| SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 2 - SUMMARY
OF SIGNIFICANT ACCOUNTING POLICIES Use of Estimates The preparation
of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts
of assets, liabilities and expenses. The Company regularly evaluates estimates and assumptions that affect the reported amounts of assets
and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts
of revenues and expenses during the reporting period. Actual results could differ from those estimates made by management. Cash and Cash
Equivalents The Company considers
all cash on hand, cash accounts not subject to withdrawal restrictions or penalties, and all highly liquid investment with a maturity
of three months or less to be cash and cash equivalents. Accounts Receivable The Company’s
account receivables are due from customers relating to contracts to supply surgical robotic systems, instruments, and accessories and
to provide post sales warranty/maintenance services. The Company also sells surgical robotic systems under deferred payment arrangement
and in such cases, the amounts due and recoverable beyond one year period at the balance sheet date are classified as long-term receivables.
Collateral is currently not required. The Company also maintains allowances for doubtful accounts for estimated losses resulting from
the inability of the Company’s customers to make payments. The Company periodically reviews these estimated allowances, including
an analysis of the customers’ payment history and creditworthiness, the age of the trade receivable balances and current economic
conditions that may affect a customer’s ability to make payments as well as historical collection trends for its customers as a
whole. Based on this review, the Company specifically reserves for those accounts deemed uncollectible or likely to become uncollectible.
When receivables are determined to be uncollectible, principal amounts of such receivables outstanding are deducted from the allowance.
The allowance for doubtful accounts as of June 30, 2023 and December 31, 2022 amounted to $ NIL NIL Foreign Currency
Translation The
Company’s reporting currency is U.S. Dollars. The accounts of one of the Company’s subsidiaries is maintained using the appropriate
local currency, Indian Rupees (“INR”) as the functional currency. All assets and liabilities are translated into U.S. Dollars
at balance sheet date, shareholders’ equity is translated at historical rates and revenue and expense accounts are translated at the
average exchange rate for the year or the reporting period. The translation adjustments are reported as a separate component of stockholders’
equity, captioned as accumulated other comprehensive (loss) gain. Transaction gains and losses arising from exchange rate fluctuations
on transactions denominated in a currency other than the functional currency are included in the statements of operations as foreign
currency exchange variance. The
relevant translation rates are as follows: for the three months ended June 30, 2023 closing rate at 82.0735 US$:INR, average rate
at 82.0962 US$:INR. Inventory The Company’s
inventory consists of finished goods in the form of fully assembled and tested surgical robotic system, semi-finished goods in the form
of various sub-systems of the surgical robotic systems in various stages of assembly and manufacturing and raw material in the form of
various mechanical, electrical, and other material components, parts, motors, encoders etc. which are not yet assembled/manufactured.
The inventory is valued at the lower of cost (first-in, first-out) or estimated net realizable value. As of June 30, 2023, the Company
valued the inventory at $2,608,490. Concentration
of Credit Risk Financial instruments
that potentially subject the Company to concentrations of credit risk consist principally of cash. The Company maintains its principal
cash balance in United States financial institutions, where deposits are insured by the Federal Deposit Insurance Corporation (“FDIC”)
up to $250,000. The Company also maintains cash balances maintained with banks in India, where balances are insured by Deposit Insurance
and Credit Guarantee Corporation of India (DICGC) to the extent of approximately US$ 6,100 per account and in the Bahamas, where deposits
are insured by the Deposit Insurance Corporation of Bahamas insures deposits up to US$50,000 per account. As at June 30,2023, $ 63,755
of deposits were in excess of overall insurance coverage limits. Revenue Recognition The Company recognizes
revenue in accordance with Accounting Standards Codification, or ASC, 606, the core principle of which is that an entity should recognize
revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity
expects to be entitled to receive in exchange for those goods or services. To achieve this core principle, five basic criteria must be
met before revenue can be recognized:
● Identification of a contract
with a customer or placement of a purchase order by the customer.
● Identification of the performance
obligations in the contract or the purchase order as the case may be.
● Determination of the transaction
price which is reflected in the purchase order placed by the customer.
● Allocation of the transaction
price to the performance obligations in the contract; and
● Recognition of revenue when
or as the performance obligations are satisfied as per the terms of the purchase order received from the customer. The Company accounts
for revenues when both parties to the contract have approved the contract, the rights and obligations of the parties are identified,
payment terms are identified, and collectability of consideration is probable. Product type and payment terms vary by client. The Company recognizes
the revenue at the time when the risk and reward related to that equipment gets transferred immediately when we dispatch. We also sell
instruments which are used by surgeons when they use our robotic system for surgeries. These instruments are like consumables for the
hospitals, and we recognize the revenues for sale of instruments as and when the risk and reward related to those instruments get transferred
immediately when we dispatch. The revenues attributable to the warranty is recognized over the period to which it relates. In six month
period ended June 30, 2023, we have sold six surgical robotic systems and the revenues attributable to warranty is deferred for recognition
over the period to which it relates. Due to application of ASC606, as of June 30, 2023, the sum of US$ 936,262 stands transferred to
unrealized deferred revenue and as such the revenues and profitability for six month period is impacted to the extent of this unrealized
deferred revenue. Property Plant
& Equipment Property Plant
& Equipment is recorded at cost and depreciated using the straight-line method at rates determined as per estimated useful lives
of the assets. The estimated useful lives used in in calculating depreciation are as follows:
Years
Office furniture and fixtures 4
Plant and equipment 4-8
Motor vehicles 3 Long-lived Assets In accordance with
ASC 360, “ Property Plant and Equipment Stock Compensation
Expense The Company accounts
for equity instruments issued in exchange for the receipt of goods or services from other than employees in accordance with Accounting
Standards Codification (“ASC”) Topic 505, “Equity.” Costs are measured at the estimated fair market value of
the consideration received or the estimated fair value of the equity instruments issued, whichever is more reliably measurable. The value
of equity instruments issued for consideration other than employee services is determined on the earlier of a performance commitment
or completion of performance by the provider of goods or services as defined by ASC Topic 505. Income Taxes The Company accounts
for income taxes pursuant to ASC Topic 740 “ Income Taxes. The Company applies
the provisions of ASC Topic 740-10-05 “ Accounting for Uncertainty in Income Taxes Basic and Diluted
Loss per Share In accordance with
ASC Topic 260 “ Earnings Per Share, Research and
Development Costs In accordance with
ASC Topic 730 “Research and Development”, with the exception of intellectual property that is purchased from another enterprise
and have alternative future use, research and development expenses are charged to operations as incurred. Fair Value of
Financial Instruments Our financial instruments
consist principally of accounts receivable, amounts due to related parties and promissory notes payable. The carrying amounts of cash
and cash equivalents and promissory notes approximate fair value because of the short-term nature of these items. Recent Accounting
Pronouncements Compensation—Stock
Compensation In May 2017, the
FASB issued ASU 2017-09, “Compensation—Stock Compensation (Topic 718): Scope of Modification Accounting,” that provides
guidance about which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting.
The new guidance became effective for the Company on January 1, 2018 and was applied on a prospective basis, as required. The adoption
of this standard did not have an impact on the financial statements or the related disclosures. Leases In February 2016,
the FASB issued ASU 2016-02, “Leases (Topic 842)” (“ASU 2016-02”). The FASB issued ASU 2016-02 to increase transparency
and comparability among organizations recognizing lease assets and lease liabilities on the balance sheet and disclosing key information
about leasing arrangements. Under ASU 2016-02, lessors will account for leases using an approach that is substantially equivalent to
existing GAAP for sales-type leases, direct financing leases and operating leases. Unlike current guidance, however, a lease with collectability
uncertainties may be classified as a sales-type lease. If collectability of lease payments, plus any amount necessary to satisfy a lessee
residual value guarantee, is not probable, lease payments received will be recognized as a deposit liability and the underlying assets
will not be derecognized until collectability of the remaining amounts becomes probable. ASU 2016-02 is effective for interim and annual
periods beginning after December 15, 2018, with early adoption permitted, and must be adopted using a modified retrospective transition.
The Company did not adopt the standard effective January 1, 2019, utilizing the lessor practical expedient. On November 15, 2019,
the FASB issued ASU 2019-10 which amended the effective dates for ASC 842, to give implementation relief. Under the FASB’s new
framework, two “buckets” were defined, bucket 1 includes public companies that are SEC filers but excludes “Small Reporting
Companies” (SRC’s). Bucket 2 includes all other entities, including SRC’s. Bucket 2 entities have to apply ASC 842
for fiscal years beginning after December 15, 2020, and interim periods within fiscal years beginning after December 15, 2021. |
