SS Innovations International, Inc. 10-Q

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2025 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission file number: 000-56608 SS INNOVATIONS INTERNATIONAL, INC. (Exact name of registrant as specified in its charter) Florida 47-3478854 (State or Other Jurisdiction of Incorporation or Organization) (I.R.S. Employer Identification No.) 405, 3 rd Floor , iLabs Info Technology Centre Udyog Vihar, Phase III Gurugram, Haryana 122016 , India (Address of Principal Executive Offices) Registrant’s telephone number, including area code: +91 73375 53469 Securities Registered Pursuant to Section 12(b) of the Act: Title of each class Trading Symbol(s) Name of each exchange on which registered Common Stock, par value $0.0001 per share SSII The Nasdaq Stock Market LLC Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐ Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the Registrant was required to submit such files.) Yes ☒ No ☐ Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “accelerated filer”, “large accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act. Large Accelerated Filer ☐ Accelerated Filer ☐ Non-Accelerated Filer ☒ Smaller reporting company ☒ Emerging growth company ☐ If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐ Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒ There were 193,603,970 shares of common stock, $0.0001 par value of the Registrant issued and outstanding as of May 13, 2025. Unless the context otherwise requires, the terms “ SSi, ” “ the Company ,” “ we, ” “ us, ” and “ our ” refer to SS Innovations International, Inc., and where appropriate, our subsidiaries. TABLE OF CONTENTS Page PART I – FINANCIAL INFORMATION 1 Item 1. Financial Statements 1 Condensed Consolidated Balance Sheets as of March 31, 2025 (unaudited) and December 31, 2024 1 Condensed Consolidated Statements of Operations and Comprehensive Loss for the three months ended March 31, 2025 (unaudited) and March 31, 2024 (unaudited) 2 Condensed Consolidated Statement of Changes in Equity for the three months ended March 31, 2025 (unaudited) and March 31, 2024 (unaudited) 3 Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 2025 (unaudited) and March 31, 2024 (unaudited) 4 Notes to Condensed Consolidated Financial Statements (unaudited) 5 Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations 32 Item 3. Quantitative and Qualitative Disclosures About Market Risk. 37 Item 4. Controls and Procedures 37 PART II - OTHER INFORMATION 39 Item 1. Legal Proceedings 39 Item 1A. Risk Factors. 39 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds. 39 Item 3. Defaults Upon Senior Securities. 39 Item 4. Mine Safety Disclosures. 39 Item 5. Other Information. 39 Item 6. Exhibits 40 SIGNATURES 41 i PART I – FINANCIAL INFORMATION SS INNOVATIONS INTERNATIONAL, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) Item 1. Financial Statements As of Notes March 31, 2025 December 31, 2024 ASSETS Current Assets: Cash and cash equivalents 7 $ 15,873,217 $ 466,500 Restricted cash 7 5,886,589 5,838,508 Accounts receivable, net 6 3,962,202 4,466,047 Inventory, net 14 14,295,141 10,206,898 Prepaids and other current assets 8 7,602,794 6,438,338 Total Current Assets 47,619,943 27,416,291 Non- Current Assets: Property, plant, and equipment, net 4 7,044,307 5,385,955 Right of use asset 15 2,629,225 2,623,880 Accounts receivable, net 6 2,818,043 3,299,032 Restricted cash- Non current 7 318,982 318,527 Prepaids and other non current assets 8 3,026,461 3,341,528 Total Non-Current Assets 15,837,018 14,968,922 Total Assets $ 63,456,961 $ 42,385,213 LIABILITIES AND STOCKHOLDERS' (DEFICIT) EQUITY Current Liabilities Bank overdraft facility 11 $ 7,682,411 $ 7,994,906 Notes payable 10 - 7,450,000 Current portion of operating lease liabilities 15 368,309 409,518 Accounts payable 9 3,641,410 2,312,382 Deferred revenue 12 1,871,275 1,278,602 Accrued expenses & other current liabilities 9 1,433,308 1,884,814 Total Current Liabilities 14,996,713 21,330,222 Non- Current Liabilities Operating lease liabilities, less current portion 15 2,402,653 2,349,118 Deferred Revenue- Non Current 12 5,405,227 5,173,953 Other non current liabilities 9 98,078 74,817 Total Non-Current Liabilities 7,905,958 7,597,888 Total Liabilities $ 22,902,671 $ 28,928,110 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 March 31, 2025 and December 31, 2024 13 1 1 Common stock, 250,000,000 shares authorized, $ 0.0001 par value, 193,556,177 shares and 171,579,284 shares issued and outstanding as of March 31, 2025 and December 31, 2024 respectively 13 19,354 17,157 Accumulated other comprehensive income (loss) 13 ( 726,911 ) ( 749,625 ) Additional paid in capital 13 89,705,829 56,952,200 Capital reserve 899,917 899,917 Accumulated deficit ( 49,343,900 ) ( 43,662,547 ) Total stockholders’ equity 40,554,290 13,457,103 Total liabilities and stockholders’ equity $ 63,456,961 $ 42,385,213 See accompanying notes to Condensed Consolidated Financial Statements 1 SS INNOVATIONS INTERNATIONAL, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (Unaudited) For The Three months ended Notes March 31, 2025 March 31, 2024 REVENUES System sales 12 4,502,482 3,494,759 Instruments sale 12 477,208 118,515 Warranty sale 12 122,504 9,407 Lease income 12 18,416 15,012 Total revenue $ 5,120,610 $ 3,637,693 Cost of revenue ( 4,033,402 ) ( 2,909,511 ) GROSS PROFIT 1,087,208 728,182 OPERATING EXPENSES: Research & development expense 1,010,095 527,991 Stock compensation expense 19 2,379,212 7,108,750 Depreciation and amortization expense 4 208,882 80,101 Selling, general and administrative expense 3,410,872 2,843,659 TOTAL OPERATING EXPENSES 7,009,061 10,560,501 Loss from operations ( 5,921,853 ) ( 9,832,319 ) OTHER INCOME (EXPENSE): Interest Expense ( 379,905 ) ( 190,088 ) Interest and other income, net 620,405 180,654 TOTAL OTHER INCOME (EXPENSE), NET 240,500 ( 9,434 ) LOSS BEFORE INCOME TAXES ( 5,681,353 ) ( 9,841,753 ) Income tax expense 16 - - NET LOSS $ ( 5,681,353 ) $ ( 9,841,753 ) Net loss per share - basic and diluted 2(r) $ ( 0.03 ) $ ( 0.06 ) Weighted average- basic shares 2(r) 178,836,342 170,729,490 Weighted average- diluted shares 2(r) 188,599,859 181,609,691 CONSOLIDATED STATEMENTS OF OTHER COMPREHENSIVE LOSS NET LOSS $ ( 5,681,353 ) $ ( 9,841,753 ) OTHER COMPREHENSIVE INCOME (LOSS) Foreign currency translation gain/(loss) 6,876 ( 79,314 ) Retirement Benefit (net of tax) 17 15,838 8,507 TOTAL COMPREHENSIVE LOSS $ ( 5,658,639 ) $ ( 9,912,560 ) See accompanying notes to Condensed Consolidated Financial Statements. 2 SS INNOVATIONS INTERNATIONAL, INC. CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY FOR THE THREE MONTHS ENDED MARCH 31, 2025, AND MARCH 31, 2024 (Unaudited) Preferred Stock Common Stock Common Stock to be Issued Additional Paid-In Accumulated Capital Accumulated other comprehensive Total Stockholders’ Notes Number Amount Number Amount Number Amount Capital Deficit Reserve income (loss) equity Balance as at December 31, 2024 1,000 1 171,579,284 17,157 - - 56,952,200 ( 43,662,547 ) 899,917 ( 749,625 ) 13,457,103 Stock compensation 19 - - - - - - 2,110,467 - - - 2,110,467 Common stock issued against exercise of warrants 13 - - 10,477 1 - - ( 1 ) - - - - Conversion of notes payable to equity 13 - - 21,966,416 2,196 - - 30,643,163 - - - 30,645,359 Net loss - - - - - - - ( 5,681,353 ) - 22,714 ( 5,658,639 ) Balance as at March 31, 2025 1,000 $ 1 193,556,177 $ 19,354 - $ - $ 89,705,829 $ ( 49,343,900 ) $ 899,917 $ ( 726,911 ) $ 40,554,290 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 19 - - - - - - 6,842,002 - - - 6,842,002 Common stock issued against exercise of warrants 13 - - 12,500 1 ( 12,500 ) ( 50,000 ) 49,999 - - - - Stock issued for services 13 - - 15,000 2 - - 101,249 - - - 101,250 Net loss - - - - - - - ( 9,841,753 ) - ( 70,807 ) ( 9,912,560 ) Balance as at March 31, 2024 1,000 $ 1 170,739,380 $ 17,075 - $ - $ 50,451,186 $ ( 34,353,103 ) $ 899,917 $ ( 266,306 ) $ 16,748,770 See accompanying notes to Condensed Consolidated Financial Statements. 3 SS INNOVATIONS INTERNATIONAL, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) For The Three months ended March 31, 2025 March 31, 2024 Cash flows from operating activities: Net loss $ ( 5,681,353 ) $ ( 9,841,753 ) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation and amortization 208,882 80,101 Operating lease expense 205,275 178,871 Interest Expense 155,015 283,868 Interest and other income, net ( 140,928 ) ( 168,746 ) (Reversal of) / Provision for credit loss reserve ( 422,711 ) 389,330 Stock compensation expense 2,379,212 7,108,750 Changes in operating assets and liabilities: Accounts receivable, net 1,275,750 ( 3,186,108 ) Inventory, net ( 5,082,673 ) ( 1,326,859 ) Deferred revenue 823,947 2,290,417 Prepaids and other assets ( 1,003,604 ) 56,511 Accounts payable 1,329,028 926,083 Accrued expenses & other liabilities 48,331 705,455 Operating lease payment ( 197,545 ) ( 167,838 ) Net cash used in operating activities ( 6,103,374 ) ( 2,671,918 ) Cash flows from investing activities: Purchase of property, plant and equipment ( 872,804 ) ( 127,255 ) Net cash used in investing activities ( 872,804 ) ( 127,255 ) Cash flows from financing activities: Proceeds from bank overdraft facility (net) ( 312,495 ) 188,259 Proceeds from issuance of convertible notes to principal shareholder 28,000,000 1,000,000 Proceeds from issuance of convertible notes to other investors - 1,450,000 Repayment of convertible notes to principal shareholder, including interest ( 4,212,637 ) - Repayment of convertible notes to other investors, including interest ( 1,068,849 ) - Net cash provided by financing activities 22,406,019 2,638,259 Net change in cash 15,429,841 ( 160,914 ) Effect of exchange rate on cash 25,412 ( 31,351 ) Cash and cash equivalents at the beginning of the period 6,623,535 7,087,845 Cash and cash equivalents at end of the period $ 22,078,788 $ 6,895,580 ^ For cash and cash equivalents and restricted cash, refer Note 7 Supplemental disclosure of cash flow information: Conversion of convertible notes into common stock, including interest $ 30,645,360 $ - Transfer of systems from inventory to property, plant and equipment $ 994,430 $ 1,422,880 See accompanying notes to Condensed Consolidated Financial Statements. 4 SS INNOVATIONS INTERNATIONAL, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) NOTE 1 – FINANCIAL STATEMENTS Organization SS Innovations International, Inc. (the “ Company ” or “ SSII ”) was incorporated as AVRA Surgical Microsystems, Inc. in the State of Florida on February 4, 2015 . Effective November 5, 2015, the Company’s corporate name was changed to Avra Medical Robotics, Inc. (“ AVRA ”). On April 14, 2023, a wholly owned subsidiary of the Company, AVRA-SSI Merger Corporation (“ Merger Sub ”) merged with CardioVentures, Inc., a Delaware corporation (“ CardioVentures ”), the indirect parent of Sudhir Srivastava Innovations Pvt. Ltd., an Indian private limited company engaged in the business of developing innovative surgical robotic technologies. As a result of the transaction, a “ change in control ” of the Company took place. In addition, among other matters, the Company changed its name to “ SS Innovations International, Inc. ” and implemented a one for ten reverse stock split. The 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 (the “ Accounting Acquiree ”) and Cardio Ventures Inc., the accounting acquirer, was assumed to have issued stock for the net assets of AVRA, accompanied by a recapitalization. Accordingly, for the year ended December 31, 2022, CardioVentures has been considered the ultimate holding company. Prior to October 18, 2022, Cardio Ventures Pvt Ltd., Bahamas (Cardio Bahamas), was in existence and served as the ultimate holding company. On October 18, 2022, Cardio Ventures Inc. acquired controlling interest in Otto Pvt Ltd. from Cardio Bahamas, making Cardio Ventures Inc. the ultimate holding company. Basis of Presentation Unaudited Interim Condensed Consolidated Financial Statements The interim condensed consolidated balance sheet as of March 31, 2025, and the interim condensed consolidated statements of operations, comprehensive loss and stockholders’ equity for the three months and cash flows for the three months ended March 31, 2025 and March 31, 2024 are unaudited. The unaudited interim condensed consolidated financial statements have been prepared on the same basis as the annual consolidated financial statements and reflect, in the opinion of management, all adjustments of a normal and recurring nature that are necessary for the fair presentation of our financial position as of March 31, 2025 and our results of operations for the three months and cash flows for the three months ended March 31, 2025 and March 31, 2024. The financial data and other financial information disclosed in these notes to the interim condensed consolidated financial statements related to the three months are also unaudited. The interim condensed consolidated results of operations for the three months ended March 31, 2025 are not necessarily indicative of the results to be expected for the year ending December 31, 2025 or for any future annual or interim period. The condensed consolidated balance sheet as of December 31, 2024 included herein was produced from the audited consolidated financial statements as of that date. These interim condensed consolidated financial statements should be read in conjunction with our audited consolidated financial statements included in the Annual Report on Form 10-K as filed by us with the U.S. Securities and Exchange Commission (the “SEC”) on April 15, 2025. The interim condensed consolidated financial statements and accompanying notes were prepared in accordance with accounting principles generally accepted in the United States (“ GAAP ”). The accompanying condensed financial statements have been prepared on a consolidated basis and reflect the condensed consolidated financial statements of SS Innovations International, Inc. and all of its subsidiaries (the “ Group ”). The standalone financial statements of subsidiaries are fully consolidated on a line-by-line basis. Intra-group balances and transactions, and gains and losses arising from intra-group transactions, are eliminated while preparing condensed consolidated financial statements. Certain prior period amounts have been reclassified to conform to the current year presentation. 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 GAAP. 5 Going Concern The accompanying condensed consolidated financial statements have been prepared on a going concern basis which implies the Company will continue to meet its obligations for the next 12 months as of the date these financial statements are issued. The Company had a working capital surplus of $ 32,623,230 and an accumulated deficit of $ 49,343,900 as of March 31, 2025. The Company also had a net loss of $ 5,681,353 for the three months ended March 31, 2025 as compared to loss of $ 9,841,753 for the three months ended March 31, 2024 which was mainly on account of non-cash items like stock compensation expense of $ 2,379,212 , depreciation of $ 208,882 . 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 unaudited interim condensed consolidated financial statements are issued. 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 . In January 2025, the Company raised $ 28,000,000 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 . In February 2025, the Company paid $ 4,212,637 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. 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. 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. In February 2025, the Company converted Convertible Notes worth $ 22,000,000 , along with the interest accrued thereon, issued to Sushruta Pvt Ltd. into 16,046,814 common shares of the Company. In March 2025, the Company converted Convertible Notes worth $ 8,000,000 , along with the interest accrued thereon, issued to Sushruta Pvt Ltd into 5,811,554 common shares of the Company. 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. 6 NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES a) Use of Estimates The preparation of condensed consolidated financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities and expenses. The Company regularly evaluates estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates made by management. Significant estimates 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 an original maturity of ninety days or less to be cash equivalents. c) Restricted Cash Restricted cash includes any cash and cash equivalents that are legally restricted as to withdrawal or usage for the Company’s operations. For the purposes of the condensed consolidated statement of cash flows, the Company includes in its cash and cash-equivalent balances those amounts that have been classified as restricted cash and restricted cash equivalents. d) Accounts Receivable and Allowance for Expected Credit Losses The Company’s account receivables are due from customers relating to contracts to supply surgical robotic systems, instruments, and accessories and to provide post sales warranty/maintenance services. The Company also sells surgical robotic systems under deferred payment arrangements and in such cases, the amounts due and recoverable beyond the one year period at the balance sheet date are classified as long-term receivables. Collateral is currently not required. The Company also maintains credit loss allowance for estimated losses resulting from the inability of the Company’s customers to make payments. The Company periodically reviews these estimated allowances, including an analysis of the customers’ payment history and creditworthiness, the age of the trade receivable balances and current economic conditions that may affect a customer’s ability to make payments as well as historical collection trends for its customers as a whole. Based on this review, the Company specifically reserves for those accounts deemed uncollectible or likely to become uncollectible. When receivables are determined to be uncollectible, principal amounts of such receivables outstanding are deducted from the allowance. The allowance for doubtful accounts as of March 31, 2025, and December 31, 2024 amounted to $ 175,647 and $ 545,799 respectively. e) Employee Benefits Contributions to defined contribution plans are charged to the condensed consolidated statement of operations and comprehensive loss in the period in which services are rendered by the covered employees. Current service costs for defined benefit plans are recognized in the period to which they relate. The liability in respect of defined benefit plans is calculated annually by the Company using the projected unit credit method. The Company records annual amounts relating to its defined benefit plans based on calculations that incorporate various actuarial and other assumptions, including discount rates, mortality, future compensation increases and attrition rates. The Company reviews its assumptions on an annual basis and makes modifications to the assumptions based on current rates and trends when it is appropriate to do so. The effect of modifications to those assumptions is recorded in other comprehensive income (loss) (“OCI”) and amortized to net periodic benefit cost over the expected remaining period of service of the covered employees using the corridor method. The Company believes that the assumptions utilized in recording its obligations under its plans are reasonable based on its experience and market conditions. These assumptions may not be within the control of the Company and accordingly it is reasonably possible that these assumptions could change in future periods. The Company includes the service cost component of the net periodic benefit cost in the same line item or items as other compensation costs arising from services rendered by the respective employees during the period. The interest cost, expected return on plan assets and amortization of actuarial gains/loss, are included in “Other income/(expense), net”. Refer to Note 17 - Employee Benefit Plans to the unaudited interim condensed consolidated financial statements for details. 7 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 March 31, 2025 and March 31, 2024 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 $ 12,094 and $ 6,151 for the three months ended March 31, 2025 and March 31, 2024, 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 condensed consolidated statement of operations and comprehensive loss. The assets and liabilities of the subsidiaries for which the functional currency is other than the U.S. dollar are translated into U.S. dollars, the reporting currency, at the rate of exchange prevailing on the balance sheet date. Revenues and expenses are translated into U.S. dollars at the exchange rates prevailing on the last business day of each month, which approximates the average monthly exchange rate. Share capital and other equity items are translated at exchange rates that prevailed on the date of inception of the transaction. Resulting translation adjustments are included in “Accumulated other comprehensive income/(loss)” in the condensed consolidated balance sheet. The relevant translation rates are as follows: for the three months ended March 31, 2025 closing rate at 85.46 US$: INR, average rate at 85.52 US$:INR. The relevant translation rates are as follows: for the three months ended March 31, 2024 closing rate at 83.35 US$: INR, average rate at 83.27 US$:INR. The relevant translation rates are as follows: for the year ended December 31, 2024 closing rate at 85.58 US$: INR, average rate at 84.39 US$:INR g) Inventory The Company’s inventory consists of finished goods in the form of fully assembled and tested surgical robotic system, semi-finished goods in the form of various sub-systems of the surgical robotic systems in various stages of assembly and manufacturing and raw material in the form of various mechanical, electrical, and other material components, parts, motors, encoders etc. which are not yet assembled/manufactured. The inventory is valued at the lower of cost (first-in, first-out) or estimated net realizable value. 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. 8 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 outflow of resources is remote, no provision or disclosure is made. Legal costs incurred in connection with such liabilities are expensed as incurred. Capital commitments are disclosed in the condensed consolidated financial statements. 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. 9 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 3 to 5 years. The exact terms are mutually agreed upon with the customer. 5. Delivery, Installation, and Training: The Company is responsible for delivering and installing the system at the customer’s premises. Post-installation, the Company provides free training to surgeons and surgical staff to enable them to operate the system effectively. 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 delivered to the customer. 10 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 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. 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 life of the assets. The estimated useful lives used 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 systems 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. 11 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. Stock Options : These provide employees with the right, but not the obligation, to purchase shares of the Company’s stock at a specified price within a defined period, as per the terms of the stock option agreement. Stock-based compensation expense associated with AVRA 2016 Stock Incentive Plan is measured at fair-value using a Black-Scholes option-pricing model at commencement of each offering period and recognized over that offering period. Stock Units (Restricted Stock Units, or RSUs): These do not require the employee to exercise any options. Each stock unit automatically converts into a specified number of shares upon vesting. The Company uses last three month’s average share price of common stock on OTC exchange as grant date fair value for RSUs. The Company recognizes stock-based compensation expense in the condensed consolidated statement of operations and comprehensive loss for both employees and non-employee directors based on the grant-date fair value of the awards. These costs are recognized on a straight-line basis over the requisite service period, or until the date at which the recipient becomes eligible for retirement, if shorter. Forfeitures of equity awards are accounted for as they occur. The Company accounts for equity instruments issued in exchange for goods or services from non-employees in accordance with ASC Topic 718 Stock Compensation. The costs associated with these equity instruments are measured at the estimated fair market value of the consideration received or the estimated fair value of the equity instruments issued, whichever is more reliably measurable. 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. 12 r) Basic and Diluted Loss per Share The following table sets forth the computation of basic and diluted earnings per share: For three Months ended March 31, 2025 2024 Net Loss ( 5,681,353 ) ( 9,841,753 ) Basic weighted average common shares outstanding 178,836,342 170,729,490 Dilutive effect of convertible note (1) - 326,830 Dilutive effect of stock-based awards 9,763,517 10,553,371 Diluted weighted average common shares outstanding 188,599,859 181,609,691 Earnings per share attributable to SS INNOVATIONS INTERNATIONAL INC. stockholders: Basic and Diluted ( 0.03 ) ( 0.06 ) (1) Represents dilution effect related to the interest on convertible notes in the calculation of diluted weighted average shares outstanding for the portion of the period. Refer Note 10 – Notes Payable to the condensed 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 In accordance with ASC Topic 730 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. 13 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 condensed consolidated balance sheet. Right-of-use assets (ROU) assets represent the Company’s right to use an underlying asset during the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease arrangement. Lease liabilities are recognized at commencement date based on the present value of lease payments over the lease term. Operating lease ROU assets are recognized at commencement date in an amount equal to lease liability, adjusted for any lease prepayments, initial direct costs, and lease incentives. For leases in which the rate implicit in the lease is not readily determinable, the Company uses its incremental borrowing rate based on the information available at commencement date. The Company determines the incremental borrowing rate by adjusting the benchmark reference rates with appropriate financing spreads applicable to the respective geographies where the leases are entered and lease specific adjustments for the effects of collateral, if applicable. Lease terms includes the effects of options to extend or terminate the lease when it is reasonably certain at commencement of the lease that the Company will exercise that option. Lease expense for operating lease arrangements is recognized on a straight-line basis over the lease term reflecting single operating lease cost. The Company evaluates lease agreements to determine lease and non-lease components, which are accounted for separately. Lease payments that depend on factors other than an index or rate are considered variable lease payments and are excluded from the operating lease assets and liabilities and are recognized as expense in the period in which the obligation is incurred. Lease payments include payments for common area maintenance, utilities such as electricity, heating and water, among others, and property taxes, and other similar payments paid to the landlord, which are treated as non-lease component. The Company accounts for lease-related concessions in accordance with guidance in Topic 842, Leases, to determine, on a lease-by-lease basis, whether the concession provided by lessor should be accounted for as a lease modification. The Company accounts for a modification as a separate contract when it grants an additional right of use not included in the original lease and the increase is commensurate with the standalone price for the additional right of use, adjusted for the circumstances of the particular contract. Modifications which are not accounted for as a separate contract are reassessed as of the effective date of the modification based on its modified terms and conditions and the facts and circumstances as of that date. Upon modification, the Company remeasures the lease liability to reflect changes to the remaining lease payments and discount rates and recognizes the amount of the remeasurement of the lease liability as an adjustment to the ROU assets. However, if the carrying amount of the ROU assets is reduced to zero as a result of modification, any remaining amount of the remeasurement is recognized as an expense in condensed consolidated statement of operations and comprehensive loss. The Company reviews ROU assets for impairment whenever events or changes in circumstances indicate that the related carrying amount may not be recoverable. 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 Unaudited Interim Condensed Consolidated Statements of Comprehensive Loss. Total foreign currency transaction gains and losses were immaterial for three months ended March 31, 2025, and March 31, 2024. 14 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 three months ended March 31, 2025, and 2024, the Company’s revenues from within India accounted for 82 % and 100 % respectively of total revenue, while revenue from the Company’s markets outside India accounted for 18 % and nil , 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 segment 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 March 31, 2025, and December 31, 2024, 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 as on: - March 31, 2025 December 31, 2024 Gross Amount Computer & peripheral 370,365 290,724 Furniture 303,150 175,538 Leasehold improvement 621,828 254,468 Office equipment 279,353 156,579 Pay Per Use Systems 4,373,474 3,374,228 Plant and machinery 431,367 377,121 Server & networking 36,569 34,926 Vehicles 192,235 191,961 Demo system 1,129,916 1,128,305 Capital work in progress 162,624 47,592 Accumulated depreciation ( 856,574 ) ( 645,487 ) Total 7,044,307 5,385,955 Depreciation expenses for the three months ended March 31, 2025, and 2024 amounted to $ 208,882 and $ 80,101 respectively. From its inventory, the Company determined to use 4 systems for demonstration purposes. As at March 31, 2025, three systems are placed in the Company’s premises while 1 system is placed at partner’s location. These systems are recorded as Property, plant and equipment in accordance with ASC 360. 15 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 shares 5,000 of newly designated Series A Non-Convertible Preferred Stock (the “ Series A Preferred Shares ”). These shares: ● Vote together with SSII common stock as a single class, except as required by law. ● Entitle holders to exercise 51 % of the total voting power of the Company. ● Are not convertible into common stock, have no dividend rights, and carry a nominal liquidation preference. ● Include protective provisions requiring the majority vote of Series A Preferred Shares to amend their rights. ● Are subject to automatic redemption for nominal consideration if holders own less than 50 % of the shares received in the Merger. Restructuring and Capital Contributions: Concurrent with the Merger: ● The Company changed its name to “ SS Innovations International, Inc. ,” effected a one-for-ten reverse stock split, and increased its authorized common stock to 250,000,000 shares. ● Dr. Sudhir Srivastava, our Chief Executive Officer, through his holding company, assigned patents, trademarks, and other intellectual property related to its surgical robotic systems to a wholly owned subsidiary of SSII. ● Two investors, including a current director provided interim financing during 2022, contributing $ 3,000,000 each. As a result, the current director 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. The second investor 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. 16 NOTE 6 – ACCOUNTS RECEIVABLE, NET Accounts receivable consisted of the following as of: March 31, 2025 December 31, 2024 Accounts receivable, net 3,962,202 4,466,047 Accounts receivable, net (non-current) 2,818,043 3,299,032 6,780,245 7,765,079 The Company performed an analysis of the trade receivables related to SSI India and determined, based on the deferred payment terms of the contracts, that a $ 2,818,043 (December 31, 2024: $ 3,299,032 ) may not be due and collectible in next one year and thus company classified these receivables as non- current. Details of customers which accounted for 10 % or more of total revenues during the three months period ended March 31, 2025, and March 31, 2024 and 10 % or more of total accounts receivables as at March 31, 2025, and December 31, 2024. Percentage of revenue ended For three months ended Percentage of accounts receivables as of March 31, 2025 March 31, 2024 March 31, 2025 December 31, 2024 Customer A 0 % - 5 % 5 % Customer B - - - 13 % Customer C - 40 % - 7 % Customer D 1 % 20 % - 4 % Customer E 0 % 13 % - - Customer F 0 % 12 % 4 % 3 % Customer G 0 % 12 % 5 % 4 % Customer H 13 % - - - Customer I 14 % - - - Customer J 17 % - 7 % 6 % Customer K 11 % - - - Customer L 10 % - - - NOTE 7 – CASH, CASH EQUIVALENTS AND RESTRICTED CASH For the purpose of condensed consolidated statement of cash flows, cash, cash equivalents and restricted cash (Current) & (Non-Current) consisted of the following as of: March 31, 2025 December 31, 2024 Cash and cash equivalents 15,873,217 466,500 Fixed Deposit Lien Against Overdraft Facility 5,816,649 5,768,396 Lien Against Letter of Credit 24,520 24,757 Lien Against Bank Guarantee 45,420 45,355 Restricted cash (Current) 5,886,589 5,838,508 Fixed Deposit Lien Against Bank Guarantee 302,739 302,307 Lien Against Credit Card Facility 16,243 16,220 Restricted cash (Non-current) 318,982 318,527 Total Cash, cash equivalents and restricted cash 22,078,788 6,623,535 17 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: March 31, 2025 December 31, 2024 Receivables from statutory authorities 4,080,722 2,691,800 Prepaid expense- stock compensation current 1,074,990 1,074,991 Security deposits 228,354 157,574 Other prepaid- current assets 2,218,728 2,513,973 Prepaid and other current assets 7,602,794 6,438,338 Prepaid expense- stock compensation non current 2,783,701 3,052,445 Security deposits 169,883 145,198 Other prepaid- non current assets 72,877 143,885 Prepaid and other non current assets 3,026,461 3,341,528 Total prepaid, current and non current assets 10,629,255 9,779,866 Prepaid expenses – stock compensation represents unamortized portion of common stock granted to advisors for services to be rendered by them in future. (Refer Note 19 – Stock Compensation Expenses) NOTE 9 – ACCOUNTS PAYABLE AND ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES Accounts payable and accrued expenses consisted of the following as of: March 31, 2025 December 31, 2024 Accounts payable 3,641,410 2,312,382 Payable to statutory authorities 151,991 55,699 Client liabilities 198,710 574,603 Salary payable 34,916 91,825 Other accrued liabilities 1,047,691 1,162,687 Other accrued liabilities 1,433,308 1,884,814 Provision for Gratuity Long term 98,078 74,817 Other accrued liabilities- Non Current 98,078 74,817 Total accounts payable, accrued current and non current expenses 5,172,796 4,272,013 Accounts payable at $ 3,641,410 as of March 31, 2025 (December 31, 2024: $ 2,312,382 ), reflect the amounts due to various vendors of supplies and services in the normal course of business operations. Other accrued liabilities of $ 1,047,691 as of March 31, 2025 (December 31, 2024: $ 1,162,687 ), mainly include accrued expenses of $ 985,813 . 18 NOTE 10 – NOTES PAYABLE 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 . In January 2025, the Company raised $ 28,000,000 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 . In February 2025, the Company paid $ 4,212,637 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. 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. 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. In February 2025, the Company converted Convertible Notes worth $ 22,000,000 , along with the interest accrued thereon, issued to Sushruta Pvt Ltd. into 16,046,814 common shares of the Company. In March 2025, the Company converted Convertible Notes worth $ 8,000,000 , along with the interest accrued thereon, issued to Sushruta Pvt Ltd into 5,811,554 common shares of the Company. 19 NOTE 11 – BANK OVERDRAFT FACILITY Bank overdraft facility consisted of the following as of: March 31, 2025 December 31, 2024 HDFC Bank Ltd overdraft (with lien against fixed deposits) (OD1) 4,341,725 4,486,181 HDFC Bank Ltd overdraft (OD2) 3,340,686 3,508,725 Bank overdraft 7,682,411 7,994,906 The HDFC Bank overdraft facility (OD1), amounting to $ 4,341,725 , is availed against a lien on fixed deposits totaling $ 5,412,015 provided by the Company and the HDFC Bank LTD Overdraft (OD2) facility is secured by a charge over all current assets, plant, and machinery of the Company, as well as a lien on fixed deposits of $ 351,050 in favor of HDFC Bank. Additionally, both overdraft facilities are secured by personal guarantees provided by Dr. Sudhir Prem Srivastava. As of March 31, 2025, and December 31, 2024, the Company was in compliance with all financial and non-financial covenants under the bank overdraft facility agreements. HDFC Bank has sanctioned overdraft facilities subject to operational terms and conditions, including payment on demand, comprehensive insurance coverage against all risks of primary security, periodic inspections of the plant by the bank, and submission of monthly stock and financial records to the bank within 30 days after each month-end. Security for this facility includes current assets, plant and machinery, furniture and fixtures, and a personal guarantee from Dr. Sudhir Srivastava. The cash credit facility is sanctioned at an interest rate of 9.50 % (linked with 3-month T-Bill) per annum on the working capital overdraft limit, with interest payable monthly on the first day of the subsequent month. Overdraft facility against fixed deposits is sanctioned with an interest rate of 1.25 % over and above prevailing rate of interest on fixed deposits, payable at monthly intervals on the first day of the following month. NOTE 12 – DEFERRED REVENUE Contract liabilities (deferred revenue) consist of advance billings and billing in excess of revenues recognized. Deferred revenue also includes the amount for which services have been rendered but other conditions of revenue recognition are not met, for example, where the Company does not have an enforceable contract. The revenues attributable to the warranty is recognized over the period to which it relates. During the three months ended March 31, 2025, the Company sold eight surgical robotic systems. The revenues attributable to warranty for the agreed warranty period in respect of each of the sales contracts are deferred for recognition over the period to which it relates. In case of systems sold on deferred payment basis, the present value of the invoiced system sales realizable over the deferred payment period is recognized as systems sales. The difference between the invoiced amount and its present value is adjusted (reduced) in the accounts receivable balance. This difference is recorded as interest income in other income, with a corresponding impact on accounts receivable over the collection period of contract. The Company recorded $ 79,236 and $ 71,181 as interest income on account of deferred financing component during the three months ended March 31, 2025 and 2024 respectively. As of March 31, 2025 As of December 31, 2024 Deferred revenue- beginning of period 6,452,555 1,095,480 Additions 1,028,897 5,685,704 Net changes in liability for pre-existing contracts 7,481,452 6,781,184 Revenue recognized for warranty sales 122,504 177,518 Revenue recognized for instrument sales 82,446 151,111 Deferred revenue- end of period 7,276,502 6,452,555 Deferred revenue expected to be recognized in: One year or less 1,871,275 1,278,602 More than one year 5,405,227 5,173,953 7,276,502 6,452,555 20 The following table disaggregates our revenue by major source for three months period ended: March 31, 2025 March 31, 2024 System sales 4,502,482 3,494,759 Instruments sale 477,208 118,515 Warranty sale 122,504 9,407 Lease income 18,416 15,012 Total revenue 5,120,610 3,637,693 Revenues by geographic region (determined based upon customer domicile), were as follows for the three months ended: March 31, 2025 March 31, 2024 India 4,188,394 3,637,693 Indonesia 872,977 - South America 51,884 - UAE 7,355 - 5,120,610 3,637,693 NOTE 13 – STOCKHOLDERS’ EQUITY Common stock The Company is authorized to issue up to 250,000,000 shares of common stock, $ 0.0001 par value per share. The Company has one class of common stock outstanding. Holders of the Company’s common stock are entitled to one vote per share. Upon the liquidation or dissolution of the Company, its common stockholders are entitled to receive a ratable share of the available net assets of the Company after payment of all debts and other liabilities. The Company’s shares of common stock have no pre-emptive, subscription, redemption or conversion rights. As of March 31, 2025, there were 193,556,177 (December 31, 2024: 171,579,284 ) issued and outstanding common shares. Holders of common stock are entitled to one vote for each share of common stock. Preference shares 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 March 31, 2025, there were 1,000 (December 31, 2024: 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. 21 Common Stock issued post-Merger 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. On February 12, 2025, the Company issued 48,030 shares of common stock to Ashok Kumar Hemal against the conversion of notes amounting to $ 213,732 including interest thereon at conversion price of $ 4.45 per share. On February 13, 2025, the Company issued 30,010 and 30,008 shares of common stock to Sandra R Johnson Trustee and Dorthea B Hardin Living Trust against the conversion of notes amounting to $ 133,546 and $ 133,534 respectively including interest thereon at conversion price of $ 4.45 per share. On February 20, 2025, the Company issued 16,046,814 shares of common stock to Sushruta against the conversion of notes amounting to $ 22,144,603 including interest thereon at conversion price of $ 1.38 per share. On March 01, 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. On March 31, 2025, the Company issued 5,811,554 shares of common stock to Sushruta against the conversion of notes amounting to $ 8,019,945 including interest thereon at conversion price of $ 1.38 per share. Holders of common stock are entitled to one vote for each share of common stock held. NOTE 14 – INVENTORY Inventory consisted of the following as of: March 31, 2025 December 31, 2024 Raw materials (includes goods in transit $ 1,049,254 (December 31, 2024: $ 969,959 )] 6,836,914 4,461,898 Work-in-progress 1,491,645 1,436,250 Finished goods 5,966,582 4,308,750 14,295,141 10,206,898 22 NOTE 15 – LEASES The Company conducts its operations using facilities leased under operating lease agreements that expire at various dates. The following is a summary of operating lease assets and liabilities: Operating leases As of March 31, 2025 As of December 31, 2024 Assets Right of use operating lease assets 2,629,225 2,623,880 Liabilities Current portion of operating lease liabilities 368,309 409,518 Non Current portion of operating lease liabilities 2,402,653 2,349,118 Total lease liabilities 2,770,962 2,758,636 Operating leases As of March 31, 2025 As of December 31, 2024 Weighted average remaining lease terms (years) Ilabs Info Technology 3rd Floor 4.94 5.19 Ilabs Info Technology 1st Floor 5.33 5.58 Ilabs Info Technology Ground Floor 7.17 7.42 Village Chhatarpur-1849-1852-Farm 0.33 0.58 Weighted average discount rate Ilabs Info Technology 3rd Floor 12.00 % 12.00 % Ilabs Info Technology 1st Floor 12.00 % 12.00 % Ilabs Info Technology Ground Floor 12.00 % 12.00 % Village Chhatarpur-1849-1852-Farm 10.00 % 10.00 % Supplemental cash flow and other information related to leases are as follows: Period ended March 31, 2025 March 31, 2024 Cash payments for amounts included in the measurement of lease liabilities: Operating cash outflows for operating leases 197,545 167,838 Maturities of lease liabilities as of March 31, 2025 were as follows: Fiscal year Operating Leases Amount (in $) 2025 519,752 2026 618,909 2027 643,460 2028 669,239 2029 696,307 2030 and thereafter 715,349 Total lease payment 3,863,016 Less: Imputed Interest 1,092,054 Present value of lease liabilities 2,770,962 23 NOTE 16 – INCOME TAX The Company has not recorded income tax benefits for the net operating losses incurred during the period ended March 31, 2025, and 2024 nor for other deferred tax assets generated, due to its uncertainty of realizing a benefit from those items . The components of loss before income taxes consist of the following: Period ended March 31, 2025 March 31, 2024 Domestic ( 3,618,366 ) ( 7,668,515 ) Foreign ( 2,062,987 ) ( 2,173,238 ) Total ( 5,681,353 ) ( 9,841,753 ) The Company has federal and state net operating losses as of March 31, 2025, and 2024. The Company has not recorded any amounts for unrecognized tax benefits as of March 31, 2025, and March 31, 2024. The Company’s practice is to recognize interest and penalties related to income tax matters in income tax expense. The Company had no accrual of interest and penalties on the Company’s balance sheets and has not recognized interest and penalties in the condensed consolidated statement of operations and comprehensive loss for the period ended March 31, 2025, and March 31, 2024. 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. The effective income tax rate differs from the amount computed by applying the income tax rate of India to Income/(Loss) before income taxes approximately as follows: Period ended March 31, 2025 March 31, 2024 Accounting loss before income tax ( 5,681,353 ) ( 9,841,753 ) Income tax expense/(benefit) at federal statutory rate at 21 % ( 1,193,084 ) ( 2,066,768 ) Foreign tax rate differential ( 236,799 ) ( 410,204 ) Non-deductible expenses ( 102,345 ) 149,234 Excess tax expense/(benefit) on depreciation ( 2,592 ) ( 35,496 ) Excess tax expense/(benefit) on security deposit 63 77 Impact of unrecognized deferred tax asset on the loss of the year 1,534,757 2,363,157 Income tax expense/(benefit) - - The Company recorded nil income tax expense for the period ended March 31, 2025 and March 31, 2024, due to losses in current period and prior year and it does not expect to recover the tax benefit on the losses incurred during the period ended March 31, 2025, and March 31, 2024. The components of the deferred tax balances were as follows: March 31, 2025 December 31, 2024 Deferred tax assets: Net operating loss carry forwards 8,966,345 5,123,862 Net operating loss 1,297,958 3,842,483 Lease payments 29,765 28,299 Credit loss reserve 109,934 198,703 Others 32,463 44,204 10,436,465 9,237,551 Valuation allowance ( 10,345,618 ) ( 9,150,495 ) Deferred tax assets 90,847 87,056 Deferred tax liabilities: Depreciation and amortization 76,832 74,285 Others 14,015 12,771 Deferred tax liabilities 90,847 87,056 Net deferred tax assets/liability - - 24 Deferred tax assets and liabilities are recognized for future tax consequences attributable to temporary differences between the financial statement carrying values of assets and liabilities and their respective tax bases and operating loss carry forwards. The Company performed an analysis of the realizability of deferred tax assets as of March 31, 2025, and December 31, 2024, and recorded a valuation allowance of $ 10,345,618 and $ 9,150,495 , respectively. NOTE 17 – EMPLOYEE BENEFIT PLAN The Company’s Gratuity Plan in India provides for a lump sum payment to 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. The benefit obligation has been measured as of March 31, 2025, and December 31, 2024. The following table sets forth the activity and the amounts recognized in the Company’s consolidated financial statements at the end of the relevant periods: March 31, 2025 December 31, 2024 Change in projected benefit obligation Projected benefit obligation as on beginning 80,833 34,005 Service cost 9,492 30,692 Interest cost 1,443 2,373 Benefits paid - - Actuarial loss ^ 15,838 14,226 Effect of exchange rate changes ( 829 ) ( 463 ) Projected benefit obligation at end 106,777 80,833 Unfunded status in the end 106,777 80,833 Unfunded amount recognized in consolidated balance sheets Non-current liability (included under other non-current liabilities) 98,078 74,817 Current liability (included under accrued employee costs) 8,699 6,016 Total accrued liability 106,777 80,833 Accumulated benefit obligation at end 58,159 42,792 ^ During the period ended March 31, 2025, and December 31, 2024, actuarial loss was driven by changes in actuarial assumptions, offset by experience adjustments on present value of benefit obligations. Components of net periodic benefit costs recognized in condensed consolidated statements of operations and comprehensive loss and actuarial loss reclassified from AOCI, were as follows: March 31, 2025 December 31, 2024 Service cost 9,492 30,692 Interest cost 1,443 2,373 Expected return on plan assets - - Amortization of actuarial loss, gross of tax - - Net gratuity cost 10,935 33,065 25 The components of retirement benefits included in AOCI, excluding tax effects, were as follows: March 31, 2025 December 31, 2024 Net actuarial loss 15,838 14,226 Amount recognized in AOCI, excluding tax effects 15,838 14,226 The weighted average actuarial assumptions used to determine benefit obligations and net gratuity cost were: March 31, 2025 December 31, 2024 Discount rate 7.04 % 7.22 % Rate of increase in compensation levels 12.50 % 12.50 % 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 as of March 31, 2025 2025 8,698 2026 20,351 2027 17,877 2028 16,379 2029 13,505 2030-2034 78,624 NOTE 18 – FAIR VALUE MEASUREMENT – FINANCIAL INSTRUMENTS Assets and liabilities recorded at fair value are measured using the fair value hierarchy, which prioritizes the inputs used in measuring fair value. The levels of the fair value hierarchy are: ● Level 1: observable inputs such as quoted prices in active markets. ● Level 2: inputs other than quoted prices in active markets that are either directly or indirectly observable; and ● Level 3: unobservable inputs for which little or no market data exists, therefore requiring the Company to develop its own assumptions. The company’s financial assets which are set out below in the table is measured at fair value by considering the level III inputs. The company does not have financial assets which are measured using Level I or Level II inputs. 26 Carrying value and fair value of Level III Financial assets and liabilities: Carrying Value Fair Value March 31, 2025 December 31, 2024 March 31, 2025 December 31, 2024 Financial Assets Account receivables, net (1) 2,818,043 3,299,032 2,818,043 3,299,032 Other non-current financial assets (2) 177,167 214,252 177,167 214,252 Total 2,995,210 3,513,284 2,995,210 3,513,284 Financial Liabilities Lease liabilities (3) 2,402,653 2,349,118 2,402,653 2,349,118 Total 2,402,653 2,349,118 2,402,653 2,349,118 (1) Account receivable net of allowance for credit losses represent the long-term debtors of the company in relation to the sales made during the year. The Company has presented the receivable balances account after reducing the significant financing component included using the discount rate of 10 %. (2) Other non-current assets include security deposits and long-term fixed deposits with banks. Company has calculated the fair value of security deposit at present value of future receipt using discount rate of 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 15 Leases). The Company has assessed that the financial instruments that are not carried at fair value consist primarily of cash and cash equivalents, restricted cash, accounts receivable, 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. NOTE 19 – 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. 27 Stock options: Stock options activity for the period ended March 31, 2025, was as follows: Number of shares options Weighted average grant date fair value per share Unvested balance as of December 31, 2024 2,536,776 $ 3.41 Granted - - Vested - - Forfeited - - Unvested balance as of March 31, 2025 2,536,776 $ 3.41 Number of shares options Weighted average grant date fair value per share Exercisable balance as of March 31, 2025 5,041,405 $ 2.06 During the three months ended March 31, 2025, no stock options are vested. Further there were no stock options issued during the end of the March 31, 2025. Restricted Stock Awards (RSA) Restricted Stock Awards activity for the period ended March 31, 2025, was as follows: Number of shares RSAs Weighted average grant date fair value per share Unvested balance as of December 31, 2024 2,117,598 $ 7.76 Granted - - Vested - - Forfeited 1,237 $ 7.76 Unvested balance as of March 31, 2025 2,116,361 $ 7.76 During the three months ended March 31, 2025, no RSAs are vested. Further there were no RSAs issued during the end of the March 31, 2025. Advisory shares: Common stock issued to consultants as advisory shares during the period as follows: Grant dates Fair value on grant date Unvested shares in the beginning Shares granted during the year Shares vested during the period Unvested shares at the end of the period 31-Oct-23 $ 8.99 41,449 - 3,454 37,995 31-Oct-23 $ 8.99 5,580 - 465 5,115 31-Oct-23 $ 8.99 4,440 - 370 4,070 31-Oct-23 $ 8.99 17,506 - 1,459 16,047 68,975 - 5,748 63,227 There were no advisory shares issued during the period ended March 31, 2025. 28 Stock compensation expenses During the three months ended, the Company has recorded share compensation expense of $ 2,379,212 and $ 7,108,750 respectively in relation to stock options, RSAs and Advisory shares as follows: March 31, 2025 March 31, 2024 Stock options 710,020 5,375,700 Restricted stock awards (RSAs) 1,348,773 1,390,179 Advisory shares 320,419 342,871 Total stock compensation expenses 2,379,212 7,108,750 Stock option model & assumptions The Black-Scholes-Merton option pricing model is used to estimate the fair value of stock options and RSU granted under the Company’s share based compensation plans and the rights to acquire stock granted under the stock options plans. The weighted-average estimated fair values of stock options and the rights to acquire stock as well as the weighted-average assumptions used in calculating the fair values of stock options and the rights to acquire stock that were granted till March 31, 2025 were as follows: Period ended March 31, 2025 Grant date Stock Options February 13, 2024 Stock Options November 27, 2023 Restricted stock awards November 27, 2023 Fair value on grant date $ 1.39 $ 3.41 $ 7.76 Risk free interest rate 4.40 % 4.40 % 4.40 % Expected volatility 24.96 % 18.50 % 18.50 % Exercise prices $ 5.00 $ 5.00 0.0001 Share price on the grant date $ 5.50 $ 7.76 $ 7.76 Expected term of vesting 2.5 years 4 years 4 years As share-based compensation expense recognized in the Consolidated Statements of operations and comprehensive loss during the period ended March 31, 2025, and 2024, is based on awards ultimately expected to vest, it has been reduced for estimated forfeitures, if any. As of March 31, 2025, there was $ 7,940,386 , $ 15,083,786 of total unrecognized compensation expense related to unvested stock options and restricted stock units to acquire common stock under the 2016 Inventive Stock plan respectively. The unrecognized compensation expense is expected to be recognized over a weighted-average period of 2.66 years for unvested stock options and restricted stock units for rights granted to acquire common stock under 2016 Incentive Stock Plan. 29 NOTE 20 – RELATED PARTY The details of transactions with the related parties for three months ended March 31, 2025, March 31, 2024 and balances outstanding as on March 31, 2025 and December 31, 2024 are as follows: For the period ended For the period ended March 31, March 31, Particulars 2025 2024 Transactions during the year: Expenses incurred on behalf of affiliates Srivastava Robotic Surgery Pvt Ltd 414 - SS International Centre For Robotics Surgery Pvt Ltd 6,397 - Sudhir Srivastava Medical Innovations Pvt Ltd 584 - Telegnosis Private Limited 727 - Sudhir Prem Srivastava 18,000 - Expense incurred on behalf of affiliates Sudhir Prem Srivastava 72,920 170,335 Barry F. Cohen - 2.500 ESOPs expenses Anup Sethi 323,153 327,191 Barry F. Cohen 142,004 143,778 Dr. Frederic H Moll - - Dr. S.P. Somashekhar 53,098 52,298 Sudhir Prem Srivastava 426,012 5,088,142 Vishwajyoti P. Srivastava, M.D 142,004 143,778 Consultancy charges and other perquisites Anup Sethi 51,156 43,969 Barry F. Cohen 45,000 45,000 Sudhir Prem Srivastava 220,342 220,401 Vishwajyoti P. Srivastava, M.D 53,708 52,414 Proceeds from notes issued Sushruta Private Limited 28,000,000 1,000,000 Interest accrued on notes Sushruta Private Limited 182,400 10,694 Conversion of notes into common stock Sushruta Private Limited 30,164,548 - 30 As on March 31, As on December 31, Balances outstanding as on year end: 2025 2024 Balance receivable / (payable) Accrued expenses & other current liabilities: Barry F. Cohen ( 355,500 ) ( 310,500 ) Sushruta Private Limited - ( 194,785 ) Vishwajyoti P. Srivastava. M.D ( 30,000 ) ( 75,006 ) Prepaids and other current assets: Srivastava Robotic Surgery Pvt Ltd 414 345 SS International Centre For Robotics Surgery Pvt Ltd 7,350 948 Cardio Bahamas^ ( 76,741 ) ( 76,741 ) SSI PTE Singapore^ ( 424,586 ) ( 424,586 ) Sudhir Prem Srivastava^ 1,521,904 1,644,825 Sudhir Srivastava Medical Innovations Pvt Ltd 584 491 Sushruta Private Limited 5,000 5,000 Telegnosis Private Limited 727 727 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 21 – 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 $ 24,714 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 $ 15,735 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 $ 8,808 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 $ 17,540 plus taxes. NOTE 22 – SUBSEQUENT EVENTS 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. 31 Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations. Introduction The Company is engaged in the business of developing, manufacturing, and selling a surgical robotic system under our proprietary brand “ SSi Mantra ,” together with allied accessories and a wide range of surgical instruments capable of supporting cardiac and a variety of other surgical procedures under our proprietary brand “SSi Mudra”. Having commenced commercial sales of our surgical robotic system in the second half of 2022, the year 2023 was our first full year of commercial sales and during the year 2024, we further consolidated our installed base of SSi Mantra in various parts of India and also expanded our presence in the global markets. Our financial performance is largely driven by increasing awareness of the benefits of robotically assisted surgery, reduced learning curves for robotic surgeons and the affordability and accessibility of surgical robotic technology. Our financial performance is also dependent on our obtaining regulatory approvals in various regulated markets where we have plans to sell our products. Robotically assisted surgeries are increasingly being recognized as an approved treatment modality from an insurance coverage perspective. Our manufacturing operations being based in India derive significant operating cost advantages in terms of availability of quality and cost-effective fabrication/3D printing solutions, electronic/electrical/mechanical components, outsourced services and skilled manpower. All these factors help us in having lower costs of production which eventually helps us make our surgical robotic system cost effective and relatively affordable. During the period ended March 31, 2025, we sold 8 surgical robotic systems. In addition, during the period ended March 31, 2025, we also installed 4 systems on a pay-per-use basis. Results of Operations Introduction The financial statements appearing elsewhere in this report have been prepared assuming that the Company will continue as a going concern. The Company is still in its initial years of revenue generation by way of the sale of its product and has not yet established consistent operational revenue cash flows to meet all its fixed operating costs and hence may continue to incur losses for some time. These conditions raise substantial doubt about the Company’s ability to continue as a going concern. The following table provides selected balance sheet data for the Company as of: Balance Sheet Data March 31, 2025 December 31, 2024 Cash 15,873,217 466,500 Restricted cash** 6,205,571 6,157,035 Total Assets 63,456,961 42,385,213 Total Liabilities 22,902,671 28,928,110 Total liabilities and stockholders’ equity 63,456,961 42,385,213 ** Represents Fixed Deposits held by bank as security for bank facilities and certain performance guarantees. To date, the Company has mainly relied on debt and equity raised in private offerings to finance its operations. During 2025, the Company plans to raise additional capital through further private or public offerings. However, if we are unable to do so and if we experience a shortfall in operating capital, we could be faced with having to limit our expansion plans, research and development and marketing activities. For the three months ended March 31, 2025 March 31, 2024 Total Revenue 5,120,610 3,637,693 Cost of revenue (4,033,402 ) (2,909,511 ) Gross profit 1,087,208 728,182 Research & development expense 1,010,095 527,991 Stock compensation expense 2,379,212 7,108,750 Depreciation and amortization expense 208,882 80,101 Selling, general and administrative expense 3,410,872 2,843,659 Loss from operations (5,921,853 ) (9,832,319 ) Other income (expenses) 240,500 (9,434 ) Income tax expense - - Net loss (5,681,353 ) (9,841,753 ) 32 Three months ended March 31, 2025, as compared to three months ended March 31, 2024 Total Revenue. We had revenues of $5,120,610 (comprising $4,502,482 of system sales, $477,208 of instrument sales, $122,504 of warranty sales and lease income $18,416), for the three months ended March 31, 2025, compared to $3,637,693 (comprising $3,494,759 of system sales and $118,515 of instrument sales $9,407 of warranty sales and lease income $15,012) for the three months ended March 31, 2024. The increase in net total is primarily due to sale of increased 3 units of surgical robotic systems and instruments during the three months ended March 31, 2025, as compared to three months ended March 31, 2024. Gross profit. We had gross profit of $1,087,208 for the three months ended March 31, 2025, compared to $728,182 for the three months ended March 31, 2024. The increase in GP margin by 1.21% is due to reduction in raw material prices as compared to the period ended March 31, 2024. Research and development expense. Research and development expenses were $1,010,095 for the three months ended March 31, 2025, as compared to $527,991 for the three months ended March 31, 2024. Research and development expense primarily consists of salaries paid to engineers, amounting to $309,147 and $191,487 for the period ended March 31, 2025 and 2024, respectively. The increase in research and development expenses as compared to the previous period is in line with the Company’s continued focus on improving the design and technological capabilities of its SSi Mantra surgical robotic system and further expanding its product offerings. Stock compensation expense. We had compensation expenses of $2,379,212 and $7,108,750 during three months ended March 31, 2025 and March 31, 2024, respectively. The substantial decrease in the stock compensation expense in the 2025 quarter is primarily the result of the award of stock options to executive officers of the Company in February 2024 under our 2016 Incentive Stock Plan, in recognition of their efforts in developing and commercializing our SSi Mantra system. Depreciation and amortization expense. We had depreciation and amortization expense of $208,882 for the period ended March 31, 2025, as compared to $80,101 for the period ended March 31, 2024. The depreciation and amortization expenses primarily consist of depreciation on fixed assets. Selling, general and administrative expense. We incurred $3,410,872 in selling, general and administrative (“ SG&A ”) expense during the three months ended March 31, 2025, as compared to $2,843,659 for the three months ended March 31, 2024. Our SG&A expense comprise of expense relating to salaries and benefits, retirement benefits as well as costs related to recruitment, other compensation expenses of sales and marketing and client management personnel, sales commission, travel and brand building, client events and conferences, training and retention of senior management and other support personnel in enabling functions, telecommunications, utilities, travel and other miscellaneous administrative costs. SG&A expense also include acquisition-related costs, legal and professional fees (which represent the costs of third party legal, tax, accounting, immigration and other advisors), investment in product development, digital technology, advanced automation and robotics, related to grant of our equity awards to members of our board of directors. We expect our SG&A expense to increase as we continue to strengthen our support and enabling functions and invest in leadership development, performance management and training programs. The increase in selling, general and administrative expense is majorly due to marketing event SMRSC 2025 held during the quarter which contributed to approximately to $602,560. Other income/expenses, net . We earned other income of $240,500 for the three months ended March 31, 2025, as compared to $9,434 of other expenses during the three months ended March 31, 2024. The increase is due to reversal in amount of credit loss reserve by $422,711 offset by increase in interest expense on notes amounting to $189,216 in three months ended March 31, 2025 as compared to March 31, 2024. Net Loss. We incurred a net loss of $5,681,353 for the three months ended March 31, 2025, as compared to a net loss of $9,841,753 for the three months ended March 31, 2024. The decrease in net loss from March 31, 2024 to March 31, 2025 is primarily the result of the reduction in stock compensation expense by $4,729,538 offset by increase in SG&A by $567,213. 33 Liquidity and Capital Resources The Company expects to require substantial funds for scaling up its operations, for incurring capital expenditure to have its own in-house machining and tooling capacity and to continue to finance its research and development work in the field of surgical robotics. 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. In January 2025, the Company raised $28,000,000 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. In February 2025, the Company paid $4,212,637 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. 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. 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. In February 2025, the Company converted Convertible Notes worth $22,000,000, along with the interest accrued thereon, issued to Sushruta Pvt Ltd. into 16,046,814 common shares of the Company. In March 2025, the Company converted Convertible Notes worth $8,000,000, along with the interest accrued thereon, issued to Sushruta Pvt Ltd into 5,811,554 common shares of the Company. While we have been successful in raising funds to meet our working capital needs to date, believe that we have the resources to do so for the balance, we do not have any committed sources of funding and there are no assurances that we will be able to secure additional funding if and when needed. The condensed consolidated financial statements included in this report have been prepared assuming that the Company will continue as a going concern. If we cannot obtain financing, then we may be forced to further curtail our operations or consider other strategic alternatives. Even if we are successful in raising the additional financing, there is no assurance regarding the terms of any additional investment and any such investment or other strategic alternative would likely substantially dilute our current shareholders. These factors raise a substantial doubt about the Company’s ability to continue as a going concern For the three months ended S. No. Particulars March 31, 2025 March 31, 2024 Net cash provided by operating activities: 1 Net loss (5,681,353 ) (9,841,753 ) 2 Non-cash adjustments 2,384,745 7,872,174 3 Change in operating assets and liabilities (2,806,766 ) (702,339 ) 4 Net cash used in operating activities (6,103,374 ) (2,671,918 ) 5 Net cash used in investing activities (872,804 ) (127,255 ) 6 Net cash provided by financing activities 22,406,019 2,638,259 7 Net change in cash 15,429,841 (160,914 ) 8 Effect of exchange rate on cash 25,412 (31,351 ) 9 Cash at the beginning of the period 6,623,535 7,087,845 10 Cash at the end of period 22,078,788 6,895,580 34 Cash Flows from Operating Activities During the three months ended March 31, 2025, net cash used in operating activities was $6,103,374 resulting from our net loss of $5,681,353 partially offset by non-cash charges of $2,384,745 primarily driven by depreciation charges, operating lease expense and stock compensation expense. We had cash used in our operating assets and liabilities of $2,806,766 primarily driven by increases in inventory, prepaid and other assets offset by decrease in accounts receivables and increase in deferred revenue. During the three months ended March 31, 2024, net cash used in operating activities was $2,671,918 resulting from our net loss of $9,841,753 partially offset by non-cash charges of $7,872,174 primarily driven by credit loss reserve, depreciation charges and stock compensation expense. We had cash used in our operating assets and liabilities of $702,339 primarily driven by increases in inventory, accounts payable and decrease in prepaid and other assets. Cash Flows from Investing Activities During the three months ended March 31, 2025, we had net cash used in investing activities of $872,804 in purchase of property and equipment. During the three months ended March 31, 2024, we had net cash used in investing activities of $127,255 in purchase of property and equipment. Cash Flows from Financing Activities During the three months ended March 31, 2025, we had net cash provided by financing activities of $22,406,019, which comprised of proceeds from $28,000,000 from issuance of convertible notes to our principal shareholder offset by repayment of convertible notes to principal shareholder and other investors amounting to $4,212,637 and $1,068,849 respectively. During the three months ended March 31, 2024, we had net cash, provided by financing activities of $2,638,259, which comprised of $2,450,000 in proceeds from issuance of the convertible notes to our principal shareholder and other investors as set forth above. While we have been successful in raising funds to finance our operations since inception and we believe that we will be successful in obtaining the necessary financing to fund our operations going forward, we do not have any committed sources of funding and there are no assurance that we will be able to secure additional funding. The accompanying condensed consolidated financial statements have been prepared assuming that the Company will continue as a going concern; however, if we cannot obtain financing, then we may be forced to further curtail our operations or consider other strategic alternatives. Even if we are successful in raising the additional financing, there is no assurance regarding the terms of any additional investment and any such investment or other strategic alternative would likely substantially dilute our current shareholders. Critical Accounting Policies Use of Estimates The discussion and analysis of our financial condition and results of operations are based upon the unaudited interim condensed consolidated financial statements included in this Report on Form 10-Q, which have been prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”). A summary of our significant accounting policies is included in Note 2 - Summary of Significant Accounting Policies to our unaudited interim condensed consolidated financial statements under Part I, Item 1, “Financial Statements.” We consider the policies discussed below to be critical to an understanding of our consolidated financial statements, as their application places the most significant demands on management’s judgment regarding matters that are inherently uncertain at the time an estimate is made. These policies include fair value of stock options and standalone selling price in case of bundled revenue contracts. These accounting policies, estimates and the associated risks are set out below. Future events may not develop exactly as forecasted and estimates routinely require adjustment. 35 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. As of March 31, 2025, 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. 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. Recent Accounting Pronouncements Refer to Note 1, Basis of Presentation and Summary of Significant Accounting Policies, within the notes to the to our condensed consolidated financial statements included in this Quarterly Report on Form 10-Q for more information about recent accounting pronouncements, the timing of their adoption, and our assessment, to the extent we have made one, of their potential impact on our financial condition and results of operations. Off-Balance Sheet Arrangements There are no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to investors. 36 Item 3. Quantitative and Qualitative Disclosures About Market Risk. Not applicable. Item 4. Controls and Procedures. Disclosure Controls and Procedures Our Chief Executive Officer and Interim 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 March 31, 2025. 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 Securities and Exchange Commission, 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 Interim Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure. Based on the evaluation performed as of March 31, 2025, 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 Interim Chief Financial Officer determined that our disclosure controls and procedures were not effective as of such date in that: ● 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. 37 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 Interim 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. 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 fiscal quarter covered by this report that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting. 38 PART II – OTHER INFORMATION Item 1. Legal Proceedings. In April 2024, an ex-shareholder of Otto Pvt Ltd., an indirect wholly owned Bahamian subsidiary of SSi(“ Otto ”) commenced litigation in the Bahamas, seeking legal confirmation that it holds 9,000 shares (approximately a 9% interest) in Otto. The litigation, in which Otto is one of the defendants, relates to a purported transaction in 2021, at which time Dr. Sudhir Srivastava, the Company’s Chairman, Chief Executive Officer and principal shareholder, was the sole shareholder of Otto. The plaintiff in the litigation alleges that at that time, it acquired the 9,000 Otto shares from Dr. Srivastava. However, as the plaintiff failed to pay the agreed upon consideration for the shares, in July 2022, the shareholding was cancelled. Dr. Srivastava along with Otto, has recently filed an action in the Bahamas to confirm the cancellation of the shares and reconfirm their ownership and both actions are pending in the Bahamian courts. The Bahamian court has issued an interim order to maintain the status quo as it stands today with respect to the 9,000 Otto shares at the center of the dispute, as well as Otto’s shareholdings in Sudhir Srivastava Innovations Pvt Ltd. (“ SSI-India ”), our Indian operating subsidiary and SSI-India’s assets during the pendency of the litigation. Based on legal opinions obtained from counsel, the Company believes that there will be a favorable outcome in this case. Notwithstanding the foregoing, Dr. Srivastava and the Company have entered into an Indemnification Agreement on October 12, 2024, pursuant to which Dr. Srivastava has agreed to fully indemnify the Company for any claims, damages and costs (including legal fees) which it incurs in connection with this litigation or in relation to any of his ventures prior to consummation of the Company’s acquisition by merger of CardioVentures, Inc. in April 2023. In addition to the foregoing and other matters which have been reported in the Company’s previous periodic Exchange Act filings, from time to time, the Company may become involved in various lawsuits and legal proceedings which arise in the ordinary course of business. Litigation is subject to inherent uncertainties, and an adverse result in any such matter may harm the Company’s business. Item 1A. Risk Factors. Not Applicable. Item 2. Unregistered Sales of Equity Securities and Use of Proceeds. Dr. Sudhir Srivastava, our Chairman and Chief Executive Officer, through Sushruta Pvt. Ltd. (“ Sushruta ”), his holding Company, provided the Company with $2,000,000 in financing on December 4, 2024, $5,000,000 in financing on January 3, 2025, $10,000,000 in financing on January 20, 2025, $5,000,000 in financing on January 30, 2025 and $8,000,000 in financing on March 19. 2025. Each tranche of financing provided by Dr. Srivastava was evidenced by a one-year convertible promissory note (collectively, the “ One-Year Notes ”). The One-Year Notes bore interest at the rate of seven percent (7%) per annum, which accrued and was due at maturity. The One-Year Notes were convertible at the option of the holder into shares of our common stock at a conversion price of $1.38 per share, subject to adjustment for stock splits, stock dividends and similar recapitalization events. As of March 31, 2025, all $30,000,000 in principal amount of One-Year Notes, together with $164,548 in interest thereon, were converted by Sushruta into 21,858,368 shares of our common stock. The foregoing securities were issued in accordance with the exemption from registration afforded by Section 4(a)(2) of under the Securities Act of 1933, as amended. Item 3. Defaults Upon Senior Securities. None. Item 4. Mine Safety Disclosures. Not applicable Item 5. Other Information . None . 39 Item 6. Exhibits. Exhibit No. Description of Exhibit 31.1 Section 302 Certification – Chief Executive Officer (1) 31.2 Section 302 Certification – Chief Financial Officer (1) 32.1 Section 906 Certification – Chief Executive Officer (1) 32.2 Section 906 Certification – Chief Financial Officer (1) 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 (1) Filed herewith. * Pursuant to Rule 406T of Regulation S-T, these interactive data files are deemed not filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934 and otherwise are not subject to liability under those sections. 40 SIGNATURES Pursuant to the requirements 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. Dated: May 14, 2025 SS INNOVATIONS INTERNATIONAL, INC. By: /s/ Arvind Palaniappan Arvind Palaniappan Interim Chief Financial Officer (Principal Financial and Accounting Officer) 41