Business context and reporting period
Entity clarification: The supplied filing is the Form 10-K of AVRA Medical Robotics, Inc., for the fiscal year ended December 31, 2022; it is not a filing under the name SS Innovations International, Inc. AVRA was a development-stage medical robotics company pursuing an AI-guided autonomous system, initially for aesthetic skin treatments. It had no revenue and reported two full-time and three part-time employees as of the report date.
In November 2022, AVRA signed a definitive merger agreement to acquire CardioVentures, Inc. and, indirectly, the Indian surgical robotics business SSI-India. The merger had not closed as of the report date. Its terms contemplate SSI-side holders receiving 95% of post-merger common equity, with existing AVRA holders retaining 5%, alongside preferred shares carrying 51% of total voting power.
Financial results and position
| Metric | 2022 | 2021 |
|---|---|---|
| Revenue | $0 | $0 |
| Operating expenses | $2,447,606 | $1,407,038 |
| Net loss | $2,213,012 | $1,484,313 |
| Net loss per share, basic and diluted | $0.05 | $0.05 |
| Cash used in operating activities | $1,435,841 | $363,034 |
| Cash and cash equivalents at year-end | $1,351,364 | $405,774 |
| Total assets | $4,371,441 | $428,607 |
| Total liabilities | $4,051,229 | $287,281 |
| Stockholders’ equity | $320,213 | $141,326 |
Research and development expense was $72,959, compared with $1,000 in 2021; compensation expense was $1,135,468 versus $947,237; and general and administrative expense was $1,239,179 versus $458,801. Net other income was $234,594, including $279,975 of origination fees and $45,529 of interest expense. No revenue means operating margins are not meaningful.
Year-end current assets were $4,360,042, including a $3,000,000 acquisition-related note receivable; current liabilities were $4,051,229, including $4,000,000 in related-party notes payable and $45,529 of accrued interest. The company reported no non-current debt in the balance sheet. Cash flow statement figures show $3,000,000 used in investing activities and $5,381,431 provided by financing activities. The company raised $1,100,250 from a fourth-quarter common-stock offering of 4,401,000 shares at $0.25 per share.
Material changes versus 2021
- Net loss increased by approximately $729,000; operating expenses rose about $1.04 million, principally from higher general and administrative and compensation costs.
- Operating cash use increased from $363,034 to $1,435,841. Cash at year-end rose, supported by financing, while liabilities increased substantially, largely reflecting merger-related notes.
- AVRA advanced $4 million to merger-related parties during 2022, recorded as an acquisition note receivable. The filing says an additional $1 million was raised in February 2023 and describes total interim financing of $5 million as of the report date.
- Common shares outstanding increased from 37,848,905 at December 31, 2021 to 53,887,738 at December 31, 2022.
Outlook, risks and unusual items
Management expects to need substantial additional funding for development and operations and plans to seek securities financing and potentially development partnerships. It reported no committed funding sources and warned that inability to raise capital could force reductions in research and development or other operations; new financing could materially dilute existing shareholders. The auditor’s report and management’s disclosures raise substantial doubt about the company’s ability to continue as a going concern, citing recurring losses and negative operating cash flows.
The merger remained subject to closing conditions, including a company name change, a 1-for-10 reverse split, an increase in authorized common shares to 250 million, and regulatory and corporate filings. If completed, the transaction would substantially change ownership, voting control, management and the company’s business focus. The filing describes a 7% interest rate on interim-financing notes and potential conversion provisions. AVRA also expects to assign SSI intellectual property to a subsidiary in exchange for a royalty of 3% of net revenues, as defined in the agreement.
Management concluded disclosure controls were not effective at the reasonable-assurance level because of material weaknesses involving undocumented internal-control procedures and inadequate segregation of accounting duties. Remediation was planned when resources become available. The filing reports no material legal proceedings and no material off-balance-sheet arrangements. It provides no numerical operating guidance.
Most important facts for investors to verify
- Confirm the correct issuer and filing: this report is for AVRA Medical Robotics, Inc., despite the request naming SS Innovations International, Inc.
- Verify the merger’s closing status, final consideration and dilution, preferred-stock voting rights, note-conversion terms, and intellectual-property assignment and royalty provisions.
- Assess the company’s ability to fund operations, collect the $3 million acquisition note receivable, and address the auditor’s going-concern warning.
- Reconcile reported figures: the cash-flow statement labels the $945,590 change in cash as a decrease although reported cash rose from $405,774 to $1,351,364; the financial statements show year-end equity of $320,213 while a note states $320,231.
- Review the full audited statements and notes for debt maturities, financing terms, stock-based compensation, and the status of the disclosed internal-control remediation.