Filing identity and business context
Important identity discrepancy: The request names SS Innovations International, Inc., but the supplied Form 10-Q is for AVRA Medical Robotics, Inc. It covers the quarter and six months ended June 30, 2018, and was signed August 13, 2018. AVRA was developing a prototype robotic system for facial procedures with the University of Central Florida (UCF); it reported no products ready for market.
Financial results and liquidity
| Metric | Q2 2018 | Q2 2017 | Six months 2018 | Six months 2017 |
|---|---|---|---|---|
| Revenue | $0 | $0 | $0 | $0 |
| Research and development | $4,229 | $4,624 | $16,281 | $51,141 |
| General and administrative | $201,298 | $173,764 | $427,676 | $314,580 |
| Total operating expenses | $205,527 | $178,388 | $443,957 | $365,721 |
| Net loss | $205,509 | $187,376 | $443,913 | $383,691 |
| Loss per share, basic and diluted | $0.01 | $0.01 | $0.02 | $0.02 |
For the six months ended June 30, operating cash use was $242,312, investing cash use was $18,567, and financing cash flow was $0. Cash fell by $260,879 to $191,693. At June 30, total current assets were $203,522 and current liabilities were $318,316, a working-capital deficit of $114,794. Total assets were $284,777; stockholders’ deficit was $33,539. Current liabilities included $228,426 of accrued expenses, including $199,500 of accrued officer compensation, and an $84,000 stock liability. The filing reports no outstanding promissory-note principal at period end; $480,000 of notes had converted to shares in 2017.
No gross or operating margin is meaningful because the company had no revenue. No income tax provision was recorded.
Changes versus comparable periods
- Q2 net loss widened by $18,133 year over year; six-month net loss widened by $60,222.
- Six-month G&A expense rose $113,096, which management attributed to management compensation, public-company legal and professional costs, and stock-based compensation.
- Six-month R&D expense declined $34,860. Management attributed the decrease to completion of the first phase of UCF research; prototype development continued.
- Cash decreased from $452,572 at December 31, 2017 to $191,693 at June 30, 2018. Shares outstanding increased from 20,644,746 to 20,862,746, primarily reflecting share issuances for services and accrued compensation.
Outlook, risks, and notable items
- Management said substantial additional funding would be needed for research and development and expected to seek securities financing and, if possible, development partnerships. It disclosed no committed funding source and gave no quantified financial guidance.
- The company had not established sufficient revenue or operations to sustain itself. The filing states that these conditions raise substantial doubt about its ability to continue as a going concern; management’s financing plans were not assured, and failure to obtain funding could force curtailed operations or other strategic alternatives. Future financing could materially dilute shareholders.
- AVRA remained at the prototype stage, with no product or training program approved or ready for retail marketing; timing of market readiness was uncertain. The UCF research agreement was extended through September 30, 2019 without additional required payments. A 1% royalty applies in any year that sales of products using the relevant intellectual property exceed $20 million.
- Management concluded disclosure controls and procedures were not effective at the reasonable-assurance level because of material weaknesses identified in the 2017 Form 10-K. No material changes in internal control over financial reporting were reported during the quarter.
- The office lease was amended effective August 1, 2018, after quarter-end, through July 31, 2019, at monthly rent of $1,944; either party may cancel with 30 days’ notice.
Investor verification priorities
- Confirm the intended issuer: the supplied filing is AVRA Medical Robotics, Inc., not SS Innovations International, Inc.
- Assess near-term funding needs, financing availability and potential dilution in light of the going-concern warning and declining cash.
- Track prototype progress, UCF collaboration deliverables, commercialization timing and the conditions attached to the $68,952 Florida High Tech Corridor Council grant.
- Reconcile stock-based compensation disclosures: the cash-flow statement reports $44,781 for the first half of 2018, while the stock-option note reports $15,031 for that period.
- Review remediation of the disclosed material weaknesses and monitor accrued officer compensation and the stock liability.