0001564590-22-012250 | POS AM | XBRL Viewer | Sarcos Technology Robotics Corp

Less: Cash payment of transaction expenses - Sarcos

$ (16,571)

Net cash provided by financing activities

230,241

$ 42,301

Less: Warrant liabilities assumed

(8,774)

Less: Other non-cash net assets assumed

Less: Unpaid and previously expensed Merger transaction costs

(148)

Net contributions from recapitalization

$ 219,906

Common stock, shares outstanding

137,722,658

104,039,354

21,483,286

Common stock, shares issued

137,722,658

104,039,354

Less: redemption of Rotor Common Stock

$ (23,479,970)

Total shares from Merger and PIPE financing

32,525,990

Recapitalization of Old Sarcos common stock into Class A common stock1

^[1]

105,063,285

Total shares of Common Stock immediately after the Effective Time

137,589,275

PIPE Financing

Net cash provided by financing activities

Aggregate purchase price

$ 220,000

228,800

Merger and PIPE Financing

Net cash provided by financing activities

$ 228,788

Pipe Investors

Common stock, shares issued

22,000,000

Rotor Acquisition Corp

Cash proceeds from Rotor, net of redemptions and transaction expenses

$ 25,359

Rotor Acquisition Corp | Common Class A

Common stock, shares outstanding

27,600,000

Rotor Acquisition Corp | Common Class B

Common stock, shares outstanding

6,405,960

[1]

The number of Old Sarcos shares was determined from the 21,483,286 shares of Old Sarcos Common Stock warrants, Common Stock and preferred stock outstanding immediately prior to the closing of the Business Combination, which are presented net of the Common and Preferred Stock redeemed, converted at the Exchange Ratio of 5.129222424. This excludes a restricted stock award for 5,129,222 shares that was unvested as of the date of the Merger. All fractional shares were rounded down.

Income Taxes - Reconciliation of Beginning and Ending Amounts of Unrecognized Benefits (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020
Income Tax Disclosure [Abstract]
Unrecognized tax benefits at the beginning of year	$ 2,054	$ 1,388
Gross increases – current year tax positions	580	666
Unrecognized tax benefits at end of year	$ 2,634	$ 2,054

Stock-based Compensation (Tables)

12 Months Ended

Dec. 31, 2021

Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]

Schedule of Stock Options Activity

The following summarizes the Company’s stock option activity for the years ended December 31, 2021 and 2020:


	Options Outstanding
	Number of Shares			Weighted Average Exercise Price		Weighted- Average Remaining Contractual Term (in years)		Aggregate Intrinsic Value (in thousands)
Outstanding – December 31, 2019		7,738,866		$	0.49		7.36	$	5,848
Granted		1,993,969		1.24
Exercised		(318,564	)		0.40
Cancelled		(1,531,184	)	0.93
Outstanding – December 31, 2020		7,883,087		0.59			6.83	$	5,058
Granted		3,761,109		7.93
Exercised		(158,129	)	0.16
Cancelled		(1,458,973	)	1.11
Outstanding – December 31, 2021		10,027,094		$	3.28	7.23		$	67,173
Exercisable – December 31, 2020		5,063,856		$	0.33	5.78		$	4,592
Exercisable – December 31, 2021		5,176,464		$	0.46	5.33		$	49,268

Schedule of Quantitative Information Regarding Assumptions Used in Binomial Lattice Model

The Company calculated the fair value of option grants on the respective dates of grant using the following weighted average assumptions:


	Years ended
	December 31,			December 31,
	2021			2020
Options
Risk-free interest rate		1.19	%		0.51	%
Expected term (in years)	6.08				6.06
Expected dividend yield		—	%		—	%
Expected volatility		66.56	%		64.98	%

Summary of RSUs and RSAs Activity

The following summarizes the Company’s employee RSU activity for the years ended December 31, 2021 and 2020:


	Restricted Stock Units Outstanding
	Number of Shares			Weighted- Average Grant-Date Fair Value(1)
Outstanding – December 31, 2019		1,454,642		$	8.78
Granted		384,692		3.25
Cancelled		(938,117	)	6.51
Outstanding – December 31, 2020		901,217		$	8.78
Granted		932,123		7.93
Released		(28,982	)	8.78
Cancelled		(6,884	)	8.78
Outstanding – December 31, 2021		1,797,474		$	8.34

(1) Weighted average grant-date fair values have been updated to reflect the impact of the modification to the RSUs discussed below.

The following summarizes the Company’s employee RSAs activity for the year ended December 31, 2021:


	Restricted Stock Awards Outstanding
	Number of Shares		Weighted-Average Grant-Date Fair Value
Outstanding – December 31, 2020		—	$	—
Granted		5,129,222		8.78
Outstanding – December 31, 2021		5,129,222	$	8.78

Schedule of Stock Based Compensation Expense

The Company recognized stock-based compensation expense in the consolidated statement of operations and comprehensive loss as follows:

	December 31,		December 31,
(In thousands)	2021		2020
Cost of revenue	$	92	$	109
Research and development		446		249
Sales and marketing		814		45
General and administrative		41,766		1,888
Total stock-based compensation expense	$	43,118	$	2,291

Fair Value Measurements - Schedule of Changes in Fair Value of Level 3 Warrants (Details) $ in Thousands	12 Months Ended
	Dec. 31, 2021 USD ($)
Fair Value Disclosures [Abstract]
Initial recognition of warrants	$ 8,774
Increase in fair value of warrants	4,927
Balance at December 31, 2021	$ 13,701

Income Taxes - Schedule of Statutory Federal Income Tax Rate to Income Before Taxes (Details)	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020
Income Tax Disclosure [Abstract]
Statutory federal income tax rate	21.00%	21.00%
State tax provision	3.70%	3.70%
Change in valuation allowance	(24.90%)	(25.30%)
Research credits	0.70%	3.00%
Permanent differences	(0.30%)	(2.40%)
Other	(0.20%)
Total provision for income taxes	0.00%	0.00%

Employee Benefits - Additional Information (Details) - USD ($)	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020
Compensation And Retirement Disclosure [Abstract]
Maximum defer net employment income percentage	100.00%	100.00%
Accrued amount for employee contribution	$ 0	$ 0

Fair Value Measurements (Tables)

12 Months Ended

Dec. 31, 2021

Fair Value Disclosures [Abstract]

Schedule of Assets and Liabilities Measured at Fair Value on Recurring Basis

The fair value of the Company’s financial assets and liabilities measured at fair value on a recurring basis was determined using the following inputs:

	As of December 31, 2021
(In thousands)	Level 1		Level 2		Level 3		Fair Value
Liabilities:
Warrant liability	$	—	$	—	$	13,701	$	13,701
Total liabilities	$	—	$	—	$	13,701	$	13,701

	As of December 31, 2020
(In thousands)	Level 1		Level 2		Level 3		Fair Value
Assets:
Cash equivalents:
Money market funds	$	31,726	$	—	$	—	$	31,726
Total assets	$	31,726	$	—	$	—	$	31,726

Schedule of Changes in Fair Value of Level 3 Warrants

The table below sets forth a summary of changes in the fair value of the Company’s Level 3 warrants for the year ended December 31, 2021:

(In thousands)
Balance at December 31, 2020	$	—
Initial recognition of warrants		8,774
Increase in fair value of warrants		4,927
Balance at December 31, 2021	$	13,701

Fair Value Measurements - Schedule Of Assets and Liabilities Measured At Fair Value On Recurring Basis (Details) - USD ($) $ in Thousands	Dec. 31, 2021	Dec. 31, 2020
Defined Benefit Plan Disclosure [Line Items]
Total liabilities	$ 13,701
Total assets		$ 31,726
Cash Equivalents \| Money Market Funds
Defined Benefit Plan Disclosure [Line Items]
Total assets		31,726
Fair Value, Inputs, Level 1
Defined Benefit Plan Disclosure [Line Items]
Total assets		31,726
Fair Value, Inputs, Level 1 \| Cash Equivalents \| Money Market Funds
Defined Benefit Plan Disclosure [Line Items]
Total assets		$ 31,726
Fair Value, Inputs, Level 3
Defined Benefit Plan Disclosure [Line Items]
Total liabilities	13,701
Warrant Liability
Defined Benefit Plan Disclosure [Line Items]
Total liabilities	13,701
Warrant Liability \| Fair Value, Inputs, Level 3
Defined Benefit Plan Disclosure [Line Items]
Total liabilities	$ 13,701

Basis of Presentation and Summary of Significant Accounting Policies - Schedule of Estimated Useful Lives by Asset (Details)	12 Months Ended
	Dec. 31, 2021
Robotics and Manufacturing Equipment \| Minimum
Summaryof Significant Accounting Policies Details [Line Items]
Property and equipment, useful lives	1 year
Robotics and Manufacturing Equipment \| Maximum
Summaryof Significant Accounting Policies Details [Line Items]
Property and equipment, useful lives	10 years
Computer Equipment \| Minimum
Summaryof Significant Accounting Policies Details [Line Items]
Property and equipment, useful lives	3 years
Computer Equipment \| Maximum
Summaryof Significant Accounting Policies Details [Line Items]
Property and equipment, useful lives	5 years
Software
Summaryof Significant Accounting Policies Details [Line Items]
Property and equipment, useful lives	3 years
Furnitures and Fixtures
Summaryof Significant Accounting Policies Details [Line Items]
Property and equipment, useful lives	3 years
Leasehold Improvements
Summaryof Significant Accounting Policies Details [Line Items]
Property and equipment, useful lives	Lesser of the useful life or theremaining term of the lease

Notes Payable

12 Months Ended

Dec. 31, 2021

Debt Instruments [Abstract]

Notes Payable

4. Notes Payable

Paycheck Protection Program Loan

Old Sarcos received two unsecured loans under the Paycheck Protection Program (“PPP”) administered by the Small Business Administration, pursuant to the Coronavirus Aid, Relief, and Economic Security Act. The first loan, with a principal amount of $2.4 million, was received in April 2020, and the second loan, with a principal amount of $2.0 million, was received in March 2021. These PPP loans had an interest rate of 1.00% per year. The first PPP loan of $2.4 million was forgiven during June 2021, and the second PPP loan of $2.0 million was forgiven during November 2021. The forgiveness of these PPP loans resulted in gains of $4.4 million during the year ended December 31, 2021,

which were recorded as gain on forgiveness of notes payable within the consolidated statements of operations and comprehensive loss.

Notes payable consisted of the following:

(In thousands)	December 31, 2021		December 31, 2020
First PPP loan	$	—	$	2,394
Total Notes payable		—		2,394
Less: Notes payable, current portion		—		1,328
Notes payable, net of current portion	$	—	$	1,066

The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants.

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Notes Payable - Additional Information (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2021	Nov. 30, 2021	Jun. 30, 2021	Mar. 31, 2021	Apr. 30, 2020
Debt Instrument [Line Items]
Gain on forgiveness of notes payable	$ 4,394
First PPP Loan
Debt Instrument [Line Items]
Principal amount					$ 2,400
Loans forgiven			$ 2,400
Second PPP Loan
Debt Instrument [Line Items]
Principal amount				$ 2,000
Loans forgiven		$ 2,000
PPP Loan
Debt Instrument [Line Items]
Annual interest rate				1.00%	1.00%
Gain on forgiveness of notes payable	$ 4,400

CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020
Cash flows from operating activities:
Net loss	$ (81,508)	$ (20,926)
Adjustments to reconcile net loss to net cash used in operating activities:
Stock-based compensation	43,118	2,291
Depreciation	531	458
Change in fair value of warrant liability	4,927
Gain on forgiveness of notes payable	(4,394)
Changes in operating assets and liabilities
Accounts receivable	263	(135)
Unbilled receivable	(2)	649
Inventories	(299)	441
Prepaid expenses and other current assets	(8,082)	(144)
Other non-current assets	(148)	(163)
Accounts payable	244	(320)
Accrued liabilities	2,646	592
Deferred revenue	(27)	(143)
Deferred rent	1,004
Other non-current liabilities	(376)	518
Net cash used in operating activities	(42,103)	(16,882)
Cash flows from investing activities:
Purchases of property and equipment	(4,688)	(950)
Net cash used in investing activities	(4,688)	(950)
Cash flows from financing activities:
Proceeds from issuance of common stock and warrants		39,867
Proceeds from notes payable	2,000	2,394
Proceeds from exercise of stock options	26	124
Acquisition of common stock for tax withholding obligations	(284)
Purchase of non-controlling interest	(200)
Payment of obligations under capital leases	(89)	(84)
Proceeds from PIPE	220,000
Proceeds from Merger	25,359
Payments for transaction costs	(16,571)
Net cash provided by financing activities	230,241	42,301
Net increase in cash, cash equivalents	183,450	24,469
Cash, cash equivalents at beginning of period	33,664	9,195
Cash, cash equivalents at end of period	217,114	33,664
Supplemental disclosure of cash flow information:
Cash paid for interest	11	1
Cash paid for income taxes	2	1
Supplemental disclosure of non-cash financing and investing activities:
Issuance of common stock warrants		1,220
Purchases of property and equipment included in accounts payable at period-end	605	28
Purchase of property and equipment under capital leases		303
Vesting of founder shares subject to repurchase		$ 75
Leasehold improvements paid by lessor	988
Unpaid transaction costs	148
Assumption of warrant liabilities	$ 8,774

Basis of Presentation and Summary of Significant Accounting Policies - Schedule of Total Amount of Revenue (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020
Summaryof Significant Accounting Policies Details [Line Items]
Revenue, net	$ 5,075	$ 8,813
Customer A
Summaryof Significant Accounting Policies Details [Line Items]
Revenue, net	1,685	2,222
Customer B
Summaryof Significant Accounting Policies Details [Line Items]
Revenue, net	630	2,156
Customer C
Summaryof Significant Accounting Policies Details [Line Items]
Revenue, net		$ 1,066
Customer D
Summaryof Significant Accounting Policies Details [Line Items]
Revenue, net	928
Customer E
Summaryof Significant Accounting Policies Details [Line Items]
Revenue, net	602
Customer F
Summaryof Significant Accounting Policies Details [Line Items]
Revenue, net	$ 555

Amount, excluding tax collected from customer, of revenue from satisfaction of performance obligation by transferring promised good or service to customer. Tax collected from customer is tax assessed by governmental authority that is both imposed on and concurrent with specific revenue-producing transaction, including, but not limited to, sales, use, value added and excise.

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Business Combination And Asset Acquisition [Abstract]

Stock-based Compensation - Additional Information (Details) - USD ($) $ / shares in Units, $ in Thousands	1 Months Ended	12 Months Ended
	Apr. 30, 2021	Dec. 31, 2021	Dec. 31, 2020
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Stock-based compensation expense		$ 43,118	$ 2,291
Share-based Payment Arrangement, Option
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Share-based compensation arrangement by share-based payment award, award vesting period		48 months
Aggregate intrinsic value of options exercised		$ 800	$ 300
Weighted average estimated fair value of options granted		$ 4.79	$ 0.72
Options, expiration period		10 years
Stock-based compensation expense		$ 47,800
Period for recognition of unrecognized compensation cost related to non-vested stock awards		1 year 10 months 24 days
Restricted Stock
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Share-based payment arrangement, incremental compensation costs	$ 9,700
Modification incremental compensation cost recognized		$ 8,400
Restricted Stock Awards
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Share-based compensation arrangement by share-based payment award, award vesting period		15 months
Stock-based compensation expense		$ 26,200
Restricted Stock Awards \| Chairman and Chief Executive Officer \| Upon Achievement of Earn-Out Targets
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Stock-based compensation expense		$ 5,100
Minimum \| Restricted Stock \| Service Vesting Rights
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Share-based compensation arrangement by share-based payment award, award vesting period		1 year
Maximum \| Restricted Stock \| Service Vesting Rights
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Share-based compensation arrangement by share-based payment award, award vesting period		4 years
Two Thousand Fifteen Equity Incentive Plan \| Minimum
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Share-based compensation arrangement by share-based payment award, award vesting period		3 years
Two Thousand Fifteen Equity Incentive Plan \| Maximum
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Share-based compensation arrangement by share-based payment award, award vesting period		5 years
Stock - based compensation exercisable period		10 years
Two Thousand Twenty One Equity Incentive Plan
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Total number of shares		30,000,000
Due to failure to vest, additional shares added.		12,760,600
Number of shares available for grant		27,842,561
Two Thousand Twenty One Equity Incentive Plan \| Minimum
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Share-based compensation arrangement by share-based payment award, award vesting period		1 year
Two Thousand Twenty One Equity Incentive Plan \| Maximum
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Share-based compensation arrangement by share-based payment award, award vesting period		4 years
Stock - based compensation exercisable period		10 years

Reverse Recapitalization (Tables)

12 Months Ended

Dec. 31, 2021

Schedule of Merger to the Consolidated Statement of Cash Flows and Consolidated Statement of Stockholders' Equity

The following table reconciles the elements of the Merger to the consolidated statements of cash flows and the consolidated statements of stockholders’ equity for the year ended December 31, 2021:

(In thousands)	Recapitalization
Cash proceeds from Rotor, net of redemptions and transaction expenses	$	25,359
Cash proceeds from PIPE Financing		220,000
Less: Cash payment of transaction expenses - Sarcos		(16,571	)
Net Cash proceeds from Merger and PIPE financing		228,788
Less: Warrant liabilities assumed		(8,774	)
Less: Other non-cash net assets assumed		40
Less: Unpaid and previously expensed Merger transaction costs		(148	)
Net contributions from recapitalization	$	219,906

Immediately following closing of the Merger, the Company had 137,589,275 shares issued and outstanding of Common Stock. The following table present the number of shares of the Company’s Common Stock outstanding immediately following the consummation of the Merger:

	Number of Shares
Rotor Class A Common Stock, outstanding prior to Merger		27,600,000
Rotor Class B Common Stock, outstanding prior to Merger		6,405,960
Class A common stock issued to PIPE Investors		22,000,000
Less: redemption of Rotor Common Stock		(23,479,970	)
Total shares from Merger and PIPE financing		32,525,990
Recapitalization of Old Sarcos common stock into Class A common stock¹		105,063,285
Total shares of Common Stock immediately after the Effective Time		137,589,275

Basis of Presentation and Summary of Significant Accounting Policies (Tables)

12 Months Ended

Dec. 31, 2021

Accounting Policies [Abstract]

Schedule of Total Amount of Revenue

The total amount of revenue for each such customer was as follows:

(In thousands)	2021		2020
Customer A	$	1,685	$	2,222
Customer B		630		2,156
Customer C	*NM			1,066
Customer D		928	*NM
Customer E		602	*NM
Customer F		555	*NM

NM - Not meaningful as the customer’s related revenue was less than 10% of the Company’s revenue for the respective year.

Schedule of Estimated Useful Lives by Asset

The estimated useful lives by asset classification are generally as follows:

		Useful life
Robotics and manufacturing equipment		1 – 10 years
Computer equipment		3 – 5 years
Software		3 years
Furniture and fixtures		3 years
Leasehold improvements		Lesser of the useful life or the remaining term of the lease

Summary of the Total Amount of Revenue for Each Such Customer

The revenue recognized for Research and Development Services and Product Revenue were as follows:

	December 31,
(In thousands)	2021		2020
Research and Development Services	$	3,584	$	6,811
Product Revenue		1,491		2,002
Revenue, net	$	5,075	$	8,813

Summary of Opening and Closing Balances of Our Accounts Receivable, Unbilled Receivables, Contract Assets and Deferred Revenues

The opening and closing balances of our accounts receivable, unbilled receivables, contract assets and deferred revenues are as follows:

(In thousands)	Accounts receivable			Unbilled receivable			Contract assets (current)			Contract assets (long-term)			Deferred revenue (current)
Opening Balance as of December 31, 2019	$	916		$	868		$	195		$	110		$	200
Increase/(decrease), net		135			(649	)		(102	)		(17	)		(143	)
Ending Balance as of December 31, 2020		1,051			219			93			93			57
Increase/(decrease), net		(263	)		2			1			(57	)		(27	)
Ending Balance as of December 31, 2021	$	788		$	221		$	94		$	36		$	30

Balance Sheet Components - Property Plant and Equipment Net (Details) - USD ($) $ in Thousands	Dec. 31, 2021	Dec. 31, 2020
Schedule Of Balance Sheet Components [Line Items]
Property and equipment, gross	$ 8,287	$ 2,414
Accumulated depreciation and amortization	(1,236)	(989)
Property and equipment, net	7,051	1,425
Robotics and Manufacturing Equipment
Schedule Of Balance Sheet Components [Line Items]
Property and equipment, gross	876	659
Leasehold Improvements
Schedule Of Balance Sheet Components [Line Items]
Property and equipment, gross	3,890	154
Computer Equipment
Schedule Of Balance Sheet Components [Line Items]
Property and equipment, gross	1,270	568
Capital Leased Computer Equipment
Schedule Of Balance Sheet Components [Line Items]
Property and equipment, gross	271	386
Software
Schedule Of Balance Sheet Components [Line Items]
Property and equipment, gross	355	359
Other Fixed Assets
Schedule Of Balance Sheet Components [Line Items]
Property and equipment, gross	753	147
Construction in Progress
Schedule Of Balance Sheet Components [Line Items]
Property and equipment, gross	$ 872	$ 141

Basis of Presentation and Summary of Significant Accounting Policies - Summary of Information about Contract Balances (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020
Accounts receivable
Opening Balance	$ 1,051	$ 916
Increase/(decrease), net	(263)	135
Ending Balance	788	1,051
Unbilled receivable
Opening Balance	219	868
Increase/(decrease), net	2	(649)
Ending Balance	221	219
Contract assets (current)
Opening Balance	93	195
Increase/(decrease), net	1	(102)
Ending Balance	94	93
Contract assets (long-term)
Opening Balance	93	110
Increase/(decrease), net	(57)	(17)
Ending Balance	36	93
Deferred revenue (current)
Opening Balance	57	200
Deferred revenue	(27)	(143)
Ending Balance	$ 30	$ 57

Related Party Transactions

12 Months Ended

Dec. 31, 2021

Related Party Transactions

13. Related Party Transactions

As of December 31, 2020, the Company held a controlling interest of 79% in Zepto. The remaining 21% of Zepto was held by MLC 401k Trust for the benefit of the Company’s Chief Legal Officer. On February 16, 2021, Old Sarcos acquired the non-controlling interest’s shares in Zepto for a purchase price of $0.2 million making Zepto a wholly-owned subsidiary of the Company.

During the year ended December 31, 2020, the Company entered into an agreement with one of its investors, Delta Air Lines, Inc., to provide demonstration services. The Company recognized $0.1 million of revenue related to these services during the year ended December 31, 2020. No revenue was recognized for the year ended December 31, 2021.

On April 4, 2021, the Company entered into an agreement with Palantir as described above. Pursuant to that agreement, the Company committed to access software products and utilize services from Palantir over the next six years for a total cost of $42.0 million. The software and services are an integral part of the Company’s plans to provide Robots as a Service upon commercialization of the Company’s Guardian XO and XT robotic systems. Palantir was an investor in the PIPE Financing. The Company recognized $2.2 million in sales and marketing expenses, related to services provided by Palantir during the year ended December 31, 2021. The Company had a prepaid expense balance of $3.6 million related to the Palantir contract as of December 31, 2021.

On May 16, 2021, the Company entered into an agreement with Sparks Marketing Corp. to begin the construction of an experiential marketing mobile display to be used for demonstrations of Company products at prospective customer locations as well as other marketing and demonstration events. Negotiations of this agreement involved an account executive at Sparks Marketing Corp. who is the brother-in-law of Mr. Wolff, our former CEO and current Executive Chairman of the Board. The Company recognized $0.8 million related to costs capitalized to construction in progress for the experiential mobile display for the period ended December 31, 2021.

Stock-based Compensation - Summary of RSAs Activity (Details)	12 Months Ended
	Dec. 31, 2021 $ / shares shares
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Weighted average fair value, granted \| $ / shares	$ 8.78
Weighted average fair value, ending balance \| $ / shares	$ 8.78
Restricted Stock Awards
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Number of shares, granted \| shares	5,129,222
Number of shares, ending balance \| shares	5,129,222

Balance Sheet Components

12 Months Ended

Dec. 31, 2021

Organization Consolidation And Presentation Of Financial Statements [Abstract]

Balance Sheet Components

3. Balance Sheet Components

Inventories, net

Inventories, net consist of the following:


(In thousands)	December 31, 2021		December 31, 2020
Raw materials	$	458	$	516
Work-in-process		41		100
Finished goods, net		507		91
Total inventories	$	1,006	$	707

The Company had inventory reserves of $0.3 million and $0.1 million for the years ended December 31, 2021 and 2020, respectively.

Prepaid expenses and other current assets

Prepaid expenses and other current assets consist of the following:


(In thousands)	December 31, 2021		December 31, 2020
Prepaid insurance	$	4,786	$	34
Software		4,144		287
Other prepaid expense		171		279
Other assets		101		93
Total prepaid expenses and other current assets	$	9,202	$	693

Property and equipment, net

Property and equipment, net consist of the following:


(In thousands)	December 31, 2021			December 31, 2020
Robotics and manufacturing equipment	$	876		$	659
Leasehold improvements		3,890			154
Computer equipment		1,270			568
Capital leased computer equipment		271			386
Software		355			359
Other fixed assets		753			147
Construction in progress		872			141
Property and equipment, gross		8,287			2,414
Accumulated depreciation and amortization		(1,236	)		(989	)
Property and equipment, net	$	7,051		$	1,425

Depreciation expenses were $0.5 million and $0.5 million for the years ended December 31, 2021 and 2020, respectively. Amortization of assets under capital leases is included as part of depreciation expense.

Accrued liabilities

Accrued liabilities consist of the following:


(In thousands)	December 31, 2021		December 31, 2020
Payroll and related costs	$	2,511	$	934
Consulting and professional services		406		125
Legal accrual		520		—
Other current liabilities		1,043		196
Total accrued liabilities	$	4,480	$	1,255

Other non-current liabilities

Other non-current liabilities consist of the following:


(In thousands)	December 31, 2021		December 31, 2020
Payroll and related costs	$	—	$	286
Capital leases and other		7		240
Deferred rent		1,992		—
Total other non-current liabilities	$	1,999	$	526

Balance Sheet Components (Tables)

12 Months Ended

Dec. 31, 2021

Organization Consolidation And Presentation Of Financial Statements [Abstract]

Inventories, Net

Inventories, net consist of the following:


(In thousands)	December 31, 2021		December 31, 2020
Raw materials	$	458	$	516
Work-in-process		41		100
Finished goods, net		507		91
Total inventories	$	1,006	$	707

Prepaid Expenses and Other Current Assets

Prepaid expenses and other current assets consist of the following:


(In thousands)	December 31, 2021		December 31, 2020
Prepaid insurance	$	4,786	$	34
Software		4,144		287
Other prepaid expense		171		279
Other assets		101		93
Total prepaid expenses and other current assets	$	9,202	$	693

Summary of Estimated Useful Lives by Asset Classification

Property and equipment, net consist of the following:


(In thousands)	December 31, 2021			December 31, 2020
Robotics and manufacturing equipment	$	876		$	659
Leasehold improvements		3,890			154
Computer equipment		1,270			568
Capital leased computer equipment		271			386
Software		355			359
Other fixed assets		753			147
Construction in progress		872			141
Property and equipment, gross		8,287			2,414
Accumulated depreciation and amortization		(1,236	)		(989	)
Property and equipment, net	$	7,051		$	1,425

Accrued Liabilities

Accrued liabilities consist of the following:


(In thousands)	December 31, 2021		December 31, 2020
Payroll and related costs	$	2,511	$	934
Consulting and professional services		406		125
Legal accrual		520		—
Other current liabilities		1,043		196
Total accrued liabilities	$	4,480	$	1,255

Other non-current Liabilities

Other non-current liabilities consist of the following:


(In thousands)	December 31, 2021		December 31, 2020
Payroll and related costs	$	—	$	286
Capital leases and other		7		240
Deferred rent		1,992		—
Total other non-current liabilities	$	1,999	$	526

Warrants - Additional Information (Details) - USD ($) $ / shares in Units, $ in Thousands			1 Months Ended	12 Months Ended
	Sep. 24, 2021	Jan. 20, 2021	Jan. 31, 2020	Dec. 31, 2021	Dec. 31, 2020
Class Of Warrant Or Right [Line Items]
Shares of common stock per warrant			250,000
Warrant exercise price			$ 11.3243
Expiration date			Jan. 31, 2030
Contractual term			10 years	6 years 29 days	6 years 21 days
Risk-free interest rate			3.05%	1.19%	0.51%
Volatility rate			85.00%	66.56%	64.98%
Dividend yield			0.00%
Loss on fair value of warrant liability				$ (4,927)
Redemption of Warrants When Price Per Share Equals or Exceeds $18.00 Per Share
Class Of Warrant Or Right [Line Items]
Redemption of warrants price per share				$ 18.00
Warrants price per share				$ 0.01
Minimum period for written notice of redemption				30 days
Redemption of warrants description				• upon not less than 30 days’ prior written notice of redemption (the “30-day redemption period”) to each Warrant holder; and
Consecutive trading days				20 days
Consecutive trading days after commencement				30 days
Trading days, description				• if, and only if, the last reported sale price of the shares of our Common Stock for any 20 trading days within a 30-trading day period commencing after the Warrants become exercisable and ending three business days before we send the notice of redemption to the Warrant holders (which we refer to as the “Reference Value”) equals or exceeds $18.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like).
Redemption of Warrants When Price Per Share Equals or Exceeds $18.00 Per Share \| Minimum
Class Of Warrant Or Right [Line Items]
Warrants reference value per share				$ 18.00
Redemption of Warrants When Price Per Share Equals or Exceeds $10.00 Per Share
Class Of Warrant Or Right [Line Items]
Redemption of warrants price per share				10.00
Warrants price per share				$ 0.10
Minimum period for written notice of redemption				30 days
Redemption of warrants description				• at $0.10 per Warrant upon a minimum of 30 days’ prior written notice of redemption; provided that holders will be able to exercise their Warrants on a cashless basis prior to redemption and receive that number of shares determined by reference to an agreed table based on the redemption date and the “fair market value” of our Common Stock;
Redemption of Warrants When Price Per Share Equals or Exceeds $10.00 Per Share \| Minimum
Class Of Warrant Or Right [Line Items]
Warrants reference value per share				$ 10.00
Redemption of Warrants When Price Per Share Equals or Exceeds $10.00 Per Share \| Maximum
Class Of Warrant Or Right [Line Items]
Warrants reference value per share				$ 18.00
Private Placement Warrants
Class Of Warrant Or Right [Line Items]
Contractual term	3 months 25 days			21 days
Risk-free interest rate	1.00%			1.22%
Volatility rate	18.90%			30.30%
Dividend yield	0.00%			0.00%
Loss on fair value of warrant liability				$ 4,900
Common Stock
Class Of Warrant Or Right [Line Items]
Shares of common stock per warrant				1
Warrant exercise price				$ 11.50
Expiration date				Sep. 24, 2026
Warrant expiration term				5 years
IPO
Class Of Warrant Or Right [Line Items]
Issuance of shares (in Shares)		27,600,000
Sale of warrants (in Shares)		7,270,000

Income Taxes (Tables)

12 Months Ended

Dec. 31, 2021

Income Tax Disclosure [Abstract]

Schedule of Provision for Income Taxes

The Company's provision for income taxes consists of the following:


	Years Ended December 31,
(In thousands)	2021			2020
Current:
Federal	$	—		$	—
State		(1	)		(1	)
Total current		(1	)		(1	)
Deferred:
Federal		(16,377	)		(4,142	)
State		(3,948	)		(1,144	)
Change in valuation allowance		20,325			5,286
Total deferred		—			—
Total provision for income taxes	$	(1	)	$	(1	)

Schedule of Statutory Federal Income Tax Rate to Income Before Taxes

The Company's provision for income tax differs from the amount computed by applying the statutory federal income tax rate to income before taxes as follows:

	Years Ended December 31,
(In thousands)	2021			2020
Statutory federal income tax rate		21.0	%		21.0	%
State tax provision		3.7			3.7
Change in valuation allowance		(24.9	)		(25.3	)
Research credits		0.7			3.0
Permanent differences		(0.3	)		(2.4	)
Other		(0.2	)		—
Total provision for income taxes		0.0	%		0.0	%

Schedule of Net Deferred Tax Asset

As of December 31, 2021 and 2020, the net deferred tax asset consisted of the following:


	December 31,
(In thousands)	2021			2020
Deferred tax assets:
Accrued expenses	$	1,050		$	192
Stock compensation		11,094			479
Research credits		2,486			1,939
Net operating loss carryforwards		22,393			12,838
Total gross deferred tax assets		37,023			15,448
Less valuation allowance		(35,476	)		(15,151	)
Total deferred tax assets		1,547			297
Deferred tax liabilities:
Property and equipment		(1,547	)		(297	)
Total deferred tax liabilities		(1,547	)		(297	)
Net deferred tax asset	$	—		$	—

Reconciliation of Beginning and Ending Amount of Valuation Allowance

A reconciliation of the beginning and ending amount of the valuation allowance is as follows:


	December 31,
(In thousands)	2021		2020
Valuation allowance at beginning of year	$	15,151	$	9,865
Change in valuation allowance		20,325		5,286
Valuation allowance at end of year	$	35,476	$	15,151

Reconciliation of Beginning and Ending Amounts of Unrecognized Benefits

A reconciliation of the beginning and ending amounts of unrecognized benefits is as follows:


	Years ended December 31,
(In thousands)	2021		2020
Unrecognized tax benefits at the beginning of year	$	2,054	$	1,388
Gross increases – current year tax positions	580			666
Unrecognized tax benefits at end of year	$	2,634	$	2,054
Interest and penalties in year-end balance	$	—	$	—

Reverse Recapitalization - Additional Information (Details) - USD ($) $ / shares in Units, $ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020
Business Acquisition [Line Items]
Net cash proceeds	$ 230,241	$ 42,301
Common stock, shares issued	137,722,658	104,039,354
Incremental Costs	$ 32,900
Transaction costs	1,100
PIPE Financing
Business Acquisition [Line Items]
Net cash proceeds	$ 228,800
Common Stock
Business Acquisition [Line Items]
Contingent merger consideration earn-out shares issuable	28,125,000
Common stock, shares issued	137,589,275
Common Stock Price Per Share Equals Or Exceeds 15.00 Per Share
Business Acquisition [Line Items]
Contingent merger consideration earn-out shares issuable	14,062,500
Earnout Price Per Share	$ 15.00
Earn-Out trading days	20 days
Earn-Out consecutive trading days	30 days
Common Stock Price Per Share Equals Or Exceeds 20.00 Per Share
Business Acquisition [Line Items]
Contingent merger consideration earn-out shares issuable	14,062,500
Earnout Price Per Share	$ 20.00
Earn-Out trading days	20 days
Earn-Out consecutive trading days	30 days

Stock-based Compensation

12 Months Ended

Dec. 31, 2021

Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]

Stock-based Compensation

8. Stock-based Compensation

Equity Incentive Plan

2015 Stock Plan

The Old Sarcos 2015 Equity Incentive Plan (the “2015 Plan”) provided stock option awards, RSUs and RSAs for issuance to Company employees, officers, directors, non-employee agents and consultants. These awards vest over three to five years and are exercisable up to 10 years from the date of grant. Unvested options are forfeited upon termination. Following the closing of the Merger, no further awards will be made under the 2015 Plan. Any forfeited awards will be added to the 2021 Plan.

2021 Stock Plan

On September 15, 2021, the stockholders of the Company approved the Sarcos Technology and Robotics Corporation 2021 Equity Incentive Plan (the “2021 Plan”), and on the Closing Date, the 2021 Plan was approved by the board of

directors. The 2021 Plan provides stock option awards, RSUs and RSAs for issuance to Company employees, officers, directors, non-employee agents and consultants. In general, these awards vest over one to four years and are exercisable up to 10 years from the date of grant. The maximum number of shares of Common Stock that may be issued pursuant to the 2021 Plan is (i) 30,000,000 shares of Common Stock of the Company plus (ii) any shares of Common Stock subject to stock options and other awards that were assumed in the Business Commination and expire or otherwise terminate without having been exercised in full, are tendered to or withheld by the Company for payment of an exercise price or for tax withholding obligations, or are forfeited to or repurchased by the Company due to failure to vest, with the maximum number of shares to be added to the 2021 Plan pursuant to clause (ii) equal to 12,760,600 shares of Common Stock. As of December 31, 2021, 27,842,561 shares were available to grant under the 2021 Plan.

The following summarizes the Company’s stock option activity for the years ended December 31, 2021 and 2020:


	Options Outstanding
	Number of Shares			Weighted Average Exercise Price		Weighted- Average Remaining Contractual Term (in years)		Aggregate Intrinsic Value (in thousands)
Outstanding – December 31, 2019		7,738,866		$	0.49		7.36	$	5,848
Granted		1,993,969		1.24
Exercised		(318,564	)		0.40
Cancelled		(1,531,184	)	0.93
Outstanding – December 31, 2020		7,883,087		0.59			6.83	$	5,058
Granted		3,761,109		7.93
Exercised		(158,129	)	0.16
Cancelled		(1,458,973	)	1.11
Outstanding – December 31, 2021		10,027,094		$	3.28	7.23		$	67,173
Exercisable – December 31, 2020		5,063,856		$	0.33	5.78		$	4,592
Exercisable – December 31, 2021		5,176,464		$	0.46	5.33		$	49,268

The aggregate intrinsic value is the fair market value on the reporting date less the exercise price for each option.

The aggregate intrinsic value of the options exercised was $0.8 million and $0.3 million during the years ended December 31, 2021 and 2020, respectively.

For options granted during the years ended December 31, 2021, and 2020, the weighted average estimated fair value was $4.79 and $0.72 per option, respectively.

The Company utilizes the Black-Scholes option pricing model for estimating the fair value of options granted, which requires the input of subjective assumptions. The Company calculates the fair value of each option grant on the grant date using the following assumptions:

Expected Term—Options granted generally vest over a period of 48 months and expire 10 years from date of grant. The Company uses the simplified method when calculating expected term due to insufficient historical information.

Expected Volatility—Due to insufficient historical information the Company uses a blended approach when calculating expected volatility. The Company uses its historic data for the periods it has been publicly-traded and a benchmark of other comparable public companies’ volatility rates.

Expected Dividend Yield—The dividend yield used is zero as the Company does not have a history of paying dividends on its Common Stock and does not anticipate doing so in the foreseeable future.

Risk-Free Interest Rate—The interest rates used are based on the implied yield available on U.S. Treasury zero-coupon issues with an equivalent remaining term equal to the expected life of the award.

The Company calculated the fair value of option grants on the respective dates of grant using the following weighted average assumptions:


	Years ended
	December 31,			December 31,
	2021			2020
Options
Risk-free interest rate		1.19	%		0.51	%
Expected term (in years)	6.08				6.06
Expected dividend yield		—	%		—	%
Expected volatility		66.56	%		64.98	%

The following summarizes the Company’s employee RSU activity for the years ended December 31, 2021 and 2020:


	Restricted Stock Units Outstanding
	Number of Shares			Weighted- Average Grant-Date Fair Value(1)
Outstanding – December 31, 2019		1,454,642		$	8.78
Granted		384,692		3.25
Cancelled		(938,117	)	6.51
Outstanding – December 31, 2020		901,217		$	8.78
Granted		932,123		7.93
Released		(28,982	)	8.78
Cancelled		(6,884	)	8.78
Outstanding – December 31, 2021		1,797,474		$	8.34

(1) Weighted average grant-date fair values have been updated to reflect the impact of the modification to the RSUs discussed below.

RSUs granted generally include service vesting periods of one to four years. Certain awards granted under the 2015 Plan included vesting conditions related to the completion of a qualifying liquidity event and/or requirements related to the forfeiture of cash compensation.

In April 2021, the Board of Directors of the Company approved a modification that updated the terms of the awards such that the Business Combination would satisfy the liquidity event vesting condition for eight award recipients. Total incremental compensation costs resulting from the modification of these RSUs was $9.7 million, of which $8.4 million was recognized during the year ended December 31, 2021.

The following summarizes the Company’s employee RSAs activity for the year ended December 31, 2021:


	Restricted Stock Awards Outstanding
	Number of Shares		Weighted-Average Grant-Date Fair Value
Outstanding – December 31, 2020		—	$	—
Granted		5,129,222		8.78
Outstanding – December 31, 2021		5,129,222	$	8.78

As of December 31, 2021, the only holder of RSAs was Mr. Wolff, the Company’s Executive Chairman. The RSAs held by Mr. Wolff vest over a 15-month period following the consummation of a qualifying transaction. For the five-year period prior to the grant of the RSAs, Mr. Wolff had not received any equity compensation from the Company other than RSUs issued in lieu of cash compensation. The RSAs include vesting acceleration provisions which would result in the award becoming fully vested following a change in control event or upon death of the grantee. The Business Combination was determined to be the qualifying transaction that triggered the commencement of the 15-month vesting period, resulting in the recognition of compensation expense for RSAs of $26.2 million for the year ended December 31, 2021.

Mr. Wolff is eligible to receive additional shares upon achievement of earn-out targets as discussed in Note 5 above. The Company recognized compensation expense of $5.1 million for these earn-out shares during the year ended December 31, 2021.

The Company recognized stock-based compensation expense in the consolidated statement of operations and comprehensive loss as follows:

	December 31,		December 31,
(In thousands)	2021		2020
Cost of revenue	$	92	$	109
Research and development		446		249
Sales and marketing		814		45
General and administrative		41,766		1,888
Total stock-based compensation expense	$	43,118	$	2,291

As of December 31, 2021, there was approximately $47.8 million of unrecognized stock-based compensation cost, which is expected to be recognized over an average period of 1.9 years.

Commitments and Contingencies

12 Months Ended

Dec. 31, 2021

Commitments And Contingencies Disclosure [Abstract]

Commitments and Contingencies

11. Commitments and Contingencies

Legal Proceedings

The Company may be involved in various claims, lawsuits, investigations, and other proceedings, in the normal course of business. The Company accrues a liability when management believes information available prior to the issuance of the consolidated financial statements indicates it is probable a loss has been incurred as of the date of the financial statements and the amount of loss can be reasonably estimated. The Company adjusts its accruals to reflect the impact of negotiations, settlements, rulings, advice of legal counsel and other information and events pertaining to a particular case. Legal costs are expensed as incurred. The Company has recorded an accrual of $0.5 million as of December 31, 2021, related to estimated settlements for ongoing legal claims. The Company did not record any material loss contingency in the balance sheet as of December 31, 2020.

Indemnifications

In the ordinary course of business, the Company may provide indemnifications of varying scope and terms to investors, directors, officers, employees, customers or vendors with respect to certain matters, including losses arising out of the Company’s breach of such agreements, services to be provided by the Company or from intellectual property infringement claims made by third parties. These indemnifications may survive termination of the underlying agreement and the maximum potential amount of future payments the Company could be required to make under these indemnification provisions may not be subject to maximum loss clauses. The maximum potential amount of future payments the Company could be required to make under these indemnification provisions is indeterminable. The Company has never paid a material claim, nor has the Company been involved in litigation in connection with these indemnification arrangements. As of December 31, 2021 and 2020, the Company has not accrued a liability for these indemnifications as the likelihood of incurring a payment obligation, if any, in connection with these indemnifications is not probable or reasonably estimable due to the unique facts and circumstances involved.

Operating Leases

The Company leases facilities under noncancelable operating lease agreements. Future minimum rental payments under the noncancelable operating leases, subsequent to December 31, 2021, are as follows:


(In thousands)	Operating Leases
2022	$	1,279
2023		970
2024		1,323
2025		1,360
2026		1,397
2027 and thereafter		9,919
Total	$	16,248

Rent expense related to noncancelable operating leases totaled $1.4 million and $0.3 million for the years ended December 31, 2021 and 2020, respectively. One of the operating leases includes two three-year renewal options.

Capital Leases

The Company leases equipment under agreements expiring at various times during the next three years. The Company has recorded the capital lease obligation within its consolidated balance sheets. Future minimum rental payments under the noncancelable capital leases, subsequent to December 31, 2021, are as follows:


(In thousands)	Capital Leases
2022	$	98
2023		4
2024		4
Minimum lease payment including interest		106
Amount representing interest		(4	)
Minimum lease payments excluding interest	$	102

Unconditional purchase commitments

On April 4, 2021, the Company entered into an agreement with Palantir Technologies (“Palantir”). Pursuant to that agreement, the Company committed to purchase licenses to access software products and utilize services from Palantir over a six year period for a total cost to the Company of $42.0 million. As of December 31, 2021, the Company has an unconditional purchase commitment with Palantir as detailed in the table below:


(In thousands)	Annual Service Payments
2022	$	—
2023		8,000
2024		8,000
2025		10,000
2026		10,000
Total	$	36,000

Warrants (Tables)

12 Months Ended

Dec. 31, 2021

Schedule of Quantitative Information Regarding Assumptions Used in Binomial Lattice Model

The Company calculated the fair value of option grants on the respective dates of grant using the following weighted average assumptions:


	Years ended
	December 31,			December 31,
	2021			2020
Options
Risk-free interest rate		1.19	%		0.51	%
Expected term (in years)	6.08				6.06
Expected dividend yield		—	%		—	%
Expected volatility		66.56	%		64.98	%

Private Placement Warrants

Schedule of Quantitative Information Regarding Assumptions Used in Binomial Lattice Model

The following table provides quantitative information regarding assumptions used in the binomial lattice model to determine the fair value of the Private Placement Warrants:


	December 31, 2021			September 24, 2021 (Closing Date)
Stock price	$	9.98		$	10.05
Term (in years)		0.06			0.32
Implied volatility		30.3	%		18.9	%
Risk-free rate		1.22	%		1.0	%
Dividend yield		0.0	%		0.0	%

Equity

12 Months Ended

Dec. 31, 2021

Stockholders Equity Note [Abstract]

Equity

6. Equity

Common Stock

On September 27, 2021, the Company’s Common Stock and Warrants began trading on the Nasdaq Global Market under the ticker symbols “STRC” and “STRCW”, respectively.

As of December 31, 2021, the Company had authorized a total of 990,000,000 shares for issuance as Common Stock. As of December 31, 2021, 137,722,658 shares of Common Stock were issued and outstanding.

In September 2016, the founders of Old Sarcos granted Old Sarcos a purchase right for 4,000,000 shares of Class B common stock of Old Sarcos originally purchased by the founders in 2015. Old Sarcos had an exclusive option to repurchase unvested shares of Class B common stock at a price per share equal to the original issue price per share in the event that the founder’s relationship with Old Sarcos was terminated. The repurchase right for the 4,000,000 shares lapsed in equal monthly amounts over 48 months ending in September 2020. The fair value of the repurchase rights were categorized as Class B common stock options at the date the repurchase rights were granted, based on the fair market value on the grant date. These repurchase rights were recorded as stock-based compensation expense on a straight-line basis over the vesting period and were recorded to general and administrative expense within the

consolidated statements of operations and comprehensive loss. For the year ended December 31, 2020, the amount of stock-based compensation recognized related to the founder stock options was $1.5 million. For the year ended December 31, 2021, no shares of Class B Common Stock were subject to the repurchase option and there was no unrecognized amount of stock-based compensation remaining. Upon the closing of the Merger, holders of outstanding Class B common stock of Old Sarcos received shares of the Company’s Common Stock in an amount determined by application of the Exchange Ratio, as discussed in Note 1, Basis of Presentation and Summary of Significant Accounting Policies.

Preferred Stock

As of December 31, 2021, the Company had authorized a total of 10,000,000 shares for issuance as preferred stock. The Company’s board of directors has the authority to issue preferred stock and to determine the rights, privileges, preferences, restrictions and voting rights of those shares. As of December 31, 2021, the Company had no shares of preferred stock outstanding as all preferred stock of Old Sarcos had been converted to Common Stock as part of the Business Combination.

Non-controlling Interest

The non-controlling interest represents the membership interest in ZeptoVision, Inc., (“Zepto”) that was held by a holder other than the Company. Zepto was formed in April 2016 and the formation of Zepto was accounted for as a common control transaction at the time of formation. As of December 31, 2020, the Company’s ownership percentage in Zepto was 79%. The Company has consolidated the financial position and results of operations of Zepto and reflected the 21% interest as a non-controlling interest for the year ended December 31, 2020. The carrying amount of the non-controlling interest was adjusted to reflect the change in its ownership interest in the subsidiary, with the offset to equity attributable to the Company.

On February 16, 2021, the Company acquired the non-controlling interest’s shares in Zepto for a purchase price of $0.2 million making Zepto a wholly owned subsidiary of the Company. The acquisition of the remaining shares of Zepto resulted in the decrease of non-controlling interest to zero and adjustment to additional paid-in capital to reflect the Company’s increased ownership in Zepto.

The entire disclosure for shareholders' equity comprised of portions attributable to the parent entity and noncontrolling interest, including other comprehensive income. Includes, but is not limited to, balances of common stock, preferred stock, additional paid-in capital, other capital and retained earnings, accumulated balance for each classification of other comprehensive income and amount of comprehensive income.

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Warrants

12 Months Ended

Dec. 31, 2021

Equity [Abstract]

Warrants

7. Warrants

On January 31, 2020, Old Sarcos issued 250,000 Class A Common Stock warrants to one of its investors, at an exercise price of $11.3243 per share with an expiration date of January 31, 2030. The Company generally accounts for warrants to purchase Common Stock as a component of equity at its issued cost unless the warrants include a conditional obligation to issue a variable number of shares or there is a deemed possibility that the Company may need to settle the warrants in cash.

Old Sarcos estimated the fair value of these warrants using the Black-Scholes option valuation model based on the estimated fair value of the underlying Common Stock, with the following assumptions: remaining contractual term of ten years, risk-free interest rate of 3.05%, volatility of 85% and no dividend yield. These estimates, especially the market value of the underlying Common Stock and the related expected volatility, are judgmental and could differ materially in the future. Old Sarcos estimated the fair value of warrants exercisable for Class A Common Stock using the Black-Scholes option valuation model based on the estimated fair value of the underlying Common Stock.

Immediately prior to the effective time of the Merger, all the issued and outstanding warrants to purchase 250,000 shares of Class A Stock of Old Sarcos warrants were net exercised and upon the Closing were exchanged for shares of the Company’s Common Stock in an amount determined by application of the Exchange Ratio, as discussed in Note 1.

On January 20, 2021, Rotor consummated the initial public offering (“IPO”) of 27,600,000 units (the “Units”), including the full exercise by the underwriters of their over-allotment option. Each Unit included one share of Class A Common Stock and one half of one warrant (the “Public Warrants”). Simultaneously with the closing of the IPO, Rotor consummated the sale of 7,270,000 warrants (the “Private Placement Warrants”) in a private placement to Rotor Sponsor LLC (the “Sponsor”), an affiliate of Rotor’s officers and directors, and certain funds and accounts managed by two qualified institutional buyers. At the Closing Date, Old Sarcos acquired the net liabilities from Rotor, including

the Public Warrants, that were recorded as equity instruments, and the Private Placement Warrants, that were recorded as warrant liabilities (together the “Warrants”).

The Company estimated the fair value of the Private Placement Warrants exercisable for Common Stock measured at fair value on a recurring basis at the respective dates using the binomial lattice valuation model. The binomial lattice valuation model inputs are based on the estimated fair value of the underlying Common Stock at the valuation measurement date, the remaining contractual term of the warrant, the risk-free interest rates, the expected dividends and the implied volatility of the price of the Company’s underlying stock. These estimates, especially the expected volatility, are highly judgmental and could differ materially in the future. The Company recognized a loss of $4.9 million related to the change in fair value of the Private Placement Warrants during the year ended December 31, 2021, recorded as a loss on warranty liability within the consolidated statements of operations and comprehensive loss.

The following table provides quantitative information regarding assumptions used in the binomial lattice model to determine the fair value of the Private Placement Warrants:


	December 31, 2021			September 24, 2021 (Closing Date)
Stock price	$	9.98		$	10.05
Term (in years)		0.06			0.32
Implied volatility		30.3	%		18.9	%
Risk-free rate		1.22	%		1.0	%
Dividend yield		0.0	%		0.0	%

Each whole Warrant entitles the registered holder to purchase one share of our Common Stock at a price of $11.50 per share, subject to adjustment as discussed below, at any time commencing on January 20, 2022, provided that we have an effective registration statement under the Securities Act covering the shares of the Common Stock issuable upon exercise of the Warrants and a current prospectus relating to them is available (or we permit holders to exercise their Warrants on a cashless basis under the circumstances specified in the warrant agreement entered into between Continental Stock Transfer & Trust Company and Rotor (the “Warrant Agreement”)) and such shares are registered, qualified or exempt from registration under the securities laws of the state of residence of the holder. Pursuant to the Warrant Agreement, a Warrant holder may exercise its Warrants only for a whole number of shares of our Common Stock. This means only a whole Warrant may be exercised at a given time by a Warrant holder. The Warrants will expire five years after the completion of the Business Combination, or September 24, 2026, at 5:00 p.m., New York City time, or earlier upon redemption or liquidation.

We will not be obligated to deliver any Common Stock pursuant to the exercise of a Warrant and will have no obligation to settle such Warrant exercise unless a registration statement under the Securities Act with respect to the shares of our Common Stock underlying the Warrants is then effective and a prospectus relating thereto is current, subject to our satisfying our obligations described below with respect to registration, or a valid exemption from registration is available. No Warrant will be exercisable, and we will not be obligated to issue a share of our Common Stock upon exercise of a Warrant unless the share of our Common Stock issuable upon such Warrant exercise has been registered, qualified or deemed to be exempt under the securities laws of the state of residence of the registered holder of the Warrants. In the event the conditions in the two immediately preceding sentences are not satisfied with respect to a Warrant, the holder of such Warrant will not be entitled to exercise such Warrant and such Warrant may have no value and expire worthless. In no event will we be required to net cash settle any Warrant. In the event a registration statement is not effective for the exercised Warrants, the purchaser in the Rotor IPO of a Unit containing such Warrant will have paid the full purchase price for the Unit solely for the share of our Common Stock underlying such Unit.

Except as described herein, the Private Placement Warrants have terms and provisions that are identical to those of the Public Warrants. If the Private Placement Warrants are held by holders other than the Sponsor or its permitted transferees, the Private Placement Warrants will be redeemable by us in all redemption scenarios and exercisable by the holders on the same basis as the Public Warrants. The Private Placement Warrants will not be redeemable by us so long as they are held by the initial purchasers or its permitted transferees, subject to certain exceptions. The Sponsor, or its permitted transferees, have the option to exercise the Private Placement Warrants on a cashless basis.

Redemption of Warrants When the Price per Share of Our Common Stock Equals or Exceeds $18.00. Once the Warrants become exercisable, we may call the Warrants for redemption:

•

in whole and not in part;

•

at a price of $0.01 per Warrant;

•

upon not less than 30 days’ prior written notice of redemption (the “30-day redemption period”) to each Warrant holder; and

•

if, and only if, the last reported sale price of the shares of our Common Stock for any 20 trading days within a 30-trading day period commencing after the Warrants become exercisable and ending three business days before we send the notice of redemption to the Warrant holders (which we refer to as the “Reference Value”) equals or exceeds $18.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like).

If and when the Warrants become redeemable by us, we may exercise our redemption right even if we are unable to register or qualify the underlying securities for sale under all applicable state securities laws. However, we will not redeem the Warrants unless an effective registration statement under the Securities Act covering the shares of our Common Stock issuable upon exercise of the Warrants is effective and a current prospectus relating to those shares of our Common Stock is available throughout the 30-day redemption period.

Redemption of Warrants When the Price per Share of Our Common Stock Equals or Exceeds $10.00. Once the Warrants become exercisable, we may redeem the outstanding Warrants (except as described herein with respect to the Private Placement Warrants if we do not utilize this redemption provision):

•

in whole and not in part;

•

at $0.10 per Warrant upon a minimum of 30 days’ prior written notice of redemption; provided that holders will be able to exercise their Warrants on a cashless basis prior to redemption and receive that number of shares determined by reference to an agreed table based on the redemption date and the “fair market value” of our Common Stock;

•

if, and only if, the Reference Value (as defined above) equals or exceeds $10.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like); and

•

if the Reference Value is less than $18.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) the Private Placement Warrants must also be concurrently called for redemption on the same terms (except as described above with respect to a holder’s ability to cashless exercise its Warrants) as the outstanding Public Warrants, as described above.

Segment Information - Additional Information (Details)	12 Months Ended
Segment Information - Additional Information (Details)	Dec. 31, 2021 USD ($) Segment	Dec. 31, 2020 USD ($)
Segment Reporting Information [Line Items]
Number of reportable segment	1
Number of operating segment	1
Non-US
Segment Reporting Information [Line Items]
Revenue earned from customers \| $	$ 0	$ 0

Amount, including tax collected from customer, of revenue from satisfaction of performance obligation by transferring promised good or service to customer. Tax collected from customer is tax assessed by governmental authority that is both imposed on and concurrent with specific revenue-producing transaction, including, but not limited to, sales, use, value-added and excise.

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
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CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Dec. 31, 2021	Dec. 31, 2020
Current assets:
Cash and cash equivalents	$ 217,114	$ 33,664
Accounts receivable	788	1,051
Unbilled receivables	221	219
Inventories, net	1,006	707
Prepaid expenses and other current assets	9,202	693
Total current assets	228,331	36,334
Property and equipment, net	7,051	1,425
Other non-current assets	441	292
Total assets	235,823	38,051
Current liabilities:
Accounts payable	1,681	972
Accrued liabilities	4,480	1,255
Notes payable, current		1,328
Total current liabilities	6,161	3,555
Notes payable, net of current		1,066
Warrant liabilities	13,701
Other non-current liabilities	1,999	526
Total liabilities	21,861	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 December 31, 2021, and December 31, 2020; 137,722,658 and 104,039,354 shares issued and outstanding as of December 31, 2021, and December 31, 2020, respectively	14	10
Additional paid-in capital	359,439	96,880
Accumulated deficit	(145,491)	(63,983)
Total Sarcos Technology and Robotics Corporation stockholders’ equity	213,962	32,907
Noncontrolling interests		(3)
Total stockholders’ equity	213,962	32,904
Total liabilities and stockholders’ equity	$ 235,823	$ 38,051

Related Party Transactions - Additional Information (Details) - USD ($) $ in Thousands	1 Months Ended	12 Months Ended
	Apr. 04, 2021	Dec. 31, 2021	Dec. 31, 2020	Feb. 16, 2021
Related Party Transactions Details [Line Items]
Revenue, net		$ 5,075	$ 8,813
Construction in Progress, Cost Capitalized		800
Delta Air Lines I N C
Related Party Transactions Details [Line Items]
Revenue, net		100	$ 0
Palantir Technologies \| Software
Related Party Transactions Details [Line Items]
Finite-Lived Intangible Asset, Useful Life	6 years
Capitalized Computer Software, Net	$ 42,000
Service expenses	$ 2,200
Prepaid expense		$ 3,600
Zepto
Related Party Transactions Details [Line Items]
Ownership percentage		79.00%
Business Combination, Acquisition of Less than 100 Percent, Noncontrolling Interest, Fair Value				$ 200
Chief Legal Officer \| Zepto
Related Party Transactions Details [Line Items]
Participating Ownership Holding Percentage		21.00%

Equity - Additional Information (Details) - USD ($) $ in Thousands		1 Months Ended	12 Months Ended
	Feb. 16, 2021	Sep. 30, 2016	Dec. 31, 2021	Dec. 31, 2020	Sep. 24, 2021
Stockholders Equity Details [Line Items]
Common stock, shares authorized			990,000,000	133,312,415
Common stock, shares issued			137,722,658	104,039,354
Common stock, shares outstanding			137,722,658	104,039,354	21,483,286
Stock-based compensation expense			$ 43,118	$ 2,291
Preferred stock, shares authorized			10,000,000
Preferred stock, shares outstanding			0
Acquired non controlling interest shares purchase price	$ 200
Zepto
Stockholders Equity Details [Line Items]
Ownership percentage				79.00%
Non-controlling interest				21.00%
Founder Shares
Stockholders Equity Details [Line Items]
Shares subject to repurchase			0
Stock Repurchase Expiration Date		Sep. 30, 2020
Stock repurchase lapse period		48 months
Stock-based compensation expense				$ 1,500
Unrecognized stock based compensation			$ 0
Common Class B \| Founder Shares
Stockholders Equity Details [Line Items]
Shares subject to repurchase		4,000,000

Warrants - Schedule of Quantitative Information Regarding Assumptions Used in Binomial lattice Model (Details) - $ / shares		1 Months Ended	12 Months Ended
	Sep. 24, 2021	Jan. 31, 2020	Dec. 31, 2021	Dec. 31, 2020
Class Of Warrant Or Right [Line Items]
Term (in years)		10 years	6 years 29 days	6 years 21 days
Implied volatility		85.00%	66.56%	64.98%
Risk-free rate		3.05%	1.19%	0.51%
Dividend yield		0.00%
Private Placement Warrants
Class Of Warrant Or Right [Line Items]
Stock price	$ 10.05		$ 9.98
Term (in years)	3 months 25 days		21 days
Implied volatility	18.90%		30.30%
Risk-free rate	1.00%		1.22%
Dividend yield	0.00%		0.00%

Stock-based Compensation - Schedule of Stock Based Compensation Expense (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Stock-based compensation expense	$ 43,118	$ 2,291
Cost of Revenue
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Stock-based compensation expense	92	109
Research and Development
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Stock-based compensation expense	446	249
Sales and Marketing
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Stock-based compensation expense	814	45
General and Administrative
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Stock-based compensation expense	$ 41,766	$ 1,888

Income Taxes - Schedule of Provision for Income Taxes (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020
Current:
State	$ (1)	$ (1)
Total current	(1)	(1)
Deferred:
Federal	(16,377)	(4,142)
State	(3,948)	(1,144)
Change in valuation allowance	20,325	5,286
Total provision for income taxes	$ (1)	$ (1)

Amount of current income tax expense (benefit) and deferred income tax expense (benefit) pertaining to continuing operations.

+ References + Details

CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares	Dec. 31, 2021	Sep. 24, 2021	Dec. 31, 2020
Statement Of Financial Position [Abstract]
Common stock, par value	$ 0.0001		$ 0.0001
Common stock, shares authorized	990,000,000		133,312,415
Common stock, shares issued	137,722,658		104,039,354
Common stock, shares outstanding	137,722,658	21,483,286	104,039,354

Commitments and Contingencies - Schedule of Future Minimum Lease Payments under Noncancelable Capital Leases (Details) $ in Thousands	Dec. 31, 2021 USD ($)
Commitments And Contingencies Disclosure [Abstract]
2022	$ 98
2023	4
2024	4
Minimum lease payment including interest	106
Amount representing interest	(4)
Minimum lease payments excluding interest	$ 102

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020
Income Statement [Abstract]
Revenue, net	$ 5,075	$ 8,813
Operating expenses:
Cost of revenue	3,867	5,602
Research and development	17,516	14,117
General and administrative	58,059	7,297
Sales and marketing	6,624	2,796
Total operating expenses	86,066	29,812
Loss from operations	(80,991)	(20,999)
Interest (expense) income, net	(34)	40
Loss on warrant liability	(4,927)
Gain on forgiveness of notes payable	4,394
Other income, net	51	34
Loss before provision for income taxes	(81,507)	(20,925)
Provision for income taxes	(1)	(1)
Net loss and comprehensive loss	(81,508)	(20,926)
Net loss attributable to common stockholders	$ (81,508)	$ (20,926)
Net loss per share attributable to common stockholders:
Basic and diluted	$ (0.72)	$ (0.21)
Weighted-average shares used in computing net loss per share attributable to common stockholders
Basic and diluted	113,184,357	100,114,664

Segment Information

12 Months Ended

Dec. 31, 2021

Segment Reporting [Abstract]

Segment Information

12. Segment information

The Company’s Chief Executive Officer (“CEO”) is the Chief Operating Decision Maker (“CODM”). The CODM allocates resources and makes operating decisions based on financial information presented on a consolidated basis. The profitability of the Company’s product group is not a determining factor in allocating resources and the CODM does not evaluate profitability below the level of the consolidated company. Accordingly, the Company has determined that it has a single reportable segment and operating segment structure.

The Company’s revenue is derived primarily from U.S. customers. During the year ended December 31, 2021 and 2020, the Company had no material revenue earned from customers located outside the United States.

All long-lived assets are maintained in the United States. All losses are attributable to operations within the United States.

The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments.

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Compensation And Retirement Disclosure [Abstract]

Balance Sheet Components - Additional Information (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020
Organization Consolidation And Presentation Of Financial Statements [Abstract]
Inventory reserves	$ 300	$ 100
Depreciation	$ 531	$ 458

Employee Benefits

12 Months Ended

Dec. 31, 2021

Employee Benefits

14. Employee Benefits

The Company has a defined contribution 401(k) plan covering substantially all employees. The plan allows employees to defer up to 100% of their employment income (subject to annual contribution limits imposed by the I.R.S.) after all taxes and applicable benefit deductions. The Company did not provide matching contributions for the employee contributions to the plan during the years ended December 31, 2021 and 2020; and no amounts have been accrued as of December 31, 2021 and 2020.

Basis of Presentation and Summary of Significant Accounting Policies - Additional Information (Details)		12 Months Ended
	Sep. 24, 2021 USD ($) $ / shares shares	Dec. 31, 2021 USD ($) $ / shares shares	Dec. 31, 2020 USD ($) Customer $ / shares shares
Summaryof Significant Accounting Policies Details [Line Items]
Right to receive exchange ratio of common stock	5.12922%
Sale of per share price (in Dollars per share) \| $ / shares	$ 0.0001
Earn-outs, up to an aggregate \| shares		65,628,258	10,066,610
Common stock, shares issued \| shares		137,722,658	104,039,354
Common stock, par value \| $ / shares		$ 0.0001	$ 0.0001
Cash and cash equivalents		$ 217,100,000	$ 33,700,000
Accumulated deficit		145,500,000
Working capital		222,200,000
Net proceeds amount	$ 228,800,000
Allowance for doubtful receivables		0	0
Accounts receivable write off		0	0
Impairment loss recognized		0	0
Deferred revenue, revenue recognized		100,000	$ 200,000
Revenue, Remaining Performance Obligation, Amount		$ 1,800,000
Accounts Receivable \| Credit Concentration Risk \| Customer One
Summaryof Significant Accounting Policies Details [Line Items]
Concentration risk, percentage		81.00%
Accounts Receivable \| Credit Concentration Risk \| Customer Five
Summaryof Significant Accounting Policies Details [Line Items]
Concentration risk, percentage			97.00%
Revenue \| Customer Concentration Risk
Summaryof Significant Accounting Policies Details [Line Items]
'Number of customer \| Customer			5
Revenue \| Customer Concentration Risk \| Customer Five
Summaryof Significant Accounting Policies Details [Line Items]
Concentration risk, percentage		87.00%
Revenue \| Customer Concentration Risk \| Customer Three
Summaryof Significant Accounting Policies Details [Line Items]
Concentration risk, percentage			64.00%
PIPE Investor
Summaryof Significant Accounting Policies Details [Line Items]
Common stock, shares issued \| shares	22,000,000
Common stock, par value \| $ / shares	$ 10.00
Aggregate purchase price	$ 220,000,000.0
Common Stock
Summaryof Significant Accounting Policies Details [Line Items]
Earn-outs, up to an aggregate \| shares		28,125,000

Fair Value Measurements - Additional Information (Details) - USD ($)	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020
Fair Value Disclosures [Abstract]
Transfers between fair value measurements levels	$ 0	$ 0

Commitments and Contingencies - Schedule of Future Minimum Lease Payments under Noncancelable Operating Leases (Details) $ in Thousands	Dec. 31, 2021 USD ($)
Commitments And Contingencies Disclosure [Abstract]
2022	$ 1,279
2023	970
2024	1,323
2025	1,360
2026	1,397
2027 and thereafter	9,919
Total	$ 16,248

Subsequent Events - Additional Information (Details) - Subsequent Event $ / shares in Units, $ in Millions	Mar. 28, 2022 USD ($) $ / shares
Subsequent Event [Line Items]
Business Combination Consideration Transferred1	$ 100.0
Cash paid, net of cash acquired	30.0
Fair value of common stock issued	$ 70.0
Minimum
Subsequent Event [Line Items]
Weighted average price per share \| $ / shares	$ 5.00
Maximum
Subsequent Event [Line Items]
Weighted average price per share \| $ / shares	$ 9.00

Balance Sheet Components - Schedule of Prepaid Expenses And Other Current Assets (Details) - USD ($) $ in Thousands	Dec. 31, 2021	Dec. 31, 2020
Organization Consolidation And Presentation Of Financial Statements [Abstract]
Prepaid insurance	$ 4,786	$ 34
Software	4,144	287
Other prepaid expense	171	279
Other assets	101	93
Total prepaid expenses and other current assets	$ 9,202	$ 693

Commitments and Contingencies - Schedule of Unconditional Purchase Commitment (Details) $ in Thousands	Dec. 31, 2021 USD ($)
Commitments And Contingencies Disclosure [Abstract]
2023	$ 8,000
2024	8,000
2025	10,000
2026	10,000
Total	$ 36,000

Notes Payable - Summary of Notes Payable (Details) $ in Thousands	Dec. 31, 2020 USD ($)
Debt Instrument [Line Items]
First PPP loan	$ 2,394
Total Notes payable	2,394
Notes payable, current	1,328
Notes payable, net of current	1,066
First PPP Loan
Debt Instrument [Line Items]
First PPP loan	2,394
Total Notes payable	$ 2,394

Subsequent Events

12 Months Ended

Dec. 31, 2021

Subsequent Events [Abstract]

Subsequent Events

15. Subsequent events

On March 28, 2022, the Company filed a current report on form 8-K and press release announcing that the Company had reached a definitive agreement to acquire RE2, Inc., a Pittsburgh, PA based developer of manipulator arms with human-like performance, intuitive robot interfaces, and advanced autonomy capabilities for use in any environment. The aggregate consideration for the acquisition of RE2, Inc. will be approximately $100.0 million, subject to customary purchase price adjustments for cash, net working capital and indebtedness. The consideration for the acquisition of RE2, Inc. will be comprised of approximately $30.0 million in cash, which the Company expects to fund with cash on hand, and approximately $70.0 million in shares of the Company's common stock. The number of shares of common stock to be issued in the acquisition of RE2, Inc. will be based on the volume weighted-average price per share over a 10-day trading period ending on the third business day prior to the closing and is subject to a collar, with a floor of $5.00 per share and a ceiling of $9.00 per share. The acquisition of RE2, Inc. is subject to certain customary and other closing conditions, and is expected to close during the second quarter of 2022.

Stock-based Compensation - Schedule of Stock Options Activity (Details) - USD ($) $ / shares in Units, $ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]
Options outstanding, beginning balance	7,883,087	7,738,866
Options granted	3,761,109	1,993,969
Options exercised	(158,129)	(318,564)
Options cancelled	(1,458,973)	(1,531,184)
Options outstanding, ending balance	10,027,094	7,883,087	7,738,866
Options exercisable		5,063,856
Options exercisable	5,176,464
Options outstanding, weighted average exercise price, beginning balance	$ 0.59	$ 0.49
Options granted, weighted average exercise price	7.93	1.24
Options exercised, weighted average exercise price	0.16	0.40
Options cancelled, weighted average exercise price	1.11	0.93
Options outstanding, weighted average exercise price, ending balance	3.28	0.59	$ 0.49
Options exercisable, weighted average exercise price		$ 0.33
Options exercisable, weighted average exercise price	$ 0.46
Options outstanding, weighted average remaining contractual term	7 years 2 months 23 days	6 years 9 months 29 days	7 years 4 months 9 days
Options exercisable, weighted average remaining contractual term	5 years 3 months 29 days	5 years 9 months 10 days
Options outstanding, aggregate intrinsic value	$ 67,173	$ 5,058	$ 5,848
Options exercisable, aggregate intrinsic value	$ 49,268	$ 4,592

Basis of Presentation and Summary of Significant Accounting Policies (Policies)

12 Months Ended

Dec. 31, 2021

Accounting Policies [Abstract]

Description of the Business

Business Combination

•

Basis Of Presentation And Consolidation

Basis of Presentation and Consolidation

prior year amounts have been reclassified to conform to current year presentation. The Company’s fiscal year begins on January 1 and ends on December 31.

COVID-19 Pandemic

Use of Estimates

Liquidity and Capital Resources

Concentration of Credit Risk

Accounts receivable

Revenue

(In thousands)	2021		2020
Customer A	$	1,685	$	2,222
Customer B		630		2,156
Customer C	*NM			1,066
Customer D		928	*NM
Customer E		602	*NM
Customer F		555	*NM

*NM - Not meaningful as the customer’s related revenue was less than 10% of the Company’s revenue for the respective year.

Cash and Cash Equivalents

Accounts Receivable

Inventories

Property and Equipment

		Useful life
Robotics and manufacturing equipment		1 – 10 years
Computer equipment		3 – 5 years
Software		3 years
Furniture and fixtures		3 years
Leasehold improvements		Lesser of the useful life or the remaining term of the lease

Impairment of Property and Equipment

Revenue Recognition

Revenues from Contracts with Customers

Research and Development Services

Product Revenue

The revenue recognized for Research and Development Services and Product Revenue were as follows:

	December 31,
(In thousands)	2021		2020
Research and Development Services	$	3,584	$	6,811
Product Revenue		1,491		2,002
Revenue, net	$	5,075	$	8,813

Contract Balances

Cash funds received in excess of revenues recognized that is contingent upon the satisfaction of performance obligations is accounted for as deferred revenue.

The opening and closing balances of our accounts receivable, unbilled receivables, contract assets and deferred revenues are as follows:

(In thousands)	Accounts receivable			Unbilled receivable			Contract assets (current)			Contract assets (long-term)			Deferred revenue (current)
Opening Balance as of December 31, 2019	$	916		$	868		$	195		$	110		$	200
Increase/(decrease), net		135			(649	)		(102	)		(17	)		(143	)
Ending Balance as of December 31, 2020		1,051			219			93			93			57
Increase/(decrease), net		(263	)		2			1			(57	)		(27	)
Ending Balance as of December 31, 2021	$	788		$	221		$	94		$	36		$	30

Remaining performance obligations

As of December 31, 2021, the Company had backlog, or revenue related to remaining performance obligations, of $1.8 million. We expect that all of this backlog will be recognized in 2022.

Research and Development Costs

Research and development expenses consist of costs incurred for experimentation, design, and testing that are expensed as incurred.

Sales and Marketing Costs

Stock-Based Compensation

Income Taxes

Recently Adopted and Issued Accounting Standard Pronouncements

Recently Issued Accounting Standard Pronouncements

interim statements thereafter. The Company is currently in the process of evaluating the impact adopting ASC 842 will have on its consolidated financial statements and related disclosures.

Balance Sheet Components - Schedule of Accrued Liabilities (Details) - USD ($) $ in Thousands	Dec. 31, 2021	Dec. 31, 2020
Organization Consolidation And Presentation Of Financial Statements [Abstract]
Payroll and related costs	$ 2,511	$ 934
Consulting and professional services	406	125
Legal accrual	520
Other current liabilities	1,043	196
Total accrued liabilities	$ 4,480	$ 1,255

Net Loss Per Share

12 Months Ended

Dec. 31, 2021

Earnings Per Share [Abstract]

Net Loss Per Share

9. Net loss per Share

The following table sets forth the computation of the basic and diluted net loss per share attributable to common stockholders for the twelve months ended December 31, 2021 and 2020:


	Year ended December 31,
(In thousands, except share and per share data)	2021			2020
Numerator:
Net loss attributable to common stockholders	$	(81,508	)	$	(20,926	)
Denominator:
Weighted average shares outstanding, basic and diluted		113,184,357			100,114,664
Basic and diluted net loss per share	$	(0.72	)	$	(0.21	)

The basic and diluted net loss per share for the twelve months ended December 31, 2021, which has been computed to give effect to the conversion of the Old Sarcos Class B common stock and all convertible preferred shares into Old Sarcos Class A common stock as though the conversion had occurred as of the beginning of the period or the original date of issuance, if later.

Basic and diluted net loss per share attributable to common stockholders is the same for the twelve months ended December 31, 2021 and 2020, as the inclusion of potential shares of Common Stock would have been anti‑dilutive for the periods presented.

The following table discloses securities that could potentially dilute basic net loss per share in the future that were not included in the computation of diluted net loss per share:


	As of December 31,
	2021		2020
Outstanding warrants		20,549,468		1,282,306
Outstanding restricted stock awards		5,129,222		—
Outstanding stock options and restricted stock units		11,824,568		8,784,304
Outstanding earnout shares		28,125,000		—
Total anti-dilutive securities		65,628,258		10,066,610

Balance Sheet Components - Schedule of Inventories, Net (Details) - USD ($) $ in Thousands	Dec. 31, 2021	Dec. 31, 2020
Organization Consolidation And Presentation Of Financial Statements [Abstract]
Raw materials	$ 458	$ 516
Work-in-process	41	100
Finished goods, net	507	91
Total inventories	$ 1,006	$ 707

Net Loss Per Share (Tables)

12 Months Ended

Dec. 31, 2021

Earnings Per Share [Abstract]

Schedule of Basic and Diluted Net Loss Per Share

The following table sets forth the computation of the basic and diluted net loss per share attributable to common stockholders for the twelve months ended December 31, 2021 and 2020:


	Year ended December 31,
(In thousands, except share and per share data)	2021			2020
Numerator:
Net loss attributable to common stockholders	$	(81,508	)	$	(20,926	)
Denominator:
Weighted average shares outstanding, basic and diluted		113,184,357			100,114,664
Basic and diluted net loss per share	$	(0.72	)	$	(0.21	)

Schedule of Shares Excluded from Computation of Diluted Net Loss Per Share

The following table discloses securities that could potentially dilute basic net loss per share in the future that were not included in the computation of diluted net loss per share:


	As of December 31,
	2021		2020
Outstanding warrants		20,549,468		1,282,306
Outstanding restricted stock awards		5,129,222		—
Outstanding stock options and restricted stock units		11,824,568		8,784,304
Outstanding earnout shares		28,125,000		—
Total anti-dilutive securities		65,628,258		10,066,610

Net Loss Per Share - Schedule of Basic and Diluted Net Loss Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020
Numerator:
Net loss	$ (81,508)	$ (20,926)
Net loss per share attributable to common stockholders:
Basic and diluted	113,184,357	100,114,664
Basic and diluted	$ (0.72)	$ (0.21)

The portion of profit or loss for the period, net of income taxes, which is attributable to the parent.

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Basis of Presentation and Summary of Significant Accounting Policies - Summary of Disaggregation of Revenue (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020
Summaryof Significant Accounting Policies Details [Line Items]
Revenue, net	$ 5,075	$ 8,813
Research and Development Services
Summaryof Significant Accounting Policies Details [Line Items]
Revenue, net	3,584	6,811
Product Revenue
Summaryof Significant Accounting Policies Details [Line Items]
Revenue, net	$ 1,491	$ 2,002

Business Combination And Asset Acquisition [Abstract]

Income Taxes - Additional Information (Details) - USD ($)	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2017
Operating Loss Carryforwards [Line Items]
Loss before provision for income taxes	$ (81,507,000)	$ (20,925,000)
Less valuation allowance	35,476,000	15,151,000
Change in valuation allowance	20,300,000	5,300,000
Research credits	2,486,000	1,939,000
Unrecognized tax benefits	2,634,000	2,054,000	$ 1,388,000
Net operating loss carryforwards	22,393,000	12,838,000
Federal
Operating Loss Carryforwards [Line Items]
Deferred tax assets, operating loss	90,100,000	51,200,000		$ 5,900,000
Research credits	3,900,000	3,000,000.0
Unrecognized tax benefits	1,900
State
Operating Loss Carryforwards [Line Items]
State net operating losses	89,100,000	53,600,000
Utah
Operating Loss Carryforwards [Line Items]
Deferred tax assets, operating loss	88,800,000	53,500,000
Research credits	1,400,000	1,100,000
Unrecognized tax benefits	700,000	$ 600,000
Net operating loss carryforwards	88,800,000
Deferred tax assets, operating loss, carried forward indefinitely	$ 82,500,000

Reverse Recapitalization

12 Months Ended

Dec. 31, 2021

Reverse Recapitalization

5. Reverse Recapitalization

Pursuant to ASC 805, Business Combinations, the Business Combination was accounted for as a reverse recapitalization, rather than a business combination, for financial accounting and reporting purposes. Accordingly, Old Sarcos was deemed the accounting acquirer (and legal acquiree) and Rotor was treated as the accounting acquiree (and legal acquirer). Under this method of accounting, the reverse recapitalization was treated as the equivalent of Old Sarcos issuing stock for the net assets of Rotor, accompanied by a recapitalization. The net assets of Rotor are stated at historical cost, with no goodwill or other intangible assets recorded. The consolidated assets, liabilities, and results of operations prior to the Merger are those of Old Sarcos. The shares and corresponding capital amounts and earnings per share available for common stockholders, prior to the Merger, have been retroactively restated as shares reflecting the Exchange Ratio.

Earn-Out Shares

Each holder of Old Sarcos capital stock (including any Old Sarcos RSAs) is entitled to a right to Contingent Merger Consideration in the form of earn-outs, up to an aggregate of 28,125,000 shares of Common Stock. The earn-outs will become payable as follows:

•

14,062,500 shares of Common Stock of the Company in the aggregate if the closing share price of a share of Common Stock of the Company is equal to or exceeds $15.00 for 20 trading days in any 30 consecutive trading day period at any time during the period beginning on the first anniversary of the Closing Date and ending on the fourth anniversary of the Closing Date.

•

14,062,500 shares of Common Stock of the Company if the closing share price of a share of Common Stock of the Company is equal to or exceeds $20.00 for 20 trading days in any 30 consecutive trading day period at any time during the period beginning on the first anniversary of the Closing Date and ending on the fifth anniversary of the Closing Date.

The Earn-Out Shares issuable to holders of Old Sarcos capital stock are accounted for as equity-linked instruments and recorded in additional paid-in capital, and the Earn-Out Shares issuable to holders of Old Sarcos capital stock subject to restricted stock awards are accounted for as share-based compensation. The earn-out shares are treated as equity-linked instruments as opposed to shares outstanding, and as such are not included in shares outstanding on the Company’s consolidated balance sheets.

Upon the closing of the Business Combination and the PIPE Financing, the Company received net cash proceeds of $228.8 million. The following table reconciles the elements of the Merger to the consolidated statements of cash flows and the consolidated statements of stockholders’ equity for the year ended December 31, 2021:

(In thousands)	Recapitalization
Cash proceeds from Rotor, net of redemptions and transaction expenses	$	25,359
Cash proceeds from PIPE Financing		220,000
Less: Cash payment of transaction expenses - Sarcos		(16,571	)
Net Cash proceeds from Merger and PIPE financing		228,788
Less: Warrant liabilities assumed		(8,774	)
Less: Other non-cash net assets assumed		40
Less: Unpaid and previously expensed Merger transaction costs		(148	)
Net contributions from recapitalization	$	219,906

	Number of Shares
Rotor Class A Common Stock, outstanding prior to Merger		27,600,000
Rotor Class B Common Stock, outstanding prior to Merger		6,405,960
Class A common stock issued to PIPE Investors		22,000,000
Less: redemption of Rotor Common Stock		(23,479,970	)
Total shares from Merger and PIPE financing		32,525,990
Recapitalization of Old Sarcos common stock into Class A common stock¹		105,063,285
Total shares of Common Stock immediately after the Effective Time		137,589,275

¹The number of Old Sarcos shares was determined from the 21,483,286 shares of Old Sarcos Common Stock warrants, Common Stock and preferred stock outstanding immediately prior to the closing of the Business Combination, which are presented net of the Common and Preferred Stock redeemed, converted at the Exchange Ratio of 5.129222424. This excludes a restricted stock award for 5,129,222 shares that was unvested as of the date of the Merger. All fractional shares were rounded down.

In connection with the Merger, the Company incurred direct and incremental costs of approximately $32.9 million related to legal, accounting and other professional fees, which were deducted from the Company’s additional paid-in capital as a reduction of cash proceeds rather than expensed as incurred and $1.1 million of transaction costs that were recorded to operating expenses within the consolidated statements of operations and comprehensive loss.

Commitments and Contingencies - Additional Information (Details) - USD ($) $ in Millions		12 Months Ended
	Apr. 04, 2021	Dec. 31, 2021	Dec. 31, 2020
Commitmentsand Contingencies Details [Line Items]
Loss Contingency Accrual		$ 0.5
Operating Lease, Expense		$ 1.4	$ 0.3
Palantir Technologies
Commitmentsand Contingencies Details [Line Items]
Professional and contract services expense term	6 years
Professional and contract services expense	$ 42.0

Commitment and Contingencies (Tables)

12 Months Ended

Dec. 31, 2021

Commitments And Contingencies Disclosure [Abstract]

Schedule of Future Minimum Rental Payments for Operating Leases

The Company leases facilities under noncancelable operating lease agreements. Future minimum rental payments under the noncancelable operating leases, subsequent to December 31, 2021, are as follows:


(In thousands)	Operating Leases
2022	$	1,279
2023		970
2024		1,323
2025		1,360
2026		1,397
2027 and thereafter		9,919
Total	$	16,248

Schedule of Future Minimum Lease Payments for Capital Leases

Future minimum rental payments under the noncancelable capital leases, subsequent to December 31, 2021, are as follows:


(In thousands)	Capital Leases
2022	$	98
2023		4
2024		4
Minimum lease payment including interest		106
Amount representing interest		(4	)
Minimum lease payments excluding interest	$	102

Schedule of Unconditional Purchase Commitment

As of December 31, 2021, the Company has an unconditional purchase commitment with Palantir as detailed in the table below:


(In thousands)	Annual Service Payments
2022	$	—
2023		8,000
2024		8,000
2025		10,000
2026		10,000
Total	$	36,000

Balance Sheet Components - Other Noncurrent Liabilities (Details) - USD ($) $ in Thousands	Dec. 31, 2021	Dec. 31, 2020
Organization Consolidation And Presentation Of Financial Statements [Abstract]
Payroll and related costs		$ 286
Capital leases and other	$ 7	240
Deferred rent	1,992
Total other non-current liabilities	$ 1,999	$ 526

Reverse Recapitalization - Schedule of Consolidated Statement of Cash Flows and Consolidated Statement of Stockholders Equity (Parenthetical) (Details) - shares	Sep. 24, 2021	Dec. 31, 2021	Dec. 31, 2020
Business Acquisition [Line Items]
Common stock, shares outstanding	21,483,286	137,722,658	104,039,354
Business combination exchange ratio	5.12922%
Restricted Stock Awards
Business Acquisition [Line Items]
Number of shares unvested	5,129,222	5,129,222

Stock-based Compensation - Schedule of Fair Value of Option Grants (Details)	1 Months Ended	12 Months Ended
	Jan. 31, 2020	Dec. 31, 2021	Dec. 31, 2020
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]
Risk-free interest rate	3.05%	1.19%	0.51%
Contractual term	10 years	6 years 29 days	6 years 21 days
Dividend yield	0.00%
Volatility rate	85.00%	66.56%	64.98%

Net Loss Per Share - Schedule of Shares Excluded from Computation of Diluted Net Loss Per Share (Details) - shares	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items]
Earn-outs, up to an aggregate	65,628,258	10,066,610
Outstanding Warrants
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items]
Earn-outs, up to an aggregate	20,549,468	1,282,306
Restricted Stock Awards
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items]
Earn-outs, up to an aggregate	5,129,222
Outstanding Stock Options And Restricted Stock Units
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items]
Earn-outs, up to an aggregate	11,824,568	8,784,304
Outstanding Earnout Shares
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items]
Earn-outs, up to an aggregate	28,125,000

Stock-based Compensation - Summary of RSUs Activity (Details) - $ / shares	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Weighted average fair value, granted	$ 8.78
Weighted average fair value, ending balance	$ 8.78
Restricted Stock Units (RSUs)
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Number of shares, beginning balance	901,217	1,454,642
Number of shares, granted	932,123	384,692
Number of shares, released	(28,982)
Number of shares, cancelled	(6,884)	(938,117)
Number of shares, ending balance	1,797,474	901,217
Weighted average fair value, beginning balance	$ 8.78	$ 8.78
Weighted average fair value, granted	7.93	3.25
Weighted average fair value, released	8.78
Weighted average fair value, cancelled	8.78	6.51
Weighted average fair value, ending balance	$ 8.34	$ 8.78

Fair Value Measurements

12 Months Ended

Dec. 31, 2021

Fair Value Disclosures [Abstract]

Fair Value Measurements

2. Fair Value Measurements

ASC Topic 820, Fair Value Measurement, defines fair value as the exchange price that would be received for an asset or an exit price paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. The fair value hierarchy defines a three-level valuation hierarchy for disclosure of fair value measurements as follows:

Level 1—Fair value is based on observable inputs such as quoted prices for identical assets or liabilities in active markets.

Level 2—Fair value is determined using quoted prices for similar assets or liabilities in active markets or quoted prices for identical or similar assets or liabilities in markets that are not active or are directly or indirectly observable.

Level 3—Fair value is determined using one or more significant inputs that are unobservable in active markets at the measurement date, such as an option pricing model, discounted cash flow, or similar technique.

Financial Assets and Liabilities Measured at Fair Value on a Recurring Basis

On a recurring basis, the Company measures certain of its financial assets and liabilities, namely its warrant liabilities and cash equivalents, at fair value. The fair value of the Company’s financial assets and liabilities measured at fair value on a recurring basis was determined using the following inputs:

	As of December 31, 2021
(In thousands)	Level 1		Level 2		Level 3		Fair Value
Liabilities:
Warrant liability	$	—	$	—	$	13,701	$	13,701
Total liabilities	$	—	$	—	$	13,701	$	13,701

	As of December 31, 2020
(In thousands)	Level 1		Level 2		Level 3		Fair Value
Assets:
Cash equivalents:
Money market funds	$	31,726	$	—	$	—	$	31,726
Total assets	$	31,726	$	—	$	—	$	31,726

Cash equivalents consist primarily of money market funds with original maturities of three months or less at the time of purchase, and the carrying amount is a reasonable estimate of fair value. There were no transfers between fair value measurements levels during the years ended December 31, 2021 and 2020.

The table below sets forth a summary of changes in the fair value of the Company’s Level 3 warrants for the year ended December 31, 2021:

(In thousands)
Balance at December 31, 2020	$	—
Initial recognition of warrants		8,774
Increase in fair value of warrants		4,927
Balance at December 31, 2021	$	13,701

The carrying amounts of accounts payable, accrued expenses and notes payable approximate their fair values because of the relatively short periods until they mature or are required to be settled.

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

+ References + Details

Income Taxes - Reconciliation of Beginning and Ending Amount of Valuation Allowance (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020
Valuation And Qualifying Accounts Disclosure [Line Items]
Change in valuation allowance	$ 20,300	$ 5,300
SEC Schedule, 12-09, Valuation Allowance, Deferred Tax Asset
Valuation And Qualifying Accounts Disclosure [Line Items]
Valuation allowance at beginning of year	15,151	9,865
Change in valuation allowance	20,325	5,286
Valuation allowance at end of year	$ 35,476	$ 15,151

Income Taxes

12 Months Ended

Dec. 31, 2021

Income Tax Disclosure [Abstract]

Income Taxes

10. Income taxes

Loss before provision for income taxes was $81.5 million and $20.9 million for the years ended December 31, 2021 and 2020, respectively, all of which was generated in the United States. The Company's provision for income taxes consists of the following:


	Years Ended December 31,
(In thousands)	2021			2020
Current:
Federal	$	—		$	—
State		(1	)		(1	)
Total current		(1	)		(1	)
Deferred:
Federal		(16,377	)		(4,142	)
State		(3,948	)		(1,144	)
Change in valuation allowance		20,325			5,286
Total deferred		—			—
Total provision for income taxes	$	(1	)	$	(1	)

The Company's provision for income tax differs from the amount computed by applying the statutory federal income tax rate to income before taxes as follows:

	Years Ended December 31,
(In thousands)	2021			2020
Statutory federal income tax rate		21.0	%		21.0	%
State tax provision		3.7			3.7
Change in valuation allowance		(24.9	)		(25.3	)
Research credits		0.7			3.0
Permanent differences		(0.3	)		(2.4	)
Other		(0.2	)		—
Total provision for income taxes		0.0	%		0.0	%

As of December 31, 2021 and 2020, the net deferred tax asset consisted of the following:


	December 31,
(In thousands)	2021			2020
Deferred tax assets:
Accrued expenses	$	1,050		$	192
Stock compensation		11,094			479
Research credits		2,486			1,939
Net operating loss carryforwards		22,393			12,838
Total gross deferred tax assets		37,023			15,448
Less valuation allowance		(35,476	)		(15,151	)
Total deferred tax assets		1,547			297
Deferred tax liabilities:
Property and equipment		(1,547	)		(297	)
Total deferred tax liabilities		(1,547	)		(297	)
Net deferred tax asset	$	—		$	—

Valuation allowances are established when necessary to reduce deferred tax assets, including temporary differences and net operating loss carryforwards, to the amount expected to be realized in the future. FASB guidance indicates that forming a conclusion that a valuation allowance is not needed is difficult when there is negative evidence such as cumulative losses in recent years. The Company had cumulative losses from continuing operations in the United States for the three-year period ended December 31, 2021. The Company considered this negative evidence along with all other available positive and negative evidence and concluded that, at December 31, 2021, it is more likely than not that the Company’s U.S. deferred tax assets will not be realized. As of December 31, 2021, a valuation allowance has been recorded on the Company’s deferred tax assets to recognize only the proportion of the deferred tax asset that is more likely than not to be recognized. The Company’s total valuation allowance was $35.5 million at December 31, 2021 and $15.2 million at December 31, 2020. The Company’s valuation allowance increased $20.3 million and $5.3 million during the fiscal years ended December 31, 2021 and 2020, respectively. A reconciliation of the beginning and ending amount of the valuation allowance is as follows:


	December 31,
(In thousands)	2021		2020
Valuation allowance at beginning of year	$	15,151	$	9,865
Change in valuation allowance		20,325		5,286
Valuation allowance at end of year	$	35,476	$	15,151

As of December 31, 2021, the Company had cumulative federal net operating losses of approximately $90.1 million. Of these losses, $5.9 million were generated in 2015 through 2017, prior to the Tax Cuts and Jobs Act enactment, and will begin expiring from 2035 to 2037 if not utilized. The remaining net operating losses have an indefinite carryforward period. As of December 31, 2020, the Company had cumulative federal net operating losses of approximately $51.2 million.

As of December 31, 2021, the Company had a $3.9 million deferred tax asset related to a federal research and development credit carryforward. This credit has been offset by a liability for unrecognized tax benefits of $1.9 million. If not utilized, the credits will expire beginning in 2035 through 2041. As of December 31, 2020, the Company had a $3.0 million deferred tax asset related to a federal research and development credit carryforward.

As of December 31, 2021, the Company had cumulative state net operating losses of approximately $89.1 million. Of the total state net operating losses, approximately $88.8 million is attributable to Utah. Utah law allows unused net operating losses arising in tax years beginning after December 31, 2017 to be carried forward indefinitely. Of the total $88.8 million of Utah net operating losses, $82.5 million are carried forward indefinitely, and the remaining net operating losses will expire beginning in 2035 through 2037. The remaining state net operating loss carryforwards are attributable to various other states with varying expiration periods. As of December 31, 2020, the Company had cumulative state net operating losses of approximately $53.6 million. Of the total state net operating losses, approximately $53.5 million is attributable to Utah.

As of December 31, 2021, the Company had a $1.4 million deferred tax asset related to Utah research and development credits carryforward. This credit has been offset by a liability for unrecognized tax benefits of $0.7 million. If not utilized, the credits will expire beginning in 2029 through 2035. As of December 31, 2020, the Company had a $1.1 million deferred tax asset related to a Utah research and development credit carryforward. This credit has been offset by a liability for unrecognized tax benefits of $0.6 million.

ASC Topic 740-10-05 requires that the impact of a tax position be recognized in the financial statements if that position is more likely than not of being sustained on audit, based on the technical merits of the position. As of December 31, 2021, the Company had a $2.6 million liability for unrecognized tax benefits, all of which is netted against deferred tax assets for related carryforward credits. As of December 31, 2020, the Company had a $2.1 million liability for unrecognized tax benefits, all of which is netted against deferred tax assets for related carryforward credits. The Company expects no material changes to the liability for unrecognized tax benefits in the next 12 months. Interest and penalties associated with uncertain tax positions are recorded as a component of income tax expense. There would be no impact to the Company’s effective rate if the unrecognized tax benefits were recognized. A reconciliation of the beginning and ending amounts of unrecognized benefits is as follows:


	Years ended December 31,
(In thousands)	2021		2020
Unrecognized tax benefits at the beginning of year	$	2,054	$	1,388
Gross increases – current year tax positions	580			666
Unrecognized tax benefits at end of year	$	2,634	$	2,054
Interest and penalties in year-end balance	$	—	$	—

The Company files U.S. and various state tax returns in jurisdictions with various statutes of limitation. As of December 31, 2021, the tax returns for fiscal year 2016 through fiscal year 2020 remain subject to examination. Annual tax provisions include amounts considered necessary to pay assessments that may result from examination of prior

year tax returns; however, the amount ultimately paid upon resolution of issues may differ materially from the amount accrued. As of December 31, 2021, there are no income tax returns currently under audit.

The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information.

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section 50
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-URI http://asc.fasb.org/extlink&oid=121826272&loc=d3e32857-109319

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
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-Name Accounting Standards Codification
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Reference 3: http://www.xbrl.org/2003/role/disclosureRef
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Reference 4: http://www.xbrl.org/2003/role/disclosureRef
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Reference 5: http://www.xbrl.org/2003/role/disclosureRef
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Reference 6: http://www.xbrl.org/2003/role/disclosureRef
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Reference 7: http://www.xbrl.org/2003/role/disclosureRef
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-Name Accounting Standards Codification
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Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
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Reference 9: http://www.xbrl.org/2003/role/disclosureRef
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