What changed in this filing

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Item 2. Management’s Discussion and Analysis

2024-09-06 compared with 2024-05-15 · 110 added, 68 removed, 80 unchanged (69% of the section changed)

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We are a commercial-stage surgical robotics company

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

focused on transforming patient lives by democratizing access to advanced surgical robotics technologies at relatively affordable costs.

We design, manufacture and market an advanced,

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

next-generation and affordable surgical robotic system called the SSi Mantra and its allied instruments and accessories.

While surgical robotic systems have gained acceptance

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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.

Lower levels of surgical

robotic penetration outside these territories have been largely attributed to high capital costs and operating expenses coupled with steep

learning curve.

With the SSi Mantra, we are aiming to break down

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

We are constantly working on making our surgical

robotics technology even more user-friendly, easy to operate and even more cost effective so as to make its benefits reach to larger communities

across the globe.

We are relentlessly pursuing our vision of increasing the penetration of robotics surgeries in regions and countries

which were hitherto completely forgotten.

In this pursuit, we recently set up first surgical robotic system in the Himalayan nation, Nepal

in one of the leading multi-specialty hospital which has generated tremendous interest in other hospitals also in the region.

The SSi Mantra Surgical Robotic System has received

regulatory approvals in India, Indonesia, Nepal, Guatemala and Ecuador.

We are at various stages of the regulatory registration process

in a number of other countries which accept Indian regulatory body approvals coupled with their own registration requirements for the

import of surgical robotic system into these countries.

We have initiated the regulatory approval process in the United States

and the EU, with approvals to market anticipated in the second half of 2025.

Results of Operations

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

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.

As of June 30, 2024, we have sold 33 systems (including

one system as intra-group sale) and in addition to these sold systems, we have also installed 5 systems on pay-per-use/revenue share basis,

two systems are installed in two prominent hospitals in India for clinical evaluation.

The intra-group sale system is currently installed

in a rented space in New York for demonstration purposes.

As of June 30, 2024, we have a network of 40 systems within India and overseas.

More than 1400 procedures of various types involving varying degrees of complexities have been performed on the systems installed in India.

General surgery and urology constitute a majority of the surgical operations performed on our systems so far.

The following table provides selected balance

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

sheet data for our Company as of June 30, 2024, (unaudited) and December 31, 2023:

Balance Sheet Data

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The Company has been consistently making efforts

to raise debt and equity capital to meet the demands of further scaling 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 March 31, 2024, 2023,

as compared to three months ended March 31, 2023

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

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 also

be faced with having to slow down our expansion plans.

Three months ended June 2024, as compared

to three months ended June 30, 2023

We had revenues of $4,386,051

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

for the three months ended June 30, 2024, compared to $1,575,306 for the three months ended June 30, 2023.

The company sold 9 surgical

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.

robotic systems (not including the intra-group sale of one system) during the three months ended June 30, 2024.

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.

We incurred $3,777,479 and $1,983,053 in selling, general and administrative expenses during the three months ended June 30, 2024,

and June 30, 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.

expenses, stock compensation expenses, salaries and payroll 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 ”).

increase in selling, general and administration expenses is mainly due to increased manpower strength and increased marketing

and business promotion expenses to expand our system installed base across India.

We also participated in the annual convention of Society

of Robotics Surgeons in June 2023 in Orlando where we showcased Mantra 3, our current generation surgical robotic system.

This also led

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

Other Income/Expenses .

We incurred other

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.

expenses of $164,778 for the three months ended June 30, 2024, as compared to $91,533 during the three months ended June 30, 2023, Other

expenses consist mainly of interest expenses related to bank overdraft and other income mainly consist of interest earned on fixed deposits

and finance component on sales due to application of ASC606.

We incurred a net loss of $2,931,834

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.

for the three months ended June 30, 2024, as compared to a net loss of $1,850,423 for the three months ended June 30, 2023.

Six months ended June 2024, as compared to

three months ended June 30, 2023

We had revenues of $11,617,011

for the six months ended June 30, 2024, compared to $3,086,685 for the six months ended June 30, 2023.

The company sold 9 surgical robotic

systems (not including the intra-group sale of one system) during the three months ended June 30, 2024,

Selling, General and Administrative Expenses .

We incurred $9,102,278 and $3,400,013 in selling, general and administrative expenses during the six months ended June 30, 2024, and

June 30, 2023, respectively.

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

stock compensation expense, salaries and payroll expense, 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

in selling, general and administration expenses is mainly due to increased manpower strength commensurate to the increased level of operations

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

We also participated in the

annual convention of Society of Robotics Surgeons in June 2023 in Orlando where we showcased Mantra 3, our current generation surgical

robotic system.

This also led to a significant increase in Selling, General and Administrative expenses, year on year basis.

Other Income/Expenses .

other expenses of $168,461 for the six months ended June 30, 2024, as compared to $173,791 during the six months ended June 30,

Other expenses consist mainly of interest expenses related to bank overdraft and other income mainly consist of interest

earned on fixed deposits and finance component on sales due to application of ASC606.

We incurred a net loss of $5,579,695

for the six months ended June 30, 2024, as compared to a net loss of $2,838,466 for the six months ended June 30, 2023.

Liquidity and Capital Resources

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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.

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

senior level manpower strength in various functional areas, 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,

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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.

These Notes 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

In April 2024, the Company 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

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

needs and in July 2024, raised another US$ 500,000 by way of One-Year 7% Promissory Note issued to Sushruta Pvt Ltd.

While we have been successful in raising funds to meet our working

capital needs to date, and believe that we have the resources to do so for the balance of the year, 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.

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Cash Flows used in Operating Activities

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.

During the six months ended June 30, 2024, net

cash used in operating activities was $2,094,584 resulting from our net loss of $5,579,695 partially offset by non-cash charges of $3,777,739

comprising of depreciation, stock compensation expense and lease expense and movement of $292,628 in net operating assets and liabilities

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

During the six months ended June 30, 2023, net

cash used in operating activities was $10,521,468, 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 $7,993,900, primarily driven by increases in accounts

payable and prepaid expenses.

Cash Flows from Investing Activities

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.

During the six months ended June 30, 2024, we

had net cash used in investing activities of $4,118,959 which is the net result of $1,488,212 towards net additions in property, plant

& equipment, $2,900,895 due to long term receivables and $270,149 as amount received back from Loan and advance to related party.

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.

Cash Flows from Financing Activities

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

During the six months ended June 30, 2024, we

had $6,239,861 of net cash provided by financing activities including $4,450,000 in proceeds from Notes Payables, $101,252 in securities

offering, and $1,688,608 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.

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.

Critical Accounting Policies

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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