What changed in this filing

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Item 2. Management’s Discussion and Analysis

2024-05-15 compared with 2023-11-13 · 78 added, 146 removed, 70 unchanged (76% of the section changed)

1 unchanged sentence

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 the 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.

During the quarter ended September 30, 2023, the Company entered into an agreement with a very

prestigious cardiac focused hospital, Narayana Hrudalaya (NH) in Bangalore (India) under which 100 cardiac procedures are being performed

using our Mantra surgical robotic system on a pay-per-use model.

This agreement underlines the cardiac procedure capability of our surgical

robotic system which is one of its unique selling propositions in comparison to other alternative surgical robotic systems available today.

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 (“ 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

in control ” of the Company took place.

In addition, among other matters, the Company changed its name to “ SS Innovations

International, Inc.

” and implemented a one for ten reverse stock split.

The financial statements, financial information and

share and per share information contained in this report reflect the operations of both the Company and CardioVentures and give pro forma

effect to the reverse stock split.

See Note 8 of the Notes to Condensed Consolidated

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

We are a commercial-stage surgical robotics company

focused on transforming patient lives by democratizing access to advanced surgical robotics technologies.

We design, manufacture and market an advanced,

next-generation and affordable surgical robotic system called the SSi Mantra.

While surgical robotic systems have gained acceptance

globally in the past two decades for providing greater efficiency, better clinical outcomes and reducing healthcare costs, access to such

systems remains largely limited to developed countries such as the United States, the European Union and Japan.

With the SSi Mantra, we are breaking down barriers

and accelerating access to surgical robotics technologies in underserved regions of the world.

Results of Operations

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

As of September 30, 2023, we have sold 12 systems, which

have performed more than 400 procedures of various types involving varying degrees of complexities.

As of March 31, 2024, we have sold 23 systems and in addition

to these sold systems, we have also installed 5 systems on pay-per-use/revenue share basis, three systems are installed in three prominent

hospitals in India for clinical evaluation and one system is installed at Johns Hopkins hospital for research and training purposes.

of March 31, 2024, we have a network of 32 systems within India and overseas.

More than 1000 procedures of various types involving varying

degrees of complexities have been performed on the systems installed in India.

The following table provides selected balance

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

September 30,

sheet data for our Company as of March 31, 2024, (unaudited) and December 31, 2023:

Balance Sheet Data

2 unchanged sentences

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

To date, the Company has relied on

2 unchanged sentences

expansion plans.

Three months ended September 30, 2023, as

compared to three months ended September 30, 2022

Three months ended March 31, 2024, 2023,

as compared to three months ended March 31, 2023

We had revenues of $6,851,058

for the three months ended September 30, 2023, compared to $ 0 for the three months ended September 30, 2022.

for the three months ended March 31, 2024, compared to $ 1,511,379 for the three months ended March 31, 2023.

The company sold 8 surgical

robotic systems during the three months ended September 30,2023 and in addition to these three installations, the Company also installed

two systems on pay per use basis in two hospitals in India for a predefined number of procedures post which the Company expects to receive

regular purchase order for its surgical robotic system from these hospitals.

Considering that the pay-per-use model installations at these

two hospitals were done towards the latter part of the quarter and not many procedures were done as yet on these two installations, no

revenues have yet been recognized from these two installations during the quarter ended September 30, 2023.

Salary, Payroll and

Compensation Expense.

We had salary, payroll and stock compensation expenses of $857,243 and $724,965 during the three months ended

September 30, 2023, and September 30, 2022, respectively.

This includes compensation for the management staff and stock-based compensation

expenses related to the Company’s 2016 Stock Incentive Plan.

General and Administrative Expenses.

incurred $1,275,062 in general and administrative expenses during the three months ended September 30, 2023, and $175,180 September 30,

2022, respectively.

General and administrative expenses include travel expenses, marketing expenses, legal and other professional expenses

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

robotic systems during the three months ended March 31, 2024, and in addition to the sale of these eight systems, the Company also installed

a robotic system at a minimal access surgery training institute in India on revenue share basis.

Salary and Payroll Expense.

We had salary

and payroll expenses of $674,436 during the three months ended March 31, 2024, as compared to $357,674 for the three months ended March

This 89% y-o-y increase is mainly due to increase in manpower strength at our India manufacturing facility from 128 at the end

of March 2023 to 237 at the end of March 2024.

Stock Compensation Expense.

compensation expense of $1,937,202 for the three months period ended March 31, 2024, as against $1,592,309 for the three months ended

March 31, 2023.

This includes stock-based compensation expenses related to the Company’s 2016 Stock Incentive Plan.

Selling, General and Administrative Expenses.

We incurred $2,611,019 and $1,490,414 in selling, general and administrative expenses during the three months ended March 31, 2024,

and March 31, 2023, respectively.

General and administrative expenses mainly include travel expenses, marketing and business promotions

expenses, legal and other professional expenses including the expenses related to the Company’s filings as a public company with

the Securities and Exchange Commission (the “ SEC ”).

The y-o-y increase of about 75% in selling, general and administration

expenses is mainly due to increased marketing and business promotion expenses to expand our system installed base across India.

organized a global robotics conference in New Delhi, India in the month of Jan 2024 involving significant expense which also led to this

increase in Selling, General and Administrative expenses, year on year basis.

Other Income/Expenses .

We incurred other

expenses of $11,478 for the three months ended September 30, 2023, as compared to $110,042 of other income during the three months ended

September 30, 2022.

Other expenses consist mainly of interest expenses related to bank overdraft.

expenses of $80,271 for the three months ended March 31, 2024, as compared to $29,510 of other income during the three months ended March

31, 2023, Other expenses consist mainly of interest expenses related to bank overdraft and other income mainly consist of interest earned

on fixed deposits.

We incurred a net loss of $2,798,448

for the three months ended September 30, 2023, as compared to a net loss of $790,104 for the three months ended September 30, 2022.

Nine months ended September 30, 2023, as

compared to Nine months ended September 30, 2022

had revenues of $4,516,458 for the Nine months ended September 30, 2023, as compared to $ 0 for the Nine months ended September 30, 2022.,

Due to application of ASC606, as of September 30, 2023, the sum of US$ 1,355,448 stands transferred to unrealized deferred revenue and

due to this adjustment, the revenues, and gross and net profitability for nine-month period ended September 30, 2023 is reflected less

to the extent of this unrealized deferred revenue.

Salaries, Payroll

and Compensation Expense.

We had Salary, payroll and stock compensation expenses of $3,886,197 and $819,732 during Nine months ended

September 30, 2023 and September 30, 2022, respectively.

This includes compensation for the management staff and stock-based compensation

expenses related to the Company’s 2016 Stock Incentive Plan.

General and Administrative

We incurred $1,646,121 and $330,900 in general and administrative expenses during the nine months ended September 30,

2023, and September 30, 2022, respectively.

General and administrative expenses include marketing expenses, and travel expenses, legal

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

Other Income/Expenses .

We incurred $185,269

in other expenses/income for the nine months ended September 2023, as compared to $110,106 in other income during the nine months ended

September 30, 2022.

Other expenses consisted of interest expense related to bank overdraft.

incurred a net loss of $4,822,406 for the nine months ended September 30, 2023, as compared to a net loss of $1,040,525 for the Nine months

ended September 30, 2022.

for the three months ended March 31, 2024, as compared to a net loss of $2,992,362 for the three months ended March 31, 2023.

Liquidity and Capital Resources

The Company expects to require substantial funds

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

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

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.

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 $US 20.0 million for working capital purposes.

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.

September 27, 2023, US$16,980,000 in advances were outstanding under the Line of Credit Note.

On September 27, 2023, SPL exercised

its option to convert the US$16,980,000 in advances that were outstanding under the Line of Credit Note into 22,945,946 shares at

the conversion price of $0.74 per share.

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 our Quarterly Report on Form 10-Q for the Quarter

Ended June 30, 2023.

This conversion of funds advanced under the Line

of Credit Note and subsequently converted into equity has resulted in a significant improvement in the Company’s stockholders’

equity and working capital position.

As of September 30, 2023, the Company had stockholders’ equity of US$ 15.76 million and a working

capital surplus of US$ 11.03 million as compared to stockholders’ equity of US$ 821,595 and a working capital deficit of US$ 2.88

million as of June 30, 2023.

for expansion of its manufacturing capacity through the installation of additional machinery and equipment, bulk ordering of components

for use in manufacturing of its final products, conducting global clinical trials to meet various regulatory requirements, lease of additional

office and manufacturing space, augmenting working capital and establishing regional marketing offices.

To meet these fund requirements,

the company is making efforts to raise long term funds by way of equity or loans.

Between February 1, 2024, and February 14, 2024,

the Company raised $2.45 million through a private offering of 7% One-Year Convertible Promissory Notes (“ Notes ”) from

two affiliates ($1,000,000 each) and $450,000 from three other investors to finance its ongoing working capital requirements.

are payable in full after 12 months from the respective date of issuance of these Notes and are convertible at the election of noteholder

at any time through the maturity date at a per share price of $4.45.

On February 14, 2024, the Company filed a Registration

Statement on Form S-1 with the Securities and Exchange Commission with respect to a proposed public offering of our common stock.

In April 2024, the Company has raised US$2.00

Million from Sushruta Pvt Ltd.

by issuance of two, One-Year 7% Promissory Notes of US$ 1.00 Million each, to meet certain working capital

While we have been successful in raising funds

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Cash Flows used in Operating Activities

During the nine months ended September 30, 2023, net cash used by operating

activities was $13,831,054 resulting from our net loss of $4,822,406 partially offset by non-cash charges of $1,587,581 primarily driven

by depreciation, stock compensation expense and translation adjustment.

During the nine months ended 30 September 2023, we also had cash

used in net operating assets and liabilities, to the extent of $10,596,231 primarily driven by increases in prepaid expenses and other

current assets to the extent of $12,723,129 including the fixed deposits provided to bank to secure the working capital facilities thereagainst

and an increase in accounts payable and accrued expenses to the extent of $2,126,898.

During the nine months ended September 30, 2022, net

cash used by operating activities was $303,711, resulting from our net loss of $1,040,525, partially offset by non-cash expenses of $819,732.

During the same period, we also had cash invested in our operating assets and liabilities of $89,782 primarily due to decreases in accounts

payable and contract liabilities.

During the three months ended March 31, 2024,

net cash provided by operating activities was $1,338,218 resulting from our net loss of $2,798,448 partially offset by non-cash charges

of $1,980,537 comprising of depreciation, stock compensation expense and translation adjustment and movement of $2,156,128 in net operating

assets and liabilities comprising mainly of prepaid expenses and other current assets and accounts payable and accrued expenses.

During the three months ended March 31, 2024,

net cash used by operating activities was $173,553, resulting from our net loss of $2,992,362, partially offset by non-cash expenses of

$1,599,972 and movement of $1,218,838 in net operating assets and liabilities comprising mainly of accounts payable and accrued expenses.

Cash Flows from Investing Activities

During the nine months ended September 30, 2023, we had net cash used

in investing activities of $4,946,786, investment in $877,403 in purchase of equipment, as well as our loans and advances and long term

receivables of $4,069,383.

During the nine months ended September 30, 2022, we

had no cash flows from investing activities activity.

During the three months ended March 31, 2024,

we had net cash used in investing activities of $4,207,606 which is the net result of $1,245,508 towards net additions in equipment and

right-of-use assets and $2,962,098 towards increase in loans and advances and long-term receivables.

During the three months ended March 31, 2023, we had $2,000,000 as

reduction in Notes Receivables.

Cash Flows from Financing Activities

During the September 30, 2023, we had net cash provided by investing

activities of $24,022,701, including $6,118,214 in proceeds from bank overdraft, $446,188 in securities offering, $12,360 in repayment

of Warrants, $22,980,000 in Proceeds from Notes converted, $50,000 in Proceeds from Options Exercised, as well as our Recapitalization

of $4,594,341 and also comprising of repayments of notes to the extent of $1,000,000.

During the nine months ended September 30, 2022, we

generated $412,080 from a private securities offering.

During the three months ended March 31, 2024,

we had $2,739,507 of net cash provided by financing activities including $2,450,000 in proceeds from Notes Payables, $101,249 in securities

offering, and $188,259 as increase in bank overdraft.

During the three months ended March 31, 2023,

we had $1,433,828 of net cash provided by financing activities comprising of $446,188 in securities offering, $1,000,000 from 7% convertible

promissory notes and repayment of warrants of $12,360.

Critical Accounting Policies

34 unchanged sentences

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-Q

Item 2. Management’s Discussion and Analysis