Business context and reporting period
This is Avra Medical Robotics, Inc.’s unaudited Form 10-Q for the quarter and six months ended June 30, 2021, signed November 3, 2022. The filing is for Avra, not SS Innovations International, Inc.; the company and period in the request metadata therefore do not match the filing. Avra described itself as a pre-revenue medical robotics developer focused on an AI-enabled system for aesthetic skin-resurfacing procedures.
Financial results and liquidity
| Metric | Three months ended June 30 | Six months ended June 30 |
|---|---|---|
| Revenue | $0 in 2021 and 2020 | $0 in 2021 and 2020 |
| Operating expenses | $412,352 in 2021; $219,988 in 2020 | $712,429 in 2021; $526,659 in 2020 |
| Net loss | $412,314 in 2021; $220,301 in 2020 | $712,369 in 2021; $527,316 in 2020 |
| Loss per share, basic and diluted | $0.02 in 2021; $0.01 in 2020 | $0.03 in 2021; $0.02 in 2020 |
| Operating cash flow | Used $133,144 in the first half of 2021, versus $71,188 used in first-half 2020 |
For the first half of 2021, compensation expense was $545,636, general and administrative expense was $165,794, and research and development expense was $1,000. The filing reports no revenue, so revenue margins are not meaningful.
At June 30, 2021, cash was $307,565, total assets $440,038, current liabilities $1,297,971, and stockholders’ deficit $857,933. Current liabilities included $995,200 of accrued expenses and $195,000 of related-party notes payable. The balance sheet shows no long-term debt. Cash increased from $160,709 at December 31, 2020, primarily reflecting $267,850 of financing proceeds from securities offerings. The company reported $12,150 of proceeds related to its Avra Air investment in investing activities, although the cash-flow statement labels that section “Net Cash Used.”
Changes versus prior comparable periods
- First-half net loss widened to $712,369 from $527,316; operating expenses rose to $712,429 from $526,659.
- Second-quarter net loss widened to $412,314 from $220,301. Compensation expense more than doubled year over year for the quarter, to $326,035 from $151,487.
- First-half operating cash use increased to $133,144 from $71,188. Cash at period-end nevertheless rose year over year from $5,416, supported by financing.
- Common shares issued and outstanding increased to 27,125,349 from 25,721,971 at December 31, 2020; the filing also reports 413,172 shares classified as common stock liability at June 30, 2021.
Outlook, risks, contingencies and unusual items
- Going concern: Management disclosed substantial doubt about the company’s ability to continue as a going concern. Avra had no established recurring revenue source and relied on debt and equity financing; additional funding was not committed, and management cautioned that financing might not be available on acceptable terms.
- Development and regulatory risk: The company said it was developing a prototype and pursuing regulatory work, but commercialization depended on further development, regulatory approvals and financing. The UCF research agreement expired April 30, 2021; Avra also described new development work with Florida Polytechnic University.
- Related-party exposure: The company disclosed $195,000 of related-party notes payable and significant accrued expenses. Its CEO was also an owner of Avra Air, in which Avra reported a 49.8% interest.
- Controls: Management said disclosure controls were ineffective as of June 30, 2021 because of material weaknesses identified in the 2020 Form 10-K. The same discussion later says the controls were effective, an apparent internal inconsistency requiring clarification.
- Subsequent events, not June 2021 results: The filing describes later stock issuances and conversions, and an August 2022 non-binding business-combination letter of intent with the SSI parties. The proposed transaction contemplated SSI-party shareholders owning 95% of post-transaction Avra and Avra shareholders 5%, subject to definitive agreements, due diligence and other conditions; completion was not assured. The filing also describes interim financing advances and convertible notes connected with the proposal.
- The filing states there were no legal proceedings, defaults upon senior securities, or material off-balance-sheet arrangements. It discusses COVID-19 uncertainty but does not quantify an effect on these reported results.
Important facts for investors to verify
- Confirm the intended issuer and reporting period: this filing names Avra Medical Robotics, Inc., while the request names SS Innovations International, Inc.
- Review the going-concern disclosure against the company’s funding needs, cash position and subsequent financing activity.
- Reconcile the filing’s inconsistent statements about whether quarterly and six-month net losses increased or decreased; the reported figures show increases.
- Clarify the cash-flow statement’s “Net Cash Used” label despite the positive $12,150 amount shown for investing activities.
- Investigate the disclosed material weaknesses and resolve the contradictory statements about control effectiveness.
- Distinguish the June 2021 financial position from the later SSI transaction proposal, related advances and other subsequent events; verify their final terms and status.