SS Innovations International, Inc 10-Q for FY2020 Q2
SS Innovations International, Inc. (SSII)
About this 10-Q
SS Innovations International, Inc filed this 10-Q on July 18, 2022, covering the quarter ended June 30, 2020 (FY2020 Q2).
Headline figures
Quarter ended June 30, 2020, as reported in this filing, compared with the same period a year earlier where the filing states it.
- Net loss
- $220.3K
- compared with a net loss of $539K a year earlier
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
For
the quarterly period ended
or
Commission
file number:
(Exact name of registrant as specified in its charter)
| (State or Other Jurisdiction of | (I.R.S. Employer | |
| Incorporation or Organization) | Identification No.) |
(Address of Principal Executive Offices)
(Registrant’s telephone number, including area code)
(Former name, former address and former fiscal year, if changed since last report)
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name
of each exchange on which registered | ||
| None | N/A | N/A |
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 ☐
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 | ☐ |
| ☒ | 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
TABLE OF CONTENTS
i
PART I – FINANCIAL INFORMATION
Item 1. Financial Statements.
AVRA MEDICAL ROBOTICS, INC.
CONDENSED BALANCE SHEETS
(Unaudited)
| June
30, 2020 | December 31, 2019 | |||||||
| ASSETS | ||||||||
| CURRENT ASSETS: | ||||||||
| Cash and cash equivalents | $ | $ | ||||||
| Other prepaid expenses and deposit | ||||||||
| Total Current Assets | ||||||||
| EQUIPMENT: | ||||||||
| Equipment | ||||||||
| Accumulated depreciation | ( | ) | ( | ) | ||||
| Total Equipment, net | ||||||||
| OTHER ASSETS: | ||||||||
| Website | ||||||||
| Accumulated amortization | ( | ) | ( | ) | ||||
| Total Other Assets, net | ||||||||
| TOTAL ASSETS | $ | $ | ||||||
| LIABILITIES AND STOCKHOLDERS’ DEFICIT CURRENT LIABILITIES: | ||||||||
| Accounts payable | $ | $ | ||||||
| Accrued compensation | ||||||||
| Accrued expenses | ||||||||
| Notes payable - related party | ||||||||
| Promissory notes | ||||||||
| Total Current Liabilities | ||||||||
| LONG-TERM LIABILITIES: | ||||||||
| Note payable SBA | - | |||||||
| Total Long-term Liabilities | - | |||||||
| STOCKHOLDERS’ DEFICIT: | ||||||||
| Preferred stock, | ||||||||
| Common stock, | ||||||||
| Common stock liability, | ||||||||
| Additional paid-in capital | ||||||||
| Accumulated deficit | ( | ) | ( | ) | ||||
| Total Stockholders’ Deficit | ( | ) | ( | ) | ||||
| TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT | $ | $ | ||||||
See accompanying notes to unaudited Condensed Financial Statements.
1
AVRA MEDICAL ROBOTICS, INC.
CONDENSED STATEMENTS OF OPERATIONS
(Unaudited)
| FOR THE THREE MONTHS | FOR THE SIX MONTHS | |||||||||||||||
| ENDED JUNE 30, | ENDED JUNE 30, | |||||||||||||||
| 2020 | 2019 | 2020 | 2019 | |||||||||||||
| Revenues | $ | $ | $ | $ | ||||||||||||
| OPERATING EXPENSES: | ||||||||||||||||
| Research and Development | ||||||||||||||||
| Compensation Expense | ||||||||||||||||
| General and Administrative | ||||||||||||||||
| Total Operating Expenses | ||||||||||||||||
| OTHER INCOME AND (EXPENSES) | ||||||||||||||||
| Interest Earned | ||||||||||||||||
| Interest Expense | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Total Other Income and (Expenses), net | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Loss before Income Taxes | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Provision for Income Taxes | ||||||||||||||||
| NET LOSS | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Loss per common share - basic and diluted | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Weighted average common shares outstanding - basic and diluted | ||||||||||||||||
See accompanying notes to unaudited Condensed Financial Statements.
2
AVRA MEDICAL ROBOTICS
CONDENSED STATEMENT OF STOCKHOLDERS’ DEFICIT
FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2020 AND 2019
(Unaudited)
Common Stock | Common Stock to be Issued | Additional | Accumulated | Total Stockholders’ | ||||||||||||||||||||||||
| Number | Amount | Number | Amount | Paid - In Capital | Deficit | Deficit | ||||||||||||||||||||||
| BALANCE AT DECEMBER 31, 2019 | $ | $ | $ | $ | ( | ) | $ | ( | ) | |||||||||||||||||||
| Stock based compensation expense | - | - | ||||||||||||||||||||||||||
| Conversion of debt to equity | ||||||||||||||||||||||||||||
| Stock issued for services | ||||||||||||||||||||||||||||
| Common stock issuable for services | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||
| Net loss | - | - | ( | ) | ( | ) | ||||||||||||||||||||||
| BALANCE AT MARCH 31, 2020 | ( | ) | ( | ) | ||||||||||||||||||||||||
| Stock based compensation expense | - | - | ||||||||||||||||||||||||||
| Common stock issuable for services | ||||||||||||||||||||||||||||
| Net loss | - | - | ( | ) | ( | ) | ||||||||||||||||||||||
| BALANCE AS AT JUNE 30, 2020 | $ | $ | $ | $ | ( | ) | $ | ( | ) | |||||||||||||||||||
| BALANCE AT DECEMBER 31, 2018 | $ | $ | $ | $ | ( | ) | $ | ( | ) | |||||||||||||||||||
| Stock based compensation expense | - | - | ||||||||||||||||||||||||||
| Stock issued for services | ||||||||||||||||||||||||||||
| Stock warrants | - | - | ||||||||||||||||||||||||||
| Common stock issuable for services | ||||||||||||||||||||||||||||
| Net (loss) - 3 months ended March 31, 2019 | - | - | ( | ) | ( | ) | ||||||||||||||||||||||
| BALANCE AT MARCH 31, 2019 | ( | ) | ( | ) | ||||||||||||||||||||||||
| Exercise of stock options | - | - | ||||||||||||||||||||||||||
| Stock issued for services | ||||||||||||||||||||||||||||
| Stock based compensation expense | - | - | ||||||||||||||||||||||||||
| Common stock issuable for services | ( | ) | ||||||||||||||||||||||||||
| Net (loss) - 3 months ended June 30, 2019 | - | - | ( | ) | ( | ) | ||||||||||||||||||||||
| BALANCE AS AT JUNE 30, 2019 | $ | $ | $ | $ | ( | ) | $ | ( | ) | |||||||||||||||||||
See accompanying notes to unaudited Condensed Financial Statements.
3
AVRA MEDICAL ROBOTICS, INC.
CONDENSED STATEMENTS OF CASH FLOWS
(Unaudited)
For the Six Months Ended June 30, | ||||||||
| 2020 | 2019 | |||||||
| As Adjusted | ||||||||
| CASH FLOWS OPERATING ACTIVITIES: | ||||||||
| Net loss | $ | ( | ) | $ | ( | ) | ||
| Adjustments to reconcile net loss to net | ||||||||
| cash used in operating activities: | ||||||||
| Depreciation and amortization expense | ||||||||
| Stock compensation expense | ||||||||
| Non-cash interest | ||||||||
| Changes in operating assets and liabilities: | ||||||||
| Prepaid expenses | ( | ) | ||||||
| Accounts payable and accrued expenses | ||||||||
| Net Cash Used in Operating Activities | ( | ) | ( | ) | ||||
| INVESTING ACTIVITIES: | ||||||||
| Website costs | ||||||||
| Equipment acquisition | ( | ) | ( | ) | ||||
| Net Cash Used in Investing Activities | ( | ) | ( | ) | ||||
| FINANCING ACTIVITIES: | ||||||||
| Proceeds from exercise of stock options | ||||||||
| Proceeds from related party | ||||||||
| Proceeds from promissory notes | ( | ) | ||||||
| Proceeds from SBA | ||||||||
| Net Cash Provided by Financing Activities | ||||||||
| INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | ( | ) | ||||||
| CASH AND CASH EQUIVALENTS - BEGINNING OF PERIOD | ||||||||
| CASH AND CASH EQUIVALENTS - END OF PERIOD | $ | $ | ||||||
| Supplemental information of non-cash investing and financing activities: | ||||||||
| Non-cash investing activities: | ||||||||
| Cash paid for interest | $ | $ | ||||||
| Cash paid for income taxes | $ | $ | ||||||
| Non-cash financing activities: | ||||||||
| Equipment acquisition included in accounts payable | $ | $ | ||||||
| Related party note payable converted to common stock | $ | $ | ||||||
| Promissory note converted into common stock | $ | $ | ||||||
| Reduction of account payable and equipment | $ | $ | ||||||
See accompanying notes to unaudited Condensed Financial Statements.
4
AVRA MEDICAL ROBOTICS, INC.
NOTES TO FINANCIAL STATEMENTS
NOTE 1 – COMPANY AND BASIS OF PRESENTATION
Organization
AVRA Medical Robotics, Inc. (the “Company” or “AVRA”) 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. The Company was established to develop advanced medical surgical devices. The Company is structured to invest in four principal areas – surgical robotic systems, surgical tools, implantable devices and surgical robotic training.
The significant accounting policies of AVRA were described in Note 1 to the audited financial statements included in the Company’s 2019 Annual Report on Form 10-K (“2019 Form 10-K”). There have been no significant changes in the Company’s significant accounting policies for the three and six months ended June 30, 2020.
Basis of Presentation
The accompanying unaudited condensed financial statements of the Company have been prepared in conformity with accounting principles generally accepted in the United States (“GAAP”) for interim financial information and in accordance with the rules and regulations of the Securities and Exchange Commission. Therefore, they do not include all information and footnotes normally included in annual consolidated financial statements and should be read in conjunction with the consolidated financial statements and notes thereto included in the 2019 Form 10-K for the year ended December 31, 2019. In the opinion of the Company’s management, the accompanying unaudited condensed financial statements contain all the adjustments necessary (consisting only of normal recurring accruals) to present the financial position of the Company as of June 30, 2020 and the results of operations and cash flows for the periods presented. The results of operations for the three and six months ended June 30, 2020 are not necessarily indicative of the operating results for the full fiscal year or any future period.
Going Concern
The
accompanying financial statements have been prepared assuming the continuation of the Company as a going concern. At June 30, 2020, the
Company’s stockholders’ deficit was $
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Estimates
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities and expenses. The Company regularly evaluates estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates made by management.
5
Cash and Cash Equivalents
The Company considers all cash on hand, cash accounts not subject to withdrawal restrictions or penalties, and all highly liquid debt instruments purchased with a maturity of three months or less to be cash and cash equivalents.
Concentration of Credit Risk
Financial
instruments that potentially subject the Company to concentrations of credit risk consist principally of cash. The Company maintains
its principal cash balance in a financial institution. These balances are insured by the Federal Deposit Insurance Corporation (“FDIC”)
up to $
Revenue Recognition
In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers (Topic 606). The ASU and all subsequently issued clarifying ASUs replaced most existing revenue recognition guidance in U.S. GAAP. The ASU also required expanded disclosures relating to the nature amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. The Company adopted the new standard effective January 1, 2018, the first day of the Company’s fiscal year. For these reasons, the adoption of this ASU did not have a significant impact on the Company’s financial statements
Effective January 1, 2018, the Company adopted guidance issued by the FASB regarding recognizing revenue from contracts with customers. The revenue recognition policies as enumerated below reflect the Company’s accounting policies effective January 1, 2018, which did not have a materially different financial statement result than what the results would have been under the previous accounting policies for revenue recognition.
Equipment
Equipment is recorded at cost and depreciated using the straight-line method at rates determined to estimate the useful lives of the assets. The annual rates used in calculating depreciation is as follows:
Equipment
-
Intangibles
Intangible assets continue to be subject to amortization, and any impairment is determined in accordance with ASC 360, “Property, Plant, and Equipment,” intangible assets are stated at historical cost and amortized over their estimated useful lives. The Company uses a straight-line method of amortization, unless a method that better reflects the pattern in which the economic benefits of the intangible asset are consumed or otherwise used up can be reliably determined
The Company purchased existing Intellectual Property from the University of Central Florida. Management regularly assesses the carrying value of the intellectual property to determine if there has been any diminution of value.
Website
Website
is recorded at cost and amortized using the straight-line method over its estimated life of
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.
6
Stock Compensation Expense
The Company accounts for equity instruments issued in exchange for the receipt of goods or services from other than employees in accordance with Accounting Standards Codification (“ASC”) Topic 505, “Equity.” Costs 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. The value of equity instruments issued for consideration other than employee services is determined on the earlier of a performance commitment or completion of performance by the provider of goods or services as defined by ASC Topic 505.
Income Taxes
The Company accounts for income taxes pursuant to ASC Topic 740 “Income Taxes.” Under ASC Topic 740, deferred tax assets and liabilities are determined based on temporary differences between the bases of certain assets and liabilities for income tax and financial reporting purposes. The deferred tax assets and liabilities are classified according to the financial statement classification of the assets and liabilities generating the differences. A valuation allowance is recorded when it is more likely than not that some or all of the deferred tax assets will not be realized.
The Company applies the provisions of ASC Topic 740-10-05 “Accounting for Uncertainty in Income Taxes.” The ASC clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements. The ASC prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. The ASC provides guidance on de-recognition, classification, interest and penalties, accounting in interim periods, disclosure and transition.
Basic and Diluted Loss per Share
In accordance with ASC Topic 260 “Earnings Per Share,” basic loss per common share is computed by dividing net loss available to common stockholders by the weighted average number of common shares outstanding during the period. Diluted loss per common share gives effect to dilutive convertible securities, options, warrants and other potential common stock outstanding during the period, only in periods in which such effect is dilutive. The Company has stock options, warrants, and convertible promissory notes that may be converted to outstanding potential common shares.
Research and Development Costs
In accordance with ASC Topic 730 “Research and Development”, with the exception of intellectual property that is purchased from another enterprise and have alternative future use, research and development expenses are charged to operations as incurred.
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.
7
Recent Accounting Pronouncements
Compensation- Stock Compensation
In May 2017, the FASB issued ASU 2017-09, “Compensation—Stock Compensation (Topic 718): Scope of Modification Accounting,” that provides guidance about which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting. The new guidance became effective for the Company on January 1, 2018 and was applied on a prospective basis, as required. The adoption of this standard did not have an impact on the financial statements or the related disclosures.
Leases
In February 2016, the FASB issued ASU 2016-02, “Leases (Topic 842)” (“ASU 2016-02”). The FASB issued ASU 2016-02 to increase transparency and comparability among organizations recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. Under ASU 2016-02, lessors will account for leases using an approach that is substantially equivalent to existing GAAP for sales-type leases, direct financing leases and operating leases. Unlike current guidance, however, a lease with collectability uncertainties may be classified as a sales-type lease. If collectability of lease payments, plus any amount necessary to satisfy a lessee residual value guarantee, is not probable, lease payments received will be recognized as a deposit liability and the underlying assets will not be derecognized until collectability of the remaining amounts becomes probable. ASU 2016-02 is effective for interim and annual periods beginning after December 15, 2018, with early adoption permitted, and must be adopted using a modified retrospective transition. The Company did not adopt the standard effective January 1, 2019, utilizing the lessor practical expedient. On November 15, 2019, the FASB issued ASU 2019-10 which amended the effective dates for ASC 842, to give implementation relief. Under the FASB’s new framework, two “buckets” were defined, bucket 1 includes public companies that are SEC filers but excludes “Small Reporting Companies” (SRC’s). Bucket 2 includes all other entities, including SRC’s. Bucket 2 entities have to apply ASC 842 for fiscal years beginning after December 15, 2020, and interim periods within fiscal years beginning after December 15, 2021.
NOTE 3 – NOTES PAYABLE – RELATED PARTY
On
December 31, 2018, the Company borrowed $
On
February 6, 2019, the Company borrowed from its CEO, $
On
May 8, 2019, the Company borrowed from its CEO, $
On
May 29, 2019, the Company borrowed from its CEO, $
On
June 26, 2019, the Company borrowed from its CEO, $
On
July 19, 2019, the Company borrowed from its CEO, $
On
October 11, 2019, the Company borrowed from its CEO, $
8
On
November 14, 2019, the Company borrowed from its CEO, $
On
March 1, 2020, the Company entered into a promissory notes totaling $
On
August 26, 2019, the Company borrowed from its CEO, $
On
December 3, 2019, the Company borrowed from its CEO, $
On
December 6, 2019, the Company borrowed from its CEO, $
On
December 30, 2019, the Company borrowed from its CEO, $
On
January 3, 2020, the Company borrowed from its CEO, $
On
January 5, 2020, the related party exercised his option and converted his note of $
On
March 31, 2020, the Company borrowed from its CEO, $
On
May 4, 2020, the Company borrowed from its CEO, $
On
June 1, 2020, the Company borrowed from its CEO, $
On
June 30, 2020, the Company borrowed from its CEO, $
NOTE 4 – PROMISSORY NOTES
On
December 31, 2018, the Company borrowed an additional $
During
January 2019, the Company borrowed $
On
March 11, 2019, the Company borrowed $
On
March 14, 2019, the Company borrowed $
On
March 29, 2019, the Company borrowed $
During
the three and six months ended June 30, 2020,
9
NOTE 5– INCOME TAXES
The
Company’s deferred tax assets at June 30, 2020 consist of net operating loss carry forwards of $
Due
to the uncertainty of their realization, no income tax benefits have been recorded by the Company for these loss carry forwards as valuation
allowances have been established for any such benefits. The increase in the valuation allowance was the result of increases in the net
operating losses discussed above. Therefore, the Company’s provision for income taxes is $-
At June 30, 2020 and December 31, 2019, the Company had no material unrecognized tax benefits and no adjustments to liabilities or operations were required. The Company does not expect that its unrecognized tax benefits will materially increase within the next twelve months. The Company recognizes interest and penalties related to uncertain tax positions in general and administrative expense. At June 30, 2020 and December 31, 2019, the Company has not recorded any provisions for accrued interest and penalties related to uncertain tax positions.
The Company files U.S. federal and state income tax returns in jurisdictions with varying statutes of limitations.
NOTE 6 – STOCKHOLDERS’ DEFICIT
The
Company is authorized to issue up to
On
September 30, 2017, the Company raised an additional $
Effective
April 1, 2017, the Company entered into Conversion Agreements with its Chairman/CEO and the Chief Financial Officer whereby each agreed
to convert the amounts owing to them as of March 31, 2017 as compensation into common stock of the Company at a price of $
On
September 30, 2017, the Chairman/CEO and the Chief Financial Officer converted $
10
In
addition, on September 30, 2017, the promissory notes of $
On
February 23, 2018, the board of directors of AVRA authorized the issuance of an aggregate of
| ● |
| ● |
| ● |
On
August 13, 2018 the Company sold
On October 4, 2018, the Board of Directors adopted the following resolutions and took the following actions by unanimous written consent in lieu of a meeting in accordance with the applicable provisions of the Florida business Corporation Act:
| ● |
| ● |
On
January 4, 2019,
On
April 1, 2019,
On
July 1, 2019,
On
August 28, 2019,
On
December 1, 2019, the Company canceled
During
the first quarter of 2020,
NOTE 7 – 2016 INCENTIVE STOCK PLAN
On
August 1, 2016, the Company adopted the 2016 Incentive Stock Plan (the “Plan”). The Plan provides for the granting of options
to employees, directors, consultants and advisors to purchase up to
For
options granted October 1, 2017, the following factors were used: volatility
11
For
options granted July 1, 2018, the following factors were used: volatility
For
options granted May 1, 2018, the following factors were used: volatility
On
July 1, 2018 options for
For
the year ended December 31, 2019 and 2018,
On
December 1, 2019, the Company granted to its majority shareholder options to purchase
At
December 31, 2019 and 2018 options representing
All
options issued to-date expire after five years from the issue date. Except for the option for
Stock options are accounted for in accordance with FASB ASC Topic 718,
Compensation –Stock Compensation, with option expense amortized over the vesting period based on the Black-Scholes option-pricing
model fair value on the grant date, which includes a number of estimates that affect the amount
of expense. During the three months ended June 30, 2020 and 2019, $
The
grant date fair value of options granted during the year of 2018 and 2019 were estimated on the grant date using the Black-Scholes model
with the following assumptions: For options granted May 1, 2018, the following factors were used; volatility
For
options granted February 1, 2019: Volatility
For
options granted April 1, 2019: Volatility
For
options granted August 1, 2019: Volatility
For
options granted October 1, 2019: Volatility
For
options granted December 1, 2019: Volatility
The
grant date fair value of options granted during the year of 2020 were estimated on the grant date using the Black-Scholes model with
the following assumptions: For the options granted March 1, 2020 the fair market value is $
Option
values are calculated using Black Scholes with the following inputs: expected volatilities are based on the average volatilities of six
similar companies; fair market values are calculated using the implied share values of recent company financings or OTC closing prices
for that day, whichever is more suitable; risk-free rate used was
12
NOTE 8 – COMMITMENTS
Intellectual property
Effective May 1, 2016, the Company entered into a Research Agreement (the “Research Agreement”) with the University of Central Florida (“UCF” or the “University”) for the development of a prototype surgical robotic device supporting minimal invasive surgical facial corrections.
The Agreement provides that the University will provide personnel to accomplish the objectives as stated in the Statement of Work over a period extending to September 30, 2017. Effective May 1, 2016, the research agreement with the University of Central Florida has been extended to April 30, 2021. No additional payments to the University were required.
The
Company agreed to extend funding of $
In
addition, AVRA has paid $
For
the three and six months ended, June 30, 2020 and 2019, $-0- had been paid under the Agreement. The balance of the amount owing to the
University was fully paid on February 24, 2017 and April 7, 2017. Additionally, a $
Employment Agreements
On
July 1, 2016,
On
August 1, 2016,
13
On
August 1, 2016,
Further, on July 1, 2016, the Company entered into Indemnification Agreements with the Chairman and Chief Executive Officer, and on August 1, 2016 the Chief Financial Officer and the Vice-President of Global Business Development providing for the Company to indemnify the individuals for all expenses, judgments, etc. incurred while serving in various capacities with the Company.
Commencing
March 1, 2018, the Company entered into an employment agreement with its new Chief Strategy Officer whereby compensation will be determined
upon sufficient funding of the Company. The Company granted a
In
addition, on May 1, 2018 options for
Commencing
January 1, 2019, the Company entered into a consulting agreement with an IR/PR Company whereby compensation will be $
Lease
The Company occupies office and laboratory space in Orlando, Florida under a lease agreement that expired on July 31, 2018. Effective August 1, 2018 and expiring July 31, 2019, the Company signed a new agreement, with monthly payments of $1,829.25 plus applicable sales tax. Effective August 1, 2019, the Company signed a year lease agreement, provides that the Company pay insurance, maintenance and taxes with a monthly lease expense of $2,454.75 plus applicable sales tax. Effective January 15, 2020, the Company amended its August 1, 2019 lease agreement reducing its monthly lease payment to $2,223 plus applicable sales tax. On April 30, 2020, the rent due under our lease agreement had been reduced by 50% for the months of April and May, 2020. Either party may cancel the agreement at any time with 30 days’ notice (see Note 15).
NOTE 9 – OTHER MATTERS
On January 30, 2020, the World Health Organization (“WHO”) announced a global health emergency because of a new strain of coronavirus originating in Wuhan, China (the “COVID-19 outbreak”) and the risks to the international community as the virus spreads globally beyond its point of origin. In March 2020, the WHO classified the COVID-19 outbreak as a pandemic, based on the rapid increase in exposure globally.
The full impact of the COVID-19 outbreak continues to evolve as of the date of this report. As such, it is uncertain as to the full magnitude that the pandemic will have on the Company’s financial condition, liquidity, and future results of operations. Management is actively monitoring the global situation on its financial condition, liquidity, operations, suppliers, industry, and workforce. Given the daily evolution of the COVID-19 outbreak and the global responses to curb its spread, the Company is not able to estimate the effects of the COVID-19 outbreak on its results of operations, financial condition, or liquidity for fiscal year 2020.
On March 27, 2020, President Trump signed into law the “Coronavirus Aid, Relief, and Economic Security (CARES) Act.” The CARES act was enacted as a response to the COVID-19 outbreak discussed above and is meant to provide companies with economic relief. The CARES Act, among other things, includes provisions relating to refundable payroll tax credits, deferment of employer side social security payments, net operating loss carryback periods, alternative minimum tax credit refunds, modifications to the net interest deduction limitations, increased limitations on qualified charitable contributions, and technical corrections to tax depreciation methods for qualified improvement property.
14
NOTE 10 – SUBSEQUENT EVENTS
The Company has evaluated subsequent events through the date that the financial statements were issued and determined that there were subsequent events requiring adjustments to or disclosure in the financial statements.
Effective
January 1, 2021, the Company signed an amendment which modified the August 1, 2020 agreement, increasing the monthly lease expense to
$
On October 26, 2020, AVRA issued an aggregate 256,027 Units (“Units”) at a price of $1.00 per Unit in a private offering (the “Offering”) to four “accredited investors.” Each Unit consisted of (a) four shares of our common stock (“Shares”); (b) a three-year warrant to purchase five Shares at an exercise price of $0.40 per Share; and (c) a put option of their Membership Units in Avra Air LLC for one share of our common stock. As a result of the foregoing, the investors were issued an aggregate of 1,024,108 Shares, warrants to purchase 1,280,135 Shares and put options for 256,027 Shares. One of the accredited investors, per his original commitment, subsequently invested an additional $45,000 on May 3, 2021 in this same Unit funding thus receiving an additional 180,000 Shares, a warrant to purchase 225,000 Shares and a put option for 45,000 Shares.
On
August 21, 2020 and October 19, 2020 the Company borrowed from its CEO, $
On
December 22, 2020 one accredited investor and the CEO invested $
On
January 26, 2021, AVRA issued an aggregate
On June 3, 2021, the Board of Directors ratified the following issuances of common stock:
| 1. | The Company issued |
| 2. | The Company issued |
| 3. | The Company issued |
| 4. | The Company issued |
| 5. | The Company issued |
| 6. | The Company issued |
| 7. | The Company issued |
15
| 8. | The Company issued |
| 9. | The Company issued |
| 10. | On October 26, 2020, the Company received a commitment to sell |
In
July, 2021 several holders of stock options elected to exercise their stock options with a cashless exercise provision resulting in the
issuance of
On
September 22, 2021, the Company’s CEO, converted a total of $
On
October 1, 2021, a former employee now a consultant elected to convert a total of $
Between
October 5, 2021 and December 8, 2021 the Company sold a total of
On
October 1, 2021 the Company issued a total of
On
October 1, 2021 the Company issued
On
October 1, 2021 the Company issued
On
October 1, 2021 the Company issued a total of
On
October 1, 2021 the Company issued a total of
On
October 1, 2021 the Company issued
16
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
When used in this report, unless otherwise indicated, the terms “Avra,” “the Company,” “we,” “us” and “our” refer to Avra Medical Robotics, Inc.
Note Regarding Forward Looking Statements
This report contains forward-looking statements that reflect our current views about future events. We use the words “anticipate,” “assume,” “believe,” “estimate,” “expect,” “will,” “intend,” “may,” “plan,” “project,” “should,” “could,” “seek,” “designed,” “potential,” “forecast,” “target,” “objective,” “goal” or the negatives of such terms or other similar expressions. These statements relate to future events or our future financial performance and involve known and unknown risks, uncertainties and other factors that may cause our actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements.
Overview
We are a medical robotics company developing a fully autonomous medical robotic system using proprietary software which integrates Artificial Intelligence (“AI”) and Deep Learning, or machine learning, (“DL”). By using an AI and DL enhanced software program, we are creating an intelligent robotic system that we believe can “robotize” a wide range of medical procedures currently being performed by human hands. We are concentrating our research and development efforts to meet rising expectations of patients and practitioners alike for the precision, safety and speed offered by an AI enhanced robotics platform system that can be combined with proven medical devices, end-effectors and surgical instruments.
We believe that progress in mechanical and software engineering has made possible lightweight and relatively inexpensive robotic devices for difficult procedures in various medical fields. Medical robots are already being successfully employed in several areas of surgery, including Urology (Prostate), Colo-Rectal, Gynecology, Thoracic, General Surgery, Orthopedics, and Neuro and Spine Surgery. Robots are also being used for Telemedicine and assistive robotic methods are addressing the delivery of healthcare in inaccessible locations, ranging from rural areas lacking specialist expertise to post-disaster scenarios, and battlefield areas. With the aging population dominating demographics in the U.S. across all spectrums of healthcare, robotic technologies are being developed toward promoting improved function, lower morbidity and improved overall outcomes.
We are developing a treatment-independent autonomous robotics system utilizing our proprietary AI-driven precision guidance system, applicable to a variety of minimally and non-invasive procedures, with an initial focus on skin resurfacing aesthetic procedures utilizing several FDA approved skin enhancing techniques robotized for superior performance and optimal results. Our medical robotic system is being developed to deliver skin resurfacing treatments, such as micro-needling and laser therapies with improved efficiency, accuracy and precision over current procedures conducted by human hand, and only requiring the doctor to input or just confirm treatment parameters. As a result, use of our medical robotic system is expected to provide improved quality and safety as well as improve patient throughput and workflow.
Our autonomous medical robotics system is being developed to be compatible with available FDA approved surgical tools and end-effectors, enabling us to initially penetrate a sizable and fast-growing aesthetics market, which includes micro-needling and laser solutions. Our robotics system will allow doctors, and anyone permitted to treat patients, defined at the State level, such as a licensed aesthetician, to treat damaged skin autonomously by delivering, for example, micro-needling to the skin. The micro-needling catalyzes the natural process of collagen remodeling, consisting of formation of new collagen, elastin, and vascularization in the papillary dermis, similar to the effect of laser treatments.
We expect our robotic system to eliminate many of the common errors that occur during handheld procedures, such as over- or under- exposure of the needles or energy-based instruments that can have terrible cosmetic results and even injure the patient. In addition, our system is being designed to continuously adjust treatment parameters, such as penetration depth, time, and energy in order to individualize the outcome based on our algorithms.
Our robotic system has been designed and developed through a seamless collaboration of the surgeon, the engineer and the scientist. Since the medical robotic industry has progressed greatly in miniaturization, adaptability and lower costs, we believe that the Avra “brains” technology component can lead to dramatic opportunities in all of medicine.
17
The advantages of robotizing already FDA approved aesthetic devices are many. In contrast to a human using a handheld device, our aesthetics robotic system has the potential to perform each and every procedure with unsurpassed precision without constraint of age, proficiency, experience or fatigue. Likewise, in many skin related treatments the amount of energy delivered, distance and/or depth of the instrument to, or into, the skin, and treating only the affected area are critical to the outcome. The robotic system can maintain these parameters with unparalleled accuracy. The system can also replicate the same procedure time and again precisely. Delivery of certain aesthetic treatments by robotic systems is believed to be the most efficient option, requiring fewer visits per patient while increasing patient throughput — a benefit for patients and practitioners alike.
Advantages of using our medical robotic approach to procedures include:
| ● | Reduced cost per treatment. |
| ● | Better treatment accuracy. |
| ● | Better treatment outcomes. |
| ● | Increased patient throughput and revenue generation for the physician. |
| ● | Easier multi-platform integration. |
| ● | Addresses shortfall of physicians/surgeons. |
| ● | Easier future integration of medical and technological advancements such as molecular biologics. |
We believe that our initial medical robotic system for the aesthetics market should find rapid acceptance based on the aforementioned advantages of using the attribute of robotics versus traditional manual applications. Furthermore, there is general acceptance by consumers for fee-for-service cash payments in the facial aesthetics market thereby avoiding medical insurance reimbursement issues.
Our medical robotic system utilizes a robotic arm that has 7-degrees of freedom integrated with our proprietary AI-driven control software and algorithms. The robotic arm was designed and built under the required medical device standards of the U.S. Food and Drug Administration (the “FDA”). Our strategy is to integrate the robotic arm with FDA approved devices, which is expected to allow for a more expedited approval of the integrated system. We believe that the FDA approval process will primarily focus upon validation of the medical robotic system’s software control. This could lead to a less onerous, more de-risked regulatory path to approval, particularly if strong preclinical results are achieved. Subsequent to the completion of the FDA preclinical work, estimated to take six months, we believe that we will be able to additionally modify and robotize certain non-invasive instruments that do not require FDA approvals and proceed to the cosmetic treatments marketplace. This action could sharply reduce the time to commercial operations and revenues.
We previously retained the services of The Horizon Phoenix Group (“HPG”), a consulting firm experienced in securing U.S. and foreign regulatory approvals for medical devices, in order to initiate the regulatory process. Working with HPG, we prepared and filed an application with the FDA for our initial medical robotic system and in August 2019 held an initial pre-collaboration meeting with the FDA. We believe that this is the first of a series of meetings where the Avra system and its regulatory requirements will be discussed in ever-increasing specificity. This should allow for a more focused regulatory process, saving both resources and time. The robotic arm that we intend to utilize for our system has already been granted approval in the EU and received a CE mark. We have begun implementing a quality and regulatory system that will serve as the foundation for U.S., Canadian, European, Australian, Japanese, and Brazilian market access for our medical robotic system. The Medical Device Single Audit Program(“MDSAP”), which we plan to employ, is a single inspection that, when completed, is expected to support market access to these six most important medical device marketplaces.
Since 2016, we had a research partnership with the University of Central Florida (“UCF”) to develop a prototype intelligent medical robotic system. UCF is recognized particularly for its work in the area of medical robotic research and design, with a focus on the guidance systems. Avra has paid UCF a one-time fee for outright ownership of work developed by UCF in the collaboration. The Research Agreement was extended several times and expired on April 30, 2021. To further the depth of our research and development we also began a partnership in 2021 with Florida Polytechnic University and are actively working with them on developing our system. Avra recently brought in two Associate Professors and a graduate to join Avra’s engineering development team. Effective October 11th, 2021 Avra executed a Sponsored Student Project Agreement which included two payments of $8,030 each covering Fall semester in 2021 and Spring semester in 2022.
18
On September 10, 2019, we entered into a collaborative research and development agreement with Infinite Mind, LLC, now known as Avra Air, LLC (“Avra Air”). Avra Air is in the business of developing computerized systems for robot operation and automation employing software and AI for applications in various industries and has more recently expanded to the development of air sanitizing devices to help address such pathogens as COVID-19. Our CEO is also an owner of Avra Air. Avra Air, with the use of Avra’s facilities and cooperation of Avra personnel, will seek to develop software and AI systems for robots that are relevant to the field of medical treatment or diagnostics. As part of the collaboration, Avra Air has granted Avra an exclusive, worldwide, full paid-up, perpetual, royalty-free license to commercialize any technology (including any patents) developed by Avra Air individually or jointly with Avra during the term of the agreement as well as existing technology of AVRA AIR in the field of medical robotics. This license survives termination of the agreement.
On November 6, 2020, AVRA made an investment of $210,000 in Avra Air which was made with $40,000 in cash and the balance by the issuance to Avra Air of 472,222 restricted shares of our common stock valued at $0.36 per share. In exchange for the investment. Avra received (a) a 49.8% limited liability company membership interest in Avra Air; and (b) the remaining 50% of a vehicular air sterilization provisional patent that Avra did not yet control. In addition, Avra also agreed to pay Avra Air a royalty payment of $1.50 per vehicular air sterilization kit for two years from the date that a first kit that uses the patent is sold. On December 22, 2020, the Company issued 472,222 shares of its common stock towards the acquisition of its interest in Avra Air. Avra Air has recently built a prototype portable air de-contaminant system which it plans to market soon.
Our senior leadership team and advisory boards have broad and deep experience in clinical practice, medical research, innovation and development in the medical robotics field. We believe that our team, which has been active in the medical robotics field for many years, brings the necessary skills and experience to develop and commercialize intelligent medical robotic systems, as well as in marketing, supply chain management, and the implementation of all other aspects of our planned business operations.
We believe we can rapidly develop and commercialize its initial medical robotic system in the aesthetic skin resurfacing market because of the following advantages and progress made to date, including:
| ● | Our team is experienced in medical robotic engineering. |
| ● | We are working in conjunction with preeminent physicians, engineers and scientific institutions. |
| ● | We have substantially completed the design phase and are ready to complete a final, integrated prototype for the regulatory approval process which has been initiated. |
| ● | Our robotic arm was built under the required medical device standards of the FDA and has already received a CE Mark in Europe. |
| ● | Our strategy is to integrate the robotic arm with FDA approved devices for skin resurfacing, which we anticipate will allow for a more expedited regulatory approval, with the FDA approval process primarily focused upon validation of the medical robotic system’s software control. We held a pre-collaboration meeting with the FDA in August 2019, which should allow us to better focus on only the meaningful required activities, saving both resources and time. |
| ● | We have begun implementing a quality and regulatory system that will serve as the foundation for U.S., Canadian, European, Australian, Japanese, and Brazilian market access for AVRA’s medical robotic system. MDSAP, which we plan to employ, is a single inspection that, when completed, is expected to support market access to the six most important medical device marketplaces. |
| ● | We believe that our treatment-independent medical robotics platform system will be compatible with currently and yet to be approved end-effectors and/or surgical tools enabling rapid entry into the skin resurfacing and other markets with new and improved devices. |
19
Results of Operations
Introduction
The financial statements appearing elsewhere in this report have been prepared assuming the Company will continue as a going concern. The Company was recently formed and has not established sufficient operations or revenues to sustain the Company. 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 our Company at June 30, 2020 (unaudited) and December 31, 2019:
| Balance Sheet Data: | As of | As of | ||||||
| June 30, | December 31, | |||||||
| 2020 | 2019 | |||||||
| Cash | $ | 5,416 | $ | 28,474 | ||||
| Total Assets | $ | 65,750 | $ | 132,524 | ||||
| Total Liabilities | $ | 1,270,892 | $ | 1,195,782 | ||||
| Total Stockholders’ Deficit | $ | (1,205,142 | ) | $ | (1,063,258 | ) | ||
To date, the Company has relied on debt and equity raised in private offerings and shareholder loans to finance operations and no other sources of capital has been identified. If we experience a shortfall in operating capital, we could be faced with having to limit our research and development activities.
Three months ended June 30, 2020, as compared to three months ended June 30, 2019
Revenues. We had no revenues during either the three months ended June 30, 2020 or the three months ended June 30, 2019.
Research and Development Expenses. Research and development expenses during the three months ended June 30, 2020 were $-0-, as compared to $27,812 for the three months ended June 30, 2019. Research and development expenses reflect continuing development work on the Company’s prototype robotic system at its facilities at UCF’s incubator in Orlando, Florida.
General and Administrative Expenses. We incurred $219,988 and $504,696 in general and administrative expenses during the three months ended June 30, 2020 and June 30, 2019, respectively. General and administrative expenses include compensation for the management staff, legal and other professional expenses related to the Company’s filings as a public company with the Securities and Exchange Commission (the “SEC”) and stock-based compensation expense related to the Company’s 2016 Stock Incentive Plan.
Other Income/Expenses. We had $313 of other expenses during the three months ended June 30, 2020 consisting of interest expense related to loans. This is compared to other expenses of $6,492 for the three months ended June 30, 2019, consisting of $6,493 in interest expense offset by $1 in interest earned.
Net Loss. We incurred a net loss of $220,301 for the three months ended June 30, 2020, as compared to a net loss of $539,000 for the three months ended June 30, 2019. The decrease in net loss from the 2019 quarter to the 2020 quarter is in large part due to decreases in stock-based compensation expense.
Six months ended June 30, 2020, as compared to six months ended June 30, 2019
Revenues. We had no revenues during either the six months ended June 30, 2020 or the six months ended June 30, 2019.
Research and Development Expenses. Research and development expenses during the six months ended June 30, 2020 were $2,000, as compared to $51,874 for the six months ended June 30, 2019. Research and development expenses reflect continuing development work on the Company’s prototype robotic system at its facilities at UCF’s incubator in Orlando, Florida.
20
General and Administrative Expenses. We incurred $524,659 and $874,963 in general and administrative expenses during the six months ended June 30, 2020 and June 30, 2019, respectively. General and administrative expenses include compensation for the management staff, legal and other professional expenses related to the Company’s filings as a public company with the Securities and Exchange Commission (the “SEC”) and stock-based compensation expense related to the Company’s 2016 Stock Incentive Plan.
Other Income/Expenses. We had $657 of other expenses during the six months ended June 30, 2020 consisting of interest expense related to loans. This is compared to other expenses of $7,644 for the six months ended June 30, 2019, consisting of $7,649 in interest expense offset by $5 in interest earned.
Net Loss. We incurred a net loss of $527,316 for the six months ended June 30, 2020, as compared to a net loss of $934,481 for the six months ended June 30, 2019. The decrease in net loss from the 2019 period to the 2020 period is in large part due to decreases in stock-based compensation expense.
Liquidity and Capital Resources
The Company expects to require substantial funds for research and development, to continue to develop, secure marketing approval for and ultimately manufacture and market its initial medical robotic system. Until the Company is able to generate revenues from the sale of its initial medical robotic system, it expects to meet its operating cash flow requirements from the net proceeds of this Offering and if necessary, from future public or private sales of its securities and, if possible, on favorable terms, by entering into development partnerships to assist the Company with its technology development activities.
During the period from inception (February 4, 2015) through June 30, 2020, the Company raised (a) $1,900 from an initial private offering of its common stock in February 2017; (b) $480,000 from the private offering of the convertible notes completed in June 2017; (c) $135,000 from a private offering of 135,000 shares of common stock at a price of $1.00 per share completed in February 2017; (d) $542,260 from a private offering of 433,808 shares of stock in a private offering at a price of $1.25 per share completed in September 2017; and (e) $20,000 from the private sale of 16,000 shares of our common stock at a price of $1.25 per share in August 2018.
In March 2019, the Company sold 7.5 Units in a private offering of ten (10) units (“Units”), each Unit consisting of a $10,000 principal amount six-month promissory note bearing interest at the rate of 5% per annum and a three-year warrant to purchase 5,000 shares of common stock at an exercise price of $1.25 per share.
In addition to the foregoing, from December 2018 thru June 2020, the Company obtained fourteen loans from Barry F. Cohen, our Chief Executive Officer totaling $468,500. The loans were due 12 months from funding date and did not bear interest. With the exception of two loans totaling $145,000, all of these loans were subsequently repaid in full via conversions into restricted company shares or Units including one loan for $100,000 which was used to exercise a stock option for 1,000,000 shares held by Mr. Cohen.
While we have been successful in raising funds to fund 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 assurances that we will be able to secure additional funding. The accompanying financial statements have been prepared assuming that the Company will continue as a going concern; however, if the efforts noted above are not successful, it would raise substantial doubt about the Company’s ability to 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.
Critical Accounting Policies
Use of Estimates
The preparation of 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 and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Significant estimates included deferred revenue, costs incurred related to deferred revenue, the useful lives of property and equipment and the useful lives of intangible assets.
21
Income Taxes
The Company accounts for income taxes in accordance with ASC 740, Accounting for Income Taxes, as clarified by ASC 740-10, Accounting for Uncertainty in Income Taxes. Under this method, deferred income taxes are determined based on the estimated future tax effects of differences between the financial statement and tax basis of assets and liabilities given the provisions of enacted tax laws. Deferred income tax provisions and benefits are based on changes to the assets or liabilities from year to year. In providing for deferred taxes, the Company considers tax regulations of the jurisdictions in which the Company operates, estimates of future taxable income, and available tax planning strategies. If tax regulations, operating results or the ability to implement tax-planning strategies vary, adjustments to the carrying value of deferred tax assets and liabilities may be required. Valuation allowances are recorded related to deferred tax assets based on the “more likely than not” criteria of ASC 740.
ASC 740-10 requires that the Company recognize the financial statement benefit of a tax position only after determining that the relevant tax authority would more likely than not sustain the position following an audit. For tax positions meeting the “more-likely-than-not” threshold, the amount recognized in the financial statements is the largest benefit that has a greater than 50 percent likelihood of being realized upon ultimate settlement with the relevant tax authority.
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.
Item 3. Quantitative Disclosures About Market Risks.
As a “smaller reporting company,” we are not required to provide the information required by this Item.
Item 4. Controls and Procedures.
Our Chief Executive Officer and Acting Chief Financial Officer, as our principal executive, financial and accounting Officer, conducted an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures, 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 June 30, 2020, to ensure that information required to be disclosed by us in the reports filed or submitted by us under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the rules and forms of the SEC, including to ensure that information required to be disclosed by us in the reports filed or submitted by us under the Exchange Act is accumulated and communicated to our management, including our Chief Executive Officer and Acting Chief Financial Officer, as our principal executive, financial and accounting officer, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure. Based on that evaluation, our Chief Executive Officer and Acting Chief Financial Officer, as our principal executive, financial and accounting officer, has concluded that as of June 30, 2020, our disclosure controls and procedures were not effective at the reasonable assurance level due to the material weaknesses identified and described in Item 9A(b) of our Annual Report on Form 10-K for the year ended December 31, 2019.
Our Chief Executive Officer and Acting Chief Financial Officer, as our principal executive, financial and accounting officer, does not expect that our disclosure controls or internal controls will prevent all error and all fraud. Although our disclosure controls and procedures were designed to provide reasonable assurance of achieving their objectives and our principal executive officer has determined that our disclosure controls and procedures are effective at doing so, 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 a control system must reflect the fact that there are 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 realities that judgments in decision-making can be faulty, and that breakdowns can occur because of simple error or mistake. Additionally, controls can be circumvented if there exists in an individual a desire to do so. 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
There were no changes in our internal controls over financial reporting that occurred during the period covered by this report that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
22
PART II – OTHER INFORMATION
Item 1. Legal Proceedings.
Not Applicable.
Item 1A. Risk Factors.
As a “smaller reporting company,” we are not required to provide the information required by this Item.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
None.
Item 3. Defaults Upon Senior Securities.
None.
Item 4. Mine Safety Disclosures.
Not applicable.
Item 5. Other Information.
None.
23
Item 6. Exhibits.
| Exhibit No. | Description of Exhibit | |
| 31.1 | Section 302 Certification | |
| 32.1 | Section 906 Certification | |
| 101.INS | Inline XBRL Instance Document | |
| 101.SCH | Inline XBRL Taxonomy Extension Schema Document | |
| 101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document | |
| 101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document | |
| 101.LAB | Inline XBRL Taxonomy Extension Label Linkbase Document | |
| 101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document | |
| 104 | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101). |
24
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.
| AVRA MEDICAL ROBOTICS, INC. | ||
| Dated: July 18, 2022 | By: | /s/ Barry F. Cohen |
| Barry F. Cohen, Chief Executive Officer and Acting Chief Financial Officer | ||
| (Principal Executive, Financial and Accounting Officer) | ||
25
Exhibit 31.1
CERTIFICATION OF CHIEF
EXECUTIVE OFFICER AND CHIEF FINANCIAL OFFICER
PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED
PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Barry F. Cohen, Chief Executive Officer and Acting Chief Financial Officer (principal executive, financial and accounting officer) of AVRA Medical Robotics, Inc., a Florida corporation (the “Registrant”), certify that:
1. I have reviewed this Form 10-Q for the quarter ended June 30, 2020 of the Registrant;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this report;
4. I, as the Registrant’s Chief Executive Officer and Acting Chief Financial Officer (principal executive, financial and accounting officer), am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e)and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15 (f) and 15d-15(f)) for the registrant and have:
| a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under my supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
| b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under my supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
| c) | Evaluated the effectiveness of the Registrant’s disclosure controls and procedures and presented in this report my conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
| d) | Disclosed in this report any change in the Registrant’s internal control over financial reporting that occurred during the Registrant’s most recent fiscal quarter (the Registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting; and |
5. I, as the Registrant’s Chief Executive Officer and Acting Chief Financial Officer (principal executive, financial and accounting officer), have disclosed, based on my most recent evaluation of internal control over financial reporting, to the Registrant’s auditors and the audit committee of the Registrant’s board of directors (or persons performing the equivalent functions):
| a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant’s ability to record, process, summarize and report financial information; and |
| b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant’s internal control over financial reporting. |
| AVRA MEDICAL ROBOTICS, INC. | ||
| Date: July 18, 2022 | By: | /s/ Barry F. Cohen |
| Barry F. Cohen, Chief Executive Officer and Acting Chief Financial Officer | ||
| (Principal Executive, Financial and Accounting Officer) | ||
Exhibit 32.1
CERTIFICATION OF CHIEF EXECUTIVE OFFICER AND CHIEF FINANCIAL OFFICER
PURSUANT TO 18 U.S.C. SECTION 1350 AS ADOPTED
PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of AVRA Medical Robotics, Inc., a Florida corporation (the “Company”) on Form 10-Q for the quarter ended June 30, 2020, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Barry F. Cohen, the Chief Executive Officer and Acting Chief Financial Officer (principal executive, financial and accounting officer) of the Company, certify, pursuant to 18 U.S.C. §1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002, that:
| 1. | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
| 2. | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
| AVRA MEDICAL ROBOTICS, INC. | ||
| Date: July 18, 2022 | By: | /s/ Barry F. Cohen |
| Chief Executive Officer and Acting Chief Financial Officer | ||
| (Principal Executive, Financial and Accounting Officer) | ||