UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
For the quarterly period ended
or
Commission file number:
(Exact name of registrant as specified in its charter)
| (State or Other Jurisdiction of | (I.R.S. Employer | |
| Incorporation or Organization) | Identification No.) |
(Address of Principal Executive Offices)
(Registrant’s telephone number, including area code)
(Former name, former address and former fiscal year, if changed since last report)
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||
Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports),
and (2) has been subject to such filing requirements for the past 90 days.
Indicate by check mark whether the registrant
has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the
preceding 12 months (or for such shorter period that the Registrant was required to submit such files.) Yes ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “accelerated filer”, “large accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| Large Accelerated Filer | ☐ | Accelerated Filer | ☐ |
| ☒ | Smaller reporting company | ||
| Emerging growth company | |||
If an emerging growth company, indicate by check
mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting
standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate by check mark whether the registrant
is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No
There were
TABLE OF CONTENTS
i
EXPLANATORY NOTE
On April 14, 2023, a wholly-owned subsidiary of the Company merged with CardioVentures, Inc., a Delaware corporation, which is the indirect parent of Sudhir Srivastava Innovations Pvt. Ltd., an Indian private limited company engaged in the business of developing innovative surgical robotic technologies. As a result of such transaction, a “change in control” of the Company took place. In addition, among other matters, the Company changed its name to “SS Innovations International, Inc.” and implemented a one for ten reverse stock split. The financial statements, financial information and share and per share information contained in this report only reflect the operations of the Company prior to the acquisition and do not give pro forma effect to the reverse stock split.
When used in this report, unless otherwise indicated, the terms “SSII,” “the Company,” “we,” “us” and “our” refer to SS Innovations International, Inc. f/k/a Avra Medical Robotics, Inc.
ii
PART I – FINANCIAL INFORMATION
Item 1. Financial Statements.
SS INNOVATIONS INTERNATIONAL, INC. F/K/A AVRA MEDICAL ROBOTICS, INC.
CONDENSED BALANCE SHEETS
(Unaudited)
| March 31, 2023 | December 31, 2022 | |||||||
| ASSETS | ||||||||
| CURRENT ASSETS: | ||||||||
| Cash and cash equivalents | $ | $ | ||||||
| Other prepaid expenses and deposit | $ | $ | ||||||
| Notes Receivables – Acquisition | $ | $ | ||||||
| Total Current Assets | $ | $ | ||||||
| EQUIPMENT: | ||||||||
| Equipment | $ | $ | ||||||
| Accumulated depreciation | $ | ( | ) | $ | ( | ) | ||
| Total Equipment, net | $ | $ | ||||||
| TOTAL ASSETS | $ | $ | ||||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
| CURRENT LIABILITIES: | ||||||||
| Accrued expenses | $ | $ | ||||||
| Accrued interest | $ | $ | ||||||
| Promissory note | $ | $ | ||||||
| Total Current Liabilities | $ | $ | ||||||
| Commitments and contingencies (see Note 8) | ||||||||
| STOCKHOLDERS’ EQUITY: | ||||||||
| $ | $ | |||||||
| Additional paid in capital | $ | $ | ||||||
| Accumulated deficit | $ | ( | ) | $ | ( | ) | ||
| Total Stockholders’ Equity | $ | $ | ||||||
| TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | $ | $ | ||||||
See accompanying notes to unaudited Condensed Financial Statements
1
SS INNOVATIONS INTERNATIONAL, INC. F/K/A AVRA MEDICAL ROBOTICS, INC.
CONDENSED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED MARCH 31,
(Unaudited)
| 2023 | 2022 | |||||||
| Revenues | $ | $ | ||||||
| OPERATING EXPENSES | ||||||||
| Research and Development | ||||||||
| Compensation Expense | ||||||||
| General and Administrative | ||||||||
| Total Operating Expenses | ||||||||
| OTHER INCOME AND (EXPENSES) | ||||||||
| Interest Earned | ||||||||
| Origination Fees | ||||||||
| Rewards | - | |||||||
| Interest Expense | ( | ) | ||||||
| Total Other Income and (Expenses), net | ||||||||
| Loss before Income Taxes | ( | ) | ( | ) | ||||
| Provision for Income Taxes | ||||||||
| NET LOSS | $ | ( | ) | $ | ( | ) | ||
| $ | ( | ) | $ | ( | ) | |||
See accompanying notes to unaudited Condensed Financial Statements.
2
SS INNOVATIONS INTERNATIONAL, INC. F/K/A AVRA MEDICAL ROBOTICS, INC.
CONDENSED STATEMENT OF STOCKHOLDERS’ (DEFICIT)
FOR THE THREE MONTHS ENDED MARCH 31, 2023, AND 2022
(Unaudited)
| Common Stock | Common Stock to be Issued | Additional Paid-In | Treasury | Accumulated | Total Stockholders’ | |||||||||||||||||||||||||||
| Number | Amount | Number | Amount | Capital | Stock | Deficit | Equity | |||||||||||||||||||||||||
| BALANCE AT DECEMBER 31, 2022 | $ | - | $ | $ | $ | $ | ( | ) | $ | |||||||||||||||||||||||
| Stock based compensation expense | - | $ | - | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
| Conversion of debt to equity | - | $ | - | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
| Stock issued for services | - | $ | - | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
| Common stock issuable for services | - | $ | - | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
| Common stock issued | $ | - | $ | $ | $ | $ | $ | |||||||||||||||||||||||||
| Net loss | - | $ | - | $ | $ | $ | $ | ( | ) | $ | ( | ) | ||||||||||||||||||||
| BALANCE AT MARCH 31, 2023 | $ | - | $ | $ | $ | $ | ( | ) | $ | |||||||||||||||||||||||
| BALANCE AT DECEMBER 31, 2021 | $ | $ | $ | $ | $ | ( | ) | $ | ||||||||||||||||||||||||
| Stock based compensation expense | - | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||
| Conversion of debt to equity | - | $ | - | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
| Stock issued for services | - | $ | - | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
| Common stock issued | - | $ | - | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
| Treasury stock | - | $ | - | $ | $ | $ | ( | ) | $ | $ | - | |||||||||||||||||||||
| Common stock issuable for services | - | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||
| Net loss | - | $ | - | $ | $ | $ | $ | ( | ) | $ | ( | ) | ||||||||||||||||||||
| BALANCE AT MARCH 31, 2022 | $ | $ | $ | $ | ( | ) | $ | ( | ) | $ | ||||||||||||||||||||||
See accompanying notes to unaudited Condensed Financial Statements.
3
SS INNOVATIONS INTERNATIONAL, INC. F/K/A AVRA MEDICAL ROBOTICS, INC.
CONDENSED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED MARCH 31,
(Unaudited)
| 2023 | 2022 | |||||||
| CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||
| Net Loss | $ | ( | ) | $ | ( | ) | ||
| Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
| Depreciation and amortization expense | ||||||||
| Stock compensation expense | ||||||||
| Changes in operating assets and liabilities: | - | - | ||||||
| Accounts payable and accrued expenses | ( | ) | ||||||
| Net Cash Used in Operating Activities | ( | ) | ( | ) | ||||
| INVESTING ACTIVITIES: | ||||||||
| Notes Receivables - Acquisition | ( | ) | ||||||
| Equipment acquisition | ||||||||
| Net Cash Used in Investing Activities | ( | ) | ||||||
| FINANCING ACTIVITIES: | ||||||||
| Proceeds from securities offering | ||||||||
| Repayment of warrants | ( | ) | ||||||
| Proceeds from | ||||||||
| Net Cash Provided by Financing Activities | ||||||||
| INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | ( | ) | ( | ) | ||||
| CASH AND CASH EQUIVALENTS - BEGINNING OF PERIOD | ||||||||
| CASH AND CASH EQUIVALENTS - END OF PERIOD | $ | $ | ||||||
| Supplemental information of non-cash investing and financing activities: | ||||||||
| Non-cash investing activities: | ||||||||
| Cash paid for interest | $ | $ | ||||||
| Cash received for interest | $ | $ | ||||||
| Non-cash financing activities: | ||||||||
| Related party note payable converted into common stock | $ | $ | ||||||
| Promissory note converted into common stock | $ | $ | ||||||
| Reduction of account payable and equipment | $ | $ | ||||||
See accompanying notes to unaudited Condensed Financial Statements
4
SS INNOVATIONS INTERNATIONAL, INC. F/K/A AVRA MEDICAL ROBOTICS, INC.
NOTES TO FINANCIAL STATEMENTS
NOTE 1 – COMPANY AND BASIS OF PRESENTATION
Organization
SS Innovations International, Inc. (the “Company” or “SSII”) was incorporated as AVRA Surgical Microsystems, Inc. in the State of Florida on February 4, 2015. Effective November 5, 2015, the Company’s corporate name was changed to Avra Medical Robotics, Inc. The Company was established to develop advanced medical surgical devices. The Company is structured to invest in four principal areas – surgical robotic systems, surgical tools, implantable devices and surgical robotic training.
On April 14, 2023, a wholly-owned subsidiary of the Company merged with CardioVentures, Inc., a Delaware corporation, which is the indirect parent of Sudhir Srivastava Innovations Pvt. Ltd., an Indian private limited company engaged in the business of developing innovative surgical robotic technologies. As a result of such transaction, a “change in control” of the Company took place. In addition, among other matters, the Company changed its name to “SS Innovations International, Inc.” and implemented a one for ten reverse stock split. The financial statements, financial information and share and per share information contained in this report only reflect the operations of the Company prior to the acquisition and do not give pro forma effect to the reverse stock split.
The significant accounting policies of SSII were described in Note 1 to the audited financial statements included in the Company’s 2022 Annual Report on Form 10-K . There have been no significant changes in the Company’s significant accounting policies for the quarterly period ended March 31, 2023.
Basis of Presentation
The accompanying unaudited condensed financial statements of the Company have been prepared in conformity with accounting principles generally accepted in the United States (“GAAP”) for interim financial information and in accordance with the rules and regulations of the Securities and Exchange Commission. Therefore, they do not include all information and footnotes normally included in annual consolidated financial statements and should be read in conjunction with the consolidated financial statements and notes thereto included in the 2022 Form 10-K for the year ended December 31, 2022. In the opinion of the Company’s management, the accompanying unaudited condensed financial statements contain all the adjustments necessary (consisting only of normal recurring accruals) to present the financial position of the Company as of March 31, 2023, and the results of operations and cash flows for the periods presented. The results of operations for the quarterly period ended March 31, 2023, are not necessarily indicative of the operating results for the full fiscal year or any future period.
Going Concern
The accompanying financial statements have been
prepared assuming the continuation of the Company as a going concern. At March 31, 2023, the Company’s stockholders’ equity
was $
5
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Estimates
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities and expenses. The Company regularly evaluates estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates made by management.
Cash and Cash Equivalents
The Company considers all cash on hand, cash accounts not subject to withdrawal restrictions or penalties, and all highly liquid debt instruments purchased with a maturity of three months or less to be cash and cash equivalents.
Concentration of Credit Risk
Financial instruments that potentially subject
the Company to concentrations of credit risk consist principally of cash. The Company maintains its principal cash balance in a financial
institution. These balances are insured by the Federal Deposit Insurance Corporation (“FDIC”) up to $
Equipment
Equipment is recorded at cost and depreciated using the straight-line method at rates determined to estimate the useful lives of the assets. The annual rates used in calculating depreciation is as follows:
Equipment -
Long-lived Assets
In accordance with ASC 360, “Property Plant and Equipment”, the Company tests long-lived assets or asset groups for recoverability when events or changes in circumstances indicate that their carrying amount may not be recoverable. Circumstances which could trigger a review include, but are not limited to : significant decreases in the market price of the asset; significant adverse changes in the business climate or legal factors; accumulation of costs significantly in excess of the amount originally expected for the acquisition or construction of the asset; current cash flow or operating losses combined with a history of losses or a forecast of continuing losses associated with the use of the asset and current expectation that the asset will more than likely not be sold or disposed significantly before the end of its estimated useful life. Recoverability is assessed based on the carrying amount of the asset and its fair value which is generally determined based on the sum of the discounted cash flows expected to result from the use and the eventual disposal of the asset, as well as specific appraisal in certain circumstances. An impairment loss is recognized when the carrying amount is not recoverable and exceeds fair value.
Stock Compensation Expense
The Company accounts for equity instruments issued in exchange for the receipt of goods or services from other than employees in accordance with Accounting Standards Codification (“ASC”) Topic 505, “Equity.” Costs are measured at the estimated fair market value of the consideration received or the estimated fair value of the equity instruments issued, whichever is more reliably measurable. The value of equity instruments issued for consideration other than employee services is determined on the earlier of a performance commitment or completion of performance by the provider of goods or services as defined by ASC Topic 505.
6
Income Taxes
The Company accounts for income taxes pursuant to ASC Topic 740 “Income Taxes.” Under ASC Topic 740, deferred tax assets and liabilities are determined based on temporary differences between the bases of certain assets and liabilities for income tax and financial reporting purposes. The deferred tax assets and liabilities are classified according to the financial statement classification of the assets and liabilities generating the differences. A valuation allowance is recorded when it is more likely than not that some or all of the deferred tax assets will not be realized.
The Company applies the provisions of ASC Topic 740-10-05 “Accounting for Uncertainty in Income Taxes.” The ASC clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements. The ASC prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. The ASC provides guidance on de-recognition, classification, interest and penalties, accounting in interim periods, disclosure and transition.
Basic and Diluted Loss per Share
In accordance with ASC Topic 260 “Earnings Per Share,” basic loss per common share is computed by dividing net loss available to common stockholders by the weighted average number of common shares outstanding during the period. Diluted loss per common share gives effect to dilutive convertible securities, options, warrants and other potential common stock outstanding during the period, only in periods in which such effect is dilutive. The Company has stock options, warrants, and convertible promissory notes that may be converted to outstanding potential common shares.
Research and Development Costs
In accordance with ASC Topic 730 “Research and Development”, with the exception of intellectual property that is purchased from another enterprise and have alternative future use, research and development expenses are charged to operations as incurred.
Fair Value of Financial Instruments
Our financial instruments consist principally of accounts receivable, amounts due to related parties and promissory notes payable. The carrying amounts of cash and cash equivalents and promissory notes approximate fair value because of the short-term nature of these items.
Recent Accounting Pronouncements
Compensation—Stock Compensation
In May 2017, the FASB issued ASU 2017-09, “Compensation—Stock Compensation (Topic 718): Scope of Modification Accounting,” that provides guidance about which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting. The new guidance became effective for the Company on January 1, 2018 and was applied on a prospective basis, as required. The adoption of this standard did not have an impact on the financial statements or the related disclosures.
7
Leases
In February 2016, the FASB issued ASU 2016-02, “Leases (Topic 842)” (“ASU 2016-02”). The FASB issued ASU 2016-02 to increase transparency and comparability among organizations recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. Under ASU 2016-02, lessors will account for leases using an approach that is substantially equivalent to existing GAAP for sales-type leases, direct financing leases and operating leases. Unlike current guidance, however, a lease with collectability uncertainties may be classified as a sales-type lease. If collectability of lease payments, plus any amount necessary to satisfy a lessee residual value guarantee, is not probable, lease payments received will be recognized as a deposit liability and the underlying assets will not be derecognized until collectability of the remaining amounts becomes probable. ASU 2016-02 is effective for interim and annual periods beginning after December 15, 2018, with early adoption permitted, and must be adopted using a modified retrospective transition. The Company did not adopt the standard effective January 1, 2019, utilizing the lessor practical expedient. On November 15, 2019, the FASB issued ASU 2019-10 which amended the effective dates for ASC 842, to give implementation relief. Under the FASB’s new framework, two “buckets” were defined, bucket 1 includes public companies that are SEC filers but excludes “Small Reporting Companies” (SRC’s). Bucket 2 includes all other entities, including SRC’s. Bucket 2 entities have to apply ASC 842 for fiscal years beginning after December 15, 2020, and interim periods within fiscal years beginning after December 15, 2021.
NOTE 5 – WARRANTS
During the years ended 2021 and 2022,
NOTE 6 – MERGER
On April 14, 2023 (“Closing”), the Company consummated the acquisition of CardioVentures, Inc., a Delaware corporation (“CardioVentures”), pursuant to a Merger Agreement dated November 7, 2022 (the “Merger Agreement”), by and among the Company, a wholly-owned subsidiary of the Company (“Merger Sub”), CardioVentures and Dr. Sudhir Srivastava, who, through his holding company, owned a controlling interest in CardioVentures.
CardioVentures, through a subsidiary, owns a controlling interest in Sudhir Srivastava Innovations Pvt. Ltd., an Indian private limited company (“SSI-India”). Based in Haryana, India, SSI-India is engaged in the business of developing innovative surgical robotic technologies with a vision to make the benefits of robotic surgery affordable and accessible to a larger part of the global population. SSII’s product range includes its proprietary “SSI Mantra” surgical robotic system and a wide range of surgical instruments capable of supporting a variety of cardiac and other surgical procedures. The Company now intends to focus on the business of SSI-India and has plans to globally expand the presence of its technologically advanced, user-friendly, and cost-effective surgical robotic solutions.
Pursuant to the Merger Agreement, at Closing,
Merger Sub merged with and into CardioVentures (the “Merger”). In the Merger, holders of the outstanding shares of
common stock of CardioVentures (including certain parties who provided interim convertible financing during the pendency of the Merger
Agreement, were issued
Pursuant to the Merger Agreement, at Closing, the holders of CardioVentures common stock also received shares of newly designated Series A Non-Convertible Preferred Stock (the “Series A Preferred Shares”).
The Series A Preferred Shares vote together with
shares of SSII common stock as a single class on all matters presented to a vote of shareholders, except as required by law, and entitle
the holders of the Series A Preferred Shares to exercise
8
In addition to the foregoing, following Closing,
The securities issued in connection with the Merger and to these two investors were issued pursuant to the exemptions from registration of Section 4(a)(2) of the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.
As a result of the foregoing, a “Change in Control” of the Company occurred, with Dr. Sudhir Srivastava becoming the Company’s principal and controlling shareholder.
Concurrent with consummation of the Merger, Dr.
Sudhir Srivastava, through his holding company, assigned patents, trademarks and other intellectual property used in the development,
commercialization, manufacturing and sale of its medical and surgical robotic systems and products (the “SSII Intellectual Property”)
to a wholly-owned subsidiary of SSII. In consideration thereof, Dr. Srivastava’s holding company will receive a quarterly royalty
of three percent (
At Closing, the Company’s articles of incorporation were amended to:
| 1. | change the Company’s corporate name to “SS Innovations International, Inc.;” |
| 2. | effect the |
| 3. | authorize the designation of the Series A Preferred Shares; and |
| 4. | increase its authorized common stock to |
NOTE 7 – INCOME TAXES
The Company’s deferred tax assets at March
31, 2023 consist of net operating loss carry forwards of $
Due to the uncertainty of their realization, no income tax benefits have been recorded by the Company for this loss carry forward as valuation allowances have been established for any such benefits. The increase in the valuation allowance was the result of increases in the net operating losses discussed above. Therefore, the Company’s provision for income taxes is $-0- for the three months ended March 31, 2023, and 2022.
At March 31, 2023 and December 31, 2022, the Company had no material unrecognized tax benefits and no adjustments to liabilities or operations were required. The Company does not expect that its unrecognized tax benefits will materially increase within the next twelve months. The Company recognizes interest and penalties related to uncertain tax positions in general and administrative expense. At March 31, 2023 and December 31, 2022, the Company has not recorded any provisions for accrued interest and penalties related to uncertain tax positions.
The Company files U.S. federal and state income tax returns in jurisdictions with varying statutes of limitations.
9
NOTE 8 – STOCKHOLDERS’ EQUITY
The Company is authorized to issue up to
On Jan 27, 2023, the Company issued
On Feb 1, 2023, the Company issued
On Jan 27, 2023, the Company issued shares to one accredited investor as a result of their cashless exercise of two options.
During the first quarter of 2023 the Company issued
a total of
On Feb 24, 2023, the Company issued a total of
On March 4, 2023, the Company issued
NOTE 9 – 2016 INCENTIVE STOCK PLAN
On August 1, 2016, the Company adopted the 2016
Incentive Stock Plan (the “Plan”). The Plan provides for the granting of options to employees, directors, consultants and
advisors to purchase up to
10
Stock options are accounted for in accordance
with FASB ASC Topic 718-10-55-136., Compensation –Stock Compensation, with option expense amortized over the vesting period
based on the Black-Scholes option-pricing model fair value on the grant date, which includes a number of estimates that affect the amount
of expense.
Expected volatilities are based on the average
volatilities of six similar companies; fair market values are calculated using the implied share values of recent company financings or
OTC closing prices for that day, whichever is more suitable; risk-free rate used was
NOTE 10 – COMMITMENTS
Employment Agreements
In December 2022 the Company canceled its employment agreement dated
July 1, 2021 with Mr. Cohen, by paying him the balance of payments due per such agreement through the end of the agreement’s term.
Mr. Cohen agreed to continue
Lease
The Company occupies office and laboratory space
in Orlando, Florida under a lease agreement that expired on
Effective November 1, 2022 the Company signed an amendment which further modified the August 1, 2020 agreement, reducing the monthly lease expense to $404.68 including applicable sales tax. Either party may cancel the agreement at any time with 30 days’ notice.
NOTE 11 – SUBSEQUENT EVENTS
See Note 6 about the Merger which closed on April 14, 2023.
11
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
Note Regarding Forward Looking Statements
This report contains forward-looking statements that reflect our current views about future events. We use the words “anticipate,” “assume,” “believe,” “estimate,” “expect,” “will,” “intend,” “may,” “plan,” “project,” “should,” “could,” “seek,” “designed,” “potential,” “forecast,” “target,” “objective,” “goal” or the negatives of such terms or other similar expressions. These statements relate to future events or our future financial performance and involve known and unknown risks, uncertainties and other factors that may cause our actual results, levels of activity, performance, or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements.
Overview
General
We are a medical robotics company developing a fully autonomous medical robotic system using proprietary software which integrates Artificial Intelligence (“AI”) and Deep Learning, or machine learning, (“DL”). By using an AI and DL enhanced software program, we are creating an intelligent robotic system that we believe can “robotize” a wide range of medical procedures currently being performed by human hands. We are concentrating our research and development efforts to meet rising expectations of patients and practitioners alike for the precision, safety and speed offered by an AI enhanced robotics platform system that can be combined with proven medical devices, end-effectors and surgical instruments.
We believe that progress in mechanical and software engineering has made possible lightweight and relatively inexpensive robotic devices for difficult procedures in various medical fields. Medical robots are already being successfully employed in several areas of surgery, including Urology (Prostate), Colo-Rectal, Gynecology, Thoracic, General Surgery, Orthopedics, and Neuro and Spine Surgery. Robots are also being used for Telemedicine and assistive robotic methods are addressing the delivery of healthcare in inaccessible locations, ranging from rural areas lacking specialist expertise to post-disaster scenarios, and battlefield areas. With the aging population dominating demographics in the U.S. across all spectrums of healthcare, robotic technologies are being developed toward promoting improved function, lower morbidity and improved overall outcomes.
12
Merger
On April 14, 2023, a wholly-owned subsidiary of the Company merged with CardioVentures, Inc., a Delaware corporation, which is the indirect parent of Sudhir Srivastava Innovations Pvt. Ltd., (“SSI India”) an Indian private limited company engaged in the business of developing innovative surgical robotic technologies with a vision to make the benefits of robotic surgery affordable and accessible to a larger part of the global population. SSII’s product range includes its proprietary “SSI Mantra” surgical robotic system and a wide range of surgical instruments capable of supporting a variety of cardiac and other surgical procedures. The Company now intends to focus on the business of SSI-India and has plans to globally expand the presence of its technologically advanced, user-friendly, and cost-effective surgical robotic solutions.
As a result of the transaction, a “change in control” of the Company took place. In addition, among other matters, the Company changed its name to “SS Innovations International, Inc.” and implemented a one for ten reverse stock split. The financial statements and financial information contained in this report only reflect the operations of the Company prior to the acquisition and do not give pro forma effect to the reverse stock split.
See Note 6 to the Notes to Financial Statements included in Part I, Item 1 of this report for additional details regarding the acquisition.
Results of Operations
Introduction
The financial statements appearing elsewhere in this report have been prepared assuming the Company will continue as a going concern. The Company was recently formed and has not established sufficient operations or revenues to sustain the Company. These conditions raise substantial doubt about the Company’s ability to continue as a going concern.
The following table provides selected balance sheet data for our Company at March 31, 2023 (unaudited) and December 31, 2022:
| Balance Sheet Data | As of | As of | ||||||
| March 31, | December 31, | |||||||
| 2023 | 2022 | |||||||
| Cash | $ | 448,543 | $ | 1,351,364 | ||||
| Total Assets | $ | 5,466,341 | $ | 4,371,441 | ||||
| Total Liabilities | $ | 5,118,927 | $ | 4,051,229 | ||||
| Total Stockholders’ Equity | $ | 347,414 | $ | 320,213 | ||||
To date, the Company has relied on debt and equity raised in private offerings and shareholder loans to finance operations and no other sources of capital has been identified. If we experience a shortfall in operating capital, we could be faced with having to limit our research and development activities.
13
Three months ended March 31, 2023, as compared to three months ended March 31, 2022
Revenues. We had no revenues during either the three months ended March 31, 2023, or the three months ended March 31, 2022.
Research and Development Expenses. Research and development expenses were $0 during the three months ended March 31, 2023, and for the three months ended March 31, 2022. Research and development expenses reflect continuing development work on the Company’s prototype robotic system at its facilities at UCF’s incubator in Orlando, Florida.
Compensation Expense. We had compensation expenses of $1,592,309 and $28,240 during the three months ended no revenues during either the three months ended March 31, 2023 and March 31, 2022, respectively. This includes compensation for the management staff and stock-based compensation expense related to the Company’s 2016 Stock Incentive Plan.
General and Administrative Expenses. We incurred $464,758 and $52,215 in general and administrative expenses during the three months ended March 31, 2023, and March 31, 2022, respectively. General and administrative expenses include legal and other professional expenses related to the Company’s filings as a public company with the Securities and Exchange Commission (the “SEC”).
Other Income/Expenses. We had $52,747 in the first three quarters of 2023 as compared to $35 of other expenses during the three months ended March 31, 2022 consisting of interest expense related to loans.
Net Loss. We incurred a net loss of $2,004,320 for the three months ended March 31, 2023, as compared to a net loss of $80,421 for the three months ended March 31, 2022.
Liquidity and Capital Resources
The Company expects to require substantial funds for research and development, to continue to develop, secure marketing approval for and ultimately manufacture and market its initial medical robotic system. Until the Company is able to generate revenues from the sale of its initial medical robotic system, it expects to meet its operating cash flow requirements from the net proceeds of this Offering and if necessary, from future public or private sales of its securities and, if possible, on favorable terms, by entering into development partnerships to assist the Company with its technology development activities.
While we have been successful in raising funds to fund our operations since inception and we believe that we will be successful in obtaining the necessary financing to fund our operations going forward, we do not have any committed sources of funding and there are no assurances that we will be able to secure additional funding. The accompanying financial statements have been prepared assuming that the Company will continue as a going concern; however, if the efforts noted above are not successful, it would raise substantial doubt about the Company’s ability to continue as a going concern. If we cannot obtain financing, then we may be forced to further curtail our operations or consider other strategic alternatives. Even if we are successful in raising the additional financing, there is no assurance regarding the terms of any additional investment and any such investment or other strategic alternative would likely substantially dilute our current shareholders.
14
Critical Accounting Policies
Use of Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Significant estimates included deferred revenue, costs incurred related to deferred revenue, the useful lives of property and equipment and the useful lives of intangible assets.
Income Taxes
The Company accounts for income taxes in accordance with ASC 740, Accounting for Income Taxes, as clarified by ASC 740-10, Accounting for Uncertainty in Income Taxes. Under this method, deferred income taxes are determined based on the estimated future tax effects of differences between the financial statement and tax basis of assets and liabilities given the provisions of enacted tax laws. Deferred income tax provisions and benefits are based on changes to the assets or liabilities from year to year. In providing for deferred taxes, the Company considers tax regulations of the jurisdictions in which the Company operates, estimates of future taxable income, and available tax planning strategies. If tax regulations, operating results or the ability to implement tax-planning strategies vary, adjustments to the carrying value of deferred tax assets and liabilities may be required. Valuation allowances are recorded related to deferred tax assets based on the “more likely than not” criteria of ASC 740.
ASC 740-10 requires that the Company recognize the financial statement benefit of a tax position only after determining that the relevant tax authority would more likely than not sustain the position following an audit. For tax positions meeting the “more-likely-than-not” threshold, the amount recognized in the financial statements is the largest benefit that has a greater than 50 percent likelihood of being realized upon ultimate settlement with the relevant tax authority.
Off-Balance Sheet Arrangements
There are no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to investors.
Item 3. Quantitative Disclosures About Market Risks.
As a “smaller reporting company,” we are not required to provide the information required by this Item.
15
Item 4. Controls and Procedures.
Our Chief Executive Officer and Chief Financial Officer conducted an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), as of March 31, 2023, to ensure that information required to be disclosed by us in the reports filed or submitted by us under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the rules and forms of the SEC, including to ensure that information required to be disclosed by us in the reports filed or submitted by us under the Exchange Act is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure. Based on that evaluation, our Chief Executive Officer and Chief Financial Officer, as our principal executive, financial and accounting officer, has concluded that as of March 31, 2023, our disclosure controls and procedures were not effective at the reasonable assurance level due to the material weaknesses identified and described in Item 9A(b) of our Annual Report on Form 10-K for the year ended December 31, 2022.
Our Chief Executive Officer and Chief Financial Officer, do not expect that our disclosure controls or internal controls will prevent all error and all fraud. Although our disclosure controls and procedures were designed to provide reasonable assurance of achieving their objectives and our Chief Executive Officer and Chief Financial Officer have determined that our disclosure controls and procedures are effective at doing so, a control system, no matter how well conceived and operated, can provide only reasonable, not absolute assurance that the objectives of the system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of simple error or mistake. Additionally, controls can be circumvented if there exists in an individual a desire to do so. There can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions.
Changes in Internal Controls Over Financial Reporting
There were no changes in our internal controls over financial reporting that occurred during the period covered by this report that have materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
16
PART II – OTHER INFORMATION
Item 1. Legal Proceedings.
Not Applicable.
Item 1A. Risk Factors.
As a “smaller reporting company,” we are not required to provide the information required by this Item.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
During the first quarter of 2023, the Company sold the following unregistered equity securities, which have not been previously been reported in its Annual Report on Form 10-K for the year ended December 31, 2022 or in a Current Report on form 8-K:
On Feb 1, 2023, the Company issued 5,000 shares of our common stock to our then Chief Medical Officer per his service agreement dated September 15, 2020.
During the first quarter of 2023 the Company issued a total of 670,000 shares of our common stock to five “accredited investors” at a price per share ranging from $0.25 to $0.40 resulting in proceeds of $189,500 to the Company.
On March 4, 2023, the Company issued 6,600 shares to a vendor for consulting services.
The above securities were issued pursuant to the exemptions from registration of Section 4(a)(2) of the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.
Item 3. Defaults Upon Senior Securities.
None.
Item 4. Mine Safety Disclosures.
Not applicable.
Item 5. Other Information.
None.
Item 6. Exhibits.
| Exhibit No. | Description of Exhibit | |
| 31.1 | Section 302 Certification – Chief Executive Officer | |
| 31.2 | Section 302 Certification – Chief Financial Officer | |
| 32.1 | Section 906 Certification – Chief Executive Officer | |
| 32.2 | Section 906 Certification – Chief Financial Officer | |
| 101.INS | Inline XBRL Instance 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 (formatted as Inline XBRL and contained in Exhibit 101). |
17
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| SS INNOVATIONS INTERNATIONAL, INC. | ||
| Dated: May 15, 2023 | By: | /s/ Anup Sethi |
| Anup Sethi, Chief Financial Officer | ||
| (Principal Financial and Accounting Officer) | ||
18