Palladyne AI Corp. 10-K

Item 9A. Controls and Procedures. Evaluation of Disclosure Controls and Procedures Disclosure controls are procedures that are designed with the objective of ensuring that information required to be disclosed in our reports filed under the Exchange Act, such as this Report, is recorded, processed, summarized and reported within the time period specified in the SEC rules and forms. Disclosure controls and procedures are also designed with the objective of ensuring that such information is accumulated and communicated to our management, including the chief executive officer and chief financial officer, as appropriate, to allow timely decisions regarding required disclosure. Our management evaluated, with the participation of our Chief Executive Officer and Chief Financial Officer (our “Certifying Officers”), the effectiveness of our disclosure controls and procedures as of the end of the fiscal quarter ended December 31, 2022, pursuant to Rule 13a-15(b) under the Exchange Act. Based upon that evaluation, our Certifying Officers concluded that our disclosure controls and procedures were effective as of December 31, 2022. We do not expect that our disclosure controls and procedures will prevent all errors and all instances of fraud. Disclosure controls and procedures, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the disclosure controls and procedures are met. Further, the design of disclosure controls and procedures must reflect the fact that there are resource constraints, and the benefits must be considered relative to their costs. Because of the inherent limitations in all disclosure controls and procedures, no evaluation of disclosure controls and procedures can provide absolute assurance that we have detected all our control deficiencies and instances of fraud, if any. The design of disclosure controls and procedures also is based partly on certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Management’s Report on Internal Control Over Financial Reporting Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rules 13a-15(f) and 15d-15(f). Under the supervision of our Certifying Officers, management conducted an evaluation of the effectiveness of our internal control over financial reporting as of December 31, 2022 based on the framework set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in “Internal Control-Integrated Framework.” Based on that evaluation, management has concluded that our internal control over financial reporting was effective as of December 31, 2022. We acquired RE2, Inc., (“RE2”) on April 25, 2022. Management has excluded RE2 from its evaluation of the effectiveness of internal control over financial reporting as of December 31, 2022. The total assets and total revenue of RE2 represent approximately 15.2% and 74.1%, respectively, of the related consolidated financial statements amounts as of and for the fiscal year ended December 31, 2022. This Annual Report on Form 10-K does not include an attestation report of our independent registered public accounting firm as permitted due to our status as an emerging growth company under the JOBS Act. Changes in Internal Control over Financial Reporting There was no change in our internal control over financial reporting that occurred during the fiscal quarter ended December 31, 2022 covered by this Report that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting. Item 9B. Other Information. None. Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections. Not applicable. 103 PART III ITEM 10. DIRECTORS, EXECTIVE OFFICERS AND CORPORATE GOVERNANCE Executive Officers and Directors The information required by this item with respect to our executive officers is set forth in Part I of this Annual Report on Form 10-K under the caption “Information about our Executive Officers,” and information relating to the availability of our code of conduct for executive officers and directors is set forth below. The other information required by this item is incorporated by reference to our definitive proxy statement to be filed in connection with the 2023 Annual Meeting of Stockholders no later than 120 days after December 31, 2022. Code of Ethics We have adopted a Code of Business Conduct and Ethics applicable to our directors, executive officers and employees. The Code of Business Conduct and Ethics codifies the business and ethical principles that govern all aspects of our business. The full text of our code of business conduct and ethics is posted on the investor relations page on our website at https://investor.sarcos.com/governance/documents-charters . In addition, a copy of the Code of Ethics will be provided without charge upon request to us in writing at 650 South 500 West, Salt Lake City, Utah 84101 or by telephone at 888-927-7296. Any amendments to or waivers of the Code of Conduct will be disclosed on our website. ITEM 11. EXECUTIVE COMPENSATION The information required by this item is incorporated by reference to our definitive proxy statement to be filed in connection with the 2023 Annual Meeting of Stockholders no later than 120 days after December 31, 2022. ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS The information required by this item is incorporated by reference to our definitive proxy statement to be filed in connection with the 2023 Annual Meeting of Stockholders no later than 120 days after December 31, 2022. 104 ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS The information required by this item is incorporated by reference to our definitive proxy statement to be filed in connection with the 2023 Annual Meeting of Stockholders no later than 120 days after December 31, 2022. ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES The information required by this item is incorporated by reference to our definitive proxy statement to be filed in connection with the 2023 Annual Meeting of Stockholders no later than 120 days after December 31, 2022. 105 PART IV Item 15. Exhibits, Financial Statement Schedules. a) (1) Financial Statements See Index to consolidated financial statements in Part II, Item 8 of this Annual Report on Form 10-K. (2) Financial Statement Schedule All financial statement schedules have been omitted because they are either not applicable or the required information is shown in the consolidated financial statements or notes thereto. (3) Exhibits See the Exhibit Index which precedes the signature page of this Annual Report on Form 10-K. b) Exhibits See Item 15(a)(3) above. c) Financial Statement Schedules See Item 15(a)(2) above. In reviewing the agreements included as exhibits to this Annual Report on Form 10-K, please remember that they are included to provide you with information regarding their terms and are not intended to provide any other factual or disclosure information about the Company or the other parties to the agreement. The agreements may contain representations and warranties that the parties made to each other as of specific dates. The assertions embodied in those representations and warranties were made solely for purposes of the applicable agreement and may be subject to important qualifications and limitations agreed to by the parties in connection with negotiating the terms of such agreement. In addition, such representations and warranties: (i) may not be accurate or complete as of any specified date; (ii) are modified and qualified in important part by the underlying disclosure schedules; (iii) may be subject to a contractual standard of materiality different from those generally applicable to investors; or (iv) may have been used for the purpose of allocating risk among the parties to the applicable agreement, rather than establishing matters as facts. Moreover, information concerning the subject matter of the representations and warranties may change after the date of the applicable agreement, which subsequent information may or may not be fully reflected in Company’s public disclosures. For the foregoing reasons, the representations and warranties should not be relied upon as statements of factual information. Exhibit Number Description 2.1† Agreement and Plan of Merger, dated as of April 5, 2021, by and among the Company, Rotor Merger Sub Corp. and Old Sarcos (incorporated by reference to the Company’s Current Report on Form 8-K filed with the SEC on April 6, 2021). 2.2 Amendment No. 1 to Merger Agreement, dated as of August 28, 2021, by and among the Company, Rotor Merger Sub Corp. and Old Sarcos (incorporated by reference to the Company’s Current Report on Form 8-K filed with the SEC on August 30, 2021). 2.3† Merger Agreement, dated March 27, 2022, by and among the Company, Spiral Merger Sub I, Inc., Spiral Merger Sub II, LLC, RE2, Inc. and Draper Triangle Ventures III, LP, solely in its capacity as the agent for and on behalf of the shareholders of RE2 (incorporated by reference to the Company’s Current Report on Form 8-K filed with the SEC on March 29, 2022). 3.1 Second Amended and Restated Certificate of Incorporation of Sarcos Technology and Robotics Corporation (incorporated by reference to the Company’s Current Report on Form 8-K filed on September 30, 2021). 3.2 Amended and Restated Bylaws of Sarcos Technology and Robotics Corporation (incorporated by reference to the Company’s Current Report on Form 8-K filed on November 8, 2022). 4.1 Warrant Agreement between Continental Transfer & Trust Company and the Registrant (incorporated by reference to the Company’s Form S-1/A filed with the SEC on December 30, 2020). 4.2 Specimen Warrant Certificate (incorporated by reference to the Company’s Form S-1/A filed with the SEC on December 30, 2020). 4.3 Specimen Stock Certificate (incorporated by reference to the Company’s Current Report on Form 8-K filed on September 30, 2021). 106 4.4 Registration Rights Agreement, dated March 27, 2022, by and among the Company and Draper Triangle Ventures III, LP, in its capacity as the agent for and on behalf of the shareholders of RE2 (incorporated by reference to the Company’s Current Report on Form 8-K filed on March 29, 2022). 4.5* Description of Company’s Securities. 10.1 Letter Agreement between Rotor, Rotor Sponsor LLC, and Riverview LLC (incorporated by reference to the Company’s Form 8-K filed January 20, 2021). 10.2 Form of Letter Agreement between the Company, Rotor Sponsor LLC and Black Rock Funds (incorporated by reference to the Company’s Form 8-K filed on January 20, 2021). 10.3 Form of Subscription Agreement (incorporated by reference to the Company’s Current Report on Form 8-K filed with the SEC on April 6, 2021). 10.4 Form of Lock-up Agreement, by and among the Company, Sarcos, and Sarcos Holders (incorporated by reference to the Company’s Current Report on Form 8-K filed with the SEC on April 6, 2021). 10.5 Form of Lock-up Agreement, by and among the Company, Sarcos, and certain stockholders of Sarcos (incorporated by reference to the Company’s Current Report on Form 8-K filed with the SEC on April 6, 2021). 10.6 Form of Lock-up Agreement with RE2 employee securityholders (incorporated by reference to the Company’s Current Report on Form 8-K filed on March 29, 2022). 10.7 Form of Waiver Agreement (incorporated by reference to the Company’s Current Report on Form 8-K filed with the SEC on April 6, 2021). 10.8 Form of Registration Rights Agreement, by and among the Company, Rotor Sponsor LLC, and certain stockholders of Sarcos (incorporated by reference to the Company’s Current Report on Form 8-K filed on April 6, 2021). 10.9 Registration Rights Agreement, dated January 14, 2021, by and among the Company, Rotor Sponsor LLC, and certain stockholders of the Company (incorporated by reference to the Company’s Current Report on Form 8-K filed on January 20, 2021). 10.10+ Sarcos Technology and Robotics Corporation 2021 Equity Incentive Plan, forms of agreement (incorporated by reference to the Company’s Current Report on Form 8-K filed on September 30, 2021). 10.11+ Sarcos Technology and Robotics Corporation 2021 Employee Stock Purchase Plan (incorporated by reference to the Company’s Current Report on Form 8-K filed on September 30, 2021). 10.12+ Sarcos Technology and Robotics Corporation Outside Director Compensation Policy (incorporated by reference to the Company’s registration statement on Form S-1 filed with the SEC on October 15, 2021). 10.13+ Employment Agreement by and between the Company and Kristi Martindale, effective as of September 24, 2021 (incorporated by reference to the Company’s Current Report on Form 8-K filed on September 30, 2021). 10.14+ Employment Agreement by and between the Company and Kiva Allgood, effective as of December 13, 2021 (incorporated by reference to the Company’s Current Report on Form 8-K filed on December 9, 2021). 10.15+ Promotion Agreement, dated February 24, 2022, between Denis Garagic and the Company, effective as of January 29, 2022 (incorporated by reference to the Company's Quarterly Report on Form 10-Q filed on May 11, 2022). 10.16+ Employment Agreement, dated March 27, 2022, between Jorgen Pedersen, Sarcos Corp. and the Company (incorporated by reference to the Company’s Current Report on Form 8-K filed on April 27, 2022.) 10.17+ Noncompetition and Nonsolicitation Agreement, dated March 27, 2022, between Jorgen Pedersen and the Company (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed on April 27, 2022). 10.18+ Redemption Rights Agreement, dated April 25, 2022, between Jorgen Pedersen and the Company (incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K filed on April 27, 2022). 10.19+ Employment Agreement, dated October 9, 2022, among Andrew Hamer, Sarcos Corp., and the Company (incorporated by reference to the Company’s Current Report on Form 8-K filed on October 11, 2022). 10.20+ Form of Indemnification Agreement (incorporated by reference to the Company’s Current Report on Form 8-K filed on September 30, 2021). 10.21+ Sarcos 2015 Equity Incentive Plan (incorporated by reference to the Company’s Current Report on Form 8-K filed on September 30, 2021). 16.1 Letter Regarding Change in Certifying Accountant (incorporated by reference to the Company’s Current Report on Form 8-K filed on August 12, 2021) 21.1* List of Subsidiaries. 107 23.1* Consent of Independent Registered Public Accounting Firm 31.1* Certification of Principal Executive Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. 31.2* Certification of Principal Financial Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. 32.1** Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. 32.2** Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. 101.INS Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because XBRL tags are embedded within the Inline XBRL document. 101.SCH Inline XBRL Taxonomy Extension Schema Document 101.CAL Inline XBRL Taxonomy Extension Calculation Linkbase Document 101.DEF Inline XBRL Taxonomy Extension Definition Linkbase Document 101.LAB Inline XBRL Taxonomy Extension Label Linkbase Document 101.PRE Inline XBRL Taxonomy Extension Presentation Linkbase Document 104 Cover Page Interactive Data File (embedded within the Inline XBRL document) * Filed herewith. ** Furnished herewith + Indicates management contract or compensatory plan. † Schedules and exhibits to this Exhibit omitted pursuant to Regulation S-K Item 601(b)(2). The Registrant agrees to furnish supplementally a copy of any omitted schedule or exhibit to the SEC upon request. 108 Item 16. Form 10-K Summary None. 109 SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized . Sarcos Technology and Robotics Corporation Date: March 16, 2023 By: /s/ Kiva A. Allgood Kiva A. Allgood President and Chief Executive Officer ( Principal Executive Officer ) Date: March 16, 2023 By: /s/ Andrew Hamer Andrew Hamer Chief Financial Officer ( Principal Financial and Accounting Officer ) 110 POWER OF ATTORNEY KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Kiva A. Allgood and Andrew Hamer, and each one of them, as his or her true and lawful attorneys-in-fact and agents, with full power of substitution and resubstitution, for him or her and in their name, place and stead, in any and all capacities, to sign any amendments to this Annual Report on Form 10-K and to file the same, with Exhibits thereto and other documents in connection therewith with the Securities and Exchange Commission, hereby ratifying and confirming all that each of said attorneys-in-fact, or substitute or substitutes may do or cause to be done by virtue hereof. Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, this Annual Report on Form 10-K has been signed below by the following persons on behalf of the Registrant in the capacities and on the dates indicated. Signature Title Date /s/ Kiva A. Allgood President, Chief Executive Officer and Director March 16, 2023 Kiva A. Allgood ( Principal Executive Officer ) /s/ Andrew Hamer Chief Financial Officer March 16, 2023 Andrew Hamer ( Principal Financial and Accounting Officer ) /s/ Dennis Weibling Chairman of the Board March 16, 2023 Dennis Weibling /s/ Priya Balasubramaniam Director March 16, 2023 Priya Balasubramaniam /s/ Brian D. Finn Director March 16, 2023 Brian D. Finn /s/ Peter Klein Director March 16, 2023 Peter Klein /s/ Matthew Shigenobu Muta Director March 16, 2023 Matthew Shigenobu Muta /s/ Eric T. Olson Director March 16, 2023 Eric T. Olson /s/ Laura J. Peterson Director March 16, 2023 Laura J. Peterson /s/ Benjamin G. Wolff Director March 16, 2023 Benjamin G. Wolff 111