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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K/A
Amendment No. 1 to Form 8-K
Pursuant to Section 13 or 15(d) of The Securities
Exchange Act of 1934
Date of report (Date of earliest event reported):
April 14, 2023
SS INNOVATIONS INTERNATIONAL, INC.
(Exact name of registrant as specified in its charter)
| Florida |
|
333-216054 |
|
47-3478854 |
(State or Other Jurisdiction
of Incorporation) |
|
(Commission File Number) |
|
(IRS Employer
Identification No.) |
|
1600 SE 15th Street, #512
Fort Lauderdale, Florida |
|
33316 |
| (Address of Principal Executive Offices) |
|
(Zip Code) |
Registrant’s telephone number, including
area code: (954) 478-1410
Avra Medical Robotics, Inc.
3259 Progress Drive
Orlando, FL 32826
(Former name or former address, if changed since
last report)
Check the appropriate box below if the Form 8-K
filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General
Instruction A.2. below):
| ☐ |
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| ☐ |
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ☐ |
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ☐ |
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered pursuant to Section 12(b)
of the Act:
| Title of each Class |
|
Trading Symbol |
|
Name of each exchange on which registered |
| None |
|
N/A |
|
N/A |
Indicate by check mark whether the registrant
is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the
Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
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.
EXPLANATORY NOTE
As used in this Form 8-K/A Amendment No. 1 to
Current Report on Form 8-K (this “Report”), originally filed with the Securities and Exchange Commission on April
19, 2023, the terms “SSII,” “the Company,” “we,” “us” and
“our” refer to SS Innovations International, Inc. f/k/a Avra Medical Robotics, Inc. and its subsidiaries.
All share information set forth in this Report
gives effect to a one–for-ten reverse stock split (the “Reverse Stock Split”) effected as of the open of trading
on April 17, 2023, as described in Item 2.01 below.
This Report amends the original filing to disclose
the historical consolidated financial statements of CardioVentures, Inc. and the proforma financial information required by Items 9.01
(a) and (b) of Form 8-K.
Item 2.01 Completion of Acquisition or Disposition
of Assets.
The Merger
On April 14, 2023, the Company (“Closing”),
the Company consummated the acquisition by merger of CardioVentures, Inc., a Delaware corporation (“CardioVentures”),
pursuant to Merger Agreement dated November 7, 2022 (the “Merger Agreement”), 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.
CardioVentures, through a subsidiary, owns a controlling
interest in Sudhir Srivastava Innovations Pvt. Ltd., an Indian private limited company (“SSI-India”). Based in Haryana,
India, SSI-India is engaged in the business of developing innovative surgical robotic technologies with a vision to make the benefits
of robotic surgery affordable and accessible to a larger part of the global population. SSII’s product range includes its proprietary
“SSI Mantra” surgical robotic system and a wide range of surgical instruments capable of supporting a variety of cardiac and
other surgical procedures. The Company now intends to focus on the business of SSI-India and has plans to globally expand the presence
of its technologically advanced, user-friendly, and cost-effective surgical robotic solutions.
Pursuant to the Merger Agreement, at Closing,
Merger Sub merged with and into CardioVentures (the “Merger”). In the Merger, holders of the outstanding shares of
common stock of CardioVentures (including certain parties who provided interim convertible financing during the pendency of the Merger
Agreement, were issued 135,808,884 shares of SSII common stock, representing approximately 95% of issued and outstanding shares of SSII
common stock post-Merger, with the existing shareholders of SSII holding approximately 6,544,344 shares of SSII common stock representing
approximately 5% of issued and outstanding shares of SSII common stock post-Merger.
Pursuant to the Merger Agreement, at Closing,
the holders of CardioVentures common stock also received shares of newly designated Series A Non-Convertible Preferred Stock (the “Series
A Preferred Shares”).
The Series A Preferred Shares vote together with
shares of SSII common stock as a single class on all matters presented to a vote of shareholders, except as required by law, and entitle
the holders of the Series A Preferred Shares to exercise 51.0% of the total voting power of the Company. The Series A Preferred Shares
are not convertible into common stock, do not have any dividend rights and have a nominal liquidation preference. The Series A Preferred
Shares also have certain protective provisions, such as requiring the vote of a majority of Series A Preferred Shares to change or amend
their rights, powers, privileges, limitations and restrictions. The Series A Preferred Shares will be automatically redeemed by the Company
for nominal consideration at such time as the holders of the Series A Preferred Shares own less than 50% of the shares of SSII common
stock received in the Merger.
In addition to the foregoing, following Closing,
the Company issued 3,818,028 post-Merger shares of SSII common stock to Dr. Frederic Moll, an investor who provided $3,000,000 in interim
financing to the Company pending consummation of the Merger. These shares were issued pursuant to the Investment Agreement with Dr. Moll
dated April 7, 2023, which was described in and included as an Exhibit to the Company’s Current Report on Form 8-K, dated April
14, 2023.
The securities issued in connection with the Merger
and to Dr. Moll were issued pursuant to the exemptions from registration of Section 4(a)(2) of the Securities Act of 1933, as amended,
and the rules and regulations promulgated thereunder.
As a result of the foregoing, a “Change
in Control” of the Company occurred, with Dr. Sudhir Srivastava becoming the Company’s principal and controlling shareholder.
Concurrent with consummation of the Merger, Dr.
Sudhir Srivastava, through his holding company, assigned patents, trademarks and other intellectual property used in the development,
commercialization, manufacturing and sale of its medical and surgical robotic systems and products (the “SSII Intellectual Property”)
to a wholly owned subsidiary of SSII. In consideration thereof, Dr. Srivastava’s holding company will receive a quarterly royalty
of three percent (3%) of all “net revenues” (gross revenues actually received less cost of goods sold) generated from
the sale or licensing of the SSII Intellectual Property or products or services utilizing the SSII Intellectual Property.
At Closing, the Company’s articles of incorporation
were amended to:
| |
1. |
change the Company’s corporate name to “SS Innovations International, Inc.;” |
| |
2. |
effect the one for ten Reverse Stock Split; |
| |
3. |
authorize the designation of the Series A Preferred Shares; and |
| |
4. |
increase its authorized common stock to 250,000,000 shares. |
The above description of the amendments to the
Company’s Amended and Restated Articles of Incorporation is qualified in its entirety by reference to the Articles of Amendment
filed with the Florida Secretary of State, a copy of which is filed with this Report as Exhibit 3.1 and incorporated herein by
reference.
Changes in Management
At Closing, Alen Sands York and Ettore Tomasetti
resigned as directors of the Company and Barry F. Cohen, Dr. Ray Powers and Dr. Farhan Taghizadeh resigned as Chief Executive Officer
and Acting Chief Financial Officer, Chief Operating Officer, and Chief Medical Officer of the Company, respectively. Mr. Cohen continues
as a director of the Company and assumed the office of Chief Operating Officer–Americas. In addition, Dr. Sudhir Srivastava became
a director, Chairman and Chief Executive Officer of SSII, Dr. Vishwajyoti P. Srivastava, the son of Dr. Sudhir Srivastava, became a director
and President and Chief Operating Officer–South Asia and Anup Sethi became Chief Financial Officer of the Company.
The following sets forth background information
regarding the Company’s new directors and executive officers.
Sudhir Srivastava, M.D.,75, founded
the SS Innovations Group of Companies, including SSI India (the “SSI Companies Group”) in 2019 with the objective
of launching the development of an advanced, affordable, and accessible surgical robotic system that would benefit many more
patients around the world. Dr. Srivastava completed his medical degree in India in 1971 and moved to the United States in 1972,
where he underwent a residency in general surgery in St. Louis and further completed his training, including cardiothoracic surgery,
at the University of British Columbia Hospitals in Vancouver, Canada. He is double board certified by the American Board of Surgery
and Thoracic Surgery. Dr. Srivastava, after moving to Texas to begin his practice in 1981, became heavily involved in advancing
minimally invasive cardiac surgical approaches and robotic cardiac surgery procedures during his time in Texas. While in Texas, in
2002 Dr. Srivastava was the founding chairman of Alliance Hospital, which became one of the busiest robotic cardiac centers
globally. In 2007, Dr. Srivastava joined the University of Chicago faculty and served as the Director of Robotic Cardiac Surgery to
launch their program. In 2009, Dr. Srivastava moved to Atlanta, Georgia, and founded the International College of Robotic Surgery
and launched the Robotic Revascularization Program at St. Joseph’s Hospital. While in the United States, he performed over
1400 robotic cardiothoracic procedures, which was the largest experience globally and trained over 350 surgical teams from around
the world. His passion and experience took him to various countries around the world, where he helped launch robotic cardiac surgery
programs. Dr. Srivastava returned to India in 2011 to establish robotic surgery programs throughout the country during a time when
robotic surgery was still nascent in India. He founded the International Centre for Robotic Surgery in Delhi, India, and trained
surgeons in different specialties and introduced high level robotic cardiac surgery procedures. Recognizing the high cost and
limited access to robotic surgery in India, in 2012, Dr. Srivastava undertook the mission of developing an affordable system that
would be technologically advanced, so that many more patients could benefit from robotic cardiac surgery in India and worldwide. His
efforts led to the development of the SSI Mantra Surgical Robotic System by the SSI Companies Group, which was commercially
introduced in August 2022. Dr. Srivastava is globally recognized as a pioneer and leader in robotic cardiac surgery and has received
numerous awards worldwide for advancing the field. Dr. Srivastava has served as Chairman, Managing Director, and Chief Executive
Officer of the SSI Companies Group since its founding.
Vishwajyoti P. Srivastava, M.D., 46, joined
the SSI Companies Group as President and Chief Operating Officer for South Asia in November 2020. Prior to that, he served as President
of OMNI 3DHD from January 2018 to November 2020, where he led the development of a secondary 3D Visualization System that was designed
with the objective of giving 3D vision to the entire robotic surgical team. In 2015, Dr. Srivastava served as the COO of a Miami based
health and wellness startup, Reshape Inc., that developed an online platform for healthy living initiatives. Dr. Srivastava was also instrumental
in the creation of the International College of Robotic Surgery in Atlanta, Georgia, in 2009 as well as the International Centre for Robotic
Surgery in New Delhi, India, in 2011. Dr. Srivastava has been deeply involved in the field of surgical robotics since 2008, covering the
wide spectrum of clinical applications, teaching and training, tele-mentoring platforms, web-based surgeon didactic training modules,
digital media and marketing. Dr. Srivastava graduated from Saint James School of Medicine in Anguilla, receiving his M.D. degree in August
2020. Dr. Srivastava also holds a B.A. in International Studies with a focus on South Asia from the University of Washington in Seattle
that he received in 1999. Dr. Srivastava completed all his premedical requirements at Columbia University’s Post Baccalaureate Program
in New York City, graduating in 2003. He is fluent in English, Hindi and French.
Anup Kumar Sethi, 58, became Chief Financial
Officer of the SSI Companies Group in January 2023 and has been associated with the SSI Companies Group since 2018 on a consulting basis
as a financial advisor. For over 10 years prior thereto, he held senior management positions in well-established healthcare companies
in India, including Fortis and International Oncology. With close to thirty (30) years of overall experience and having worked in India,
China, South Africa, and Nigeria, in organizations of various sizes belonging to a diverse range of industries like automotive tires manufacturing,
textiles, digital media and healthcare delivery, Mr. Sethi is very well adapted to building and working with multi-faceted, multi-cultural
teams. Mr. Sethi has a FCMA qualification (Fellow Member of Institute of Cost Accountants of India), an Associate membership of CPA,
Australia, and has a Certified Financial Planner (CFP) certification from FPSB, with hands-on experience in leading teams in the functional
areas of corporate finance, strategy, accounting, compliance and business development.
The Company, through Otto Pvt. Ltd., a wholly
owned subsidiary, is party to employment agreements with each of Dr. Sudhir Srivastava, Dr. Vishwajyoti P. Srivastava and Anup Sethi.
Dr. Sudhir Srivastava’s employment agreement is for a five (5) year period expiring in November 2024 and provides for an annual
base salary of US$600,000. Dr. Vishwajyoti P. Srivastava’s employment agreement is for a five (5) year period expiring in September
2026 and provides for an annual base salary of US$200,000. Mr. Sethi’s employment agreement is for a five (5) year period expiring
in January 2028 and provides for an annual base salary of US $175,000. Each of the employment agreements contain customary confidentiality,
assignment of proprietary rights, non-competition, and non- solicitation provisions.
The above description of the employment agreements
is qualified in its entirety by reference to the copies of such agreements files as Exhibits 10.1, 10.2 and 10.3
to this Report and incorporated herein by reference.
Item 3.02 Unregistered Sales of Equity Securities.
The disclosure set forth in Item 2.01 of this Current Report
on Form 8-K is incorporated into this item by reference.
Item 5.01 Changes in Control of the Registrant.
The disclosure set forth in Item 2.01 of this Current Report
on Form 8-K is incorporated into this item by reference.
Item 5.02 Departure of Directors or Certain
Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
The disclosure set forth in Item 2.01 of this Current Report
on Form 8-K is incorporated into this item by reference.
Item 5.03 Amendments to Articles of Incorporation or Bylaws; Change
in Fiscal Year.
The disclosure set forth in Item 2.01 of this Current Report
on Form 8-K is incorporated into this item by reference.
Item 8.01 Other Events.
On April 19, 2023, the Company issued a press release with respect
to consummation of the Merger.
A copy of the press release is filed as Exhibit 99.1 to this
Report.
Item 9.01 Financial Statements and Exhibits.
(a) Financial statements of
businesses acquired. The following financial statements of CardioVentures are filed with this Report:
Independent Auditor’s Report
Consolidated Balance Sheets at December 31, 2022
and December 31, 2021
Consolidated Statements of Operations and Shareholders’
Equity for the years ended December 31, 2022, and December 31, 2021
Consolidated Statements of Cash Flows for the years ended
December 31, 2022, and December 31, 2021
Notes to Consolidated Financial Statements
Consolidated Balance Sheets at March 31, 2023 and December
31, 2022 (unaudited)
Consolidated Statements of Operations and Shareholders’
Equity for the three-month periods ended March 31, 2023 and March 31, 2022 (unaudited)
Consolidated Statements of Cash Flows for the three-month
periods ended March 31, 2023, and March 31, 2022 (unaudited)
Notes to Unaudited Consolidated Financial Statements
(b) Pro forma financial information.
The following pro forma financial information of CardioVentures and the Company is filed with this Report:
Unaudited Pro Forma Combined Balance
Sheet as at March 31, 2023
Unaudited Pro Forma Combined Statement
of Operations for the three months ended March 31, 2023
Unaudited Pro Forma Combined Balance
Sheet as at December 31, 2022
Unaudited Pro Forma Combined Statement
of Operations for the year ended December 31, 2022
(d) Exhibits
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 hereunto duly authorized.
Dated:
June 26, 2023 |
SS INNOVATIONS INTERNATIONAL, INC. |
| |
|
| |
By: |
/s/
Sudhir Srivastava |
| |
|
Sudhir Srivastava, M.D. Chairman and
Chief Executive Officer |
INDEX TO FINANCIAL STATEMENTS AND PRO FORMA
FINANCIAL INFORMATION
CARDIOVENTURES, INC.
| |
Page |
| |
|
| Independent Auditor’s Report |
8 |
| |
|
| Consolidated Balance Sheets at December 31, 2022 and December 31, 2021 |
9 |
| |
|
| Consolidated Statements of Operations and Shareholders’ Equity for the years ended December 31, 2022 and December 31, 2021 |
10 |
| |
|
|
Consolidated Statements of Cash Flows for the years ended December 31, 2022, and December 31, 2021 |
11 |
| |
|
| Notes to Consolidated Financial Statements |
12 |
| |
|
| Consolidated Balance Sheets at March 31, 2023 and December 31, 2022 (unaudited) |
18 |
| |
|
| Consolidated Statements of Operations and Shareholders’ Equity for the three-month periods ended March 31, 2023 and March 31, 2022 (unaudited) |
19 |
| |
|
| Consolidated Statements of Cash Flows for the three-month periods ended March 31, 2023 and March 31, 2022 (unaudited) |
20 |
| |
|
| Notes to Unaudited Consolidated Financial Statements |
21 |
| |
|
| Unaudited Pro Forma Combined Balance Sheet as at March 31, 2023 |
27 |
| |
|
| Unaudited
Pro Forma Combined Statement of Operations for the three months ended March 31, 2023 |
28 |
| |
|
| Unaudited Pro Forma Combined Balance Sheet as at December 31, 2022 |
30 |
| |
|
|
Unaudited Pro Forma Combined Statement of Operations for the year ended December 31, 2022 |
31 |
Report of Independent Registered Public Accounting
Firm
To the shareholders and the board of directors
of Cardio Ventures, Inc.
Opinion on the Financial Statements
We have audited the accompanying consolidated
balance sheets of Cardio Ventures, Inc. as of December 31, 2022 and 2021, the related statements of operations, stockholders’ equity (deficit),
and cash flows for the years then ended, and the related notes (collectively referred to as the “financial statements”). In
our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31,
2022 and 2021, and the results of its operations and its cash flows for the years then ended, in conformity with accounting principles
generally accepted in the United States.
Substantial Doubt about the Company’s
Ability to Continue as a Going Concern
The accompanying financial statements have been
prepared assuming that the Company will continue as a going concern. As discussed in Note 1 to the financial statements, the Company has
suffered recurring losses from operations and has a significant accumulated deficit. In addition, the Company continues to experience
negative cash flows from operations. These factors raise substantial doubt about the Company’s ability to continue as a going concern.
Management’s plans in regard to these matters are also described in Note 1. The financial statements do not include any adjustments that
might result from the outcome of this uncertainty.
Basis for Opinion
These financial statements are the responsibility
of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audit. We
are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are
required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and
regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the
standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged
to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding
of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s
internal control over financial reporting. Accordingly, we express no such opinion.
Our audit included performing procedures to assess
the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond
to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.
Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating
the overall presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion.
/S/ BF Borgers CPA PC
BF Borgers CPA PC (PCAOB ID 5041)
We have served as the Company’s auditor since
2023
Lakewood, CO
June 26, 2023
CARDIO VENTURES, INC.
CONSOLIDATED BALANCE SHEETS
at December 31, 2022 and December 31, 2021
| |
December 31, | | |
December 31, | |
| Particulars | |
2022 | | |
2021 | |
| ASSETS | |
| | |
| |
| Current assets: | |
| | |
| |
| Cash and cash equivalents | |
$ | 216,177 | | |
$ | 25,850 | |
| Accounts receivable, net of allowances | |
| 161,979 | | |
| 100,000 | |
| Inventory | |
| 855,777 | | |
| 123,519 | |
| Prepaids and other current assets | |
| 692,242 | | |
| 731,140 | |
| Total current assets | |
| 1,926,175 | | |
| 980,509 | |
| | |
| | | |
| | |
| Property, plant, and equipment, net | |
$ | 377,421 | | |
$ | 761,364 | |
| Long Term Receivable | |
| 430,333 | | |
| - | |
| Loans & Advances ( Related Party) | |
| 1,575,834 | | |
| - | |
| Total assets | |
| 4,309,763 | | |
| 1,741,873 | |
| LIABILITIES AND STOCKHOLDERS’ EQUITY | |
| | | |
| | |
| Current liabilities: | |
| | | |
| | |
| Bank Overdraft Facility | |
$ | 3,123,046 | | |
$ | 391,176 | |
| Notes Payable : AVRA Medical Inc. | |
| 3,000,000 | | |
| | |
| Current maturities of long-term debt, bank | |
| 120,880 | | |
| 134,476 | |
| Accounts payable | |
| 618,852 | | |
| 217,808 | |
| Deferred tax liability | |
| 20,597 | | |
| 9,061 | |
| Other accrued liabilities | |
| 202,148 | | |
| 216,332 | |
| Total current liabilities | |
$ | 7,085,523 | | |
$ | 968,853 | |
| Long-term debt, bank | |
| - | | |
| 134,477 | |
| Total liabilities | |
$ | 7,085,523 | | |
$ | 1,103,330 | |
| Stockholders’ (deficit) equity : | |
| | | |
| | |
| Common stock, 10,105,000 shares authorized, $0.001 par value, 5,010 shares and 100,010 shares issued and outstanding as of December 31, 2022, and 2021, respectively | |
$ | 5,001 | | |
$ | 100,001 | |
| Translation adjustment | |
| 15,521 | | |
| (3,390 | ) |
| Short Provision for Income Tax | |
| 342 | | |
| (779 | ) |
| Retained earnings | |
| (3,696,541 | ) | |
| (357,205 | ) |
| Accumulated other comprehensive income (loss) | |
| 899,916 | | |
| 899,916 | |
| Total stockholders’ (deficit) equity | |
| (2,775,760 | ) | |
| 638,544 | |
| Total stockholders’ (deficit) equity | |
| (2,775,760 | ) | |
| 638,544 | |
| Total liabilities and stockholders’ (deficit) equity | |
| 4,309,763 | | |
| 1,741,873 | |
CARDIO VENTURES, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS AND SHAREHOLDERS’
EQUITY
for the year ending December 31, 2022, and December
31, 2021
| | |
December 31, | | |
December 31, | |
| Particulars | |
2022 | | |
2021 | |
| Revenue: | |
| | |
| |
| Export Of Service | |
$ | - | | |
$ | 2,841,332 | |
| System Sales | |
| 1,438,969 | | |
| - | |
| Warranty Sales | |
| 19,346 | | |
| - | |
| Total revenue | |
| 1,458,315 | | |
| 2,841,332 | |
| | |
| | | |
| | |
| Cost of revenue: | |
| 968,721 | | |
| 881,082 | |
| | |
| | | |
| | |
| Gross profit | |
| 489,594 | | |
| 1,960,249 | |
| | |
| | | |
| | |
| Operating expenses: | |
| | | |
| | |
| Selling, general and administrative | |
$ | 3,872,897 | | |
$ | 2,322,230 | |
| R&D | |
| 10,323 | | |
| 62,735 | |
| | |
| | | |
| | |
| Total operating expenses | |
| 3,883,221 | | |
| 2,384,965 | |
| | |
| | | |
| | |
| Loss from operations | |
| (3,393,626 | ) | |
| (424,716 | ) |
| | |
| | | |
| | |
| Interest and other income, net | |
$ | 5,134 | | |
$ | 1,256 | |
| | |
| | | |
| | |
| Loss before taxes | |
| (3,388,493 | ) | |
| (423,459 | ) |
| | |
| | | |
| | |
| Net income | |
| (3,388,493 | ) | |
| (423,459 | ) |
| | |
| | | |
| | |
| Net loss per share - basic and diluted | |
| -676 | | |
| -0 | |
| | |
| | | |
| | |
| Weighted average common shares outstanding - basic and diluted | |
| 5,010 | | |
| 2,856,845 | |
CARDIO VENTURES, INC.
CONDENSED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31,
| |
December 31, | | |
December 31, | |
| Particulars | |
2022 | | |
2021 | |
| | |
| | |
| |
| CASH FLOWS FROM OPERATING ACTIVITIES: | |
| | |
| |
| Net Loss | |
$ | (3,388,493 | ) | |
$ | (542,637 | ) |
| Adjustments to reconcile net loss to net cash used in operating activities: | |
| | | |
| | |
| Depreciation and amortization expense | |
| 119,758 | | |
| 86,982 | |
| Investment loss | |
| - | | |
| 899,916 | |
| Translation diff | |
| 69,189 | | |
| (4,904 | ) |
| Changes in operating assets and liabilities: | |
| | | |
| | |
| Accounts payable and accrued expenses | |
| 398,395 | | |
| (694,657 | ) |
| Prepaid and other current assets | |
| (755,338 | ) | |
| (449,672 | ) |
| Net Cash Used in Operating Activities | |
| (3,556,490 | ) | |
| (704,973 | ) |
| | |
| | | |
| | |
| INVESTING ACTIVITIES: | |
| | | |
| | |
| Long Term Receivable | |
| (430,333 | ) | |
| - | |
| Purchase of Fixed Assets | |
| - | | |
| (38,964 | ) |
| Dr. Sudhir Prem Srivastava Loan | |
| (1,575,834 | ) | |
| - | |
| Sale of Fixed Assets | |
| 484,510 | | |
| - | |
| Purchase of Equipment | |
| (220,324 | ) | |
| - | |
| Net Cash Used in Investing Activities | |
| (1,741,981 | ) | |
| (38,964 | ) |
| | |
| | | |
| | |
| FINANCING ACTIVITIES: | |
| | | |
| | |
| Proceeds from Long Term Borrowings | |
| 2,583,798 | | |
| 660,129 | |
| Proceeds from Notes | |
| 3,000,000 | | |
| | |
| Share capital | |
| (95,000 | ) | |
| (287,517 | ) |
| Net Cash Provided by Financing Activities | |
| 5,488,798 | | |
| 372,611 | |
| | |
| | | |
| | |
| INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | |
| 190,327 | | |
| (371,325 | ) |
| | |
| | | |
| | |
| CASH AND CASH EQUIVALENTS - BEGINNING OF PERIOD | |
| 25,850 | | |
| 397,175 | |
| | |
| | | |
| | |
| CASH AND CASH EQUIVALENTS - END OF PERIOD | |
| 216,177 | | |
| 25,850 | |
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For December 31, 2022, and December
31, 2021
NOTE 1 – FINANCIAL STATEMENTS
Organization
Cardio Ventures Inc., a Delaware registered company,
(“the Company”) through its wholly owned downstream subsidiary company, Sudhir Srivastava Innovations Private Limited, a private
limited company registered in India, is engaged in the business of development, commercialization, manufacturing, and sale of medical
and surgical robotic systems. The Company is structured to invest in four principal areas – surgical robotic systems and its allied
accessories, instruments and similar technologies, surgical tools, and surgical robotic training. The Company has a wholly owned subsidiary
“Otto Pvt. Ltd.”, a company registered in the Bahamas which, in turn, owns 99.9% of Sudhir Srivastava Innovations Pvt Ltd.,
India.
Basis of Presentation
The accompanying consolidated financial statements
are prepared on the basis of accounting principles generally accepted in the United States of America (“GAAP”). The Company
is in the business of assembly, manufacturing and selling of surgical robotic systems and is in its initial revenue growth stage. It is
also involved in developing new technologies within the field of medical robotics. Being an initial revenue growth stage enterprise, it
is devoting substantial efforts to establishing a new business, financial planning, raising capital, and research into innovative medical
robotic products which may become part of the Company’s product portfolio going forward.
Going Concern
The accompanying consolidated financial statements
have been prepared assuming the continuation of the Company as a going concern. The Company has recently launched its surgical robotic
system in India, and it has so far been well received by the hospitals/medical institutions which is reflected by more orders being received
by the Company. The Company has been able to raise financial resources to sustain its operations even though it has a negative working
capital situation and operational losses due to its initial stages of operations and revenue growth. 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
Estimates
The preparation of consolidated financial statements
in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities,
and expenses. The Company regularly evaluates estimates and assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the 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.
Cash and Cash Equivalents
The Company considers all highly liquid investments
with maturities of three months or less at the date of purchase to be cash equivalents.
Inventories
The Company has inventories of spares, components
and parts as raw materials, semi-finished robotic systems as Work-in-progress and fully assembled surgical robotic systems and surgical
instruments as Finished Goods. These are valued at cost or net realizable value whichever is less.
Loans and Advances:
The Company and its subsidiaries, during the course
of their routine business operations, grant loans and advances to directors which are fully recoverable and/or adjustable against the
financial assistance, if any, extended by them to the Company or its subsidiaries. The Company and its subsidiaries occasionally grant
advances to its staff members which are fully recoverable from their salaries in the following month. Advances paid to suppliers/service
providers as per their purchase order terms are fully adjustable against their invoices for supplies of goods or provision of services.
Concentrations of Supplier Risk
The Company is dependent on certain suppliers,
some of which are single source suppliers, and the inability of these suppliers to deliver necessary components of the Company’s
products in a timely manner at prices, quality levels and volumes that are acceptable, or the Company’s inability to efficiently
manage these components from these suppliers, could have a material adverse effect on the Company’s business, prospects, financial
condition and operating results.
Revenue Recognition
The Company adopted ASU 2014-09, Revenue
from Contracts with Customers, and its related amendments (collectively known as “ASC 606”), effective January 1, 2019,
using the modified retrospective transition approach applied to all contracts. Therefore, the reported results for the years ended December 31,
2022, and 2021 reflect the application of ASC 606. Management determined that there were no retroactive adjustments necessary to
revenue recognition upon the adoption of the ASU 2014-09. The Company determines revenue recognition through the following steps:
| ● | 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. |
Revenue is recognized when control of the promised
goods or services is transferred to customers, in an amount that reflects the consideration the Company expects to be entitled to in exchange
for those goods or services.
We recognize the revenue at the time when the
risk and reward related to that equipment gets transferred immediately when we dispatch. We also sell instruments which are used by surgeons
when they use our robotic system for surgeries. These instruments are like consumables for the hospitals, and we recognize the revenues
for sale of instruments as and when the risk and reward related to those instruments get transferred immediately when we dispatch. In
2022, we had three surgical robotic systems sold and some instrument sales and the revenue for the same has been included in the P&L
of 2022 on the abovementioned basis whereas in 2021, while there were no revenues from assembly, manufacturing and sale of surgical robotic
systems and instruments, we had revenues from provision of services under a professional technology services agreement which has since
been terminated.
Research and Development Costs
Research and development costs include, but are
not limited to, outsourced engineering services, allocated facilities costs, internal engineering and development expenses, materials,
internally developed software and related to development of the Company’s products and services and are expensed when incurred.
Our current primary research and development objectives
focus on the development of our surgical robotic system and related future technologies. The successful development of this effort involves
many uncertainties, including:
| ● | our ability to recruit and retain skilled engineering staff. |
| | | |
| ● | timing in finalizing systems design and specifications. |
| | | |
| ● | successful completion of safety tests. |
| | | |
| ● | our ability to obtain additional applicable approvals, licenses
or certifications from regulatory agencies, if required, and maintaining current approvals, licenses or certifications. |
| | | |
| ● | performance of a limited number of suppliers for certain
raw materials and components. |
| | | |
| ● | performance of our third-party contractors that support our
production and research and development activities including the quality of components and subassemblies; and |
| | | |
| ● | our ability to maintain rights from third parties for intellectual
properties critical to research and development activities. |
General and Administrative
| ● | General and administrative costs primarily consist of all
personnel-related expenses for executive management, Sales and Marketing, Manufacturing and assembly and administrative functions, including
finance and accounting, legal, and human resources, as well as general corporate expenses like lease rent for the premises leased by
the Company, utilities, and general insurance. General and administrative costs also include depreciation on fixed assets. |
Property Plant & Equipment
Property Plant & Equipment is recorded at
cost and depreciated using the straight-line method at rates determined as per estimated useful lives of the assets. The estimated useful
lives used in in calculating depreciation are as follows:
| | |
Years | |
| Office furniture and fixtures | |
| 4 | |
| Plant and equipment | |
| 4-8 | |
| Motor vehicles | |
| 3 | |
Income Taxes
The Company accounts for income taxes in accordance
with ASC 740, Accounting for Income Taxes, as clarified by ASC 740-10, Accounting for Uncertainty in Income Taxes. Under this method,
deferred income taxes are determined based on the estimated future tax effects of differences between the financial statement and tax
basis of assets and liabilities given the provisions of enacted tax laws. Deferred income tax provisions and benefits are based on changes
to the assets or liabilities from year to year. In providing for deferred taxes, the Company considers tax regulations of the jurisdictions
in which the Company operates, estimates of future taxable income, and available tax planning strategies. If tax regulations, operating
results or the ability to implement tax-planning strategies vary, adjustments to the carrying value of deferred tax assets and liabilities
may be required. Valuation allowances are recorded related to deferred tax assets based on the “more likely than not” criteria
of ASC 740.
ASC 740-10 requires that the Company recognize
the financial statement benefit of a tax position only after determining that the relevant tax authority would more likely than not sustain
the position following an audit. For tax positions meeting the “more-likely-than-not” threshold, the amount recognized in
the financial statements is the largest benefit that has a greater than 50 percent likelihood of being realized upon ultimate settlement
with the relevant tax authority.
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.
Foreign Currency Translation
The functional currency of the Company is the
United States dollar. The functional currency of the Company’s subsidiary company in India is Indian Rupees. The financial statements
of the Company’s subsidiaries were translated to United States dollars in accordance with ASC 830, Foreign Currency Translation
Matters, using period-end rates of exchange for assets and liabilities, and average rates of exchange for the year for revenues and
expenses. Gains and losses arising on foreign currency denominated transactions are included in consolidated financial statements as Translation
adjustments in shareholder equity(deficit).
Earnings per share
Basic earning/loss per share are calculated by
dividing the net profit or loss for the period attributable to equity shareholders by the weighted average number of shares outstanding
during the year.
Fair Value of Financial Instruments
Financial Instrument included in our consolidated
financial statements consist principally of accounts receivable, amounts due to/from related parties and promissory notes payable. The
carrying amounts of cash and cash equivalents, loans and advances and promissory notes approximate fair value of these financial instruments.
Related Party Disclosure
The disclosure of related
party is given below: -
Name of related party and description of relationship
| Key Management Personnel |
Sudhir Prem Srivastava |
| |
|
| |
Vishwajyoti Srivastava |
| |
|
| Associate company |
Telegnosis Private Limited |
| |
|
| Holding Company |
Otto Private Limited |
Demand Notes Payable
Sudhir Srivastava Innovations Pvt Ltd has availed
a $2,913,210 working capital line of credit facility with HDFC Bank (OD AC 50200060619790) which bears interest at HDFC MCLR i.e. 7.25%
p.a. and are secured by a pledge of fixed deposits of $2,872,111 provided by Dr. Sudhir Prem Srivastava and $41,099 provided by the Company.
The outstanding balance under this line of credit was $2,762,962 at December 31, 2022. and $391,176 on December 31, 2021.
The abovementioned Overdraft facility is additionally
secured by personal guarantee of Dr. Sudhir Prem Srivastava.
Sudhir Srivastava Innovations Pvt Ltd, Company
has also availed another Working Capital Overdraft facility of US $ 362,640 with HDFC Bank (OD AC 50200072074161) which bears interest
at HDFC MCLR7.25 i.e.% p.a. This facility is primarily secured by a charge over the current assets of the Company. The outstanding balance
under this line of credit was $360,084 on December 31, 2022 and $0 at December 31, 2021.
The abovementioned Working Capital Overdraft facility
is also additionally secured by personal guarantee of Dr. Sudhir Prem Srivastava.
Subsequent Event:
The Merger
On April 14, 2023, the Company (“Closing”),
the Company consummated the acquisition by merger of CardioVentures, Inc., a Delaware corporation (“CardioVentures”),
pursuant to Merger Agreement dated November 7, 2022 (the “Merger Agreement”), 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.
CardioVentures, through a subsidiary, owns a controlling
interest in Sudhir Srivastava Innovations Pvt. Ltd., an Indian private limited company (“SSI - India”). Based in Haryana,
India, SSI-India is engaged in the business of developing innovative surgical robotic technologies with a vision to make the benefits
of robotic surgery affordable and accessible to a larger part of the global population. SSII’s product range includes its proprietary
“SSI Mantra” surgical robotic system and a wide range of surgical instruments capable of supporting a variety of cardiac and
other surgical procedures. The Company now intends to focus on the business of SSI-India and has plans to globally expand the presence
of its technologically advanced, user-friendly, and cost-effective surgical robotic solutions.
Pursuant to the Merger Agreement, at Closing,
Merger Sub merged with and into CardioVentures (the “Merger”). In the Merger, holders of the outstanding shares of
common stock of CardioVentures (including certain parties who provided interim convertible financing during the pendency of the Merger
Agreement, were issued 135,808,884 shares of SSII common stock, representing approximately 95% of issued and outstanding SSII common stock
post-Merger, with the existing shareholders of SSII holding approximately 6,544,344 shares of SSII common stock representing approximately
5% of issued and outstanding common stock post-Merger.
In addition to the foregoing, upon completion
of the Merger, the holders of SSII common stock received shares of newly designated Series A Non-Convertible Preferred Stock (the “Series
A Preferred Shares”).
The Series A Preferred Shares vote together with
shares of SSII common stock as a single class on all matters presented to a vote of shareholders, except as required by law and entitle
the holders of the Series A Preferred Shares to exercise 51.0% of the total voting power of the Company. The Series A Preferred Shares
are not convertible into common stock, do not have any dividend rights and have a nominal liquidation preference. The Series A Preferred
Shares also have certain protective provisions, such as requiring the vote of a majority of Series A Preferred Shares to change or amend
their rights, powers, privileges, limitations and restrictions. The Series A Preferred Shares are automatically redeemable by the Company
for nominal consideration at such time as the holders of the Series A Preferred Shares own less than 50% of the shares of SSII common
stock received in the Merger.
In addition to the foregoing, following Closing,
the Company issued 3,818,028 post-Merger shares of SSII common stock to Dr. Frederic Moll, an investor who provided $3,000,000 in interim
financing to the Company pending consummation of the Merger. These shares were issued pursuant to the Investment Agreement with Dr. Moll
dated April 7, 2023, which was described in and included as an Exhibit to the Company’s Current Report on Form 8-K, dated April
14, 2023.
The securities issued in connection with the Merger
were issued pursuant to the exemptions from registration of Section 4(a)(2) of the Securities Act of 1933, as amended and the rules and
regulations promulgated thereunder.
As a result of the foregoing, a “Change
in Control” of the Company occurred, with Dr. Sudhir Srivastava, through his holding company, becoming the Company’s principal
and controlling shareholder.
Concurrent with consummation of the Merger, Dr.
Sudhir Srivastava, through his subsidiary, assigned patents, trademarks and other intellectual property used in the development, commercialization,
manufacturing and sale of its medical and surgical robotic systems and products (the “SSII Intellectual Property”)
to a wholly owned subsidiary of SSII. In consideration thereof, Dr. Srivastava, through his holding company, will receive a quarterly
royalty of three percent of all “net revenues” (gross revenues actually received less cost of goods sold) generated
from the sale or licensing of the SSII Intellectual Property or products or services utilizing the SSII Intellectual Property.
At Closing, the Company’s articles of incorporation
were amended to:
| |
1. |
change the Company’s corporate name to “SS Innovations International, Inc.;” |
| |
2. |
effect the one for ten Reverse Stock Split: |
|
|
3.
4. |
authorize the designation of the Series A Preferred
Shares; and
AVRA shall have increased its authorized common
stock to 250,000,000 shares. |
CARDIO VENTURES, INC.
CONSOLIDATED BALANCE SHEETS (Unaudited)
at March 31, 2023
| | |
March 31, | | |
December 31, | |
| | |
2023 | | |
2022 | |
| ASSETS | |
| | |
| |
| Current Assets: | |
| | |
| |
| Cash and cash equivalents | |
$ | 163,097 | | |
$ | 216,177 | |
| Accounts receivable, net of allowances | |
| 1,469,404 | | |
| 161,979 | |
| Inventory | |
| 1,310,413 | | |
| 855,777 | |
| Prepaids and other current assets | |
| 69,698 | | |
| 692,242 | |
| Total Current Assets | |
| 3,012,613 | | |
| 1,926,175 | |
| | |
| | | |
| | |
| Non- Current Assets: | |
| | | |
| | |
| Property, plant, and equipment, net | |
| 419,423 | | |
| 377,421 | |
| Long Term Receivable | |
| 982,311 | | |
| 430,333 | |
| Loans & Advances ( Related Party) | |
| 925,584 | | |
| 1,575,834 | |
| Total Non-Current Assets | |
| 2,327,317 | | |
| 2,383,588 | |
| Total Assets | |
$ | 5,339,930 | | |
$ | 4,309,763 | |
| | |
| | | |
| | |
| LIABILITIES AND STOCKHOLDERS’ (DEFICIT) EQUITY | |
| | | |
| | |
| Current Liabilities | |
| | | |
| | |
| Bank Overdraft Facility | |
$ | 3,863,404 | | |
$ | 3,123,046 | |
| Notes Payable : AVRA Medical Inc. | |
| 5,000,000 | | |
| 3,000,000 | |
| Current maturities of long-term debt, bank | |
| - | | |
| 120,880 | |
| Accounts payable | |
| 55,457 | | |
| 618,852 | |
| Deferred tax liability | |
| 20,740 | | |
| 20,597 | |
| Other accrued liabilities | |
| 186,241 | | |
| 202,148 | |
| Total Current Liabilities | |
| 9,125,843 | | |
| 7,085,523 | |
| | |
| | | |
| | |
| Other long-term liabilities | |
| - | | |
| - | |
| Total Liabilities | |
| 9,125,843 | | |
| 7,085,523 | |
| | |
| | | |
| | |
| Commitments and contingencies | |
| | | |
| | |
| | |
| | | |
| | |
| Stockholders’ (deficit) equity : | |
| | | |
| | |
| Common stock, 10,105,000 shares authorized, $0.001 par value,5,010 shares and 100,010 shares issued and outstanding as of March 31, 2023, and December 31,2022 respectively | |
| 5,001 | | |
| 5,001 | |
| Translation adjustment | |
| (6,247 | ) | |
| 15,523 | |
| Short Provision for Income Tax | |
| - | | |
| 342 | |
| Accumulated other comprehensive income (loss) | |
| 899,916 | | |
| 899,916 | |
| Accumulated deficit | |
| (4,684,582 | ) | |
| (3,696,542 | ) |
| Total stockholders’ (deficit) equity | |
| (3,785,913 | ) | |
| (2,775,760 | ) |
| Total liabilities and stockholders’ (deficit) equity | |
$ | 5,339,930 | | |
$ | 4,309,763 | |
CARDIO VENTURES, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS AND SHAREHOLDERS’
EQUITY
for the three-month periods ended March 31,
2023, and March 31, 2022 (unaudited)
| | |
March 31, | | |
March 31, | |
| | |
2023 | | |
2022 | |
| REVENUES | |
| | |
| |
| System Sales | |
$ | 1,491,310 | | |
| - | |
| Warranty Sales | |
| 20,069 | | |
| - | |
| Cost of revenue | |
| (1,000,204 | ) | |
| (333,564 | ) |
| GROSS (LOSS) PROFIT | |
| 511,175 | | |
| (333,564 | ) |
| | |
| | | |
| | |
| OPERATING EXPENSES: | |
| | | |
| | |
| Selling, general and administrative | |
| 1,416,960 | | |
| (611,132 | ) |
| TOTAL OPERATING EXPESNES | |
| 1,416,960 | | |
| (611,131 | ) |
| | |
| | | |
| | |
| Loss from operations | |
| (905,785 | ) | |
| (944,695 | ) |
| | |
| | | |
| | |
| OTHER INCOME (EXPENSE): | |
| | | |
| | |
| Interest and other income, net | |
| (82,258 | ) | |
| 2,520 | |
| TOTAL OTHER (EXPENSE) INCOME | |
| (82,258 | ) | |
| 2,520 | |
| | |
| | | |
| | |
| NET LOSS | |
| (988,042 | ) | |
| (942,174 | ) |
| Net loss attributable to Cardio Ventures, Inc. | |
$ | (988,042 | ) | |
$ | (942,174 | ) |
| | |
| | | |
| | |
| Net loss per share - basic and diluted | |
| (197 | ) | |
| (9 | ) |
| Weighted average | |
| 5,010 | | |
| 100,010 | |
CARDIO VENTURES, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
for the three-month periods ended March 31,
2023 and March 31, 2022 (Unaudited)
| | |
For the Three Months ended | |
| | |
2023 | | |
2022 | |
| Cash flows from operating activities: | |
| | |
| |
| Net loss | |
$ | (988,042 | ) | |
$ | (942,174 | ) |
| Adjustments to reconcile net loss to net cash used in operating activities: | |
| | | |
| | |
| Depreciation and amortization | |
| 31,025 | | |
| 15,619 | |
| Translation diff | |
| (22,109 | ) | |
| 2,210 | |
| Prepaid expenses and other assets | |
| (1,139,518 | ) | |
| (838,552 | ) |
| Accounts payable and accrued expenses | |
| (579,158 | ) | |
| 126,662 | |
| Net cash used in operating activities | |
| (2,697,802 | ) | |
| (1,636,235 | ) |
| Cash flows from investing activities: | |
| | | |
| | |
| Long Term Receivable | |
| (551,978 | ) | |
| - | |
| Purchase of property and equipment | |
| (203,955 | ) | |
| - | |
| Sale of property and equipment | |
| 130,928 | | |
| 369,843 | |
| Net cash used in investing activities | |
| (625,005 | ) | |
| 369,843 | |
| Cash flows from financing activities: | |
| | | |
| | |
| Proceeds from loan | |
| 650,250 | | |
| (99,010 | ) |
| Proceeds of Demand Notes Payable | |
| 740,358 | | |
| 1,444,227 | |
| Repayment of Current maturities of long-term debt, bank | |
| (120,880 | ) | |
| - | |
| Proceeds from Notes | |
| 2,000,000 | | |
| - | |
| Net cash provided by financing activities | |
| 3,269,727 | | |
| 1,345,217 | |
| Net change in cash | |
| (53,080 | ) | |
| 78,825 | |
| Cash at beginning of year | |
| 216,177 | | |
| 25,850 | |
| Cash at end of year | |
$ | 163,097 | | |
$ | 104,675 | |
| Supplemental disclosure of cash flow information: | |
| | | |
| | |
| Cash paid for income taxes | |
| - | | |
| - | |
| Cash paid for interest | |
| - | | |
| - | |
NOTES TO UNAUDITED CONSOLIDATED
FINANCIAL STATEMENTS
For March 31, 2023 and March 31, 2022
NOTE 1 – FINANCIAL STATEMENTS
Organization
Cardio Ventures Inc., a Delaware registered company,
(“the Company”) through its wholly owned downstream subsidiary company, Sudhir Srivastava Innovations Private Limited, a private
limited company registered in India, is engaged in the business of development, commercialization, manufacturing and sale of medical and
surgical robotic systems. The Company is structured to invest in four principal areas – surgical robotic systems and its allied
accessories, instruments and similar technologies, surgical tools, and surgical robotic training. The Company has a wholly owned subsidiary
“Otto Pvt. Ltd.”, a company registered in the Bahamas which, in turn, owns 99.23% of Sudhir Srivastava Innovations Pvt Ltd.,
India.
Basis of Presentation
The accompanying consolidated financial statements
are prepared on the basis of accounting principles generally accepted in the United States of America (“GAAP”). The Company
is in the business of assembly, manufacturing and selling of surgical robotic systems and is in its initial revenue growth stage. It is
also involved in developing new technologies within the field of medical robotics. Being an initial revenue growth stage enterprise, it
is devoting substantial efforts to establishing a new business, financial planning, raising capital, and research into innovative medical
robotic products which may become part of the Company’s product portfolio going forward.
Going Concern
The accompanying consolidated financial statements
have been prepared assuming the continuation of the Company as a going concern. The Company has recently launched its surgical robotic
system in India, and it has so far been well received by the hospitals/medical institutions which is reflected by more orders being received
by the Company. The Company has been able to raise financial resources to sustain its operations even though it has a negative working
capital situation and operational losses due to its initial stages of operations and revenue growth. 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
Estimates
The preparation of consolidated financial statements
in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities,
and expenses. The Company regularly evaluates estimates and assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the 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.
Cash and Cash Equivalents
The Company considers all highly liquid investments
with maturities of three months or less at the date of purchase to be cash equivalents.
Inventories
The Company has inventories of spares, components
and parts as raw materials, semi-finished robotic systems as Work-in-progress and fully assembled surgical robotic systems and surgical
instruments as Finished Goods. These are valued at cost or net realizable value whichever is less.
Loans and Advances
The Company and its subsidiaries, during the course
of their routine business operations, grant loans and advances to directors which are fully recoverable and/or adjustable against the
financial assistance, if any, extended by them to the Company or its subsidiaries. The Company and its subsidiaries occasionally grant
advances to its staff members which are fully recoverable from their salaries in the following month. Advances paid to suppliers/service
providers as per their purchase order terms are fully adjustable against their invoices for supplies of goods or provision of services.
Concentrations of Supplier Risk
The Company is dependent on certain suppliers,
some of which are single source suppliers, and the inability of these suppliers to deliver necessary components of the Company’s
products in a timely manner at prices, quality levels and volumes that are acceptable, or the Company’s inability to efficiently
manage these components from these suppliers, could have a material adverse effect on the Company’s business, prospects, financial
condition and operating results.
Revenue Recognition
The Company adopted ASU 2014-09, Revenue
from Contracts with Customers, and its related amendments (collectively known as “ASC 606”), effective January 1, 2019,
using the modified retrospective transition approach applied to all contracts. Therefore, the reported results for the period ended March 31,
2023, and 2022 reflect the application of ASC 606. Management determined that there were no retroactive adjustments necessary to
revenue recognition upon the adoption of the ASU 2014-09. The Company determines revenue recognition through the following steps:
| ● | 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. |
Revenue is recognized when control of the promised
goods or services is transferred to customers, in an amount that reflects the consideration the Company expects to be entitled to in exchange
for those goods or services.
We recognize the revenue at the time when
the risk and reward related to that equipment gets transferred immediately when we dispatch. We also sell instruments which are used
by surgeons when they use our robotic system for surgeries. These instruments are like consumables for the hospitals, and we
recognize the revenues for sale of instruments as and when the risk and reward related to those instruments get transferred
immediately when we dispatch. In 202, we had three surgical robotic systems sold and some instrument sales and the revenue for the
same has been included in the P&L of 2023 on the abovementioned basis whereas in 2022, while there were no revenues from
assembly, manufacturing and sale of surgical robotic systems and instruments, we had revenues from provision of services under a
professional technology services agreement which has since been terminated.
Research and Development Costs
Research and development costs include, but are
not limited to, outsourced engineering services, allocated facilities costs, internal engineering and development expenses, materials,
internally developed software and related to development of the Company’s products and services and are expensed when incurred.
Our current primary research and development objectives
focus on the development of our surgical robotic system and related future technologies. The successful development of this effort involves
many uncertainties, including:
| ● | our ability to recruit and retain skilled engineering staff. |
| ● | timing in finalizing systems design and specifications. |
| ● | successful completion of safety tests. |
| ● | our ability to obtain additional applicable approvals, licenses
or certifications from regulatory agencies, if required, and maintaining current approvals, licenses or certifications. |
| ● | performance of a limited number of suppliers for certain
raw materials and components. |
| ● | performance of our third-party contractors that support our
production and research and development activities including the quality of components and subassemblies; and |
| ● | our ability to maintain rights from third parties for intellectual
properties critical to research and development activities. |
General and Administrative
| ● | General and administrative costs primarily consist of all
personnel-related expenses for executive management, Sales and Marketing, Manufacturing and assembly and administrative functions, including
finance and accounting, legal, and human resources, as well as general corporate expenses like lease rent for the premises leased by
the Company, utilities and general insurance. General and administrative costs also include depreciation on fixed assets. |
Property Plant & Equipment
Property Plant & Equipment is recorded at
cost and depreciated using the straight-line method at rates determined as per estimated useful lives of the assets. The estimated useful
lives used in in calculating depreciation are as follows:
| | |
Years | |
| Office furniture and fixtures | |
| 4 | |
| Plant and equipment | |
| 4-8 | |
| Motor vehicles | |
| 3 | |
Income Taxes
The Company accounts for income taxes in accordance
with ASC 740, Accounting for Income Taxes, as clarified by ASC 740-10, Accounting for Uncertainty in Income Taxes. Under this method,
deferred income taxes are determined based on the estimated future tax effects of differences between the financial statement and tax
basis of assets and liabilities given the provisions of enacted tax laws. Deferred income tax provisions and benefits are based on changes
to the assets or liabilities from year to year. In providing for deferred taxes, the Company considers tax regulations of the jurisdictions
in which the Company operates, estimates of future taxable income, and available tax planning strategies. If tax regulations, operating
results, or the ability to implement tax-planning strategies vary, adjustments to the carrying value of deferred tax assets and liabilities
may be required. Valuation allowances are recorded related to deferred tax assets based on the “more likely than not” criteria
of ASC 740.
ASC 740-10 requires that the Company recognize
the financial statement benefit of a tax position only after determining that the relevant tax authority would more likely than not sustain
the position following an audit. For tax positions meeting the “more-likely-than-not” threshold, the amount recognized in
the financial statements is the largest benefit that has a greater than 50 percent likelihood of being realized upon ultimate settlement
with the relevant tax authority.
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.
Foreign Currency Translation
The functional currency of the Company is the
United States dollar. The functional currency of the Company’s subsidiary company in India is Indian Rupees. The financial statements
of the Company’s subsidiaries were translated to United States dollars in accordance with ASC 830, Foreign Currency Translation
Matters, using period-end rates of exchange for assets and liabilities, and average rates of exchange for the year for revenues and
expenses. Gains and losses arising on foreign currency denominated transactions are included in consolidated financial statements as Translation
adjustments in shareholder equity(deficit).
Earnings per share
Basic earning/loss per share are calculated by
dividing the net profit or loss for the period attributable to equity shareholders by the weighted average number of shares outstanding
during the period.
Fair Value of Financial Instruments
Financial Instrument included in our consolidated
financial statements consist principally of accounts receivable, amounts due to/from related parties and promissory notes payable. The
carrying amounts of cash and cash equivalents, loans and advances and promissory notes approximate fair value of these financial instruments.
Related Party Disclosure
The disclosure of related
party is given below: -
Name of related party and description of relationship
| Key Management Personnel |
Sudhir Prem Srivastava |
| |
|
| |
Vishwajyoti Srivastava |
| |
|
| Associate company |
Telegnosis Private Limited |
| |
|
| Holding Company |
Otto Private Limited |
Demand Notes Payable
Sudhir Srivastava Innovations Pvt Ltd has availed
a $3,706,485 working capital line of credit facility with HDFC Bank (OD AC 50200060619790) which bears interest at HDFC MCLR i.e. 7.25%
p.a. and are secured by a pledge of fixed deposits of $3,456,552 provided by Dr. Sudhir Prem Srivastava and $41,386 provided by the Company.
The outstanding balance under this line of credit was $3,497,938 at March 31, 2023. and $2,762,962 at December 31, 2022.
The abovementioned Overdraft facility is additionally
secured by personal guarantee of Dr. Sudhir Prem Srivastava.
Sudhir Srivastava Innovations Pvt Ltd, Company
has also availed another Working Capital Overdraft facility of US$ 365,171 with HDFC Bank (OD AC 50200072074161) which bears interest
at HDFC MCLR i.e 7.25.% p.a. This facility is primarily secured by a charge over the current assets of the Company. The outstanding balance
under this line of credit was $365,466 at March 31, 2023 and $360,084 at December 31, 2022.
The abovementioned Working Capital Overdraft facility
is also additionally secured by personal guarantee of Dr. Sudhir Prem Srivastava.
Subsequent Event:
The Merger
On April 14, 2023, the Company (“Closing”),
the Company consummated the acquisition by merger of CardioVentures, Inc., a Delaware corporation (“CardioVentures”),
pursuant to Merger Agreement dated November 7, 2022 (the “Merger Agreement”), 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.
CardioVentures, through a subsidiary, owns a controlling
interest in Sudhir Srivastava Innovations Pvt. Ltd., an Indian private limited company (“SSI - India”). Based in Haryana,
India, SSI-India is engaged in the business of developing innovative surgical robotic technologies with a vision to make the benefits
of robotic surgery affordable and accessible to a larger part of the global population. SSII’s product range includes its proprietary
“SSI Mantra” surgical robotic system and a wide range of surgical instruments capable of supporting a variety of cardiac and
other surgical procedures. The Company now intends to focus on the business of SSI-India and has plans to globally expand the presence
of its technologically advanced, user-friendly, and cost-effective surgical robotic solutions.
Pursuant to the Merger Agreement, at Closing,
Merger Sub merged with and into CardioVentures (the “Merger”). In the Merger, holders of the outstanding shares of
common stock of Cardio Ventures (including certain parties who provided interim convertible financing during the pendency of the Merger
Agreement, were issued 135,808,884 shares of SSII common stock, representing approximately 95% of issued and outstanding SSII common stock
post-Merger, with the existing shareholders of SSII holding approximately 6,544,344 shares of SSII common stock representing approximately
5% of issued and outstanding common stock post-Merger.
In addition to the foregoing, upon completion
of the Merger, the holders of SSII common stock received shares of newly designated Series A Non-Convertible Preferred Stock (the “Series
A Preferred Shares”).
The Series A Preferred Shares vote together with
shares of SSII common stock as a single class on all matters presented to a vote of shareholders, except as required by law and entitle
the holders of the Series A Preferred Shares to exercise 51.0% of the total voting power of the Company. The Series A Preferred Shares
are not convertible into common stock, do not have any dividend rights and have a nominal liquidation preference. The Series A Preferred
Shares also have certain protective provisions, such as requiring the vote of a majority of Series A Preferred Shares to change or amend
their rights, powers, privileges, limitations and restrictions. The Series A Preferred Shares are automatically redeemable by the Company
for nominal consideration at such time as the holders of the Series A Preferred Shares own less than 50% of the shares of SSII common
stock received in the Merger.
In addition to the foregoing, following Closing,
the Company issued 3,818,028 post-Merger shares of SSII common stock to Dr. Frederic Moll, an investor who provided $5,000,000 interim
financing to the Company pending consummation of the Merger. These shares were issued pursuant to the Investment Agreement with Dr. Moll
dated April 7, 2023, which was described in and included as an Exhibit to the Company’s Current Report on Form 8-K dated April 14,
2023.
The securities issued in connection with the Merger
were issued pursuant to the exemptions from registration of Section 4(a)(2) of the Securities Act of 1933, as amended and the rules and
regulations promulgated thereunder.
As a result of the foregoing, a “Change
in Control” of the Company occurred, with Dr. Sudhir Srivastava, through his holding company, becoming the Company’s principal
and controlling shareholder.
Concurrent with consummation of the Merger, Dr.
Sudhir Srivastava, through his subsidiary, assigned patents, trademarks and other intellectual property used in the development, commercialization,
manufacturing and sale of its medical and surgical robotic systems and products (the “SSII Intellectual Property”)
to a wholly owned subsidiary of SSII. In consideration thereof, Dr. Srivastava, through his holding company, will receive a quarterly
royalty of three percent of all “net revenues” (gross revenues actually received less cost of goods sold) generated
from the sale or licensing of the SSII Intellectual Property or products or services utilizing the SSII Intellectual Property.
At Closing, the Company’s articles of incorporation
were amended to:
| |
1. |
change the Company’s corporate name to “SS Innovations International, Inc.;” |
| |
2. |
effect the one for ten Reverse Stock Split; |
|
|
3.
|
authorize the designation of the Series A Preferred
Shares; and
|
| |
4. |
AVRA shall have increased its authorized common
stock to 250,000,000 shares. |
UNAUDITED PRO FORMA COMBINED FINANCIAL INFORMATION
FOR THE YEARS ENDED MARCH 31, 2023.
SS INNOVATIONS INTERNATIONAL INC.
UNAUDITED PRO FORMA CONDENSED
COMBINED BALANCE SHEET
FOR THE PERIOD ENDED MARCH 31, 2023
| ASSETS | |
AVRA Medical Robotics, INC. | | |
Cardio Ventures Inc. | | |
Pro Forma Adjustments | | |
Notes | | |
Pro Forma Combined | |
| CURRENT ASSETS | |
| | |
| | |
| | |
| | |
| |
| Cash and cash equivalents | |
$ | 448,543 | | |
$ | 163,097 | | |
| - | | |
| | | |
$ | 611,640 | |
| Accounts receivable, net of allowances | |
| - | | |
$ | 1,469,404 | | |
| - | | |
| | | |
$ | 1,469,404 | |
| Other prepaid expenses and deposit | |
| 8,678 | | |
$ | 69,698 | | |
| - | | |
| | | |
$ | 78,376 | |
| Notes Receivables - Acquisition | |
| 5,000,000 | | |
$ | - | | |
| (5,000,000 | ) | |
| (a) | | |
$ | - | |
| Inventory | |
| - | | |
$ | 1,310,413 | | |
| - | | |
| | | |
$ | 1,310,413 | |
| TOTAL CURRENT ASSETS | |
| 5,457,221 | | |
$ | 3,012,613 | | |
$ | (5,000,000 | ) | |
| | | |
$ | 3,469,834 | |
| | |
| | | |
| | | |
| | | |
| | | |
| | |
| Equipment | |
$ | 9,120 | | |
$ | 419,423 | | |
| - | | |
| | | |
$ | 428,543 | |
| Long Term Receivable | |
| | | |
$ | 982,311 | | |
| | | |
| | | |
$ | 982,311 | |
| Loans & Advances ( Related Party) | |
$ | - | | |
$ | 925,584 | | |
| 1,000,000 | | |
| (c
) | | |
$ | 1,925,584 | |
| TOTAL OTHER ASSETS | |
$ | 9,120 | | |
$ | 2,327,318 | | |
$ | 1,000,000 | | |
| | | |
$ | 3,336,438 | |
| | |
| | | |
| | | |
| | | |
| | | |
| | |
| TOTAL ASSETS | |
$ | 5,466,341 | | |
$ | 5,339,930 | | |
$ | (4,000,000 | ) | |
| | | |
$ | 6,806,271 | |
| | |
| | | |
| | | |
| | | |
| | | |
| | |
| LIABILITIES AND OWNER’S EQUITY | |
| | | |
| | | |
| | | |
| | | |
| | |
| CURRENT LIABILITIES | |
| | | |
| | | |
| | | |
| | | |
| | |
| Bank Overdraft Facility | |
$ | - | | |
$ | 3,863,404 | | |
| - | | |
| | | |
$ | 3,863,404 | |
| Notes payable - related party | |
| 5,000,000 | | |
$ | 5,000,000 | | |
| (5,000,000 | ) | |
| (a) | | |
$ | - | |
| | |
| | | |
| | | |
| (5,000,000 | ) | |
| (b) | | |
| | |
| Accounts payable | |
| - | | |
$ | 55,457 | | |
| - | | |
| | | |
$ | 55,457 | |
| Deferred tax liability | |
| - | | |
$ | 20,740 | | |
| - | | |
| | | |
$ | 20,740 | |
| Accrued Expenses | |
| 5,700 | | |
$ | 186,241 | | |
| - | | |
| | | |
$ | 191,941 | |
| Accrued Interest | |
| 113,227 | | |
$ | - | | |
| (113,227 | ) | |
| (c) | | |
$ | - | |
| TOTAL CURRENT LIABILITIES | |
$ | 5,118,927 | | |
$ | 9,125,843 | | |
$ | (10,113,227 | ) | |
| | | |
$ | 4,131,542 | |
| STOCKHOLDERS’ DEFICIT: | |
| | | |
| | | |
| | | |
| | | |
| | |
| Common Stock | |
| 6,544 | | |
$ | 5,001 | | |
| | | |
| | | |
$ | 11,545 | |
| Additional paid in capital | |
| 13,036,260 | | |
| | | |
| 5,113,227 | | |
| (b) | | |
$ | 19,174,802 | |
| | |
| | | |
| | | |
| 1,025,315 | | |
| (c) | | |
| | |
| Translation adjustment | |
| | | |
$ | (6,247 | ) | |
| | | |
| | | |
$ | (6,247 | ) |
| Accumulated other comprehensive income (loss) | |
| | | |
| 899,916 | | |
| | | |
| | | |
$ | 899,916 | |
| Accumulated deficit | |
| (12,695,390 | ) | |
| (4,684,582 | ) | |
| (25,315 | ) | |
| (c) | | |
$ | (17,405,287 | ) |
| TOTAL OWNER’S EQUITY | |
$ | 347,414 | | |
$ | (3,785,913 | ) | |
$ | 6,113,227 | | |
| | | |
$ | 2,674,729 | |
| | |
| | | |
| | | |
| | | |
| | | |
| | |
| TOTAL LIABILITIES AND OWNER’S EQUITY | |
$ | 5,466,341 | | |
$ | 5,339,930 | | |
$ | (4,000,000 | ) | |
| | | |
$ | 6,806,271 | |
SS INNOVATIONS INTERNATIONAL INC.
PROFORMA STATEMENTS OF OPERATIONS
FOR THE YEAR ENDED MARCH 31, 2023
| REVENUE | |
AVRA Medical Robotics, INC. | | |
Cardio Ventures Inc. | | |
Pro Forma Adjustments | | |
Notes | | |
Pro Forma Combined | |
| Sales | |
$ | - | | |
$ | 1,511,379 | | |
| | | |
| | | |
$ | - | |
| Revenue | |
$ | - | | |
$ | 1,511,379 | | |
| | | |
| | | |
$ | - | |
| Cost of Sales | |
| | | |
$ | 1,000,204 | | |
| | | |
| | | |
$ | 1,000,204 | |
| Total Cost of Sales | |
| | | |
$ | 1,000,204 | | |
| | | |
| | | |
$ | 1,000,204 | |
| Income (loss) from operations | |
$ | - | | |
$ | 511,175 | | |
| | | |
| | | |
$ | 511,175 | |
| | |
| | | |
| | | |
| | | |
| | | |
| | |
| General and administrative expenses | |
| | | |
| | | |
| | | |
| | | |
| | |
| Selling, general and administrative | |
$ | 2,057,067 | | |
$ | 1,416,960 | | |
| | | |
| | | |
$ | 3,474,027 | |
| Total General and administrative expenses | |
$ | 2,057,067 | | |
$ | 1,416,960 | | |
| | | |
| | | |
$ | 3,474,027 | |
| | |
| | | |
| | | |
| | | |
| | | |
| | |
| Interest and other income, net | |
$ | (52,747 | ) | |
$ | 82,257 | | |
$ | 25,315 | | |
| (c) | | |
$ | 54,825 | |
| Net Income( loss) | |
$ | (2,004,320 | ) | |
$ | (988,042 | ) | |
$ | (25,315 | ) | |
| | | |
$ | (3,017,677 | ) |
| | |
| | | |
| | | |
| | | |
| | | |
| | |
| Loss per common share - basic and diluted | |
| -0.03 | | |
| -197 | | |
| | | |
| | | |
$ | (0 | ) |
| Weighted average common shares outstanding (Basic) | |
| 61,705,851 | | |
| 5010 | | |
| | | |
| | | |
$ | 61,705,851 | |
Notes to Unaudited Pro Forma Condensed Combined Financial Information
Note 1 — Basis of Presentation
The Company’s historical consolidated financial
statements have been adjusted in the pro forma condensed combined financial statements to give effect to pro forma events that are (i)
directly attributable to the business combination, (ii) factually supportable, and (iii) with respect to the pro forma condensed combined
statements of operations, expected to have a continuing impact on the combined results following the business combination.
The pro forma combined financial statements do
not necessarily reflect what the combined Company’s financial condition or results of operations would have been had the acquisition
occurred on the dates indicated. They also may not be useful in predicting the future financial condition and results of operations of
the combined Company. The actual financial position and results of operations may differ significantly from the pro forma amounts reflected
herein due to a variety of factors.
The combined pro forma financial information does
not reflect the realization of any expected cost savings or other synergies from the acquisition of Avra Medical Robotics, Inc. as a result
of restructuring activities and other planned cost savings initiatives following the completion of the business combination.
Pursuant
to the Merger Agreement, at Closing, Merger Sub merged with and into CardioVentures (the “Merger”). In the Merger,
holders of the outstanding shares of common stock of CardioVentures (including certain parties who provided interim convertible financing
during the pendency of the Merger Agreement, were issued 135,808,884 shares of SSII common stock, representing approximately 95%
of issued and outstanding shares of SSII common stock post-Merger, with the existing shareholders of SSII holding approximately 6,544,344 shares
of SSII common stock representing approximately 5% of issued and outstanding shares of SSII common stock post-Merger. Total
shares issued thereof are 142,353,228, out of which 5% is related to AVRA i.e., 6,544,344 shares and the remaining 95% i.e. 135,808,884
are new issuance.
Note 2
– Pro Forma Adjustments
| a) | Represents the elimination of AVRA Medical Robotics Inc Notes
Receivables and the Cardio Ventures Inc. Notes Payable from the acquisition. |
| | | |
| b) | Represents
the conversion of Notes Payable into 7,647,871 shares
of common stock valued at $6,138,542 in merger with AVRA Medical Robotics Inc., and Cardio Ventures Inc. |
| | | |
| c) | Represents the adjustment for remaining 1,000,000 notes payable
issued after 31st March 2023 and its conversion into shares as on date of merger. |
UNAUDITED PRO FORMA COMBINED FINANCIAL INFORMATION
FOR THE YEARS ENDED DECEMBER 31, 2022
SS
INNOVATIONS INTERNATIONAL INC.
UNAUDITED PRO FORMA CONDENSED COMBINED BALANCE SHEET
FOR THE YEARS ENDED DECEMBER 31, 2022
| ASSETS | |
AVRA Medical Robotics, Inc. | | |
Cardio Ventures Inc. | | |
Pro Forma Adjustments | | |
Notes | | |
Pro Forma Combined | |
| CURRENT ASSETS | |
| | |
| | |
| | |
| | |
| |
| Cash and cash equivalents | |
$ | 1,351,364 | | |
$ | 216,177 | | |
| - | | |
| | | |
$ | 1,567,541 | |
| Accounts receivable, net of allowances | |
| - | | |
| 161,979 | | |
| - | | |
| | | |
| 161,979 | |
| Notes Receivables - Acquisition | |
| 3,000,000 | | |
| - | | |
| (3,000,000 | ) | |
| (a) | | |
| - | |
| Inventory | |
| - | | |
| 855,777 | | |
| - | | |
| | | |
| 855,777 | |
| Prepaids and other current assets | |
| 8,678.00 | | |
$ | 692,242 | | |
| - | | |
| | | |
$ | 700,920 | |
| Total Current Assets | |
$ | 4,360,042 | | |
$ | 1,926,175 | | |
$ | (3,000,000 | ) | |
| | | |
$ | 3,286,217 | |
| Property, plant, and equipment, net | |
| 11,399 | | |
$ | 377,421 | | |
| - | | |
| | | |
| 388,820 | |
| Long Term Receivable | |
| | | |
$ | 430,333 | | |
| | | |
| | | |
| 430,333 | |
| Loans & Advances ( Related Party) | |
| - | | |
$ | 1,575,834 | | |
| 2,000,000 | | |
| (c) | | |
| 3,575,834 | |
| Total Non Current Assets | |
$ | 11,399 | | |
$ | 2,383,588 | | |
$ | 2,000,000 | | |
| | | |
$ | 4,394,987 | |
| TOTAL ASSETS | |
$ | 4,371,442 | | |
$ | 4,309,763 | | |
$ | (1,000,000 | ) | |
| | | |
$ | 7,681,204 | |
| | |
| | | |
| | | |
| | | |
| | | |
| | |
| LIABILITIES AND OWNER’S EQUITY | |
| | | |
| | | |
| | | |
| | | |
| | |
| CURRENT LIABILITIES | |
| | | |
| | | |
| | | |
| | | |
| | |
| Bank Overdraft Facility | |
$ | - | | |
$ | 3,123,046 | | |
| - | | |
| | | |
$ | 3,123,046 | |
| Notes payable - related party | |
| 4,000,000 | | |
| 3,000,000 | | |
| (3,000,000 | ) | |
| (a) | | |
| - | |
| | |
| | | |
| | | |
| (4,000,000 | ) | |
| (b) | | |
| | |
| Current maturities of long-term debt, bank | |
| - | | |
| 120,880 | | |
| - | | |
| | | |
| 120,880 | |
| Accounts payable | |
| - | | |
| 618,852 | | |
| - | | |
| | | |
| 618,852 | |
| Deferred tax liability | |
| - | | |
| 20,597 | | |
| - | | |
| | | |
| 20,597 | |
| Accrued Expenses | |
| 5,700.00 | | |
| 202,148 | | |
| - | | |
| | | |
| 207,848 | |
| Accrued Interest | |
| 45,529 | | |
| - | | |
| (45,529 | ) | |
| (b) | | |
$ | - | |
| Total Current Liabilities | |
| 4,051,229 | | |
| 7,085,523 | | |
$ | (7,045,529 | ) | |
| | | |
$ | 4,091,223 | |
| Stockholders’ (deficit)/equity: | |
| | | |
| | | |
| | | |
| | | |
| | |
| Common stock | |
| 5,389 | | |
| 5,001 | | |
$ | 7,649 | | |
| (c) | | |
| 18,039 | |
| Translation Adjustments | |
| | | |
| 15,521 | | |
| | | |
| (c) | | |
| 15,521 | |
| Additional paid in capital | |
| 11,005,895 | | |
| | | |
$ | 4,045,529 | | |
| (b) | | |
| 17,136,789 | |
| | |
| | | |
| | | |
$ | 2,085,365 | | |
| (c) | | |
| | |
| Accumulated other comprehensive income (loss) | |
| | | |
| 899,916 | | |
| | | |
| | | |
| 899,916 | |
| Accumulated deficit | |
| (10,691,071 | ) | |
| (3,696,198 | ) | |
$ | (93,014 | ) | |
| (c) | | |
$ | (14,480,283 | ) |
| Total stockholders’ (deficit) equity | |
| 320,213 | | |
$ | (2,775,760 | ) | |
$ | 6,045,529 | | |
| | | |
$ | 3,589,982 | |
| | |
| | | |
| | | |
| | | |
| | | |
| | |
| TOTAL LIABILITIES AND OWNER’S EQUITY | |
$ | 4,371,442 | | |
$ | 4,309,763 | | |
$ | (1,000,000 | ) | |
| | | |
$ | 7,681,205 | |
SS
INNOVATIONS INTERNATIONAL INC.
PROFORMA STATEMENTS OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 2022
| REVENUE
| |
AVRA Medical
Robotics, Inc. | | |
Cardio
Ventures Inc. | | |
Pro Forma
Adjustments | | |
Notes | | |
Pro Forma
Combined | |
| Revenue | |
| | |
| | |
| | |
| | |
| |
| Sales | |
$ | - | | |
$ | 1,458,315 | | |
| | | |
| | |
$ | 1,458,315 | |
| Total Revenue | |
$ | - | | |
$ | 1,458,315 | | |
| | | |
| | |
$ | 1,458,315 | |
| Cost of Revenue | |
| | | |
$ | 968,721 | | |
| | | |
| | |
$ | 968,721 | |
| Total Cost of Sales | |
| | | |
$ | 968,721 | | |
| | | |
| | |
$ | 968,721 | |
| Gross Profit (Loss) | |
$ | - | | |
$ | 489,594 | | |
| | | |
| | |
$ | 489,594 | |
| Operating expenses | |
| | | |
| | | |
| | | |
| | |
| | |
| Selling, general and administrative | |
$ | 1,239,179 | | |
$ | 3,872,897 | | |
| | | |
| | |
$ | 5,112,076 | |
| R&D | |
| 72,959 | | |
| 10,323 | | |
| | | |
| | |
$ | 83,282 | |
| Compensation Expense | |
| 1,135,468 | | |
| | | |
| | | |
| | |
$ | 1,135,468 | |
| Total Operating expenses | |
$ | 2,447,606 | | |
$ | 3,883,220 | | |
| | | |
| | |
$ | 6,330,826 | |
| Other Income & expenses, net | |
| 234,594 | | |
| 5,134 | | |
| (93,014 | ) | |
(c) | | |
$ | 146,714 | |
| Net income | |
$ | (2,213,012 | ) | |
$ | (3,388,492 | ) | |
$ | (93,014 | ) | |
| | |
$ | (5,694,518 | ) |
| | |
| | | |
| | | |
| | | |
| | |
| | |
| Weighted average common shares outstanding - basic and diluted | |
| 40,878,824 | | |
| 5,010 | | |
| | | |
| | |
| 40,878,824 | |
| Net loss per common share - basic and diluted | |
| (0.05 | ) | |
| (676.35 | ) | |
| | | |
| | |
| (0.14 | ) |
Notes to Unaudited Pro Forma Condensed Combined Financial Information
Note 1 — Basis of Presentation
The Company’s historical consolidated financial
statements have been adjusted in the pro forma condensed combined financial statements to give effect to pro forma events that are (i)
directly attributable to the business combination, (ii) factually supportable, and (iii) with respect to the pro forma condensed combined
statements of operations, expected to have a continuing impact on the combined results following the business combination.
The business combination was accounted for under
the acquisition method of accounting in accordance with ASC Topic 805, Business Combinations. As the acquirer for accounting
purposes, the Company has estimated the fair value of AVRA MEDICAL ROBOTICS, INC.’s assets acquired, and liabilities assumed and
conformed to the accounting policies of the acquired company to its own accounting policies.
The pro forma combined financial statements do
not necessarily reflect what the combined Company’s financial condition or results of operations would have been had the acquisition
occurred on the dates indicated. They also may not be useful in predicting the future financial condition and results of operations of
the combined Company. The actual financial position and results of operations may differ significantly from the pro forma amounts reflected
herein due to a variety of factors.
The combined pro forma financial information does
not reflect the realization of any expected cost savings or other synergies from the acquisition of AVRA MEDICAL ROBOTICS, INC. as a result
of restructuring activities and other planned cost savings initiatives following the completion of the business combination.
Pursuant
to the Merger Agreement, at Closing, Merger Sub merged with and into CardioVentures (the “Merger”). In the Merger,
holders of the outstanding shares of common stock of CardioVentures (including certain parties who provided interim convertible financing
during the pendency of the Merger Agreement, were issued 135,808,884 shares of SSII common stock, representing approximately 95%
of issued and outstanding shares of SSII common stock post-Merger, with the existing shareholders of SSII holding approximately 6,544,344 shares
of SSII common stock representing approximately 5% of issued and outstanding shares of SSII common stock post-Merger..
Note 2
– Pro Forma Adjustments
| a) | Represents the elimination of AVRA Medical Robotics Inc Notes
Receivables and the Notes Payable from the acquisition. |
| | | |
| b) | Represents
the conversion of Notes Payable of $4,045,529 into additional
Paid-up capital upon the Merger. |
| | | |
| c) | Represents the adjustment for remaining 2,000,000 notes payable
issued after 31st December 2022 and accrued interest of $93,014 and its conversion into shares of 7,647,871 as on date of
merger. |
AVRA Medical Robotics (PK) (USOTC:AVMR)
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