SS Innovations International, Inc. 10-K

Item 1 Business. Overview We are a medical robotics company developing a fully autonomous medical robotic system using proprietary software which integrates Artificial Intelligence (“ AI ”) and Deep Learning, or machine learning, (“ DL ”). By using an AI and DL enhanced software program, we are creating an intelligent robotic system that we believe can “ robotize ” a wide range of medical procedures currently being performed by human hands. We are concentrating our research and development efforts to meet rising expectations of patients and practitioners alike for the precision, safety and speed offered by an AI enhanced robotics platform system that can be combined with proven medical devices, end-effectors and surgical instruments. We believe that progress in mechanical and software engineering has made possible lightweight and relatively inexpensive robotic devices for difficult procedures in various medical fields. Medical robots are already being successfully employed in several areas of surgery, including Urology (Prostate), Colo-Rectal, Gynecology, Thoracic, General Surgery, Orthopedics, and Neuro and Spine Surgery. Robots are also being used for Telemedicine and assistive robotic methods are addressing the delivery of healthcare in inaccessible locations, ranging from rural areas lacking specialist expertise to post-disaster scenarios, and battlefield areas. With the aging population dominating demographics in the U.S. across all spectrums of healthcare, robotic technologies are being developed toward promoting improved function, lower morbidity and improved overall outcomes. We are developing a treatment-independent autonomous robotics system utilizing our proprietary AI-driven precision guidance system, applicable to a variety of minimally and non-invasive procedures, with an initial focus on skin resurfacing aesthetic procedures utilizing several FDA approved skin enhancing techniques robotized for superior performance and optimal results. Our medical robotic system is being developed to deliver skin resurfacing treatments, such as micro-needling and laser therapies with improved efficiency, accuracy and precision over current procedures conducted by human hand, and only requiring the doctor to input or just confirm treatment parameters. As a result, use of our medical robotic system is expected to provide improved quality and safety as well as improve patient throughput and workflow. Our autonomous medical robotics system is being developed to be compatible with available FDA approved surgical tools and end-effectors, enabling us to initially penetrate a sizable and fast-growing aesthetics market, which includes micro-needling and laser solutions. Our robotics system will allow doctors, and anyone permitted to treat patients, defined at the State level, such as a licensed aesthetician, to treat damaged skin autonomously by delivering, for example, micro-needling to the skin. The micro-needling catalyzes the natural process of collagen remodeling, consisting of formation of new collagen, elastin, and vascularization in the papillary dermis, similar to the effect of laser treatments. 1 We expect our robotic system to eliminate many of the common errors that occur during handheld procedures, such as over- or under- exposure of the needles or energy-based instruments that can have terrible cosmetic results and even injure the patient. In addition, our system is being designed to continuously adjust treatment parameters, such as penetration depth, time, and energy in order to individualize the outcome based on our algorithms. Our robotic system has been designed and developed through a seamless collaboration of the surgeon, the engineer and the scientist. Since the medical robotic industry has progressed greatly in miniaturization, adaptability and lower costs, we believe that the Avra “ brains ” technology component can lead to dramatic opportunities in all of medicine. The advantages of robotizing already FDA approved aesthetic devices are many. In contrast to a human using a handheld device, our aesthetics robotic system has the potential to perform each and every procedure with unsurpassed precision without constraint of age, proficiency, experience or fatigue. Likewise, in many skin related treatments the amount of energy delivered, distance and/or depth of the instrument to, or into, the skin, and treating only the affected area are critical to the outcome. The robotic system can maintain these parameters with unparalleled accuracy. The system can also replicate the same procedure time and again precisely. Delivery of certain aesthetic treatments by robotic systems is believed to be the most efficient option, requiring fewer visits per patient while increasing patient throughput — a benefit for patients and practitioners alike. Advantages of using our medical robotic approach to procedures include: ● Reduced cost per treatment. ● Better treatment accuracy. ● Better treatment outcomes. ● Increased patient throughput and revenue generation for the physician. ● Easier multi-platform integration. ● Addresses shortfall of physicians/surgeons. ● Easier future integration of medical and technological advancements such as molecular biologics. We believe that our initial medical robotic system for the aesthetics market should find rapid acceptance based on the aforementioned advantages of using the attribute of robotics versus traditional manual applications. Furthermore, there is general acceptance by consumers for fee-for-service cash payments in the facial aesthetics market thereby avoiding medical insurance reimbursement issues. Our medical robotic system utilizes a robotic arm that has 7-degrees of freedom integrated with our proprietary AI-driven control software and algorithms. The robotic arm was designed and built under the required medical device standards of the U.S. Food and Drug Administration (the “ FDA ”). Our strategy is to integrate the robotic arm with FDA approved devices, which is expected to allow for a more expedited approval of the integrated system. We believe that the FDA approval process will primarily focus upon validation of the medical robotic system’s software control. This could lead to a less onerous, more de-risked regulatory path to approval, particularly if strong preclinical results are achieved. Subsequent to the completion of the FDA preclinical work, estimated to take six months, we believe that we will be able to additionally modify and robotize certain non-invasive instruments that do not require FDA approvals and proceed to the cosmetic treatments marketplace. This action could sharply reduce the time to commercial operations and revenues. We previously retained the services of The Horizon Phoenix Group (“ HPG ”), a consulting firm experienced in securing U.S. and foreign regulatory approvals for medical devices, in order to initiate the regulatory process. Working with HPG, we prepared and filed an application with the FDA for our initial medical robotic system and in August 2019 held an initial pre-collaboration meeting with the FDA. We believe that this is the first of a series of meetings where the Avra system and its regulatory requirements will be discussed in ever-increasing specificity. This should allow for a more focused regulatory process, saving both resources and time. The robotic arm that we intend to utilize for our system has already been granted approval in the EU and received a CE mark. We have begun implementing a quality and regulatory system that will serve as the foundation for U.S., Canadian, European, Australian, Japanese, and Brazilian market access for our medical robotic system. The Medical Device Single Audit Program(“ MDSAP ”), which we plan to employ, is a single inspection that, when completed, is expected to support market access to these six most important medical device marketplaces. 2 Since 2016, we had a research partnership with the University of Central Florida (“ UCF ”) to develop a prototype intelligent medical robotic system. UCF is recognized particularly for its work in the area of medical robotic research and design, with a focus on the guidance systems. Avra has paid UCF a one-time fee for outright ownership of work developed by UCF in the collaboration. The Research Agreement was extended several times and expired on April 30, 2021. To further the depth of our research and development we also began a partnership in 2021 with Florida Polytechnic University and are actively working with them on developing our system. Avra recently brought in two Associate Professors and three graduates to join Avra’s engineering development team. Effective October 11th, 2021 Avra executed a Sponsored Student Project Agreement which includes two payments of $8,030 each covering Fall semester in 2021 and Spring semester in 2022. Recent Developments On November 7, 2022, AVRA entered into a definitive Merger Agreement (the “ Merger Agreement ”), by and among AVRA, AVRA-SSI Merger Corporation, a Delaware corporation and wholly-owned subsidiary of AVRA (“ Merger Sub ”), CardioVentures, Inc., a Delaware corporation (“ SSI - DE ”) Dr. Sudhir Srivastava (“ Dr. Srivastava ”), who, through his holding company, owns a controlling interest in SSI-DE. SSI-DE, 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 development, commercialization, manufacturing and sale of medical and surgical robotic systems utilizing patents, trademarks and other intellectual property held by Dr. Srivastava (the “SSI Intellectual Property”). Pursuant to the Merger Agreement, Merger Sub will merge with and into SSI – DE (the “ Merger ”). In the Merger, holders of the outstanding shares of common stock of SSI – DE at closing (including certain parties providing Interim Financing as described below), will receive in exchange for their SSI – DE shares, such number of shares of AVRA common stock as will result in such holders owning 95% of the outstanding post-Merger shares of AVRA common stock, with the current shareholders of AVRA owning 5% of the outstanding post-Merger shares of AVRA common stock. In addition to the foregoing, upon completion of the Merger, the holders of SSI – DE common stock will receive, pro rata, shares of newly designated Series A Non-Convertible Preferred Stock (the “ Series A Preferred Shares ”). The Series A Preferred Shares will vote together with Shares of our common stock as a single class on all matters presented to a vote of stockholders, 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 holder owns less than 50% of the shares of AVRA common stock received in the Merger. Concurrent with consummation of the Merger, Dr. Srivastava will assign the SSI Intellectual Property being utilized by SSI – India in the development, manufacture and sale of its robotic surgical system to a subsidiary of AVRA. In exchange for such assignment, Dr. Srivastava will receive a royalty of three percent (3%) of net revenues (gross revenues less cost of goods sold) generated from the sale or license of products using the SSI Intellectual Property. In addition, at closing, the current directors and executive officers will resign, other than Barry Cohen, who will continue as a director and in a new executive capacity, and the designees of the SSI – DE stockholders will be appointed to AVRA’s board of directors and management. Post – Merger, AVRA intends to focus a significant part of its efforts on expanding and further developing the business of SSI-India, which will be an indirect majority-owned subsidiary of AVRA. In addition to customary closing conditions, consummation of the Merger is subject to the following conditions to be satisfied or waived by SSI – DE and Dr. Srivastava at or prior to consummation of the Merger: ● AVRA shall have changed its corporate name to “SS Innovations, Inc.; 3 ● AVRA shall have implemented a one for ten reverse stock split; and ● AVRA shall have increased its authorized common stock to 250,000,000 shares. The Merger Agreement, the Merger and the above corporate actions have been approved by AVRA’s board of directors and majority stockholders. They are subject to the final processing of an Issuer Company – Related Action Notification Form, which we have filed with the Financial Industry Regulatory Authority and the filing of appropriate amendments to our Articles of Incorporation with the Florida Secretary of State. Interim Financing As contemplated by the Merger Agreement, pending consummation of the Merger, we have provided SSI – DE and its affiliates, a total of $5,000,000 in interim financing as of the date of this Report (the “ Interim Financing ”). The Interim Financing is evidenced by one-year promissory Notes made in favor of the Company by SSI-DE and its affiliates, including Dr. Srivastava, jointly and severally (the “ SSI Notes ”). Interest on the SSI Notes accrues at the rate of 7% per annum, payable together with the principal amount at maturity. The SSI Notes have an original issue discount of 10% for the first $2,000,000 and 6% for the balance. If the SSI Notes are not repaid in full on or at maturity, they will automatically convert into a percentage equity interest in SSI-DE determined by dividing the principal amount of accrued interest on the SSI Notes divided by $100 million. The SSI Notes contain customary default provisions and other typical terms and conditions. Prior to consummation of the Merger, we may make additional advances to SSI – DE and its affiliates, evidenced by additional SSI Notes. These SSI Notes will be substantially similar in form and substance to the initial SSI Notes, provided, however, that SSI Notes issued in excess of an aggregate principal amount of $2,000,000, will have an original issue discount of 6% as opposed to 10%, and the valuation for determining conversion may be $250 million as opposed to $100 million. In order to fund the Interim Financing, the Company offered and sold to two accredited investors, a total of $3,000,000 and $2,000,000 in principal amount of one-year convertible promissory notes (the “ Convertible Notes ”), respectively. The Convertible Notes will have the same interest rate and payment terms as the SSI Notes and otherwise be substantially similar to the SSI Notes, provided, however, that the Convertible Notes do not have an original issue discount. Further, upon consummation of the Merger (if and when it is consummated) the Convertible Notes will automatically convert into a number of shares of AVRA common stock determined by dividing the principal amount of the Convertible Notes by $100 million and multiplying such number expressed as a percentage by the number of AVRA shares of common stock issued to the stockholders of SSI-DE upon consummation of the Merger. 4 The Convertible Notes were issued in private transactions pursuant to the exemptions from registration under Section 4(a)2 of the Securities Act of 1933, as amended and the rules and regulations promulgated thereunder. Pending the Merger, each of AVRA and SSI–DE and its affiliates may seek to secure additional equity or debt financing, including, without limitation, further Interim Financing. Employees As of the date of this report the Company has two full-time and three part-time employees, including certain executive officers. We also rely on independent third-party consultants to perform additional services as needed. Item 1A. Risk Factors. As a “ smaller reporting company ,” as defined in Rule 12b-2 under the Securities Exchange Act of 1924, as amended (the “ Exchange Act ”), we are not required to provide the information required by this Item. Item 1B. Unresolved Staff Comments. Not applicable. Item 2. Properties. The Company currently does not own any properties but leases an office from UCF at 3259 Progress Drive, Orlando, FL 32826 under a lease expiring July 31, 2023, at a rental of $404.68 per month.