SS Innovations International, Inc. 10-Q/A

Item 1. Financial Statements As of Notes March 31, 2024 December 31, 2023 (As restated) ASSETS Current Assets: Cash and cash equivalents 6 948,119 2,022,276 Restricted cash 6 5,620,396 5,029,650 Accounts receivable, net 5 4,964,543 1,901,244 Receivable from related party 14 1,510,647 1,567,559 Inventory, net 6,921,892 7,017,913 Prepaids and other current assets 7 3,625,957 3,890,017 Total Current Assets 23,591,554 21,428,659 Non- Current Assets: Property, plant, and equipment, net 3 2,176,439 706,405 Right of use asset 15 2,552,193 2,657,554 Accounts receivable, net 5 2,486,947 2,365,013 Restricted cash 6 327,065 35,919 Prepaids and other non current assets 7 4,067,385 4,322,444 Total Non-Current Assets 11,610,029 10,087,335 Total Assets 35,201,583 31,515,994 LIABILITIES AND STOCKHOLDERS’ EQUITY Current Liabilities Bank overdraft facility 10 6,207,185 6,018,926 Notes payable 9 2,450,000 - Current maturities of long-term debt 11 521,873 510,189 Current portion of operating lease liabilities 15 415,331 396,784 Accounts payable 8 1,827,635 901,552 Deferred revenue 12 252,265 156,330 Other accrued liabilities 8 1,358,275 489,939 Total Current Liabilities 13,032,564 8,473,720 Non- Current Liabilities Operating lease liabilities, less current portion 15 2,238,259 2,351,113 Deferred revenue 12 3,133,632 939,150 Other accrued liabilities 8 48,358 33,933 Total Non-Current Liabilities 5,420,249 3,324,196 Total Liabilities 18,452,813 11,797,916 Stockholders’ equity: Preferred stock, authorized 5,000,000 shares of Series A, Non-Convertible Preferred Stock, $ 0.0001 par value per share; 5,000 shares issued and outstanding as of March 31, 2024 and December 31, 2023 13 1 1 Common stock, 250,000,000 shares authorized, $ 0.0001 par value, 170,739,380 shares and 170,711,880 shares issued and outstanding as of March 31, 2024 and December 31, 2023 respectively 13 17,075 17,072 Accumulated other comprehensive income (loss) 13 ( 266,306 ) ( 195,499 ) Common stock to be issued, 12,500 shares 13 - 50,000 Additional paid in capital 13 50,451,186 43,457,937 Capital reserve 899,917 899,917 Accumulated deficit ( 34,353,103 ) ( 24,511,350 ) Total stockholders’ equity 16,748,770 19,718,078 Total liabilities and stockholders’ equity 35,201,583 31,515,994 See accompanying notes to Condensed Consolidated Financial Statements 1 SS INNOVATIONS INTERNATIONAL, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (Unaudited) For The Three months ended Notes March 31, 2024 (As restated) March 31, 2023 (As restated) REVENUES System sales 12 3,494,759 355,414 Instruments sale 12 118,515 14,706 Warranty sale 12 9,407 - Lease income 12 15,012 - Total revenue 3,637,693 370,120 Cost of revenue ( 2,909,511 ) ( 292,173 ) GROSS PROFIT 728,182 77,947 OPERATING EXPENSES: Research & development expense 527,991 242,127 Stock compensation expense 19 7,108,750 - Depreciation and amortization expense 3 80,101 32,591 Selling, general and administrative expense 2,843,659 873,858 TOTAL OPERATING EXPENSES 10,560,501 1,148,576 Loss from operations ( 9,832,319 ) ( 1,070,629 ) OTHER INCOME (EXPENSE): Interest Expense ( 190,088 ) ( 256,670 ) Interest and other income, net 180,654 14,283 TOTAL OTHER INCOME (EXPENSE), NET ( 9,434 ) ( 242,387 ) LOSS BEFORE INCOME TAXES ( 9,841,753 ) ( 1,313,016 ) Income tax expense - - NET LOSS ( 9,841,753 ) ( 1,313,016 ) Net loss per share- Basic and Diluted 2(p) ( 0.06 ) ( 0.01 ) Weighted average-basic shares 2(p) 170,729,490 128,161,013 Weighted average- diluted shares 2(p) 181,609,691 128,161,013 CONSOLIDATED STATEMENTS OF OTHER COMPREHENSIVE LOSS March 31, 2024 (As restated) March 31, 2023 (As restated) NET LOSS ( 9,841,753 ) ( 1,313,016 ) OTHER COMPREHENSIVE INCOME (LOSS) Foreign currency translation gain/(loss) ( 79,314 ) ( 48,623 ) Retirement Benefit (net of tax) 8,507 4,301 TOTAL COMPREHENSIVE LOSS ( 9,912,560 ) ( 1,357,338 ) See accompanying notes to Condensed Consolidated Financial Statements. 2 SS INNOVATIONS INTERNATIONAL, INC. CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY FOR THE THREE MONTHS ENDED MARCH 31, 2024, AND MARCH 31, 2023 (Unaudited) Preferred Stock Common Stock Common Stock to be Issued Additional Paid-In Accumulated Capital Accumulated other comprehensive Total Stockholders’ Notes Number Amount Number Amount Number Amount Capital Deficit Reserve income (loss) equity Balance as at December 31, 2023 5,000 1 170,711,880 17,072 12,500 50,000 43,457,937 ( 24,511,350 ) 899,917 ( 195,499 ) 19,718,078 Stock compensation 19 - - - - - - 6,842,002 - - - 6,842,002 Common stock issued against exercise of warrants - - 12,500 1 ( 12,500 ) ( 50,000 ) 49,999 - - - - Stock issued for services - - 15,000 2 - - 101,249 - - - 101,250 Net loss - - - - - - - ( 9,841,753 ) - ( 70,807 ) ( 9,912,560 ) Balance as at March 31, 2024 5,000 1 170,739,380 17,075 - - 50,451,186 ( 34,353,103 ) 899,917 ( 266,306 ) 16,748,770 Balance as at December 31, 2022 - - 128,161,013 12,817 - - ( 12,812 ) ( 3,633,058 ) 899,917 54,599 ( 2,678,537 ) Net loss - - - - - - - ( 1,313,016 ) - ( 44,322 ) ( 1,357,338 ) Balance as at March 31, 2023 - - 128,161,013 12,817 - - ( 12,812 ) ( 4,946,074 ) 899,917 10,277 ( 4,035,875 ) See accompanying notes to Condensed Consolidated Financial Statements. 3 SS INNOVATIONS INTERNATIONAL, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) For The Three months ended March 31, 2024 (As restated) March 31, 2023 (As restated) Cash flows from operating activities: Net loss ( 9,841,753 ) ( 1,313,016 ) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation and amortization 80,101 32,591 Operating lease liability 11,033 5,668 Interest expense (net) 9,434 242,387 Credit loss reserve 389,330 - Stock compensation expense 7,108,750 - Changes in operating assets and liabilities: Accounts receivable, net ( 3,186,108 ) ( 190,479 ) Inventory, net 96,021 ( 1,231,380 ) Receivables from / payable to related parties 56,912 124,950 Deferred revenue 2,290,417 44,223 Prepaids and other current assets 23,196 ( 578,340 ) Accounts payable 926,083 150,337 Prepaids and other non current assets ( 11,689 ) 45,363 Other accrued liabilities 799,235 182,974 Net cash used in operating activities ( 1,249,038 ) ( 2,484,722 ) Cash flows from investing activities: Purchase of property, plant and equipment ( 1,550,135 ) ( 71,881 ) Net cash used in investing activities ( 1,550,135 ) ( 71,881 ) Cash flows from financing activities: Proceeds from bank overdraft facility (net) 188,259 740,358 Proceeds from issuance of convertible notes to principal shareholder 1,000,000 - Proceeds from issuance of convertible notes to other investors 1,450,000 2,000,000 Repayment of term loan - ( 124,098 ) Net cash provided by financing activities 2,638,259 2,616,260 Net change in cash ( 160,914 ) 59,657 Effect of exchange rate on cash ( 31,351 ) ( 103,131 ) Cash and cash equivalents at the beginning of the period 7,087,845 274,625 Cash and cash equivalents at end of the period 6,895,580 231,151 See accompanying notes to Condensed Consolidated Financial Statements. 4 SS INNOVATIONS INTERNATIONAL, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) NOTE 1 – FINANCIAL STATEMENTS Organization SS Innovations International, Inc. (the “ Company ” or “ SSII ”) was incorporated as AVRA Surgical Microsystems, Inc. in the State of Florida on February 4, 2015. Effective November 5, 2015, the Company’s corporate name was changed to Avra Medical Robotics, Inc. (AVRA). On April 14, 2023, a wholly owned subsidiary of the Company, AVRA-SSI Merger Corporation (Merger Sub) merged with CardioVentures, Inc., a Delaware corporation (“ CardioVentures ”), the indirect parent of Sudhir Srivastava Innovations Pvt. Ltd., 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, share and per share information contained in this report reflect the operations of both the Company and Cardio Ventures Inc. and give actual effect to the reverse stock split. The Transaction (Note 4) was accounted for as a reverse recapitalization in accordance with GAAP (the “Reverse Recapitalization”). Under this method, AVRA was treated as the “acquired” company (“Accounting Acquiree”) and Cardio Ventures Inc., the accounting acquirer, was assumed to have issued stock for the net assets of AVRA, accompanied by a recapitalization. Accordingly, for the year ended December 31, 2022, CardioVentures has been considered the ultimate holding company. Prior to October 18, 2022, Cardio Ventures Pvt Ltd., Bahamas (Cardio Bahamas), was in existence and served as the ultimate holding company. On October 18, 2022, Cardio Ventures Inc. acquired controlling interest in Otto Pvt Ltd. from Cardio Bahamas, making Cardio Ventures Inc. the ultimate holding company. Basis of Presentation Unaudited Interim Condensed Consolidated Financial Statements The interim condensed consolidated balance sheet as of March 31, 2024, and the interim condensed consolidated statements of operations, comprehensive loss, cash flows, and stockholders’ equity for the three months ended March 31, 2024 and 2023 are unaudited. The unaudited interim condensed consolidated financial statements have been prepared on the same basis as the annual consolidated financial statements and reflect, in the opinion of management, all adjustments of a normal and recurring nature that are necessary for the fair statement of our financial position as of March 31, 2024 and our results of operations and cash flows for the three months ended March 31, 2024 and 2023. The financial data and other financial information disclosed in these notes to the interim condensed consolidated financial statements related to the three month periods are also unaudited. The interim condensed consolidated results of operations for the three months ended March 31, 2024 are not necessarily indicative of the results to be expected for the year ending December 31, 2024 or for any future annual or interim period. The interim condensed consolidated balance sheet as of December 31, 2023 included herein was derived from the audited consolidated financial statements as of that date. These interim condensed consolidated financial statements should be read in conjunction with our audited consolidated financial statements included in the Annual Report on Form 10-K/A as filed by us with the U.S. Securities and Exchange Commission (the “SEC”) on December 6, 2024. The interim condensed consolidated financial statements and accompanying notes were prepared in accordance with accounting principles generally accepted in the United States (“ GAAP ”). The accompanying financial statements have been prepared on a consolidated basis and reflect the consolidated financial statements of SS Innovations International, Inc. and all of its subsidiaries (“Group”) for the three months ended March 31, 2024. However, the comparative financial statements for three months ended March 31, 2023, have been prepared on a consolidated basis and reflect the consolidated financial statements of Cardio Ventures Inc. and all of its subsidiaries (“Group”). The standalone financial statements of subsidiaries are fully consolidated on a line-by-line basis. Intra-group balances and transactions, and gains and losses arising from intra-group transactions, are eliminated while preparing condensed consolidated financial statements. Accounting policies of the respective individual subsidiaries are aligned wherever necessary, to ensure consistency with the accounting policies that are adopted by the Company under U.S. GAAP. Restatement of Previously Issued Financial Statements for Correction of Errors The Company restated the accompanying condensed consolidated balance sheet as at March 31, 2024 as well as the condensed consolidated statement of operations and comprehensive loss and the condensed consolidated statements of cash flows for the three months ended March 31, 2024, and March 31, 2023 respectively, as previously reported in its Form 10-Q, to reflect the correction of errors arising out of: i. Accounting for the merger transaction ii. Functional / other reclassification iii. Recognition of revenue in case of deferred payment sales iv. Recognition of right of use of certain assets and liabilities v. Errors / Adjustments 5 Restatement in March 2024 Summary of restatements made in condensed consolidated balance sheet as at March 31, 2024 is as follows: Particulars As Previously Reported As Restated Changes Accounting for the merger transaction¹ Functional / Other reclassification² Recognition of revenue in case of deferred payment sales³ Recognition of right of use of certain assets and liabilities³ Errors / Adjustments⁴ ASSETS Current assets: Cash and cash equivalents 948,152 948,119 ( 33 ) - - - - ( 33 ) Restricted cash 5,954,970 5,620,396 ( 334,574 ) - ( 334,574 ) - - - Accounts receivable, net 4,226,144 4,964,543 738,399 - 3,172,400 ( 2,896,293 ) - 462,292 Receivable from related party - 1,510,647 1,510,647 - 1,409,555 - - 101,092 Inventory, net 6,162,235 6,921,892 759,657 - - - - 759,657 Prepaids and other current assets 2,495,457 3,625,957 1,130,500 ( 8,678 ) 282,413 - - 856,765 Total Current Assets 19,786,958 23,591,554 3,804,596 ( 8,678 ) 4,529,794 ( 2,896,293 ) - 2,179,773 Non- Current Assets: Property, plant, and equipment, net 2,061,596 2,176,439 114,843 ( 2,283 ) - - - 117,126 Right of use asset 2,127,769 2,552,193 424,424 - - - 424,424 - Accounts receivable, net 5,659,347 2,486,947 ( 3,172,400 ) - ( 3,172,400 ) - - - Restricted cash - 327,065 327,065 - 327,065 - - - Receivable from related party 1,409,555 - ( 1,409,555 ) - ( 1,409,555 ) - - - Prepaids and other non current assets - 4,067,385 4,067,385 - 275,927 - - 3,791,457 Total Non-Current Assets 11,258,267 11,610,029 351,762 ( 2,283 ) ( 3,978,962 ) - 424,424 3,908,583 Total Assets 31,045,225 35,201,583 4,156,358 ( 10,961 ) 550,832 ( 2,896,293 ) 424,424 6,088,356 LIABILITIES AND STOCKHOLDERS’ EQUITY Current Liabilities: Bank overdraft facility 6,207,185 6,207,185 - - - - - - Notes payable 2,450,000 2,450,000 - - - - - - Current maturities of long-term debt - 521,873 521,873 - - - - 521,873 Current portion of operating lease liabilities 281,380 415,331 133,951 - - - 133,951 - Accounts payable 1,446,218 1,827,635 381,417 - 791,404 - - ( 409,987 ) Deferred tax liability 6,582 - ( 6,582 ) - - - - ( 6,582 ) Deferred revenue - 252,265 252,265 - - 252,265 - - Other accrued liabilities 5,271,874 1,358,275 ( 3,913,599 ) ( 5,700 ) 815,588 ( 3,560,077 ) - ( 1,163,410 ) Total Current Liabilities 15,663,238 13,032,564 ( 2,630,674 ) ( 5,700 ) 1,606,992 ( 3,307,812 ) 133,951 ( 1,058,106 ) Non-Current Liabilities: Operating lease liabilities, less current portion 1,846,389 2,238,259 391,870 - - - 391,870 - Deferred revenue - 3,133,632 3,133,632 - - 3,133,632 - - Other accrued liabilities - 48,358 48,358 - - - - 48,358 Total Non-Current Liabilities 1,846,389 5,420,249 3,573,860 - - 3,133,632 391,870 48,358 Total Liabilities 17,509,627 18,452,813 943,185 ( 5,700 ) 1,606,992 ( 174,180 ) 525,821 ( 1,009,748 ) Stockholders’ equity: Preferred stock, $ 0.0001 par value per share; authorized 5,000,000 shares of Series A Non-Convertible Preferred Stock, 5,000 shares and nil shares issued and outstanding as of March 31, 2024 and December 31, 2023 1 1 - - - - - - Common stock, 250,000,000 shares authorized, $ 0.0001 par value, 170,739,380 shares and 170,711,880 shares issued and outstanding as of March 31, 2024, and December 31, 2023 respectively 17,073 17,075 2 - - - - 2 Accumulated other comprehensive income (loss) ( 331,489 ) ( 266,306 ) 65,183 - - - - 65,183 Additional paid in capital 51,077,789 50,451,186 ( 626,603 ) ( 13,042,805 ) - - - 12,416,202 Capital reserve 899,917 899,917 ( 0 ) - - - - - Accumulated deficit ( 38,127,694 ) ( 34,353,103 ) 3,774,591 13,037,544 ( 1,056,160 ) ( 2,722,113 ) ( 101,397 ) ( 5,383,283 ) Total stockholders’ equity 13,535,597 16,748,770 3,213,173 ( 5,261 ) ( 1,056,160 ) ( 2,722,113 ) ( 101,397 ) 7,098,104 Total liabilities and stockholders’ equity 31,045,224 35,201,583 4,156,358 ( 10,961 ) 550,832 ( 2,896,293 ) 424,424 6,088,356 6 Condensed consolidated statement of operations and comprehensive loss for the three-months ended March 31, 2024: Particulars As Previously Reported As Restated Changes Accounting for the merger transaction¹ Functional / Other reclassification² Recognition of revenue in case of deferred payment sales³ Recognition of right of use of certain assets and liabilities³ Errors / Adjustments⁴ REVENUE: System sales 6,474,832 3,494,759 ( 2,980,073 ) - ( 118,515 ) ( 2,861,558 ) - - Instrument sales - 118,515 118,515 - 118,515 - - - Warranty sales 376,226 9,407 ( 366,819 ) - - ( 366,819 ) - - Lease income - 15,012 15,012 - - - 15,012 - Total revenue 6,851,058 3,637,693 ( 3,213,365 ) - - ( 3,228,377 ) 15,012 - Cost of revenue ( 3,873,339 ) ( 2,909,511 ) 963,828 - 506,255 - ( 75,776 ) 533,348 GROSS PROFIT 2,977,720 728,182 ( 2,249,538 ) - 506,255 ( 3,228,377 ) ( 60,764 ) 533,348 OPERATING EXPENSES: Research and development expense 396,050 527,991 131,941 - 92,004 - 39,938 - Stock compensation expense 1,937,202 7,108,750 5,171,548 - - - - 5,171,548 Salaries & Payroll Expenses 674,436 - ( 674,436 ) - ( 674,436 ) - - - Depreciation and amortization expense 77,189 80,101 2,912 - 2,912 - - - Selling, general and administrative expense 2,611,019 2,843,659 232,640 - 460,047 - 63,158 ( 290,564 ) TOTAL OPERATING EXPENSES 5,695,897 10,560,501 4,864,604 - ( 119,475 ) - 103,096 4,880,984 Loss from operations ( 2,718,177 ) ( 9,832,319 ) ( 7,114,142 ) - 625,730 ( 3,228,377 ) ( 163,859 ) ( 4,347,635 ) OTHER INCOME (EXPENSE): Interest expenses ( 183,212 ) ( 190,088 ) ( 6,876 ) - 4,819 - - ( 11,695 ) Interest and other income, net 102,941 180,654 77,713 - 4,034 71,181 - 2,498 TOTAL OTHER INCOME (EXPENSE), NET ( 80,271 ) ( 9,434 ) 70,837 - 8,853 71,181 - ( 9,197 ) LOSS BEFORE INCOME TAXES ( 2,798,448 ) ( 9,841,753 ) ( 7,043,305 ) - 634,583 ( 3,157,196 ) ( 163,859 ) ( 4,356,832 ) Income tax expense - - - - - - - - NET LOSS ( 2,798,448 ) ( 9,841,753 ) ( 7,043,305 ) - 634,583 ( 3,157,196 ) ( 163,859 ) ( 4,356,832 ) Consolidated statements of other comprehensive loss NET LOSS ( 2,798,448 ) ( 9,841,753 ) ( 7,043,305 ) - 634,583 ( 3,157,196 ) ( 163,859 ) ( 4,356,832 ) Foreign currency translation gain/(loss) ( 2,389 ) ( 79,314 ) ( 76,925 ) - - - - ( 76,925 ) Retirement benefit (net of tax) - 8,507 8,507 - - - - 8,507 TOTAL COMPREHENSIVE LOSS ( 2,800,837 ) ( 9,912,560 ) ( 7,111,723 ) - 634,583 ( 3,157,196 ) ( 163,859 ) ( 4,425,250 ) 7 Condensed consolidated statement of cashflows for the three-months ended March 31, 2024: Particular As Previously Reported As Restated Changes Accounting for the merger transaction¹ Functional / Other reclassification² Recognition of revenue in case of deferred payment sales³ Recognition of right of use of certain assets and liabilities³ Errors / Adjustments⁴ Cash flows from operating activities: Net loss ( 2,798,448 ) ( 9,841,753 ) ( 7,043,305 ) - 634,583 ( 3,157,196 ) ( 163,859 ) ( 4,356,832 ) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation and amortization 45,725 80,101 34,376 - - - - 34,376 Translation difference ( 2,389 ) - 2,389 - 2,389 Operating lease liability - 11,033 11,033 - - - 11,033 - Stock compensation expense 1,937,201 7,108,750 5,171,549 - - - - 5,171,549 Interest expense (net) - 9,434 9,434 - ( 95,248 ) - - 104,682 Credit loss reserve - 389,330 389,330 - - - 389,330 Changes in operating assets and liabilities: Accounts receivable, net - ( 3,186,108 ) ( 3,186,108 ) - - ( 3,186,108 ) - - Inventory, net - 96,021 96,021 - - - - 96,021 Receivables from / payable to related parties - 56,912 56,912 - 56,907 - - 5 Deffered revenue - 2,290,417 2,290,417 - - 2,290,417 - - Prepaids and other current assets - 23,196 23,196 - ( 355,975 ) - - 379,171 Accounts payable 3,697,874 926,083 ( 2,771,791 ) 788,799 ( 3,560,590 ) Prepaids and other non current assets - ( 11,689 ) ( 11,689 ) - - - - ( 11,689 ) Prepaid expenses and other assets ( 1,534,137 ) - 1,534,137 - - - - 1,534,137 Other accrued liabilities - 799,235 799,235 - 977,618 - - ( 178,383 ) Right of use liability, current portion ( 7,608 ) - 7,608 - - - - 7,608 Net cash used in operating activities 1,338,218 ( 1,249,038 ) ( 2,587,256 ) - 2,006,684 ( 4,052,887 ) ( 152,826 ) ( 388,226 ) Cash flows from investing activities: Accounts receivable, net ( 3,019,005 ) - 3,019,005 - - - - 3,019,005 Purchase of property, plant and equipment ( 1,317,157 ) ( 1,550,135 ) ( 232,978 ) - - - - ( 232,978 ) Receivables from / payable to related parties 56,907 - ( 56,907 ) - - - - ( 56,907 ) Right of use asset 71,649 - ( 71,649 ) - - - - ( 71,649 ) Net cash used in investing activities ( 4,207,606 ) ( 1,550,135 ) 2,657,471 - - - - 2,657,471 Cash flows from financing activities: Proceeds from issuance of convertible notes to other investors - 1,450,000 1,450,000 - - - - 1,450,000 Proceeds from issuance of convertible notes to principal shareholder 2,450,000 1,000,000 ( 1,450,000 ) - - - - ( 1,450,000 ) Proceeds from bank overdraft facility (net) 188,259 188,259 - - - - - - Proceeds from securities offering 101,249 - ( 101,249 ) - - - - ( 101,249 ) Net cash provided by financing activities 2,739,507 2,638,259 ( 101,249 ) - - - - ( 101,249 ) Net change in cash ( 129,881 ) ( 160,914 ) ( 31,033 ) - 2,006,684 ( 4,052,887 ) ( 152,826 ) 2,167,996 Effect of exchange rate on cash - ( 31,351 ) ( 31,351 ) Cash and cash equivalents at the beginning of the period 7,033,001 7,087,845 54,844 Cash and cash equivalents at end of the period 6,903,120 6,895,580 ( 7,540 ) (1) Accounting for merger transaction Background On April 14, 2023, SSII (earlier known as ‘AVRA Medical Robotics Inc’ or ‘AVRA’) consummated the acquisition of Cardio Ventures, Inc., a Delaware corporation (“Cardio Ventures”), pursuant to a Merger Agreement dated November 7, 2022 (the “Merger Agreement”), by and among the Company, a wholly owned subsidiary of the Company (“Merger Sub”), Cardio Ventures and Dr. Sudhir Srivastava, who, through his holding company, owned a controlling interest in Cardio Ventures. Pursuant to the Merger Agreement, at Closing, Merger Sub merged with and into Cardio Ventures (the “Cardio Ventures Merger”). Further, the Company changed its name to “SS Innovations International, Inc.,” effected a one-for-ten reverse stock split and increased its authorized common stock to 250,000,000 shares. 8 Before In the previously filed financial statements (Form 10-Q) for the period ended March 31, 2024, the merger transaction between SS Innovations International, Inc. (“SSII” or “the Company”) and CardioVentures, Inc., was accounted for as a reverse merger in the nature of a recapitalization, in accordance with ASC 805. According to Note 1 of the originally filed Form 10-Q, a wholly owned subsidiary of the Company was treated as the Accounting Acquirer, and CardioVentures, Inc. was treated as the accounting acquiree. The balances in the financial statements for the period ended March 31, 2023, included only the assets and liabilities of both AVRA and Cardio Ventures. After Upon review of merger agreements and related technical accounting guidance available in ASC 805, it was determined that AVRA’s assets and liabilities should have been recorded at their fair value as of the date of merger. The fair value of assets and liabilities of AVRA was assessed as nil at the time of the merger. This revaluation resulted in a change in the recorded amounts for the acquired assets, which has now been appropriately reflected in the restated condensed consolidated financial statements. Additionally, the amount recognized as issued equity interests in the condensed consolidated financial statements for three months ended March 31, 2023 was determined by considering the equity interests of Cardio Venture Inc outstanding immediately before the business combination. In accordance with ASC 805, the equity structure (the number and type of equity interests issued) reflects that of AVRA, including the equity interests issued by AVRA to effect the merger as reverse recapitalization. As a result, the equity structure for three months ended March 31, 2023 of Cardio Venture Inc. (the accounting acquirer) has been restated using the exchange ratio established in the acquisition agreement to reflect the number of shares issued by the legal parent (AVRA, the accounting acquiree) in the merger. The Company identified that fair value of assets and liabilities of AVRA was assessed as nil at the time of merger. Additionally, the Company excluded Accumulated deficit and Additional paid in Capital pertaining to AVRA as per ASC 805. (2) Functional / Other reclassifications The Company conducted an in-depth review of its functional expense classification and other reclassifications resulting in more appropriate allocation of costs based on their specific business functions. The following adjustments have been implemented: 1. Reclassification of lease expenses related to Production (COGS) and Research & Development (R&D) from Sales General & Administration cost (SG&A) Previously, lease expenses related to production and R&D activities were grouped under SG&A expenses. As a result of the review, these costs have now been reclassified to more accurately reflect their functional relationship with core business activities. Lease expenses for production-related activities are now included under cost of revenue, as they are directly tied to the production process. Lease expenses for R&D activities are now classified under R&D expenses, ensuring that these costs are appropriately aligned with innovative efforts and accurately allocated based on the proper assumptions regarding their direct contribution to the Company’s research and development initiatives. This reclassification provides a clearer picture of how the Company allocates resources toward both operational production and future product development. 9 2. Salaries and Related Expenses in COGS, R&D and SG&A Previously, salaries and related expenses were shown directly as a separate head in the statement of Income and Other comprehensive loss. Following further evaluation, these expenses have been reclassified between COGS, R&D and SG&A. Salaries and benefits for production staff are now included under COGS, aligning them more accurately with the Company’s production costs. This enhances the calculation of gross profit margins and ensures the expenses are matched with the corresponding revenue. Salaries for R&D personnel have been classified exclusively in R&D expenses, properly attributing costs to the development of new products and technologies and reflecting the Company’s ongoing investment in innovation. These changes improve the functional categorization of expenses and provide a more accurate depiction of the Company’s operating performance. 3. Other reclassifications in condensed consolidated balance sheet and condensed consolidated statement of cash flows We noted that there are reclassifications required in the condensed consolidated balance sheet and condensed consolidated statement of cash flows to - correct current/non-current positions - correct classification basis nature of receivable/payable Impact on restated condensed consolidated financial statements for the period ended March 31, 2024 (A) Impact on restated Condensed Consolidated Balance Sheet Reclassifications were of below nature: 1. Restricted Cash: 1. Fixed deposit against bank guarantee of $ 310,410 are now reclassified to Restricted cash non-current, 2. Fixed Deposits of $ 16,655 reclassified to Restricted cash non-current, 3. Fixed deposit with no withdrawal restrictions of $ 7,469 reclassified under prepaids and other non-current assets. 2. Accounts receivable of $ 3,172,400 are reclassified from non-current to current based on their due date of collection as per contract with customers. 3. Receivables from related party (net) of $ 1,409,555 reclassified from non-current to current based on their due date of collection. 4. Prepaids and other current assets: Security Deposit of $ 268,458 for long term lease earlier classified under Prepaid Current assets now reclassified to Prepaid and other non-current assets. 5. Reclassification of long term deferred revenue from other accrued liabilities to long term deferred revenue amounting to $ 3,133,632 . This amount has now been reclassified to deferred revenue (Non-Current) for accurate reporting and compliance with revenue recognition standards. 6. Accounts payable: As at March 31, 2024 Amount of advance to vendors knocked off earlier amounting to $ 791,404 are now reclassified to prepaid and other current asset. 7. Other accrued liabilities: As at March 31, 2024 amount of $ 779,897 relating to advance from customers is now reclassified in other accrued liabilities. Differential impact of above adjustments have been corrected in the condensed consolidated statement of cash flows for the three months ended March 31, 2024. 10 (B) Reclassifications Condensed Consolidated Statement of Operations and comprehensive loss Reclassifications were of below nature: (i) Functional classification 1. Operating expenses are now reclassified functionally, encompassing Selling, General and Administrative, Research and Development, Stock compensation expense and Salaries & Payroll Expenses. This reclassification has resulted in a decrease in the Cost of revenue by $ 506,255 , and increase in Research and Development expense by $ 92,004 and in Selling, General and administrative expense by $ 460,047 for three months ended March 31, 2024. (ii) Other reclassifications 1. In the financial reporting structure, total revenue is now detailed into two categories: System Sales and Instrument Sales. Earlier, Instrument Sales were not disclosed separately which has been effected now. Consequently, in restated financial statements, System Sales is now reduced by $ 118,515 for three months ended March 31, 2024 and is disclosed as Instrument sales specifically to reflect this refined categorization. 2. Interest and other income related to deposits and deferred payment on revenue have been reclassified from Selling, General, and Administrative Expenses and Interest and other income to Interest Expense. This reclassification amounts to $ 4,034 for three months ended March 31, 2024, aligning the reporting with appropriate expense categorization standards. (3) Correction of accounting policies misapplications A. Revenue recognition Background The Company identified that it had inadvertently failed to apply some of the relevant provisions of ASC 606, “Revenue from Contacts,” accordingly, in the preparation of our revised financial statements for the period ended March 31, 2024 and 2023. We have revised our revenue recognition policy to incorporate discounting for the present value of expected revenue. Before In previously filed financial statements, our revenue was recognized at nominal values without considering the time value of money. Also, in previously filed financial statements, the Company recognized revenue from maintenance and warranty services starting in the first year following delivery. Further, the Company included deferred revenue within the accrued liabilities. After The decision to adopt a discounting approach arises from our commitment to providing stakeholders with a more precise representation of our revenue streams. By discounting future cash flows to their present value, we ensure that our revenue reflects the economic reality of our transactions, considering the timing of cash receipts. This adjustment aligns our financial statements with best practices in revenue recognition and improves the comparability of our financial information across periods. However, after management’s evaluation, it has been determined that the first year post-delivery is classified as a standard warranty period, with extended comprehensive maintenance and warranty services commencing in the second year. The services offered under the extended maintenance and warranty agreements are consumed by customers concurrently with the Company’s performance of those services. In line with ASC 606-10-25-27, revenue from maintenance and warranty services is to be recognized over the term of the comprehensive maintenance and warranty agreements. As a result, any advance revenue received will be recorded as deferred revenue until the related performance obligations are fulfilled. 11 Also, deferred revenue has now been reclassified as a separate line item on the Balance Sheet, in accordance with U.S. GAAP guidelines. Additionally, deferred revenue has now been divided into short-term and long-term classifications based on when revenue is expected to be recognized. These adjustments provide more clarity and transparency. Moreover, the Company has now separated revenue into instrument sales and system sales. This differentiation enables a more detailed understanding of the revenue streams and their respective recognition patterns. Revenue from instrument sales and system sales will now be recorded separately on the face of condensed consolidated statement of operations and other comprehensive loss, reflecting the distinct performance obligations and timing of revenue recognition for each category. Impact on restated condensed consolidated financial statements for the period ended March 31, 2024 The Company identified that revenue and accounts receivable were incorrectly recorded due to the financing component of trade receivables and deferred revenue, which is to be recovered and recognized after one year from the balance sheet date according to purchase order terms. In line with ASC 606, correction entries were made to reflect the financing component in accounts receivable and revenue. Long term account receivables balances were presented at gross balances basis in previous filed financial statements however, as per ASC 606, revenue contract in which company have significant financing component in consideration receivable from customers, the net sales and related debtor balance should be accounted at the present value of the future cash flow and the interest component related to financing component should be recorded over the period of contract. Accordingly, the company restated the account receivable balances on net level to provide impact of significant financing component and reduced trade receivable by $ 2,896,293 . Also, warranty income to be recognized once the performance obligation condition gets fulfil to in line with this provision, unrealized warranty income included of the sale were reversed and recoded as deferred revenue in balance sheet till the time performance obligation relation to this is not fulfilled. Hence due to this $ 3,385,897 was recorded as deferred revenue till the period and further the same was reclassed as current and non-current $ 252,265 and $ 3,133,632 respectively in these restated financial statements. Deferred revenue recorded earlier amounting to $ 3,560,077 in Other accrued liabilities was reversed as the same was not as per ASC 606 Principles. Interest income for the current period related to unwinding of account receivable balances recorded as interest income of $ 71,181 which is adjusted with the net of system and warranty sale of $ 3,228,377 in condensed consolidated statement of operations and other comprehensive loss for three months ended March 31, 2024. B. Lease Before For the three months ended March 31, 2024, the Company identified that it had inadvertently failed to apply ASC 842, “Leases,” to certain operating lease arrangements. Upon further review, the Company also determined that similar issues impacted the financial statements for three months ended March 31, 2024. During these periods, while preparing the condensed consolidated financial statements, the Company inadvertently failed to apply ASC 842 to all of their lease agreements. This resulted in the exclusion of material lease liabilities and related right-of-use assets from the financial statements. 12 After In conjunction with the correction of the lease accounting, the Company has also updated its incremental borrowing rates used to measure lease liabilities and right-of-use assets. The revised rates are now more reflective of the Company’s current borrowing conditions and have been applied retrospectively to all affected lease arrangements. Impact on Financial Statements: The restatement is expected to primarily affect: Lease Liabilities: Previously unrecorded liabilities associated with the identified leases will be recognized. Right-of-Use Assets: Corresponding assets related to the identified lease arrangements will be recognized. Lease Expenses: Adjustments will be made to accurately reflect lease-related expenses, including interest and depreciation charges for the right-of-use assets. The Company identified that it had a leased property in India, but no transaction recorded initially as per ASC 842 only the lease payments were recorded as rent expenses. As per ASC 842, if a company entered into a lease contract for specific period of time it shall record the Right to Use Assets (ROU), Lease liabilities and amortize ROU and interest on lease liabilities over the lease term. Accordingly, restatement adjustment of $ 424,424 was recorded to correct the balances of ROU in line with above provision of ASC 842. Classification of current and non-current amount of lease liability corrected by $ 133,951 and $ 391,870 respectively. Further lease expenses was classified based on functional classification as $ 75,776 as cost of revenue, $ 39,938 as research and development and $ 63,158 as Selling, general and administrative for the three months ended March 31, 2024. Differential impact of above adjustments has been corrected in the consolidated statement of cash flows for the three months ended March 31, 2024. Further as per ASC 842, lease payments of $ 15,012 are recognized in condensed consolidated statement of operations and other comprehensive loss for three months ended March 31, 2024 relating to the fixed payments arising out of the systems installed on Pay per use basis. 4. Correction of other errors in measurement of income/expense/asset/liabilities. We also noted errors in measurement of income/expense/assets/liabilities throughout different financial statements captions which were corrected in the restated financial statements. Below are major error corrections made in condensed consolidated financial statements for the period ended March 31, 2024: (i) Reinstatement of recourse letter of credit: The Company identified that the encashment of a letter of credit (LC – with recourse) received from banker against the customer’s invoicing was incorrectly netted off with the customer’s closing balance, affecting the financing component for the period ending March 31, 2024. To rectify this, a correction was made to reconcile the accounts receivable balance and the impact of the financing component amounting to $ 11,695 on the income statement. Accounts receivable balance of $ 534,280 has been restated and corresponding current maturities of long-term borrowings, as the bank retains the right to recover proceeds from the company in case customer makes default in payment. (ii) Advance to vendors: For the period ended March 31, 2024, the Company identified that an advance given to a vendor was not adjusted against respective capital and operating expenditures while the invoices were received by the Company. An adjustment was recorded to adjust the vendor advance against respective expenditure totaling $ 305,198 . (iii) Incorrect useful life of PPE: The Company identified that property, plant, and equipment were previously recorded incorrectly, with depreciation charged based on estimated useful life determined by management. Following a thorough analysis, the asset lives were corrected, and depreciation was recalculated accordingly. As a result of this adjustment property, plant, and equipment was increased by $ 117,126 for the period ended March 31, 2024. (iv) Incorrect valuation of Inventory: The Company identified that the inventory was previously recorded at incorrect valuation. As a result of this adjustment inventory is increased by $ 759,657 as at March 31, 2024. Consequent to this adjustment, cost of revenue has decreased by $ 533,348 for three months ended March 31, 2024. 13 (v) Unrecognized Gratuity provision: The Company identified that the expense and provision for gratuity were not recorded from the initial stage. These were subsequently recorded for the years 2021, 2022, 2023 and the current period, with balances reconciled against the actuarial report. A gratuity liability recorded by $ 48,358 relates to noncurrent and $ 426 as current portion which was not accounted for earlier. (vi) Discounting of Security deposits: The Company identified that discounting of security deposits was not initially performed. As a result, the discounting of security deposits has now been recorded, along with the corresponding prepaid security deposit. (vii) Deferred tax liability: Since the company has significant carried forward tax losses hence earlier recorded deferred tax liability reversed $ 6,582 . (viii) Stock compensation expenses: Included in Selling, general and administrative expense pertaining to non-employees: The Company identified that stock compensation expense was recorded incorrectly as it did not pertain to the current year. A correction entry was made, creating a prepaid expense to allow for proper amortization in the correct year. Consequently, prepaid expense for stock compensation was recorded in current and non current assets amounting to $ 1,066,991 and $ 3,823,383 respectively. (ix) Incorrect accruals of expenses: The Company identified that there are some accruals which was previously recorded incorrectly in books of accounts, as a result the accruals amounting to $ 1,095,351 and $ 409,987 has been reversed from other current liability and accounts payable respectively for the period ended March 31, 2024. (x) Personal expenses pertaining to Director earlier recorded as business expense of the Company: The Company identified that legal expenses amounting to $ 101,092 which were actually related to the personal expenses of Dr. Sudhir Prem Srivastava has been charged as business expense of the company. The expense has now been reversed and corresponding receivables from related party (Dr. Sudhir Prem Srivastava) has been recorded. (xi) Stock compensation expenses: The Company identified that stock compensation expense was recorded incorrectly as it did not include stock options (vesting immediately) given to employees and also requires correction in granted fair value. Consequently, an amount of $ 5,171,548 has additionally been recognized in the condensed consolidated statements of operations and comprehensive loss. (xii) Unrecognized credit loss reserve: The Company identified that there are certain balances relating to amounts receivable from government authorities, security deposits and accounts receivable whose recoverability is uncertain. Consequently, and amount of $ 389,330 has been recorded in the condensed consolidated statements of operations and comprehensive loss under Selling, general and administrative expense. Differential impact of above adjustments has been corrected in the condensed consolidated statement of cash flows for the three months ended March 31, 2024. 14 Restatement in March 2023 Condensed consolidated statement of operations and comprehensive loss for the three months ended March 31, 2023: Particulars As Previously Reported As Restated Changes Accounting for the merger transaction REVENUE: System sales 1,491,310 355,414 ( 1,135,896 ) ( 1,135,896 ) Instrument sales - 14,706 14,706 14,706 Warranty sales 20,069 - ( 20,069 ) ( 20,069 ) Total revenue 1,511,379 370,120 ( 1,141,259 ) ( 1,141,259 ) Cost of revenue ( 1,000,204 ) ( 292,173 ) 708,031 708,031 GROSS PROFIT 511,175 77,947 ( 433,228 ) ( 433,228 ) OPERATING EXPENSES: Research and development expense 1,955 242,127 240,172 240,172 Stock compensation expense 1,592,309 - ( 1,592,309 ) ( 1,592,309 ) Salaries & Payroll Expenses 357,674 - ( 357,674 ) ( 357,674 ) Depreciation and amortization expense 31,675 32,591 916 916 Selling, general and administrative expense 1,490,414 873,858 ( 616,556 ) ( 616,556 ) TOTAL OPERATING EXPENSES 3,474,027 1,148,576 ( 2,325,451 ) ( 2,325,451 ) Loss from operations ( 2,962,852 ) ( 1,070,629 ) 1,892,223 1,892,223 OTHER INCOME (EXPENSE): Interest expenses - ( 256,670 ) ( 256,670 ) ( 256,670 ) Interest and other income, net ( 29,510 ) 14,283 43,793 43,793 TOTAL OTHER INCOME (EXPENSE), NET ( 29,510 ) ( 242,387 ) ( 212,877 ) ( 212,877 ) LOSS BEFORE INCOME TAXES ( 2,992,362 ) ( 1,313,016 ) 1,679,346 1,679,346 Income tax expense - - - - NET LOSS ( 2,992,362 ) ( 1,313,016 ) 1,679,346 1,679,346 Consolidated statements of other comprehensive loss NET LOSS ( 2,992,362 ) ( 1,313,016 ) 1,679,346 1,679,346 Foreign currency translation gain/(loss) - ( 48,623 ) ( 48,623 ) ( 48,623 ) Retirement benefit (net of tax) - 4,301 4,301 4,301 TOTAL COMPREHENSIVE LOSS ( 2,992,362 ) ( 1,357,338 ) 1,635,024 1,635,024 15 Condensed consolidated statement of cashflows for three months ended March 31, 2023: Particulars As Previously Reported As Restated Changes Accounting for the merger transaction Cash flows from operating activities: Net loss ( 2,992,362 ) ( 1,313,016 ) 1,679,346 1,679,346 Adjustments to reconcile net loss to net cash used in operating activities: - Depreciation and amortization 2,279 32,591 30,312 30,312 Operating lease liability - 5,668 5,668 5,668 Stock compensation expense 1,597,693 - ( 1,597,693 ) ( 1,597,693 ) Interest expense (net) - 242,387 242,387 242,387 Accounts receivable, net - ( 190,479 ) ( 190,479 ) ( 190,479 ) Inventory, net - ( 1,231,380 ) ( 1,231,380 ) ( 1,231,380 ) Receivables from / payable to related parties - 124,950 124,950 124,950 Deferred revenue - 44,223 44,223 44,223 Prepaids and other current assets - ( 578,340 ) ( 578,340 ) ( 578,340 ) Accounts payable 1,218,838 150,337 ( 1,068,501 ) ( 1,068,501 ) Prepaids and other non current assets - 45,363 45,363 45,363 Other accrued liabilities - 182,974 182,974 182,974 Net cash used in operating activities ( 173,553 ) ( 2,484,722 ) ( 2,311,170 ) ( 2,311,170 ) Cash flows from investing activities: - - - - Notes receivables - acquisition ( 2,000,000 ) - 2,000,000 2,000,000 Purchase of property, plant and equipment - ( 71,881 ) ( 71,881 ) ( 71,881 ) Net cash used in investing activities ( 2,000,000 ) ( 71,881 ) 1,928,119 1,928,119 Cash flows from financing activities: - - Proceeds from issuance of convertible notes to principal shareholder - 2,000,000 2,000,000 2,000,000 Proceeds from bank overdraft facility (net) - 740,358 740,358 740,358 Repayment of term loan - ( 124,098 ) ( 124,098 ) ( 124,098 ) Proceeds from securities offering 446,188 - ( 446,188 ) ( 446,188 ) Repayment of warrants ( 12,360 ) - 12,360 12,360 Proceeds from 7% convertible promissory note 1,000,000 - ( 1,000,000 ) ( 1,000,000 ) Net cash provided by financing activities 1,433,828 2,616,260 1,182,432 1,182,432 Net change in cash ( 739,724 ) 59,657 799,381 799,381 Effect of exchange rate on cash - ( 103,131 ) ( 103,131 ) ( 103,131 ) Cash and cash equivalents at the beginning of the period 1,351,364 274,625 ( 1,076,739 ) ( 1,076,739 ) Cash and cash equivalents at end of the period 611,640 231,151 ( 380,489 ) ( 380,489 ) 16 Impact on restated consolidated financial statements for three months period ended March 31, 2023 (refer note 4) During the course of a detailed re-review of the original filing of Form 10-Q for period ended March 2024, it has been observed that there were also significant inaccuracies in the corresponding figures reported for the three months ended March 2023 condensed consolidated statement of operations and comprehensive loss and condensed consolidated statement of cashflows. These errors primarily originated from the inclusion of figures that pertain to AVRA Medical Robotics, Inc. and Cardio Venture Inc., rather than the correct entities i.e. Cardio Venture Inc. and its subsidiaries. Details of Identified Errors: 1. Condensed consolidated statement of operations and comprehensive loss and condensed consolidated statement of cashflows figures for the three months period ended March 2023: The corresponding figures reported in the condensed consolidated statement of operations and comprehensive loss and condensed consolidated statement of cashflows for March 2023 were entirely related to AVRA Medical Robotics, Inc. and Cardio Venture Inc., rather than Cardio Venture Inc. and its subsidiaries. Corrective Actions Undertaken: 1. Condensed consolidated statement of operations and comprehensive loss and condensed consolidated statement of cashflow adjustments for the three months period ended March 2023: The figures related to Cardio Venture Inc. and its subsidiaries now have been updated as the corresponding figures in the condensed consolidated statement of operations and comprehensive loss and condensed consolidated statement of cashflows for three months ended March 2023. These updated numbers provide a correct basis for comparison with the financials for the three months ended March 31, 2024. 17 Going Concern The accompanying condensed consolidated financial statements have been prepared on a going concern basis which implies the Company will continue to meet its obligations for the next 12 months as of the date these financial statements are issued. The Company had a working capital surplus of $ 10,558,990 and an accumulated deficit of $ 34,353,103 as of March 31, 2024. The Company also had a net loss of $ 9,841,753 for the three months ended March 31, 2024 which was mainly on account of non-cash items like Stock Compensation expense of $ 7,108,750 , Depreciation of $ 80,101 . In addition, the Company has been dependent on related parties to fund operations. These conditions raise substantial doubt about the Company’s ability to continue as a going concern within one year after the date that the condensed consolidated financial statements are issued. Between February 1, 2024, and February 14, 2024, the Company raised $ 2,450,000 million through a private offering of 7 % One-Year Convertible Promissory Notes (“Notes”) from two affiliates of $1,000,000 each and $ 450,000 from three other investors to finance its ongoing working capital requirements. 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 . In April 2024, the Company has raised $2,000,000 from Sushruta Pvt Ltd. by issuance of two, One-Year 7 % Promissory Notes of $ 1,000,000 each, to meet certain working capital needs. However, the Company’s existing cash resources and income from operations, are not expected to provide sufficient funds to carry out the Company’s operations and business development through the next twelve (12) months. The management of the Company is making efforts to raise further funding to scale up operations and meet its longer-term capital needs. While management of the Company believes that it will be successful in its capital formation and planned expansion of its operating activities, there can be no assurance that the Company will be able to raise additional equity capital or be successful in generating additional revenues and ultimately achieving profitability. The accompanying financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities that may result from the possible inability of the Company to continue as a going concern. NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES a) Use of Estimates The preparation of condensed consolidated financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities and expenses. The Company regularly evaluates estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates made by management. Significant estimates included discount rate for measuring significant financing component for deferred collections in revenue contracts, fair value of stock options, incremental borrowing rate for leases and useful life of property plant and equipment. b) Cash and Cash Equivalents The Company considers all highly liquid investments purchased with an original maturity of ninety days or less to be cash equivalents. c) Restricted Cash Restricted cash includes any cash and cash equivalents that are legally restricted as to withdrawal or usage for the Company’s operations. For the purposes of the condensed consolidated statement of cash flows, the Company includes in its cash and cash-equivalent balances those amounts that have been classified as restricted cash and restricted cash equivalents. 18 d) Accounts Receivable and Allowance for Expected Credit Losses The Company’s account receivables are due from customers relating to contracts to supply surgical robotic systems, instruments, and accessories and to provide post sales warranty/maintenance services. The Company also sells surgical robotic systems under deferred payment arrangements and in such cases, the amounts due and recoverable beyond the one year period at the balance sheet date are classified as long-term receivables. Collateral is currently not required. The Company also maintains credit loss allowance for estimated losses resulting from the inability of the Company’s customers to make payments. The Company periodically reviews these estimated allowances, including an analysis of the customers’ payment history and creditworthiness, the age of the trade receivable balances and current economic conditions that may affect a customer’s ability to make payments as well as historical collection trends for its customers as a whole. Based on this review, the Company specifically reserves for those accounts deemed uncollectible or likely to become uncollectible. When receivables are determined to be uncollectible, principal amounts of such receivables outstanding are deducted from the allowance. The allowance for doubtful accounts as of March 31, 2024, and December 31, 2023 amounted to $71,989 and $ nil respectively. e) Employee Benefits Contributions to defined contribution plans are charged to the condensed consolidated statement of operations and comprehensive loss in the period in which services are rendered by the covered employees. Current service costs for defined benefit plans are recognized in the period to which they relate. The liability in respect of defined benefit plans is calculated annually by the Company using the projected unit credit method. The Company records annual amounts relating to its defined benefit plans based on calculations that incorporate various actuarial and other assumptions, including discount rates, mortality, future compensation increases and attrition rates. The Company reviews its assumptions on an annual basis and makes modifications to the assumptions based on current rates and trends when it is appropriate to do so. The effect of modifications to those assumptions is recorded in other comprehensive income (loss) (“OCI”) and amortized to net periodic benefit cost over the expected remaining period of service of the covered employees using the corridor method. The Company believes that the assumptions utilized in recording its obligations under its plans are reasonable based on its experience and market conditions. These assumptions may not be within the control of the Company and accordingly it is reasonably possible that these assumptions could change in future periods. The Company includes the service cost component of the net periodic benefit cost in the same line item or items as other compensation costs arising from services rendered by the respective employees during the period. The interest cost, expected return on plan assets and amortization of actuarial gains/loss, are included in “Other income/(expense), net”. f) Foreign Currency Translation The functional currency of each entity in the group is the currency of the primary economic environment in which it operates. Transactions in foreign currencies are initially recorded into functional currency at the rates of exchange prevailing on the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are remeasured into functional currency at the rates of exchange prevailing at the balance sheet date. Non-monetary assets and liabilities are remeasured to the functional currency at exchange rates that prevailed on the date of inception of the transaction. All foreign exchange gains and losses arising on re-measurement are recorded in the Company’s condensed consolidated statement of operations and comprehensive loss. The assets and liabilities of the subsidiaries for which the functional currency is other than the U.S. dollar are translated into U.S. dollars, the reporting currency, at the rate of exchange prevailing on the balance sheet date. Revenues and expenses are translated into U.S. dollars at the exchange rates prevailing on the last business day of each month, which approximates the average monthly exchange rate. Share capital and other equity items are translated at exchange rates that prevailed on the date of inception of the transaction. Resulting translation adjustments are included in “Accumulated other comprehensive income/(loss)” in the condensed consolidated balance sheet. The relevant translation rates are as follows: for the three months ended March 31, 2024 closing rate at 83.3465 US$: INR, average rate at 83.2683 US$:INR. The relevant translation rates are as follows: for the three months ended March 31, 2023 closing rate at 82.15 US$: INR, average rate at 82.41 US$:INR. 19 The relevant translation rates are as follows: for the year ended December 31, 2023 closing rate at 83.19 US$: INR, average rate at 82.96 US$:INR g) Inventory The Company’s inventory consists of finished goods in the form of fully assembled and tested surgical robotic system, semi-finished goods in the form of various sub-systems of the surgical robotic systems in various stages of assembly and manufacturing and raw material in the form of various mechanical, electrical, and other material components, parts, motors, encoders etc. which are not yet assembled/manufactured. The inventory is valued at the lower of cost (first-in, first-out) or estimated net realizable value. As of March 31, 2024, and December 31, 2023, the Company valued the inventory at $ 6,921,892 and $ 7,017,913 respectively. h) Fair value measurements ASC Topic 820, Fair Value Measurements and Disclosures defines fair value as the price that would be received upon sale of an asset or paid upon transfer of a liability in an orderly transaction between market participants at the measurement date and in the principal or most advantageous market for that asset or liability. The fair value should be calculated based on assumptions that market participants would use in pricing the asset or liability as against assumptions specific to the entity. In addition, the fair value of liabilities should include consideration of non-performance risk, including the Company’s own credit risk. The fair value hierarchy consists of the following three levels: ● Level I — Quoted prices for identical instruments in active markets. ● Level II — Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations whose inputs are observable or whose significant value drivers are observable. ● Level III — Instruments whose significant value drivers are unobservable. i) Concentration of Credit Risk Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash. and cash equivalents, time deposits and accounts receivable. By their nature, all such financial instruments involve risks including the credit risks of non-performance by counterparties. The surplus funds are maintained as cash and cash equivalents and time deposits, placed with highly rated financial institutions to reduce its exposure to market risk with regard to these funds. The Company’s exposure to credit risk on account receivable is influenced mainly by the individual characteristic of each customer and the concentration of risk from the top few customers. To mitigate this risk the Company evaluates the creditworthiness of its customers in conjunction with its revenue recognition processes as well as through its ongoing collectability assessment processes for accounts receivable. The Company does not enter into or trade financial instruments, including derivative financial instruments, for speculative purposes. j) Commitments and Contingencies Liabilities for loss contingencies arising from claims, assessments, litigation, fines and penalties, and other sources are recognized when it is probable that a liability has been incurred and the amount of the assessment and/or remediation can be reasonably estimated. A disclosure for a contingent liability is made when there is a possible obligation that may require an outflow of resources. When there is a possible obligation or a present obligation in respect of which the likelihood of outflow of resources is remote, no provision or disclosure is made. Legal costs incurred in connection with such liabilities are expensed as incurred. Capital commitments are disclosed in the condensed consolidated financial statements. 20 k) Revenue Recognition The Company recognizes revenue in accordance with Accounting Standards Codification, or ASC606, the core principle of which is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled to receive in exchange for those goods or services. To achieve this core principle, five basic criteria must be met before revenue can be recognized: ● Identification of a contract with a customer or placement of a purchase order by the customer. ● Identification of the performance obligations in the contract or the purchase order as the case may be. ● Determination of the transaction price which is reflected in the purchase order placed by the customer. ● Allocation of the transaction price to the performance obligations in the contract; and ● Recognition of revenue when or as the performance obligations are satisfied as per the terms of the purchase order received from the customer. The Company accounts for revenues when both parties to the contract have approved the contract, the rights and obligations of the parties are identified, payment terms are identified, and collectability of consideration is probable. Product type and payment terms vary by client. i. System Sales: The Company recognizes revenue when the “transfer of control” occurs, which typically takes place upon the delivery of the system to the customer. In cases where a deferred payment arrangement exists, revenue is recognized at the present value of the consideration receivable, adjusted by the present value of any extended warranty obligations. Key Terms of Customer Contracts The Company enters into binding contracts with customers through either an agreement or a sales order, with all terms and conditions mutually agreed upon by both parties. The key terms and conditions include: 1. Finalization of Product and Price: Agreement on the specific model of the “SSI Mantra” system and its selling price. 2. Payment Terms: Determination of payment terms, which may involve either a deferred payment arrangement or a one-time payment upon delivery and installation of the system at the customer’s premises. 3. Deferred Payment Model: For deferred payments, customers typically pay an advance amount before the dispatch of the system. The remaining balance is payable in yearly installments over a period of 3 to 5 years. Present value of deferred payment is calculated using the prevailing interest rate. 4. Warranty Services: Instead of negotiating the sales price, the Company provides a warranty service that includes a 1-year assurance warranty and an extended warranty for an additional 3 to 5 years. The exact terms are mutually agreed upon with the customer. 5. Delivery, Installation, and Training: The Company is responsible for delivering and installing the system at the customer’s premises. Post-installation, the Company provides free training to surgeons and surgical staff to enable them to operate the system effectively. 6. Transfer of Risk and Rewards: The risks and rewards associated with the system are transferred to the customer upon delivery to their premises. 21 ii. Instrument and accessories Sales: The Company also sells instruments for use by surgeons in conjunction with the use of our surgical robotic systems. These instruments are consumable items for our hospital customers, and we recognize the revenues from the sale of instruments as and when the instruments are delivered to the customer. iii. Warranty and Annual Maintenance Contract Sales: Under ASC 606, the portion of the equipment sales value attributable to annual maintenance contracts is recorded separately as Warranty sales, which are recognized at their present value. Once the warranty periods expire, the maintenance contracts commence, and the revenue generated from these maintenance contracts is recognized as a distinct revenue stream. iv. Lease Income: Under ASC 842, in case where the systems are installed under a pay-per-use arrangement, the fixed component of income arising from the contract shall be recognized as lease income over the period of receipt of fixed consideration on a straight-line basis. Further this arrangement doesn’t involves any transfer of title to the counterparty, hence the Company has capitalized the cost of production relating to those systems under property, plant and equipment and accordingly charges the depreciation over its period of useful life. l) Property Plant & Equipment Property and equipment are stated at cost, which is generally comprised of the purchase price for such property or equipment, non-refundable duties and taxes, but excludes any discounts and/or rebates, less accumulated depreciation and impairment. The Company reviews property and equipment for impairment whenever events or changes in circumstances indicate that the related carrying amounts may not be recoverable. Property Plant & Equipment depreciated using the straight-line method at rates determined as per estimated useful lives of the assets. The estimated useful lives used in in calculating depreciation are as follows: Years Computer & peripherals 3 Furniture 5 Leasehold improvement 4 - 9 Office equipment 5 Plant and machinery 4 - 8 R & D equipment 5 Server & networking 3 Vehicles 5 Pay per use systems 10 m) Long-lived Assets In accordance with ASC 360, “ Property Plant and Equipment ”, the Company tests long-lived assets or asset groups for recoverability when events or changes in circumstances indicate that their carrying amount may not be recoverable. Circumstances which could trigger a review include, but are not limited to: significant decreases in the market price of the asset; significant adverse changes in the business climate or legal factors; accumulation of costs significantly in excess of the amount originally expected for the acquisition or construction of the asset; current cash flow or operating losses combined with a history of losses or a forecast of continuing losses associated with the use of the asset and current expectation that the asset will more than likely not be sold or disposed significantly before the end of its estimated useful life. Recoverability is assessed based on the carrying amount of the asset and its fair value which is generally determined based on the sum of the discounted cash flows expected to result from the use and the eventual disposal of the asset, as well as specific appraisal in certain circumstances. An impairment loss is recognized when the carrying amount is not recoverable and exceeds fair value. n) Stock Compensation Expense Under the fair value recognition provisions of ASC Topic 718, Compensation-Stock Compensation, cost is measured at the grant date based on the fair value of the award and is amortized on a straight-line basis over the requisite service periods of the awards, which is generally the vesting period. 22 Determining the fair value of stock-based awards at the grant date requires significant judgment, including estimating the expected term over which the stock awards will be outstanding before they are exercised and the expected volatility of our stock. Stock Options : These provide employees with the right, but not the obligation, to purchase shares of the Company’s stock at a specified price, within a defined period, as per the terms of the stock option agreement. Stock-based compensation expense associated with AVRA 2016 Stock Incentive Plan is measured at fair-value using a Black-Scholes option-pricing model at commencement of each offering period and recognized over that offering period. Stock Units (Restricted Stock Units, or RSUs): These do not require the employee to exercise any options. Each stock unit automatically converts into a specified number of shares upon vesting. The Company uses last three month’s average share price of common stock on OTC exchange as grant date fair value for RSUs. The Company recognizes stock-based compensation expense in the condensed consolidated statement of operations and comprehensive loss for both employees and non-employee directors based on the grant-date fair value of the awards. These costs are recognized on a straight-line basis over the requisite service period, or until the date at which the recipient becomes eligible for retirement, if shorter. Forfeitures of equity awards are accounted for as they occur. The Company accounts for equity instruments issued in exchange for goods or services from non-employees in accordance with ASC Topic 718 Stock Compensation. The costs associated with these equity instruments are measured at the estimated fair market value of the consideration received or the estimated fair value of the equity instruments issued, whichever is more reliably measurable. o) Income Taxes The Company accounts for income taxes using the asset and liability method of accounting for income taxes. The Company calculates and provides income taxes in each of the tax jurisdictions in which it operates. The deferred tax assets and liabilities are recognized for future tax consequences attributable to temporary differences between the condensed consolidated financial statement carrying values of existing assets and liabilities and their respective tax bases and all operating losses carried forward, if any. Deferred tax assets and liabilities are measured using tax rates expected to apply to taxable income in the years in which the applicable temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates or tax status is recognized in the statements of income in the period in which the change is identified. The Company releases (reclassifies) the tax effects from AOCI to the condensed consolidated statement of operations and comprehensive loss for amortization of deferred actuarial gain/(loss) on retirement benefits. Deferred tax assets are reduced by a valuation allowance if, based on available evidence, it is more likely than not that some portion or all of the deferred tax assets will not be realized. The Company establishes provisions for uncertain tax provisions and related interest and penalties when the Company believes those tax positions are not more likely than not of being sustained, if challenged. p) Basic and Diluted Loss per Share The following table sets forth the computation of basic and diluted earnings per share: For three Months ended March 31, 2024 2023 (As Restated) (As Restated) Net Loss ( 9,841,753 ) ( 1,313,016 ) Basic weighted average common shares outstanding 170,729,490 128,161,013 Dilutive effect of convertible note (1) 326,830 - Dilutive effect of stock-based awards 10,553,371 - Diluted weighted average common shares outstanding 181,609,691 128,161,013 Earnings per share attributable to SS INNOVATIONS INTERNATIONAL INC. stockholders: Basic and Diluted ( 0.06 ) ( 0.01 ) 23 Basic net loss per share is calculated by dividing the net loss attributable to SSII stockholders by the weighted-average number of shares of common stock outstanding for the period. The diluted net loss per share is computed by giving effect to all potentially dilutive securities outstanding for the period. For periods in which we report net losses, diluted net loss per share is the same as basic net loss per share because potentially dilutive common shares are not assumed to have been issued if their effect is anti-dilutive. (1) Represents dilution effect related to the interest on convertible notes in the calculation of diluted weighted average shares outstanding for the portion of the period. Refer Note 9– Notes Payable to the condensed consolidated financial statements for further details. q) Research and Development Costs In accordance with ASC Topic 730 “Research and Development”, with the exception of intellectual property that is purchased from another enterprise and have alternative future use, research and development expenses are charged to operations as incurred. r) Fair Value of Financial Instruments Our financial instruments consist principally of accounts receivable, amounts due to related parties and promissory notes payable. The carrying amounts of cash and cash equivalents and promissory notes approximate fair value because of the short-term nature of these items. s) Leases The Company determines if an arrangement is a lease at inception of the contract. The Company’s assessment is based on whether: (1) the contract involves the use of a distinct identified asset, (2) the Company obtains the right to substantially all the economic benefit from the use of the asset throughout the term of the contract, and (3) the Company has the right to direct the use of the asset. A lease is classified as a finance lease if any one of the following criteria are met: (1) the lease transfers ownership of the asset by the end of the lease term, (2) the lease contains an option to purchase the asset that is reasonably certain to be exercised, (3) the lease term is for a major part of the remaining useful life of the asset or (4) the present value of the lease payments equals or exceeds substantially all of the fair value of the asset. Operating leases are presented within “Right-of-use assets, operating lease” “Current portion of operating lease liabilities” and “Operating lease liabilities, less current portion” in the Company’s condensed consolidated balance sheet. Right-of-use assets (ROU) assets represent the Company’s right to use an underlying asset during the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease arrangement. Lease liabilities are recognized at commencement date based on the present value of lease payments over the lease term. Operating lease ROU assets are recognized at commencement date in an amount equal to lease liability, adjusted for any lease prepayments, initial direct costs, and lease incentives. For leases in which the rate implicit in the lease is not readily determinable, the Company uses its incremental borrowing rate based on the information available at commencement date. The Company determines the incremental borrowing rate by adjusting the benchmark reference rates with appropriate financing spreads applicable to the respective geographies where the leases are entered and lease specific adjustments for the effects of collateral, if applicable. Lease terms includes the effects of options to extend or terminate the lease when it is reasonably certain at commencement of the lease that the Company will exercise that option. Lease expense for operating lease arrangements is recognized on a straight-line basis over the lease term reflecting single operating lease cost. The Company evaluates lease agreements to determine lease and non-lease components, which are accounted for separately. 24 Lease payments that depend on factors other than an index or rate are considered variable lease payments and are excluded from the operating lease assets and liabilities and are recognized as expense in the period in which the obligation is incurred. Lease payments include payments for common area maintenance, utilities such as electricity, heating and water, among others, and property taxes, and other similar payments paid to the landlord, which are treated as non-lease component. The Company accounts for lease-related concessions in accordance with guidance in Topic 842, Leases, to determine, on a lease-by-lease basis, whether the concession provided by lessor should be accounted for as a lease modification. The Company accounts for a modification as a separate contract when it grants an additional right of use not included in the original lease and the increase is commensurate with the standalone price for the additional right of use, adjusted for the circumstances of the particular contract. Modifications which are not accounted for as a separate contract are reassessed as of the effective date of the modification based on its modified terms and conditions and the facts and circumstances as of that date. Upon modification, the Company remeasures the lease liability to reflect changes to the remaining lease payments and discount rates and recognizes the amount of the remeasurement of the lease liability as an adjustment to the ROU assets. However, if the carrying amount of the ROU assets is reduced to zero as a result of modification, any remaining amount of the remeasurement is recognized as an expense in condensed consolidated statement of operations and comprehensive loss. The Company reviews ROU assets for impairment whenever events or changes in circumstances indicate that the related carrying amount may not be recoverable. t) Segment reporting The Company operates in one segment only. The chief operating decision maker regularly reviews the operating results of the Company on a condensed consolidated basis as part of making decisions for allocating resources and evaluating performance. As at March 31, 2024 and December 31, 2023 100 % of long-lived assets were in India. Revenue from external customers is attributed to individual countries based on customer location. u) Recent Accounting Pronouncements In March 2023, the Financial Accounting Standard Board (“FASB”) issued Accounting Standard Update (“ASU”) No. 2023-01, Leases (“Accounting Standards Codification (“ASC”) Topic 842”): Common Control Arrangements. This ASU provides guidance in ASC Topic 842 that leasehold improvements associated with common control leases should be (i) amortized by the lessee over the useful life of the leasehold improvements to the common control group, regardless of the lease term, as long as the lessee controls the use of the underlying asset through a lease, and (ii) accounted for as a transfer between entities under common control through an adjustment to equity if and when the lessee no longer controls the use of the underlying asset. The ASU is effective for fiscal years beginning after December 15, 2023. Early adoption is permitted for both interim and annual financial statements that have not yet been issued. When adopted in an interim period, it must be adopted from the beginning of the year that includes that interim period. The Company does not have any lease arrangements with entities under common control and the adoption of this ASU is not expected to have a material impact on its condensed consolidated financial statements. 25 NOTE 3 – PROPERTY, PLANT AND EQUIPMENT, NET The Company’s property and equipment consisted of the following:- March 31, 2024 December 31, 2023 (As Restated) Gross Amount Computer & peripherals 207,246 180,009 Furniture 198,815 175,707 Leasehold improvement 190,580 154,651 Office equipment 118,806 103,371 Plant and machinery 148,158 128.498 R & D equipment 91,533 90,434 Server & networking 26,296 21,999 Vehicles 183,233 183,577 Pay Per Use Systems 1,423,013 - Accumulated depreciation ( 411,241 ) ( 331,841 ) Total 2,176,439 706,405 Depreciation expenses for the three months ended March 31, 2024, and 2023 amounted to $ 80,101 and $ 32,591 respectively. During the current quarter, the Company leased 4 systems under Pay-per-use model to customers. These systems were initially recorded as inventory. However, from the date of lease these were recorded as “Property, plant and equipment” in accordance with ASC 842. NOTE 4 – REVERSE RECAPITALIZATION The Transaction On April 14, 2023 (“Closing”), the Company consummated the acquisition of CardioVentures, Inc., a Delaware corporation (“CardioVentures”), pursuant to a Merger Agreement dated November 7, 2022 (the “Merger Agreement”). This agreement was executed among AVRA-SSI Merger Corporation, a wholly owned subsidiary of the Company (“Merger Sub”), CardioVentures, and Dr. Sudhir Srivastava, who, through his holding company, owned a controlling interest in CardioVentures. At Closing, Merger Sub merged with and into CardioVentures (the “Merger”), with CardioVentures being determined as the accounting acquirer for financial reporting purposes in accordance with ASC 805. The transaction was accounted for as a reverse recapitalization, with AVRA being treated as the accounting acquiree. This determination was based on several factors: ● CardioVentures’ stockholders obtained the largest portion of voting rights in the post-combination company. ● The Board and management of the combined entity are primarily composed of individuals associated with CardioVentures. ● CardioVentures had a larger entity size based on historical operations, assets, revenues, and workforce. ● The ongoing operations, post-combination, are those of CardioVentures. Merger Consideration and Share Issuance: As part of the Merger, holders of CardioVentures’ outstanding common stock, including certain parties who provided interim convertible financing, were issued 135,808,884 shares of SSII common stock, representing approximately 95 % of the issued and outstanding shares of SSII post-merger, while the existing SSII shareholders retained approximately 5 % ( 6,545,531 shares) of the post-merger issued shares. 26 Pursuant to the Merger Agreement, the holders of CardioVentures’ common stock also received shares 5,000 of newly designated Series A Non-Convertible Preferred Stock (the “Series A Preferred Shares”). These shares: ● Vote together with SSII common stock as a single class, except as required by law. ● Entitle holders to exercise 51 % of the total voting power of the Company. ● Are not convertible into common stock, have no dividend rights, and carry a nominal liquidation preference. ● Include protective provisions requiring the majority vote of Series A Preferred Shares to amend their rights. ● Are subject to automatic redemption for nominal consideration if holders own less than 50 % of the shares received in the Merger. Restructuring and Capital Contributions: Concurrent with the Merger: ● The Company changed its name to “SS Innovations International, Inc.,” effected a one-for-ten reverse stock split, and increased its authorized common stock to 250,000,000 shares. ● Dr. Sudhir Srivastava, through his holding company, assigned patents, trademarks, and other intellectual property related to its surgical robotic systems to a wholly owned subsidiary of SSII. ● Dr. Frederic Moll and Andrew Economos provided interim financing during 2022, contributing $ 3,000,000 each. As a result, Dr. Moll received 7 % of SSII’s post-merger issued and outstanding common stock on a fully diluted basis, with 4 % treated as stock compensation expenses for strategic value. Economos received 2.86 % of SSII’s post-merger issued shares. Reverse Recapitalization Impact: As part of the reverse recapitalization, CardioVentures acquired the net assets of AVRA at fair value at Closing. The fair value of AVRA’s net assets was assessed to be zero by management, resulting in a recognized loss of $ 5,000,000 in additional paid-in capital. This loss was due to the difference between the fair value of the shares issued ( 5 % of the total) and AVRA’s net assets. For comparative periods, the assets and liabilities of CardioVentures (the accounting acquirer) were recognized at their pre-combination carrying amounts, with retained earnings and equity balances carried forward. The equity structure reflects that of AVRA (the legal parent) using the exchange ratio established in the Merger Agreement. NOTE 5 – ACCOUNTS RECEIVABLE, NET Accounts receivable consisted of the following as of March 31, 2024 and December 31, 2023: March 31, 2024 December 31, 2023 (As Restated) Accounts receivable, net (current) 4,964,543 1,901,244 Accounts receivable, net (non-current) 2,486,947 2,365,013 Total accounts receivable, net 7,451,490 4,266,257 The Company performed an analysis of the trade receivables related to SSI India and determined, based on the deferred payment terms of the contracts, that a $ 2,486,947 may not be due and collectible in next one year and thus company classified these receivables as non- current. Details of customers which accounted for 10% or more of total revenues during the three months period ended March 31, 2024, and March 31, 2023 and 10% or more of total accounts receivables as at March 31, 2024, and December 31, 2023: Percentage of Revenue Percentage of Accounts For three months ended Receivable as at March 31, 2024 March 31, 2023 March 31, 2024 December 31, 2023 Customer A - - 6 % 12 % Customer B - - 7 % 13 % Customer C 40 % - - - Customer D 20 % - 33 % - Customer E 13 % - 4 % - Customer F 12 % - 5 % - Customer G 12 % - 5 % - Customer H - 96 % 3 % 7 % 27 NOTE 6 – CASH, CASH EQUIVALENTS AND RESTRICTED CASH For the purpose of condensed consolidated statement of cash flows, cash, cash equivalents and restricted cash (Current) & (Non-Current) consisted of the following as of March 31, 2024, and December 31, 2023. March 31, 2024 December 31, 2023 (As Restated) Cash and cash equivalents 948,119 2,022,276 Fixed deposit Lien against overdraft facility 5,553,097 4,962,515 Lien against Letter of credit 24,285 24,041 Lien against Bank Guarantee 43,014 43,094 Restricted cash (Current) 5,620,396 5,029,650 Fixed deposit Lien against bank guarantee 310,410 19,233 Lien against credit card facility 16,655 16,686 Restricted cash (Non- current) 327,065 35,919 Total cash, cash equivalents and restricted cash 6,895,580 7,087,845 We have classified fixed deposits (FDs), which are subject to withdrawal restrictions, as Restricted cash. Additionally, time deposits with a maturity of over one year have been classified as non-current. The Company has secured a bank overdraft facility from HDFC bank, collateralized by fixed deposits held with HDFC bank. This facility includes a withdrawal restriction tied to the fixed deposit. (Refer Note 10 – Bank Overdraft.) NOTE 7 – PREPAID, CURRENT AND NON- CURRENT ASSETS Prepaid, Current and Non-Current Assets consisted of the following as of March 31, 2024, and December 31, 2023: March 31, 2024 December 31, 2023 (As Restated) Receivables from statutory authorities 1,486,866 1,904,859 Prepaid expenses – Stock Compensation current 1,066,991 1,066,991 Security deposit 251,046 299,540 Other prepaid- current assets 821,054 618,627 Prepaid and other current assets 3,625,957 3,890,017 Prepaid expenses – Stock Compensation non current 3,823,383 4,090,131 Security deposits 173,629 225,488 Other prepaid- non current asset 70,373 6,825 Prepaid and other non current assets 4,067,385 4,322,444 Total prepaid, current and non current assets 7,693,342 8,212,461 Prepaid expenses – stock compensation represents unamortized portion of common stock granted to advisors for services to be rendered by them in future. (Refer Note 19 – Stock Compensation Expenses) 28 NOTE 8 – ACCOUNTS PAYABLE AND ACCRUED EXPENSES Accounts payable and accrued current and non-current expenses consisted of the following as of March 31, 2024, and December 31, 2023: March 31, 2024 December 31, 2023 (As Restated) Accounts Payable 1,827,635 901,552 Payable to statutory authorities 102,212 35,149 Salary payable 381,235 310,789 Other accrued liabilities 874,828 144,001 Other accrued liabilities 1,358,275 489,939 Provision for gratuity long term 48,358 33,933 Other accrued liabilities- non current 48,358 33,933 Total accounts payable, accrued current and non-current expenses 3,234,268 1,425,424 Accounts payable $ 1,827,635 as of March 31, 2024, reflect the amounts due to various vendors of supplies and services in the normal course of business operations. Other accrued liabilities of $ 874,828 as of March 31, 2024, mainly include $ 764,899 advance from customers and expenses payable of $ 102,589 . NOTE 9 – NOTES PAYABLE In the month of February 2024, the Company raised $ 2,450,000 through 7 % One-Year Convertible Promissory Notes (“Notes”) from two affiliates of $ 1,000,000 each and $ 450,000 from other investors to finance its ongoing working capital requirements. 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 NOTE 10 – BANK OVERDRAFT FACILITY Bank overdraft facility consisted of the following as of March 31, 2024, and December 31, 2023. March 31, 2024 December 31, 2023 (As Restated) HDFC Bank Ltd overdraft (with lien against fixed deposits)(OD1) ( 45,902 ) 4,756,389 HDFC Bank Ltd overdraft (OD2) ( 615,828 ) 1,262,537 HDFC Bank working capital demand loan (1)- 8.50 % 4,949,218 - HDFC Bank working capital demand loan (2)- 9.24 % 599,905 - HDFC Bank working capital demand loan (3)- 9.23 % 1,319,792 - Bank overdraft 6,207,185 6,018,926 29 HDFC bank has sanctioned the facilities for the Company which include overdraft and working capital demand loan (WCDL). The facility of HDFC Bank overdraft (OD1) is availed on the basis of lien on the fixed deposits of $ 5,549,118 provided by the Company while (OD2) is secured by all the current assets, plant and machinery of the Company and additionally secured by personal security of Dr. Sudhir Srivastava for this facility. As of March 31, 2024 and December 31, 2023, all financial and non-financial covenants under the bank overdraft facility agreement were complied with by the Company. HDFC Bank has sanctioned overdraft facilities subject to operational terms and conditions, including payment on demand, comprehensive insurance coverage against all risks of primary security, periodic inspections of the plant by the bank, and submission of monthly stock and financial records to the bank within 30 days after each month-end. Security for this facility includes current assets, plant and machinery, furniture and fixtures, and a personal guarantee from Dr. Sudhir Srivastava. The cash credit facility is sanctioned at an interest rate of 9.50 % (linked with 3-month T-Bill) per annum on the working capital overdraft limit, with interest payable monthly on the first day of the subsequent month. Overdraft facility against fixed deposits is sanctioned with an interest rate of 1.25 % over and above prevailing rate of interest on fixed deposits, payable at monthly intervals on the first day of the following month. During the current period, the Company has availed the facility of working capital demand loan (WCDL) against the conversion of Bank overdraft which is availed on basis of lien on the fixed deposits provided by the Company, all the current assets, plant and machinery of the Company and additionally on personal guarantee of Dr. Sudhir Srivastava for this facility as set forth above. This facility of WCDL carries a fixed interest rate (as mentioned above) and is repayable in the month of August 2024. NOTE 11 – BORROWINGS As part of our ongoing efforts to manage working capital and improve liquidity, we have arranged for Axis Bank to issue a Letter of Credit (LC) on behalf of one of our debtors, Indraprastha Cancer Society & Research Centre (RGCI), for $ 452,818 . This LC is valid for a period of 666 days. It is classified as a short-term liability (including interest) for the year ended December 31, 2023, and for the period ended March 31, 2024. March 31, 2024 December 31, 2023 (As Restated) Current maturities of long-term debt 521,873 510,189 NOTE 12 – DEFERRED REVENUE Contract liabilities (deferred revenue) consist of advance billings and billing in excess of revenues recognized. Deferred revenue also includes the amount for which services have been rendered but other conditions of revenue recognition are not met, for example, where the Company does not have an enforceable contract. The revenues attributable to the warranty is recognized over the period to which it relates. During the three months ended March 31, 2024, the company had sold five surgical robotic systems. The revenues attributable to warranty for the agreed warranty period in respect of each of the sales contracts are deferred for recognition over the period to which it relates. In case of systems sold on deferred payment basis, the present value of the invoiced system sales realizable over the deferred payment period is recognized as systems sales. The difference between the invoiced amount and its present value is adjusted (reduced) in the accounts receivable balance. This difference is recorded as interest income under other income, with a corresponding impact on accounts receivable over the collection period of contract. The Company recorded $ 71,181 and $ nil as interest income on account of deferred financing component during the three months ended March 31, 2024 and 2023 respectively. 30 March 31, 2024 December 31, 2023 (As Restated) Deferred revenue— beginning of period 1,095,480 43,917 Additions 2,299,824 1,053,334 Net changes in liability for pre-existing contracts 3,395,304 1,097,251 Revenue recognized 9,407 1,771 Deferred revenue— end of period 3,385,897 1,095,480 March 31, 2024 December 31, 2023 (As Restated) Deferred revenue expected to be recognized in: One year or less 252,265 156,330 More than One year 3,133,632 939,150 3,385,897 1,095,480 For the three months ended March 31, 2024, and 2023. The following table disaggregates our revenue by major source: March 31, 2024 March 31, 2023 (As Restated) (As Restated) System sales 3,494,759 355,414 Instruments sale 118,515 14,706 Warranty sale 9,407 - Lease income 15,012 - Total revenue 3,637,693 370,120 Revenues for three months ended March 31, 2024 and 2023 by geographic region (determined based upon customer domicile), were as follows: March 31, 2024 March 31, 2023 (As Restated) (As Restated) India 3,637,693 370,120 3,637,693 370,120 NOTE 13 – STOCKHOLDERS’ EQUITY Common stock The Company is authorized to issue up to 250,000,000 shares of common stock, $ 0.0001 par value per share. The Company has one class of common stock outstanding. Holders of the Company’s common stock are entitled to one vote per share. Upon the liquidation or dissolution of the Company, its common stockholders are entitled to receive a ratable share of the available net assets of the Company after payment of all debts and other liabilities. The Company’s shares of common stock have no pre-emptive, subscription, redemption or conversion rights. As of March 31, 2024, there were 170,739,380 issued and outstanding common shares. Holders of common stock are entitled to one vote for each share of common stock. 31 Preference shares The Company had outstanding 5,000 shares of preferred stock, par value $ 0.0001 as at March 31, 2024 and December 31, 2023. NOTE 14 – RELATED PARTY TRANSACTIONS As of March 31, 2024, and December 31, 2023, there were amounts due from related parties, respectively. The advances are unsecured, non-interest bearing and due on demand. March 31, 2024 December 31, 2023 (As Restated) Receivable from related party 1,510,647 1,567,559 Total 1,510,647 1,567,559 The receivable balances from related parties are across the Company and its related entities in the normal course of business. All such receivable balances are non-interest bearing and are receivable on demand. Receivable from related party amounting to $ 1,510,647 and $ 1,567,559 as at March 31, 2024 and December 31, 2023 respectively, represents proceeds of convertible promissory notes raised by the Company from the investors during the respective years, but collected by related entities on its behalf. NOTE 15 – LEASES The Company conducts its operations using facilities leased under operating lease agreements that expire at various dates. The following is a summary of operating lease assets and liabilities: March 31, December 31, 2024 2023 (As Restated) Operating leases Assets Right of use operating lease assets 2,552,193 2,657,554 Liabilities Current portion of operating lease liability 415,331 396,784 Non Current portion of operating lease liability 2,238,259 2,351,113 Total lease liabilities 2,653,590 2,747,897 March 31, December 31, 2024 2023 (As Restated) Operating leases Weighted average remaining lease term (years) Ilabs Info Technology 3rd Floor 5.94 6.19 Ilabs Info Technology Ground Floor 8.17 8.42 Village Chhatarpur-1849-1852-Farm 1.33 1.58 Weighted average discount rate Ilabs Info Technology 3rd Floor 12 % 12 % Ilabs Info Technology Ground Floor 12 % 12 % Village Chhatarpur-1849-1852-Farm 10 % 10 % 32 Supplemental cash flow and other information related to leases are as follows: Period ended March 31 2024 2023 (As Restated) (As Restated) Cash payments for amounts included in the measurement of lease liabilities: Operating cash outflows for operating leases 167,838 93,738 Maturities of lease liabilities as of March 31, 2024 were as follows: Operating Leases Fiscal Year Amount (in $) 2024 525,573 2025 616,749 2026 498,499 2027 506,614 2028 515,136 2029 and thereafter 1,170,606 Total Lease Payment 3,833,177 Less: Imputed Interest 1,179,587 Present value of lease liabilities 2,653,590 NOTE 16– INCOME TAX The Company has not recorded income tax benefits for the net operating losses incurred during the period ended March 31, 2024, and 2023 nor for other deferred tax assets generated, due to its uncertainty of realizing a benefit from those items . The components of loss before income taxes consist of the following: Period ended March 31, 2024 March 31, 2023 (As Restated) (As Restated) Domestic - - Foreign ( 9,841,753 ) ( 1,313,016 ) Total ( 9,841,753 ) ( 1,313,016 ) The Company does not have federal and state net operating losses for the period ended March 31, 2024, and March 31, 2023. The Company has not recorded any amounts for unrecognized tax benefits as of March 31, 2024, and March 31, 2023. The Company’s practice is to recognize interest and penalties related to income tax matters in income tax expense. The Company had no accrual of interest and penalties on the Company’s balance sheets and has not recognized interest and penalties in the condensed consolidated statement of operations and comprehensive loss for three months ended March 31, 2024, and March 31, 2023. The Company is subject to taxation in the United States and India. The Company’s tax returns filed has no pending examinations in India and US. 33 The effective income tax rate differs from the amount computed by applying the income tax rate of India to Income/(Loss) before income taxes approximately as follows: Period ended March 31, 2024 March 31, 2023 (As Restated) (As Restated) Accounting loss before income tax ( 9,841,753 ) ( 1,313,016 ) Income tax expense/(benefit) at federal statutory rate at 21 % ( 2,066,768 ) ( 275,733 ) Foreign tax rate differential ( 410,204 ) ( 54,727 ) Non-deductible expenses 149,234 12,613 Excess tax expense/(benefit) on depreciation ( 35,496 ) 2,454 Excess tax expense/(benefit) on security deposit 77 77 Impact of unrecognized deferred tax asset on the loss of the year 2,363,157 315,316 Income tax expense/(benefit) - - The Company recorded nil income tax expense for three months ended March 31, 2024 and March 31, 2023, due to losses in current period and prior period and it does not expect to recover the tax benefit on the losses incurred during three months ended March 31, 2024, and March 31, 2023. The components of the deferred tax balances were as follows: March 31, 2024 December 31, 2023 (As Restated) Deferred tax assets: Net operating loss carry forwards 5,123,861 763,591 Net operating loss 1,952,953 4,360,270 Lease payments 21,293 18,976 Others 135,372 23,754 7,233,479 5,166,591 Valuation allowance ( 7,190,630 ) ( 5,145,040 ) Deferred tax assets 42,849 21,551 Deferred tax liabilities: Depreciation and amortization 42,849 16,763 Others - 4,788 Deferred tax liabilities 42,849 21,551 Net deferred tax assets/liability - - Deferred tax assets and liabilities are recognized for future tax consequences attributable to temporary differences between the financial statement carrying values of assets and liabilities and their respective tax bases and operating loss carry forwards. The Company performed an analysis of the realizability of deferred tax assets as of March 31, 2024, and December 31, 2023, and recorded a valuation allowance of $ 7,190,630 and $ 5,145,040 , respectively. 34 NOTE 17 – EMPLOYEE BENEFIT PLAN The Company’s Gratuity Plan in India provides for a lump sum payment to vested employees on retirement or upon termination of employment in an amount based on the respective employee’s salary and years of employment with the Company. Liabilities under this plan are determined by actuarial valuation using the projected unit credit method. Current service costs for these plans are accrued in the year to which they relate. Actuarial gains or losses or prior service costs, if any, resulting from amendments to the plans, are recognized and amortized over the remaining period of service of the The Gratuity Plan is unfunded, and the company does not make contributions to the plan assets. The benefit obligation has been measured as of March 31, 2024, and December 31, 2023. The following table sets forth the activity and the amounts recognized in the Company’s consolidated financial statements at the end of the relevant periods: March 31, December 31, 2024 2023 (As restated) Change in projected benefit obligation Projected benefit obligation as on beginning 34,005 10,655 Service cost 5,684 15,707 Interest cost 601 759 Benefits paid - - Actuarial loss ^ 8,507 7,009 Effect of exchange rate changes ( 78 ) ( 125 ) Projected benefit obligation at end 48,719 34,005 Unfunded status in the end Unfunded amount recognized in consolidated balance sheets 48,719 34,005 Non-current liability (included under other non-current liabilites) 48,358 33,933 Current liability (included under accrued employee costs) 361 72 Total accrued liability 48,719 34,005 Accumulated benefit obligation at end 21,982 15,508 ^ During the period ended March 31, 2024, and December 31, 2023, actuarial loss was driven by changes in actuarial assumptions, offset by experience adjustments on present value of benefit obligations. Components of net periodic benefit costs recognized in condensed consolidated statements of operations and comprehensive loss and actuarial loss reclassified from AOCI, were as follows: March 31, December 31, 2024 2023 (As restated) Service cost 5,684 15,707 Interest cost 601 759 Expected return on plan assets - - Amortization of actuarial loss, gross of tax - - Net gratuity cost 6,285 16,466 35 The components of retirement benefits included in AOCI, excluding tax effects, were as follows: March 31, December 31, 2024 2023 (As restated) Net actuarial loss 8,507 ( 7,009 ) Net prior service cost - - Amount recognized in AOCI, excluding tax effects 8,507 ( 7,009 ) The weighted average actuarial assumptions used to determine benefit obligations and net gratuity cost were: March 31, December 31, 2024 2023 (As restated) Discount rate 7.25 % 7.08 % Rate of increase in compensation levels 12.50 % 15.00 % Expected long-term rate of return on plan assets per annum - - The Company evaluates these assumptions annually based on its long-term plans of growth and industry standards. The discount rates are either based on current market yields on government securities or yields on government securities adjusted for a suitable risk premium, if available Expected benefit payments for the period ended March 31, 2024 March 31, 2024 425 2025 6,517 2026 8,129 2027 7,301 2028 6,695 2029-2033 48,229 Mortality Table IALM (2012-14) Ages Withdrawal Rate (%) Withdrawal Rate (%) Withdrawal Rate (%) Upto 30 years 30.00 % 30.00 % 23.50 % From 31 to 44 years 30.00 % 30.00 % 23.50 % Above 44 years 30.00 % 30.00 % 23.50 % 36 NOTE 18 – FAIR VALUE MEASUREMENT – FINANCIAL INSTRUMENTS Assets and liabilities recorded at fair value are measured using the fair value hierarchy, which prioritizes the inputs used in measuring fair value. The levels of the fair value hierarchy are: ● Level 1: observable inputs such as quoted prices in active markets. ● Level 2: inputs other than quoted prices in active markets that are either directly or indirectly observable; and ● Level 3: unobservable inputs for which little or no market data exists, therefore requiring the Company to develop its own assumptions. The company’s financial assets which are set out below in the table is measured at fair value by considering the level III inputs. The company does not have financial assets which are measured using Level I or Level II inputs. Carrying value and fair value of Level III Financial assets and liabilities: Carrying Value Fair value March 31, December 31, March 31, December 31, 2024 2023 2024 2023 Financial Assets Account receivables net (1) 2,486,947 2,365,013 2,486,947 2,365,013 Other non-current financial assets (2) 181,098 171,146 181,098 171,146 Total 2,668,045 2,536,159 2,668,045 2,536,159 Financial Liabilities Lease liabilities (3) 2,238,259 2,351,113 2,238,259 2,351,113 Other non-current financial liabilities (4) 48,358 33,933 48,358 33,933 Total 2,286,617 2,385,046 2,286,617 2,385,046 (1) Account receivable net of allowance for credit losses represent the long-term debtors of the company in relation to the sales made during the year. The Company has presented the receivable balances account after reducing the significant financing component included using the discount rate of 10 %. (2) Other non-current assets include security deposits and long-term fixed deposits with banks. Company has calculated the fair value of security deposit at present value of future receipt using discount rate of 10 % and fair value of long-term fixed deposit with banks are carried at cost which is approximate to the fair value. (3) The Company has long term lease liabilities in relation to office properties which is carried at cost using the discount rate (Refer Note 15 Leases). (4) Other non-current financial liabilities include provision for gratuity which is carried at a cost which is approximate to its fair value. (Refer Note 17 Employee benefit plans). The Company has assessed that the financial instruments that are not carried at fair value consist primarily of cash and cash equivalents, restricted cash, receivable from related party, prepaid and other current assets, note payable, Bank overdraft facility and account payable for which fair values approximate their carrying amounts due to the short-term maturities of these instruments. 37 NOTE 19 – STOCK COMPENSATION EXPENSES Stock options to Employees : Company grants share of the company’s common stock, par value $ 0.0001 . The price at which the Grantee shall be entitled to purchase the Shares upon the exercise of the Option (the “Option Price”) shall be US $ 5.00 per Share. The Shares shall vest as to twenty percent ( 20 %) of the shares covered thereunder as of the Grant Date, with the balance of the shares covered thereunder vesting in four equal annual installments on the first, second, third and fourth anniversaries of the Grant Date provided that the Grantee remains in the Continuous Employment of the Company or any of its subsidiaries or affiliates, as defined and provided for in the Plan. The Options, to the extent vested and not exercised, shall expire five ( 5 ) years from the Grant Date. Restricted Stock Award to Employees: Company grants restricted share of the company’s common stock, $ 0.0001 per value under the company’s 2016 stock incentive plan. The grant of restricted share is made in consideration of services to be rendered by the Grantee to the company. The Restricted Stock Award shall vest as to twenty percent ( 20 %) of the Restricted Shares covered thereunder as of the Grant Date, with the balance of the Restricted Shares covered thereunder vesting in four equal annual installments on the first, second, third and fourth anniversaries of the Grant Date, subject to the Grantee’s continued employment by the Company, as provided for in the Plan. Unvested portions of the Restricted Stock Award may not be transferred at any time, except to the extent provided for in the Plan. Until the Restricted Stock Award granted under this Agreement vests in accordance with the terms hereof, the Grantee shall have no rights as a shareholder (including, without limitation, voting and dividend rights) with respect to any of the Restricted Shares covered by the Restricted Stock Award. Stock Options issued to Doctors/Proctors as Advisors : Company issue common stock (“Advisory Share”) to retain the Advisor to perform the Services and in exchange for the compensation, which is issued in a phased manner as determined by the company. The “Services” includes (a) provide proctoring and medical advisory services, (b) advise the Company related to development of surgical robotics procedures and improvements in design and technology (c) participate in case observation and live surgery performance (d) disseminate information about Company’s products as speaker in various scientific meets/surgical robotic conferences globally. Stock options: Stock options activity for the year period ended March 31, 2024, was as follows: Number of shares options Weighted average grant date fair value Unvested balance as of December 31, 2023 3,303,601 $ 3.41 Granted 3,350,221 $ 1.39 Vested 3,561,040 $ 1.51 Forfeited - - Unvested balance as of March 31, 2024 3,092,782 $ 3.41 The aggregate fair value of the stock options vested was $ 5,375,700 and $ 3,152,066 during the three months ended March 31, 2024 and year ended December 31, 2023 respectively. The options vested during the year were not exercised at the end of the year March 31, 2024. Restricted Stock Awards (RSA) Restricted Stock Awards activity for the period ended March 31, 2024, was as follows: Number of shares RSAs Weighted average grant date fair value per share Unvested balance as of December 31, 2023 2,807,289 $ 7.76 Granted - - Vested 179,147 $ 7.76 Forfeited - - Unvested balance as of March 31, 2024 2,628,142 $ 7.76 During the three months ended March 31, 2024, 179,147 RSA are vested. The aggregate vesting date fair value of RSAs vested was $ 1,390,179 and $ 6,095,401 during the three months ended March 31, 2024, and year ended December 31, 2023 respectively. There were no RSAs issued during the three months ended March 31, 2024. 38 Advisory shares: Common stock issued to consultants as advisory shares during the period as follows: Grant dates Fair value on grant date Unvested options in the beginning Option vested Unvested option at period end 01-Jun-23 8.15 5,000 3,000 2,000 31-Oct-23 8.99 52,963 3,454 49,509 31-Oct-23 8.99 7,130 465 6,665 31-Oct 23 8.99 5,673 370 5,303 31-Oct 23 8.99 22,368 1,459 20,909 01-Mar-24 6.75 - 15,000 - 93,134 23,748 84,386 The aggregate vesting date fair value of Advisory shares issued was $ 342,871 and $ 5,633,147 during the three months ended March 31, 2024 and year ended December 31, 2023 respectively. Stock compensation expenses During the period ended March 31, 2024, the Company has recorded share compensation expense of $ 7,108,750 in relation to stock options, RSAs and Advisory shares as follows: For the period ended For the period ended March 31, 2024 March 31, 2023 (As restated) (As restated) Stock options 5,375,700 - Restricted stock award (RSA) 1,390,179 - Advisory shares 342,871 - Total stock compensation expenses 7,108,750 - Stock option model & assumptions The Black-Scholes-Merton option pricing model is used to estimate the fair value of stock options and RSU granted under the Company's share based compensation plans and the rights to acquire stock granted under the stock options plans. The weighted-average estimated fair values of stock options and the rights to acquire stock as well as the weighted-average assumptions used in calculating the fair values of stock options and the rights to acquire stock that were granted during the years March 31, 2024 is as follows: Period ended March 31, 2024 (As restated) Stock Options Stock Options Restricted stock awards Grant date February 13, 2024 November 27, 2023 November 27, 2023 Fair value on grant date $ 1.39 $ 3.41 $ 7.76 Risk free interest rate 4.40 % 4.40 % 4.40 % Expected volatility 24.96 % 18.50 % 18.50 % Exercise prices $ 5.00 $ 5.00 $ 0.0001 Share price on the grant date $ 5.50 $ 7.76 $ 7.76 Expected term of vesting 2.5 years 4 years 4 years As share-based compensation expense recognized in the Condensed Consolidated Statements of operations and comprehensive loss during the three months ended March 31, 2024, and 2023, is based on awards ultimately expected to vest, it has been reduced for estimated forfeitures, if any. 39 As of March 31, 2024, there was $ 10,546,385 , $ 20,394,387 of total unrecognized compensation expense related to unvested stock options and restricted stock units to acquire common stock under the 2016 Inventive Stock plan respectively. The unrecognized compensation expense is expected to be recognized over a weighted-average period of 3.66 years for unvested stock options and restricted stock units for rights granted to acquire common stock under 2016 Incentive Stock Plan. NOTE 20 – COMMITMENTS The Company, through its SSI-India subsidiary, occupies office, manufacturing, and assembly space in Gurugram, Haryana (India) under a lease agreement entered into in March 2021, with monthly payments of $ 24,410 plus applicable taxes. This lease expires in March 2030 . Effective June 01, 2023, SSI-India subsidiary signed another lease agreement for occupying an additional space of 21,600 sq ft on the ground floor of the same building where its current facility is located, to further expand its manufacturing and assembly capacity. This lease provides for a monthly payment of $ 15,564 plus taxes and expires on May 31, 2032 , subject to further renewal on mutually acceptable terms. In August 2023, SSI India had leased a house pursuant to the terms of employment agreement to provide residential accommodation to Dr Sudhir Srivastava. This lease provides for a monthly payment of $ 18,014 plus taxes. NOTE 21 – SUBSEQUENT EVENTS 1. In April 2024, the Company raised $ 2,000,000 from Sushruta Pvt Ltd. by issuance of two 7 % One-Year Promissory note of $ 1,000,000 each, to meet certain working capital needs. 2. In July 2024, the Company raised $ 500,000 from Sushruta Pvt Ltd. by issuance of another One-Year 7 % One-Year Promissory notes to meet certain working capital needs. 3. In August 2024, the Company issued 125,000 shares to certain doctors/proctors for providing their proctoring/mentoring services. 4. In October 2024, the Company borrowed $ 250,000 from Sushruta Pvt Ltd. to meet certain working capital needs evidenced by an additional One-Year 7 % Promissory Note in such principal amount. In October 2024, our SSI-India subsidiary’s working capital facilities from HDFC bank were also increased by an additional $ 1,093,881 . 5. In December 2024, the Company borrowed $ 2,000,000 from Sushruta Pvt. Ltd. to meet certain working capital needs evidenced by an additional 7 % One-Year Convertible Promissory Note. 6. In January 2025, the Company borrowed $ 20,000,000 from Sushruta Pvt. Ltd. to meet certain working capital needs evidenced by an additional 7 % One-Year Convertible Promissory Note. 40