What changed in this filing

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Item 7. Management’s Discussion and Analysis

2024-03-22 compared with 2023-03-31 · 145 added, 45 removed, 59 unchanged (76% of the section changed)

1 unchanged sentence

and Analysis of Financial Condition and Results of Operations.

The Company is engaged in the business of developing,

manufacturing, and selling a surgical robotic system under our proprietary brand “ SSi Mantra ,” together with allied

accessories and a wide range of surgical instruments capable of supporting cardiac and a variety of other surgical procedures.

commenced commercial sales of our surgical robotic system in the second half of 2022, the year 2023 was our first full year of commercial

sales of our surgical robotic system and its allied instruments and accessories.

Accordingly, the operating results detailed below largely

reflect the impact of the consummation of the CardioVentures Merger in April 2023, when compared with operating results for the corresponding

period in 2022.

Our financial performance is largely driven by

increasing awareness of the benefits of robotically assisted surgery, reduced learning curves for robotic surgeons and the affordability

and accessibility of surgical robotic technology.

Our financial performance is also dependent on our obtaining regulatory approvals in

various regulated markets where we have plans to sell our products.

Robotically assisted surgeries are increasingly being recognized as

an approved treatment modality from an insurance coverage perspective.

Our manufacturing operations being based in India

derive significant operating cost advantages in terms of availability of quality and cost-effective fabrication/3D printing solutions,

electronic/electrical/mechanical components, outsourced services and skilled manpower.

All these factors help us in having lower costs

of production which eventually helps us make our surgical robotic system cost effective and relatively affordable.

During the years ended December 31, 2023, and

December 31, 2022, we sold twelve and three surgical robotic systems, respectively.

In addition, during the year ended December 31, 2023,

we also installed four systems in four hospitals, belonging to well-known hospital groups in India, for their clinical evaluation in anticipation

of orders from these hospital groups.

In addition to this, we also installed three systems on a pay-per-use basis.

These systems were

installed in December 2023 and accordingly had not generated any revenues as of December 31, 2023.

We also installed one system at the

Johns Hopkins Hospital, in Baltimore, Maryland at no cost, for clinical training and ongoing research and development purposes.

at the end of December 2023, we had a total of twenty-three installed systems of which 20 were installed during the year ended December

Results of Operations

The financial statements appearing elsewhere in

this prospectus 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.

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

The Company has recently commenced its commercial

operations by way of the sale of its product and has not yet established consistent operational revenue cash flows to meet all its fixed

operating costs and hence may continue to incur losses for some time.

These conditions raise doubt about the Company’s ability to

continue as a going concern.

The following table provides selected financial

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Balance Sheet Data

Restricted Cash**

Total Liabilities

Total Stockholders’ Equity

To date, the Company has relied on debt and equity

raised in private offerings to finance operations and no other source of capital has been identified or sought.

If we experience a shortfall

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

Year ended December

31, 2022, as compared to year ended December 31, 2021

We had no revenue during

the years ended December 31, 2022 and December 31, 2021.

Total Shareholders’ Equity

$ (2,460,547 )

* Amounts for the year ended December 31, 2022, represent consolidated

financials for AVRA Medical Robotics, Inc.

and CardioVentures Inc.

to reflect the effect of the CardioVentures Merger.

** Represents Fixed Deposits held by bank as security for bank

facilities and certain performance guarantees.

To date, the Company has mainly relied on debt

and equity raised in private offerings to finance its operations.

During 2024, the company plans to raise additional capital through further

private or public offerings.

However, if we are unable to do so and if we experience a shortfall in operating capital, we could be faced

with having to limit our expansion plans, research and development and marketing activities.

December 31, 2023, as compared to year ended December 31, 2022

During the year ended December

31, 2023, the Company had revenues of $5,879,710 (comprising $5,692,721 of system and instrument sales and $186,989 of warranty sales),

compared to revenues of $1,458,315 (comprising $1,438,969 of system and instrument sales and $19,346 of warranty sales) during the year

ended December 31, 2022.The increase in revenue is primarily due to sale of increased number of surgical robotic systems and instruments

in the year ended December 31, 2023 as compared to the year ended December 31, 2022.

Research and Development Expenses.

and development expenses during year ended December 31, 2022 were $72,959 as compared to $1,000 for the year ended December 31, 2021.

Research 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 $1,135,468 and $947,237 during year ended 2022 and 2021 respectively.

This includes compensation for the management staff

and stock-based compensation expense related to the Company’s 2016 Stock Incentive Plan.

and Development expenses during the year ended December 31, 2023, were $576,168, as compared to $83,282 for the year ended December 31,

The increase in the Research and Development expenses as compared to the previous year is in line with the Company’s continued

focus on improving the design and technological capabilities of its existing SSi Mantra system and further expanding its product offerings.

Stock Compensation Expense.

compensation expenses of $13,425,319 and $1,135,468 during the years ended December 31, 2023, and December 31, 2022 respectively.

substantial increase in the stock compensation expense in 2023 is primarily the result of the award of stock grants to employees of the

Company and its subsidiaries and the issuance of stock awards and stock options to executive officers of the Company and its subsidiaries

in November 2023 under our Incentive Stock Plan, in recognition of their efforts in developing and commercializing our SSi Mantra system.

Salaries and Payroll Expense .

We had salary

and payroll expense of $2,215,620 for the year ended December 31,2023, as compared to $1,698,283 in the year ended December 31, 2022.

This increase in salary and payroll expense is a reflection of the increase in Company’s employee count from 102 at December 31,

2022 to 221 at December 31, 2023, commensurate with the expansion in the Company’s manufacturing and commercial sales operations

during 2023 Salaries and payroll expense includes salaries and payroll expense related to executive officers of the Company.

General and Administrative Expenses.

incurred $1,239,179 in general and administrative expenses during the year ended December 31, 2022, as compared to $458,801 for the year

incurred $5,164,713 in general and administrative expenses during the year ended December 31, 2023, as compared to $3,251,794 for the

year ended December 31, 2022.

General and administrative expenses include sales, marketing and travel-related expenses, rent for the manufacturing

facility offices, legal and other professional expenses related to the Company’s filings as a public company with the SEC.

in general and administrative expenses resulted from the increased scale of commercial operations during 2023.

as compared to the year

ended December 31, 2022.

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 ”).

Other Income (Expenses) .

We have earned

$234,594 during the year ended 2022 as compared to $118 during 2021.

The increase in other income is primarily result of origination fees

We have incurred

$273,599 in interest expenses during the year ended December 31,2023 as compared to net interest income of $77,729 during the year ended

December 31, 2022.

The increase in interest expense from 2022 to 2023 resulted from an increase in bank borrowings for working capital

from HDFC Bank in India.

We incurred a net loss of

$2,213,012 for 2022 as compared to a net loss of $1,484,313 for 2021.

The increase in net loss from 2022 to 2021 is primarily a result

of the increase in consulting fees, payroll expenses, compensation expenses.

$20,941,972 for the year ended December 31, 2023, as compared to a net loss of $5,601,504 for the year ended December 31, 2022.

in net loss from 2022 to 2023 is primarily the result of the increase in stock compensation expenses as set forth above.

for the year ended December 31, 2023, was also higher due to $1,668,146 of system sales revenue that stands to be transferred to unrealized

deferred revenue pursuant to the application of ASC606.

Liquidity and Capital Resources

The Company expects to require substantial funds

for research and development, to continue to develop its initial proposed medical robotic system.

The Company plans to meet its operating

cash flow requirements by raising additional funds from the sale of our securities and, if possible, on favorable terms, by entering into

development partnerships to assist the Company with its technology development activities.

Between October 5, 2021 to December 8, 2021 the

Company sold a total of 2,229,231 shares of common stock at prices ranging between $0.13 and $0.52 per share.

Company received proceeds of $315,200.

During the quarter ended December 31, 2022, the Company issued and

sold 4,401,000 shares of our common stock at $0.25 per share to 21 purchasers in a private offering.

The Company received proceeds of

for scaling up its operations, incurring capital expenditures to have its own manufacturing facility for in-house machining and tooling

capacity and to continue to finance its research and development work in the field of surgical robotics.

On April 15, 2023, the Company executed a Convertible

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

(“ Sushruta ”), the Bahamian holding

company owned by Dr.

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

Pursuant to the Line of Credit

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

in an aggregate amount of up to $20 million for working capital purposes.

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

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

During the year ended December 31, 2023, Sushruta made advances aggregating to

$16,980,000 under the Line of Credit Note and exercised its option to convert the full amount of advances made into shares of our common

stock at a conversion price of $0.74 per share.

Accordingly, 22,945,946 shares of our common stock were issued to Sushruta during the

year ended December 31, 2023.

As of December 31, 2023, the Company had shareholders’

equity of $14.3 million and a working capital surplus of $9.1 million as compared to shareholders’ deficit of $2.46 million and

a working capital deficit of $4.42 million as of December 31, 2022.

Cash Flows Used in Operating Activities

During the year ended December 31, 2023, net cash

used in operating activities was $13,572,758 resulting from our net loss of $20,941,972, partially offset by non-cash charges of $ 14,193,327

comprised mainly of depreciation, stock compensation expense and expenses for which common stock issued.

During the year ended December

31, 2023, we had net cash invested in our operating assets and liabilities of $6,962,654 primarily as a result of increases in prepaid

expenses and other current assets to the extent of $9,200,688, including fixed deposits provided to HDFC bank to secure working capital

facilities and an increase in accounts payable and accrued expenses of $2,238,034.

During the year ended December 31, 2022, net cash

used in operating activities was $5,555,345, resulting from our net loss of $5,601,504, partially offset by non-cash charges of $994,369

comprised mainly of depreciation and stock compensation expense.

During 2022 we had net cash invested in our operating assets and liabilities

primarily as a result of increased prepaid expenses and other current assets.

Cash Flows from Investing Activities

During the year ended December 31, 2023, we had

net cash used in investing activities of $2,299,356, resulting mainly from investment of $563,967 in purchases of equipment, $2,199,418

towards the value of a Right of Use asset, as well as long term loans and advances and long-term receivables of $2,535,971 and receipt

of funds through Note receivables – acquisition of $3,000,000.

During the year ended December 31, 2022, we had

net cash used in investing activities of $2,735,814, resulting mainly from investment of $220,324 in purchases of fixed assets, reduction

in Notes Receivable – Acquisition of $3,000,000 and realization of $484,510 from sale of fixed assets.

Cash Flows from Financing Activities

During the year ended December 31, 2023, we had

net cash provided by financing activities of $16,734,963, comprised of a $4,947,233 increase in restricted cash (i.e., fixed deposits

provided to secure bank facilities and for providing guarantees), partially offset by an increase of $2,895,880 in proceeds from our bank

overdraft facility, $808,244 from private securities offerings, $12,360 from the exercise of previously issued warrants, $22,980,000 in

proceeds from promissory notes converted to common stock, $100,000 in proceeds from the exercise of stock options, as well as the reduction

by conversion of promissory notes of $7,000,000.

We also had an increase in right of use liability (non-current portion) of $1,910,432.

During the year ended December 31, 2022, we had

net cash provided by financing activities of $9,294,395, comprised of $145,000 in repayment of promissory notes, $2,583,798 of proceeds

from our bank overdraft facility, $1,500,431 in proceeds from private securities offerings, $7,000,000 in proceeds from the issuance of

7% convertible promissory notes, $26,000 in common stock issued and a decrease of $1,670,834 in related party loans.

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

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

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

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or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to investors.

Quantitative and Qualitative

Disclosures About Market Risk

Quantitative and Qualitative Disclosures

About Market Risk

Not applicable.

2 unchanged sentences

on page F-1 below.

and Disagreements with Accountants on Accounting and Financial Disclosure.

Changes in and Disagreements with

Accountants on Accounting and Financial Disclosure.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 7. Management’s Discussion and Analysis