Most types of armor, shields, and weapons in Starfinder come in a variety of grades. Each grade represents an improved version of that piece of equipment and should be sought after once your character reaches the appropriate level. While higher-level versions of equipment are available on the open market, many adventurers prefer going through the effort of upgrading their existing gear rather than buying new.
Equipment typically comes in seven grades: commercial, tactical, advanced, superior, elite, ultimate, and paragon. While most armor, shields, and weapons can exist in any grade from commercial to paragon, some equipment doesn't exist at certain grades and must be initially purchased or crafted at a higher grade. Equipment other than armor, weapons, and shields only exist at grades specifically listed in the item and cannot be improved to a higher grade if it's not listed.
Armor, shields, and weapons (pages 244, 250, and 253 respectively) are typically listed using their lowest available grade, usually commercial. Each grade beyond the first provides the equipment with additional statistics as given in the tables listed for the appropriate item. Equipment listed with multiple grades in their entry do not use these charts and instead use the statistics listed for each grade in their description.
Armor, shields and weapons gain more upgrade slots as they improve. Higher grades of armor add more AC and gains the resilient trait, improving the saving throws of their wielder by the listed value. Higher grades of weapons have improved damage dice and gain the tracking trait, improving their attack rolls by the listed value. Higher grades of shields have increased Hardness, Hit Points, and BT.
A character who is trained or better in
Crafting can improve an item using the original item and
UPBs as raw materials using the same process as the
Craft activity, except as noted here. The original item provides raw materials equal to its price. The DC of the Crafting check to improve an item is determined by the item level of the finished product. You do not need the formula to improve an item, as the instructions can be found readily available on any infosphere and are usually provided as a complimentary file when you purchase the equipment, but Crafting without a formula means you will have to provide raw materials equal to the item's price. It only takes 1 day to improve an item by spending the remaining portion of its Price in materials.
If you have the formula for the item you can improve an item by supplying UPB equal to half the difference between the two items, but you must work multiple days to reduce the materials needed to complete the item as usual with the Craft activity. You cannot improve an item to a higher-grade version if you're not capable of Crafting items of that level.