Filing summary
Issuer and period: The financial statements and MD&A identify the company as Avra Medical Robotics, Inc. and cover the three months ended March 31, 2019, compared with the three months ended March 31, 2018. This does not match the request metadata naming SS Innovations International, Inc.; the filing cover also says the quarter ended March 31, 2018, while the report’s financial statements and contents refer to 2019 Q1.
Business context: Avra is developing a robotic system for facial-correction procedures with the University of Central Florida. The system remained at the prototype stage; the company said it had no products or training programs approved or ready for retail marketing.
Financial performance and position
| Metric | Q1 2019 | Q1 2018 |
|---|---|---|
| Revenue | $0 | $0 |
| Research and development expense | $24,062 | $12,052 |
| General and administrative expense | $285,504 | $226,378 |
| Total operating expenses | $309,566 | $238,430 |
| Net loss | $310,718 | $238,404 |
| Basic and diluted loss per share | $0.01 | $0.01 |
| Cash used in operating activities | $107,686 | $120,103 |
At March 31, 2019, cash was $61,530, total assets were $164,734, current liabilities were $623,136, and stockholders’ deficit was $458,402. Working capital was negative $555,776. Current liabilities included $392,362 in accrued expenses, $94,680 in promissory notes net of discount, $71,492 in stock liability, and $32,500 due to the majority shareholder. Cash increased by $25,814 during the quarter, supported by $133,500 of financing inflows, including promissory-note proceeds and shareholder loans. There was no cash used in investing activities in Q1 2019.
Changes, outlook, and risks
- Net loss increased by $72,314 year over year as operating expenses rose; R&D expense approximately doubled and G&A increased. Stock-based compensation was a significant noncash expense.
- The company reported no ongoing revenue source sufficient to cover operating costs and stated that it depends on debt and equity financing. Management planned to seek additional securities funding and potentially development partnerships, but reported no committed funding sources or assurance of raising capital.
- The filing states that these conditions raise substantial doubt about the company’s ability to continue as a going concern. Failure to obtain financing could require reduced research and development or other strategic alternatives; additional financing could substantially dilute existing shareholders.
- No specific financial guidance or commercialization timetable was provided. Management cautioned that product readiness could be delayed and that there is no assurance of successful development, commercialization, or collaboration.
- Disclosure controls and procedures were reported as not effective at the reasonable-assurance level because of material weaknesses identified in the 2018 Form 10-K. The controls discussion later contains a conflicting statement that controls were effective; no material changes in internal control were reported during the quarter.
- Subsequent event: the board ratified a $25,000 promissory note to the CEO dated May 8, 2019.
Important facts to verify
- Confirm the correct issuer and reporting period: metadata names SS Innovations International, Inc., while the filing text names Avra Medical Robotics, Inc.; the cover period also conflicts with the body.
- Reconcile share-count disclosures: the cover cites 21,427,546 shares outstanding as of May 14, 2018, while the balance sheet reports 21,122,496 shares at March 31, 2019.
- Review the filing’s internal inconsistencies, including the conflicting statements about control effectiveness and the MD&A reference to loans obtained in “December 2019,” despite the reporting date and note disclosures referring to December 2018.
- Assess near-term cash needs, note maturities, related-party financing, and the ability to fund product development given the substantial working-capital deficit and going-concern warning.