Good day and thank you for standing by. Welcome to Q4 2021 Sarcos Technology and Robotics Corporation Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speakers’ presentation, there will be a question-and-answer session. Please be advised that today’s conference is being recorded. I would now like to hand the conference over to your speaker today, Ben Mimmack, Head of Investor Relations. Please go ahead.

Thanks Didi. Good morning, everyone, and welcome to the Sarcos’ fourth quarter and full year earnings call. Joining us on the call today are Sarcos’ President and Chief Executive Officer, Kiva Allgood; and Chief Financial Officer, Steve Hansen. Kiva will start the call with an overview of the fourth quarter and recent events, 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. In addition, statements about our planned acquisition of RE2 including our expectations regarding the benefits we achieve, the financial performance of the combined company, the timing of the closing of the transaction, future market or revenue opportunities, integration plans and other statements regarding the combination of the two companies are forward-looking statements. These statements represent management’s beliefs and expectations of the future events as of today, but there are many risks and uncertainties that could cause the actual results to differ from what we have projected. Among those risks and uncertainties are those described in our annual report on Form 10-K filed today with the SEC and those mentioned in our earnings press release and our press release announcing our planned acquisition of RE2. We encourage you to review the risks and uncertainties described in these press releases and 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 afternoon and then our 10-K, both of which will be posted in the Investors section of our website at sarcos.com and on the SEC’s website. In addition, we will be discussing certain non-GAAP financial measures on our call today. Throughout this call all financial measures will be GAAP unless otherwise noted. A reconciliation of any non-GAAP measures to the most directly comparable GAAP measures, as well as the description, limitations and rational to such measures are included in the earnings release filed with the SEC this morning, and which is available on our website and on the SEC’s website. A recording of this call will also be archived on our website. The information that we’re 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. At this point, I’d like to turn the call over to our President and CEO, Kiva Allgood.

Thanks, Ben, and thank all of you for joining us today. It’s a very exciting time for Sarcos. On a personal note, this earnings call is my first as President and CEO of Sarcos, having succeeded Ben Wolff in December of last year, when he stepped into a new role as Executive Chairman. Although I’ve only been CEO for a few months, my involvement with Sarcos goes back much further, to my time at GE, when GE invested in Sarcos. I am impressed with the Sarcos revolutionary technology, and my enthusiasm has only grown since then. I’m delighted to be continuing my journey with Sarcos as President and CEO and leading our company on the path to the commercial release of our flagship robotic systems, with the first products ready for commercial productions late this year. This afternoon, I’ll update you on the current state of the business. After that, I’ll hand the call over to our CFO, Steve Hansen, who will provide financial update on the Company before we end with taking questions from all of you. Before I turn to the fourth quarter, I first want to say how much -- how excited we are about welcoming RE2 to the Sarcos family, once the transaction closes. Many of you may be aware that yesterday we announced that we have reached an agreement to acquire RE2. Like Sarcos, RE2 is a leader in the development of teleoperated robotic systems with a primary focus on use cases and markets that Sarcos does not currently has got. For example, RE2 Sapien range of robotic arms are designed for use in subsea and medical applications, two markets that Sarcos does not currently address today. In addition to expanding Sarcos’ addressable market, RE2’s products will also allow us to offer our industrial and…

Thanks, Kiva. And good afternoon to everyone listening today. First, I’d like to take the opportunity to congratulate Kiva on her first earnings call. As she has said, this is indeed a very exciting time for Sarcos, and I’m very happy she’s on board. I’d also like to join Kiva in expressing my excitement with regard to our planned acquisition of RE2. We believe the transaction will be accretive for Sarcos, allowing us to benefit immediately from the RE2’s commercial contracts and relationships. As you are aware, the transaction was only announced yesterday and is not yet closed. Therefore at this time, we are unable to make any pro forma forecasts. As a result, any guidance I give in my prepared remarks will be for Sarcos on a standalone basis and will not include any forecasts for RE2. On our next earnings call, I anticipate updating guidance as a combined company basis. This afternoon, we released our earnings and 10-K filing in which we report full year 2021 revenue of $5.1 million, down from $8.8 million in 2020. On a quarterly basis, we reported fourth quarter revenue of $1 million, down from $3.4 million in the last quarter of 2020. This change in revenue was primarily due to a change in our work efforts for the various projects during the comparable periods and decision to focus only on projects fully aligned with our product commercialization efforts. This change in work efforts resulted in a decline in revenue for research and development services from $6.8 million to $3.6 million for the year. As I mentioned on our last call, our focus is now on meeting our commercialization timeline. As a result, we will continue to accept only those development contracts that will allow us to concentrate on our commercialization efforts and…

Our first question comes from John Walsh of Credit Suisse. Please proceed.

Hi. Good afternoon. And a welcome to you, Kiva.

Thanks, John.

I guess, maybe the first question, as we think about commercialization in 2023. Can you help us understand maybe first just, do you expect to see both, the XO and the XT, kind of go out around the same time, or might one go out before the other? And then, do you have any help on how to think about, either from a revenue or a unit perspective, your ability to ramp those programs from a capacity standpoint?

So, we’re on track to deliver the commercial units by the end of the year. And what I’d say is both are on track around the same time. As far as scale and volume goes, we’ve invested a lot this year, both on the human capital side and then obviously, on the factory side. So, we’ve brought in a very, very talented new leadership team member on my team. So, the head of supply chain now reports directly to me, as the head of production. So, we’ve got line of sight to be able to produce up to 500 units on site here. And that’s what the team is targeting towards.

Great. And then, maybe a question around cash burn, realize you haven’t closed yet. But I guess one of the questions just thinking about the release yesterday around RE is you’re obviously adding a good amount of headcount, without any associated impact to the cash burn. So, just any more color that you can provide around that, obviously, realizing the transaction hasn’t closed yet?

Yes. John, let me kind of answer that for you. First of all, we’re still evaluating the full impact of transactions on our future financial performance. As we know, RE2 had revenue approximately $15 million in 2021. But what we hope to achieve is both revenue and cost synergies as we leverage the technology and resources across the two companies. So, the exact extent of that synergy and -- it’s really hard to predict at this point, but it’s subject to risks and uncertainties, as you might imagine. But, we expected that to be neutral to our bottom-line at this point. We expect to just continue with our path we protected prior to the acquisition.

Great. And maybe if I could just sneak one more housekeeping question in. I think you said the stock dilution was 5.7%. I just want to make sure I understand the base we’re taking that off of. I think your ending share count was like 142.9 million. Is that what we should do the math off just so that we’re all level set on what the right share count number is you’re trying to help us get to?

That’s a fair point. I think what we did is, when we took a look at the full value of all of our shares, potentially on the market, including the earn-out shares and the unrealized distribution of our shares, our options stock plans, we put that total number at 231.2 million shares approximately out there full amount of diluted shares in the market and we mapped that against the amount of shares in the deal at the low end of the collar. And that gave us the 5.7% dilution back.

Great. I’ll pass it along. I could keep going. But I really appreciate you taking the questions, and look forward to success on the commercialization. Thank you.

Thank you, John.

Thank you. Our next question comes from Joseph Donohue of Baird. Please proceed.

I’m on for Rob. Thanks for taking the question. So, actually, I’ll start with the customer trials. Have you opened reservations or are they filled? And beyond that, can you talk about how you’re looking to help customers speed things from a sales and adoption perspective?

Yes. From a channel perspective, we had our ex-tag team here last week and some of our top customers. One of the things that’s super exciting about this role is every single time we cover more discovery sessions, we’re out on the tarmac or on the factory floor, there’s another aha moment. So, we had one this week with regard to lightning on the tarmac and can’t get a human out, but she could get a teleoperated XT out there, no problem. So really good progress on the pipeline and really good progress on scheduling the trials with the different potential customers. So, pipeline is definitely going up.

Okay. Cool. That’s great to hear. Kind of on the manufacturing, one housekeeping one further out thing. The 500 units, is that XO and XT? And then afterwards, are you still planning on using a contract manufacturer?

Yes. So, the plan is we are currently in the process of evaluating different manufacturing options. And right now, we’re looking at between 300 and 500 units out of the facility here, depending upon what the mix is. So to answer your question, it is depending upon what we see as far as orders come in. That will really shift the total number of units we can produce. That also includes our HLS and GS units. So again, I don’t know what the full mix is going to look like, but it’ll be a mix of all of the products.

And then, one last question on the RE2 acquisition. Can you talk about other different industries or applications that either the Sapiens or the XT would be better for? I mean, obviously subsea, but you know, if there’s an industrial use, how are you going to decide which product is better suited to the customer, kind of look through the portfolio and decide?

Yes. I think the beautiful part with this transaction is the products are very complementary. So, we’ll now have a full stack of products. So, depending upon what the task is at hand, if you need to lift a certain weight, we’ll be able to look at our products at the XO and XT. If you need more agility, or you need a clean room, then you will lean into the products where RE at. So I think it’s a nice complement across the board. It’ll also create a lot of optionality for the customers, so that they can have a single partner that can provide them with both, heavy lift and light.

Got it. Wait, one more. Sorry. Could you provide any idea of the RE2 sales run rate, unit, dollar, whatever you have?

Yes. The transaction hasn’t been closed. And that’s still information that we -- sorry.

No problem. Thanks so much. I’ll pass it on.

You bet.

Thank you. I would now like to turn the conference back to management for final remarks.

Thank you, Didi. We are super excited about where we find ourselves today. Sarcos is in a position to revolutionize industrial labor force by developing robots to create the most-safe production, cost effective workforce in the world. We’re proud of our mission and looking forward to keeping you up to date on our progress. So, thank you for your time and your interest. And please let Ben know if you have any additional questions.

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