SS Innovations International, Inc. 10-K

Item 9A. Controls and Procedures . (a) Disclosure Controls and Procedures Our Chief Executive Officer and Chief Financial Officer evaluated the effectiveness of the design and operation of our disclosure controls and procedures and internal control over financial reporting, as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “ Exchange Act ”), as of December 31, 2024. To ensure that information required to be disclosed by us in the reports filed or submitted by us under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the rules and forms of the SEC, including to ensure that information required to be disclosed by us in the reports filed or submitted by us under the Exchange Act is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure. Based on the evaluation performed as of December 31, 2024, as a result of the material weaknesses in internal control over financial reporting that are described below in Management’s Report on Internal Control Over Financial Reporting, our Chief Executive Officer and Chief Financial Officer determined that our disclosure controls and procedures were not effective as of such date. Internal Controls over Financial Reporting Management’s Report on Internal Controls Over Financial Reporting Management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rules 13a-15(f) and 15d-15(f). A company’s internal control over financial reporting is a process designed by, or under the supervision of, its Chief Executive Officer and Chief Financial Officer, and effected by such company’s board of directors, management and other personnel to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles and includes those policies and procedures that: ● pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company; ● provide reasonable assurance that transactions are recorded as necessary to permit preparation of consolidated financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and ● provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of a company’s annual or interim consolidated financial statements will not be prevented or detected on a timely basis. 30 Management, with the participation of our Chief Executive Officer and Chief Financial Officer, has conducted an evaluation of the effectiveness of our internal control over financial reporting as of December 31, 2024, based on the framework set forth in Internal Control-Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Based on this assessment, management has concluded that the Company did not maintain effective internal control over financial reporting as of December 31, 2024 due to the material weaknesses described below. ● We failed to design adequate controls and procedures to provide reasonable assurance that U.S. GAAP was being properly applied to the matters resulting into the restatement of our quarterly financial statements, including recognition of revenue in case of deferred payment sales, recognition of right of use of certain assets and lease liabilities and functional and other classifications, also leading to certain accounting errors as described in details in the restatement notes as included in the respective amended quarterly financial statements. ● We do not have written documentation of our internal control policies and procedures. Written documentation of key internal controls over financial reporting is a requirement of Section 404 of the Sarbanes-Oxley Act. ● We do not have sufficient segregation of duties within accounting functions, which is a basic internal control. Due to our size and nature, segregation of all conflicting duties may not always be possible and may not be economically feasible. However, to the extent possible, the initiation of transactions, the custody of assets and the recording of transactions should be performed by separate individuals. Remediation Plan The Company has been addressing and remediating these material weaknesses with the support and assistance of the accounting and financial staff employed by our Indian operating subsidiary. We have enhanced the review process for significant transactions to ensure proper accounting treatment under applicable guidelines and have engaged the external experts to provide guidance to the Company staff in the areas of financial reporting, internal controls, and enterprise risk management and assist it in the application of accounting principles to complex transactions. This external expert group is also helping the Company in strengthening its existing internal controls, policies and Standard Operating Procedures (“ SOPs ”) in all the major functional areas. In addition, we have also engaged services of external experts in the field of designing, development and implementation of a comprehensive cloud-based ERP system. The ERP implementation process involves a detailed process study of each of the business functions and engagement with their respective process owners, identifying their linkages with other business functions and designing report formats, data sourcing and customizing the ERP system and training of the respective teams to meet the business data flow and reporting requirements of each business function. Post completion of roll out of all the functional modules under this new cloud-based ERP system which is designed to integrate all business functions within the accounting and financial department would help us in further addressing the abovementioned weaknesses. Our Chief Executive Officer and Chief Financial Officer do not expect that our disclosure controls or internal controls will prevent all errors and all fraud. Although our disclosure controls and procedures were designed to provide reasonable assurance of achieving their objectives, a control system, no matter how well conceived and operated, can provide only reasonable, not absolute assurance that the objectives of the system are met. Further, the design of any control system is subject to resource constraints and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected. These inherent limitations include the fact that judgments in decision-making can be faulty, and that breakdowns can occur because of simple errors or mistakes. There can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. (b) Changes in Internal Controls Over Financial Reporting Except for the remediation efforts described above, there were no changes in our internal controls over financial reporting that occurred during the last fiscal quarter covered by the Form 10-K that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting. Item 9B. Other Information. None . Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections. None. 31 PART III Item 10. Directors, Executive Officers and Corporate Governance. Our directors and executive officers and their respective ages and titles are as follows: Name Age Position(s) and Office(s) Held Sudhir Srivastava, MD 77 Chairman, Chief Executive Officer and Director Anup Sethi 60 Chief Financial Officer Vishwajyoti P. Srivastava, M.D 48 President, Chief Operating Officer – South Asia and Director Barry F. Cohen 85 Chief Operating Officer – Americas and Director Dr. Mylswamy Annadurai 66 Director Dr. S.P. Somashekhar 52 Director Dr. Frederic H Moll 73 Director Tim Adams 56 Director Set forth below is a brief description of the background and business experience of our directors and executive officers. Sudhir Srivastava, M.D., joined the Company on April 14, 2023, as its Chairman, Chief Executive Officer and a director upon completion of the CardioVentures Merger. Dr. Srivastava founded Sudhir Srivastava Innovations Pvt. Ltd. (“ SSI-India ”), our Indian operating subsidiary in 2019 and has served as its Chairman, Managing Director and Chief Executive Officer since that time. SSI-India was founded with the objective of launching the development of an advanced, affordable, and accessible surgical robotic system that would benefit greater numbers of patients around the world. Dr. Srivastava completed his medical degree in India in 1971 and moved to the United States in 1972, where he underwent a residency in general surgery in St. Louis and further completed his training, including in cardiothoracic surgery, at the University of British Columbia Hospitals in Vancouver, Canada. He is double board certified by the American Board of Surgery and Thoracic Surgery. Dr. Srivastava, after moving to Texas to begin his practice in 1981, became heavily involved in advancing minimally invasive cardiac surgical approaches and robotic cardiac surgery procedures during his time in Texas. While in Texas, in 2002 Dr. Srivastava was the founding chairman of Alliance Hospital, which became one of the busiest robotic cardiac centers globally. In 2007, Dr. Srivastava joined the University of Chicago faculty and served as the Director of Robotic Cardiac Surgery to launch their program. In 2009, Dr. Srivastava moved to Atlanta, Georgia, and founded the International College of Robotic Surgery and launched the Robotic Revascularization Program at St. Joseph’s Hospital. While in the United States, he performed over 1,400 robotic cardiothoracic procedures and trained over 350 surgical teams from around the world. His passion and experience took him to various countries around the world, where he helped launch robotic cardiac surgery programs. Dr. Srivastava returned to India in 2011 to establish robotic surgery programs throughout the country during a time when robotic surgery was still nascent in India. He founded the International Centre for Robotic Surgery in Delhi, India, and trained surgeons in different specialties, introducing them to high-level robotic cardiac surgery procedures. Recognizing the high cost and limited access to robotic surgery in India, in 2012, Dr. Srivastava undertook the mission of developing an affordable system that would be technologically advanced, so that greater numbers of patients could benefit from robotic cardiac surgery in India and worldwide. His efforts led to the development of the SSi Mantra Surgical Robotic System by the SSi Companies Group, which was commercially introduced in August 2022. Dr. Srivastava is globally recognized as a pioneer and leader in robotic cardiac surgery and has received numerous awards worldwide for advancing the field. 32 Anup Kumar Sethi joined the Company on April 14, 2023, as its Chief Financial Officer, upon completion of the Cardio Ventures Merger. Mr. Sethi has served as Chief Financial Officer of SSI-India since January 2023 and has been associated with SSI-India since 2018 on a consulting basis as a financial advisor. For over ten years prior thereto, he held senior management positions in well-established healthcare companies in India, including Fortis and International Oncology. With close to thirty years of overall experience and having worked in India, China, South Africa, and Nigeria, in organizations of various sizes belonging to a diverse range of industries like automotive tires manufacturing, textiles, digital media and healthcare delivery, Mr. Sethi is very well adapted to building and working with multi-faceted, multi-cultural teams. Mr. Sethi has a FCMA qualification (Fellow Member of Institute of Cost Accountants of India), an Associate membership of CPA, Australia, and a Certified Financial Planner (CFP) certification from the Financial Planning Standards Board, with hands-on experience in leading teams in the functional areas of corporate finance, strategy, accounting, compliance and business development. Vishwajyoti P. Srivastava , M.D. , joined the Company on April 14, 2023, as its President, Chief Operating Officer – South Asia and a director upon completion of the CardioVentures Merger. Dr. Srivastava joined SSI-India as President and Chief Operating Officer for South Asia in November 2020. Prior to that, he served as President of OMNI 3DHD from January 2018 to November 2020, where he led the development of a secondary 3D Visualization System that was designed with the objective of giving 3D vision to the entire robotic surgical team. In 2015, Dr. Srivastava served as the COO of a Miami based health and wellness startup, Reshape Inc., that developed an online platform for healthy living initiatives. Dr. Srivastava was also instrumental in the creation of the International College of Robotic Surgery in Atlanta, Georgia, in 2009 as well as the International Centre for Robotic Surgery in New Delhi, India, in 2011. Dr. Srivastava has been deeply involved in the field of surgical robotics since 2008, covering the wide spectrum of clinical applications, teaching and training, tele-mentoring platforms, web-based surgeon didactic training modules, digital media and marketing. Dr. Srivastava graduated from Saint James School of Medicine in Anguilla, receiving his M.D. degree in August 2020. Dr. Srivastava also holds a B.A. in International Studies with a focus on South Asia from the University of Washington in Seattle that he received in 1999. Dr. Srivastava completed all his premedical requirements at Columbia University’s Post Baccalaureate Program in New York City, graduating in 2003. He is fluent in English, Hindi and French. Barry F. Cohen co-founded the Company (then known as Avra Medical Robotics, Inc.) and served as its Chief Executive Officer and a director from February 4, 2015, until completion of CardioVentures Merger on April 14, 2023, when he assumed the position of Chief Operating Officer-Americas and continued as a director. Between 2006 and 2008, Mr. Cohen was a private investor and founded AVRA Surgical, Inc., a medical technology company. Prior to founding the Company, Mr. Cohen was a director of Dualis Med-Tech from 2012 to 2014 and was a director of AvraMiro GmbH from 2009 to 2014 and Avra Surgical Robotics, Inc. since 2011, which is currently inactive. From approximately 1979 to 1983 he served as director of Synalloy Corp., a manufacturer of pipe, piping systems and specialty chemicals after which he was appointed to serve as President from 1984 to 1985. Mr. Cohen also served as Chairman of the Executive Board of Wolverine Technologies, Inc., a NYSE listed company from 1979 to 1983 and President of Barry F. Cohen & Co., an NASD member from 1983 to 1999. Mr. Cohen has over fifty years’ experience in managing private and public industrial companies, and forty-seven years’ experience as a securities executive. Dr. Mylswamy Annadurai joined the Company as a director on July 30, 2023. Dr. Annadurai is a distinguished space scientist of international repute, who has been involved in the Indian space program for over forty years, approximately thirty-six of which (1982-2018) were spent in various positions with the Indian Space Research Organization (“ISRO”), most recently as Director of the ISRO Satellite Center from April 2015 to July 2018. During that period, he was responsible for overseeing the development, manufacture and launch of twenty-nine satellites. Prior thereto, he also served as Program Director of Indian Remote Sensing and Small Satellite Program at ISRO from 2011-2015, where among other matters, he was responsible for overseeing ISRO’s Mars Orbiter Mission and as Project Director of India’s firs lunar mission, Chandarayaan-1, from 2004-2010. From August 2018 until March 2022, Dr. Annadurai served as Chairman of the National Design and Research Forum and from October 2018 to March 2023, he served as Vice President of the Tamil Nadu State Council for Science and Technology. Since May 2019. Dr. Annadurai has been serving as Chairman of the Aerospace Committee of the Southern India Chamber of Commerce and Industries in Chennai and since March 2021, as a director of Moon Land Technologies Pvt. Ltd. Since February 2023, he is also serving as a Trustee Member of the India Trustee Board of the America-India Foundation. Dr. Annadurai has received numerous awards from the Indian government, ISRO, international space organizations, academic institutions and professional bodies and societies. Dr. Annadurai holds B.E. (ECE), M.E. (Applied Electronics) and Ph.D. degrees from Anna University. 33 Dr. S.P. Somashekhar joined the Company as a director on July 30, 2023. Dr. Somashekhar is a highly respected surgical oncologist and one of the first physicians to employ robotic surgery in India. Since January 2022, he has been affiliated with the Aster Group of Hospitals in India, where he serves as Global Director of the Aster International Institute of Oncology and Head of Department and Lead Consultant in Surgical and Gynecological Oncology and Robotic Surgery. He also serves as Chairman of the Medical Advisory Board for Aster DM Healthcare. For over twenty years prior to joining Aster, he was affiliated with Manipal Hospitals in Bengaluru, most recently as Head of Department of Surgical Oncology and Chairman of the Surgical Oncology Advisory Board. Dr. Somashekhar has served in a number of teaching positions, significant experience in conducting clinical studies, authored numerous medical papers and articles and received multiple awards in the medical field. He holds an M.B.B.S. degree from Mysuru University, an M.S. in General Surgery from the Sheth K.M. School of Postgraduate & Research in Ahmedabad, and an MCh in Oncosurgery from the Gujarat Cancer & Research Institute in Ahmedabad. He is also a Fellow of the Royal College of Surgeons (Edinburgh). Dr. Frederic H Moll joined the Company as a Director on August 20, 2024. Dr. Moll is a renowned physician and visionary entrepreneur whose pioneering work in medical robotics has shaped the field of minimally invasive surgery. He did his B.A. from the University of California at Berkeley, an M.D. from the University of Washington, and an M.S. in Business Management from Stanford University. He is a pioneer in Medical Robotics, particularly in minimally invasive surgery. Dr. Moll co-founded Intuitive Surgical in 1995, where he co-developed the da Vinci robotic-assisted surgery system, a global standard for minimally invasive surgery. He also founded Hansen Medical and Auris Health, creating advanced robotic technologies for vascular procedures and lung cancer diagnosis, respectively. His innovations have shaped the field of surgery, and he has served on the Boards of influential Healthcare Tech companies like Mako Surgical and RefleXion. Tim Adams joined the Company as a Director on August 20, 2024. Mr. Adams served as President and CEO of Ascension Saint Thomas Health and Ministry Market Executive for Ascension Tennessee from January 2018 until January 2023, leading a network of nine inpatient facilities across Middle Tennessee. Prior to this, he was the Texas Region Chief Executive Officer at Tenet Healthcare, overseeing 26 hospitals and leading operational efforts for one of the company's largest regions. Earlier in his career, Mr., Adams served as CEO of Cedar Park Regional Medical Center, a partner with Ascension's Seton Healthcare Family, and held executive roles at Community Health Systems and IASIS Healthcare, overseeing multi-hospital operations in Texas and Florida. Beyond his professional commitments, he is also an active member of the healthcare community, serving on numerous boards, including the Tennessee Hospital Association, Nashville Health Care Council, and the United Way of Greater Nashville. He holds a Bachelor of Business Administration from Baylor University and an MBA from The University of Texas at El Paso. In January 2023, Tim transitioned to the role of Regional Operating Officer and Senior Vice President for Ascension, overseeing Ascension ministries in 10 states, including Tennessee. Terms of Office Our directors are appointed for a one-year term to hold office until the next annual meeting of our stockholders and until a successor is appointed and qualified, or until their removal, resignation, or death. Executive officers serve at the pleasure of the board of directors. Family Relationships ● Dr. Sudhir Srivastava and Dr. Vishwajyoti P. Srivastava are father and son. There are no other familial relationships among our officers and directors. 34 Board Committees and Independence In an effort to improve our corporate governance, the company has constituted three standing committees: an audit committee, a compensation committee and a nominating and corporate governance committee. Our board of directors has determined that Dr. Annadurai, Dr. Somashekhar, Dr. Moll and Mr. Adams are “ Independent ” within the meaning of the applicable rules and regulations of the SEC and the listing standards of the Nasdaq Stock Market. Each Committee consists of at least two Independent Directors. In addition, the board has determined that Mr. Adams is an “ audit committee financial expert ” as the term is defined by the applicable rules and regulations of the SEC and the Nasdaq Stock Market listing standards, based on his business and management experience Members of the aforesaid Committee (s) are as follows: Name of the Committee Members of the Committee Audit Committee Dr. Frederic H Moll Mr. Tim Adams Dr. SP Somasekhar Compensation Committee Dr. Frederic H Moll Mr. Tim Adams Mr. Barry F. Cohen Nominating and Corporate Governance Committee Dr. Frederic H Moll Mr. Tim Adams Audit Committee The audit committee assists our board of directors in its oversight of the Company’s accounting and financial reporting processes and the audits of the Company’s financial statements, including (a) the quality and integrity of the Company’s financial statements; (b) the Company’s compliance with legal and regulatory requirements; (c) the independent auditors’ qualifications and independence; and (d) the performance of our Company’s internal audit functions and independent auditors, as well as other matters which may come before it as directed by the board of directors. Further, the audit committee, to the extent it deems necessary or appropriate, among its several other responsibilities, shall: ● be responsible for the appointment, compensation, retention, termination and oversight of the work of any independent auditor engaged for the purpose of preparing or issuing an audit report or performing other audit, review or attest services for the Company; ● discuss the annual audited financial statements and the quarterly unaudited financial statements with management and the independent auditors prior to their filing with the SEC in our Annual Report on Form 10-K and Quarterly Reports on Form 10-Q; ● review with the Company’s financial management on a periodic basis (a) issue regarding accounting principles and financial statement presentations, including any significant changes in the Company’s selection or application of accounting principles; and (b) the effect of any regulatory and accounting initiatives, as well as off-balance sheet structures, on the financial statements of the Company; ● monitor the Company’s policies for compliance with federal, state, local and foreign laws and regulations and the Company’s policies on corporate conduct; ● maintain open, continuing, and direct communication between the board of directors, the audit committee and our independent auditors; and ● monitor our compliance with legal and regulatory requirements and shall have the authority to initiate any special investigations of conflicts of interest, and compliance with federal, state and local laws and regulations, including the Foreign Corrupt Practices Act, as may be warranted. 35 Compensation Committee The compensation committee aids our board of directors in meeting its responsibilities relating to the compensation of the Company’s executive officers and to administer all incentive compensation plans and equity-based plans of the Company, including the plans under which Company securities may be acquired by directors, executive officers, employees and consultants. Further, the compensation committee, to the extent it deems necessary or appropriate, among its several other responsibilities, shall: ● review periodically the Company’s philosophy regarding executive compensation to (a) ensure the attraction and retention of corporate officers, (b) ensure the motivation of corporate officers to achieve the Company’s business objectives, and (c) align the interests of key management with the long-term interests of our shareholders; ● review and approve corporate goals and objectives relating to Chief Executive Officer compensation and other executive officers of SSi and its subsidiary companies; ● make recommendations to the board of directors regarding compensation for non-employee directors, and review periodically non-employee director compensation in relation to other comparable companies and in light of such factors as the compensation committee may deem appropriate; and ● review periodically reports from management regarding funding the Company’s pension, retirement, long-term disability and other management welfare and benefit plans. Nominating and Corporate Governance Committee The nominating and corporate governance committee shall recommend to the board of directors individuals qualified to serve as directors and on committees of the board of directors to advise the board of directors with respect to the board of directors composition, procedures and committees to develop and recommend to the board of directors a set of corporate governance principles applicable to the Company; and to oversee the evaluation of our board of directors and management. Further, the nominating and corporate governance committee, to the extent it deems necessary or appropriate, among its several other responsibilities shall: ● recommend to the board of directors and for approval by a majority of independent directors for election by shareholders or appointment by the board of directors as the case may be, pursuant to our bylaws and consistent with the board of directors’ criteria for selecting new directors; ● review the suitability for continued service as a director of each member of the board of directors when his or her term expires or when he or she has a significant change in status; ● review annually the composition of the board of directors and to review periodically the size of the board of directors; ● make recommendations on the frequency and structure of board of directors’ meetings or any other aspect of procedures of the board of directors; ● make recommendations regarding the chairmanship and composition of standing committees and monitor their functions; ● review annual committee assignments and chairmanships; ● recommend the establishment of special committees as may be necessary or desirable from time to time; and ● develop and review periodically corporate governance procedures and consider any other corporate governance issue. Compliance with Section 16(a) of the Securities Exchange Act of 1934 Section 16(a) of the Exchange Act requires our executive officers and directors and persons who own more than 10% of a registered class of our equity securities to file with the SEC initial statements of beneficial ownership, reports of changes in ownership and annual reports concerning their ownership of our common stock and other equity securities, on Forms 3, 4 and 5 respectively. Executive officers, directors and greater than 10% stockholders are required by the SEC regulations to furnish us with copies of all Section 16(a) reports that they file. 36 Based solely on our review of the copies of such forms received by us, or written representations from certain reporting persons, we believe that all filing requirements applicable to our officers, directors and greater than 10% beneficial owners were complied with under Section 16 of the Exchange Act during the year ended December 31, 2024, and up through the date of this Annual Report, except for the following late filings resulting from administrative oversights: ● A Form 4 reporting the acquisition of 50,000 shares of restricted common by stock by Dr. S.P. Somashekhar on August 31, 2024, pursuant to a grant under the Company’s Incentive Stock Plan, was filed on February 28, 2025. ● A Form 4 reporting disposition by gift of 17,500 shares of common stock by Dr. Sudhir Srivastava on September 6, 2024, was filed on September 12, 2024. ● A Form 4 reporting the acquisition by Dr. Sudhir Srivastava of a $2,000,000 principal amount 7% One-Year Convertible Promissory Note from the Company on December 12, 2024, was filed on January 23, 2025. ● A Form 4 reporting the acquisition by Dr. Sudhir Srivastava of a $5,000,000 principal amount 7% One-Year Convertible Promissory Note from the Company on January3, 2025, was filed on January 23, 2025. ● A Form 4 reporting the acquisition by Dr. Sudhir Srivastava of a $5,000,000 principal amount 7% One-Year Convertible Promissory Note from the Company on January 31, 2025, was filed on February 21, 2025. ● A Form 4 reporting the disposition by gift of 221,788 shares of common stock by Dr. Sudhir Srivastava on February 5, 2025, was filed on February 21, 2025. Rule 10b5-1 Trading Arrangements During the year ended December 31, 2024, no director or officer (as defined in Rule 16a-1(f) under the Exchange Act) of the Company adopted or terminated any Rule 10b5-1 trading arrangements or non-Rule 10b5-1 trading arrangements (in each case, as defined in Item 408(a) of Regulation S-K). Code of Ethics We have adopted a Code of Ethics that applies to employees, including our principal executive officer, principal financial officer and/or people performing similar functions. Board of Directors Role in Risk Oversight Members of the board of directors have periodic meetings with management and the Company’s independent auditors to perform risk oversight with respect to the Company’s internal control processes. The Company believes that the board’s role in risk oversight does not materially affect the leadership structure of the Company. Insider Trading Policies and Procedures We have adopted insider trading policies and procedures governing the purchase, sale, and/or other dispositions of our securities by our directors, officers and employees, and the Company itself, that are reasonably designed to promote compliance with insider trading laws, rules and regulations, and any listing standards applicable to the Company. Involvement in Certain Legal Proceedings To the best of our knowledge, during the past ten years, none of our directors or executive officers were involved in any of the following: (1) any bankruptcy petition filed by or against any business of which such person was a general partner or executive officer either at the time of the bankruptcy or within two years prior to that time; (2) any conviction in a criminal proceeding or being subject to a pending criminal proceeding (excluding traffic violations and other minor offenses); (3) being subject to any order, judgment, or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining, barring, suspending or otherwise limiting his involvement in any type of business, securities or banking activities; and (4) being found by a court of competent jurisdiction (in a civil action), the Securities and Exchange Commission or the Commodities Futures Trading Commission to have violated a federal or state securities or commodities law, and the judgment has not been reversed, suspended or vacated. 37 Compensation Committee Interlocks and Insider Participation None of our officers currently serves, or in the past year has served, as a member of the compensation committee of any entity that has one or more officers serving on our Board of Directors. Item 11. Executive Compensation. Summary Compensation Table The table below summarizes all compensation awarded to earned by or paid to our Chief Executive Officer and our other executive officers for the years ended December 31, 2024. Name and Principal Position Year Salary ($) Bonus ($) Stock Awards (#) Option Awards (#) Option Awards ($) Non-Equity Incentive Plan Compensation ($) Nonqualified Deferred Compensation Earnings ($) All Other Compensation ($) Total ($) Sudhir Srivastava, M.D. Chairman and 2024 600,000 0 0 5,886,997 (2) 13,307,213 (2) 0 0 289,567 14,196,780 Chief Executive Officer (1) Anup Kumar Sethi 2024 177,385 0 845,592 (4) 0 0 0 0 866 178,251 Chief Financial Officer (3) Vishwajyoti P. Srivastava, M.D. 2024 200,000 0 0 845,592 (2) 2,883,468 (2) 0 0 12,164 3,095,632 President and Chief Operating Officer – South Asia (5) Barry F. Cohen 2024 180,000 0 0 845,592 (2) 2,883,468 (2) 0 0 0 3,063,468 Chief Operating (7) Officer-Americas (6) (1) Sudhir Srivastava became our Chairman and Chief Executive Officer on April 14, 2023, upon completion of the CardioVentures Merger. (2) Represents an option to purchase common stock granted under our Incentive Plan. The option vests in five equal annual installments commencing upon the date of grant and expires five years from the date of grant. (3) Mr. Sethi became our Chief Financial Officer on April 14, 2023, upon completion of the CardioVentures Merger. (4) Represents a grant of restricted shares of our common stock awarded under our Incentive Plan. The grant vests in five equal annual installments commencing upon the date of grant. (5) Dr. Vishwajyoti Srivastava became our President and Chief Operating Officer – South Asia on April 14, 2023, upon completion of the CardioVentures Merger. (6) Barry F. Cohen served as our Chairman and Chief Executive Officer from founding of the Company on February 4, 2015, until completion of the CardioVentures Merger on April 14, 2023, when he stepped down from those positions and assumed the position of Chief Operating Officer – Americas. (7) Represents a grant of restricted shares of our common stock awarded under our Incentive Plan, which vested in full on the date of grant. 38 Employment Agreements The Company, through Otto Pvt. Ltd., an indirect, wholly owned subsidiary was party to employment agreements with each of Dr. Sudhir Srivastava, Anup Kumar Sethi and Dr. Vishwajyoti P. Srivastava. Dr. Sudhir Srivastava’s employment agreement with a base annual salary of $600,000 was with Otto Pvt Ltd. for a five-year period expiring in September 2026. Effective August 1, 2024, his employment agreement was moved to the Company on similar compensation terms now expiring in July 2027. Mr. Sethi’s employment agreement with an annual base salary of $175,000 was also with Otto Pvt Ltd. for a five-year (5-year) period expiring in January 2028. Effective August 1, 2024, his engagement contract was moved to the subsidiary company in India on the same terms of compensation (now payable in local currency) having a term of five years. Dr. Vishwajyoti P. Srivastava’s employment agreement with an annual base salary of $ 200,000 was also with Otto Pvt Ltd. and effective August 1, 2024, it was restructured as a consulting agreement with the Company with the same annual base compensation of $200,000 now expiring in July 2026. Each of the employment/consulting/engagement agreements contain customary confidentiality, assignment of proprietary rights, non-competition and non-solicitation provisions. The Company is party to an employment agreement with Barry F. Cohen for a three-year (3-year) period expiring in April 2026, which provides for an annual base salary of $180,000. The employment agreement also provides for reimbursement of other reasonable business expenses incurred by Mr. Cohen in the performance of his duties and contains customary confidentiality, assignment of proprietary rights, non-competition and non-solicitation provisions. Outstanding Equity Awards at Fiscal Year-End Table The table below summarizes all unexercised options, stock that has not vested, and equity incentive plan awards for each of our executive officers outstanding as of December 31, 2024. Number of Securities Underlying Unexercised Options Exercisable Number of Securities Underlying Unexercised Options Unexercisable Option Exercise Price Option Expiration Date Number of shares that have not vested Market value of shares of stock that have not vested** Sudhir Srivastava, M.D. 4,364,931 1,522,066 $ 5.00 Nov 27, 2028 Anup Kumar Sethi 507,355 3,937,076 Vishwajyoti P. Srivastava 338,237 507,355 $ 5.00 Nov 27, 2028 Barry F. Cohen 338,237 507,355 $ 5.00 Nov 27, 2028 * The volume weighted average exercise price per share for all options awarded is $5.00. ** Based on market price of $7.76 per share on the grant date The above are options to purchase common stock granted under our Incentive Plan. The options vest in five equal annual instalments commencing upon the date of grant and expire five years from the date of grant. 39 Compensation of Directors Table The table below summarizes all compensation paid to our directors for the year ended December 31, 2024, our last completed fiscal year. DIRECTOR COMPENSATION Name Fees Earned or paid in Cash ($) Stock Awards ($) Option Awards (#) Option Awards (2) ($) Non-Equity Incentive Plan Compensation ($) Non-Qualified Deferred Compensation Earnings ($) All Other Compensation ($) Total ($) Sudhir Srivastava, M.D. 600,000 5,886,997 13,307,213 0 0 289,567 14,196,780 Vishwajyoti P. Srivastava, M.D. 200,000 845,592 2,883,468 0 0 12,164 3,095,632 Barry F. Cohen 180,000 845,592 2,883,468 0 0 0 3,063,468 Dr. Mylswamy Annadurai 0 0 0 0 0 0 Dr. S.P. Somashekhar (1) 0 16,000 0 0 0 0 0 16,000 Tim Adams 0 0 0 0 0 0 0 Frederic H Moll 0 0 0 0 0 0 0 (1) Represents the value of a grant of 50,000 restricted shares of our common stock awarded under our Incentive Plan. The grant has fully vested as of December 31, 2024. (2) Represents the value of options to purchase common stock granted under our Incentive Plan. The option vests in five equal annual instalments commencing upon the date of grant and expires five years from the date of grant. Narrative Disclosure to the Director Compensation Table The Company has not established a formal compensation arrangement for its non-employee directors but anticipates that they will initially be compensated with periodic grant of options under the 2016 Incentive Stock Plan, in the discretion of the board of directors. Non-employee directors are also reimbursed for travel and lodging expenses in connection with their attendance at in-person meetings of the board. When the Company is sufficiently capitalized, the Company may institute payment of cash directors’ fees to its non-employee directors in amounts to be determined at that time. 2016 Incentive Stock Plan Our 2016 Incentive Stock Plan (the “Incentive Stock Plan ”) provides for equity incentives to be granted to our employees, executive officers or directors or to key advisers or consultants. Equity incentives may be in the form of stock options with an exercise price not less than the fair market value of the underlying shares as determined pursuant to the 2016 Plan, restricted stock awards, other stock-based awards, or any combination of the foregoing. In the absence of a compensation committee, the 2016 Plan was administered by the board of directors. However, with the recent constitution of compensation committee, the Plan will henceforth be administered by the compensation committee, 3,000,000 shares of our common stock were originally reserved for issuance pursuant to the exercise of awards under the 2016 Plan. In August 2019, our board of directors and our majority shareholders approved an increase in the number of shares reserved under the 2016 Plan to 10,000,000 shares of our common stock. Our board of directors and majority shareholders in July 2022, approved a subsequent increase in the number of shares of our common stock reserved under the 2016 Plan to 20,000,000 shares of common stock. Our board of directors and majority shareholders in October 2023 mandated to keep 10% of our issued and outstanding common shares reserved under the 2016 Incentive Stock Plan. As of December 31, 2024, we have granted options to purchase 7,767,431 shares under the 2016 Plan, exercisable at $5.00 per share and 4,375,407 shares in stock grants. 40 Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters. The following table sets forth, as of the date of this Annual Report, the beneficial ownership of our common stock by (i) each director and executive officer; (ii) directors and executive officers as a group; (iii) each other five percent (5%) beneficial owner of our common stock. The percentage ownership information shown in the table is based upon 193,559,340 shares of common stock outstanding as of the date of this Annual Report. Unless otherwise stated, the address of the persons set forth on the table is c/o the Company. Beneficial ownership is determined in accordance with the rules of the SEC and includes voting or investment power with respect to the securities. Except as otherwise indicated, each person or entity named in the table has sole voting and investment power with respect to all shares of our capital shown as beneficially owned, subject to applicable community property laws. In accordance with SEC rules, shares of our common stock which may be acquired upon exercise of stock options which are currently exercisable or which become exercisable within sixty (60) days of the date of this Annual Report are deemed beneficially owned by the holders of such options and are deemed outstanding for the purpose of computing the percentage of ownership of such person, but are not treated as outstanding for the purpose of computing the percentage of ownership of any other person Names and addresses of beneficial owners Number of shares of common stock Percentage of class (%) Directors and executive officers Sudhir Srivastava, M.D. (1) 117,158,445 58.94 % Anup Sethi (2) 378,236 * Vishwajyoti P. Srivastava, M.D. (3) 338,237 * Barry F. Cohen (4) 8,501,954 4.28 % Dr. Mylswamy Annadurai 0 * Dr. S.P. Somashekhar (5) 282,696 * Tim Adams 5,031,902 2.53 % Dr. Frederic H Moll 20,335,045 10.23 % All directors and executive officers as a group (eight persons) (6) 152,026,515 76.48 % 5% or greater shareholders Manipal Global Health Services 14,949,070 7.52 % 22, St. Georges Street, Port Louis 11302, Mauritius Unless otherwise indicated, the address for all our directors and executive officers is, care of the Company, 404-405, 3rd Floor, iLabs Info Technology Centre, Udyog Vihar, Phase III, Gurugram, Haryana 122016, India. * Less than 1%. (1) Includes (a) 112,761,514 shares held of record by Sushruta Pvt. Ltd. (“ Sushruta ”), a Bahamian holding company beneficially owned by Dr. Sudhir Srivastava; (b) 32,000 shares held by Dr Sudhir Srivastava; and (c) 4,364,931 shares issuable upon the exercise of vested stock options granted under our Incentive Plan. Sushruta also holds all 1,000 issued and outstanding Series A Preferred Shares, which entitles the holder to 51% of the total voting power of the Company. (2) Includes 338,237 vested stock awards granted under the Incentive Plan. (3) Represents 338,237 shares issuable upon the exercise of vested stock options granted under the Incentive Plan. (4) Includes 338,237 shares issuable upon the exercise of vested stock options granted under the Incentive Plan. (5) Includes a grant of 166,348 fully vested restricted shares of our common stock awarded under our Incentive Plan. (6) Includes the items in footnotes (1) – (5) above. (7) Dr. Ranjan R. Pai is the beneficial owner of the shares of common stock held of record by Manipal Global Health Services. 41 The people named above have full voting and investment power with respect to the shares indicated. Under the rules of the SEC, a person (or group of persons) is deemed to be a “beneficial owner” of a security if he or she, directly or indirectly, has or shares the power to vote or to direct the voting of such security, or the power to dispose of or to direct the disposition of such security. Accordingly, more than one person may be deemed to be a beneficial owner of the same security. Securities Authorized for Issuance under Equity Compensation Plans Plan category Number of securities to be issued upon exercise of outstanding options, grants warrants and rights Weighted- average exercise price of outstanding options, grants warrants and rights Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) Equity compensation plans approved by security holders 12,142,838 shares (1) $ 3.863 7,213,096 shares (1) Equity compensation plans not approved by security holders 0 shares -- 0 shares Total 12,142,838 (1) $ 0 7,213,096 (1) (1) Represents shares of common stock under our Incentive Stock Plan. As of the date of this Annual Report, 12,142,838 shares of common stock (comprised of 7,767,431 stock options and 4,375,407 stock grants) were issued under the Incentive Stock Plan. As of the date of this Annual Report an additional 7,213,096 shares of common stock are available for future issuances under the Incentive Stock Plan. Item 13. Certain Relationships and Related Transactions, and Director Independence. Information to be filed pursuant to this Item 13 are appended to this Annual Report on Form 10-K filed herewith can be found at Part IV, Item 15, “Exhibits and Financial Statement Schedules.” under Note- 21. 42 Item 14. Principal Accounting Fees and Services. Fees billed by our independent registered public accounting firms, BDO India LLP (“ BDO ”) and BF Borgers CPA PC. for services provided for fiscal year 2024 and BF Borgers CPA PC. for fiscal year 2023 were as follows: Year Ended December 31, 2024 Year Ended December 31, 2023 Audit Fees(1) 686,326 112,500 Audit-Related Fees - - Tax Fees - - All Other Fees - - Total 686,326 112,500 (1) Audit fees relate to professional services rendered in connection with the audit of the Company’s annual financial statements including expanded audit services related to the Company’s restatement, quarterly review of financial statements included in the Company’s Quarterly Report on Form 10-Q/A, and audit services provided in connection with other statutory and regulatory filings or engagements. Audit fees include $82,500 relating to filing of “Registration Statement” in Form-S1 of our former auditor BF Borgers CPA PC. (“Borgers”). Audit Fees This category includes the audit of our annual financial statements, review of financial statements included in our Quarterly Reports on Form 10-Q and services that are normally provided by the independent registered public accounting firm in connection with engagements for those fiscal years. This category also includes advice on audit and accounting matters that arose during, or as a result of, the audit or the review of interim financial statements. Audit-Related Fees This category consists of assurance and related services by the independent registered public accounting firm that are reasonably related to the performance of the audit or review of our financial statements and are not reported above under “ Audit Fees .” The services for the fees disclosed under this category include consultation regarding our correspondence with the SEC and other accounting consulting. Tax Fees This category consists of professional services rendered by our independent registered public accounting firm for tax compliance and tax advice. The services for the fees disclosed under this category include tax return preparation and technical tax advice. All Other Fees This category consists of fees for other miscellaneous items. Our Board of Directors has adopted a procedure for pre-approval of all fees charged by our independent registered public accounting firm. Under the procedure, the Board approves the engagement letter with respect to audit, tax and review services. Other fees are subject to pre-approval by the Board, or, in the period between meetings, by a designated member of the Board. Any such approval by the designated member is disclosed to the entire Board at the next meeting. Any services and fees of BDO are also approved pursuant to the pre-approval policy of the Company. Pre-Approval Policy We have recently constituted our audit committee. Provision of the above-mentioned services was approved by our board of directors in the absence of an audit committee at that point in time. 43 PART IV Item 15. Exhibits and Financial Statement Schedules. (a) The following documents are filed as part of this Report: (1) Financial Statements . The following financial statements and the report of our independent registered public accounting firm are filed as “ Item 8. Financial Statements and Supplementary Data ” of this Annual Report: Page Report of Independent Registered Public Accounting Firm (BDO India LLP; Mumbai, India; PCAOB ID# 6074) F-2 Consolidated Balance Sheets at December 31, 2024 and December 31, 2023 F-4 Consolidated Statements of operations and comprehensive loss for the years ended December 31, 2024 and December 31, 2023 F-5 Consolidated Statements of changes in equity for the years ended December 31, 2024 and December 31, 2023 F-6 Consolidated Statements of cash flows for the years ended December 31, 2024 and December 31, 2023 F-7 Notes to Consolidated Financial Statements F-8 (2) Financial Statement Schedules. Financial Statement Schedules are omitted because the information required is not applicable or the required information is shown in the financial statements or notes thereto. 44 (3) Exhibits. Exhibit Number Description 3.1(i) Amended and Restated Articles of Incorporation (1) 3.1(ii) Articles of Amendment to Amended and Restated Articles of Incorporation (2) 3.2 By-Laws (1) 10.1 2016 Incentive Stock Plan (1)+ 10.2 Employment Agreement with Dr, Sudhir Srivastava (2) 10.3 Employment Agreement with Dr. Vishwajyoti P. Srivastava (2)+ 10.6 Employment Agreement with Anup Sethi (2)+ 10.7 Employment Agreement with Barry F. Cohen (3)+ 10.8 Promissory Note made in favor of Sushruta Pvt. Ltd. (3) 10.9 Form of Director Appointment Agreement (1)+ 10.10 Form of Indemnification Agreement (1)+ 14.1 Code of Ethical Conduct (1) 14.2 Insider Trading Policy (4) 21.1 List of Subsidiaries (4) 31.1 Section 302 Certification by Chief Executive Officer (4) 31.2 Section 302 Certification by Chief Financial Officer (4) 32.1 Section 906 Certification by Chief Executive Officer (4) 32.2 Section 906 Certification by Chief Financial Officer (4) 99.1 Audit Committee Charter (4) 99.2 Compensation Committee Charter (4) 99.3 Nominating and Corporate Governance Committee Charter (4) 101.INS Inline XBRL Instance Document. 101.SCH Inline XBRL Taxonomy Extension Schema Document. 101.CAL Inline XBRL Taxonomy Extension Calculation Linkbase Document. 101.DEF Inline XBRL Taxonomy Extension Definition Linkbase Document. 101.LAB Inline XBRL Taxonomy Extension Label Linkbase Document. 101.PRE Inline XBRL Taxonomy Extension Presentation Linkbase Document. 104 Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101). (1) Filed as an exhibit to the Company’s Registration Statement on Form S-1 (File No. 333-216054) and incorporated herein by reference. (2) Filed as an exhibit to the Company’s Current Report on Form 8-K filed on April 19, 2023 and incorporated herein by reference. (3) Filed as an exhibit to the Company’s Current Quarterly Report on Form 10-Q for the quarter ended June 30, 2023 filed on August 8, 2023 and incorporated herein by reference. (4) Filed herewith + Indicates management contract or compensatory plan or arrangement. Item 16. Form 10-K Summary. None. 45 SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. SS INNOVATIONS INTERNATIONAL, INC. Dated: April 15, 2025 By: /s/ Sudhir Srivastava Sudhir Srivastava, M.D., Chairman, Chief Executive Officer and Director (Principal Executive Officer) Dated: April 15, 2025 By: /s/ Anup Sethi Anup Sethi, Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer) Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated: Dated: April 15, 2025 By: /s/ Sudhir Srivastava Sudhir Srivastava, M.D., Chairman, Chief Executive Officer and Director (Principal Executive Officer) Dated: April 15, 2025 By: /s/ Anup Sethi Anup Sethi, Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer) Dated: April 15, 2025 By: /s/ Vishwajyoti P. Srivastava Vishwajyoti P. Srivastava, M.D., President, Chief Operating Officer – South Asia and Director Dated: April 15, 2025 By: /s/ Barry F. Cohen Barry F. Cohen, Chief Operating Officer – Americas and Director Dated: April 15, 2025 By: /s/ Mylswamy Annadurai Dr. Mylswamy Annadurai, Director Dated: April 15, 2025 By: /s/ S.P. Somashekhar Dr. S.P. Somashekhar, Director 46 INDEX TO CONSOLIDATED FINANCIAL STATEMENTS Page Report of Independent Registered Public Accounting Firm (BDO India LLP; Mumbai, India; PCAOB ID# 6074 ) F-2 Consolidated Balance Sheets at December 31, 2024 and December 31, 2023 F-4 Consolidated Statements of operations and comprehensive loss for the years ended December 31, 2024 and December 31, 2023 F-5 Consolidated Statements of changes in equity for the years ended December 31, 2024 and December 31, 2023 F-6 Consolidated Statements of Cash Flows for the years ended December 31, 2024 and December 31, 2023 F-7 Notes to Consolidated Financial Statements F-8 F- 1 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM Shareholders and Board of Directors SS Innovations International Inc. 405, 3 rd Floor, iLabs Info Technology Centre Udyog Vihar, Phase III Gurugram, Haryana 122016, India Opinion on the Consolidated Financial Statements We have audited the accompanying consolidated balance sheets of SS Innovations International Inc. (the “Company”) as of December 31, 2024 and 2023, the related consolidated statements of operations and comprehensive loss, consolidated statements of changes in equity, and cash flows for each of the years then ended, and the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2024 and 2023, and the results of its operations and its cash flows for the years then ended , in conformity with accounting principles generally accepted in the United States of America. Substantial Doubt about the Company’s Ability to Continue as a Going Concern The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1 to the consolidated financial statements, the Company has suffered recurring losses from operations and has negative cash flows from operating activities during the year ended December 31, 2024. The Company is dependent on further funding to meet its obligations to sustain its operations. These conditions raise substantial doubt about the Company’s ability to continue as a going concern. Management’s plans in regard to these matters are also described in Note 1 to the consolidated financial statements. These consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty. Basis for Opinion These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion. F- 2 Critical Audit Matter The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates. Determination of Standalone Selling Price As described in Note 2 to the consolidated financial statements, during the year ended December 31, 2024, the Company recognized revenue for system sale arrangements of approximately $19.46 million. The Company’s system sale arrangements could include a combination of the following performance obligations: system(s); system accessories or instruments and extended warranty. For multiple-element arrangements, revenue is allocated to each distinct performance obligation based on its relative standalone selling price (“SSP”). SSP are based on observable prices at which the Company separately sells the products or services. If a SSP is not directly observable, then management estimates the SSP considering market conditions and entity-specific factors including historical pricing data, features and functionality of the products and services and industry data. We identified the determination of the SSP of distinct performance obligations as a critical audit matter. The determination of SSP requires management’s significant judgments and assumptions. Auditing management’s significant judgments and assumptions involved especially challenging and subjective auditor judgment due to the nature and extent of audit effort required to address these matters. The primary procedures we performed to address this critical audit matter included: ● Assessing the appropriateness of management’s process and methodology for determining the SSP against relevant accounting literature. ● Testing the reasonableness of management’s significant assumptions and judgments used in determining the SSP through: (i) assessing a sample of revenue contracts and identifying distinct performance obligations, (ii) evaluating the consistency of assumptions used against internal and external market data and competitor margin data, and (iii) testing the completeness and accuracy of the data used in developing the SSP assumptions. (Signed BDO India, LLP ) We have served as the Company's auditor since 2024. Gurugram, India April 15, 2025 F- 3 SS INNOVATIONS INTERNATIONAL, INC. CONSOLIDATED BALANCE SHEETS As of Notes December 31, 2024 December 31, 2023 ASSETS Current Assets: Cash and cash equivalents 7 $ 466,500 $ 2,022,276 Restricted cash 7 5,838,508 5,029,650 Accounts receivable, net 6 4,466,047 1,901,244 Inventory, net 15 10,206,898 7,017,913 Prepaids and other current assets 8 6,438,338 5,457,576 Total Current Assets 27,416,291 21,428,659 Non- Current Assets: Property, plant, and equipment, net 4 5,385,955 706,405 Right of use asset 16 2,623,880 2,657,554 Accounts receivable, net 6 3,299,032 2,365,013 Restricted cash 7 318,527 35,919 Prepaids and other non-current assets 8 3,341,528 4,322,444 Total Non-Current Assets 14,968,922 10,087,335 Total Assets $ 42,385,213 $ 31,515,994 LIABILITIES AND STOCKHOLDERS' EQUITY Current Liabilities Bank overdraft facility 11 $ 7,994,906 $ 6,018,926 Notes payable 10 7,450,000 - Current maturities of long-term debt 12 - 510,189 Current portion of operating lease liabilities 16 409,518 396,784 Accounts payable 9 2,312,382 901,552 Deferred revenue 13 1,278,602 156,330 Accrued expenses & other current liabilities 9 1,884,814 489,939 Total Current Liabilities 21,330,222 8,473,720 Non- Current Liabilities Operating lease liabilities, less current portion 16 2,349,118 2,351,113 Deferred Revenue- non-current 13 5,173,953 939,150 Other non-current liabilities 9 74,817 33,933 Total Non-Current Liabilities 7,597,888 3,324,196 Total Liabilities 28,928,110 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; 1,000 shares issued and outstanding as of December 31, 2024 and December 31, 2023 14 1 1 Common stock, 250,000,000 shares authorized, $ 0.0001 par value, 171,579,284 shares and 170,711,880 shares issued and outstanding as of December 31, 2024 and December 31, 2023, respectively 14 17,157 17,072 Accumulated other comprehensive income (loss) 14 ( 749,625 ) ( 195,499 ) Common stock to be issued, 12,500 shares 14 - 50,000 Additional paid in capital 14 56,952,200 43,457,937 Capital reserve 899,917 899,917 Accumulated deficit ( 43,662,547 ) ( 24,511,350 ) Total stockholders’ equity 13,457,103 19,718,078 Total liabilities and stockholders’ equity $ 42,385,213 $ 31,515,994 The accompanying notes are an integral part of these consolidated financial statements. F- 4 SS INNOVATIONS INTERNATIONAL, INC. CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS For The Year Ended Notes December 31, 2024 December 31, 2023 REVENUES System sales 13 19,457,767 5,225,777 Instruments sale 13 942,548 647,766 Warranty sale 13 177,518 1,771 Lease income 13 71,695 - Total revenue $ 20,649,528 $ 5,875,314 Cost of revenue ( 12,197,162 ) ( 5,149,786 ) GROSS PROFIT 8,452,366 725,528 OPERATING EXPENSES: Research & development expense 2,491,771 1,058,660 Stock compensation expense 20 14,342,784 9,723,492 Depreciation and amortization expense 4 436,005 152,738 Selling, general and administrative expense 10,157,768 10,064,622 TOTAL OPERATING EXPENSES 27,428,328 20,999,512 Loss from operations ( 18,975,962 ) ( 20,273,984 ) OTHER INCOME (EXPENSE): Interest expense ( 973,235 ) ( 894,621 ) Interest and other income, net 798,000 290,313 TOTAL OTHER EXPENSE, NET ( 175,235 ) ( 604,308 ) LOSS BEFORE INCOME TAXES ( 19,151,197 ) ( 20,878,292 ) Income tax expense 17 - - NET LOSS $ ( 19,151,197 ) $ ( 20,878,292 ) Net loss per share - basic and diluted 2(r) $ ( 0.11 ) $ ( 0.14 ) Weighted average- basic shares 2(r) 170,847,444 144,866,674 Weighted average- diluted shares 2(r) 181,203,673 152,069,825 CONSOLIDATED STATEMENTS OF OTHER COMPREHENSIVE LOSS NET LOSS $ ( 19,151,197 ) $ ( 20,878,292 ) OTHER COMPREHENSIVE INCOME (LOSS) Foreign currency translation loss ( 539,900 ) ( 243,089 ) Retirement Benefit (net of tax) 18 ( 14,226 ) ( 7,009 ) TOTAL COMPREHENSIVE LOSS $ ( 19,705,323 ) $ ( 21,128,390 ) The accompanying notes are an integral part of these consolidated financial statements. F- 5 SS INNOVATIONS INTERNATIONAL, INC. CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY 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, 2022 - - 128,161,013 12,817 - - ( 12,812 ) ( 3,633,058 ) 899,917 54,599 ( 2,678,537 ) Preferred stock issued 14 1,000 1 - - - - ( 1 ) - - - - Reverse recapitalization 5 - - 6,545,531 655 - - ( 655 ) - - - - Conversion of notes payable to equity - - 30,593,816 3,059 - - 23,114,844 - - - 23,117,903 Stock issued for services 20 - - 4,562,451 456 - - 10,630,075 - - - 10,630,531 Common stock issued against exercise of warrants 14 - - 90,514 9 12,500 50,000 362,046 - - - 412,055 Common stock issued against exercise of options 14 - - 50,000 5 - - 49,995 - - - 50,000 Stock grants - - 718,555 72 - - 5,575,914 - - - 5,575,986 Share cancellation - - ( 10,000 ) ( 1 ) - - 1 - - - - Stock compensation 20 - - - - - - 3,738,530 - - - 3,738,530 Net loss - - - - - - - ( 20,878,292 ) - ( 250,098 ) ( 21,128,390 ) Balance as at December 31, 2023 1,000 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 20 - - - - - - 7,795,586 - - - 7,795,586 Common stock issued against exercise of warrants 14 - - 12,500 1 ( 12,500 ) ( 50,000 ) 49,999 - - - - Stock issued for services 20 - - 149,039 14 - - 171,236 - - - 171,250 Stock grants 20 - - 705,865 70 - - 5,477,442 - - 5,477,512 Net loss - - - - - - - ( 19,151,197 ) - ( 554,126 ) ( 19,705,323 ) Balance as at December 31, 2024 1,000 $ 1 171,579,284 $ 17,157 - - $ 56,952,200 $ ( 43,662,547 ) $ 899,917 $ ( 749,625 ) $ 13,457,103 The accompanying notes are an integral part of these consolidated financial statements. F- 6 SS INNOVATIONS INTERNATIONAL, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS For the Year ended December 31, 2024 December 31, 2023 Cash flows from operating activities: Net loss $ ( 19,151,197 ) $ ( 20,878,292 ) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation and amortization 436,005 152,738 Operating lease expense 753,449 560,668 Interest Expense 317,234 479,476 Interest and other income, net ( 418,426 ) ( 290,313 ) Property, plant and equipment written off 48,456 9,250 Credit loss reserve 955,762 - Shares issued to investors and advisors - 5,063,799 Stock compensation expense 14,342,784 9,723,492 Changes in operating assets and liabilities: Accounts receivable, net ( 4,890,032 ) ( 3,071,640 ) Inventory, net ( 7,691,518 ) ( 6,113,810 ) Deferred revenue 5,357,075 1,051,563 Prepaids and other assets ( 1,411,621 ) ( 2,690,178 ) Accounts payable 1,410,830 736,075 Accrued expenses & other liabilities 1,144,037 430,293 Operating lease payment ( 705,868 ) ( 524,766 ) Net cash used in operating activities ( 9,503,030 ) ( 15,361,645 ) Cash flows from investing activities: Purchase of property, plant and equipment ( 661,479 ) ( 453,327 ) Net cash used in investing activities ( 661,479 ) ( 453,327 ) Cash flows from financing activities: Proceeds from issuance of common stock against warrants and options - 412,056 Proceeds from issuance of promissory notes to principal shareholder 3,000,000 - Proceeds from issuance of convertible notes to principal shareholder 3,000,000 16,980,000 Proceeds from issuance of convertible notes to other investors 1,450,000 3,000,000 Proceeds from bank overdraft facility (net) 1,975,980 2,480,735 Repayment of term loan - ( 126,505 ) Proceeds from warrant exercised pending allotment - 50,000 Net cash provided by financing activities 9,425,980 22,796,286 Net change in cash ( 738,529 ) 6,981,314 Effect of exchange rate on cash 274,219 ( 168,094 ) Cash and cash equivalents at the beginning of the year^ 7,087,845 274,625 Cash and cash equivalents at end of the year $ 6,623,535 $ 7,087,845 ^ For cash and cash equivalents and restricted cash, refer Note 7 Supplemental disclosure of cash flow information: Conversion of convertible notes into common stock - $ 23,117,903 Transfer of systems from inventory to property, plant and equipment $ 4,502,533 - The accompanying notes are an integral part of these consolidated financial statements. F- 7 SS INNOVATIONS INTERNATIONAL, INC. NOTES TO FINANCIAL STATEMENTS 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. On April 14, 2023, a wholly owned subsidiary of the Company 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 CardioVentures and give pro forma effect to the reverse stock split. The Transaction (Note 5) 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. Basis of Presentation The consolidated financial statements have been prepared in conformity with United States generally accepted accounting principles (“U.S. GAAP”). The accompanying financial statements have been prepared on a consolidated basis and reflect the financial statements of SS Innovations International, 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 consolidated financial statements. Accounting policies of the respective individual subsidiaries are aligned wherever necessary, so as to ensure consistency with the accounting policies that are adopted by the Company under U.S. GAAP. Principles of Consolidation The consolidated financial statements include our accounts and all majority-owned subsidiaries. Intercompany accounts and transactions have been eliminated in consolidation. The Company follows a monthly reporting calendar, with its fiscal year ending on December 31. Reclassifications Certain prior period amounts in the consolidated statements of operations and consolidated balance sheets have been reclassified to conform with the current period presentation. F- 8 Concentrations of Business and Credit Risk We maintain certain cash balances in excess of limits insured by Federal Deposit Insurance Corporation for US and Deposit Insurance and Credit Guarantee Corporation for India. We periodically evaluate the credit worthiness of the financial institutions with which we maintain cash deposits. We have not experienced any losses in such accounts and do not believe that there is any material credit risk to our cash. Concentration of credit risk with respect to accounts receivable is limited due to the wide variety of customers to whom our products are sold. Receivables from individual customers exceeding 10% of our total receivables as of December 31, 2024, and 2023 are disclosed separately in Note-6. Going Concern The accompanying 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 consolidated financial statements are issued. The Company has a working capital surplus of $ 6,086,069 and an accumulated deficit of $ 43,662,547 as of December 31, 2024. The Company also had a net loss of $ 19,151,197 for the year ended December 31, 2024, which was mainly on account of non-cash items like stock compensation expense of $ 14,342,784 and depreciation and amortization of $ 436,005 . 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 consolidated financial statements are issued. Management recognizes that the Company must obtain additional resources to successfully implement its business plans. The Company has been able to augment its financial resources to further supplement its operations. Subsequent to year end, the Company has issued the convertible notes of $ 28,000,000 which has been converted into Company’s common stock in March 2025. This conversion of funds has resulted in a significant improvement in the Company’s stockholders’ equity and working capital position. 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. MERGER ACCOUNTING On April 14, 2023, a wholly owned subsidiary of the Company merged with CardioVentures, Inc., a Delaware corporation, the indirect parent of Sudhir Srivastava Innovations Pvt. Ltd., an Indian private limited company. 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 consolidated financial statements, financial information and share and per share information contained in this report reflect the operations of both the Company and CardioVentures and give pro forma effect to the reverse stock split. The CardioVentures Merger was accounted for as a reverse-merger, and recapitalization in accordance with generally accepted accounting principles (“GAAP”). For financial reporting purposes, SS Innovations International Inc. was the acquirer and AVRA was the acquired company. Consequently, the assets and liabilities and operations reflected in the historical financial statements prior to the CardioVentures Merger are consolidated assets and liabilities of AVRA and SS Innovations International Inc. and have been recorded at historical cost basis. The financial statements after completion of the CardioVentures Merger include the assets and liabilities of AVRA and SS Innovations International Inc. F- 9 NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (a) Use of Estimates The preparation of consolidated financial statements in conformity with GAAP 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 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 include fair value of stock options and standalone selling price in case of bundled revenue contracts. (b) Cash and Cash Equivalents The Company considers all highly liquid investments purchased with 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 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 (d) Accounts Receivable and Allowance for Expected Credit Loss 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 allowances for credit losses 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 credit losses as of December 31, 2024, and December 31, 2023, amounted to $ 545,799 and $ NIL respectively. (e) Employee Benefits Contributions to defined contribution plans are charged to the Consolidated Statements 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.” Refer to Note 18 - Employee Benefit Plans to the consolidated financial statements for details. F- 10 (f) Foreign Currency Translation The Company’s reporting currency is U.S. dollars. The functional currency of the Company is the U.S. dollar. The functional currency of the Company’s subsidiary in India is Indian National Rupee (“INR”). Transactions denominated in INR are translated to U.S. dollars at rates which approximate those in effect on the transaction dates. Monetary assets and all liabilities denominated in foreign currencies on December 31, 2024 and December 31, 2023 are translated at the exchange rate in effect as of those dates. Non-monetary assets and stockholders’ equity are translated at the appropriate historical rates. Included in selling, general and administrative expense were foreign exchange loss resulting from such translations of approximately $ 15,228 and $ 22,855 for the years ended December 31, 2024 and 2023, respectively. 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 Consolidated Statements 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 loss” in the consolidated balance sheets. The relevant translation rates are as follows: for the year ended December 31, 2024, closing rate at 85.58 USD/INR, average rate at 84.39 USD/INR. The relevant translation rates are as follows: for the year ended December 31, 2023, closing rate at 83.19 USD/INR, average rate at 82.96 USD/INR. (g) Inventory The Company’s inventory consists of finished goods in the form of fully assembled and tested surgical robotic systems, 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. (h) Cost of Sales Cost of sales primarily consists of manufacturing cost incurred for production of the Mantra System and the related instruments and accessories which are used to facilitate the use of the Mantra System. Further, Cost of sales also includes other costs such as salaries and rent which are directly attributable to the manufacturing process. (i) Selling and Administrative Expenses Selling and administrative expenses primarily consist of indirect expenses which are not directly attributable to any other identified expense category of the Company. F- 11 (j) 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. (k) 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. (l) 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 an outflow of resources is remote, no provision or disclosure is made. Legal costs incurred in connection with such liabilities are expensed as they are incurred. Capital commitments are disclosed in the consolidated financial statements. (m) 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. F- 12 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. Standalone Selling Price: Our system sale arrangements contain multiple products and services, including system, accessories, instruments and services. Other than services, we generally deliver all of the products upfront. Each of these products and services is a distinct performance obligation. System, instruments, accessories and services are also sold on a standalone basis. For multiple-element arrangements, revenue is allocated to each performance obligation based on its relative standalone selling price. Standalone selling prices are based on observable prices at which we separately sell the products or services. If a standalone selling price is not directly observable, then we estimate the standalone selling prices considering market conditions and entity-specific factors including, but not limited to, historical pricing data, features and functionality of the products and services and industry benchmark. We regularly review standalone selling prices and maintain internal controls over establishing and updating these estimates. Revenue that is allocated to the service obligation is deferred and recognized ratably over the service period upon expiration of first year of service which is free and included in the system sale arrangements. 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 1 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. With respect to the sale of surgical robotic systems, training is provided at the time of delivery to the end customer, however the effort involved is considered negligible. 6. Transfer of Risk and Rewards: The risks and rewards associated with the system are transferred to the customer upon delivery to their premises. Instrument and accessories sales: We also sell 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 dispatched to the customer. Warranty and Annual Maintenance Contract Sales: By application of ASC 606, a portion of the equipment sales value which is attributable towards the component of annual maintenance contracts is shown separately as Warranty sales. Once the assurance warranty or standard warranty periods are over, the actual maintenance contracts become effective and actual income from maintenance contracts is recognized as a distinct revenue stream. Lease Income: Under ASC 842, in cases where the systems are installed on a pay per procedure basis, the Company earns revenue which is a mix of fixed and variable components. Variable component consists of revenue share which is agreed based on the number and type of procedures performed by the customer, while the fixed component involves an agreed amount which the customer is obliged to pay over the lease term. Accordingly, the fixed component is recognized on a straight-line basis as lease income. Since the title to the system is not getting transferred to the counterparty, hence the cost relating to those systems is capitalized under property, plant and equipment and accordingly depreciation is charged over its period of useful life. F- 13 (n) 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, Installation cost, freight, other associated costs, 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 Research & Development equipment 5 Server & networking 3 Vehicles 5 Pay per use system 10 Demo system 10 (o) 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. (p) 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. 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. F- 14 As of December 31, 2024, the Company has issued two types of equity incentives: 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 months’ 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 Consolidated Statements 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. (q) Income Taxes We record income taxes under the asset and liability method, whereby deferred tax assets and liabilities are recognized based on the future tax consequences attributable to temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases, and attributable to operating loss and tax credit carry forwards. The carrying amounts of deferred tax assets are reduced by a valuation allowance if, based on available evidence, it is more likely than not that such assets will not be realized. Accordingly, the need to establish valuation allowances for deferred tax assets is assessed periodically based on the more-likely-than-not realization threshold. This assessment considers, among other matters, the nature, frequency, and severity of current and cumulative losses, the duration of statutory carry forward periods, and tax planning alternatives. We use a two-step approach in recognizing and measuring uncertain tax positions. The first step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates that it is more likely than not that the position will be sustained on audit, including resolution of related appeals and litigation processes, if any. The second step is to measure the largest amount of tax benefit as the largest amount that is more likely than not to be realized upon settlement. Changes in recognition or measurement are reflected in the period in which the change in judgment occurs. Significant management judgment is required in determining provision for income taxes, deferred tax assets and liabilities, tax contingencies, unrecognized tax benefits, and any required valuation allowance, including taking into consideration the probability of the tax contingencies being incurred. Management assesses this probability based upon information provided by its tax advisers, its legal advisers and similar tax cases. If at a later time the assessment of the probability of these tax contingencies changes, accrual for such tax uncertainties may increase or decrease. The Company has a valuation allowance due to management’s overall assessment of risks and uncertainties related to its future ability in the U.S. to realize and, hence, utilize certain deferred tax assets, primarily consisting of net operating losses (“NOLs”), carry forward temporary differences and future tax deductions. The effective tax rate for annual and interim reporting periods could be impacted if uncertain tax positions that are not recognized are settled at an amount which differs from the Company’s estimate. Finally, if the Company is impacted by a change in the valuation allowance resulting from a change in judgment regarding the realizability of deferred tax assets, such effect will be recognized in the interim period in which the change occurs. F- 15 (r) Basic and Diluted Loss per Share The following table sets forth the computation of basic and diluted earnings per share: Year ended December 31, 2024 2023 Net Loss (a) ( 19,151,197 ) ( 20,878,292 ) Basic weighted average common shares outstanding (b) 170,847,444 144,866,674 Dilutive effect of convertible note (1) 595,309 - Dilutive effect of stock-based awards 9,760,921 7,203,151 Diluted weighted average common shares outstanding 181,203,673 152,069,825 Earnings per share attributable to SS INNOVATIONS INTERNATIONAL INC. stockholders: Basic and Diluted (a)/(b) ( 0.11 ) ( 0.14 ) (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 year. Refer Note 10– Notes Payable to the consolidated financial statements for further details. 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. (s) Research and Development Costs Research and development costs are expensed as incurred and include costs of material, salaries, benefits and other headcount-related costs, contract and other outside service fees, and facilities and overhead costs. (t) 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. (u) Recent Accounting Pronouncements In November 2024, FASB issued ASU 2024-03, Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220-40), which requires entities to disaggregate any relevant expense caption presented on the face of the income statement within continuing operations into the following required natural expense categories, as applicable: (1) purchases of inventory, (2) employee compensation, (3) depreciation, (4) intangible asset amortization, and (5) depreciation, depletion, and amortization recognized as part of oil- and gas-producing activities or other depletion expenses. An entity’s share of earnings or losses from investments accounted for under the equity method is not a relevant expense caption that requires disaggregation. Such ASU’s amendments are effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027. Early adoption is permitted. We are currently evaluating the impact of this pronouncement on our disclosures and our consolidated financial statements. In November 2023, FASB issued ASU No. 2023-07, Segment Reporting (“ASC Topic 280”): Improvements to Reportable Segment Disclosures. This ASU improves reportable segment disclosure requirements on an annual and interim basis for all public entities by requiring disclosure of significant segment expenses that are regularly reviewed by the chief operating decision maker (“CODM”) and included within each reported measure of segment profit or loss, an amount and description of its composition for other segment items, and interim disclosures of a reportable segment’s profit or loss and assets. The ASU also allows, in addition to the measure that is most consistent with U.S. GAAP, the disclosure of additional measures of segment profit or loss that are used by the CODM in assessing segment performance and deciding how to allocate resources. The ASU is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted. F- 16 We adopted this ASU on December 31, 2024, and applied the amendment retrospectively to all periods presented in our consolidated financial statements (refer to Note 3, Segments, for further details). In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. Under this ASU, public entities must annually (1) disclose specific categories in the rate reconciliation and (2) provide additional information for reconciling items that meet a quantitative threshold (if the effect of those reconciling items is equal to or greater than five percent of the amount computed by multiplying pretax income or loss by the applicable statutory income tax rate). This ASU’s amendments are effective for all entities that are subject to Topic 740, Income Taxes, for annual periods beginning after December 15, 2024, with early adoption permitted. We are currently evaluating the impact of this pronouncement on our disclosures. (v) 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 consolidated balance sheets. 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 include 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. 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 Consolidated Statements 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. Comprehensive Loss Comprehensive loss consists of net loss and other gains and losses affecting stockholders’ equity that, under GAAP, are excluded from net loss. Our other comprehensive loss represents foreign currency translation adjustment attributable to Indian operations. Refer to Consolidated Statements of Comprehensive Loss. Total foreign currency transaction gains and losses were immaterial for the years ended December 31, 2024, and 2023. F- 17 NOTE 3 – SEGMENT INFORMATION The Company is focused on designing, manufacturing and marketing an advanced, next-generation and affordable surgical robotic system called the SSi Mantra, and the instruments and accessories used with SSi Mantra to perform a wide range of soft-tissue, robotically assisted surgeries. The Company is committed to accelerating access to surgical robotics technologies in all parts of the world and particularly in underserved regions through a comprehensive ecosystem of providing an affordable surgical robotic system, its related instruments and accessories backed up by clinical, field service and maintenance support also provided by the Company. The systems as well as instruments and accessories are primarily designed, developed and manufactured by the Company in its manufacturing facility located in India. During the year ended December 31, 2024, and 2023, the Company’s revenues from within India accounted for 92 % and 91 % respectively of total revenue, while revenue from the Company’s markets outside India accounted for 8 % and 9 %, respectively, of total revenue. The Company manages the business activities on a consolidated basis and operates in one reportable segment. Our determination that we operate as a single operating segment is consistent with the financial information regularly reviewed by the chief operating decision maker for purposes of evaluating performance, allocating resources, setting incentive compensation targets, and planning and forecasting for future periods. The Company’s Chief Executive Officer is the Chief Operating Decision Maker (“CODM”). The CODM utilizes the Company’s long-range plan, which includes product development, technology refinement plans and long-range selling and financial models, as a key input to resource allocation. The CODM makes decisions on resource allocation, assesses performance of the business, and monitors budget versus actual results using gross margins and net income / loss from operations. Significant expenses within income from operations, as well as within net income / loss, include cost of revenue, research and development, and selling, general and administrative expenses, which are each separately presented on the Company’s Consolidated Statements of Operations. Other segment items within net income include interest and other income, net, and income tax expense. The Company’s long-lived assets consist primarily of property, plant and equipment. As of December 31, 2024, and 2023, 100 % of long-lived assets were in India. NOTE 4 – PROPERTY, PLANT AND EQUIPMENT, NET The Company’s property, plant and equipment consisted of the following: December 31, 2024 December 31, 2023 Gross Amount Computer & peripheral 290,724 180,009 Furniture 175,538 175,707 Leasehold improvement 254,468 154,651 Office equipment 156,579 103,371 Pay Per Use Systems 3,374,228 - Plant and machinery 377,121 128,498 R & D equipment - 90,434 Server & networking 34,926 21,999 Vehicles 191,961 183,577 Demo system 1,128,305 - Capital work in progress 47,592 - Accumulated depreciation ( 645,487 ) ( 331,841 ) Total 5,385,955 706,405 Depreciation expenses for the year ended December 31, 2024, and December 31, 2023, amounted to $ 436,005 and $ 152,738 respectively. From its inventory, the Company decided to use 4 systems for demonstration purposes. As at December 31, 2024, three systems are placed in Company’s premises while 1 system is placed at partner’s location. Hence, these systems are recorded as Property, plant and equipment in accordance with ASC 360. F- 18 NOTE 5 – 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. Pursuant to the Merger Agreement, the holders of CardioVentures’ common stock also received 1,000 shares 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. F- 19 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. NOTE 6 – ACCOUNTS RECEIVABLE Accounts receivable consisted of: December 31, December 31, 2024 2023 Accounts receivable, net (current) 4,466,047 1,901,244 Accounts receivable, net (non-current) 3,299,032 2,365,013 Total accounts receivable, net 7,765,079 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 $ 3,299,032 (December 31, 2023: $ 2,365,013 ) may not be due and collectible in the next one year and thus the Company classified these receivables as non-current. Details of customers which accounted for 10% or more of total revenues or 10% or more of total accounts receivables during the years ended December 31, 2024, and 2023: Percentage of revenue Percentage of accounts for year ended receivable as of December 31, December 31, 2024 2023 2024 2023 Customer A ^ 7 % 5 % 12 % Customer B - 2 % - 13 % Customer C - 18 % - - Customer D 3 % - 13 % - ^ represents less than 1%. F- 20 NOTE 7 – CASH, CASH EQUIVALENTS AND RESTRICTED CASH For the purpose of consolidated statement of cash flows, cash, cash equivalents and restricted cash (Current) & (Non-Current) consisted of the following as of December 31, 2024, and December 31, 2023: 2024 2023 Cash and cash equivalents 466,500 2,022,276 Fixed Deposit Lien Against Overdraft Facility 5,768,396 4,962,515 Lien Against Letter of Credit 24,757 24,041 Lien Against Bank Guarantee 45,355 43,094 Restricted cash (Current) 5,838,508 5,029,650 Fixed Deposit Lien Against Bank Guarantee 302,307 19,233 Lien against Credit card facility 16,220 16,686 Restricted Cash (Non- current) 318,527 35,919 Total Cash, cash equivalents and restricted cash 6,623,535 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 11 – Bank Overdraft.) NOTE 8 – PREPAID, CURRENT AND NON- CURRENT ASSETS Prepaid, Current and Non-Current Assets consisted of the following as of December 31, 2024, and December 31, 2023: 2024 2023 Receivables from statutory authorities 2,691,800 1,904,859 Prepaid expense - stock compensation current 1,074,991 1,066,991 Security deposit 157,574 299,540 Other prepaid- current assets 2,513,973 2,186,186 Prepaid and other current assets 6,438,338 5,457,576 Prepaid expense - stock compensation non-current 3,052,445 4,090,131 Security deposits 145,198 225,488 Other prepaid- non-current Asset 143,885 6,825 Prepaid and other non-current assets 3,341,528 4,322,444 Total Prepaid, Current and Non-Current Assets 9,779,866 9,780,020 Prepaid expenses – stock compensation represents unamortized portion of common stock granted to advisors for services to be rendered by them in future. Refer Note 20. Refer Note-21 for Related Party Balances. F- 21 NOTE 9 – ACCOUNTS PAYABLE, ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES Accounts payable and accrued expenses consisted of the Year ended December 31, 2024 and December 31, 2023: 2024 2023 Accounts Payable 2,312,382 901,552 Payable to statutory authorities 55,699 35,149 Client liabilities 574,603 49,160 Salary payable 91,825 48,216 Other accrued liabilities 1,162,687 357,414 Other accrued liabilities 1,884,814 489,939 Provision for Gratuity 74,817 33,933 Other accrued liabilities- non-current 74,817 33,933 Total accounts payable, accrued expense and other liabilities 4,272,013 1,425,424 Accounts payable at $ 2,312,382 as of December 31, 2024 (December 31, 2023: $ 901,552 ), reflect the amounts due to various vendors of supplies and services in the normal course of business operations. Other accrued liabilities of $ 1,162,687 as of December 31, 2024 (December 31, 2023: $ 357,414 ), majorly include accrued expenses of $ 834,291 . Refer Note-21 for Related Party Balances. NOTE 10 – NOTES PAYABLE On April 15, 2023, the Company executed a Convertible Promissory Note (the “Line of Credit Note”) with Sushruta Pvt Ltd. (“Sushruta”), the Bahamian holding company owned by Dr. Sudhir Srivastava, our Chairman, Chief Executive Officer, and principal shareholder. Pursuant to the Line of Credit Note, SPL, in its discretion may make multiple advances to the Company through December 31, 2023 (the “Maturity Date”), in an aggregate amount of up to $ 20,000,000 for working capital purposes. The advances under the Line of Credit Note do not bear interest and are due and payable on or before the Maturity Date. Sushruta may, at its option, convert the principal amount of any advance into shares of our common stock, at a conversion price of $ 0.74 per share. During the year ended December 31, 2023, $ 16,980,000 in advances that were outstanding under the Line of Credit Note, were converted into 22,945,945 shares issued to Sushruta at the conversion price of $ 0.74 per share and as of December 31, 2023, there were no further advances convertible under the Line of Credit Note. The Company entered into an Agreement with Andrew Economos and Dr. Frederic Moll for issuing a convertible redeemable note in the principal amount of $ 3,000,000 each. The note may be converted into common shares (without any significant conversion premium on the debt) of the Company’s common stock at valuation of $ 100,000,000 . As on the date of merger, i.e. April 14, 2023, Andrew Economos converted $ 3,089,178 (comprising of US$ 3,000,000 of principal and $ 89,178 as interest) of his convertible note into 3,879,938 shares of common stock and Dr. Frederic Moll converted $ 3,049,364 (comprising of US$ 3,000,000 of principal and $ 49,364 as interest) of his convertible note into 3,767,933 shares of common stock. In February 2024, the Company raised $ 2,450,000 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 raised $ 2,000,000 from its affiliate by issuance of two One-Year 7 % Promissory Notes of $ 1,000,000 each, to meet certain working capital requirements. These Notes are payable in full after 12 months from the respective date of issuance of these Notes. In July 2024, the Company raised $ 500,000 from its affiliate by issuance of One-Year 7 % Promissory Notes 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. In October and November 2024, the Company raised $ 500,000 from its affiliate by issuance of One-Year 7 % Promissory Notes 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. In December 2024, the Company raised $ 2,000,000 from its affiliate by issuance of One-Year 7 % Convertible Promissory Notes 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 $ 1.38 . Refer Note-21 for Related Party Balances. F- 22 NOTE 11 – BANK OVERDRAFT Bank Overdraft consisted of: Year Ended December 31, December 31, 2024 2023 HDFC Bank Ltd overdraft (with lien against fixed deposits) (OD1) 4,486,181 4,756,389 HDFC Bank Ltd overdraft (OD2) 3,508,725 1,262,537 Bank overdraft 7,994,906 6,018,926 The HDFC Bank overdraft (OD1) of $ 4,486,181 is availed on the basis of lien on the fixed deposits of $ 5,404,300 provided by the Company. The HDFC Bank overdraft (OD2) is secured by all the current assets, plant and machinery of the Company and additionally secured by personal guarantees provided by Dr Sudhir Prem Srivastava. As of December 31, 2024 and 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 Prem Shrivastava. 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. NOTE 12 – BORROWINGS As part of our efforts to manage working capital and improve liquidity, we arranged for Axis Bank to issue a Letter of Credit (LC) on behalf of one of our customers, Indraprastha Cancer Society & Research Centre (RGCI), for $ 452,818 . This LC was valid for a period of 666 days. It was classified as a short-term liability (including interest) for the year ended December 31, 2023, which has been settled by RGCI directly with the Axis Bank during the year ended December 31, 2024. 2024 2023 Current maturities of long-term debt - 510,189 NOTE 13 – 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 revenue attributable to the warranty is recognized over the period to which it relates. During the year ended December 31, 2024, Company had sold 36 surgical robotic systems. The revenues attributable to warranty for the agreed warranty period in respect of each of the sales contract is deferred for recognition over the period to which it relates. F- 23 In case of systems sold on a deferred payment basis, the present value of the invoiced system sales, realizable over the deferred payment period, is recognized as system 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 $ 335,222 and $ 151,497 as interest income on account of deferred financing component during the years ended December 31, 2024, and 2023 respectively. For year ended For year ended December 31, 2024 December 31, 2023 Deferred revenue— beginning of period 1,095,480 43,917 Additions 5,685,704 1,053,329 Net changes in liability for pre-existing contracts 6,781,184 1,097,246 Revenue recognized for warranty sales 177,518 1,766 Revenue recognized for instrument sales 151,111 - Deferred revenue— end of period 6,452,555 1,095,480 As of December 31, 2024 As of December 31, 2023 Deferred revenue expected to be recognized in: One year or less 1,278,602 156,330 More than One year 5,173,953 939,150 6,452,555 1,095,480 The following table disaggregates our revenue by major source: Year ended December 31, 2024 Year ended December 31, 2023 System Sales 19,457,767 5,225,777 Instruments Sale 942,548 647,766 Warranty Sales 177,518 1,771 Lease income 71,695 - Total revenue 20,649,528 5,875,314 Revenues for each of the two years in the period ended December 31, 2024 and 2023 by geographic region (determined based upon customer domicile), were as follows: Year ended December 31, 2024 Year ended December 31, 2023 India 19,083,703 5,362,814 Nepal 501,719 - UAE - 512,500 Indonesia 595,903 - South America 468,203 - 20,649,528 5,875,314 F- 24 NOTE 14 – 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 preemptive, subscription, redemption or conversion rights. As of December 31, 2024, there were 171,579,284 (December 31, 2023: 170,711,880 ) issued and outstanding common shares. Holders of common stock are entitled to one vote for each share of common stock. Preferred stock The Company is authorized to issue up to 5,000,000 shares of preferred stock, $ 0.0001 par value per share. The Company has one class of preferred stock outstanding “ Series A- Preferred Shares ”. As of December 31, 2024, there were 1,000 (December 31, 2023: 1,000 ) issued and outstanding preferred stock. Common stock issued at the time of Merger At Closing of the Merger on April 14, 2023, 135,808,884 shares of our common stock and 1,000 Series A Preferred Shares were issued to Cardio Ventures. This includes common stock that was issued to Dr. Frederic Moll and one other accredited investor, who each provided $ 3,000,000 in interim financing to the Company pending consummation of the Merger. Following the Merger an additional 3,818,028 shares of our common stock were issued to Dr. Frederic Moll per his interim financing agreement with the Company. Common Stock issued post-Merger During the year ended December 31, 2023, $ 16,980,000 in advances that were outstanding under the Line of Credit Note, were converted into 22,945,946 shares issued to Sushruta Pvt Ltd at the conversion price of $ 0.74 per share. During the year ended December 31, 2023, the Company converted warrants and issued 90,514 shares of our common stock to two accredited investors at $ 4.00 per share receiving $ 362,056 in total proceeds. In December 2023, the Company received $ 50,000 total proceeds in relation to the issuance of 12,500 shares of common stock upon the exercise of warrants previously sold to three accredited investors at an exercise price of $ 4.00 per share. These shares are formally issued to the accredited investor subsequent to the year end 31 December 2023. Company has disclosed 12,500 common stock in Consolidated Statements of changes in equity as “Common stock to be issued”. During the year ended December 31, 2023, Farhan Taghizadeh exercised options and received 50,000 shares of common stock at a price of $ 1.00 per share. During the year ended on December 31, 2023, the Company issued 3,000 shares of common stock to Henry Gewanter in exchange for advisory services to be rendered over a 12-month period. The total fair value of such services is $ 24,450 . The value of services is calculated at the fair market value of shares as on date of contract. During the Year ended on December 31, 2023, the Company issued 50,000 shares of common stock to PCG Advisory, for investor and digital marketing services. The total value of such services is $ 100,000 . During the Year ended on December 31, 2023, the Company issued 75,000 shares of common stock to Seminars, Inc. that conducted online investment seminars in which the Company participated. The total value of services is $ 500,000 . During the year ended on December 31, 2023, the Company issued 116,348 shares of common stock to Somashekhar S P in exchange for advisory services to be rendered over a five-year period. Total fair value of such services is $ 1,045,968 . The value of services is calculated at fair market value of shares as on date of contract. F- 25 During the year ended on December 31, 2023, the Company issued 477,084 shares of common stock to Dr. Sudhir Kumar Rawal (RSS & Co Ltd) in exchange for his advisory services to be rendered over a five-year period. The total fair value of such services is $ 4,288,985 . The value of services is calculated at fair market value of shares as on date of contract. During the year ended on December 31, 2023, the Company issued 13,816 shares of common stock to Dr. Van Praet Frank in terms of his contract for advisory services to be rendered over a five-year period. The total fair value of services is $ 124,207 . The value of services is calculated at fair market value of shares as on date of contract. During the year ended on December 31, 2023, the Company issued 1,860 shares of common stock to Dr. Amitabh Singh in terms of his contract for advisory services to be rendered over a five-year period. The total fair value of services is $ 16,721 . The value of services is calculated at fair market value of shares as on date of contract. During the year ended on December 31, 2023, the Company issued 1,480 shares of common stock to Dr. Ashish Khanna under the terms of his contract for advisory services to be rendered over a five-year period. The total fair value of services is $ 13,305 . The value of services is calculated at fair market value of shares as on date of contract. During the year ended on December 31, 2023, the Company issued 5,835 shares of common stock to Dr. Vivek Bindal under the terms of his contract for advisory services to be rendered over a five-year period. The total fair value of services is $ 52,456 . The value of services is calculated at fair market value of shares as on date of contract. On November 27, 2023, the Company issued 169,118 shares of common stock to Group Chief Financial Officer, Anup Kumar Sethi, which is 20 % of a total grant of 845,592 shares awarded to him against services pursuant to the Company’s 2016 Incentive Stock Plan. The balance of 80 % vests in four equal annual instalments subject to his remaining employed by the Company or its subsidiaries. On November 27, 2023, the Company issued 549,437 shares of common stock to ninety employees of the Company’s subsidiaries, which is 20 % of a total grant of 2,747,187 shares awarded to such employees pursuant to the Company’s 2016 Incentive Stock Plan. The balance 80 % vests in four equal annual instalments subject to such employees remaining employed by the Company or its subsidiaries. On March 1, 2024 the Company issued 15,000 shares of common stock to PCG Advisory, for investor and digital marketing services. The total value of such services is $ 101,250 . On August 31, 2024, the Company issued 125,000 shares of common stock to five advisors in exchange for advisory services to be rendered over a 5 year period. The total value of such services is $ 40,000 . The value of services is calculated at the fair market value of shares as of the date of contract. On November 27, 2024, the Company issued 169,118 shares of common stock to Group Chief Financial Officer, Anup Kumar Sethi, which is second tranche of 20 % of a total grant of 845,592 shares awarded to him against services pursuant to the Company’s 2016 Incentive Stock Plan. The balance of 60 % vests in three equal annual instalments subject to his remaining employed by the Company or its subsidiaries. On November 27, 2024, the Company issued 536,747 shares of common stock to 80 employees of the Company’s subsidiary which is second tranche of 20 % of the total shares awarded to them in Nov 2023 pursuant to the Company’s 2016 Incentive Stock Plan. The balance of 60 % vests in three equal annual instalments subject to such employees remaining employed by the Company or its subsidiaries. On December 2, 2024, the Company issued 9,034 shares of common stock to an advisory firm in terms of the engagement document signed with them to provide production and graphics services to the Company. Holders of common stock are entitled to one vote for each share of common stock held. F- 26 NOTE 15 – INVENTORY Inventory for the year ended consisted of the following as on: December 31, 2024 December 31, 2023 Raw materials (includes goods in transit $ 969,959 (December 31, 2023: $ 233,888 )] 4,461,898 1,509,135 Work-in-progress 1,436,250 533,108 Finished goods 4,308,750 4,975,670 10,206,898 7,017,913 NOTE 16 – 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: As of December 31 Operating leases 2024 2023 Assets ROU operating lease assets 2,623,880 2,657,554 Liabilities Current portion of operating lease 409,518 396,784 Non Current portion of operating lease 2,349,118 2,351,113 Total lease liabilities 2,758,636 2,747,897 As of December 31 Operating leases 2024 2023 Weighted average remaining lease term (years) Ilabs Info Technology 3rd Floor 5.19 6.19 Ilabs Info Technology 1st Floor 5.58 - Ilabs Info Technology Ground Floor 7.42 8.42 Village Chhatarpur-1849-1852-Farm 0.58 1.58 Weighted average discount rate Ilabs Info Technology 3rd Floor 12 % 12 % Ilabs Info Technology 1st Floor 12 % - Ilabs Info Technology Ground Floor 12 % 12 % Village Chhatarpur-1849-1852-Farm 10 % 10 % Supplemental cash flow and other information related to leases are as follows: Year ended December 31 2024 2023 Cash payments for amounts included in the measurement of lease liabilities: Operating cash outflows for operating leases 705,868 524,766 F- 27 Maturities of lease liabilities as of December 31, 2024 were as follows: Operating Leases Fiscal Year Amount (in $ ) 2025 707,907 2026 596,737 2027 608,834 2028 621,537 2029 634,874 2030 and thereafter 703,872 Total Lease Payment 3,873,761 Less: Imputed Interest 1,115,125 Present value of lease liabilities 2,758,636 NOTE 17 – INCOME TAX The Company has not recorded income tax benefits for the net operating losses incurred during the years ended December 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 income/(loss) before income taxes consist of the following: Year ended December 31, 2024 2023 Domestic ( 17,924,310 ) ( 16,672,162 ) Foreign ( 1,226,887 ) ( 4,206,130 ) Total ( 19,151,197 ) ( 20,878,292 ) The Company has federal and state net operating losses as of December 31, 2024, and 2023. The Company has not recorded any amounts for unrecognized tax benefits as of December 31, 2024, and 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 consolidated statements of operations and comprehensive loss for the years ended December 31, 2024, and 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. F- 28 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: Year ended December 31, 2024 2023 Accounting income / (loss) before income tax ( 19,151,197 ) ( 20,878,292 ) Income tax expense (benefit) at federal statutory rate at 21 % ( 4,021,752 ) ( 4,384,441 ) Foreign tax rate differential ( 798,222 ) ( 1,078,990 ) Non-deductible expenses 245,753 ( 23,494 ) Excess tax benefit / (expense) on depreciation ( 66,770 ) 18,621 Excess tax expense on security deposit 286 10,826 Impact of unrecognized deferred tax asset on the loss of the year 4,640,705 5,457,478 Income tax expense/(benefit) - - The Company recorded nil income tax expense for the years ended December 31, 2024, and 2023 due to losses in current year and prior year and it does not expect to recover the tax benefit on the losses incurred during the years ended December 31, 2024, and 2023. The components of the deferred tax balances were as follows: December 31, 2024 December 31, 2023 Deferred tax assets: Net operating loss carry forwards 5,123,862 763,591 Net operating loss 3,842,483 4,360,270 Lease payments 28,299 18,976 Credit loss reserve 198,703 - Others 44,204 23,754 9,237,551 5,166,591 Valuation allowance ( 9,150,495 ) ( 5,145,040 ) Deferred tax assets 87,056 21,551 Deferred tax liabilities: Depreciation and amortization 74,285 16,763 Others 12,771 4,788 Deferred tax liabilities 87,056 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 December 31, 2024, and 2023 and recorded a valuation allowance of $ 9,150,495 and $ 5,145,040 respectively. NOTE 18 – 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 employees. The Gratuity Plan is unfunded, and the company does not make contributions to the plan assets. F- 29 The benefit obligation has been measured as of December 31, 2024, and 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: Year ended December 31, Change in projected benefit obligation 2024 2023 Projected benefit obligation as of January 1 34,005 10,655 Service cost 30,692 15,707 Interest cost 2,373 759 Benefits paid - - Actuarial loss (^) 14,226 7,009 Effect of exchange rate changes ( 463 ) ( 125 ) Projected benefit obligation as of December 31 80,833 34,005 Unfunded status as of December 31 80,833 34,005 Unfunded amount recognized in the consolidated balance sheets Non-current liability (included under other non-current liabilities) 74,817 33,933 Current liability (included under accrued expenses and other current liabilities) 6,016 72 Total accrued liability 80,833 34,005 Accumulated benefit obligation as of December 31 42,792 15,508 (^) During the years ended December 31, 2024, and 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 Consolidated Statements of operations and comprehensive loss and actuarial loss reclassified from AOCI, were as follows: Year ended December 31, 2024 2023 Service cost 30,692 15,707 Interest cost 2,373 759 Expected return on plan assets - - Amortization of actuarial loss, gross of tax - - Net gratuity cost 33,065 16,465 The components of retirement benefits included in AOCI, excluding tax effects, were as follows: Year ended December 31, 2024 2023 Net actuarial loss 14,226 7,009 Amount recognized in AOCI, excluding tax effects 14,226 7,009 The weighted average actuarial assumptions used to determine benefit obligations and net gratuity cost were: 2024 2023 Discount rate 7.22 % 7.08 % Rate of increase in compensation levels 12.50 % 15 % F- 30 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 during the year ending December 31, 2024 5,177 2025 13,974 2026 14,755 2027 12,660 2028 10,820 2029 – 2033 63,659 NOTE 19 – 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 December 31, 2024 December 31, 2023 December 31, 2024 December 31, 2023 Financial Assets Account receivables net (1) 3,299,032 2,365,013 3,299,032 2,365,013 Other non-current financial assets (2) 214,252 171,146 214,252 171,146 Total 3,513,284 2,536,159 3,513,284 2,536,159 Financial Liabilities Lease liabilities (3) 2,349,118 2,351,113 2,349,118 2,351,113 Total 2,349,118 2,351,113 2,349,118 2,351,113 (1) Account receivable net of allowance 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 7 % 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 16 Lease). The Company has assessed that the financial instruments that are not carried at fair value consist primarily of cash and cash equivalents, restricted cash, 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. F- 31 NOTE 20 – STOCK COMPENSATION EXPENSES Stock options to Employees: The Company grants shares of the Company’s common stock, par value $ 0.0001 to certain employees under the Company’s 2016 stock incentive plan. 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 : The Company grants restricted shares of the Company’s common stock, $ 0.0001 per value to certain employees 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/Advisors (“Advisor’s”) : The Company issues shares of the Company’s common stock (“Advisory Shares”) to retain and compensate certain Advisors for performing services for the Company and in exchange for the compensation, which is issued in a phased manner as determined by the company. The “Services” include but are not limited to (a) providing proctoring and medical advisory services, (b) advising the Company on the development of surgical robotics procedures and improvements in design and technology (c) participation in case of observation and performance of live surgeries, and (d) disseminating information about the Company’s products in various scientific meetings and surgical robotic conferences globally (e) investor’s digital marketing support. The Company issues such Advisory Shares in a phased manner commensurate with the period over which the services are to be performed, as determined by the Company. Stock Options Stock options activity for the year ended December 31, 2024, was as follows: Number of Shares Options Weighted average grant date fair value per share Unvested balance as of December 31, 2023 3,382,368 $ 3.41 Granted 3,350,221 $ 1.39 Vested 4,195,813 $ 1.79 Forfeited - - Unvested balance as of December 31, 2024 2,536,776 $ 3.41 Number of Shares Options Weighted average grant date fair value per share Exercisable balance as of December 31, 2024 5,041,405 $ 2.06 Stock options activity for the year ended December 31, 2023, was as follows: Number of shares options Weighted average grant date fair value Unvested balance as of December 31, 2022 - - Granted 4,227,960 $ 3.41 Vested 845,592 $ 3.41 Forfeited - - Unvested balance as of December 31, 2023 3,382,368 $ 3.41 F- 32 Number of Shares Options Weighted average grant date fair value per share Exercisable balance as of December 31, 2023 845,592 $ 3.41 The aggregate fair value of the stock options vested was $ 7,540,276 and $ 2,883,469 during the year December 31, 2024 and 2023 respectively. The options vested during the year were not exercised at the end of the year December 31, 2024. Further there were no stock options issued during the year December 31, 2024. Restricted Stock Awards (RSA) Restricted Stock Awards activity for the year ended December 31, 2024, was as follows: Number of Shares RSAs Weighted average grant date fair value per share Unvested balance as of December 31, 2023 2,874,223 $ 7.76 Granted - - Vested 705,865 $ 7.76 Forfeited 50,760 7.76 Unvested balance as of December 31, 2024 2,117,598 $ 7.76 Number of Shares RSAs Weighted average grant date fair value per share Exercisable balance as of December 31, 2024 - - Restricted Stock Awards activity for the year ended December 31, 2023, was as follows: Number of Shares RSAs Weighted average grant date fair value per share Unvested balance as of December 31, 2022 - - Granted 3,592,779 $ 7.76 Vested 718,556 $ 7.76 Forfeited - - Unvested balance as of December 31, 2023 2,874,223 $ 7.76 Number of Shares RSAs Weighted average grant date fair value per share Exercisable balance as of December 31, 2023 - - During the year ending December 31, 2024, 705,865 RSU were exercised and issued to employees of total common stock of $ 5,477,512 . The aggregate vesting date fair value of RSUs vested was $ 5,477,512 and $ 5,575,995 during the years ended December 31, 2024, and 2023 respectively. F- 33 Advisory shares: Common stock issued to consultants as advisory shares during the year as follows: Grant dates Fair value on grant date Unvested shares in the beginning Shares granted during the year Option vested Unvested share at year end 1-Jun-23 8.15 5,000 - 5,000 - 31-Oct-23 8.99 52,963 - 13,816 39,147 31-Oct-23 8.99 7,130 - 1,860 5,270 31-Oct-23 8.99 5,673 - 1,480 4,193 31-Oct-23 8.99 22,368 - 5,835 16,533 1-Mar-24 6.75 - 15,000 15,000 - 21-Aug-24 0.32 - 10,000 10,000 - 31-Aug-24 0.32 - 50,000 50,000 - 31-Aug-24 0.32 - 50,000 50,000 - 31-Aug-24 0.32 - 5,000 5,000 - 31-Aug-24 0.32 - 10,000 10,000 - 2-Dec-24 3.32 - 9,034 9,034 93,134 149,034 177,025 65,143 During the year ending December 31, 2024, 149,034 advisory shares were exercised and issued to advisors of total common stock of $ 171,250 . The aggregate vesting date fair value of Advisory shares vested was $ 418,694 and $ 5,633,147 during the year ended December 31, 2024 and year ended December 31, 2023 respectively. Stock compensation expenses During the year ended December 31, 2024, the Company has recorded share compensation expense of $ 14,342,784 in relation to stock options, RSU and Advisory shares as follows: For the year ended December 31, 2024 For the year ended December 31, 2023 Stock options 7,546,149 3,152,066 Restricted stock units (RSU) 5,479,441 6,095,401 Advisory shares 1,317,194 476,025 Total stock compensation expenses 14,342,784 9,723,492 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 ended December 31, 2024, and 2023, were as follows: Year ended December 31, 2024 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 25.00 % 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 F- 34 As share-based compensation expense recognized in the Consolidated Statements of operations and comprehensive loss during the years ended December 31, 2024, and 2023, is based on awards ultimately expected to vest, it has been reduced for estimated forfeitures, if any. As of December 31, 2024, there was $ 8,650,405 , $ 16,432,560 (December 31, 2023: $ 11,265,277 , $ 21,784,566 ) of total unrecognized compensation expense related to unvested stock options and restricted stock units respectively, to acquire common stock under the 2016 Inventive Stock plan. The unrecognized compensation expense is expected to be recognized over a weighted-average period of 2.91 years for unvested stock options and restricted stock units for rights granted to acquire common stock under 2016 Incentive Stock Plan. NOTE 21 – RELATED PARTY The details of transactions and balances outstanding with the related parties for the year ended December 31, 2024 and 2023 are as follows: Particulars For the year ended December 31, 2024 For the year ended December 31, 2023 Transactions during the year: Expenses incurred on behalf of affiliates Srivastava Robotic Surgery Pvt Ltd 345 330 SS International Centre For Robotics Surgery Pvt Ltd 948 2,498 Sudhir Srivastava Medical Innovations Pvt Ltd 491 357 Telegnosis Private Limited 345 383 Reimbursements payable Sudhir Prem Srivastava ( 239,223 ) ( 211,904 ) ESOP expenses Anup Sethi 1,315,032 1,434,606 Barry F. Cohen 577,868 630,413 Dr. Frederic H Moll - 4,463,799 Dr. S.P. Somashekhar 210,260 34,866 Sudhir Prem Srivastava 6,390,413 1,891,240 Vishwajyoti P. Srivastava, M.D 577,868 630,413 Consultancy charges and other perquisites Anup Sethi 178,251 167,775 Barry F. Cohen 180,000 128,000 Sudhir Prem Srivastava 889,567 805,992 Vishwajyoti P. Srivastava, M.D 212,164 209,623 Proceeds from notes issued Sushruta Private Limited 6,000,000 16,980,000 Interest expense on notes Sushruta Private Limited 194,785 - Conversion of notes into common stock Sushruta Private Limited - 16,980,000 F- 35 Balances outstanding as on year end: As on December 31, 2024 As on December 31, 2023 Balance receivable / (payable) Accrued expenses & other current liabilities: Barry F. Cohen ( 310,500 ) ( 130,500 ) Sushruta Private Limited ( 194,785 ) - Vishwajyoti P. Srivastava, M.D ( 75,006 ) ( 75,006 ) Prepaids and other current assets: Srivastava Robotic Surgery Pvt Ltd 345 - SS International Centre For Robotics Surgery Pvt Ltd 948 - Cardio Bahamas^ ( 76,741 ) ( 76,741 ) SSI PTE Singapore^ ( 424,586 ) ( 424,586 ) Sudhir Prem Srivastava^ 1,644,825 2,063,508 Sudhir Srivastava Medical Innovations Pvt Ltd 491 - Telegnosis Private Limited 727 383 Sushruta Private Limited 5,000 5,000 Notes payable: Sushruta Private Limited ( 6,000,000 ) - ^ For these balances, Dr. Sudhir Prem Srivastava is considered as the ultimate beneficial owner, and the settlement is expected to be made on net basis. Accordingly, these balances have been disclosed under prepaids and other current assets. NOTE 22 – 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 $ 24,384 plus applicable taxes. This lease expires in March 2030. Effective June 01, 2023, the Company’s SSI-India subsidiary signed another lease agreement to occupy additional space in Gurugram, to further expand its manufacturing and assembly capacity. This lease provides for a monthly payment of $ 16,144 plus taxes and expires on May 31, 2032 , subject to further renewal on mutually acceptable terms. Further effective from August 1, 2024 SSI-India subsidiary signed another lease agreement to occupy additional space in Gurugram, to further expand its operations. This lease provides for a monthly payment of $ 9,024 plus taxes and expires on July 31, 2030 . In August 2023, SSI-India leased a house pursuant to the terms of an employment agreement with Dr. Sudhir Srivastava to provide residential accommodation for Dr Sudhir Srivastava. This lease provides for a monthly payment of $ 17,995 plus taxes. As of December 31, 2024, the Company had committed to spend approximately $ 27,647 under agreements to purchase property and equipment. This amount is net of capital advances paid which are recognized in consolidated balance sheets as “Capital work in progress” under “Property, plant and equipment.” NOTE 23 – SUBSEQUENT EVENTS 1. In January 2025, the Company raised $ 20,000,000 from Sushruta Pvt Ltd. by way of issuing two 7 % One-Year Convertible Promissory Notes (“Convertible Notes”) of $ 5,000,000 each and one 7 % One Year Convertible Promissory Note of $ 10,000,000 for Company’s long-term working capital needs. 2. In February 2025, the Company paid $ 4,142,637 towards repayment of five 7 % One-Year Promissory Notes totaling to $ 4,000,000 raised from Sushruta Pvt Ltd., on various dates during the year 2024, along with interest due thereon. 3. In February 2025, the Company paid $ 1,068,849 towards repayment of one 7 % One-Year Convertible Promissory Notes of $ 1,000,000 raised from Andrew Economos along with the interest due thereon. 4. In February 2025, the Company converted Convertible Notes worth $ 22,000,000 (including $ 20,000,000 raised in the month of January 2025), along with the interest accrued thereon, issued to Sushruta Pvt Ltd. into 16,046,814 common shares of the Company. 5. In February 2025, the Company converted three 7 % One Year Convertible Promissory Notes totaling to $ 450,000 along with the interest accrued thereon, into 108,048 common shares of the Company as per the conversion rights exercised by the note holders. 6. In March 2025, the Company raised another $ 8,000,000 from Sushruta Pvt Ltd by issuing a 7 % One-Year Convertible Promissory Note for long-term working capital requirements of the Company and on March 31, 2025 converted these notes along with the interest accrued thereon, into 5,811,554 common shares of the Company. 7. In March 2025, the Company issued 7,858 common shares to one ex-employee and 2,619 common shares to an ex-director of the Company on cash-less conversion of the options held by them as per the terms of the Stock Option Agreement options executed by them with the Company. 8. In April 2025, the Company issued 3,163 shares of common stock to an advisory firm in terms of the engagement document signed with them to provide production and graphics services to the Company. F- 36