SS Innovations International (SSII) 10-Q/A 2024 Q2 Quarterly report (amended)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q/A

Amendment No. 1 to Form 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 

For the quarterly period ended June 30, 2024

or

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission file number: 333-216054

SS INNOVATIONS INTERNATIONAL, INC.

(Exact name of registrant as specified in its charter)

Florida	47-3478854
(State or Other Jurisdiction of Incorporation or Organization)	(I.R.S. Employer Identification No.)

405, 3^rd Floor, iLabs Info Technology Centre

Udyog Vihar, Phase III

Gurugram, Haryana 122016, India

(Address of Principal Executive Offices)

Registrant’s telephone number, including area code: +91 73375 53469

Securities Registered Pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
None	N/A	N/A

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the Registrant was required to submit such files.) Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “accelerated filer”, “large accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large Accelerated Filer	☐	Accelerated Filer	☐
Non-Accelerated Filer	☒	Smaller reporting company	☒
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

There were 187,744,623 shares of common stock, $0.0001 par value of the Registrant issued and outstanding as of March 7, 2025.

Unless the context otherwise requires, the terms “SSi,” “the Company,” “we,” “us,” and “our” refer to SS Innovations International, Inc., and where appropriate, our subsidiaries.

EXPLANATORY NOTE

On May 3, 2024, the SEC entered an order barring BF Borgers CPA PC (“Borgers”), the Company’s then independent registered public accounting firm, from appearing or practicing before the SEC as an accountant and therefore Borgers could no longer act as the Company’s independent registered public accounting firm. Effective May 13, 2024, the Company dismissed Borgers as its independent registered public accounting firm. Subsequently, the Company engaged BDO India LLP (“BDO”) as the Company’s new independent registered public accounting firm.

Given the circumstances giving rise to Borgers’ dismissal, the Company asked BDO to re-audit SSi’s consolidated financial statements as of and for the years ended December 31, 2023 and December 31, 2022, which were included in the Company’s Annual Report on Form 10-K filed with the SEC on March 22, 2024 (the “2023 Form 10-K”). Contemporaneously with the re-audit, the Company also undertook an internal review of certain accounting policies and internal controls and procedures. In addition to the foregoing, because of the change in auditors and the time required to perform the reaudit, the Company filed its Quarterly Reports on Form 10-Q for the quarters ended March 31, 2024, June 30, 2024 and September 30, 2024, without the required review procedures specified by the Public Company Accounting Oversight Board for a review of interim financial information as described in AS 4105, “Reviews of Interim Financial Information” (the “Required Review”).

In the course of this internal review and while BDO was performing the reaudit, the Company discovered material errors in the prior filed audited consolidated financial statements included in the 2023 Form 10-K and in the interim unaudited condensed consolidated financial statements for the quarters ended June 30, 2023, September 30, 2023, March 31, 2024, June 30, 2024 and September 30, 2024, included in the Company’s Quarterly Reports on Form 10-Q for those quarters (the “Subject Forms 10-Q”). As a result, the Company determined that in order to reflect the foregoing, the Company’s consolidated financial statements included in the 2023 Form 10-K and the Subject Forms 10-Q would need to be restated. An external consulting firm was also appointed by the Company to help perform comprehensive technical accounting evaluations.

Thereafter, the board of directors of the Company, after discussion with management of the discovered material errors, concluded that the Company’s audited consolidated financial statements as of and for the years ended December 31, 2023 and December 31, 2022 and interim unaudited condensed consolidated financial statements for the quarter ended June 30, 2023, September 30, 2023 and March 31, 2024, should no longer be relied upon due to the reasons stated above. SSi reported the foregoing in a Current Report on Form 8-K, filed with the SEC. The Company has therefore amended the Subject Forms 10-Q for the quarters ended June 30, 2023, September 30, 2023 and March 31, 2024 to give effect to the restatements arising from the reaudit.

This Form 10-Q/A Amendment No. 1 to Form-10-Q (this “Amendment” or this “Report”) restates the Company’s previously issued interim unaudited condensed consolidated financial statements and related footnote disclosures for the quarter ended June 30, 2024 , included in the Subject Form 10-Q for that quarter. For detailed information, see “Note 1. Restatement of Previously Issued Consolidated Financial Statements for Correction of Errors” to the interim unaudited condensed consolidated financial statements included in Part 1, Item 1 of this Amendment. In addition, this Amendment has undergone the Required Review.

In connection with the restatement, management re-evaluated the effectiveness of SSi’s disclosure controls and procedures and internal control over financial reporting as of June 30, 2024. As a result of that assessment, management has concluded that SSi’s disclosure controls and procedures and internal controls over financial reporting were not effective as of June 30, 2024, due to material weaknesses in SSi’s internal control over financial reporting related to above accounting errors. For a discussion of management’s consideration of SSi’s disclosure controls and procedures, internal controls over financial reporting, the material weaknesses identified, and the remedial actions being taken, see “Item 4. Controls and Procedures” in this Amendment.

As a result of the above, this Amendment amends the following Items of our Form 10-Q for the quarter ended June 30, 2024: “Item 1. Financial Statements”, “Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Item 4. Controls and Procedures” in Part I and “Item 1. Legal Proceedings” in Part II.

TABLE OF CONTENTS

		Page
PART I – FINANCIAL INFORMATION		1
Item 1. Financial Statements		1
	Condensed Consolidated Balance Sheets as of June 30, 2024 (unaudited) and December 31, 2023	1
	Condensed Consolidated Statements of Operations and comprehensive loss for the six months and three months ended June 30, 2024 (unaudited) and June 30, 2023 (unaudited)	2
	Condensed Consolidated Statement of change in equity for the six months ended June 30, 2024 (unaudited) and June 30, 2023 (unaudited)	4
	Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2024 (unaudited) and June 30, 2023 (unaudited)	5
	Notes to Condensed Consolidated Financial Statements (unaudited)	6
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations		38
Item 4. Controls and Procedures		44
PART II - OTHER INFORMATION		46
Item 1. Legal Proceedings		46
Item 2. Exhibits		46
SIGNATURES		47

i

PART I – FINANCIAL INFORMATION

SS INNOVATIONS INTERNATIONAL, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

Item 1. Financial Statements

	Notes	June 30, 2024 (As restated)			December 31, 2023
ASSETS
Current Assets:
Cash and cash equivalents	6		608,215			2,022,276
Restricted cash	6		5,620,153			5,029,650
Accounts receivable, net	5		4,280,188			1,901,244
Receivable from related party	14		1,286,980			1,567,559
Inventory, net			7,217,663			7,017,913
Prepaids and other current assets	7		4,255,897			3,890,017
Total Current Assets			23,269,096			21,428,659
Non-Current Assets:
Property, plant, and equipment, net	3		2,774,967			706,405
Right of use asset	15		2,448,965			2,657,554
Accounts receivable, net	5		3,046,783			2,365,013
Restricted cash	6		327,034			35,919
Prepaids and other non current assets	7		3,800,258			4,322,444
Total Non-Current Assets			12,398,007			10,087,335
Total Assets			35,667,103			31,515,994
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current Liabilities
Bank overdraft facility	10		6,861,536			6,018,926
Notes payable	9		4,450,000			-
Current maturities of long-term debt	11		533,854			510,189
Current portion of operating lease liabilities	15		428,713			396,784
Accounts payable	8		1,126,373			901,552
Deferred revenue	12		395,565			156,330
Other accrued liabilities	8		1,181,912			489,939
Total Current Liabilities			14,977,953			8,473,720
Non- Current Liabilities
Operating lease liabilities, less current portion	15		2,125,946			2,351,113
Deferred revenue	12		3,732,399			939,150
Other accrued liabilities	8		58,391			33,933
Total Non-Current Liabilities			5,916,736			3,324,196
Total Liabilities			20,894,689			11,797,916
Stockholders’ equity:
Preferred stock, authorized 5,000,000 shares of Series A, Non-Convertible Preferred Stock, $0.0001 par value per share;  5,000 shares issued and outstanding as of June 30, 2024 and December 31, 2023	13		1			1
Common stock,  250,000,000 shares authorized, $0.0001 par value, 170,739,380 shares and 170,711,880 shares issued and outstanding as of June 30, 2024 and December 31, 2023 respectively	13		17,075			17,072
Accumulated other comprehensive income (loss)	13		(279,138	)		(195,499	)
Common stock to be issued, 12,500 shares	13		-			50,000
Additional paid in capital	13		52,628,232			43,457,937
Capital reserve			899,917			899,917
Accumulated deficit			(38,493,673	)		(24,511,350	)
Total stockholders’ equity			14,772,414			19,718,078
Total liabilities and stockholders’ equity			35,667,103			31,515,994

See accompanying notes to Condensed Consolidated Financial Statements

1

SS INNOVATIONS INTERNATIONAL, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(Unaudited)

			For The Three months ended
	Notes		June 30, 2024 (As restated)			June 30, 2023
REVENUES
System sales		12		4,258,198			1,424,783
Instruments sale		12		204,121			467,030
Warranty sale		12		28,795			-
Lease income		12		18,012			-
Total revenue				4,509,126			1,891,813
Cost of revenue				(3,071,340	)		(1,124,116	)
GROSS PROFIT				1,437,786			767,697
OPERATING EXPENSES:
Research & development expense				759,004			246,426
Stock compensation expense		19		2,443,792			8,150
Depreciation and amortization expense		3		90,476			34,466
Selling, general and administrative expense				2,244,703			5,669,790
TOTAL OPERATING EXPENSES				5,537,975			5,958,832
Loss from operations				(4,100,189	)		(5,191,135	)
OTHER INCOME (EXPENSE):
Interest Expense				(242,577	)		(365,205	)
Interest and other income, net				202,196			31,852
TOTAL OTHER EXPENSE, NET				(40,381	)		(333,353	)
LOSS BEFORE INCOME TAXES				(4,140,570	)		(5,524,488	)
Income tax expense				-			-
NET LOSS				(4,140,570	)		(5,524,488	)
Net loss per share - basic and diluted		2(p)		(0.02	)		(0.04	)
Weighted average- basic shares		2(p)		170,739,380			143,599,382
Weighted average- diluted shares		2(p)		181,843,313			143,736,382
CONSOLIDATED STATEMENTS OF OTHER COMPREHENSIVE LOSS
NET LOSS				(4,140,570	)		(5,524,488	)
OTHER COMPREHENSIVE INCOME (LOSS)
Foreign currency translation loss				(16,131	)		(20,890	)
Retirement benefit (net of tax)				3,299			1,246
TOTAL COMPREHENSIVE LOSS				(4,153,402	)		(5,544,132	)

See accompanying notes to Condensed Consolidated Financial Statements.

2

SS INNOVATIONS INTERNATIONAL, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(Unaudited)

			For The Six months ended
	Notes		June 30, 2024 (As restated)			June 30, 2023
REVENUES
System sales		12		7,752,957			1,780,197
Instruments sale		12		322,636			481,736
Warranty sale		12		38,202			-
Lease income		12		33,024			-
Total revenue				8,146,819			2,261,933
Cost of revenue				(5,980,851	)		(1,416,289	)
GROSS PROFIT				2,165,968			845,644
OPERATING EXPENSES:
Research & development expense				1,286,995			488,553
Stock compensation expense		19		9,552,542			8,150
Depreciation and amortization expense		3		170,577			67,057
Selling, general and administrative expense				5,088,362			6,543,648
TOTAL OPERATING EXPENSES				16,098,476			7,107,408
Loss from operations				(13,932,508	)		(6,261,764	)
OTHER INCOME (EXPENSE):
Interest Expense				(432,665	)		(621,875	)
Interest and other income, net				382,850			46,135
TOTAL OTHER EXPENSE, NET				(49,815	)		(575,740	)
LOSS BEFORE INCOME TAXES				(13,982,323	)		(6,837,504	)
Income tax expense				-			-
NET LOSS				(13,982,323	)		(6,837,504	)
Net loss per share - basic and diluted		2(p)		(0.08	)		(0.05	)
Weighted average- basic shares		2(p)		170,734,435			135,965,966
Weighted average- diluted shares		2(p)		181,726,502			136,102,966
CONSOLIDATED STATEMENTS OF OTHER COMPREHENSIVE LOSS
NET LOSS				(13,982,323	)		(6,837,504	)
OTHER COMPREHENSIVE INCOME (LOSS)
Foreign currency translation loss				(95,445	)		(69,513	)
Retirement  benefit (net of tax)				11,806			5,546
TOTAL COMPREHENSIVE LOSS				(14,065,962	)		(6,901,471	)

See accompanying notes to Condensed Consolidated Financial Statements.

3

SS INNOVATIONS INTERNATIONAL, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

FOR THE SIX MONTHS ENDED JUNE 30, 2024, AND JUNE 30, 2023

(Unaudited)

		Preferred Stock				Common Stock				Common Stock to be Issued						Additional Paid-In			Accumulated			Capital		Accumulated other comprehensive			Total Stockholders’
	Notes	Number		Amount		Number		Amount		Number			Amount			Capital			Deficit			Reserve		income (loss)			equity
Balance as at December 31, 2023			5,000		1		170,711,880		17,072		12,500			50,000			43,457,937			(24,511,350	)		899,917		(195,499	)		19,718,078
Stock compensation	19		-		-		-		-		-			-			6,842,002			-			-		-			6,842,002
Common stock issued against exercise of warrants			-		-		12,500		1		(12,500	)		(50,000	)		49,999			-			-		-			-
Stock issued for services			-		-		15,000		2		-			-			101,249			-			-		-			101,250
Net loss			-		-		-		-		-			-			-			(9,841,753	)		-		(70,807	)		(9,912,560	)
Balance as at March 31, 2024			5,000		1		170,739,380		17,075		-			-			50,451,187			(34,353,103	)		899,917		(266,306	)		16,748,770
Stock compensation	19		-		-		-		-		-			-			2,177,045			-			-		-			2,177,045
Common stock issued against exercise of warrants			-		-		-		-		-			-			-			-			-		-			-
Stock issued for services			-		-		-		-		-			-			-			-			-		-			-
Net loss			-		-		-		-		-			-			-			(4,140,570	)		-		(12,832	)		(4,153,402	)
Balance as at June 30, 2024			5,000		1		170,739,380		17,075		-			-			52,628,232			(38,493,673	)		899,917		(279,138	)		14,772,414
Balance as at December 31, 2022			-		-		128,161,013		12,817		-			-			(12,812	)		(3,633,058	)		899,917		54,599			(2,678,537	)
Net loss			-		-		-		-		-			-			-			(1,313,016	)		-		(44,322	)		(1,357,338	)
Balance as at March 31, 2023			-		-		128,161,013		12,817		-			-			(12,812	)		(4,946,074	)		899,917		10,277			(4,035,875	)
Preferred stock issued			5,000		1		-		-		-			-			(1	)		-			-		-			-
Reverse recapitalization			-		-		6,545,531		655		-			-			(655	)		-			-		-			-
Conversion of notes payable to equity			-		-		7,647,871		765		-			-			6,137,773			-			-		-			6,138,538
Stock issued for services			-		-		3,818,028		382		-			-			4,463,417			-			-		-			4,463,799
Stock compensation expense	19		-		-		-		-		-			-			8,150			-			-		-			8,150
Shares to be issued for services			-		-		-		-		-			-			85,616			-			-		-			85,616
Net loss			-		-		-		-		-			-						(5,524,488	)		-		(19,644	)		(5,544,132	)
Balance as at June 30, 2023			5,000		1		146,172,443		14,619		-			-			10,681,488			(10,470,562	)		899,917		(9,367	)		1,116,096

See accompanying notes to Condensed Consolidated Financial Statements.

4

SS INNOVATIONS INTERNATIONAL, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

	For the Six Month ended
	June 30, 2024 (As restated)			June 30, 2023
Cash flows from operating activities:
Net loss		(13,982,323	)		(6,837,504	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		170,577			67,057
Operating lease liability		15,331			13,777
Interest expense (net)		49,815			575,740
Credit loss reserve		573,048			-
Shares issued to investors and advisors		-			4,463,799
Stock compensation expense		9,552,542			8,150
Changes in operating assets and liabilities:
Accounts receivable, net		(3,475,878	)		(1,040,193	)
Inventory, net		(199,750	)		(3,061,647	)
Receivables from / payable to related parties		280,579			226,228
Deferred revenue		3,032,484			342,706
Prepaids and other current assets		(488,235	)		(962,286	)
Accounts payable		224,821			560,346
Prepaids and other non current assets		(6,180	)		(73,700	)
Other accrued liabilities		558,683			341,021
Net cash used in operating activities		(3,694,486	)		(5,376,506	)
Cash flows from investing activities:
Purchase of property, plant and equipment		(2,239,139	)		(105,536	)
Net cash used in investing activities		(2,239,139	)		(105,536	)
Cash flows from financing activities:
Proceeds from bank overdraft facility (net)		842,610			1,677,577
Proceeds from issuance of convertible notes to principal shareholder		3,000,000			1,225,000
Proceeds from issuance of convertible notes to other investors		1,450,000			3,000,000
Repayment of term loan		-			(142,895	)
Net cash provided by financing activities		5,292,610			5,759,682
Net change in cash		(641,015	)		277,640
Effect of exchange rate on cash		108,572			(25,326	)
Cash and cash equivalents at the beginning of the period		7,087,845			274,625
Cash and cash equivalents at end of the period		6,555,402			526,939

See accompanying notes to Condensed Consolidated Financial Statements.

5

SS INNOVATIONS INTERNATIONAL, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

NOTE 1 – FINANCIAL STATEMENTS

Organization

SS Innovations International, Inc. (the “Company” or “SSII”) was incorporated as AVRA Surgical Microsystems, Inc. in the State of Florida on February 4, 2015. Effective November 5, 2015, the Company’s corporate name was changed to Avra Medical Robotics, Inc. (“AVRA”).

On April 14, 2023, a wholly owned subsidiary of the Company, AVRA-SSI Merger Corporation (“Merger Sub”) merged with CardioVentures, Inc., a Delaware corporation (“CardioVentures”), the indirect parent of Sudhir Srivastava Innovations Pvt. Ltd., an Indian private limited company engaged in the business of developing innovative surgical robotic technologies. As a result of the transaction, a “change in control” of the Company took place. In addition, among other matters, the Company changed its name to “SS Innovations International, Inc.” and implemented a one for ten reverse stock split. The financial statements, financial information, share and per share information contained in this report reflect the operations of both the Company and CardioVentures and give actual effect to the reverse stock split.

The Transaction (Note 4) was accounted for as a reverse recapitalization in accordance with GAAP (the “Reverse Recapitalization”). Under this method, AVRA was treated as the “acquired” company (the “Accounting Acquiree”) and Cardio Ventures Inc., the accounting acquirer, was assumed to have issued stock for the net assets of AVRA, accompanied by a recapitalization. Accordingly, for the year ended December 31, 2022, CardioVentures has been considered the ultimate holding company. Prior to October 18, 2022, Cardio Ventures Pvt Ltd., Bahamas (Cardio Bahamas), was in existence and served as the ultimate holding company. On October 18, 2022, Cardio Ventures Inc. acquired controlling interest in Otto Pvt Ltd. from Cardio Bahamas, making Cardio Ventures Inc. the ultimate holding company.

Basis of Presentation

Unaudited Interim Condensed Consolidated Financial Statements

The interim condensed consolidated balance sheet as of June 30, 2024, and the interim condensed consolidated statements of operations, comprehensive loss and stockholders’ equity for the six months and three months and cash flows for the six months ended June 30, 2024 and June 30, 2023 are unaudited. The unaudited interim condensed consolidated financial statements have been prepared on the same basis as the annual consolidated financial statements and reflect, in the opinion of management, all adjustments of a normal and recurring nature that are necessary for the fair presentation of our financial position as of June 30, 2024 and our results of operations for the six months and three months and cash flows for the six months ended June 30, 2024 and June 30, 2023. The financial data and other financial information disclosed in these notes to the interim condensed consolidated financial statements related to the six months and three months are also unaudited. The interim condensed consolidated results of operations for the six months and three months ended June 30, 2024 are not necessarily indicative of the results to be expected for the year ending December 31, 2024 or for any future annual or interim period. The condensed consolidated balance sheet as of December 31, 2023 included herein was produced from the audited consolidated financial statements as of that date. These interim condensed consolidated financial statements should be read in conjunction with our audited consolidated financial statements included in the Annual Report on Form 10-K/A as filed by us with the U.S. Securities and Exchange Commission (the “SEC”) on December 6, 2024.

The interim condensed consolidated financial statements and accompanying notes were prepared in accordance with accounting principles generally accepted in the United States (“GAAP”). The accompanying condensed financial statements have been prepared on a consolidated basis and reflect the condensed consolidated financial statements of SS Innovations International, Inc. and all of its subsidiaries (the “Group”).

The standalone financial statements of subsidiaries are fully consolidated on a line-by-line basis. Intra-group balances and transactions, and gains and losses arising from intra-group transactions, are eliminated while preparing condensed consolidated financial statements.

Accounting policies of the respective individual subsidiaries are aligned wherever necessary, so as to ensure consistency with the accounting policies that are adopted by the Company under GAAP.

Restatement of Previously Issued Financial Statements for Correction of Errors 

The Company restated the accompanying condensed consolidated balance sheet as at June 30, 2024 as well as the condensed consolidated statement of operations and comprehensive loss and the condensed consolidated statements of cash flows for the quarter and three-months ended June 30, 2024, and June 30, 2023, respectively, as previously reported in its Form 10-Q, to reflect the correction of errors arising out of:

i. Functional / other reclassification

ii. Errors / Adjustments

6

Restatement in June 2024

Summary of restatements made in condensed consolidated balance sheet, as at June 30, 2024, is as follows:

Particulars	As Previously Reported			As Restated			Changes			Functional / Other reclassification¹			Errors / Adjustments²
ASSETS
Current Assets:
Cash and cash equivalents		1,454,675			608,215			(846,460	)		(846,460	)		-
Restricted cash		5,619,490			5,620,153			663			-			663
Accounts receivable, net		4,603,800			4,280,188			(323,612	)		2,219,125			(2,542,737	)
Receivable from related party		-			1,286,980			1,286,980			1,297,410			(10,430	)
Inventory, net		6,443,067			7,217,663			774,596			-			774,596
Prepaids and other current assets		4,501,398			4,255,897			(245,501	)		-			(245,501	)
Total Current Assets		22,622,430			23,269,096			646,666			2,670,075			(2,023,409	)
Non- Current Assets:
Property, plant, and equipment, net		2,023,645			2,774,967			751,322			-			751,322
Right of use asset		2,448,918			2,448,965			47			-			47
Accounts receivable, net		5,265,908			3,046,783			(2,219,125	)		(2,219,125	)		-
Restricted cash		327,012			327,034			22			-			22
Receivable from related party		1,297,410			-			(1,297,410	)		(1,297,410	)		-
Prepaids and other non current assets		4,332,081			3,800,258			(531,823	)					(531,823	)
Total Non-Current Assets		15,694,975			12,398,007			(3,296,968	)		(3,516,535	)		219,567
Total Assets		38,317,405			35,667,103			(2,650,302	)		(846,460	)		(1,803,842	)
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Bank overdraft facility		7,707,534			6,861,536			(845,998	)		(846,460	)		463
Notes payable		4,450,000			4,450,000			-			-			-
Current maturities of long-term debt		-			533,854			533,854			510,189			23,665
Current portion of operating lease liabilities		428,705			428,713			8			-			8
Accounts payable		1,295,003			1,126,373			(168,630	)		-			(168,630	)
Deferred revenue		-			395,565			395,565			395,565			-
Other accrued liabilities		3,844,064			1,181,912			(2,662,152	)		(2,335,601	)		(326,551	)
Total Current Liabilities		17,725,305			14,977,953			(2,747,352	)		(2,276,307	)		(471,045	)
Non-Current Liabilities:
Operating lease liabilities, less current portion		2,125,906			2,125,946			40			-			40
Deferred revenue		-			3,732,399			3,732,399			2,879,186			853,213
Other accrued liabilities		939,150			58,391			(880,759	)		(905,217	)		24,458
Long-term borrowings, less current portion		544,122			-			(544,122	)		(544,122	)		-
Total Non-Current Liabilities		3,609,178			5,916,736			2,307,558			1,429,847			877,711
Total Liabilities		21,334,483			20,894,689			(439,794	)		(846,460	)		406,666
Stockholders’ equity:
Preferred stock, $0.0001 par value per share; authorized 5,000,000 shares of Series A Non-Convertible Preferred Stock, 5,000 shares and nil shares issued and outstanding as of June 30, 2024 and December 31, 2023		1			1			-			-			-
Common stock,  250,000,000 shares authorized, $0.0001 par value, 170,739,380 shares and 170,711,880 shares issued and outstanding as of June 30, 2024 and December 31, 2023 respectively		17,073			17,075			2			-			2
Accumulated other comprehensive income (loss)		(378,165	)		(279,138	)		99,027			-			99,027
Additional paid in capital		48,455,054			52,628,232			4,173,178			-			4,173,178
Capital reserve		899,917			899,917			-			-			-
Accumulated deficit		(32,010,958	)		(38,493,673	)		(6,482,715	)					(6,482,715	)
Total stockholders’ equity		16,982,922			14,772,414			(2,210,508	)		-			(2,210,508	)
Total liabilities and stockholders’ equity		38,317,405			35,667,103			(2,650,302	)		(846,460	)		(1,803,842	)

7

Condensed consolidated statement of operations and comprehensive loss for the six-months ended June 30, 2024:

Particulars	As Previously Reported			As Restated			Changes			Functional / Other reclassification¹			Errors / Adjustments²
REVENUE:
System sales		11,312,947			7,752,957			(3,559,990	)		(27,725	)		(3,532,266	)
Instruments sale		266,785			322,636			55,851			27,725			28,126
Warranty sale		37,278			38,202			924			-			924
Lease income		-			33,024			33,024			-			33,024
Total revenue		11,617,011			8,146,819			(3,470,192	)		-			(3,470,192	)
Cost of revenue		(7,499,849	)		(5,980,851	)		1,518,998			(389,932	)		1,908,930
GROSS PROFIT		4,117,163			2,165,968			(1,951,195	)		(389,932	)		(1,561,263	)
OPERATING EXPENSES:
Research & development expense		426,118			1,286,995			860,877			830,919			29,958
Stock compensation expense		-			9,552,542			9,552,542			3,248,916			6,303,626
Salaries & Payroll Expenses		-			-			-			-			-
Depreciation and amortization expense		-			170,577			170,577			169,919			658
Selling, general and administrative expense		9,102,278			5,088,362			(4,013,916	)		(4,436,679	)		422,763
TOTAL OPERATING EXPENSES		9,528,396			16,098,476			6,570,080			(186,925	)		6,757,005
Loss from operations		(5,411,234	)		(13,932,508	)		(8,521,275	)		(203,007	)		(8,318,267	)
OTHER INCOME (EXPENSE):
Interest expense		(399,004	)		(432,665	)		(33,662	)		-			(33,662	)
Interest and other income, net		230,542			382,850			152,308			-			152,308
TOTAL OTHER INCOME (EXPENSE), NET		(168,462	)		(49,815	)		118,647			-			118,647
LOSS BEFORE INCOME TAXES		(5,579,695	)		(13,982,323	)		(8,402,628	)		(203,007	)		(8,199,621	)
Income tax expense		-			-			-			-			-
NET LOSS		(5,579,695	)		(13,982,323	)		(8,402,628	)		(203,007	)		(8,199,621	)
Consolidated statements of other comprehensive loss
NET LOSS		(5,579,695	)		(13,982,323	)		(8,402,628	)		(203,007	)		(8,199,621	)
Foreign currency translation loss		(4,078	)		(95,445	)		(91,367	)		-			(91,367	)
Retirement benefit (net of tax)		-			11,806			11,806			-			11,806
TOTAL COMPREHENSIVE LOSS		(5,583,773	)		(14,065,962	)		(8,482,189	)		(203,007	)		(8,279,182	)

8

Condensed consolidated statement of operations and comprehensive loss for the three-months ended June 30, 2024:

Particulars	As Previously Reported			As Restated			Changes			Functional / Other reclassification¹			Errors / Adjustments²
REVENUE:
System sales		4,175,755			4,258,198			82,443			(22,033	)		104,476
Instruments sale		182,088			204,121			22,033			22,033			-
Warranty sale		28,207			28,795			588			-			588
Lease income		-			18,012			18,012			-			18,012
Total revenue		4,386,050			4,509,126			123,076			-			123,076
Cost of revenue		(3,345,560	)		(3,071,340	)		274,220			1,930			272,290
GROSS PROFIT		1,040,491			1,437,786			397,296			1,930			395,366
OPERATING EXPENSES:
Research & development expense		30,068			759,004			728,937			698,979			29,958
Stock compensation expense		-			2,443,792			2,443,792			1,311,714			1,132,078
Depreciation and amortization expense		-			90,476			90,476			90,476			-
Selling, general and administrative expense		3,777,479			2,244,703			(1,532,776	)		(1,776,275	)		243,499
TOTAL OPERATING EXPENSES		3,807,546			5,537,975			1,730,429			324,894			1,405,535
Loss from operations		(2,767,056	)		(4,100,189	)		(1,333,134	)		(322,965	)		(1,010,169	)
OTHER INCOME (EXPENSE):
Interest expense		(229,521	)		(242,577	)		(13,057	)		-			(13,057	)
Interest and other income, net		64,742			202,196			137,454			-			137,454
TOTAL OTHER INCOME (EXPENSE), NET		(164,779	)		(40,381	)		124,398			-			124,398
LOSS BEFORE INCOME TAXES		(2,931,834	)		(4,140,570	)		(1,208,736	)		(322,965	)		(885,772	)
Income tax expense		-			-			-			-			-
NET LOSS		(2,931,834	)		(4,140,570	)		(1,208,736	)		(322,965	)		(885,772	)
Consolidated statements of other comprehensive loss
NET LOSS		(2,931,834	)		(4,140,570	)		(1,208,736	)		(322,965	)		(885,772	)
Foreign currency translation loss		(1,689	)		(16,131	)		(14,442	)		-			(14,442	)
Retirement benefit (net of tax)		-			3,299			3,299			-			3,299
TOTAL COMPREHENSIVE LOSS		(2,933,523	)		(4,153,402	)		(1,219,879	)		(322,965	)		(896,915	)

9

Condensed consolidated statement of cashflows for the six-months ended June 30, 2024:

Particular	As Previously Reported			As Restated			Changes			Functional / Other reclassification¹			Errors / Adjustments²
Cash flows from operating activities:
Net loss		(5,579,695	)		(13,982,323	)		(8,402,628	)		(203,007	)		(8,199,621	)
Adjustments to reconcile net loss to net cash used in operating activities:											-			-
Depreciation and amortization		379,608			170,577			(209,031	)		169,919			(378,950	)
Operating lease liability		149,215			15,331			(133,884	)		-			(133,884	)
Stock compensation expense		3,248,916			9,552,542			6,303,626			-			6,303,626
Interest expense (net)		-			49,815			49,815			-			49,815
Credit loss reserve		-			573,048			573,048			-			573,048
Changes in operating assets and liabilities:											-			-
Accounts receivable, net		(2,702,556	)		(3,475,878	)		(773,322	)		2,219,125			(2,992,447	)
Inventory, net		4,064			(199,750	)		(203,814	)		-			(203,814	)
Receivables from / payable to related parties					280,579			280,579			270,149			10,430
Deffered revenue					3,032,484			3,032,484			-			3,032,484
Prepaids and other current assets		(902,474	)		(488,235	)		414,239			-			414,239
Accounts payable		3,660,476			224,821			(3,435,655	)		-			(3,435,655	)
Prepaids and other non current assets		(9,637	)		(6,180	)		3,457			-			3,457
Other accrued liabilities					558,683			558,683			-			558,683
Lease payments		(342,501	)		-			342,501			-			342,501
Net cash used in operating activities		(2,094,584	)		(3,694,486	)		(1,599,902	)		2,456,186			(4,056,088	)
Cash flows from investing activities:
Accounts receivable, net		(2,900,895	)		-			2,900,895			2,900,895			-
Purchase of property, plant and equipment		(1,488,212	)		(2,239,139	)		(750,927	)		-			(750,927	)
Receivables from / payable to related parties		270,149			-			(270,149	)		(270,149	)		-
Net cash used in investing activities		(4,118,959	)		(2,239,139	)		1,879,819			2,630,746			(750,927	)
Cash flows from financing activities:
Proceeds from issuance of convertible notes to other investors		1,450,000			1,450,000			-			-			-
Proceeds from issuance of convertible notes to principal shareholder		3,000,000			3,000,000			-			-			-
Proceeds from bank overdraft facility (net)		1,688,608			842,610			(845,998	)		-			(845,998	)
Proceeds from securities offering		101,252			-			(101,252	)		-			(101,252	)
Net cash provided by financing activities		6,239,860			5,292,610			(947,250	)		-			(947,250	)
Net change in cash		26,318			(641,015	)		(667,333	)		5,086,932			(5,754,265	)
Effect of exchange rate on cash		(4,080	)		108,572			112,652			-			-
Cash and cash equivalents at the beginning of the period		7,051,927			7,087,845			35,918			-			-
Cash and cash equivalents at end of the period		7,074,165			6,555,402			(518,763	)		5,086,932			(5,754,265	)

(1) Functional / Other reclassifications

In 2024, the Company conducted an in-depth review of its functional expense classification and other reclassifications resulting in more appropriate allocation of costs based on their specific business functions. The following adjustments have been implemented:

1. Reclassification of lease expenses related to Production (COGS) and Research & Development (R&D) from Sales General & Administration cost (SG&A)

Previously, lease expenses related to production and R&D activities were grouped under SG&A expenses. As a result of the review, these costs have now been reclassified to more accurately reflect their functional relationship with core business activities.

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Lease expenses for production-related activities are now included under cost of revenue, as they are directly tied to the production process.

Lease expenses for R&D activities are now classified under R&D expenses, ensuring that these costs are appropriately aligned with innovation efforts and accurately allocated based on the proper assumptions regarding their direct contribution to the Company’s research and development initiatives.

This reclassification provides a clearer picture of how the Company allocates resources toward both operational production and future product development.

2. Salaries and Related Expenses in COGS, R&D and SG&A

Previously, salaries and related expenses were shown directly as a separate head in the statement of Income and Other comprehensive loss. Following further evaluation, these expenses have been reclassified between COGS, R&D and SG&A.

Salaries and benefits for production staff are now included under COGS, aligning them more accurately with the Company’s production costs. This enhances the calculation of gross profit margins and ensures the expenses are matched with the corresponding revenue.

Salaries for R&D personnel have been classified exclusively in R&D expenses, properly attributing costs to the development of new products and technologies and reflecting the Company’s ongoing investment in innovation.

These changes improve the functional categorization of expenses and provide a more accurate depiction of the Company’s operating performance.

3. Other reclassifications in condensed consolidated balance sheet and condensed consolidated statement of cash flows

We noted that there are reclassifications required in the condensed consolidated balance sheet and condensed consolidated statement of cash flows to

- correct current/non-current positions

- correct classification basis nature of receivable/payable

Impact on restated condensed consolidated financial statements for the period ended June 30, 2024

(A) Impact on restated Condensed Consolidated Balance Sheet

Reclassifications were of below nature:

1. Cash & cash equivalents: The company identified that previously cash & cash equivalents includes bank overdraft balance of $ 846,460 which are now correctly reclassified to bank overdraft facility.

2. Accounts receivable of $2,219,215 are reclassified from non-current to current based on their due date of collection as per contract with customers.

3. Receivables from related party (net) of $1,297,410 reclassified from non-current to current based on their due date of collection.

4. Other accrued liabilities: Deferred revenue was previously recorded under other accrued liability (current) amounting to $2,335,601 and other accrued liability (non-current) amounting to $ 939,150. This has now been classified separately as defer revenue current amounting to $ 395,565 and non-current amounting to $2,879,186.

5. Long term borrowings: As at June 30, 2024, long term borrowings amounting to $510,189 are now reclassified to current maturities of long-term debt. Additionally, actuarial liability amounting $33,933 which were previously classified under long term borrowing (non-current) has now been reclassified to other accrued liabilities (non-current).

Differential impact of above adjustments have been corrected in the condensed consolidated statement of cash flows for the six months ended June 30, 2024.

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(B) Reclassifications Condensed Consolidated Statement of Operations and comprehensive loss

Reclassifications were of below nature:

(i) Functional classification

Operating expenses are now reclassified functionally, encompassing Selling, general and administrative expense, research and development expense and stock compensation expense. This reclassification has resulted in increase in the Cost of revenue by $389,932, Research and development expense by $830,919, Stock compensation expense by $3,248,916, Depreciation and amortization expense by $169,919 and a decrease in Selling, general and administrative expense by $4,436,679 for the six months ended June 30, 2024. Similarly, this reclassification has resulted in decrease in the Cost of revenue by $1,930, Research and development expense by $698,979, Stock compensation expense by $1,311,714, Depreciation and amortization expense by $90,476 and a decrease in Selling, general and administrative expense by $1,776,275 for the three months ended June 30, 2024.

(ii) Other reclassifications

Sales of instruments amounting to $ 27,725 and $22,033 for the six months and three months period ended June 30, 2024 respectively, was previously recorded under System sales and has now been correctly classified to Instrument sales.

2. Correction of other errors in measurement of income/expense/asset/liabilities.

We also noted errors in measurement of income/expense/assets/liabilities throughout different financial statements captions which were corrected in the restated financial statements. Below are major error corrections made in condensed consolidated financial statements for the period ended June 30, 2024:

(i)	Errors relating to sales cut-off: The Company identified that sale of systems amounting to $2,542,737 were recorded in previously filed financial statements as System sales that were not related to current period. Correspondingly, a reversal entry was made in current period resulting in decrease of accounts receivable and System sale.
(ii)	Deferred Revenue: The Company identified that sale of system amounting to $887,237 and $104,476 for six months and three months period ended June 30, 2024 respectively, were recorded in previously filed financial statements which relates to unsatisfied performance obligations. Accordingly, the same was rectified in current period that results in increase of deferred revenue and decrease in System sales.
(iii)	Lease income: Lease payments relating to the fixed payments arising out of the systems installed on Pay per use basis was recorded as lease income amounting to $33,024 and $18,012 for six months and three months period ended June 30, 2024 respectively.

(iv) Incorrect recognition of prepaid and other current asset: The Company identified that recovery of security deposits/advances amounting to $316,947 is doubtful and hence a credit loss reserve for the same was created. This was not accounted for in the previously filled financial statements. Additionally, prepaid assets amounting to $ 47,804 were expensed off as services were already availed. Further the Company accrued interest on fixed deposits amounting to $ 119,250 which was not recorded in the previously filed financial statements. As a result of these adjustments, prepaid and other current assets decreased by $245,501.

12

(v) Incorrect capitalization of PPE: The Company identified that it has leased one system on “pay per use basis” to a customer and one system was used for “demo”. However, in the previous financial statements these systems were classified as inventory, which are now capitalized in property, plant and equipment and depreciation is recomputed accordingly. As a result of this adjustment property, plant and equipment was increased by $540,040 (net of depreciation) as at June 30, 2024.   Incorrect useful life of PPE: The Company identified that property, plant, and equipment were previously recorded incorrectly, with depreciation charged based on estimated useful life determined by management. Following a thorough analysis, the asset life were corrected, and depreciation was recalculated accordingly. As a result of this adjustment property, plant, and equipment was increased by $211,282 for the six months ended June 30, 2024.

(vi) The Company identified that the inventory was previously recorded at incorrect valuation. As a result of this adjustment, inventory is increased by $774,596 (net off amount capitalized in property, plant and equipment relating to system leased on “pay per use basis” to a customer and one system was used for “demo” amounting to $542,040 as at June 30, 2024. Consequent to this adjustment, cost of revenue has decreased by $1,908,930 and $272,290 for six months and three months period ended June 30, 2024 respectively.

(vii) Incorrect accrual of expenses: The company has identified some payable balances which was previously recorded incorrectly in books of accounts, as a result amount of $326,551 and $168,830 was reduced from other accrued liability and accounts payable respectively.

(viii) Discounting of Security deposits: The Company identified that discounting of security deposits was not initially performed. As a result, the discounting of security deposits has now been recorded, along with the corresponding prepaid security deposit.

(ix) Stock compensation expenses: The Company had issued stocks to advisors upfront for services to be received in the future. However the Company had recorded complete expense upfront in the previously filed financial statements. This was corrected by reversing the stock compensation expense and recording prepaid and non current assets amounting to $533,495. Further, the stock compensation expense was incorrectly recorded and requires correction in grant date fair value. Consequently, an amount of $6,837,121 and $1,665,573 has additionally recognized in condensed consolidated statements of operations and comprehensive loss for six months and three months ended June 30, 2024 respectively.

(x) The Company identified that certain traveling and lodging expenses amounting to $10,430 were not recorded as business expense of the Company, and this has now been correctly recorded and corresponding receivables from related party (Dr. Sudhir Prem Srivastava) have been decreased.

(xi) Unrecognized Gratuity provision: The Company identified that the expense and provision for gratuity were not recorded for the period ended June 30, 2024. These were subsequently recorded for the in the current period, with balances reconciled against the actuarial report. Accordingly, gratuity liability is recorded in other accrued liabilities (non-current) by $24,458.

(xii) Unrecognized Research & development expenses: The Company identified that there are certain expenses relating to research and development expense which was not recorded in the previously filed financial statements amounting to $29,958 for six and three months ended June 30, 2024 and this has now been recognized.

(xiii) Unrecognized Interest expense: The Company identified that interest expense relating to unwinding of interest on Letter of Credit availed on recourse basis was not recorded in the previously filed financial statements amounting to $23,665 and $13,057 for six and three months ended June 30, 2024 and this has now been recognized.

(xiv) Foreign currency translation loss amounting to $91,367 and $14,442 for the six months and three months for the period ended June 30, 2024 are primarily due to translation difference in foreign exchange on account of errors / adjustments as mentioned above.

Differential impact of above adjustments has been corrected in the condensed consolidated statement of cash flows for the six months ended June 30, 2024.

Going Concern

The accompanying condensed consolidated financial statements have been prepared on a going concern basis which implies the Company will continue to meet its obligations for the next 12 months as of the date these financial statements are issued. The Company had a working capital surplus of $8,291,143 and an accumulated deficit of $38,493,673 as of June 30, 2024. The Company also had a net loss of $13,982,323 for the six months ended June 30, 2024 and $4,140,570 for the three months ended June 30, 2024 which was mainly on account of non-cash items like Stock Compensation expense of $9,552,542 for six months and $2,443,792 for three months, Depreciation of $170,577 for six months and $90,476 for three months. In addition, the Company has been dependent on related parties to fund operations. These conditions raise substantial doubt about the Company’s ability to continue as a going concern within one year after the date that the condensed consolidated financial statements are issued.

13

Between February 1, 2024 and February 14, 2024, the Company raised $2,450,000 through a private offering of 7% One-Year Convertible Promissory Notes (“Notes”) from two affiliates of $1,000,000 each and $450,000 from three other investors to finance its ongoing working capital requirements.

These notes are payable in full after 12 months from the respective date of issuance of these Notes and are convertible at the election of noteholder at any time through the maturity date at a per share price of $4.45.

In April 2024, the Company has further raised $2,000,000 from its affiliate by issuance of two One-Year 7% Promissory Notes of $ 1,000,000 each, to meet certain working capital needs.

However, the Company’s existing cash resources and income from operations, are not expected to provide sufficient funds to carry out the Company’s operations and business development through the next twelve (12) months. The management of the Company is making efforts to raise further funding to scale up operations and meet its longer-term capital needs. While management of the Company believes that it will be successful in its capital formation and planned expansion of its operating activities, there can be no assurance that the Company will be able to raise additional equity capital or be successful in generating additional revenues and ultimately achieving profitability. The accompanying financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities that may result from the possible inability of the Company to continue as a going concern.

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

a) Use of Estimates

The preparation of condensed consolidated financial statements in conformity with accounting principles generally accepted in the United States 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 condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates made by management. Significant estimates included discount rate for measuring significant financing component for deferred collections in revenue contracts, fair value of stock options, incremental borrowing rate for leases and useful life of property plant and equipment.

b) Cash and Cash Equivalents

The Company considers all highly liquid investments purchased with an original maturity of ninety days or less to be cash equivalents.

c) Restricted Cash

Restricted cash includes any cash and cash equivalents that are legally restricted as to withdrawal or usage for the Company’s operations. For the purposes of the condensed consolidated statement of cash flows, the Company includes in its cash and cash-equivalent balances those amounts that have been classified as restricted cash and restricted cash equivalents.

d) Accounts Receivable and Allowance for Expected Credit Losses

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 arrangements and in such cases, the amounts due and recoverable beyond the one year period at the balance sheet date are classified as long-term receivables. Collateral is currently not required. The Company also maintains credit loss allowance 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, 2024, and December 31, 2023 amounted to $255,536 and $nil respectively.

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e) Employee Benefits

Contributions to defined contribution plans are charged to the condensed consolidated statement of operations and comprehensive loss in the period in which services are rendered by the covered employees. Current service costs for defined benefit plans are recognized in the period to which they relate. The liability in respect of defined benefit plans is calculated annually by the Company using the projected unit credit method. The Company records annual amounts relating to its defined benefit plans based on calculations that incorporate various actuarial and other assumptions, including discount rates, mortality, future compensation increases and attrition rates. The Company reviews its assumptions on an annual basis and makes modifications to the assumptions based on current rates and trends when it is appropriate to do so. The effect of modifications to those assumptions is recorded in other comprehensive income (loss) (“OCI”) and amortized to net periodic benefit cost over the expected remaining period of service of the covered employees using the corridor method. The Company believes that the assumptions utilized in recording its obligations under its plans are reasonable based on its experience and market conditions. These assumptions may not be within the control of the Company and accordingly it is reasonably possible that these assumptions could change in future periods. The Company includes the service cost component of the net periodic benefit cost in the same line item or items as other compensation costs arising from services rendered by the respective employees during the period. The interest cost, expected return on plan assets and amortization of actuarial gains/loss, are included in “Other income/(expense), net”.

f) Foreign Currency Translation

The functional currency of each entity in the group is the currency of the primary economic environment in which it operates. Transactions in foreign currencies are initially recorded into functional currency at the rates of exchange prevailing on the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are remeasured into functional currency at the rates of exchange prevailing at the balance sheet date. Non-monetary assets and liabilities are remeasured to the functional currency at exchange rates that prevailed on the date of inception of the transaction. All foreign exchange gains and losses arising on re-measurement are recorded in the Company’s condensed consolidated statement of operations and comprehensive loss.

The assets and liabilities of the subsidiaries for which the functional currency is other than the U.S. dollar are translated into U.S. dollars, the reporting currency, at the rate of exchange prevailing on the balance sheet date. Revenues and expenses are translated into U.S. dollars at the exchange rates prevailing on the last business day of each month, which approximates the average monthly exchange rate. Share capital and other equity items are translated at exchange rates that prevailed on the date of inception of the transaction. Resulting translation adjustments are included in “Accumulated other comprehensive income/(loss)” in the condensed consolidated balance sheet.

The relevant translation rates are as follows: for the six months ended June 30, 2024 closing rate at 83.35 US$: INR, average rate at 83.27 US$:INR.

The relevant translation rates are as follows: for the six months ended June 30, 2023 closing rate at 82.07 US$: INR, average rate at 82.37 US$:INR.

The relevant translation rates are as follows: for the year ended December 31, 2023 closing rate at 83.19 US$: INR, average rate at 82.96 US$:INR

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g) 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, 2024 and December 31, 2023 the Company valued the inventory at $7,217,663 and $7,017,913 respectively.

h) Fair value measurements

ASC Topic 820, Fair Value Measurements and Disclosures defines fair value as the price that would be received upon sale of an asset or paid upon transfer of a liability in an orderly transaction between market participants at the measurement date and in the principal or most advantageous market for that asset or liability. The fair value should be calculated based on assumptions that market participants would use in pricing the asset or liability as against assumptions specific to the entity. In addition, the fair value of liabilities should include consideration of non-performance risk, including the Company’s own credit risk. The fair value hierarchy consists of the following three levels:

● Level I — Quoted prices for identical instruments in active markets.

● Level II — Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations whose inputs are observable or whose significant value drivers are observable.

● Level III — Instruments whose significant value drivers are unobservable.

i) Concentration of Credit Risk

Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash. and cash equivalents, time deposits and accounts receivable. By their nature, all such financial instruments involve risks including the credit risks of non-performance by counterparties. The surplus funds are maintained as cash and cash equivalents and time deposits, placed with highly rated financial institutions to reduce its exposure to market risk with regard to these funds. The Company’s exposure to credit risk on account receivable is influenced mainly by the individual characteristic of each customer and the concentration of risk from the top few customers. To mitigate this risk the Company evaluates the creditworthiness of its customers in conjunction with its revenue recognition processes as well as through its ongoing collectability assessment processes for accounts receivable. The Company does not enter into or trade financial instruments, including derivative financial instruments, for speculative purposes.

j) Commitments and Contingencies

Liabilities for loss contingencies arising from claims, assessments, litigation, fines and penalties, and other sources are recognized when it is probable that a liability has been incurred and the amount of the assessment and/or remediation can be reasonably estimated. A disclosure for a contingent liability is made when there is a possible obligation that may require an outflow of resources. When there is a possible obligation or a present obligation in respect of which the likelihood of outflow of resources is remote, no provision or disclosure is made. Legal costs incurred in connection with such liabilities are expensed as incurred. Capital commitments are disclosed in the condensed consolidated financial statements.

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k) Revenue Recognition 

The Company recognizes revenue in accordance with Accounting Standards Codification, or ASC606, 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.

i. System Sales:

The Company recognizes revenue when the “transfer of control” occurs, which typically takes place upon the delivery of the system to the customer. In cases where a deferred payment arrangement exists, revenue is recognized at the present value of the consideration receivable, adjusted by the present value of any extended warranty obligations.

Key Terms of Customer Contracts

The Company enters into binding contracts with customers through either an agreement or a sales order, with all terms and conditions mutually agreed upon by both parties. The key terms and conditions include:

1. Finalization of Product and Price: Agreement on the specific model of the “SSI Mantra” system and its selling price.

2. Payment Terms: Determination of payment terms, which may involve either a deferred payment arrangement or a one-time payment upon delivery and installation of the system at the customer’s premises.

3. Deferred Payment Model: For deferred payments, customers typically pay an advance amount before the dispatch of the system. The remaining balance is payable in yearly installments over a period of 3 to 5 years. Present value of deferred payment is calculated using the prevailing interest rate.

4. Warranty Services: Instead of negotiating the sales price, the Company provides a warranty service that includes a 1-year assurance warranty and an extended warranty for an additional 3 to 5 years. The exact terms are mutually agreed upon with the customer.

5. Delivery, Installation, and Training: The Company is responsible for delivering and installing the system at the customer’s premises. Post-installation, the Company provides free training to surgeons and surgical staff to enable them to operate the system effectively.

6. Transfer of Risk and Rewards: The risks and rewards associated with the system are transferred to the customer upon delivery to their premises.

ii. Instrument and Accessories Sales:

The Company also sells instruments for use by surgeons in conjunction with the use of our surgical robotic systems. These instruments are consumable items for our hospital customers, and we recognize the revenues from the sale of instruments as and when the instruments are delivered to the customer.

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iii . Warranty and Annual Maintenance Contract Sales:

Under ASC 606, the portion of the equipment sales value attributable to annual maintenance contracts is recorded separately as Warranty sales, which are recognized at their present value. Once the warranty periods expire, the maintenance contracts commence, and the revenue generated from these maintenance contracts is recognized as a distinct revenue stream. 

iv. Lease Income:

Under ASC 842, in case where the systems are installed under a pay-per-use arrangement, the fixed component of income arising from the contract shall be recognized as lease income over the lease term on a straight-line basis. Further this arrangement doesn’t involves any transfer of title to the counterparty, hence the Company has capitalized the cost of production relating to those systems under property, plant and equipment and accordingly charges the depreciation over its period of useful life.

l) Property Plant & Equipment

Property and equipment are stated at cost, which is generally comprised of the purchase price for such property or equipment, non-refundable duties and taxes, but excludes any discounts and/or rebates, less accumulated depreciation and impairment.

The Company reviews property and equipment for impairment whenever events or changes in circumstances indicate that the related carrying amounts may not be recoverable.

Property Plant & Equipment depreciated using the straight-line method at rates determined as per estimated useful life of the assets. The estimated useful lives used in calculating depreciation are as follows: 

	Years
Computer & peripherals	3
Furniture	5
Leasehold improvement	4-9
Office equipment	5
Plant and machinery	4-8
Research & Development equipment	5
Server & networking	3
Vehicles	5
Pay per use systems	10
Demo system	10

m) Long-lived Assets

In accordance with ASC 360, “Property Plant and Equipment”, the Company tests long-lived assets or asset groups for recoverability when events or changes in circumstances indicate that their carrying amount may not be recoverable. Circumstances which could trigger a review include, but are not limited to: significant decreases in the market price of the asset; significant adverse changes in the business climate or legal factors; accumulation of costs significantly in excess of the amount originally expected for the acquisition or construction of the asset; current cash flow or operating losses combined with a history of losses or a forecast of continuing losses associated with the use of the asset and current expectation that the asset will more than likely not be sold or disposed significantly before the end of its estimated useful life. Recoverability is assessed based on the carrying amount of the asset and its fair value which is generally determined based on the sum of the discounted cash flows expected to result from the use and the eventual disposal of the asset, as well as specific appraisal in certain circumstances. An impairment loss is recognized when the carrying amount is not recoverable and exceeds fair value.

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n) Stock Compensation Expense

Under the fair value recognition provisions of ASC Topic 718, Compensation-Stock Compensation, cost is measured at the grant date based on the fair value of the award and is amortized on a straight-line basis over the requisite service periods of the awards, which is generally the vesting period. 

Determining the fair value of stock-based awards at the grant date requires significant judgment, including estimating the expected term over which the stock awards will be outstanding before they are exercised and the expected volatility of our stock.

Stock Options: These provide employees with the right, but not the obligation, to purchase shares of the Company’s stock at a specified price, within a defined period, as per the terms of the stock option agreement. Stock-based compensation expense associated with AVRA 2016 Stock Incentive Plan is measured at fair-value using a Black-Scholes option-pricing model at commencement of each offering period and recognized over that offering period.

Stock Units (Restricted Stock Units, or RSUs): These do not require the employee to exercise any options. Each stock unit automatically converts into a specified number of shares upon vesting. The Company uses last three month’s average share price of common stock on OTC exchange as grant date fair value for RSUs.

The Company recognizes stock-based compensation expense in the condensed consolidated statement of operations and comprehensive loss for both employees and non-employee directors based on the grant-date fair value of the awards. These costs are recognized on a straight-line basis over the requisite service period, or until the date at which the recipient becomes eligible for retirement, if shorter. Forfeitures of equity awards are accounted for as they occur.

The Company accounts for equity instruments issued in exchange for goods or services from non-employees in accordance with ASC Topic 718 Stock Compensation. The costs associated with these equity instruments 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.

o) Income Taxes

The Company accounts for income taxes using the asset and liability method of accounting for income taxes. The Company calculates and provides income taxes in each of the tax jurisdictions in which it operates. The deferred tax assets and liabilities are recognized for future tax consequences attributable to temporary differences between the condensed consolidated financial statement carrying values of existing assets and liabilities and their respective tax bases and all operating losses carried forward, if any. Deferred tax assets and liabilities are measured using tax rates expected to apply to taxable income in the years in which the applicable temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates or tax status is recognized in the statements of income in the period in which the change is identified. The Company releases (reclassifies) the tax effects from AOCI to the condensed consolidated statement of operations and comprehensive loss for amortization of deferred actuarial gain/(loss) on retirement benefits. Deferred tax assets are reduced by a valuation allowance if, based on available evidence, it is more likely than not that some portion or all of the deferred tax assets will not be realized.

The Company establishes provisions for uncertain tax provisions and related interest and penalties when the Company believes those tax positions are not more likely than not of being sustained, if challenged.

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p) Basic and Diluted Loss per Share

The following table sets forth the computation of basic and diluted earnings per share:

	For the Six Months ended
	June 30, 2024 (As Restated)			June 30, 2023
Net Loss (a)		(13,982,323	)		(6,837,504	)
Basic weighted average common shares outstanding (b)		170,734,435			135,965,966
Dilutive effect of convertible note (1)		438,696			-
Dilutive effect of stock-based awards		10,553,371			137,000
Diluted weighted average common shares outstanding		181,726,502			136,102,966
Earnings per share attributable to SS INNOVATIONS INTERNATIONAL INC. stockholders:
Basic and Diluted (a)/(b)		(0.08	)		(0.05	)

	For the Three Months ended
	June 30, 2024 (As Restated)			June 30, 2023
Net Loss (a)		(4,140,570	)		(5,524,488	)
Basic weighted average common shares outstanding (b)		170,739,380			143,599,382
Dilutive effect of convertible note (1)		550,562			-
Dilutive effect of stock-based awards		10,553,371			137,000
Diluted weighted average common shares outstanding		181,843,313			143,736,382
Earnings per share attributable to SS INNOVATIONS INTERNATIONAL INC. stockholders:
Basic and Diluted (a)/(b)		(0.02	)		(0.04	)

Basic net loss per share is calculated by dividing the net loss attributable to SSII stockholders by the weighted-average number of shares of common stock outstanding for the period. The diluted net loss per share is computed by giving effect to all potentially dilutive securities outstanding for the period. For periods in which we report net losses, diluted net loss per share is the same as basic net loss per share because potentially dilutive common shares are not assumed to have been issued if their effect is anti-dilutive.

(1) Represents dilution effect related to the interest on convertible notes in the calculation of diluted weighted average shares outstanding for the portion of the period. Refer Note 9– Notes Payable to the condensed consolidated financial statements for further details.

q) 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.

r) 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. 

s) Leases

The Company determines if an arrangement is a lease at inception of the contract. The Company’s assessment is based on whether: (1) the contract involves the use of a distinct identified asset, (2) the Company obtains the right to substantially all the economic benefit from the use of the asset throughout the term of the contract, and (3) the Company has the right to direct the use of the asset. A lease is classified as a finance lease if any one of the following criteria are met: (1) the lease transfers ownership of the asset by the end of the lease term, (2) the lease contains an option to purchase the asset that is reasonably certain to be exercised, (3) the lease term is for a major part of the remaining useful life of the asset or (4) the present value of the lease payments equals or exceeds substantially all of the fair value of the asset.

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Operating leases are presented within “Right-of-use assets, operating lease” “Current portion of operating lease liabilities” and “Operating lease liabilities, less current portion” in the Company’s condensed consolidated balance sheet.

Right-of-use assets (ROU) assets represent the Company’s right to use an underlying asset during the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease arrangement. Lease liabilities are recognized at commencement date based on the present value of lease payments over the lease term. Operating lease ROU assets are recognized at commencement date in an amount equal to lease liability, adjusted for any lease prepayments, initial direct costs, and lease incentives. For leases in which the rate implicit in the lease is not readily determinable, the Company uses its incremental borrowing rate based on the information available at commencement date. The Company determines the incremental borrowing rate by adjusting the benchmark reference rates with appropriate financing spreads applicable to the respective geographies where the leases are entered and lease specific adjustments for the effects of collateral, if applicable. Lease terms includes the effects of options to extend or terminate the lease when it is reasonably certain at commencement of the lease that the Company will exercise that option. Lease expense for operating lease arrangements is recognized on a straight-line basis over the lease term reflecting single operating lease cost. The Company evaluates lease agreements to determine lease and non-lease components, which are accounted for separately.

Lease payments that depend on factors other than an index or rate are considered variable lease payments and are excluded from the operating lease assets and liabilities and are recognized as expense in the period in which the obligation is incurred. Lease payments include payments for common area maintenance, utilities such as electricity, heating and water, among others, and property taxes, and other similar payments paid to the landlord, which are treated as non-lease component.

The Company accounts for lease-related concessions in accordance with guidance in Topic 842, Leases, to determine, on a lease-by-lease basis, whether the concession provided by lessor should be accounted for as a lease modification.

The Company accounts for a modification as a separate contract when it grants an additional right of use not included in the original lease and the increase is commensurate with the standalone price for the additional right of use, adjusted for the circumstances of the particular contract. Modifications which are not accounted for as a separate contract are reassessed as of the effective date of the modification based on its modified terms and conditions and the facts and circumstances as of that date. Upon modification, the Company remeasures the lease liability to reflect changes to the remaining lease payments and discount rates and recognizes the amount of the remeasurement of the lease liability as an adjustment to the ROU assets. However, if the carrying amount of the ROU assets is reduced to zero as a result of modification, any remaining amount of the remeasurement is recognized as an expense in condensed consolidated statement of operations and comprehensive loss.

The Company reviews ROU assets for impairment whenever events or changes in circumstances indicate that the related carrying amount may not be recoverable.

t) Segment reporting

The Company operates in one segment only. The chief operating decision maker regularly reviews the operating results of the Company on a condensed consolidated basis as part of making decisions for allocating resources and evaluating performance. As of both June 30, 2024 and December 31, 2023 100% of long-lived assets were in India. Revenue from external customers is attributed to individual countries based on customer location.

u) Recent Accounting Pronouncements

On November 27, 2023, the FASB issued Accounting Standards Update (ASU) No. 2023- 07, “Improvements to Reportable Segment Disclosures” (“ASU 2023-07”). The effective date of ASU 2023-07 is for fiscal years beginning after December 15, 2023 and interim periods within fiscal years beginning after December 15, 2024. The adoption of ASU 2023-07 will enhance expense disclosures in segment reporting and other qualitative disclosures and allows for disclosing multiple measures of segment profit or loss. The Company does not expect any significant impact from the adoption of this standard.

On December 14, 2023, the FASB issued ASU No. 2023-09, “Income Taxes (Topic 740): Improvements to Income Tax Disclosures” (“ASU 2023-09”). The effective date of ASU 2023-09 is for fiscal years beginning after December 15, 2024. The adoption of ASU 2023-09 will enhance quantitative and qualitative disclosures related to rate reconciliation of significant components and income tax paid. The Company does not expect any significant impact from the adoption of this standard.

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NOTE 3 – PROPERTY, PLANT AND EQUIPMENT, NET

The Company’s property and equipment consisted of the following: -

	June 30, 2024 (As restated)			December 31, 2023
Gross Amount
Computer & peripheral		261,585			180,009
Furniture		212,173			175,707
Leasehold improvement		200,686			154,651
Office equipment		136,361			103,371
Pay Per Use Systems		1,694,813			-
Plant and machinery		220,128			128,498
Research & Development equipment		-			90,434
Server & networking		34,098			21,999
Vehicles		183,216			183,577
Demo system		271,933			-
Accumulated depreciation		(440,026	)		(331,841	)
Total		2,774,967			706,405

Depreciation expenses for the six months ended June 30, 2024, and 2023 amounted to $170,577 and $67,057 respectively.

Depreciation expenses for the three months ended June 30, 2024, and 2023 amounted to $90,476 and $34,466 respectively.

Further 1 system has been installed for demonstration purposes which was initially recorded as inventory. Hence, from the date of installation it has been recorded under “Property, plant and equipment” in accordance with ASC 360.

NOTE 4 – REVERSE RECAPITALIZATION

The Transaction

On April 14, 2023 (“Closing”), the Company consummated the acquisition of CardioVentures, Inc., a Delaware corporation (“CardioVentures”), pursuant to a Merger Agreement dated November 7, 2022 (the “Merger Agreement”). This agreement was executed among AVRA-SSI Merger Corporation, a wholly owned subsidiary of the Company (“Merger Sub”), CardioVentures, and Dr. Sudhir Srivastava, who, through his holding company, owned a controlling interest in CardioVentures.

At Closing, Merger Sub merged with and into CardioVentures (the “Merger”), with CardioVentures being determined as the accounting acquirer for financial reporting purposes in accordance with ASC 805. The transaction was accounted for as a reverse recapitalization, with AVRA being treated as the Accounting Acquiree. This determination was based on several factors:

● CardioVentures’ stockholders obtained the largest portion of voting rights in the post-combination company.

● The Board and management of the combined entity are primarily composed of individuals associated with CardioVentures.

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● CardioVentures had a larger entity size based on historical operations, assets, revenues, and workforce.

● The ongoing operations, post-combination, are those of CardioVentures.

Merger Consideration and Share Issuance: As part of the Merger, holders of CardioVentures’ outstanding common stock, including certain parties who provided interim convertible financing, were issued 135,808,884 shares of SSII common stock, representing approximately 95% of the issued and outstanding shares of SSII post-merger, while the existing SSII shareholders retained approximately 5% (6,545,531 shares) of the post-merger issued shares.

Pursuant to the Merger Agreement, the holders of CardioVentures’ common stock also received shares 5,000 of newly designated Series A Non-Convertible Preferred Stock (the “Series A Preferred Shares”). These shares:

● Vote together with SSII common stock as a single class, except as required by law.

● Entitle holders to exercise 51% of the total voting power of the Company.

● Are not convertible into common stock, have no dividend rights, and carry a nominal liquidation preference.

● Include protective provisions requiring the majority vote of Series A Preferred Shares to amend their rights.

● Are subject to automatic redemption for nominal consideration if holders own less than 50% of the shares received in the Merger.

Restructuring and Capital Contributions: Concurrent with the Merger:

● The Company changed its name to “SS Innovations International, Inc.,” effected a one-for-ten reverse stock split, and increased its authorized common stock to 250,000,000 shares.

● Dr. Sudhir Srivastava, through his holding company, assigned patents, trademarks, and other intellectual property related to its surgical robotic systems to a wholly owned subsidiary of SSII.

● Dr. Frederic Moll and Andrew Economos provided interim financing during 2022, contributing $3,000,000 each. As a result, Dr. Moll received 7% of SSII’s post-merger issued and outstanding common stock on a fully diluted basis, with 4% treated as stock compensation expenses for strategic value. Economos received 2.86% of SSII’s post-merger issued shares.

Reverse Recapitalization Impact: As part of the reverse recapitalization, CardioVentures acquired the net assets of AVRA at fair value at Closing. The fair value of AVRA’s net assets was assessed to be zero by management, resulting in a recognized loss of $5,000,000 in additional paid-in capital. This loss was due to the difference between the fair value of the shares issued (5% of the total) and AVRA’s net assets.

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NOTE 5 – ACCOUNTS RECEIVABLE, NET

Accounts receivable consisted of the following as of June 30, 2024 and December 31, 2023: 

	June 30, 2024 (As restated)		December 31, 2023
Accounts receivable, net		4,280,188		1,901,244
Accounts receivable, net (non-current)		3,046,783		2,365,013
		7,326,971		4,266,257

The Company performed an analysis of the trade receivables related to SSI India and determined, based on the deferred payment terms of the contracts, that a $3,046,783 may not be due and collectible in next one year and thus company classified these receivables as non- current.

Details of customers which accounted for 10% or more of total revenues during the six months and three months period ended June 30, 2024, and June 30, 2023 and 10% or more of total accounts receivables as at June 30, 2024, and December 31, 2023.

	Percentage of revenue For six months ended						Percentage of revenue For three months ended						Percentage of Accounts Receivables As at
	June 30, 2024			June 30, 2023			June 30, 2024			June 30, 2023			June 30, 2024			December 31, 2023
Customer A		0	%		-			0	%		-			6	%		10	%
Customer B		0	%		17	%		0	%		20	%		5	%		10	%
Customer C		0	%		19	%		0	%		22	%		6	%		12	%
Customer D		1	%		1	%		1	%		1	%		8	%		13	%
Customer E		18	%		-			-			-			-			-
Customer F		6	%		-			11	%		-			-			-
Customer G		6	%		-			11	%		-			-			-
Customer H		8	%		-			14	%		-			9	%		-
Customer I		5	%		-			10	%		-			4	%		-
Customer J		6	%		-			11	%		-			6	%		-
Customer K		7	%		-			12	%		-			6	%		-

NOTE 6 – CASH, CASH EQUIVALENTS AND RESTRICTED CASH

For the purpose of condensed consolidated statement of cash flows, cash, cash equivalents and restricted cash (Current) & (Non-Current) consisted of the following as of June 30, 2024, and December 31, 2023.

		June 30, 2024		December 31,
		(As Restated)		2023
Cash and cash equivalents			608,215		2,022,276
Fixed deposit	Lien against overdraft facility		5,552,579		4,962,515
	Lien against letter of credit		24,565		24,041
	Lien against bank guarantee		43,009		43,094
Restricted cash (Current)			5,620,153		5,029,650
Fixed deposit	Lien against bank guarantee		310,381		19,233
	Lien against credit card facility		16,653		16,686
Restricted cash (Non- current)			327,034		35,919
Total cash, cash equivalents and restricted cash			6,555,402		7,087,845

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We have classified fixed deposits (FDs), which are subject to withdrawal restrictions, as Restricted cash. Additionally, time deposits with a maturity of over one year have been classified as non-current.

The Company has secured a bank overdraft facility from HDFC bank, collateralized by fixed deposits held with HDFC bank. This facility includes a withdrawal restriction tied to the fixed deposit. (Refer Note 10 – Bank Overdraft.)

NOTE 7 – PREPAID, CURRENT AND NON- CURRENT ASSETS

Prepaid, Current and Non-Current Assets consisted of the following as of June 30, 2024, and December 31, 2023:

	June 30, 2024 (As Restated)		December 31, 2023
Receivables from statutory authorities		1,852,166		1,904,859
Prepaid expense- stock compensation current		1,066,991		1,066,991
Security deposits		205,238		299,540
Other prepaid- current assets		1,131,502		618,627
Prepaid and other current assets		4,255,897		3,890,017
Prepaid expense- stock compensation non current		3,556,636		4,090,131
Security deposits		176,245		225,488
Other prepaid- non current assets		67,377		6,825
Prepaid and other non current assets		3,800,258		4,322,444
Total prepaid, current and non current assets		8,056,155		8,212,461

Prepaid expenses – stock compensation represents unamortized portion of common stock granted to advisors for services to be rendered by them in future. (Refer Note 19 – Stock Compensation Expenses)

NOTE 8 – ACCOUNTS PAYABLE AND ACCRUED EXPENSES

Accounts payable and accrued current and non-current expenses consisted of the following as of June 30, 2024, and December 31, 2023:

	June 30, 2024 (As restated)		December 31, 2023
Accounts payable		1,126,373		901,552
Payable to statutory authorities		4,974		35,149
Salary payable		492,651		310,789
Other accrued liabilities		684,287		144,001
Other accrued liabilities		1,181,912		489,939
Provision for Gratuity Long term		58,391		33,933
Other accrued liabilities- Non Current		58,391		33,933
Total accounts payable, accrued current and non current expenses		2,366,676		1,425,424

Accounts payable $1,126,373 as of June 30, 2024, reflect the amounts due to various vendors of supplies and services in the normal course of business operations. Other accrued liabilities of $579,986 as of June 30, 2024, mainly include $333,348 advance from customers and expenses payable of $327,812.

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NOTE 9 – NOTES PAYABLE

In the month of February 2024, the Company raised $2,450,000 through 7% One-Year Convertible Promissory Notes (“Notes”) from two affiliates of $1,000,000 each and $450,000 from other investors to finance its ongoing working capital requirements. These Notes are payable in full after 12 months from the respective date of issuance of these Notes and are convertible at the election of noteholder at any time through the maturity date at a per share price of $4.45.

In month of April 2024, the Company raised $2,000,000 from its affiliate by issuance of two One-Year 7% Promissory Notes of $1,000,000 each, to meet certain working capital requirements. These Notes are payable in full after 12 months from the respective date of issuance of these Notes.

NOTE 10 – BANK OVERDRAFT FACILITY

Bank overdraft facility consisted of the following as of June 30, 2024, and December 31, 2023.  

	June 30, 2024 (As Restated)			December 31, 2023
HDFC Bank Ltd overdraft (with lien against fixed deposits) (OD1)		(602,581	)		4,756,389
HDFC Bank Ltd overdraft (OD2)		(243,944	)		1,262,537
HDFC Bank working capital demand loan (1) - 8.65%		599,849			-
HDFC Bank working capital demand loan (2) - 9.07%		239,940			-
HDFC Bank working capital demand loan (3) - 9 23%		599,849			-
HDFC Bank working capital demand loan (4) - 9.11%		1,319,668			-
HDFC Bank working capital demand loan (5) - 8.50%		4,948,755			-
Bank overdraft		6,861,536			6,018,926

HDFC bank has sanctioned the facilities for the Company which include overdraft and working capital demand loan (WCDL). The facility of HDFC Bank overdraft (OD1) is availed on the basis of lien on the fixed deposits of $5,549,118 provided by the Company while (OD2) is secured by all the current assets, plant and machinery of the Company and additionally secured by personal security of Dr. Sudhir Srivastava for this facility. As of June 30, 2024 and December 31, 2023, all financial and non-financial covenants under the bank overdraft facility agreement were complied with by the Company.

HDFC Bank has sanctioned overdraft facilities subject to operational terms and conditions, including payment on demand, comprehensive insurance coverage against all risks of primary security, periodic inspections of the plant by the bank, and submission of monthly stock and financial records to the bank within 30 days after each month-end. Security for this facility includes current assets, plant and machinery, furniture and fixtures, and a personal guarantee from Dr. Sudhir Srivastava.

The cash credit facility is sanctioned at an interest rate of 9.50% (linked with 3-month T-Bill) per annum on the working capital overdraft limit, with interest payable monthly on the first day of the subsequent month. Overdraft facility against fixed deposits is sanctioned with an interest rate of 1.25% over and above prevailing rate of interest on fixed deposits, payable at monthly intervals on the first day of the following month.

During the current period, the Company has availed the facility of working capital demand loan (WCDL) against the conversion of Bank overdraft which is availed on basis of lien on the fixed deposits provided by the Company, all the current assets, plant and machinery of the Company and additionally on personal guarantee of Dr. Sudhir Srivastava for this facility as set forth above. This facility of WCDL carries a fixed interest rate (as mentioned above) and is repayable in the month of July, August and November 2024 amounting to $1,319,668, $5,548,604 and $839,789 respectively.

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NOTE 11 – BORROWINGS

As part of our ongoing efforts to manage working capital and improve liquidity, we have arranged for Axis Bank to issue a Letter of Credit (LC) on behalf of one of our debtors, Indraprastha Cancer Society & Research Centre (RGCI), for $452,818. This LC is valid for a period of 666 days. It is classified as a short-term liability (including interest) for the year ended December 31, 2023, and for the period ended June 30, 2024.

	June 30, 2024 (As Restated)		December 31, 2023
Current maturities of long-term debt		533,854		510,189

NOTE 12 – DEFERRED REVENUE

Contract liabilities (deferred revenue) consist of advance billings and billing in excess of revenues recognized. Deferred revenue also includes the amount for which services have been rendered but other conditions of revenue recognition are not met, for example, where the Company does not have an enforceable contract.

The revenues attributable to the warranty is recognized over the period to which it relates. During the six months and three months ended June 30, 2024, the company had sold fourteen and ten surgical robotic systems respectively. The revenues attributable to warranty for the agreed warranty period in respect of each of the sales contracts are deferred for recognition over the period to which it relates.

In case of systems sold on deferred payment basis, the present value of the invoiced system sales realizable over the deferred payment period is recognized as systems sales. The difference between the invoiced amount and its present value is adjusted (reduced) in the accounts receivable balance. This difference is recorded as interest income under other income, with a corresponding impact on accounts receivable over the collection period of contract. The Company recorded $159,376 and $41,136 as interest income on account of deferred financing component during the period ended June 30, 2024 and 2023 respectively.

	30 June 2024		December 31,
	(As restated)		2023
Deferred revenue- beginning of period		1,095,480		43,917
Additions		3,100,972		1,053,334
Net changes in liability for pre-existing contracts		4,196,452		1,097,251
Revenue recognized for warranty sales		38,202		1,771
Revenue recognized for instrument sales		30,286		-
Deferred revenue- end of period		4,127,964		1,095,480
Deferred revenue expected to be recognized in:
One year or less		395,565		156,330
More than one year		3,732,399		939,150
		4,127,964		1,095,480

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For the six-months ended June 30, 2024, and 2023:

The following table disaggregates our revenue by major source:

	June 30, 2024		June 30,
	(As restated)		2023
System sales		7,752,957		1,780,197
Instruments sale		322,636		481,736
Warranty sale		38,202		-
Lease income		33,024		-
Total revenue		8,146,819		2,261,933

Revenues for six months ended June 30, 2024 and 2023 by geographic region (determined based upon customer domicile), were as follows:

	June 30, 2024 (As Restated)		June 30, 2023
India		7,638,754		2,261,933
Nepal		508,065		-
		8,146,819		2,261,933

For the three-months ended June 30, 2024, and 2023:

The following table disaggregates our revenue by major source:

	June 30, 2024 (As Restated)		June 30, 2023
System sales		4,258,198		1,424,783
Instruments sale		204,121		467,030
Warranty sale		28,795		-
Lease income		18,012		-
Total revenue		4,509,126		1,891,813

Revenues for three months ended June 30, 2024 and 2023 by geographic region (determined based upon customer domicile), were as follows:

	June 30, 2024 (As Restated)		June 30, 2023
India		4,001,061		1,891,813
Nepal		508,065		-
		4,509,126		1,891,813

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NOTE 13 – STOCKHOLDERS’ EQUITY

Common stock

The Company is authorized to issue up to 250,000,000 shares of common stock, $0.0001 par value per share. The Company has one class of common stock outstanding. Holders of the Company’s common stock are entitled to one vote per share. Upon the liquidation or dissolution of the Company, its common stockholders are entitled to receive a ratable share of the available net assets of the Company after payment of all debts and other liabilities. The Company’s shares of common stock have no pre-emptive, subscription, redemption or conversion rights.

As of June 30, 2024, there were 170,739,380 issued and outstanding common shares. Holders of common stock are entitled to one vote for each share of common stock. 

Preference shares

The Company had outstanding 5,000 shares of preferred stock, par value $0.0001 as at June 30, 2024 and December 31, 2023.

NOTE 14 – RELATED PARTY TRANSACTIONS

As of June 30, 2024, and December 31, 2023, there were amounts due from related parties, respectively. The advances are unsecured, non-interest bearing and due on demand.

	June 30, 2024 (As Restated)		December 31, 2023
Receivable from related party		1,286,980		1,567,559
Total		1,286,980		1,567,559

The receivable balances from related parties are across the Company and its related entities in the normal course of business. All such receivable balances are non-interest bearing and are receivable on demand.

Receivable from related party amounting to $1,286,980 and $1,567,559 as at June 30, 2024 and December 31, 2023 respectively, majorly consists proceeds of convertible promissory notes raised by the Company from the investors during the respective years, but collected by related entities on its behalf.

NOTE 15 – LEASES

The Company conducts its operations using facilities leased under operating lease agreements that expire at various dates.

The following is a summary of operating lease assets and liabilities:

	June 30,
Operating leases	2024 (As Restated)		December 31, 2023
Assets
Right of use operating lease assets		2,448,965		2,657,554
Liabilities
Current portion of operating lease liability		428,713		396,784
Non Current portion of operating lease liability		2,125,946		2,351,113
Total lease liabilities		2,554,659		2,747,897

	June 30,
Operating leases	2024 (As Restated)			December 31, 2023
Weighted average remaining lease term (years)
Ilabs Info Technology 3rd Floor		5.69			6.19
Ilabs Info Technology Ground Floor		7.92			8.42
Village Chhatarpur-1849-1852-Farm		1.08			1.58
Weighted average discount rate
Ilabs Info Technology 3rd Floor		12	%		12	%
Ilabs Info Technology Ground Floor		12	%		12	%
Village Chhatarpur-1849-1852-Farm		10	%		10	%

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Supplemental cash flow and other information related to leases are as follows:

	Period ended June 30
	2024 (As Restated)		2023
Cash payments for amounts included in the measurement of lease liabilities:
Operating cash outflows for operating leases		342,202		193,046

Maturities of lease liabilities as of June 30, 2024 were as follows: 

	Operating Leases
Fiscal Year	Amount (IN $)
2024		351,144
2025		616,692
2026		498,452
2027		506,567
2028		515,088
2029 and thereafter		1,170,498
Total Lease Payment		3,658,441
Less: Imputed Interest		1,103,782
Present value of lease liabilities		2,554,659

NOTE 16 – INCOME TAX

The Company has not recorded income tax benefits for the net operating losses incurred during the period ended June 30, 2024, and 2023 nor for other deferred tax assets generated, due to its uncertainty of realizing a benefit from those items.

The components of loss before income taxes consist of the following:

	For the Six months ended
	June 30, 2024			June 30, 2023
	(As Restated)
Domestic		-			-
Foreign		(13,982,323	)		(6,837,504	)
Total		(13,982,323	)		(6,837,504	)

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The Company does not have federal and state net operating losses for the period ended June 30, 2024, and June 30, 2023.

The Company has not recorded any amounts for unrecognized tax benefits as of June 30, 2024, and June 30, 2023. The Company’s practice is to recognize interest and penalties related to income tax matters in income tax expense. The Company had no accrual of interest and penalties on the Company’s balance sheets and has not recognized interest and penalties in the condensed consolidated statement of operations and comprehensive loss for the period ended June 30, 2024, and June 30, 2023.

The Company is subject to taxation in the United States and India. The Company’s tax returns filed has no pending examinations in India and US.

The effective income tax rate differs from the amount computed by applying the income tax rate of India to Income/(Loss) before income taxes approximately as follows:

	Period ended
	June 30, 2024			June 30, 2023
	(As Restated)
Accounting loss before income tax		(13,982,323	)		(6,837,504	)
Income tax expense (benefit) at federal statutory rate at 21%		(2,936,288	)		(1,435,876	)
Foreign tax rate differential		(582,783	)		(341,875	)
Non-deductible expenses		135,434			6,631
Excess tax expense/(benefit) on depreciation		(38,755	)		4,618
Excess tax expense/(benefit) on security deposit		152			70
Impact of unrecognized deferred tax asset on the loss of the year		3,422,240			1,424,557
Income tax expense/(benefit)		-			-

The Company recorded nil income tax expense for the period ended June 30, 2024 and June 30, 2023, due to losses in current period and prior period and it does not expect to recover the tax benefit on the losses incurred during the period ended June 30, 2024, and June 30, 2023.

The components of the deferred tax balances were as follows:

	June 30, 2024 (As Restated)			December 31, 2023
Deferred tax assets:
Net operating loss carry forwards		5,123,862			763,591
Net operating loss		2,839,581			4,360,270
Lease payments		22,196			18,976
Others		110,865			23,754
		8,096,504			5,166,591
Valuation allowance		(8,060,150	)		(5,145,040	)
Deferred tax assets		36,354			21,551
Deferred tax liabilities:
Depreciation and amortization		36,354			16,763
Others		-			4,788
Deferred tax liabilities		36,354			21,551
Net deferred tax assets/liability		-			-

Deferred tax assets and liabilities are recognized for future tax consequences attributable to temporary differences between the financial statement carrying values of assets and liabilities and their respective tax bases and operating loss carry forwards. The Company performed an analysis of the realizability of deferred tax assets as of June 30, 2024, and December 31, 2023, and recorded a valuation allowance of $8,060,150 and $5,145,040, respectively.

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NOTE 17 – EMPLOYEE BENEFIT PLAN

The Company’s Gratuity Plan in India provides for a lump sum payment to employees on retirement or upon termination of employment in an amount based on the respective employee’s salary and years of employment with the Company. Liabilities under this plan are determined by actuarial valuation using the projected unit credit method. Current service costs for these plans are accrued in the year to which they relate. Actuarial gains or losses or prior service costs, if any, resulting from amendments to the plans, are recognized and amortized over the remaining period of service of the employees.

The Gratuity Plan is unfunded, and the company does not make contributions to the plan assets.

The benefit obligation has been measured as of June 30, 2024, and December 31, 2023. The following table sets forth the activity and the amounts recognized in the Company’s consolidated financial statements at the end of the relevant periods:

	June 30, 2024 (As restated)			December 31, 2023
Change in projected benefit obligation
Projected benefit obligation as on beginning		34,005			10,655
Service cost		12,531			15,707
Interest cost		1,203			759
Benefits paid		-			-
Actuarial loss ^		11,806			7,009
Effect of exchange rate changes		(26	)		(125	)
Projected benefit obligation at end		59,519			34,005
Unfunded status in the end		59,519			34,005
Unfunded amount recognized in consolidated balance sheets
Non-current liability (included under other non-current liabilities		58,391			33,933
Current liability (included under accrued employee costs)		1,128			72
Total accrued liability		59,519			34,005
Accumulated benefit obligation at end		29,968			15,508

^ During the period ended June 30, 2024, and December 31, 2023, actuarial loss was driven by changes in actuarial assumptions, offset by experience adjustments on present value of benefit obligations.

Components of net periodic benefit costs recognized in condensed consolidated statements of operations and comprehensive loss and actuarial loss reclassified from AOCI, were as follows:

	June 30, 2024 (As restated)		December 31, 2023
Service cost		12,531		15,707
Interest cost		1,203		759
Expected return on plan assets		-		-
Amortization of actuarial loss, gross of tax		-		-
Net gratuity cost		13,734		16,466

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The components of retirement benefits included in AOCI, excluding tax effects, were as follows:

	June 30, 2024 (As restated)		June 30, 2023
Net actuarial loss		11,806		5,546
Amount recognized in AOCI, excluding tax effects		11,806		5,546

The weighted average actuarial assumptions used to determine benefit obligations and net gratuity cost were:

	June 30, 2024 (As restated)			December 31, 2023
Discount rate		7.18	%		7.08	%
Rate of increase in compensation levels		12.50	%		15.00	%
Expected long-term rate of return on plan assets per annum		-			-

The Company evaluates these assumptions annually based on its long-term plans of growth and industry standards. The discount rates are either based on current market yields on government securities or yields on government securities adjusted for a suitable risk premium, if available.

Expected benefit payments as of June 30, 2024

June 30, 2024	1,128
2025	9,659
2026	10,741
2027	9,716
2028	8,080
2029-2033	51,699

NOTE 18 – FAIR VALUE MEASUREMENT – FINANCIAL INSTRUMENTS

Assets and liabilities recorded at fair value are measured using the fair value hierarchy, which prioritizes the inputs used in measuring fair value. The levels of the fair value hierarchy are:

● Level 1: observable inputs such as quoted prices in active markets.

● Level 2: inputs other than quoted prices in active markets that are either directly or indirectly observable; and

● Level 3: unobservable inputs for which little or no market data exists, therefore requiring the Company to develop its own assumptions.

The company’s financial assets which are set out below in the table is measured at fair value by considering the level III inputs. The company does not have financial assets which are measured using Level I or Level II inputs.

33

Carrying value and fair value of Level III Financial assets and liabilities:

	Carrying Value				Fair Value
	June 30, 2024 (As restated)		December 31, 2023		June 30, 2024 (As restated)		December 31, 2023
Financial Assets
Account receivables, net (1)		3,046,783		2,365,013		3,046,783		2,365,013
Other non-current financial assets (2)		183,713		171,146		183,713		171,146
Total		3,230,496		2,536,159		3,230,496		2,536,159
Financial Liabilities
Lease liabilities (3)		2,125,946		2,351,113		2,125,946		2,351,113
Total		2,125,946		2,351,113		2,125,946		2,351,113

(1) Account receivable net of allowance for credit losses represent the long-term debtors of the company in relation to the sales made during the year. The Company has presented the receivable balances account after reducing the significant financing component included using the discount rate of 10%.

(2) Other non-current assets include security deposits and long-term fixed deposits with banks. Company has calculated the fair value of security deposit at present value of future receipt using discount rate of 10% and fair value of long-term fixed deposit with banks are carried at cost which is approximate to the fair value.

(3) The Company has long term lease liabilities in relation to office properties which is carried at cost using the discount rate (Refer Note 15 Leases).

The Company has assessed that the financial instruments that are not carried at fair value consist primarily of cash and cash equivalents, restricted cash, receivable from related party, prepaid and other current assets, note payable, Bank overdraft facility and account payable for which fair values approximate their carrying amounts due to the short-term maturities of these instruments.

NOTE 19 – STOCK COMPENSATION EXPENSES

Stock options to Employees: Company grants share of the company’s common stock, par value $ 0.0001. The price at which the Grantee shall be entitled to purchase the Shares upon the exercise of the Option (the “Option Price”) shall be $ 5.00 per Share. The Shares shall vest as to twenty percent (20%) of the shares covered thereunder as of the Grant Date, with the balance of the shares covered thereunder vesting in four equal annual installments on the first, second, third and fourth anniversaries of the Grant Date provided that the Grantee remains in the Continuous Employment of the Company or any of its subsidiaries or affiliates, as defined and provided for in the Plan. The Options, to the extent vested and not exercised, shall expire five (5) years from the Grant Date.

Restricted Stock Award to Employees: Company grants restricted share of the company’s common stock, $ 0.0001 per value under the company’s 2016 stock incentive plan. The grant of restricted share is made in consideration of services to be rendered by the Grantee to the company. The Restricted Stock Award shall vest as to twenty percent (20%) of the Restricted Shares covered thereunder as of the Grant Date, with the balance of the Restricted Shares covered thereunder vesting in four equal annual installments on the first, second, third and fourth anniversaries of the Grant Date, subject to the Grantee’s continued employment by the Company, as provided for in the Plan. Unvested portions of the Restricted Stock Award may not be transferred at any time, except to the extent provided for in the Plan. Until the Restricted Stock Award granted under this Agreement vests in accordance with the terms hereof, the Grantee shall have no rights as a shareholder (including, without limitation, voting and dividend rights) with respect to any of the Restricted Shares covered by the Restricted Stock Award.

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Stock Options issued to Doctors/Proctors as Advisors: Company issue common stock (“Advisory Share”) to retain the Advisor to perform the Services and in exchange for the compensation, which is issued in a phased manner as determined by the company. The “Services” includes (a) provide proctoring and medical advisory services, (b) advise the Company related to development of surgical robotics procedures and improvements in design and technology (c) participate in case observation and live surgery performance (d) disseminate information about Company’s products as speaker in various scientific meets/surgical robotic conferences globally.

Stock options:

Stock options activity for the period ended June 30, 2024, was as follows:

	Number of shares options		Weighted average grant date fair value
Unvested balance as of December 31, 2023		3,303,601	$	3.41
Granted		3,350,221	$	1.39
Vested		3,350,221	$	1.39
Forfeited		-		-
Unvested balance as of June 30, 2024		3,303,601	$	3.41

The aggregate fair value of the stock options vested was $ 4,656,807 and $ 3,152,066 during the period ended June 30, 2024 and year ended December 31, 2023 respectively. The options vested during the year were not exercised at the end of the June 30, 2024.

Restricted Stock Awards (RSA)

Restricted Stock Awards activity for the period ended June 30, 2024, was as follows:

	Number of shares RSAs		Weighted average grant date fair value per share
Unvested balance as of December 31, 2023		2,807,289	$	7.76
Granted		-		-
Vested		-		-
Forfeited		-		-
Unvested balance as of June 30, 2024		2,807,289	$	7.76

During the period ended June 30, 2024, 358,294 RSA are vested.

The aggregate vesting date fair value of RSAs vested was $nil and $ 6,095,401 during the period ended June 30, 2024, and year ended December 31, 2023 respectively. There were no RSAs issued during the period ended June 30, 2024.

35

Advisory shares:

Common stock issued to consultants as advisory shares during the period as follows:

Grant dates	Fair value on grant date	Unvested options in the beginning		Option vested		Unvested option at period end
01-Jun-23	8.15		5,000		5,000		-
31-Oct-23	8.99		52,963		6,908		46,055
31-Oct-23	8.99		7,130		930		6,200
31-Oct 23	8.99		5,673		740		4,933
31-Oct 23	8.99		22,368		2,918		19,450
01-Mar-24	6.75		-		15,000		-
			93,134		31,496		76,638

The aggregate vesting date fair value of Advisory shares vested was $244,147 and $5,633,147 during the period ended June 30, 2024 and year ended December 31, 2023 respectively.

Stock compensation expenses

During the period ended June 30, 2024 and June 30, 2023, the Company has recorded share compensation expense of $ 9,552,542 and $8,150 respectively in relation to stock options, RSAs and Advisory shares as follows:

	For the period ended		For the period
	June 30, 2024 (As Restated)		ended June 30, 2023
Stock options		6,094,592		-
Restricted stock award (RSA)		2,780,358		-
Advisory shares		677,592		8,150
Total stock compensation expenses		9,552,542		8,150

Stock option model & assumptions

The Black-Scholes-Merton option pricing model is used to estimate the fair value of stock options and RSU granted under the Company’s share based compensation plans and the rights to acquire stock granted under the stock options plans. The weighted-average estimated fair values of stock options and the rights to acquire stock as well as the weighted-average assumptions used in calculating the fair values of stock options and the rights to acquire stock that were granted during June 30, 2024 is as follows: 

	Period ended June 30, 2024 (As restated)
	Stock Options			Stock Options			Restricted stock awards
Grant date	February 13, 2024			November 27, 2023			November 27, 2023
Fair value on grant date	$	1.39		$	3.41		$	7.76
Risk free interest rate		4.40	%		4.40	%		4.40	%
Expected volatility		24.96	%		18.50	%		18.50	%
Exercise prices	$	5.00		$	5.00		$	0.0001
Share price on the grant date	$	5.50		$	7.76		$	7.76
Expected term of vesting		2.5 years			4 years			4 years

As share-based compensation expense recognized in the Condensed Consolidated Statements of operations and comprehensive loss during the period ended June 30, 2024, and 2023, is based on awards ultimately expected to vest, it has been reduced for estimated forfeitures, if any.

36

As of June 30, 2024, there was $9,827,493, $19,004,208 of total unrecognized compensation expense related to unvested stock options and restricted stock units to acquire common stock under the 2016 Inventive Stock plan respectively. The unrecognized compensation expense is expected to be recognized over a weighted-average period of 3.41 years for unvested stock options and restricted stock units for rights granted to acquire common stock under 2016 Incentive Stock Plan.

NOTE 20 – COMMITMENTS

The Company, through its SSI-India subsidiary, occupies office, manufacturing, and assembly space in Gurugram, Haryana (India) under a lease agreement entered into in March 2021, with monthly payments of $24,384 plus applicable taxes. This lease expires in March 2030. Effective June 01, 2023, SSI-India subsidiary signed another lease agreement for occupying an additional space in Gurugram, to further expand its manufacturing and assembly capacity. This lease provides for a monthly payment of $16,144 plus taxes and expires on May 31, 2032, subject to further renewal on mutually acceptable terms. In August 2023, SSI India had leased a house pursuant to the terms of employment agreement to provide residential accommodation to Dr Sudhir Srivastava. This lease provides for a monthly payment of $ 17,995 plus taxes.

NOTE 21 – SUBSEQUENT EVENTS

1. In July 2024, the Company raised $500,000 from Sushruta Pvt Ltd. by issuance of another One-Year 7% One-Year Promissory notes to meet certain working capital needs.

2. In August 2024, the Company issued 125,000 shares to certain doctors/proctors for providing their proctoring/mentoring services.

3. The Company borrowed $250,000 each in the months of October and November 2024 from Sushruta Pvt Ltd. to meet certain working capital needs evidenced by an additional One-Year 7% Promissory Note in such principal amount. In October 2024, our SSI-India subsidiary’s working capital facilities from HDFC bank were also increased by an additional $1,093,881.

4. In December 2024, the Company borrowed $2,000,000 from Sushruta Pvt. Ltd. to meet certain working capital needs evidenced by an additional 7% One-Year Convertible Promissory Note.

5. In January 2025, the Company borrowed $20,000,000 from Sushruta Pvt. Ltd. to meet certain working capital needs evidenced by an additional 7% One-Year Convertible Promissory Note.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Forward-Looking Statements

This Amendment contains certain statements that constitute forward-looking statements. Any and all statements contained in this Amendment that are not statements of historical fact may be deemed forward-looking statements. Terms such as “may,” “might,” “would,” “should,” “could,” “project,” “estimate,” “pro-forma,” “predict,” “potential,” “strategy,” “anticipate,” “attempt,” “develop,” “plan,” “help,” “believe,” “continue,” “intend,” “expect,” “future” and terms of similar import (including the negative of any of the foregoing) may be intended to identify forward-looking statements. However, not all forward-looking statements may contain one or more of these identifying terms. Those statements appear in this Report, and include statements regarding the intent, belief or current expectations of our Company and management that are subject to known and unknown risks, uncertainties and assumptions and other factors that could cause actual results and the timing of certain events to differ materially from future results expressed or implied by such forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those discussed in “Item 1. Business” and “Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.” in our 2023 Form 10-K, as amended.

Forward-looking statements in this Amendment may include, without limitation, statements regarding:

(i) the plans and objectives of management for future operations, including plans or objectives relating to the marketing of our surgical robotic systems both in and out of India;

(ii) the timing or likelihood of regulatory filing, approvals and required licenses for marketing our surgical robotic systems in the U.S., the European Union (the “EU”) and in other countries outside of India;

(iii) our ability to adequately protect our intellectual property rights and enforce such rights to avoid violation of the intellectual property rights of others;

(iv) the timing, costs and other aspects of our surgical robotic systems;

(v) our estimates regarding the market opportunity, clinical utility, potential advantages and market acceptance of our surgical robotic systems;

(vi) the impact of government laws and regulations;

(vii) our ability to recruit and retain qualified research and development personnel;

(viii) difficulties in maintaining commercial scale manufacturing capacity and capability and our ability to generate growth;

(ix) uncertainty in industry demand;

(x) general economic conditions and market conditions in our industry;

(xi) a projection of income (including income/loss), earnings (including earnings/loss) per share, capital expenditures, dividends, capital structure or other financial items;

(xii) our future financial performance, including any such statement contained in a discussion and analysis of financial condition by management or in the results of operations included pursuant to the rules and regulations of the SEC; and

(xiii) Changes resulting from the restatement of our condensed consolidated financial statements included in this Report.

These statements are not guarantees of future performance and are subject to numerous risks, uncertainties, and assumptions that are difficult to predict.

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Because forward-looking statements are inherently subject to risks and uncertainties, some of which cannot be predicted or quantified, you should not rely upon forward-looking statements as predictions of future events. The events and circumstances reflected in the forward-looking statements may not be achieved or occur and actual results could differ materially from those projected in the forward-looking statements. Except as required by applicable law, including the securities laws of the United States and the rules and regulations of the SEC, we do not assume any obligation to update any forward-looking statement. We disclaim any intention or obligation to update or revise any forward-looking statement contained herein, whether as a result of new information, future events or otherwise.

Introduction

The Company was originally incorporated in the state of Florida on February 4, 2015, under the name “Avra Surgical Microsystems, Inc.,” and changed its name to “Avra Medical Robotics, Inc.” (“AVRA”) on November 5, 2015.

From inception through April 13, 2023, we were engaged in developing a fully autonomous medical robotic system using proprietary software which integrated Artificial Intelligence and Deep Learning, or Machine Learning. Our research and development efforts were based in Orlando, Florida, where we established a research partnership with the University of Central Florida.

In July and August 2022, AVRA and the management of Cardio Ventures, Inc. (“CardioVentures”) began discussions to explore potential merger synergies, leading to a formal agreement in November 2022 by and among the Company, a wholly owned subsidiary of the Company (“Merger Sub”), CardioVentures and Dr. Sudhir Srivastava, who, through his holding company, owned a controlling interest in CardioVentures (the “Merger Agreement”). Cardio Ventures was primarily seeking a platform to raise funds in the U.S. to support operations of its subsidiary, SSI India. AVRA’s ability to attract funds from its high-net-worth investors became a focal point in these discussions, presenting a path for AVRA shareholders to also benefit from the merger. Consequently, as part of the merger strategy, AVRA raised funds through convertible notes (at the rate of 7% interest per annum), which were subsequently provided to Cardio Ventures via convertible notes issued by Cardio Ventures. Investors like Andrew Economos and Dr. Fred Moll, both existing AVRA shareholders, contributed to these notes, foreseeing significant commercial benefits and the potential for AVRA’s turnaround post-merger, despite AVRA’s status as an inactive company at the time. On April 14, 2023, we consummated the acquisition of by merger of CardioVentures, pursuant to the Merger Agreement.

The Company is currently engaged in the business of developing, manufacturing, and selling a surgical robotic system under our proprietary brand “SSi Mantra,” together with allied accessories and a wide range of surgical instruments capable of supporting cardiac and a variety of other surgical procedures. Having commenced commercial sales of our surgical robotic system in the second half of 2022, and its allied instruments and accessories. Accordingly, the operating results detailed below largely reflect the impact of the consummation of the Reverse Merger transaction in April 2023, when compared with operating results for the corresponding period in 2022.

Our financial performance is largely driven by increasing awareness of the benefits of robotically assisted surgery, improved learning curves for robotic surgeons and the affordability and accessibility of surgical robotic technology. Our financial performance is also dependent on our obtaining regulatory approvals in various regulated markets where we have plans to sell our products. Robotically assisted surgeries are increasingly being recognized as an approved treatment modality from an insurance coverage perspective.

Our manufacturing operations being based in India derive significant operating cost advantages in terms of availability of quality and cost-effective fabrication/3D printing solutions, electronic/electrical/mechanical components, outsourced services and skilled manpower. All these factors help us in having lower costs of production which eventually helps us make our surgical robotic system cost effective and relatively affordable.

The condensed consolidated financial statements appearing elsewhere in this report have been prepared assuming the Company will continue as a going concern. In the second half of 2022, the Company commercially launched its “SSI Mantra” robotic surgical system in India. During the six months and three months period ended June 30, 2024, we have sold 14 and 9 systems respectively, which have performed more than 230 procedures of various types involving varying degrees of complexities. 

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Results of Operations

Introduction

The following discussion should be read in conjunction with our condensed consolidated financial statement and Notes thereto. This section of the Report generally discusses 2024 and 2023 items and quarter-to- quarter comparisons between 2024 and 2023.

The Company has recently commenced its commercial operations by way of the sale of its product and has not yet established consistent operational revenue cash flows to meet all its fixed operating costs and hence may continue to incur losses for some time. These conditions raise doubt about the Company’s ability to continue as a going concern.

The financial statements appearing elsewhere in this report have been prepared assuming that the Company will continue as a going concern.

The following table provides selected balance sheet data for our Company as of June 30, 2024, and December 31, 2023:

Balance Sheet Data 

	As of June 30, 2023 (As Restated)		As of December 31, 2023
Cash		608,215		2,022,276
Restricted cash**		5,947,187		5,065,569
Total Assets		35,667,103		31, 515,994
Total Liabilities		20,894,689		11 ,797,916
Total liabilities and stockholders’ equity		35,667,103		31,515,994

** Represents Fixed Deposits held by bank as security for bank facilities and certain performance guarantees.

To date, the Company has mainly relied on debt and equity raised in private offerings to finance its operations. Subsequent to June 2024, the Company has raised $23,000,000 through its affiliates till January 2025, and the Company plans to raise additional capital through further private or public offerings. However, if we are unable to do so and if we experience a shortfall in operating capital, we could be faced with having to limit our expansion plans, research and development and marketing activities

		For the three months ended
S. No.	Particulars	June 30, 2024 (As restated)			June 30, 2023
1	Total Revenue		4,509,126			1,891,813
2	Cost of revenue		(3,071,340	)		(1,124,116	)
3	Gross profit		1,437,786			767,697
4	Research & development expense		759,004			246,426
5	Stock compensation expense		2,443,792			8,150
6	Depreciation and amortization expense		90,476			34,466
7	Selling, general and administrative expense		2,244,703			5,669,790
8	Loss from operations		(4,100,189	)		(5,191,135	)
9	Other income (expenses)		(40,381	)		(333,353	)
10	Income tax expense		-			-
11	Net loss		(4,140,570	)		(5,524,488	)

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Three months ended June 30, 2024, as compared to three months ended June 30, 2023

Total Revenue. We had revenues of $4,509,126 (comprising $4,258,198 of system sales, $204,121 of instrument sales, $28,795 of warranty sales and lease income $18,012), for the three months ended June 30, 2024, compared to $1,891,813 (comprising $1,424,783 of system sales and $467,030 of instrument sales) for the three months ended June 30, 2023. The increase in net total is primarily due to sale of increased number of surgical robotic systems and instruments in the period ended June 30, 2024 as compared to the period ended June 30, 2023.

Research and development expense. Research and development expenses were $759,004 during the three months ended June 30, 2024 as compared to $246,426 for the three months ended June 30, 2023. Research and development expense primarily consists of salaries paid to engineers, amounting to $431,920 and $151,560 for the period ended June 30, 2024 and 2023, respectively. The increase in research and development expenses as compared to the previous period is in line with the Company’s continued focus on improving the design and technological capabilities of its existing SSi Mantra system and further expanding its product offerings.

Stock compensation expense. We had compensation expenses of $2,443,792 and $8,150 during three months ended June 30, 2024 and June 30, 2023, respectively. The substantial increase in the stock compensation expense in 2024 is primarily the result of the award of stock grants to employees of the subsidiaries and the issuance of stock awards and stock options to executive officers of the Company and its subsidiaries in November 2023 under our Incentive Stock Plan, in recognition of their efforts in developing and commercializing our SSi Mantra system.

Depreciation and amortization expense. We had depreciation and amortization expense of $90,476 for the period ended June 30, 2024, as compared to $34,466 for the period ended June 30, 2023. The depreciation and amortization expenses primarily consist of depreciation on fixed assets only.

Selling, general and administrative expense. We incurred $2,244,703 in general and administrative expenses during the three months ended June 30, 2024, as compared to $5,669,790, June 30, 2023, respectively.

Our SG&A expense comprise of expense relating to salaries and benefits, retirement benefits as well as costs related to recruitment, other compensation expenses of sales and marketing and client management personnel, sales commission, travel and brand building, client events and conferences, training and retention of senior management and other support personnel in enabling functions, telecommunications, utilities, travel and other miscellaneous administrative costs. S,G&A expense also include acquisition-related costs, legal and professional fees (which represent the costs of third party legal, tax, accounting, immigration and other advisors), investment in product development, digital technology, advanced automation and robotics, related to grant of our equity awards to members of our board of directors. We expect our S,G&A expense to increase as we continue to strengthen our support and enabling functions and invest in leadership development, performance management and training programs.

The decrease in S,G&A expense is due to non-cash expense incurred relating to shares issued to investors and advisors during the period June 30, 2023.

Other income/expenses. We incurred other expenses of $40,381 for the three months ended June 30, 2024, as compared to $333,353 of other expenses during the three months ended June 30, 2023. The reduction in interest expense from June 30, 2023 to June 30, 2024 resulted from an increase in interest income on fixed deposits with HDFC bank in India.

Net Loss. We incurred a net loss of $4,140,570 for the three months ended June 30, 2024, as compared to a net loss of $5,524,488 for the three months ended June 30, 2023. The decrease in net loss from June 30, 2023 to June 30, 2024 is primarily the result of the decrease in general and administrative expenses of $3,425,087 and increase in stock compensation expense of $2,435,642 on account of stock awards and options granted to the employees and executive officers of the Company respectively.

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		For the Six months ended
S. No.	Particulars	June 30, 2024 (As restated)			June 30, 2023
1	Total Revenue		8,146,819			2,261,933
2	Cost of revenue		(5,980,851	)		(1,416,289	)
3	Gross profit		2,165,968			845,644
4	Research & development expense		1,286,995			488,553
5	Stock compensation expense		9,552,542			8,150
6	Depreciation and amortization expense		170,577			67,057
7	Selling, general and administrative expense		5,088,362			6,543,648
8	Loss from operations		(13,932,508	)		(6,261,764	)
9	Other income (expenses)		(49,815	)		(575,740	)
10	Income tax expense		-			-
11	Net loss		(13,982,323	)		(6,837,504	)

Six months ended June 30, 2024, as compared to Six months ended June 30, 2023

Total Revenue. We had revenues of $8,146,819 (comprising $7,752,957 of system sales, $322,636 of instrument sales, $38,202 of warranty sales and lease income $33,024), for the six months ended June 30, 2024, compared to $2,261,933 (comprising $1,780,197 of system sales and $481,736 of instrument sales) for the six months ended June 30, 2023. The increase in net total is primarily due to sale of increased number of surgical robotic systems and instruments in the period ended June 30, 2024 as compared to the period ended June 30, 2023.

Research and development expense. Research and development expenses were $1,286,995 during the six months ended June 30, 2024 as compared to $488,553 for the three months ended June 30, 2023. Research and development expense primarily consists of salaries paid to engineers, amounting to $618,471 and $297,123 for the period ended June 30, 2024 and 2023, respectively. The increase in research and development expenses as compared to the previous year is in line with the Company’s continued focus on improving the design and technological capabilities of its existing SSi Mantra system and further expanding its product offerings.

Stock compensation expense. We had compensation expenses of $9,552,542 and $8,150 during six months ended June 30, 2024 and June 30, 2023, respectively. The substantial increase in the stock compensation expense in 2024 is primarily the result of the award of stock grants to employees of the subsidiaries and the issuance of stock awards and stock options to executive officers of the Company and its subsidiaries in November 2023 under our Incentive Stock Plan, in recognition of their efforts in developing and commercializing our SSi Mantra system.

Depreciation and amortization expense. We had depreciation and amortization expense of $170,577 for the period ended June 30, 2024, as compared to $67,057 for the period ended June 30, 2023. The depreciation and amortization expenses primarily consist of depreciation on fixed assets only.

Selling, general and administrative expense. We incurred $5,088,362 in general and administrative expenses during the six months ended June 30, 2024, as compared to $6,543,648, June 30, 2023, respectively.

Our SG&A expense comprise of expense relating to salaries and benefits, retirement benefits as well as costs related to recruitment, other compensation expenses of sales and marketing and client management personnel, sales commission, travel and brand building, client events and conferences, training and retention of senior management and other support personnel in enabling functions, telecommunications, utilities, travel and other miscellaneous administrative costs. S,G&A expense also include acquisition-related costs, legal and professional fees (which represent the costs of third party legal, tax, accounting, immigration and other advisors), investment in product development, digital technology, advanced automation and robotics, related to grant of our equity awards to members of our board of directors. We expect our S,G&A expense to increase as we continue to strengthen our support and enabling functions and invest in leadership development, performance management and training programs.

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The decrease in S,G&A expense is due to non-cash expense incurred relating to shares issued to investors and advisors during the period June 30, 2023.

Other income/expenses. We incurred other expenses of $49,815 for the six months ended June 30, 2024, as compared to $575,740 of other expenses during the six months ended June 30, 2023. The reduction in interest expense from June 30, 2023 to June 30, 2024 resulted from an increase in interest income on fixed deposits with HDFC bank in India.

Net Loss. We incurred a net loss of $13,932,508 for the six months ended June 30, 2024, as compared to a net loss of $6,837,504 for the six months ended June 30, 2023. The increase in net loss from June 30, 2023 to June 30, 2024 is primarily the result of the decrease in general and administrative expenses of $1,455,286 and increase in stock compensation expense of $9,544,392 on account of stock awards and options granted to the employees and executive officers of the Company respectively.

Liquidity and Capital Resources

The Company expects to require substantial funds for scaling up its operations, for incurring capital expenditure to have its own in-house machining and tooling capacity and to continue to finance its research and development work in the field of surgical robotics.

Between February 1, 2024, and February 14, 2024, the Company raised $2,450,000 through a private offering of 7% One-Year Convertible Promissory Notes (“Notes”) from two affiliates of $1,000,000 each and $450,000 from three other investors to finance its ongoing working capital requirements.

These Notes are payable in full after 12 months from the respective date of issuance of these Notes and are convertible at the election of noteholder at any time through the maturity date at a per share price of $4.45.

In April 2024, the Company has raised $2,000,000 from its affiliate by issuance of two One-Year 7% Promissory Notes of $1,000,000 each, to meet certain working capital needs.

While we have been successful in raising funds to meet our working capital needs to date, believe that we have the resources to do so for the balance, we do not have any committed sources of funding and there are no assurances that we will be able to secure additional funding if and when needed. The condensed consolidated financial statements included in this report have been prepared assuming that the Company will continue as a going concern; however, if the efforts noted above are not successful, it would raise substantial doubt about the Company’s ability to continue as a going concern. If we cannot obtain financing, then we may be forced to further curtail our operations or consider other strategic alternatives. Even if we are successful in raising the additional financing, there is no assurance regarding the terms of any additional investment and any such investment or other strategic alternative would likely substantially dilute our current shareholders.

		For the six months ended
S. No.	Particulars	June 30, 2024 (As restated)			June 30, 2023
	Net cash provided by operating activities:
1	Net loss		(13,982,323	)		(6,837,504	)
2	Non-cash adjustments		10,361,313			5,128,523
3	Change in operating assets and liabilities		(73,476	)		(3,667,525	)
4	Net cash used in operating activities		(3,694,486	)		(5,376,506	)
5	Net cash (used in) / provided by investing activities		(2,239,139	)		(105,536	)
6	Net cash provided by financing activities		5,292,610			5,759,682
7	Net change in cash		(641,015	)		277,640
8	Effect of exchange rate on cash		108,572			(25,326	)
9	Cash at beginning of year		7,087,845			274,625
10	Cash at end of year		6,555,402			526,939

Cash Flows from Operating Activities

During the six months ended June 30, 2024, net cash used in operating activities was $3,694,486 resulting from our net loss of $13,982,323 partially offset by non-cash charges of $10,361,093 primarily driven by credit loss reserve, depreciation charges and stock compensation expense. We had cash used in our operating assets and liabilities of $73,476 primarily driven by increases in inventory, accounts payable and prepaid expenses.

During the six months ended June 30, 2023, net cash used in operating activities was $5,376,506 resulting from our net loss of $6,837,504 partially offset by non-cash charges of $5,128,523 primarily driven by depreciation charges and stock compensation expense. We had cash used in our operating assets and liabilities of $3,667,525 primarily driven by increases in inventory, accounts receivable and prepaid expenses.

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Cash Flows from Investing Activities

During the six months ended June 30, 2024, we had net cash used in investing activities of $2,239,139 in purchase of property and equipment.

During the six months ended June 30, 2023, we had net cash used in investing activities of $105,536 in purchase of property and equipment.

Cash Flows from Financing Activities

During the six months ended June 30, 2024, we had net cash, provided by financing activities of $5,292,610, which comprised of $842,610 in proceeds from our bank overdraft facility (net), $4,450,000 in proceeds from issuance of convertible notes to principal shareholder and other investors as set forth above.

During the six-months ended June 30, 2023, we had net cash, provided by financing activities of $5,759,682, which comprised of $1,677,577 in proceeds from our bank overdraft facility (net), $1,225,000 in proceeds from issuance of convertible notes to principal shareholder, $3,000,000 in proceeds from issuance of convertible notes to other investors and $142,895 on account of repayment of term loans.

While we have been successful in raising funds to finance our operations since inception and we believe that we will be successful in obtaining the necessary financing to fund our operations going forward, we do not have any committed sources of funding and there are no assurance that we will be able to secure additional funding. The accompanying condensed consolidated financial statements have been prepared assuming that the Company will continue as a going concern; however, if we cannot obtain financing, then we may be forced to further curtail our operations or consider other strategic alternatives. Even if we are successful in raising the additional financing, there is no assurance regarding the terms of any additional investment and any such investment or other strategic alternative would likely substantially dilute our current shareholders.

Critical Accounting Policies

Use of Estimates

The preparation of condensed consolidated financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Significant estimates included discount rate for measuring significant financing component for deferred collections in revenue contracts, fair value of stock options, incremental borrowing rate for leases and useful life of property plant and equipment.

Off-Balance Sheet Arrangements 

There are no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to investors.

Item 4. Controls and Procedures.

Management’s Report on Disclosure Controls and Procedures

In connection with the restatement of the Company’s financial statements included in this Amendment, our Chief Executive Officer and Chief Financial Officer re-evaluated the effectiveness of the design and operation of our disclosure controls and procedures and internal control over financial reporting, as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), as of June 30, 2024.

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To ensure that information required to be disclosed by us in the reports filed or submitted by us under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the rules and forms of the SEC, including to ensure that information required to be disclosed by us in the reports filed or submitted by us under the Exchange Act is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.

Based on that re-evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that as of June 30, 2024, our disclosure controls and procedures and internal control over financial reporting were not effective, due to material weaknesses in SSi’s internal control in that:

● We failed to design controls and procedures to provide reasonable assurance that GAAP was being properly applied to the matters resulting the restatement of our financial statements, including accounting for merger transaction, recognition of revenue in case of deferred payment sales, recognition of right of use of certain assets and lease liabilities and functional and other classifications, resulting in the accounting errors described in Note 1. Restatement of Previously Issued Condensed Consolidated Financial Statements of this Amendment.

● We do not have written documentation of our internal control policies and procedures. Written documentation of key internal controls over financial reporting is a requirement of Section 404 of the Sarbanes-Oxley Act. Management evaluated the impact of our failure to have written documentation of our internal controls and procedures on our assessment of our disclosure controls and procedures and has concluded that the control deficiency that resulted represented a material weakness.

● We do not have sufficient segregation of duties within accounting functions, which is a basic internal control. Due to our size and nature, segregation of all conflicting duties may not always be possible and may not be economically feasible. However, to the extent possible, the initiation of transactions, the custody of assets and the recording of transactions should be performed by separate individuals. Management evaluated the impact of our failure to have segregation of duties on our assessment of our disclosure controls and procedures and procedures and has concluded that the control deficiency that resulted represented a material weakness.

Remediation Plan

The Company has been addressing and remediating these material weaknesses with the support and assistance of the accounting and financial staff employed by our Indian operating subsidiary. We are enhancing the review process for significant transactions to ensure proper accounting treatment under applicable guidelines and are engaging external experts where necessary to assist in the application of accounting principles to complex transactions. In addition, we are implementing a new ERP system which is designed to integrate all business functions within the accounting and financial department to further address the abovementioned weaknesses.

Our Chief Executive Officer and Chief Financial Officer do not expect that our disclosure controls or internal controls will prevent all errors and all fraud. Although our disclosure controls and procedures were designed to provide reasonable assurance of achieving their objectives, a control system, no matter how well conceived and operated, can provide only reasonable, not absolute assurance that the objectives of the system are met. Further, the design of any control system is subject to resource constraints and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected. These inherent limitations include the fact that judgments in decision-making can be faulty, and that breakdowns can occur because of simple errors or mistakes. Additionally, controls can be circumvented if there exists in an individual a desire to do so. There can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions.

(b) Changes in Internal Controls Over Financial Reporting

Except for the remediation efforts described above, there were no changes in our internal controls over financial reporting that occurred during the last fiscal quarter covered by this report that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

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PART II – OTHER INFORMATION

Item 1. Legal Proceedings.

In April 2024, an ex-shareholder of Otto Pvt Ltd., an indirect wholly owned Bahamian subsidiary of SSi(“Otto”) commenced litigation in the Bahamas, seeking legal confirmation that it holds 9,000 shares (approximately a 9% interest) in Otto. The litigation, in which Otto is one of the defendants, relates to a purported transaction in 2021, at which time Dr. Sudhir Srivastava, the Company’s Chairman, Chief Executive Officer and principal shareholder, was the sole shareholder of Otto. The plaintiff in the litigation alleges that at that time, it acquired the 9,000 Otto shares from Dr. Srivastava. However, as the plaintiff failed to pay the agreed upon consideration for the shares, in July 2022, the shareholding was cancelled. Dr. Srivastava along with Otto, has recently filed an action in the Bahamas to confirm the cancellation of the shares and reconfirm their ownership and both actions are pending in the Bahamian courts. The Bahamian court has issued an interim order to maintain the status quo as it stands today with respect to the 9,000 Otto shares at the center of the dispute, as well as Otto’s shareholdings in Sudhir Srivastava Innovations Pvt Ltd. (“SSI-India”), our Indian operating subsidiary and SSI-India’s assets during the pendency of the litigation. Based on legal opinions obtained from counsel, the Company believes that there will be a favorable outcome in this case.

Notwithstanding the foregoing, Dr. Srivastava and the Company have entered into an Indemnification Agreement on October 12, 2024, pursuant to which Dr. Srivastava has agreed to fully indemnify the Company for any claims, damages and costs (including legal fees) which it incurs in connection with this litigation or in relation to any of his ventures prior to consummation of the Company’s acquisition by merger of CardioVentures, Inc. in April 2023. 

Item 2. Exhibits.

Exhibit No.	Description of Exhibit
31.1	Section 302 Certification – Chief Executive Officer(2)
31.2	Section 302 Certification – Chief Financial Officer(2)
32.1	Section 906 Certification – Chief Executive Officer(2)
32.2	Section 906 Certification – Chief Financial Officer(2)
101.INS	Inline XBRL Instance Document
101.SCH	Inline XBRL Taxonomy Extension Schema Document
101.CAL	Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF	Inline XBRL Taxonomy Extension Definition Linkbase Document
101.LAB	Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE	Inline XBRL Taxonomy Extension Presentation Linkbase Document
104	Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).

* Management Compensation Plan or Arrangement.

(1)	Previously filed.
(2)	Filed herewith.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	SS INNOVATIONS INTERNATIONAL, INC.
Dated: March 10, 2025	By:	/s/ Anup Sethi
		Anup Sethi, Chief Financial Officer
		(Principal Financial and Accounting Officer)

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0001676163 ssii:CustomerBMember us-gaap:SalesRevenueNetMember us-gaap:CustomerConcentrationRiskMember 2023-04-01 2023-06-30 iso4217:USD xbrli:shares