in its Charter) Delaw ...