Financial Performance - Revenue for the three months ended June 30, 2023, decreased by $1.8 million, or 58%, to $1.3 million compared to $3.0 million for the same period in 2022 [120]. - For the six months ended June 30, 2023, total revenue decreased by $0.2 million, or 6%, to $3.6 million compared to $3.8 million for the same period in 2022 [132]. - Product development contract revenue fell by $1.7 million, or 57%, from $3.0 million in Q2 2022 to $1.3 million in Q2 2023, primarily due to the completion of certain contracts [121]. - Other income decreased by $3.0 million, or 69%, for the three months ended June 30, 2023, primarily due to a decrease in unrealized gains on private placement warrants [131]. - Other income decreased by $7.7 million, totaling $3.0 million in the first half of 2023 compared to $10.7 million in the prior year, primarily due to a decrease in unrealized gains on private placement warrants [144]. Expenses - Research and development expenses increased by $4.1 million, or 55%, from $7.6 million in Q2 2022 to $11.7 million in Q2 2023, driven by increased headcount and labor costs [125]. - General and administrative expenses decreased by $9.9 million, or 55%, from $18.1 million in Q2 2022 to $8.3 million in Q2 2023, mainly due to reduced stock-based compensation [126]. - Sales and marketing expenses rose by $1.8 million, or 71%, from $2.6 million in Q2 2022 to $4.4 million in Q2 2023, attributed to increased professional service fees and promotional expenses [127]. - Total operating expenses for the three months ended June 30, 2023, were $31.2 million, a slight decrease of $0.8 million, or 2%, from $32.0 million in Q2 2022 [123]. - Research and development expenses for the six months ended June 30, 2023, increased by $7.7 million, or 57%, to $21.1 million compared to $13.5 million in the same period of 2022 [138]. - General and administrative expenses for the six months ended June 30, 2023, decreased by $18.0 million, or 50%, to $18.0 million compared to $35.9 million in the same period of 2022 [139]. - Sales and marketing expenses increased by $3.4 million, or 70%, from $4.8 million in the first half of 2022 to $8.2 million in the first half of 2023 [140]. - Intangible amortization expense rose by $1.1 million, from $0.6 million in the first half of 2022 to $1.6 million in the first half of 2023, due to the RE2 acquisition [141]. - Asset write-down and restructuring expenses totaled $5.1 million in the first half of 2023, including a $4.4 million inventory write-down [142]. Restructuring and Future Outlook - The company reported a restructuring charge of $5.1 million for the three and six months ended June 30, 2023, related to inventory and fixed asset write-downs [102]. - An additional restructuring expense of approximately $6.0 million is anticipated during Q3 2023, including $1.5 million in cash severance and benefit payments [102]. - The company expects a significant decrease in research and development, general and administrative, and sales and marketing expenses in the latter half of 2023 [103]. - The company expects to need additional capital before becoming cash flow positive, which is not anticipated until at least 2025 [149]. Capital and Cash Flow - The company has sufficient capital to fund operations for at least the next 12 months without seeking additional capital, but expects to need additional capital before becoming cash flow positive, which is not anticipated until at least 2025 [112]. - As of June 30, 2023, the company had $75.1 million in cash, cash equivalents, and marketable securities, expected to support operations for at least the next 12 months [146]. - Net cash used in operating activities increased by $12.1 million to $40.0 million in the first half of 2023, primarily due to a $7.8 million increase in net loss [151]. - Net cash provided by investing activities increased by $140.3 million, mainly due to $31.1 million from maturities of marketable securities [153]. - Net cash used in financing activities decreased by $6.0 million, primarily due to a reduction in funds used for share repurchases [154]. Strategic Focus - The company plans to offer its commercial AI autonomy software through a software-as-a-service (SaaS) revenue model [104]. - The company is focusing on products with the most potential for near-term revenue growth, including the Guardian Sea Class system and certain aviation and solar solutions [101]. - The company has entered into an agreement with a third-party contract manufacturer but does not anticipate high-volume production until after 2023 [115]. - The company has experienced disruptions in its supply chain due to the COVID-19 pandemic, which may continue to affect its operations [107]. - The company believes that its foundational technology and extensive patent portfolio are key competitive strengths as it continues to develop and commercialize its products [100]. Acquisition - The company acquired RE2, Inc. on April 25, 2022, and the results discussed include RE2's activity from the acquisition date through June 30, 2023 [113]. Company Status - The company remains an emerging growth company and has elected to take advantage of the extended transition period for new accounting standards [156].

Revenue Growth - Revenue increased by $1.6 million, or 209%, from $0.7 million for the three months ended March 31, 2022, to $2.3 million for the three months ended March 31, 2023[114]. - Product Development Contract Revenue rose to $2.296 million in Q1 2023, compared to $733,000 in Q1 2022, reflecting a 213% increase[114]. - Product development contract revenue increased by $1.6 million, or 213%, from $0.7 million in Q1 2022 to $2.3 million in Q1 2023, primarily due to revenue from contracts acquired in the RE2 acquisition[115][116]. Production and Capacity - The company began initial production of commercial units of the Guardian XM in September 2022 and the Guardian XT in December 2022[106]. - The company expects to manufacture between 300 to 500 systems in 2023, although it does not anticipate using all of that capacity[110]. Acquisitions - The acquisition of RE2, Inc. was completed on April 25, 2022, and its financial results are included from the acquisition date through March 31, 2023[108]. Business Model - The company plans to offer its systems primarily through a sales business model with one-time upfront payments, along with software upgrades and add-on hardware components[99]. Financial Position - The company has sufficient capital to fund operations for at least the next 12 months without seeking additional capital[107]. - As of March 31, 2023, the company had $94.7 million in cash, cash equivalents, and marketable securities, expected to support operations for at least the next 12 months[126]. - The company may seek additional financing to support operations and capital expenditures, particularly as it aims to achieve positive operating cash flows by 2025[128][129]. Research and Development - The company is focused on maintaining its leading position in the robotic systems industry through continuous investment in research and development[111]. - Research and development expenses rose by $3.5 million, or 60%, from $5.9 million in Q1 2022 to $9.4 million in Q1 2023, driven by increased labor and overhead costs[120]. Operating Expenses - Total operating expenses decreased by $888,000, or 3%, from $26.4 million in Q1 2022 to $25.5 million in Q1 2023, with significant changes in various expense categories[118]. - General and administrative expenses decreased by $8.1 million, or 45%, from $17.8 million in Q1 2022 to $9.7 million in Q1 2023, mainly due to reduced stock-based compensation[121]. - Sales and marketing expenses increased by $1.5 million, or 69%, from $2.2 million in Q1 2022 to $3.7 million in Q1 2023, attributed to higher professional service fees and additional headcount[123]. Cash Flow - Net cash used in operating activities increased by $7.7 million to $20.1 million in Q1 2023 from $12.5 million in Q1 2022, primarily due to a higher net loss and changes in operating assets and liabilities[132]. - Cash provided by investing activities increased by $10.9 million, mainly due to $10.7 million from maturities of marketable securities during Q1 2023[133]. Market Challenges - The company is facing supply chain challenges due to the COVID-19 pandemic, which may impact its ability to meet production timelines[102]. - Geopolitical and macro-economic factors, such as inflation and rising interest rates, could significantly impact demand for the company's products[112].

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[116]. - 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[119]. - The company anticipates needing additional financing before achieving positive operating cash flows, expected no earlier than 2025[139]. - The company may not achieve profitability in the near future and has incurred losses historically[214]. - Significant capital is required for business development, including R&D, production, and marketing, leading to ongoing high expenses that may impact profitability[186]. 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[127]. - The company plans to begin production of the Guardian Sea Class in the second half of 2023, with anticipated delivery to customers also in the second half of 2023[127]. - The company is prioritizing the commercialization of the Guardian XM, Guardian XT, and Guardian Sea Class while continuing to develop the Guardian XO, which may face delays due to ongoing redesign efforts[131]. - The company has limited experience in large-scale commercialization of its products, which may lead to inefficiencies and delays in achieving anticipated revenue[138]. - The success of product offerings will depend on the company's ability to incorporate preferred features and effectively communicate product improvements to customers[157]. Supply Chain and Operational Challenges - Supply chain challenges, including increased costs and material shortages, have resulted in delays in product development and could further impact the commercialization of products[130]. - The company continues to experience inflationary pressures and geopolitical events that contribute to supply shortages and price increases, negatively impacting product development schedules[130]. - The company faces significant challenges in recruiting skilled employees, which has affected product development and commercialization timelines[129]. - The company relies on third-party suppliers for key components, with some being sole-source suppliers, which poses risks to production and profitability if supply issues arise[132]. - The company is experiencing significant challenges in attracting and retaining qualified personnel, which could adversely affect product development and operational efficiency[171]. Regulatory and Compliance Risks - The company faces increased legal and compliance costs as a publicly-traded entity, which could adversely impact financial performance[173]. - The company anticipates increased legal and compliance costs due to the requirements of the Sarbanes-Oxley Act and Nasdaq regulations[206]. - The company may face significant penalties under the GDPR for noncompliance, which could reach up to €20 million or 4% of worldwide turnover for serious violations[222]. - Compliance with export control and economic sanctions laws is critical, as non-compliance could result in severe penalties and affect revenue generation[237]. - The company is subject to various legal and regulatory proceedings that could adversely affect its financial condition and operating results[241]. Market and Competitive Landscape - The market demand for the company's new robotic systems is unproven, and assumptions about pricing and adoption rates may be inaccurate[143]. - The company faces challenges in attracting and retaining customers, which could adversely affect revenue growth and overall business prospects[147]. - The robotics industry is characterized by rapid technological change, and the company expects increased competition in the future[191]. - The competitive landscape includes various companies with existing products and those developing new technologies, posing a threat to the company's market position[195]. - A substantial portion of revenue is generated from government sales, which are subject to competitive bidding and budgetary uncertainties[232]. Intellectual Property and Legal Risks - The ability to protect intellectual property through patents and trademarks is critical for maintaining competitive advantage[251]. - Patent litigation can be lengthy and costly, potentially leading to invalidation or narrow interpretation of patents[254]. - The company may face challenges in enforcing intellectual property rights in foreign jurisdictions, limiting protection[259]. - Infringement claims could result in substantial costs and harm to the company's financial resources and reputation[263]. - Compliance with federal regulations regarding intellectual property developed with government funding may limit the company's exclusive rights and ability to contract with non-U.S. manufacturers[264]. Financial Instruments and Stockholder Considerations - Approximately 71.4% of the company's Common Stock outstanding as of December 31, 2022, was issued to former securityholders of Old Sarcos, with some shares still subject to lock-up obligations[267]. - The company issued 10.8 million shares of Common Stock, representing about 7.0% of the Common Stock outstanding as of December 31, 2022, in connection with the acquisition of RE2[271]. - The company received a notice from Nasdaq on January 23, 2023, indicating non-compliance with the Minimum Bid Price Requirement, as the closing bid price was below $1.00 per share for 30 consecutive business days[282]. - The company may consider options to resolve the noncompliance with the Minimum Bid Price Requirement, including a potential reverse stock split[284]. - The company has outstanding Public Warrants to purchase approximately 13,831,262 shares of Common Stock at an exercise price of $11.50 per share, and Private Placement Warrants to purchase 6,718,191 shares at the same price, which may lead to dilution for existing shareholders[289].

Product Development and Commercialization - Sarcos Technology and Robotics Corporation has prioritized the commercialization of the Guardian XT and Sapien 6M products, which are expected to maximize near-term revenue potential [116]. - Initial production of commercial units for the Sapien 6M began in Q3 2022, with the Guardian XT expected to start production by the end of 2022, aiming for delivery in the first half of 2023 [125]. - The company expects to begin initial production of the Guardian XO in the second half of 2023, subject to potential delays due to supply chain challenges [126]. - Customer interest has been noted for the Guardian XO and Guardian XT, although these units are not yet commercially available, indicating unproven market demand [130]. - The company plans to offer its robotic systems primarily through a Robot-as-a-Service (RaaS) model, which includes ongoing maintenance and support [117]. Financial Performance - Revenue for the three months ended September 30, 2022, increased by $3.5 million, or 313%, to $4.7 million compared to $1.1 million for the same period in 2021 [137]. - Revenue from research and development services rose by $3.8 million, or 547%, from $0.7 million in Q3 2021 to $4.5 million in Q3 2022, primarily due to contributions from RE2 [138]. - Product revenue decreased by $0.3 million, or 59%, from $0.4 million in Q3 2021 to $0.2 million in Q3 2022, reflecting minimal sales of legacy products [139]. - Revenue for the nine months ended September 30, 2022, increased by $4.4 million, or 108%, to $8.4 million compared to $4.1 million for the same period in 2021 [149]. - Revenue from research and development services for the nine months ended September 30, 2022, increased by $4.9 million, or 147%, to $8.2 million compared to $3.3 million in 2021 [150]. Operating Expenses - Total operating expenses for Q3 2022 were $31.9 million, a decrease of $9.7 million, or 23%, from $41.6 million in Q3 2021 [140]. - Research and development expenses increased by $6.0 million, or 132%, from $4.5 million in Q3 2021 to $10.5 million in Q3 2022, driven by increased headcount and third-party service costs [142]. - General and administrative expenses decreased by $19.2 million, or 57%, from $33.9 million in Q3 2021 to $14.6 million in Q3 2022, mainly due to reduced stock-based compensation [143]. - Total operating expenses for the nine months ended September 30, 2022, were $90.3 million, an increase of $32.9 million, or 57%, from $57.4 million in 2021 [153]. - Research and development expenses increased by $12.5 million, or 110%, from $11.4 million for the nine months ended September 30, 2021, to $23.9 million for the nine months ended September 30, 2022 [155]. - General and administrative expenses increased by $11.5 million, or 29%, from $39.1 million for the nine months ended September 30, 2021, to $50.6 million for the nine months ended September 30, 2022 [156]. - Sales and marketing expenses increased by $3.1 million, or 75%, from $4.1 million for the nine months ended September 30, 2021, to $7.2 million for the nine months ended September 30, 2022 [158]. Cash Flow and Financing - Sarcos Technology and Robotics Corporation believes it has sufficient capital to fund operations for at least the next 12 months but plans to seek additional financing to bolster cash reserves [127]. - Net cash used in operating activities increased by $23.5 million to $44.4 million for the nine months ended September 30, 2022, from $20.9 million in the same period in 2021 [170]. - Net cash used in investing activities increased by $146.4 million to $149.4 million for the nine months ended September 30, 2022, from $3.0 million in the prior year [172]. - Net cash provided by financing activities decreased by $238.6 million, primarily due to the absence of cash proceeds from the Business Combination and PIPE Financing in 2022 [173]. - As of September 30, 2022, the company had $135.4 million in cash, cash equivalents, and marketable securities, which is expected to support operations for at least the next 12 months [164]. Supply Chain and Market Conditions - Supply chain disruptions, partly due to the COVID-19 pandemic, have impacted the availability of components and materials, affecting production timelines [121]. - Revenue is currently derived mainly from development and sales contracts rather than subscription arrangements, with no existing RaaS subscription agreements [117]. - The acquisition of RE2 on April 25, 2022, involved a payment of approximately $30 million in cash and the issuance of about 10.8 million shares of Common Stock [128]. - The company anticipates significant increases in both capital and operating expenditures to support product development, manufacturing, and personnel recruitment [118].

Production and Commercialization - Sarcos Technology and Robotics Corporation plans to begin initial production of commercial units for the Guardian XT and Sapien 6M by the end of 2022, with deliveries expected in early 2023[119]. - Customer interest in the Guardian XO, Guardian XT, and Sapien units has been noted, although these products are not yet commercially available[124]. - The commercialization of the Guardian XO has been delayed due to prioritization of the Guardian XT and Sapien 6M products, with initial production of the Guardian XO now anticipated in the second half of 2023[119]. - The company expects to manufacture between 300 to 500 units of its products in 2023, depending on the mix, but does not anticipate using all of that capacity[126]. - The company plans to offer its Guardian XO and Guardian XT primarily through a RaaS subscription model, which may lower upfront costs and enhance market adoption[125]. Financial Performance - Revenue for the three months ended June 30, 2022, increased by $1.9 million, or 166%, to $3.0 million compared to $1.1 million for the same period in 2021[130]. - Revenue from research and development services rose by $2.0 million, or 190%, from $1.0 million in Q2 2021 to $3.0 million in Q2 2022, primarily due to the inclusion of RE2 revenues[131]. - Revenue for the six months ended June 30, 2022, increased by $0.8 million, or 29%, to $3.8 million compared to $2.9 million for the same period in 2021[143]. - Product revenue for the six months ended June 30, 2022, decreased by $0.2 million, or 79%, to $0.1 million compared to $0.3 million in the same period in 2021[145]. Operating Expenses - Total operating expenses for the three months ended June 30, 2022, increased by $23.2 million, or 263%, to $32.0 million compared to $8.8 million in Q2 2021[133]. - Total operating expenses increased by $42.6 million, or 270%, from $15.8 million in the first half of 2021 to $58.4 million in the first half of 2022[146]. - Cost of revenue surged by $2.5 million, or 365%, from $0.7 million in Q2 2021 to $3.1 million in Q2 2022, driven by increased labor and material costs[134]. - Cost of revenue rose by $1.8 million, or 94%, from $1.9 million in the first half of 2021 to $3.6 million in the first half of 2022, primarily due to increased labor and material costs[147]. - General and administrative expenses increased by $15.2 million, or 521%, from $2.9 million in Q2 2021 to $18.1 million in Q2 2022, largely due to stock-based compensation[136]. - General and administrative expenses surged by $30.7 million, or 586%, from $5.2 million in the first half of 2021 to $35.9 million in the first half of 2022, largely due to stock-based compensation[149]. - Sales and marketing expenses rose by $3.0 million, or 164%, from $1.8 million in the first half of 2021 to $4.8 million in the first half of 2022, influenced by increased professional service fees and headcount[150]. Cash Flow and Financing - Net cash used in operating activities increased by $14.3 million, or 104%, from $13.7 million in the first half of 2021 to $27.9 million in the first half of 2022[164]. - Net cash used in investing activities rose by $107.6 million, or 4,715%, from $2.3 million in the first half of 2021 to $109.9 million in the first half of 2022, primarily due to the purchase of marketable securities and the RE2 acquisition[166]. - As of June 30, 2022, the company had $152.8 million in cash, cash equivalents, and marketable securities, which is expected to support operations for at least the next 12 months[158]. - The company anticipates seeking additional financing to bolster cash reserves and support working capital requirements, especially prior to achieving positive operating cash flows[161]. Strategic Initiatives - The company is focusing on a Robot-as-a-Service (RaaS) subscription model for its products, although no RaaS agreements are currently in place[111]. - The company is leveraging a multi-generational product roadmap to maximize near-term revenue potential from its robotic systems[110]. - Integration with RE2 is in early stages, with potential risks that could affect product development and commercialization timelines[123].

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 March 31, 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) Delaware ...

Part I [Business](index=8&type=section&id=Item%201.%20Business) Sarcos develops highly-dexterous mobile robotic systems, Guardian XO and XT, for industrial use, targeting early 2023 commercial launch via a RaaS model - Sarcos designs and produces highly-dexterous mobile robotic systems to augment human performance, combining human intelligence with machine strength and precision[22](index=22&type=chunk) - The company plans to offer its primary products, the Guardian XO and Guardian XT, through a Robot-as-a-Service (RaaS) subscription model to lower upfront costs for customers and generate recurring revenue[25](index=25&type=chunk)[61](index=61&type=chunk) - Initial production of commercial units for the Guardian XO and Guardian XT is targeted for the end of 2022, with customer delivery expected in early 2023[36](index=36&type=chunk)[59](index=59&type=chunk) - The company estimates its Total Addressable Market (TAM) was approximately **$147 billion** in 2020, driven by the number of workers in occupations suitable for their robotic systems[57](index=57&type=chunk) - As of March 2022, Sarcos held approximately **172 patents** and had **108 filed patent applications**, underscoring its focus on proprietary technology[68](index=68&type=chunk)[96](index=96&type=chunk) [Risk Factors](index=21&type=section&id=Item%201A.%20Risk%20Factors) The company faces significant risks including net losses, potential product launch delays, unproven RaaS market demand, supply chain dependencies, and internal control weaknesses - The company is an early-stage entity with a history of losses and expects to incur significant expenses and net losses for the foreseeable future, particularly through 2023[104](index=104&type=chunk) Net Loss | Metric | 2021 | 2020 | | :--- | :--- | :--- | | **Net Loss** | $81.5 million | $20.9 million | - There is a significant risk that the initial production and delivery of the Guardian XO and Guardian XT products may be delayed beyond the end of 2022 and early 2023, respectively, due to supply chain disruptions, labor shortages, and development challenges[111](index=111&type=chunk)[113](index=113&type=chunk)[114](index=114&type=chunk) - The company's core products represent a new category, and assumptions about market demand, pricing, and adoption rates are unproven; there are currently no binding orders for the commercial versions of these products[122](index=122&type=chunk)[123](index=123&type=chunk) - The Robot-as-a-Service (RaaS) subscription model is untested and may not gain commercial acceptance, which is a core part of the company's strategy[128](index=128&type=chunk) - Sarcos is dependent on suppliers, some of which are single or sole source, and is experiencing interruptions and cost increases for materials; the company has not yet finalized all suppliers or a contract manufacturing partner[169](index=169&type=chunk)[171](index=171&type=chunk) - Both Old Sarcos and Rotor (the SPAC) identified a material weakness in their internal control over financial reporting prior to the business combination, and the weakness related to Old Sarcos remains[195](index=195&type=chunk)[197](index=197&type=chunk)[199](index=199&type=chunk) [Unresolved Staff Comments](index=54&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) The company reports that it has no unresolved staff comments from the Securities and Exchange Commission - There are no unresolved staff comments[286](index=286&type=chunk) [Properties](index=54&type=section&id=Item%202.%20Properties) Sarcos operates a 60,000 sq ft corporate and manufacturing facility in Salt Lake City, Utah, under a lease expiring in May 2033, deemed adequate for current needs - The company's main facility is a **60,000 sq. ft.** space in Salt Lake City, Utah, under a lease expiring in May 2033[287](index=287&type=chunk) [Legal Proceedings](index=54&type=section&id=Item%203.%20Legal%20Proceedings) The company is not currently a party to any legal proceedings that it believes would have a material adverse effect on its business, financial condition, or results of operations - Sarcos is not currently involved in any material legal proceedings[288](index=288&type=chunk) [Mine Safety Disclosures](index=54&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company - Mine safety disclosures are not applicable[289](index=289&type=chunk) Part II [Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=55&type=section&id=Item%205.%20Market%20for%20Registrant%27s%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) The company's common stock and warrants trade on Nasdaq, with no intention to pay cash dividends, retaining earnings for growth - Common Stock and Warrants are traded on Nasdaq under symbols **STRC** and **STRCW**[292](index=292&type=chunk) - The company has never paid cash dividends and does not intend to in the foreseeable future, retaining funds for business growth[294](index=294&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=56&type=section&id=Item%207.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Sarcos reported a significant net loss in 2021 due to decreased revenue and surged operating expenses, with cash bolstered by the business combination Financial Highlights (in thousands) | (In thousands) | 2021 | 2020 | Change | % Change | | :--- | :--- | :--- | :--- | :--- | | **Revenue, net** | **$5,075** | **$8,813** | **($3,738)** | **(42)%** | | Cost of revenue | $3,867 | $5,602 | ($1,735) | (31)% | | Research and development | $17,516 | $14,117 | $3,399 | 24% | | General and administrative | $58,059 | $7,297 | $50,762 | 696% | | Sales and marketing | $6,624 | $2,796 | $3,828 | 137% | | **Total operating expenses** | **$86,066** | **$29,812** | **$56,254** | **189%** | | **Loss from operations** | **($80,991)** | **($20,999)** | | | - The **42% decrease in revenue** was primarily driven by a **$3.2 million (47%) reduction** in research and development services as the company narrowed its focus to projects aligned with product commercialization[339](index=339&type=chunk) - The **696% increase in General and Administrative expenses** was mainly due to **$41.8 million** in stock-based compensation recognized for awards that vested or began vesting upon the closing of the Business Combination[345](index=345&type=chunk) - The company secured approximately **$228.8 million** in net cash proceeds from the Business Combination and PIPE Financing, ending 2021 with **$217.1 million** in cash and cash equivalents[350](index=350&type=chunk)[351](index=351&type=chunk) - On March 28, 2022, Sarcos announced a definitive agreement to acquire RE2, Inc. for approximately **$100 million**, consisting of **$30 million in cash** and **$70 million in common stock**[310](index=310&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=65&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) As a smaller reporting company, Sarcos is not required to provide the information for this item - The company is not required to provide this information as it qualifies as a smaller reporting company[370](index=370&type=chunk) [Financial Statements and Supplementary Data](index=66&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) The 2021 consolidated financial statements reflect significant changes post-business combination, including increased assets and equity, a substantial net loss, and cash flow primarily from financing activities Consolidated Balance Sheet Data (in thousands) | | Dec 31, 2021 | Dec 31, 2020 | | :--- | :--- | :--- | | Cash and cash equivalents | $217,114 | $33,664 | | Total Assets | $235,823 | $38,051 | | Total Liabilities | $21,861 | $5,147 | | Total Stockholders' Equity | $213,962 | $32,904 | Consolidated Statement of Operations Data (in thousands) | | Year Ended Dec 31, 2021 | Year Ended Dec 31, 2020 | | :--- | :--- | :--- | | Revenue, net | $5,075 | $8,813 | | Loss from operations | ($80,991) | ($20,999) | | Net loss | ($81,508) | ($20,926) | | Net loss per share | ($0.72) | ($0.21) | Consolidated Cash Flow Data (in thousands) | | Year Ended Dec 31, 2021 | Year Ended Dec 31, 2020 | | :--- | :--- | :--- | | Net cash used in operating activities | ($42,103) | ($16,882) | | Net cash used in investing activities | ($4,688) | ($950) | | Net cash provided by financing activities | $230,241 | $42,301 | [Changes in and Disagreements with Accountants on Accounting and Financial Disclosure](index=94&type=section&id=Item%209.%20Changes%20in%20and%20Disagreements%20with%20Accountants%20on%20Accounting%20and%20Financial%20Disclosure) The company reports no changes in or disagreements with its accountants on accounting and financial disclosure - There were no disagreements with accountants on accounting and financial disclosure[511](index=511&type=chunk) [Controls and Procedures](index=94&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management concluded disclosure controls were ineffective as of December 31, 2021, due to a material weakness in internal control over financial reporting, with remediation efforts underway - Management concluded that disclosure controls and procedures were not effective as of December 31, 2021[512](index=512&type=chunk) - The ineffectiveness is due to a material weakness in internal control over financial reporting associated with accounting for unique and nonstandard transactions, which was identified at Old Sarcos prior to the merger[512](index=512&type=chunk) - Remediation efforts are underway, including strengthening the accounting function with new hires and engaging a third-party consulting firm[518](index=518&type=chunk) - Management excluded a formal report on internal control over financial reporting (ICFR) for fiscal year 2021 due to the timing of the business combination[514](index=514&type=chunk) [Other Information](index=95&type=section&id=Item%209B.%20Other%20Information) There is no other information to report for this item - None[519](index=519&type=chunk) Part III [Directors, Executive Officers and Corporate Governance](index=96&type=section&id=Item%2010.%20Directors%2C%20Executive%20Officers%20and%20Corporate%20Governance) The company's leadership includes Kiva Allgood as CEO and Benjamin G. Wolff as Executive Chairman, with a classified, mostly independent board and four established committees - The executive team is led by Kiva Allgood (President, CEO) and Benjamin G. Wolff (Executive Chairman)[522](index=522&type=chunk) - The board of directors is classified into three staggered three-year terms[544](index=544&type=chunk) - Seven of the nine board members are considered independent under Nasdaq rules[547](index=547&type=chunk) - The board has four primary committees: Audit, Compensation, Nominating and Corporate Governance, and Strategic Transaction[548](index=548&type=chunk)[550](index=550&type=chunk)[552](index=552&type=chunk)[554](index=554&type=chunk) [Executive Compensation](index=105&type=section&id=Item%2011.%20Executive%20Compensation) Executive compensation for 2021 was significantly impacted by large equity awards tied to the business combination and new employment agreements, with new equity and ESPP plans established 2021 Summary Compensation Table (Select Officers) | Name and Principal Position | Salary ($) | Stock Awards ($) | Option Awards ($) | Total ($) | | :--- | :--- | :--- | :--- | :--- | | Kiva Allgood, CEO | 8,654 | 3,000,002 | 3,001,038 | 6,009,694 | | Benjamin Wolff, Exec. Chairman | 396,258 | 45,049,998 | 5,565,845 | 51,237,601 | | Marian Joh, former COO | 256,923 | 1,802,000 | 2,202,861 | 4,261,784 | - Executive employment agreements are in place, providing for base salary, bonus eligibility, and severance payments/benefits upon certain termination events, including enhanced benefits following a change in control[597](index=597&type=chunk)[600](index=600&type=chunk)[604](index=604&type=chunk) - The company adopted a new 2021 Equity Incentive Plan with **30,000,000 shares** initially authorized, plus assumed and forfeited awards from the prior plan[617](index=617&type=chunk) - A new 2021 Employee Stock Purchase Plan (ESPP) was established, authorizing **3,000,000 shares** for issuance to eligible employees at a discount[639](index=639&type=chunk) [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](index=118&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Stockholder%20Matters) As of February 15, 2022, directors and executive officers collectively owned **36.8%** of common stock, with several individuals and institutions holding significant beneficial ownership - All directors and executive officers as a group beneficially own **36.8%** of the company's common stock as of February 15, 2022[670](index=670&type=chunk) Beneficial Ownership of Key Individuals and 5% Holders | Holder | Ownership % | | :--- | :--- | | Benjamin G. Wolff (Executive Chairman) | 14.1% | | Brian D. Finn (Director) | 10.5% | | Dr. Fraser Smith (Chief Innovation Officer) | 9.9% | | BlackRock, Inc. | 13.8% | | Marc Olivier | 10.1% | | DIG Investments XVIII AB | 8.0% | | Rotor-Sarcos, LLC | 6.3% | | Schlumberger Technology Corporation | 5.6% | [Certain Relationships and Related Transactions, and Director Independence](index=121&type=section&id=Item%2013.%20Certain%20Relationships%20and%20Related%20Transactions%2C%20and%20Director%20Independence) The company discloses various related party transactions, including pre-combination financings and post-combination agreements with director-affiliated entities, all subject to audit committee oversight - Directors and affiliates of Rotor (the SPAC) participated in the purchase of Founder Shares and Private Placement Warrants[674](index=674&type=chunk)[675](index=675&type=chunk) - In 2020, Old Sarcos' Series C Preferred Stock financing included participation from related parties such as Caterpillar Venture Capital, Director Dennis Weibling, DIG Investments, Rotor-Sarcos, LLC, and Schlumberger[688](index=688&type=chunk)[689](index=689&type=chunk) - Julie Wolff, spouse of Executive Chairman Benjamin Wolff, serves as the company's Chief Legal Officer, earning total compensation of **$342,820** in 2021[690](index=690&type=chunk) - The company has a Master Services Agreement with Sparks Marketing Group, where the brother-in-law of Executive Chairman Benjamin Wolff is a Vice President; Sarcos expects to pay Sparks approximately **$890,000** during 2021 and 2022[699](index=699&type=chunk) - The company has adopted a formal policy for the review and approval of related person transactions, which is overseen by the audit committee[701](index=701&type=chunk) [Principal Accountant Fees and Services](index=126&type=section&id=Item%2014.%20Principal%20Accountant%20Fees%20and%20Services) Sarcos paid Ernst & Young LLP **$1.675 million** in audit fees for 2021, including **$0.8 million** for business combination services, with all services subject to audit committee pre-approval Fees Paid to Ernst & Young LLP (in thousands) | Fee Type | 2021 | 2020 | | :--- | :--- | :--- | | Audit Fees | $1,675 | $705 | | Audit-Related Fees | $0 | $0 | | Tax Fees | $0 | $0 | | **Total Fees** | **$1,675** | **$705** | - Audit fees for 2021 included **$0.8 million** for services related to the Business Combination[707](index=707&type=chunk) Part IV [Exhibits, Financial Statement Schedules](index=127&type=section&id=Item%2015.%20Exhibits%2C%20Financial%20Statement%20Schedules) This section provides an index of financial statements referenced from Item 8 and a comprehensive list of all exhibits filed with the Form 10-K, including key corporate documents - This item incorporates the financial statements from Item 8 by reference[708](index=708&type=chunk) - An index of exhibits filed with the report is provided, including major agreements, corporate governance documents, and executive compensation plans[712](index=712&type=chunk) [Form 10-K Summary](index=129&type=section&id=Item%2016.%20Form%2010-K%20Summary) The company indicates that there is no Form 10-K summary - None[717](index=717&type=chunk)

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, 2021 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 ...

Financial Performance - For the three months ended June 30, 2021, the company reported a net loss of $14,001,087, which included formation and operational costs of $1,787,623 and a change in fair value of warrant liability of $12,220,600 [149]. - For the six months ended June 30, 2021, the company had a net loss of $5,047,405, consisting of formation and operational costs of $5,301,491 and transaction costs associated with the IPO of $603,941 [150]. - The company has not generated any revenues to date and does not expect to do so until after the completion of its Business Combination [148]. - The company has incurred significant costs in pursuit of its financing and acquisition plans, raising substantial doubt about its ability to continue as a going concern within one year after the issuance of its financial statements [158]. Initial Public Offering - The company completed its Initial Public Offering on January 20, 2021, raising gross proceeds of $276,000,000 from the sale of 27,600,000 units at $10.00 per unit [151]. - The company incurred $15,562,855 in Initial Public Offering related costs, including $5,520,000 in underwriting fees and $9,660,000 in deferred underwriting fees [152]. Trust Account and Use of Funds - As of June 30, 2021, the company had cash and investments held in the Trust Account totaling $276,046,127, which includes approximately $46,127 of interest income and unrealized gains [154]. - The company intends to use substantially all funds in the Trust Account to complete its Business Combination, with remaining proceeds allocated for working capital and growth strategies [155]. Share Issuance - The company entered into Subscription Agreements with PIPE Investors for the purchase of 22,000,000 shares of common stock at a price of $10.00 per share, totaling an aggregate purchase price of $220 million [162]. Off-Balance Sheet Arrangements - The company has no off-balance sheet arrangements as of June 30, 2021, and does not participate in transactions that create relationships with unconsolidated entities [159].

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (MARK ONE) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarter ended March 31, 2021 ☐ 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 ROTOR ACQUISITION CORP. (Exact Name of Registrant as Specified in Its Charter) Delaware 85-2838301 (State or other jurisdiction of in ...