Good day and thank you for standing by. Welcome to the Q3 2021 Sarcos Technology and Robotics Corporation Earnings Conference Call. At this time all participants are in a listen-mode. After the speakers' presentation, there will be a question-and-answer session. Please be advised that today's conference may be recorded. [Operator Instructions] I would now like to hand the conference over to your speaker today Ben Mimmack, Director of Investor Relations, and please go ahead.

Thank you, Judy. Good morning everyone and welcome to the Sarcos' third quarter earnings call. Joining upon the call this morning are Sarcos' Chairman and CEO, Ben Wolff; and Chief Financial Officer, Steve Hansen. Ben will start the call with an overview of the quarter and Steve will then talk in more detail about our financial results before we take questions from analysts. Before we begin, we must state that today's call will contain forward-looking statements, including statements concerning future commercial availability of our products, market trends, revenues costs and liquidity. These statements represent management's best predictions and expectations of the future event as of today, but there are many risks and uncertainties that could cause the actual results to differ from what we have projected. We encourage you to review the risks and uncertainties described from time to time in our filings with the SEC for further information regarding these actual and potential risks and uncertainties. We also encourage you to review the special note regarding forward-looking statements included in our earning release filed with the SEC this morning and which will be posted in the Investors section of our website at sarcos.com. In addition, we will be discussing certain non-GAAP financial measures this morning. Throughout this call all financial measures will be GAAP unless otherwise noted. A reconciliation of those numbers to the GAAP financials as well as the description, limitations and rational to such measures are included in the earning release filed with the SEC this morning, and which is available on our website. A recording of this call will also be archived on our website. The information that we are giving you on the call is as of today's date and we undertake no obligation to update the information subsequently. So thanks again for joining us. Now, at this point, I'd like to turn the call over to our Chairman and CEO, Ben Wolff.

Thanks, Ben, and thank you to everyone joining us for your interest in Sarcos. This morning, I will be giving you an update on the current state of our business and our expectations for the next few months. After that, I will hand the call over to Steve, who will give you an update our financial position before we end by taking questions from analysts. This earnings call is our first as a public company, since we listed on The NASDAQ Global Market at the end of September through a business combination with Rotor Acquisition Corp. The public listing of our stock has been a significant development for our company. The gross proceeds from the transaction of over $260 million provides us with liquidity we need to continue developing our technology and we firmly believe will be sufficient to enable us to bring our Guardian XO full-body exoskeleton robot and our Guardian XT teleoperated avatar robot to scale commercial production. On a side note, I would like to take this opportunity to share that now that we are listed. More than 80% of our shares are subject to lock-up periods of various lengths. 80% of the equity issued to current and former employees and common stockholders of Sarcos Corp in the merger, including myself, which represents over 34% of our fully diluted shares is restricted from being sold under lock-up of agreements and our bylaws until the earlier of the date on which we have shipped our first 20 Guardian XO and/or Guardian XT commercial units and the second anniversary of the closing of our merger with Rotor. By design, given the development stage of our company, we think has better aligns our interest with those of our investors. Events over the past few months have highlighted the ever growing…

Thanks, Ben, and good morning to everyone listening today. As Ben said, this is a very exciting time for Sarcos and I'm very happy to share our first result as a public company with you today. This morning, we have reported third quarter 2021 revenue of $1.1 million down from $1.5 million in the corresponding period of 2020 for Sarcos Corp, driven by the timing of our product development contract revenue. As Sarcos develops its products and narrows its focus to accepting only those development contracts that are fully aligned with our commercialization efforts, the company anticipates that development revenue may continue to be lower on a year-over-year basis during 2022. The other component of our revenue product sales, which includes our Guardian S, Guardian HLS and parts and accessories was up 69% to $0.4 million during the quarter of 2021, compared to the third quarter of 2020 for Sarcos Corp. Our third quarter of 2021 total operating expenses were $41.6 million, up significantly from the third quarter of 2020 due primarily to a non-cash stock-based compensation expense, one-time cost associated with a business combination and increased ongoing expenses associated with requirements of being a publicly traded company. As a result of these increased costs, general and administrative expense increased from $2 million in the third quarter of 2020 for Sarcos Corp to $33.9 million in the third quarter of this year, while sales and marketing expense rose to $2.3 million as compared to $0.7 million for Sarcos Corp during the same period last year. These expenses, many of which are non-recurring drove a third quarter GAAP net loss of $37 million, or $0.35 per share – diluted per share, which is an increase from the Sarcos Corp net loss of $6.9 million in the third quarter of 2020. Excluding…

[Operator Instructions] Our first question comes from Rob Mason of Baird. Please proceed.

Yes, good morning and congratulations to getting to this point, Ben and team. I wanted to know, as you go about the – the Beta trials and assembling the new features into the model, does the – all of the safety functionality that you plan for the unit, does that get assembled during the Beta process? Or is that follow the Beta process as you – in between that and commercialization, I am just curious where those features get added as well?

Good morning, Rob, and thanks for the question. This is Ben Wolff. The answer is both. We are building a significant amount of safety and functionality into the Beta design. But as we test the Beta, we will learn more about what additional enhancements need to be built in, if any, between the Beta version and the commercialization or the MVP products. So a significant amount of work is underway right now on the safety testing, safety analysis and safety planning that is a big part of the work that is being done to get to the Beta prototype.

I see. Yes. Ben, can you give us any feel for how many Beta customers may be enrolled right now? Or when you would start to enroll those?

So we do have some contracts for Beta pilots now. We have others in negotiation. I'm not going to give you a specific number because I can't tell you how many of those will actually come to fruition, but we have strong interest right now. I think it's fair to say if we have Beta units available today, we would be doing pilots today.

Would – what percent of those that you currently have were also Alpha, Alpha trials customers?

I think our Alpha trial customers and those that have been with us through the design and development process for years are all still focused on the Betas and we've obviously added more to the queue since the time of the Alpha. So it is a bit of both.

Okay, fantastic. Just a couple more real quick. And what is your expectation in terms of how long the Beta unit will reside at the customer? What the trial period would be for the XO, for the XT, I'm not sure if they would – to the extent they differ any distinction there?

I think – yes, the beta period will likely be the same from what we're seeing from our customers on both the XO and the XT and we're anticipating two to four weeks of each – for each trial and then we will move the Beta unit onto the next customer, so we can rotate as many as we can through and get as much information from different perspectives, different use cases, different industries as possible. We've had a couple of customers express a desire for an extended Beta period, meaning a couple or three months in duration and how we slot those in will be dependent on just where we are with the queue and magnitude of the opportunity.

I see. Just last question maybe for Steve. Steve, could you give us an idea of what the – I'll just say the cash operating expense run rate recur on a recurring basis would be as we go forward – and basically I'm trying to get at excluding stock compensation, what the operating expense run rate would look like.

You bet. So right now, with our development, with our development focus, we're running about 2.5 [indiscernible] right now in cash until we get to that the Beta trials and some of our projections for use of customer.

Very good. Okay. I'll hop back into queue. Thanks for taking the question.

Thanks for your questions, Rob.

[Operator Instructions] One moment. I'm showing no further questions. I would now like to turn the call back to Ben Mimmack for closing remarks.

Thank you, Judy. That concludes our earnings call for the third quarter. If anyone has any questions, please follow up with Investor Relations. With that we would say goodbye.

This concludes today's conference call. Thank you for participating and you may now disconnect.