SEC Filing | Sarcos Technology and Robotics Corporation

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424B3

Filed Pursuant to Rule 424(b)(3)

Registration No. 333-264952

PROSPECTUS SUPPLEMENT

(To Prospectus dated May 23, 2022)

Up to 10,772,674 Shares of Common Stock by the Selling Securityholders

This prospectus supplement supplements the prospectus dated May 23, 2022 (as supplemented to date, the “Prospectus”), which forms a part of our Registration Statement on Form S-1 (Registration Statement No. 333-264952) filed with the Securities and Exchange Commission (the “SEC”) on May 13, 2022, and declared effective by the SEC on May 23, 2022.

The Prospectus and this prospectus supplement relate to the offer and sale of securities to satisfy certain registration rights we have granted to the former shareholders of RE2, Inc.

This prospectus supplement should be read in conjunction with the Prospectus, which is to be delivered with this prospectus supplement. This prospectus supplement updates, amends, and supplements the information included or incorporated by reference in the Prospectus. If there is any inconsistency between the information in the Prospectus and this prospectus supplement, you should rely on the information in this prospectus supplement.

This prospectus supplement is not complete without, and may not be delivered or utilized except in connection with, the Prospectus, including any amendments or supplements to it.

Quarterly Report on Form 10-Q

On August 9, 2022, we filed a Quarterly Report on Form 10-Q with the SEC. The Form 10-Q is attached hereto.

We are an “emerging growth company,” as defined under the federal securities laws, and, as such, may elect to comply with certain reduced public company reporting requirements for future filings.

Investing in our securities involves a high degree of risk. Before buying any securities, you should carefully read the discussion of the risks of investing in our securities in the section titled “Risk Factors” beginning on page 17 of this Prospectus.

You should rely only on the information contained in this Prospectus or any prospectus supplement or amendment hereto. We have not authorized anyone to provide you with different information.

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this Prospectus is truthful or complete. Any representation to the contrary is a criminal offense.

The date of this prospectus supplement is August 9, 2022.

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 June 30, 2022


☐	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.)
650 South 500 West, Suite 150 Salt Lake City, Utah	84101
(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.

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 July 29, 2022, the registrant had 154.8 million shares of Common Stock, $0.0001 par value per share, outstanding.

Table of Contents


		Page
PART I.	FINANCIAL INFORMATION
Item 1.	Financial Statements (Unaudited)	5
	Condensed Consolidated Balance Sheets	5
	Condensed Consolidated Statements of Operations and Comprehensive Loss	6
	Condensed Consolidated Statements of Stockholders' Equity	7
	Condensed Consolidated Statements of Cash Flows	8
	Notes to Unaudited Condensed Consolidated Financial Statements	9
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	24
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	34
Item 4.	Controls and Procedures	34
PART II.	OTHER INFORMATION
Item 1.	Legal Proceedings	35
Item 1A.	Risk Factors	35
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	70
Item 3.	Defaults Upon Senior Securities	70
Item 4.	Mine Safety Disclosures	70
Item 5.	Other Information	70
Item 6.	Exhibits	71
Signatures		72

Summary Risk Factors

Our business is subject to numerous risks and uncertainties, including those highlighted in Part II, Item 1A Risk Factors. The following list summarizes the principal risks we face:

•

We are an early stage company with a history of losses, and expect to incur significant expenses for the foreseeable future.

•

If we fail to effectively manage our growth, we may not be able to design, develop, manufacture, market and launch our robotic systems successfully.

•

The success of our acquisition of RE2, Inc. is subject to numerous risks and uncertainties, including integration risks.

•

Our operating and financial projections rely on management assumptions and analyses. If these assumptions or analyses prove to be incorrect, our actual operating results may be materially different from our forecasted results.

•

Initial production of commercial units of our core products, the Guardian XO, Guardian XT and Sapien 6M, may be delayed beyond our current expectations and therefore initial delivery to customers and receipt of anticipated revenue could be delayed.

•

We are dependent on our suppliers, some of which are currently single, sole or limited source suppliers, and any inability of these suppliers to deliver necessary components of our products at the prices, volumes, performance, timing and specifications acceptable to us, could have a material adverse effect on our business, prospects, financial condition and operating results. We have not yet identified all of the suppliers that we are likely to rely on to support any future commercialization of our core products.

•

We have very limited experience commercializing our products and may not be able to do so efficiently or effectively.

•

Our business plans require a significant amount of capital. Our future capital needs may require us to sell additional equity or debt securities that may dilute our stockholders or introduce covenants that may restrict our operations or our ability to pay dividends.

•

Our core products represent a new product category, and important assumptions about market demand, pricing, adoption rates and sales cycles for our current and future products may be inaccurate.

•

With many of our products still under development, we have limited current customers and no binding orders for the upcoming commercial version of our core products, the Guardian XO, Guardian XT and Sapien 6M, and expected customer trials and discussions with respect to those products may not result in binding orders or subscriptions.

•

Even if we successfully market our products, the purchase or subscription, adoption and use of the products may be materially and negatively impacted if the employees of our customers resist the use and adoption of the products.

•

Our Robot-as-a-Service (“RaaS”) subscription model has yet to be tested and may fail to gain commercial acceptance.

•

If we are successful in commercializing our products, our revenue will be concentrated in a limited number of models for the foreseeable future.

•

The benefits to customers of our products could be supplanted by other technologies or solutions or competitors' products that utilize similar technology to ours in a more effective way.

•

Design flaws, defects, glitches or malfunctions in our products or the software that operates them, failure of our products to perform as expected, connectivity issues or user errors can result in product recalls, lower than expected return on investment for customers, harm to users and significant safety concerns, each of which could materially and adversely affect our results of operations, financial condition or reputation.

•

We have no experience maintaining or servicing our products at a large scale.

•

Our ability to develop and manufacture products of sufficient quality on schedule and on a large scale is unproven, and delays in the design, production and launch of our products could harm our business, prospects, financial condition and operating results.

•

We are or may be subject to risks associated with strategic alliances or acquisitions and may not be able to identify adequate strategic relationship opportunities, or form strategic relationships, in the future.

•

We are highly dependent on the services of our senior management and other key employees and, if we are unable to attract and retain a sufficient number of qualified employees, our ability to design, manufacture and launch our products, operate our business and compete could be harmed.

•

Our management as a group has limited experience in operating a publicly-traded company.

•

Ongoing impacts from COVID-19 or another pandemic, epidemic or outbreak of an infectious disease may materially and adversely impact our business, prospects, financial condition and operating results.

•

We may experience significant delays in the design, development, production and launch of our robotic systems, which could harm our business, prospects, financial condition and operating results.

•

Our business and prospects depend significantly on our ability to build our brands. We may not succeed in continuing to establish, maintain and strengthen our brands, and our brands and reputation could be harmed by negative publicity regarding us or our products.

•

If we are unable to contract with a third-party manufacturing partner, we would need to develop our own manufacturing facilities, which may not be feasible and, if feasible, would significantly increase our capital expenditures and operating expenditures, and would significantly delay or inhibit production of our robotic systems.

•

We operate in a competitive industry that is subject to rapid technological change, and we expect competition to increase.

•

Our financial results may vary significantly from period to period due to fluctuations in our operating costs, product demand and other factors.

•

If we are unable to develop and maintain an effective system of internal control over financial reporting, we may not be able to accurately report our financial results in a timely manner, which may adversely affect investor confidence in us and materially and adversely affect our business and operating results.

•

We expect to incur substantial research and development costs and devote significant resources to identifying and commercializing new products, which could significantly reduce our profitability and may never result in revenue.

•

Our success depends in part on our ability to obtain and maintain protection for the intellectual property relating to or incorporated into our products.

•

We may not be able to protect our intellectual property rights in all countries.

•

We may be subject to intellectual property infringement claims or misappropriation claims, which may be time consuming and expensive and, if adversely determined, could limit our ability to commercialize our products.

PART I—FINANCIAL INFORMATION

Item 1. Financial Statements.

SARCOS TECHNOLOGY AND ROBOTICS CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except share data)


	As of
	June 30, 2022			December 31, 2021
	(unaudited)
Assets
Current assets:
Cash and cash equivalents	$	73,259		$	217,114
Marketable securities		79,507			—
Accounts receivable		1,147			788
Unbilled receivables		2,824			221
Inventories, net		1,896			1,006
Prepaid expenses and other current assets		5,512			9,202
Total current assets		164,145			228,331
Property and equipment, net		7,775			7,051
Intangible assets, net		20,726			—
Goodwill		70,861			—
Other non-current assets		503			441
Total assets	$	264,010		$	235,823
Liabilities and stockholders’ equity
Current liabilities:
Accounts payable	$	1,646		$	1,681
Accrued liabilities		8,133			4,480
Total current liabilities		9,779			6,161
Warrant liabilities		3,169			13,701
Deferred tax liabilities		2,768			—
Other non-current liabilities		2,017			1,999
Total liabilities		17,733			21,861
Commitments and contingencies (Note 12)
Stockholders’ equity:
Common stock, $0.0001 par value, 990,000,000 shares authorized as of June 30, 2022, and December 31, 2021; 152,229,803 and 137,722,658 shares issued and outstanding as of June 30, 2022, and December 31, 2021, respectively		15			14
Additional paid-in capital		434,073			359,439
Accumulated deficit		(187,811	)		(145,491	)
Total stockholders’ equity		246,277			213,962
Total liabilities and stockholders’ equity	$	264,010		$	235,823

See accompanying notes to the condensed consolidated financial statements.

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 June 30,						Six Months Ended June 30,
	2022			2021			2022			2021
Revenue, net	$	3,038		$	1,143		$	3,781		$	2,942
Operating expenses:
Cost of revenue		3,146			676			3,634			1,878
Research and development		7,569			4,054			13,450			6,869
General and administrative		18,146			2,921			35,938			5,235
Sales and marketing		2,586			1,163			4,797			1,819
Intangible amortization expense		574			—			574			—
Total operating expenses		32,021			8,814			58,393			15,801
Loss from operations		(28,983	)		(7,671	)		(54,612	)		(12,859	)
Interest income (expense), net		148			(13	)		159			(23	)
Gain on warrant liability		4,113			—			10,527			—
Gain on forgiveness of notes payable		—			2,394			—			2,394
Other (expense) income, net		(2	)		28			—			28
Loss before provision for income taxes		(24,724	)		(5,262	)		(43,926	)		(10,460	)
Provision for income taxes		1,606			(1	)		1,606			(1	)
Net loss	$	(23,118	)	$	(5,263	)	$	(42,320	)	$	(10,461	)
Net loss per share
Basic and diluted	$	(0.16	)	$	(0.05	)	$	(0.30	)	$	(0.10	)
Weighted-average shares used in computing net loss per share
Basic and diluted		146,278,898			104,063,972			142,116,194			104,061,824

See accompanying notes to the condensed consolidated financial statements.

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, December 31, 2020, as adjusted		—			—			—			—			—			—			104,039,354		10		—			—			96,880			(63,983	)		(3	)		32,904
Purchase of non-controlling interest		—			—			—			—			—			—			—		—		—			—			(203	)		—			3			(200	)
Stock-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
Stock-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


	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, 2021		—	$	—		—	$	—		—	$	—		137,722,658		$	14		—	$	—	$	359,439		$	(145,491	)	$	—	$	213,962
Stock-based compensation		—		—		—		—		—		—		—			—		—		—		10,850			—			—		10,850
Common stock issued upon vesting of restricted stock awards and restricted stock units		—		—		—		—		—		—		2,013,893			—		—		—		—			—			—		—
Shares repurchased for payment of tax withholdings and other		—		—		—		—		—		—		(793,888	)		—		—		—		(5,250	)		—			—		(5,250	)
Exercise of stock options		—		—		—		—		—		—		83,582			—		—		—		65			—			—		65
Net loss		—		—		—		—		—		—		—			—		—		—		—			(19,202	)		—		(19,202	)
Balance at March 31, 2022		—	$	—		—	$	—		—	$	—		139,026,245		$	14		—	$	—	$	365,104		$	(164,693	)	$	—	$	200,425
Stock-based compensation		—		—		—		—		—		—		—			—		—		—		10,270			—			—		10,270
Common stock issued upon vesting of restricted stock awards and restricted stock units		—		—		—		—		—		—		1,402,863			—		—		—		—			—			—		—
Shares repurchased for payment of tax withholdings and other		—		—		—		—		—		—		(464,381	)		—		—		—		(1,342	)		—			—		(1,342	)
Exercise of stock options		—		—		—		—		—		—		1,492,402			—		—		—		486			—			—		486
Common stock and assumed equity awards in connection with a business acquisition		—		—		—		—		—		—		10,772,674			1		—		—		59,555			—			—		59,556
Net loss		—		—		—		—		—		—		—			—		—		—		—			(23,118	)		—		(23,118	)
Balance at June 30, 2022		—	$	—		—	$	—		—	$	—		152,229,803		$	15		—	$	—	$	434,073		$	(187,811	)	$	—	$	246,277

See accompanying notes to the condensed consolidated financial statements.

SARCOS TECHNOLOGY AND ROBOTICS CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

(in thousands)


	Six Months Ended June 30,
	2022			2021
Cash flows from operating activities:
Net loss	$	(42,320	)	$	(10,461	)
Adjustments to reconcile net loss to net cash used in operating activities:
Stock-based compensation		21,120			392
Depreciation of property and equipment		594			219
Amortization of intangible assets		574			—
Change in fair value of warrant liability		(10,527	)		—
Gain on forgiveness of notes payable		—			(2,394	)
Changes in operating assets and liabilities
Accounts receivable		463			665
Unbilled receivable		(635	)		(104	)
Inventories		(424	)		(551	)
Deferred transaction costs		—			(2,799	)
Prepaid expenses and other current assets		3,941			(655	)
Other non-current assets		(40	)		—
Accounts payable		(401	)		1,044
Accrued liabilities		1,320			455
Other non-current liabilities		(1,589	)		529
Net cash used in operating activities		(27,924	)		(13,660	)
Cash flows from investing activities:
Purchases of property and equipment		(690	)		(2,282	)
Acquisition of a business, net of cash acquired		(29,687