Drew Hamer: Thank you.
Kiva Allgood: Thanks so much.
Operator: Thank you. Our next question comes from Guy Hardwick with Credit Suisse. You may proceed.
Guy Hardwick: Hi guys. Hi Kiva, Drew.
Kiva Allgood: Hi Guy.
Drew Hamer: Hey Guy. Thanks.
Kiva Allgood: Thanks for joining us.
Guy Hardwick: No, no problem. So since you have you manufacture XMs in Q4? You’re manufacturing now, I think you said XTs and XMs and Sea Class. So what sort of inventory would you have at the end, say for the sake of argument June 30, because you’re not anticipating any sales in the first half it sounds like. So what kind of €“ what sort of inventories will you have in the mid-year and can you marry that in terms of cash burn or what does the cash burn imply you’ll have in terms of inventories in the middle of the year?
Drew Hamer: Yes, so the cash burn that we’ve talked about is mostly going to be focused here in the beginning of the year. We’re expecting that we should see that decline as we get it further into the year. The company that made some smart moves last year in trying to accelerate products and bringing them to market by bringing in consultants to assist in some of the development work and they will roll off as the year progresses here. So as it relates to cash burn, we expect that we’ll see that kind of sort of trail down a bit as we get further out into the year in the coming quarters. So high in Q1 and starting to ease off in Q2, Q3 and Q4. As it relates to the inventories we’re really doing a little bit of, we’re not over manufacturing here beginning of the year, so we’re just producing enough to meet anticipated demand as well as we need to have some just for getting out and doing €“ just kind of demoing them and getting them around the organization and other further testing on the unit.
So as we progress into the year, we’ll consider advancing on and manufacturing more units, but we should be just producing enough to meet the current year demand.
Guy Hardwick: All right. So in terms of what is ready now to actually go straight for a customer and be used do you still feel you need to have more testing in terms of, although, you have manufactured units for commercialization, do you still feel you’re not actually ready to sell any products to the customer today for use in the field?
Kiva Allgood: No, we’re definitely ready. So again, with any new variant or full solution, so great example is on the Sea Class, right. We’re making some additional changes, but we have the hardware development kit to go onto the VideoRay unit. So again, our focus now is continuing to develop where the spaces and places the product can go. So we’ve got the channel partners, like I’ve mentioned with VideoRay but each solution is a combination of hardware, software, and some form of a platform. So every time we attach to a new platform, we do have to make sure that we have that hardware development kit and can execute effectively. Right now, we’ve got an arm, last time I checked, I think it had 600 hours on it in a cage testing and running and going. So we’re doing all that test validation in both locations in Pittsburgh and Salt Lake City as part of the design process. So once we say it’s commercially ready, it’s commercially ready.
Guy Hardwick: And just lastly for me, if you have a new customer €“ potential customer you meet with today for the first time, and how do you anticipate the sales cycle to look like now that you have the product available?
Kiva Allgood: Yes, great question. So definitely, robotics lead time is that I think that’s one of the key questions we get all the time. How long does it take to do a custom solution? I’d say the advances that we’ve made there and definitely the controls team and the simulation team, we’ve really reduced, as we’ve talked about before via our physics-based model, that development time. We’re not having to iterate as much hardware and software together. We can take a current product, we can test it in simulation and then really understand whether or not we can perform that task. So we’ve greatly reduced the cycle time. The focus for us right now, the aviation use cases, the sub-sea use cases, the construction at height use cases, those are full solutions that we’re testing.
So for us, the development time and the sales cycle time goes way down because we know what the €“ how the product has to perform in field, every time we get a new one, we have to go to that process again. But for where we’re targeted and the SAM and TAM that we’re really focused on right now in those segments, the product that we have today can fit and meet the needs without redeveloping it.
Guy Hardwick: Thank you.
Operator: Thank you. And this concludes the Q&A session. I’d now like to turn the call back over to Kiva Allgood for any closing remarks.
Kiva Allgood: Yes, great questions and thank you for joining us today. After hearing from us, I hope you understand our optimism and enthusiasm for the future of Sarcos. We are enabling the workforce of the future by combining human intelligence and judgment with the strengths, endurance and precision of machines to create dexterous robots that operate in unstructured real world situations. I would also like to thank the entire Sarcos team for their commitment to our mission and our values. It’s exciting work and Drew and I look forward to telling you more about us in the future. Thank you for joining us today. Have a great evening.
Operator: Thank you. This concludes today’s conference call. Thank you for participating. You may now disconnect.
