What changed in this filing

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Item 2. Management’s Discussion and Analysis

2023-08-07 compared with 2023-05-15 · 136 added, 88 removed, 54 unchanged (81% of the section changed)

Management’s Discussion and Analysis

of Financial Condition and Results of Operations.

Note Regarding Forward Looking Statements

This report contains forward-looking statements

that reflect our current views about future events.

We use the words “ anticipate ,” “ assume ,” “ believe ,”

“ estimate ,” “ expect ,” “ will ,” “ intend ,” “ may ,”

“ plan ,” “ project ,” “ should ,” “ could ,” “ seek ,”

“ designed ,” “ potential ,” “ forecast ,” “ target ,” “ objective ,”

“ goal ” or the negatives of such terms or other similar expressions.

These statements relate to future events or our

future financial performance and involve known and unknown risks, uncertainties and other factors that may cause our actual results, levels

of activity, performance, or achievements to be materially different from any future results, levels of activity, performance or achievements

expressed or implied by these forward-looking statements.

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.

Management’s Discussion and Analysis of Financial

Condition and Results of Operations.

We are a medical robotics company engaged in the

business of developing, manufacturing and selling a surgical robotic system under our proprietary brand “ SSI Mantra ,”

together with allied accessories and a wide range of surgical instruments capable of supporting cardiac and a variety of other surgical

We are focused on making the benefits of robotic surgery affordable and accessible to a large part of the global population

by consistently working on keeping our cost of production low.

The modular design of our surgical robotic system is aimed at being more

user friendly and relatively more adaptable to operating theatres of varying sizes and different geographical locations.

Our primary research

and development, manufacturing and marketing operations are based in India.

We believe that with the constant development

of minimally invasive treatment technologies which are aimed at reducing patient recovery times, the use of surgical robotic systems equipped

with technologically advanced surgical instruments is only going to increase.

This is evidenced by the consistent year-on-year growth

in number of robotic surgeries being performed worldwide.

We believe that with our vision to make the benefits of robotic surgeries affordable

and accessible, we can help to further accelerate the adoption of robot assisted surgeries thereby making its benefits reach to all those

segments of the society who have hitherto been deprived to benefit from it.

A wide range of surgical procedures including

Urology (Prostate), Colo-Rectal, Oncology, Gynecology, Thoracic, and General Surgery are already being done with the use of surgical robotic

systems, including our SSI-Mantra surgical robotic system, we plan to extend the usage of our robotic system to complex Cardiac procedures

We believe that this this can be hugely beneficial for faster recovery of cardiac patients who have to currently undergo sternotomy

which has a much longer recovery period.

We also believe that use of robotic systems is

also going to help address the delivery of healthcare in inaccessible locations, ranging from rural areas lacking specialist expertise

to post-disaster scenarios, and remote battlefield areas and that the robotic technologies are going to consistently evolve for promoting

faster recovery periods, improved functionality, lower morbidity and improved overall medical outcomes of healthcare.

On April 14, 2023, a wholly owned subsidiary of

the Company merged with CardioVentures, Inc., a Delaware corporation, which is the indirect parent of Sudhir Srivastava Innovations Pvt.

Ltd., (“ SSI India ”) an Indian private limited company 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.

the Company merged with CardioVentures, Inc., a Delaware corporation (“ CardioVentures ”), which is the indirect parent

of Sudhir Srivastava Innovations Pvt.

Ltd., (“ SSI India ”) an Indian private limited company engaged in the business

of developing innovative surgical robotic technologies.

As a result of the transaction, a “ change

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International, Inc.

” and implemented a one for ten reverse stock split.

The financial statements and financial information contained

in this report only reflect the operations of the Company prior to the acquisition and do not give pro forma effect to the reverse stock

See Note 6 to the Notes to Financial Statements

included in Part I, Item 1 of this report for additional details regarding the acquisition.

” and implemented a one for

ten reverse stock split.

The financial statements,

financial information and share and per share information contained in this report reflect the operations of both the Company and Cardio

Ventures and give pro forma effect to the reverse stock split.

See Note 8 to the Notes to Condensed Consolidated

Financial Statements included in Part I, Item 1 of this report for additional details regarding the business combination.

Results of Operations

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this report have been prepared assuming the Company will continue as a going concern.

The Company was recently formed and has not established

sufficient operations or revenues to sustain the Company.

These conditions raise substantial doubt about the Company’s ability to

continue as a going concern.

In the second half of 2022, the Company commercially

launched its “ SSI Mantra ” robotic surgical system in India.

As of June 30, 2023, we have sold 9 systems, which have

performed more than 230 procedures of various types involving varying degrees of complexities.

The following table provides selected balance

sheet data for our Company at March 31, 2023 (unaudited) and December 31, 2022:

sheet data for our Company as of June 30, 2023 (unaudited) and December 31, 2022:

Balance Sheet Data

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Total Stockholders’ Equity

To date, the Company has relied on debt and equity

raised in private offerings and shareholder loans to finance operations and no other sources of capital has been identified.

If we experience

a shortfall in operating capital, we could be faced with having to limit our research and development activities.

Three months ended March 31, 2023, as compared to

three months ended March 31, 2022

We had no revenues during either

the three months ended March 31, 2023, or the three months ended March 31, 2022.

Research and Development Expenses.

and development expenses were $0 during the three months ended March 31, 2023, and for the three months ended March 31, 2022.

and development expenses reflect continuing development work on the Company’s prototype robotic system at its facilities at UCF’s

incubator in Orlando, Florida.

Compensation Expense.

We had compensation

expenses of $1,592,309 and $28,240 during the three months ended no revenues during either the three months ended March 31, 2023 and March

31, 2022, respectively.

This includes compensation for the management staff and stock-based compensation expense related to the Company’s

2016 Stock Incentive Plan.

General and Administrative Expenses.

incurred $464,758 and $52,215 in general and administrative expenses during the three months ended March 31, 2023, and March 31, 2022,

respectively.

General and administrative expenses include legal and other professional expenses related to the Company’s filings

as a public company with the Securities and Exchange Commission (the “ SEC ”).

The Company has been consistently making efforts

to raise debt and equity capital to meet the demands of and further scale up its growing operations.

To date, the Company has relied on

debt and equity raised in private offerings and shareholder loans to finance operations and no other sources of capital has been identified.

If we experience a shortfall in operating capital, we could face slower revenue growth and we may be faced with having to slow down our

expansion plans.

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

months ended June 30, 2022

We had revenues of $1,575,307

for the three months ended June 30, 2023, compared to $ 0 for the three months ended June 30, 2022, reflecting the commercial launch of

our robotic surgical system in late 2022..

Selling, General and Administrative

We incurred $1,983,053 in selling, general and administrative expenses during the three months ended June 30, 2023,

and $170,030 June 30, 2022, respectively.

General and administrative expenses include compensation expenses including compensation

for the management staff and stock-based compensation, consultancy charges and legal and other professional expenses related to the

Company’s filings as a public company with the Securities and Exchange Commission (the “ SEC ”).

Other Income/Expenses .

We had $52,747 in

the first three quarters of 2023 as compared to $35 of other expenses during the three months ended March 31, 2022 consisting of interest

expense related to loans.

We incurred other

expenses of $91,533 for the three months ended June 30, 2023 as compared to $29 of other expenses during the three months ended June 30,

Other expenses consisted of interest expense related to loans.

We incurred a net loss of $1,850,423

for the three months ended March 31, 2023, as compared to a net loss of $80,421 for the three months ended March 31, 2022.

for the three months ended June 30, 2023, as compared to a net loss of $170,002 for the three months ended June 30, 2022.

Six months ended June

30, 2023, as compared to six months ended June 30, 2022

had revenues of $3,086,686 for the six months ended June 30, 2023, as compared to $ 0 for the six months ended June 30, 2022, reflecting

the commercial launch of our robotic surgical system in late 2022.

Selling, General and

Administrative Expenses.

We incurred $3,400,013 and $250,486 in general and administrative expenses during the six months ended

June 30, 2023, and June 30, 2022, respectively.

General and administrative expenses include legal and other professional expenses related

to the Company’s filings as a public company with the SEC.

Other Income/Expenses .

We incurred $173,791

in other expenses for the six months ended June 2023, as compared to $64 in other expenses during the six months ended June 30, 2022.

Other expenses consisted of interest expense related to loans.

incurred a net loss of $2,838,465 for the six months ended June 30, 2023, as compared to a net loss of $250,422 for the six months ended

June 30, 2022.

Liquidity and Capital Resources

The Company expects to require substantial funds

for research and development, to continue to develop, secure marketing approval for and ultimately manufacture and market its initial

medical robotic system.

Until the Company is able to generate revenues from the sale of its initial medical robotic system, it expects

to meet its operating cash flow requirements from the net proceeds of this Offering and if necessary, from future public or private sales

of its securities and, if possible, on favorable terms, by entering into development partnerships to assist the Company with its technology

development activities.

While we have been successful in raising

funds to fund our operations since inception and we believe that we will be successful in obtaining the necessary financing to fund our

operations going forward, we do not have any committed sources of funding and there are no assurances that we will be able to secure additional

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern;

if the efforts noted above are not successful, it would raise substantial doubt about the Company’s ability to continue as a going

for scaling up its operations, for incurring capital expenditure to have its own in-house machining and tooling capacity to meet its growing

manufacturing and assembly needs and also to reduce its dependence on outsourcing vendors which, in turn, would help the Company to ensure

consistency in quality and delivery schedules of the components and potentially also bring down the manufacturing costs.

Due to the launch of our surgical robotic system

in later part of 2022, operating activities in terms of manufacturing and selling of our surgical robotic system significantly increased

in 2023, and as a result, $10,679,114 was net cash used in operating activities during the six months ended June 30, 2023, as compared

to $216,766 during the six months ended June 30, 2022.

To supplement, support and finance this increase in the operating activities, the

Company raised an aggregate of $11,258,363 in the form of Bank Overdrafts (Demand Notes Payable) and securities offered in private financings

during the six months ended June 30, 2023, as compared to $72,081 in the corresponding period in 2022.

On April 15, 2023, the Company executed a Convertible

Promissory Note (the “ Line of Credit Note ”) with Sushruta Pvt Ltd.

(“ SPL ”), the Bahamian holding

company owned by Dr.

Sudhir Srivastava, our Chairman, Chief Executive Officer and principal shareholder.

Pursuant to the Line of Credit

Note, SPL, in its discretion may make multiple advances to the Company through December 31, 2023 (the “ Maturity Date ”),

in an aggregate amount of up to $US20.0 million for working capital purposes.

The advances under the Line of Credit Note do not bear interest

and are due and payable on or before the Maturity Date.

SPL may, at its option, convert the principal amount of any advance into shares

of our common stock, at a conversion price of US$0.74 per share.

As of June 30, 2023, US$1,225,000 in advances were outstanding under

the Line of Credit Note.

The foregoing description of the Line of Credit Note is qualified in its entirety by reference to the copy of

the Line of Credit Note filed as Exhibit 10.1 to this report.

While we have been successful in raising funds

to meet our working capital needs to date, believe that we have the resources to do so for the balance of , we do not have any committed

sources of funding and there are no assurances that we will be able to secure additional funding if and when needed.

The condensed consolidated

financial statements included in this report have been prepared assuming that the Company will continue as a going concern;

the efforts noted above are not successful, it would raise substantial doubt about the Company’s ability to continue as a going

If we cannot obtain financing, then we may be forced to further curtail our operations or consider other strategic alternatives.

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and any such investment or other strategic alternative would likely substantially dilute our current shareholders.

Cash Flows From Operating Activities

During the six months ended June 30, 2023, net

cash used in operating activities was $10,679,114, reflecting the initial commercial sales of our robotic surgical system and resulting

from our net loss of $2,838,465, partially offset by non-cash charges of $310,897, primarily attributable to depreciation charges.

the 2023 period,, we had cash provided by our operating assets and liabilities of $8,151,546, primarily driven by increases in accounts

payable and prepaid expenses.

In comparison, during the six months ended June

30, 2022, net cash used by operating activities was $216,766, resulting from our net loss of $250,421, partially offset by depreciation

charges of $99,351.

During the period, we had cash used in our operating assets and liabilities of $65,696 primarily due to increases

in accounts payable.

Cash Flows From Investing Activities

During the six months ended June 30, 2023, we

had net cash used in investing activities of $1,507,552, including repayment of $3,000,000 of notes receivable, $736,006 in purchase of

property and equipment, as well as an increase in a long term receivable of $3,771,547.

During the six months ended June 30, 2022, we

had no cash flows from investing activities.

Cash Flows From Financing Activities

During the six months ended June 30, 2023, we

had net cash used in investing activities of $11,258,363, including increase in bank overdraft facility by $4,963,385 and $8,170,061 in

private securities offerings, as well as our other comprehensive income (loss) of $899,917 and repayments of notes of $2,775,000.

During the six months ended June 30, 2022, we

had private securities offerings of $72,081.

Critical Accounting Policies

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What changed 10-Q

Item 2. Management’s Discussion and Analysis