10-Q
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financing

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)

 

 

Delaware

85-2838301

( State or other jurisdiction of

incorporation or organization)

(I.R.S. Employer
Identification No.)

360 Wakara Way

Salt Lake City, Utah 84108

84108

(Address of principal executive offices)

(Zip Code)

Registrant’s telephone number, including area code: (888) 927-7296

 

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, $0.0001 par value per share

Warrants to purchase Common Stock

 

STRC

STRCW

 

The Nasdaq Global Market

The Nasdaq Global Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer

 

 

Accelerated filer

 

 

 

 

 

Non-accelerated filer

 

 

Smaller reporting company

 

 

 

 

 

 

 

 

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.

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No

As of October 22, 2021, the registrant had 142,848,780 shares of Common Stock, $0.0001 par value per share, outstanding.

 

 

 


 

Explanatory Note

 

On September 24, 2021 (the “Closing Date”), Sarcos Technology and Robotics Corporation, a Delaware corporation (f/k/a Rotor Acquisition Corp.) (unless specified otherwise, the “Company” or “Sarcos”), consummated the previously announced business combination (the “Business Combination”) pursuant to the terms of the Agreement and Plan of Merger, dated as of April 5, 2021 (the “Original Merger Agreement”), by and among the Company, Rotor Merger Sub Corp., a Delaware corporation and a direct, wholly-owned subsidiary of the Company (“Merger Sub”), and Sarcos Corp., a Utah corporation (“Old Sarcos”), and Amendment No. 1 to the Agreement and Plan of Merger, dated as of August 28, 2021 (the “Amendment” and the Original Merger Agreement, as amended, the “Merger Agreement”), by and among the Company, Merger Sub and Old Sarcos. Pursuant to the terms of the Merger Agreement, the Business Combination between the Company and Old Sarcos was effected through the merger of Merger Sub with and into Old Sarcos, with Old Sarcos continuing as the surviving corporation (the “Merger”) and a wholly-owned subsidiary of the Company. On the Closing Date, the registrant changed its name from Rotor Acquisition Corp. to Sarcos Technology and Robotics Corporation.

 

For more information on the Business Combination, see Note 1 to the unaudited condensed consolidated financial statements below.

 

Unless stated otherwise or the context clearly indicates otherwise, this Quarterly Report on Form 10-Q contains historical information about Rotor before the Business Combination. References to the “Company,” “we,” “us,” and “our” in this report refer to Old Sarcos before the consummation of the Business Combination or Sarcos after the consummation of the Business Combination, as the context suggests.

 

The Business Combination was accounted for as a reverse capitalization, with no goodwill or other intangible assets recorded, in accordance with U.S. GAAP. Under this method of accounting, Rotor is treated as the “acquired” company for financial reporting purposes. Accordingly, for accounting purposes, the financial statements of the combined entity will represent a continuation of the financial statements of Old Sarcos with the Business Combination being treated as the equivalent of Old Sarcos issuing stock for the net assets of Rotor, accompanied by a recapitalization. The net assets of Old Sarcos and Rotor are stated at historical cost, with no goodwill or other intangible assets recorded. Operations prior to the Business Combination are those of Old Sarcos.

Table of Contents

 

 

 

Page

PART I.

FINANCIAL INFORMATION

 

Item 1.

Financial Statements (Unaudited)

3

 

Condensed Consolidated Balance Sheets

3

 

Condensed Consolidated Statements of Operations and Comprehensive Loss

4

 

Condensed Consolidated Statements of Stockholders' Equity

5

 

Condensed Consolidated Statements of Cash Flows

7

 

Notes to Unaudited Condensed Consolidated Financial Statements

8

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

27

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

41

Item 4.

Controls and Procedures

41

PART II.

OTHER INFORMATION

 

Item 1.

Legal Proceedings

41

Item 1A.

Risk Factors

42

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

72

Item 3.

Defaults Upon Senior Securities

72

Item 4.

Mine Safety Disclosures

72

Item 5.

Other Information

73

Item 6.

Exhibits

74

Signatures

77

 

2


 

PART I—FINANCIAL INFORMATION

Item 1. Financial Statements.

 

SARCOS TECHNOLOGY AND ROBOTICS CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

(in thousands, except share data)

 

 

As of

 

 

September 30, 2021

 

December 31, 2020

 

 

(Unaudited)

 

 

(Note 1)

 

Assets

 

 

 

 

 

Current assets:

 

 

 

 

 

Cash and cash equivalents

$

239,148

 

 

$

33,664

 

Restricted cash, current

 

108

 

 

 

 

Accounts receivable

 

777

 

 

 

1,051

 

Unbilled receivable

 

56

 

 

 

219

 

Inventories

 

1,314

 

 

 

707

 

Prepaid expenses and other current assets

 

1,450

 

 

 

693

 

Total current assets

 

242,853

 

 

 

36,334

 

Restricted cash, net of current

 

1,932

 

 

 

 

Property and equipment, net

 

5,236

 

 

 

1,425

 

Other non-current assets

 

426

 

 

 

292

 

Total assets

$

250,447

 

 

$

38,051

 

Liabilities and stockholders' equity

 

 

 

 

 

Current liabilities:

 

 

 

 

 

Accounts payable

$

1,933

 

 

$

972

 

Accrued liabilities

 

2,689

 

 

 

1,255

 

Notes payable, current

 

108

 

 

 

1,328

 

Total current liabilities

 

4,730

 

 

 

3,555

 

Notes payable, net of current

 

1,892

 

 

 

1,066

 

Warrant liabilities

 

5,265

 

 

 

 

Deferred rent long term

 

1,819

 

 

 

 

Other non-current liabilities

 

300

 

 

 

526

 

Total liabilities

 

14,006

 

 

 

5,147

 

Commitments and contingencies (Note 11)

 

 

 

 

 

Stockholders' equity:

 

 

 

 

 

Common stock, $0.0001 par value, 990,000,000 and 133,312,415 shares authorized as of September 30, 2021 and December 31, 2020; 137,589,275 and 104,039,354 shares issued and outstanding as of September 30, 2021, and December 31, 2020, respectively

 

13

 

 

 

10

 

Additional paid-in capital

 

347,857

 

 

 

96,880

 

Accumulated deficit

 

(111,429

)

 

 

(63,983

)

Total Sarcos Technology and Robotics Corporation stockholders’ equity

 

236,441

 

 

 

32,907

 

Noncontrolling interests

 

 

 

 

(3

)

Total stockholders' equity

 

236,441

 

 

 

32,904

 

Total liabilities and stockholders' equity

$

250,447

 

 

$

38,051

 

 

See accompanying notes to the condensed consolidated financial statements.

3


 

SARCOS TECHNOLOGY AND ROBOTICS CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(Unaudited)

(in thousands, except share and per share data)

 



 

Three Months Ended September 30,

 



Nine Months Ended September 30,

 

 

2021

 



2020

 

2021

 



2020

 

Revenue, net

 

$

1,129

 

 

$

1,505

 

$

4,071

 



$

5,387

 

Operating expenses:​

 



 

 



 



 





 

Cost of revenue

 

 

929

 

 

 

1,044

 



 

2,807

 



 

3,537

 

Research and development

 

 

4,529

 

 

 

4,606

 

 

11,398

 



 

11,249

 

General and administrative

 

 

33,864

 

 

 

2,017

 

 

39,099

 



 

5,716

 

Sales and marketing

 

 

2,295

 

 

 

732

 

 

4,114

 



 

2,023

 

Total operating expenses

 

 

41,617

 

 

 

8,399

 

 

57,418

 



 

22,525

 

Loss from operations

 

 

(40,488

)

 

 

(6,894

)



 

(53,347

)



 

(17,138

)

Interest (expense) income, net

 

 

(7

)

 

 

 



 

(30

)



 

58

 

Gain on warrant liability

 

 

3,510

 

 

 

 

 

 

3,510

 

 

 

 

Gain on forgiveness of notes payable

 

 

 

 

 

 



 

2,394

 



 

 

Other income, net

 

 

 

 

 

1

 



 

28

 



 

31

 

Loss before provision for income taxes

 

 

(36,985

)

 

 

(6,893

)



 

(47,445

)



 

(17,049

)

Provision for income taxes

 

 

 

 

 

 



 

1

 



 

 

Net loss and comprehensive loss

 

 

(36,985

)

 

 

(6,893

)

 

(47,446

)



 

(17,049

)

Net loss attributable to common stockholders

 

$

(36,985

)

 

$

(6,893

)



$

(47,446

)



$

(17,049

)

Net loss per share attributable to common stockholders:

 

 

 

 

 

 

 

 



 

 

Basic and diluted

 

$

(0.35

)

 

$

(0.07

)

$

(0.45

)



$

(0.17

)

Weighted-average shares used in computing net loss per share
   attributable to common stockholders

 

 

 

 

 

 

 

 



 

 

Basic and diluted

 

 

106,614,893

 

 

 

103,506,165

 

 

104,922,111

 



 

98,862,683

 

See accompanying notes to the condensed consolidated financial statements.

4


 

SARCOS TECHNOLOGY AND ROBOTICS CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(Unaudited)

(in thousands, except share data)

 

 

 

Convertible Preferred Stock

 

 

Common Stock

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Additional

 

 

 

 

 

 

 

 

Total

 

 

 

Series A

 

 

Series B

 

 

Series C

 

 

Class A

 

 

Class B

 

 

Paid-In

 

 

Accumulated

 

 

Noncontrolling

 

 

Stockholders'

 

 

 

Shares

 

 

Amount

 

 

Shares

 

 

Amount

 

 

Shares

 

 

Amount

 

 

Shares

 

 

Amount

 

 

Shares

 

 

Amount

 

 

Capital

 

 

Deficit

 

 

Interests

 

 

Equity

 

Balance at December 31, 2020

 

 

5,421,446

 

 

$

5

 

 

 

3,158,338

 

 

$

3

 

 

 

3,532,228

 

 

$

4

 

 

 

171,645

 

 

$

 

 

 

8,000,001

 

 

$

8

 

 

$

96,870

 

 

$

(63,983

)

 

$

(3

)

 

$

32,904

 

Retroactive application of Reverse Recapitalization

 

 

(5,421,446

)

 

 

(5

)

 

 

(3,158,338

)

 

 

(3

)

 

 

(3,532,228

)

 

 

(4

)

 

 

103,867,709

 

 

 

10

 

 

 

(8,000,001

)

 

 

(8

)

 

 

10

 

 

 

 

 

 

 

 

 

 

Balance at December 31, 2020, as adjusted

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

104,039,354

 

 

 

10

 

 

 

 

 

 

 

 

 

96,880

 

 

 

(63,983

)

 

 

(3

)

 

 

32,904

 

Purchase of non-controlling interest

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(203

)

 

 

 

 

 

3

 

 

 

(200

)

Share based compensation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

173

 

 

 

 

 

 

 

 

 

173

 

Exercise of stock options

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

24,618

 

 

 

 

 

 

 

 

 

 

 

 

20

 

 

 

 

 

 

 

 

 

20

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(5,198

)

 

 

 

 

 

(5,198

)

Balance at March 31, 2021

 

 

 

 

$

 

 

 

 

 

$

 

 

 

 

 

$

 

 

 

104,063,972

 

 

$

10

 

 

$

 

 

$

 

 

$

96,870

 

 

$

(69,181

)

 

$

 

 

$

27,699

 

Share based compensation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

219

 

 

 

 

 

 

 

 

 

219

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(5,263

)

 

 

 

 

 

(5,263

)

Balance at June 30, 2021

 

 

 

 

$

 

 

 

 

 

$

 

 

 

 

 

$

 

 

 

104,063,972

 

 

$

10

 

 

 

 

 

$

 

 

$

97,089

 

 

$

(74,444

)

 

$

 

 

$

22,655

 

Cashless exercise of common stock warrants

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

999,185

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Issuance of common stock upon Merger, net of transaction costs

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

10,525,990

 

 

 

1

 

 

 

 

 

 

 

 

 

403

 

 

 

 

 

 

 

 

 

404

 

Issuance of PIPE shares

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

22,000,000

 

 

 

2

 

 

 

 

 

 

 

 

 

219,998

 

 

 

 

 

 

 

 

 

220,000

 

Share based compensation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

30,367

 

 

 

 

 

 

 

 

 

30,367

 

Exercise of stock options

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

128

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

-

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(36,985

)

 

 

 

 

 

(36,985

)

Balance at September 30, 2021

 

 

 

 

$

 

 

 

 

 

$

 

 

 

 

 

$

 

 

 

137,589,275

 

 

$

13

 

 

 

 

 

$

 

 

$

347,857

 

 

$

(111,429

)

 

$

 

 

$

236,441

 

 

See accompanying notes to the condensed consolidated financial statements.

5


 

SARCOS TECHNOLOGY AND ROBOTICS CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(Unaudited)

(in thousands, except share data)

 

 

 

Convertible Preferred Stock

 

 

Common Stock

 

 

Additional

 

 

 

 

 

 

 

 

Total

 

 

 

Series A

 

 

Series B

 

 

Series C

 

 

Class A

 

 

Class B

 

 

Paid-In

 

 

Accumulated

 

 

Noncontrolling

 

 

Stockholders'

 

 

 

Shares

 

 

Amount

 

 

Shares

 

 

Amount

 

 

Shares

 

 

Amount