Business context and reporting period
This unaudited Form 10-Q covers the three months ended March 31, 2022. The registrant at the time was AVRA Medical Robotics, Inc.; the filing describes a medical-robotics business developing an AI-enabled surgical system, initially targeting aesthetic skin-resurfacing procedures. The filing was signed November 30, 2022, and reports subsequent developments involving a proposed combination with SSI-related entities and a planned name change to SS Innovations International, Inc.
Financial results and position
| Metric | Q1 2022 | Q1 2021 / comparison |
|---|---|---|
| Revenue | $0 | $0 |
| Operating expenses | $80,456 reported | $300,078 reported |
| Net loss | $80,421 | $300,056 |
| Cash used in operations | $58,905 | $78,896 |
| Cash and cash equivalents, quarter-end | $346,869 | $405,774 at Dec. 31, 2021 |
No gross or operating margins are meaningful because the company reported no revenue. The net loss narrowed by $219,635 year over year, primarily alongside lower compensation and general and administrative costs. Research and development expense was reported as zero in both quarters.
At March 31, 2022, total assets were $367,396 and current liabilities were $278,250, including $145,000 of related-party notes payable. Current assets were $349,159, implying working capital of approximately $70,909. The notes are described as non-interest-bearing loans from the CEO/related party; the filing’s note details prior maturity extensions. The company reported no investing cash flow and no financing cash flow in Q1 2022.
Changes, outlook, risks and unusual items
- Management said the company had no established revenue source sufficient to cover operating costs and relied on debt and equity financing. The going-concern note states that substantial doubt exists about the company’s ability to continue as a going concern; additional financing was not assured.
- Management expected to need substantial funding for research, development, regulatory approval, manufacturing and commercialization. It described the prototype and regulatory strategy positively, but these were forward-looking expectations, not demonstrated commercial results. No specific financial guidance was provided.
- Disclosure controls and procedures were reported ineffective as of March 31, 2022 due to material weaknesses previously identified in the 2020 Form 10-K. No material changes in internal control over financial reporting were reported during the quarter.
- Subsequent to quarter-end, the company disclosed a November 2022 merger agreement under which SSI-DE shareholders would own 95% of post-merger common stock and existing AVRA shareholders 5%, alongside preferred shares carrying 51% of total voting power for SSI-DE holders. Closing was subject to conditions, including a 1-for-10 reverse split, a corporate name change and an increase in authorized common shares. The filing cautions that completion was not assured.
- The filing also describes $2.25 million of interim financing advanced to SSI parties, funded through convertible notes issued by AVRA, and potential additional financing. These are post-quarter transactions and should not be confused with Q1 cash flows or quarter-end liquidity.
- COVID-19 effects were described as uncertain. The filing reports no legal proceedings and no material off-balance-sheet arrangements.
Key facts for investors to verify
- Confirm the reporting entity, subsequent name change and status and final terms of the merger, including ownership, voting rights, closing conditions and any later amendments.
- Review cash needs, financing availability and the terms, maturities and repayment or conversion status of related-party and other notes.
- Reconcile the filing’s presentation of stockholders’ deficit: the balance sheet shows a positive $89,145 total under a “deficit” heading, while the going-concern note describes a deficit of $89,146.
- Check reported expense figures: the income statement lists operating-expense components that do not clearly reconcile to its reported total, and MD&A gives a different Q1 2021 general and administrative amount than the statement of operations.
- Assess progress toward a functioning product, regulatory authorization, commercialization and revenue, as well as remediation of the disclosed control weaknesses.